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tv   Bloomberg Surveillance  Bloomberg  December 14, 2022 6:00am-9:00am EST

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>> we are looking at 2023 is a big transition year. >> i think next year's opening the door for a recession. >> there are concerns of a shallow recession. >> this recession is the most anticipated recession of our entire lifetimes. >> not that we will avoid a slowdown in a mild recession but that will help underpin a milder, shorter recession. >> this is bloomberg surveillance. jonathan: france-morocco 2 p.m. eastern time, what else is happening? tom: i look for zimbabwe, coming
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down the left side. i loved how argentina moved the ball yesterday. i just love how they go down the field and there's no screwing around and that's what we will see from jerome powell. lisa: really? we are just conflating the pictures. tom: richard clarida kicking corner kicks for us later on. jonathan: from new york city this morning, good morning. we've got to talk about the fed decision, equity futures are totally unchanged on the s&p 500, still responding to what happened yesterday with a cpi report and some people responding to what happened before that. equity markets spiked and there was little conversation about maybe a leak in the mix? the white house was asked about and this is what the press
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secretary said. she said there was no leaks from here. tom: looking at the bloomberg terminal, with one million numbers in front of me, and morocco odds but you can see with the red and the green, when it moves, it moved at eight 29 instead of 8:30 a.m. jonathan: yields are lower right now. lisa: people truly reset their expectations after yesterday. there was softer than dez than expected inflation rates and people dug onto the surface and it was the different indicators and pimco said they lowered their forecast for the end of next year to be 3.3% year-over-year versus 3.7%. jonathan: at 2 p.m. the fomc and
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it to 30 p.m., the press conference -- at 2:30 p.m. the press conference. tom: the british do this that are then we do, they don't have a. plot but what they do their that's different and better as they have actual discussions and visible dissent and the other thing they do is they have people from the outside the united kingdom who come in to give perspective, we don't do that, we are right technocratic monetary policy. jonathan: i wonder if we get some dissent a little bit later. are we at that point now? lisa: may be because there is more of a real debate. i think there is a fair point, why don't we have a robust debate?
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that's what's underpinning some of the shifting nuances from chair powell. tom: the dollar index is good math and it actually matters. new dollar weakness, 7.2% from the peak. that's tangible. jonathan: let's get through the board right now and look at the equity market. equities are not doing much at all, the s&p 500 is unchanged on the 10 year and we are waving goodbye to a four handle for good? tom: is anyone framing a 310? nobody is on that part of the planet? jonathan: we've had an 80 basis point move.
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tom: nobody is framing this outlier that inco is alluding to. lisa: other than what you telegraphed, 10:00 a.m., senate banking committee on ftx with sam bankman-fried and he is fighting extradition from the bahamas. the fallout from that is snowballing as we get details of the complaints. if he gets convicted, he could serve 115 years in jail. 2:00 p.m. we get the fed rate decision and jay powell's press release at 2:30 p.m. and we've seen a true reset. how much have we seen a peak hawkish in his from the fed? 4.8% is coming potentially in may and the shift has been shocking and rapid, coming from
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a 5.25 percent fed's rate. at 2 p.m., it is the france versus morocco world cup and we have the fed special at the same time clarida and diane swonk. -- and diane sw an. i'm sure you won't be checking the scores. jonathan: we will do both. i'll check the scores when we checked the markets. the head of macro strategy joins us now. scrooge is at the fomc and why do you think that? >> i think the fed is still going to come across pretty hawkish cutting down the pace of
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tightening and we expect them to do that again in february. they will come across scrooge-like and there is no indication they will be easing next year when the reality is, even if they don't ease next year, they will have to ease a lot in 2024 and 2025 to unwind what will be a high real funds rate. tom: you published the tenancy with inflation data and the last two reports, will jerome powell speak today super restrictive? >> he should dial it back and there was a possibility the fed can revise its dots the night before of the second day meeting. it's possible they come in easier than they might've been when they were originally submitted friday and powell should speak to encouraging news on inflation. port but the pce data is lower
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than what we have seen and we are beginning to see a slightly better inflation around the world. the u.s. is the first country to come out of covid so you expect them to lead. tom: the hallmark of your work for decades has been the bigger picture and the big picture to day is a pandemic supply-side analysis of all this mumbo-jumbo back over to more conventional demand-side analysis of fed policy. where are we in that continuum right now? >> we are progressing well. when you think about covid itself, it was an extraordinary event that affected the supply and demand side and they collided. they both had a very strong problem in the beginning and the demand-side was underestimated perhaps and that has been what has been coming down. the strength and real spending is only because they are cutting prices.
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you so that yesterday in the cpi in there is good demand on the service side but that's still opening up. we are still not back to normal at the point about that unusual covid supply-side an excess demand is trying to sort itself out. you will never know whether the fed really had to take interest rates up to 5% to do with inflation. a lot of people in the early days thought they wouldn't have to be that aggressive. cave-in aggressive and they are and have been restrictive it's important they get back down to neutral quickly enough by 2024. lisa: what does neutral mean and have you reset some of your expect tatian's on how inflation will -- your expectations on how inflation will fall? >> you never know until after the event but until it becomes absolutely clear that this is different, you run that risk and
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you have to assume it doesn't change that much. we expect inflation to easily fall to around 2.5% on the pce middle of next year and heading for target in the course of 2024. they need to cut the funds rate by at least a couple of hundred basis points next year. jonathan: will this market today by with this market is selling? deutsche bank put out a note. the market will also take fed higher to signal they don't expect to cut rates in 2023, something the market will continue to view with skepticism. how do you think the market will adjust to what the fomc is signaling? >> the market is quite clever and as i've learned, the market is always right step with the market is doing is it's taking
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the risk premium that the fed has to do more than some central expectation. the expectation is the fed will be up to 5% and keep it there but there adding and negative risk premium to that and that's white the curve is so flat -- and that's why the curve is so flat. the fed doesn't necessarily need to do that but it's a risk approach. i think what will happen is the curve will state very flat to keeley on the front end but as it gets comfortable that the fed is easing whether the end of next year or the year after, we will see thatre-steepening of the curve. i think the market is pricing this in a sensible way and not really dropping its expectations for 5%, just making the risk premium negative. it's an important point when you look at the bond market and the curve shape. jonathan: thank you, sir.
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deutsche bank is coming up a little bit later this morning. tom: we will go to the fed meeting this afternoon with the same smart and experienced people. this is a lonely group and i would predict a lot of people will start reading and thinking about getting there sooner. jonathan: we are focused on a couple of things today on what the fed will signal and what this market will respond. lisa: they haven't pushed back aggressively. does he push back today other than having a high and dot? jonathan: the fed decision coming up later today as well as the world cup. i'm pleased how into futbol you've gotten. tom: go morocco. ♪ lisa: keeping you up-to-date
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with news from around the world with the first word. ftx cofounder sam eichmann free plans to fight things into the u.s. he told a judge in the bahamas tuesday that he will not waive his right to an extradition hearing. it was his first court appearance since being arrested after u.s. prosecutors filed criminal charges. the judge refused his request for dale, calling him a flight risk. the federal reserve is set to moderate its aggressive tightening today. the central bank is likely to signal that interest rates will ultimately go higher then previously forecast and policymakers are widely expected to raise interest rates by 50 basis points. the announcement is due at 2 p.m. new york time. in the u.k., there is a possibility the worst of the cost of living squeezes over. inflation dipped from a 41 year high in november and consumer prices rose 10.7% from a year earlier, down from 11% in
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october and british households are desperate for relief. china is given up counting all covid cases after mass testing. the country will only report symptomatic cases from now on. with the end of the covid zero approach, there are clear signs of virus is spreading rapidly. hospitals have been overwhelmed in beijing. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo this is bloomberg. ♪ from one company committed to building a world that works, to three that will focus on a future that does too. this is ge healthcare, creating a world where healthcare has no limits. this is ge vernova, helping generate and move the energy that our world needs. this is ge aerospace,
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>> the ftx collapse seems to stem from grossly inexperienced and not sophisticated individuals. literally, there was no record-keeping whatsoever. this is really old-fashioned embezzlement. this is taking money from customers and using it for your own purpose. jonathan: old-fashioned embezzlement, scathing words from john j ray iii. here is the price action, your equity market is negative, zero
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.2% on the s&p 500, a touch of european strength in crude is back to the mid-70's. $76 and about $.10. tom: that count, $17,400 yesterday -- bitcoin. anne-marie is our drama critic in washington and joins us this morning with more testimony to come. alsosonali in washington. i think the media's way off on the theater of sam bankman-fried. binance has 60 billion dollars in assets.
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is it a run on the bank? sonali: they had about four billion dollars in outflows for about a week and you have the ceo of binance saying that things have started to stabilize and deposits are coming back but there were outflows for a while. the ftx collapse has wrought extra scrutiny. he said in a memo to staff and a separate emailed to bloomberg, they said users are back 1:1. tom: we don't know their liabilities and neither does the department of justice. do you expect news from the department of justice on the much larger binance today or the coming days? sonali: this investigation has been reported on for years. the urgency and immanence he we are seeing when it comes to binance is hard to know.
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if you look under the hood, these are crypto companies, not like they are filing s1's. tom: well said. sonali: it's a very difficult thing, all they have is what they tell us. tom: there is not a single word about the liability side of their obligation. it's bizarre from a traditional economy standpoint. lisa: talking about what happened with ftx raise the question whether this is a case of old-fashioned fraud or whether this is something more endemic in the crypto sphere because of a lack of regulation. how much is that division widening among congress members between those who view this as a viable, important industry versus those who want to change the name of crypto?
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annmarie: we heard from senator tester over the weekend who said what's the point of regulating it? if you regulate something, then your message is that this is real and its say to invest in so why bother regulating and give out that message? there were others on capital hill and you had individuals that also were taking calls from sam bankman-fried to drum up legislation for the crypto industry. i'm thinking of senator stabenow and senator bozeman who announced yesterday they are giving back any donations that came from him for their political campaigns. i think those individuals that want to regulate, there is a debate on how it should be done. should it be called an asset like a commodity or go to the agricultural hearings were under the cftc? maybe the sec, more of a security asset, these are the
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kind of questions that those that -- that's coming from those who want to regulate it. the customer funds were just lost and many are looking into the fact that something needs to be done to have more of an oversight in washington on this industry. lisa: a lot of people in crypto say this was a good in this weeds at some of the bad players and allows the actual industry operating in good faith to continue to prosper. how much is that really presiding as the details become clear? sonali: there is some of that going around but there is another hearing today at the senate. that hearing has to celebrities. you have kevin o'leary who took money from ftx and will testify today and you have been mckenzie , the oc star. i don't watch a lot of tv but i loved his quote that he had in
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his testimony. do you watch the oc, tom? the point he's trying to get across resonates just as much. he says i know about lying because as an actor i do it for a living and the crypto story is one that's meant to deceive. i think you certainly have things that are more polarized as ever when it comes to crypto and you see it on the hill and you see it among the people who have engaged in the industry and you are now seeing it among people who are figuring out how to engage. tom: i look at where we are. i'm going to assume that most people in washington don't know what binance is. is there a desire to bring this global industry into regulation
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across nation or is it like tester, let it collapse and it will go away? annmarie: at the moment, everyone in washington is still trying to understand and unravel what happened with ftx. these individuals also are caught up in a lot of it, one of the counts yesterday was campaign fund violations with senators donating money. they are donating the money they got from him to whatever it is, a food bank or diabetes, etc.. what you will see is a big debate. at one point, it might not come down to the lawmakers. the cftc commissioner said it's time to clamp down.
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jonathan: great work over the last 24 hours. individuals we think will give this guy grief on capitol hill? lisa: he gave him a grilling yesterday and he asked the ceo of changing the name of cryptocurrency. jonathan: what a ridiculous question for that kind of hearing. tom: i got some emails on this. to me, we have to say ftx is different than binance. one has kermit -- allegations of fraud but i don't hear that frombinance but they say finally it's a primal scream for accounting transparency. how does gary gensler do that? are they domiciled in dubai? jonathan: i'm sure that will be
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part of the conversation. tom: binance is join norma's compared to ftx -- is ginormous compared to ftx. can we talk about argentina? the streets were absolutely packed. that performance yesterday was just phenomenal. tom: is his career at an end? jonathan: i thought it was and then the 35-year-old has rolled back the years. big time. from new york city, this is bloomberg. ♪
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jonathan: the fed decides a little later with a news conference. equity futures are almost unchanged on the s&p 500. on the bond market, on the two-year, november 4, got close to 480 and now 418. 350 on the tenure off the highs of the year, deutsche bank's alan ruskin said the two-year sold off at every fed meeting for the last two years. tom: part of the dialogue today
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are words that matter right now when we will get to those at 2:00 and words that have drifted away. to me, it's a cumulative thing and i would say it's the calculus which is rates of change which will be nuanced today. jonathan: it will be about the ongoing rate hikes and the indication is there will be ongoing rate hikes. will dissent shake that up? lisa: they cannot signal any kind of dovish pivot in the market will run with that. there are expectations about how inflation will decelerate more than expected. they cannot let that happen yet. tom: i take issue with this. there is no place in monetary history where central bank kowtow to the media and says let's get out front of a pivot,
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there is no history of that stuff lisa: this is different because their transmission mechanism is through the markets that they can convince the market of their intention, the market will move away from their ultimate goal and they will have to go further. this is a delicate messaging that's a blunt tool in a nuanced moment. jonathan: i would say they've had financial conditions on strength until recently. we've got cuts priced over the next 12 months or so into next year and the fed doesn't want that conversation to happen and we get a dot plot later stop they want to indicate there will be no rate cuts in 2023. will this market adjust to the communication later? lisa: there was a survey out of
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oxford economics that businesses themselves expect rate cuts in the next 12 months from the federal reserve and other companies are basing their plans around this and avoiding perhaps refinancing too soon because they expect rates to fall in the future jonathan: we are hours away from the final rate decision from the fed later today. >> they can step down to 50 basis points and i think they want to step down to 25 as quickly as they can so date of this nature allows them likely to do that in the february meeting. tom: i think they've got a huge responsibility to get inflation down well under 5% before they start acting dovish. the senior economist at wells fargo is with us now. there is a nonlinear flight path
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down to 2%. how did it change yesterday? >> i think what we saw is in the near term, there are stronger disinflationary forces with drops in things like auction prices for used cars showing up. in terms of where we look at inflation at the end of next year or the year after, i don't think that changed that much because you are ultimately seeing some pretty strong inflation on the services side. it still comes down to labor costs so that's what will make that last mile of inflation harder and more expensive to bring out. it's coming from the labor market. tom: frame to us to a whole number -- is the last mile from 3-2 or five-three?
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how do i do find that last mile? >> it's probably from 3-2 and we think inflation will make quick work coming down. cpi can get down to a 4% year-over-year probably by the middle of next year. then we are only looking at 3% at the end of 2023 and that's closer to 2.5% at the end of 2024. lisa: how does the reopening of china effect this? >> it will affect the energy aspect which has been one of the real tailwinds to distant nation we have seen over the past few months. the activity coming back online could prop up the energy side that's also another source of demand. reopening in china is inflationary so i think it makes that glide path down to 2% a little bit harder. lisa: it comes in the face of
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recent expectations and lower inflation on the heels of yesterday. pimco ratcheted down there expectations to 3.3% versus 3.7 percent so how does the fed recognize this nuance while recognizing they have further to go? >> it comes down to the messaging we will see to date in terms of statements so you mentioned the ongoing increases in that aspect of the statement is likely to stick around to signal that the pace of tightening is only one element of this cycle. it depends on the overall destination as well as the duration that policy has held. i think we will see signs of that in the statement in terms of saying how long the restrictive policies likely to stay along -- around. it's likely to be restrictive for some time but it comes down to the dot plot.
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tom: that's something john silvia would do. i don't expect that from you. lisa: the fed could have her diet -- revise their dot plot submissions at the end of the die after the cpi reap. how unusual would it be for them to change their expectations for how high the fed funds rate would be one day before the press conference? >> while they have that opportunity, not sure how many officials will take it so many -- a maybe it will affect the core pce numbers. this was ultimately another prince was coming on the heels of what was good october print but that followed a hotter september. there is some so much uncertainty around this inflation outlook. you have where officials see the risk to their inflation forecast
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and officials are still saying those will go to the upside so i think they will be cautious on marking down there expectations too much based on what was a better number but there is still plenty of signs that inflation is still running to ought. tom: the committee has to get out somewhere to reframe that timeline. i'm looking at the calendar and may 3, june 14, july 26 next year. what meeting are you focused on where jerome powell finally gets clarity or confidence in last mile? >> i think it will be a while before they get that confidence. i think what they will be confronted with is much more deterioration in the labor market. it's been easy to go full force on inflation this year because you had an incredibly tight
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labor market and it's still strong which allows them to continue these rate hikes but that discussion will get difficult around the middle of next year where you have inflation coming down but still too strong but you are seeing more market deterioration in the labor market so unemployment over 4% and likely job declines in the second half of next year which will put the fed in an uncomfortable position where they have to trade off between their two mandates more so than they have this past year. jonathan: thank you. the characterization i think. on inflation, do they still believe the risk is to the upside? when they look at the balance of risk abound under and over tightening, do they believe the
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bigger risk is doing too little versus doing too much? i had a little shift the last couple of times we have heard from jay powell. in november, he was focused on the risk of under tightening and he talked about over tightening and the idea that if we over tightening, we can do something about it like cut interest rates. then at brookings, he started talking about not wanting to over tighten. maybe it was the setting and talking about what he wouldn't in a news conference but that's what i'm focused on this afternoon. lisa: it's difficult for him to come out with any conviction for. if he doesn't do a hawk is message and tries to give nuance, that will be read as dovish and cutting rates next year. if you take a look at the
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underpinnings, the sticky aspect of inflation is still at the highest level in 40 years. the services side of inflation is at the highs and 40 years and rising. tom: i will bring this up with richard clarida of columbia. a paper was written on japanese deflation and it came down to asymmetric pressures that the bank of japan faced. to me, this is germane. neil soss was heated about measuring the pressures. jonathan: we forget that these are human things condition by history and recent experience. you wonder how scarred they are of the dovish mistakes of the last 12 months and whether that
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shapes an approach where they are committed to being lights because they don't want to repeat that. they don't want a repeat of the 1970's where they back off too soon and inflation react seller's. -- re-inflates. tom: i think because back to the bank of japan 18 years ago go. they just cut to send. jonathan: the doj is talking about a policy review. tom: so is italy. went to they start their new effort? jonathan: why was this the appropriate time? tom: when do they start the new search for 2024? jonathan: coming up, terry
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haynes, this is bloomberg. ♪ lisa: keeping you up-to-date with news from around the world with the first word, i am lisa mateo. it could be a long legal battle to get sam bankman-fried back to the u.s. to face charges. he told a judge in the bahamas he claims to fight extradition. it was his first court appearance since his arrest monday night. the judge denied his request to be released from custody on bail. the u.s. is set to fulfill a key demand from ukraine. once there is a final approval from president biden, the pentagon will send ukraine air and missile defense batteries. ukraine says patriots are needed to counter russian missiles. the president of latvia is going for a special tribunal to judge russia for its invasion of ukraine. they also told bloomberg that russia should have to pay for reconstruction. >> it's the gravest possible
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violation of international law and should -- and there should be consequences and one of the consequences is seizure of russian assets abroad and it's necessary to give these assets for a fund for rebuilding of ukraine. lisa: western countries froze the russian bank assets after it invaded ukraine in february. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪
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>> they sold -- they stole billions of dollars from ftx customers. he stole money for his personal benefit including making personal investments and cover debts.
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this investigation is very much ongoing and is moving very quickly. it's fair to say that by anyone's license, it's one of the biggest financial frauds in american history. jonathan: that line right there -- that was the u.s. attorney for the southern district of new york. as for the tiny aiming -- the timing of sam bankman-fried's at arrest, they said it was a case of the doj. the doj action might have the active politicizing crypto investigations and some republicans are likely to wonder why the biden boj swooped in to control the investigation of the second largest democratic donor and the 2022 election cycle. tom: we introduce him differently than we ever have before. terry haynes talks to us about washington and has a wonderful
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view but he is also a grizzled veteran of all the chitchat the media is doing now in the vicinity of 2022. -- of 2002. he provided counsel on scandal, the extinct -- the distinguished veteran joins us this morning. is this different than what you witnessed in the early part of this century? >> it's not. what's different is the market impact. what people forget about the enron scandal and what made necessary the sarbanes-oxley act is that markets started to view it as an attack on the ability of marcus to understand the books, the solvency, the
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prospects of publicly traded companies. they figured if enron went down and world come this simple fraud, what's next? it destroyed wealth and value and we don't have that situation today so it's much different in that regard. tom: let me cut to the chase -- b the what next is calledinance. how should the politicians you advised years ago, what should they do on then dish on the what's next? >> congress created the regulators over us -- over this. my view is that congress is the top of the food chain. congress doesn't know much about crypto or binance. but congress thinks this stuff is a scam and even people who think there was promise think
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the actors are a scam and are running away from this as quickly as they can. would gary gensler and others were saying yesterday simply was no matter who you are in this space, we are coming after you. whatever's going on at binance, gensler will use the maximum amount of his power to bring them to heal as quickly as possible. lisa: police are resilience in the shares of crypto companies. this goes against what you are saying where you said this does not look like a bad moment from which crypto could recover. it's likelier to be the beginning of the end for crypto. why do you say that which such confidence given the acceptance of the market? >> what you got here is kind of a perfect storm. you've got a situation -- what crypto is looking at in the
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future is years to come of investigations, potential indictments and certainly enforcement actions. also what you've got is a situation where crypto will be enfolded into the existing regulatory regime. the biden administration regulators have been after this for about a year and have been public about it. crypto people on wall street do not believe it. they should believe it now because that's what kinsler and others will be up to. when you combine that the possibility of crypto exposure from more established players, you will get a continued flight of capital and people will not want to be involved with something that looks like it's a potential scam that might get them in fairly serious trouble.
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given the last year that crypto has had, it's certainly possible but this will not be the game changer anybody thought it would be. lisa: we started by talking about her comment about the strange timing that the department of justice didn't give a heads up to congress ahead of releasing this indictment. you've had extensive work with the sec and the southern district of new york in these investigations. do you believe it could have been politically motivated? >> i raised it as a possible billet see. do i think it's likely? i certainly hope not. what has happened here beyond the bottom line politics is simply that the regulators and the litigators decided together they were going to push this thing forward and shove congress to the side is much as possible.
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the sdn why was specific about bringing the campaign-finance activities at spf and one implication is that congress is somehow unable to strongly investigate this stuff because they had taken money from spf crypto more largely. i think that's dead wrong. that's an implication of it. what we will get here is competition between the regulators and the litigators on the one side and congress on the other. it's unfortunate because it strings out the resolution of a lot of crypto issues. jonathan: great to catch up, as always. delta in the premarket is doing nicely. they are raising their december
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adjustment. let's get to the numbers. fourth quarter adjusted eps one to 35-140. when you look the full-year adjusted, three dollars $.17 to $3.12. they are raising their profit outlook into the end of the year and into next year as well. tom: they were running a run rate. they went down from 47 billion dollars to $17 billion large and are back to $45 billion and with significant optimism.
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they say domestic will come back and they're waiting for international. that's when this happens is now. jonathan: it seemed overly optimistic. let's see if the demand holds up at these prices through next year because demand has held up at lunch she prices. lisa: and it keeps rising. tom looks at the airline index. at a certain point, you have to imagine there is pushback. everyone was going to the delta lounges because of different personnel there cracking down on that because they got overcrowded. jonathan: those were your words. lisa: please consult. there was also a question of how much longer people accept less
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to pay more. that's what they have continually done. will some of these airlines reinstate dividends after cutting them in response to public pressure when they really were under a lot of heat and had to get bailouts. tom: the basic idea is it used to be $4000 you get the family on board and not kill yourself. you go over with the fam and you are popping $22,000 to get to paris. jonathan: that's serious money. who is the third person? tom: take the dog. me and john on vacation. lisa: that's gold. go to rome. tom: i like rome.
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well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life.
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>> we are looking at 2023 is a big transition year. >> i think it's opening the door for recession. >> there are concerns of a shallow recession. >> this recession is the most anticipated recession of our entire lifetimes. >> we don't think that we will avoid slowdown or mild recession but that will help underpin a milder, shorter recession. >> this is bloomberg surveillance with tom keene,. jonathan ferro, and lisa abramowicz
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jonathan: everyone's talking about recession and delta is saying what recession. good morning, for our audience worldwide, this is bloomberg surveillance. a fed decision coming up a little later. the premarket is up by more than 3%, looking ahead to a better 2023. tom: i know jerome powell pays attention to economists. the glass is half-full and it's led by our behavior off this pandemic. i would suggest it's not just the airlines, it's small business america and the rest. they need to hire people and they are saying let's go. jonathan: what about that behavior going into a lisa: lisa: new year? these are different populations we are talking about. delta says their profits may rise by 20% next year which is
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incredible considering how much of their profits have boomed in their demand has increased. some of these other airlines they cater to people that might not have the same kind of pocket book, not doing as well. there are pockets of less price freedom in certain areas. jonathan: i love jetblue, big fan. the cabin. lisa: you mean first-class? jonathan: we can talk about that another time. tom: is this a travel show? jonathan: it's a world cup show and everything else when you direct things. tom: when chairman powell looks at the prepared questions, he will be looking like this. jonathan: less time around we had an interesting moment in that press conference. someone accidentally let the chairman to believe the markets were up in that moment wasn't
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about the individual but about how chairman powell responded to it. on a day where he believed the equity market was rallying, pushback against that firmly. i wonder if we get the same chairman powell today. tom: you can't do this to your brain. the federal reserve bank chicago has a great number and goldman sachs is a great number. they are trying to gauge the accommodation. this is not going in the chairman's direction. jonathan: never tattoo something to your body that might change. tom: is there anybody in the world cup that doesn't have a tattoo? lisa: do you have a tattoo? jonathan: what's that about? it's called a sleeve. get a sleeve. do you know how long it takes to
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get done? lisa: how long did it take you? jonathan: the fed decision is later and equities are unchanged on the s&p 500. in the bond market, yields are unchanged. euros dollar, positive 0.2%. crude is making a comeback. it threatened to hit the 60's earlier this week but back to $76. lisa: china seems to be throwing caution to the wind and reopening in oil prices are still under $80 of barrel. i'm shocked there hasn't been more of a move. at 10 a.m., we get the senate tanking committee on ftx. sam bankman-fried has been accused of measures of fraud from the southern district of new york and he could serve 115 years if convicted.
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i am still looking for what type of pushback to the entire industry we get from senators versus talking about one bad actor. the fed rate decision comes at 2 p.m. followed by jay powell's press conference. we talk about the two year and the tenure but five-year yields have come down by more than 80 basis points, most of percentage point from their peak earlier this year. we will speak about this with richard clara do and diane swonk a little bit later. tom: great shot of the 35-year-old? jonathan: that's what happens when you go to ac malan, you just get bitter. tom: can morocco to better than croatia?
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jonathan: a more competitive game and morocco really surprised me. let's talk about this market so let's start with chairman powell. let's start with what's talking about bitcoin. what do you expect from the chairman in the conference? >> i expect them to go 50 but i expect them to downplay rate hikes. cpi is coming down. we thought was transitory 1.5 years ago and he will say it's not transitory and was seen some of the pressure evaporate so he should set expectations lower for next year's rate hikes. tom: i look at the dialogue forward and it will be based on the data-dependent fit. what is the data that matters to chairman powell? >> we have seven full weeks between this meeting in the next of that's a relatively long
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time. we will get a bunch of data and i think we are watching for jobs and they been holdings teddy. -- holding steady. if it does hold steady, that will introduce further hikes. i'm looking for inflation roll over and i think growth is slowing dramatically outside the travel and leisure industry and that we problematic for him. so i look for weaker data over the next few weeks that leads him not to hike. lisa: if the market rips when he pushes back against the action, will it not go in the opposite direction? we are already well on the way of disinflation. >> i think we've got to stop managing the entire economy to what the stock market does over a day and a week. you've got daily and weekly
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expiration options and a huge volatility so the job is not to look at daily markets. once we get the recent pop like yesterday, we will see that growth is slowing and there is concerns about what's going on in the local connie. i think some of that initial exuberance would fade so i'm looking for him to be dovish. if we get a pop like yesterday, i don't want to sell into that because the pressure on the economy in the recession will hit sooner and be worse than consensus. lisa: what about longer-term debt? if the fed backs away too soon, people will worry about stop/start inflation because the fed doesn't have the conviction to go hard and go along. at what point are we looking at a selloff in -- on longer-term debt in the face of a deficit -- of a dovish message? >> i think we get to 3.5 on the 10 year. i think we see some pressure on yields across the board.
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the initial reaction is probably lower yields across the board but i think we will see a steepening near the yield curve again. jonathan: is this a bullish or bearish moment for risk assets? >> whatever it is traditionally, i do not think that will be a great risk on moment. we will get that move and people will have to start thinking about where they want to own stocks and credit and what is the right risk premium. it's a bit high right now. tom: doesn't 60/40 recover from the mother of all disasters? >> i think it will do quite well. i am looking forward to this bull market with a big risk off move where you see lower yields and lower stocks. that hasn't been what's happening but i think this is where this all ends. you are getting a decent yield
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on the long bond. you need something in your report folio and i like the belly of the curve but i like the 60/40 concept. lisa: you are here after the ftx debacle but are you surprised there hasn't been more turmoil in the crypto space? >> a little bit, i would have thought bitcoin would be drifting toward 10,000 but it's going the other way. lehman brothers was never a moment, these things take weeks to play out. the amount of investment that ftx was doing, it seemed willy-nilly. i think will take time for people to pull back and say what do i own and where do i own it? there are three rules about crypto, rule number three is there are no rules and people
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are incentivized to keep crypto higher. people are holding their own tokens, etc. but that's not that surprising. i think we will be at 10,000 before 25,000. jonathan: we appreciate that last comment on what's happening with bitcoin. coming up in washington, d.c., we will catch up with anne-marie. this from the new york times story that's not hitting a ton of play. the united states is poised to percent of its most advanced ground-based air defense system to ukraine in response to the urgent request to defense against an onslaught of russian and -- russian drone attacks. tom: i'm so glad you brought this up. i said that's a game changer. that's what the experts say it's a long way from where we are -- where we were in february and
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april. it's not a long war but it seems like it is. jonathan: is this odd we keep having this conversation? tom: i've said that all along and you see that in the eu and u.s. financial conditions. there is something different going on. jonathan: we will break this down in just a moment from washington, d.c. we are counting down to a fed decision later today with equities higher by a 10th of 1%. ♪ lisa: keeping you up-to-date with news from around the world with the first word. ftx cofounder sam eichmann free plans to fight being sent to the u.s. he told the judge in the bahamas tuesday he will not waive his right to extradition. it was his first court appearance since being arrested
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after u.s. prosecutors filed criminal charges. his request for bail, calling him a flight risk. the federal reserve is set to moderate its aggressive tightening today. the central bank is likely to signal that interest rates will ultimately go higher than previously forecast. policymakers are widely expected to raise interest rates by 50 basis points. the announcement is due at 2 p.m. new york time. in the u.k., there is a possibility the worst of the cost of living squeezes over. inflation dipped from a 41 year high in november. consumer prices rose 10.7% from a year earlier, down from more than 11% in october and british households are desperate relief after big jump in energy and food bills. the biden administration's about to deepen the tensions between the world's two economic superpowers. they will put china's leading maker of memory chips and more than 30 other chinese companies on a trade blacklist.
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that would prevent them from buying certain american technology. delta airlines boosted his fourth-quarter earnings outlook but trimmed the top end of their forecast. the projections came out as delta executives are preparing an investor day event. delta and united airlines expect continued expansion despite the risk of recession next year. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo, this is bloomberg. ♪
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>> i believe the russians should stop their fight and should leave our territory. i don't believe in the temporary cease-fire. russians will use it for regrouping and they will continue this war. jonathan: that was the ukrainian prime minister on the relationship with russia. here is the latest from the new york times -- united states is poised to percent of its most advanced ground-based air defense system to ukraine, responding to the countries urgent request to help
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defend against an onslaught of russian missiles and drone attacks. this is according to u.s. officials. tom: this is a big deal. can i give you a story? standing in the hallway at home and there was a guy named werner von braun who invented the v2 rocket which destroyed london. he had come to america and they brought the scientists of germany to america and they had to hide them somewhere. they hid them in northern alabama. the patriot missile is from the redstone arsenal, alabama and its really good. basically, this is the only missile that can do what hollywood does, where another missile goes up and a missile knocks it down and that's why we are having this conversation. anne-marie is with us. this is a huge deal, how is the
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secretary of defense and the president moving forward? annmarie: they need to have the sign off of this idea of sending these more advanced patriot missile's over. there was a readout late last night from the pentagon. you have the defense minister lloyd austin and the president's national security adviser jake sullivan and joint chiefs of staff on the phone with her counterparts in ukraine talking about security. there is a number of questions that remain to be seen. there are teams that need to be trained on this. are they coming directly from u.s. stock or european stock? this is the most exported missile. they are in poland and saudi arabia and there's another key fact, you talked about the hollywood style of these missiles. yes, they can go directly to the intended target but that's the advanced version. the less sophisticated version,
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the older version, will hit near the aircraft. we are waiting on these questions as to what ukraine will actually get. tom: how will mr. putin response? does he have an equivalent non-nuclear patriot missile? annmarie: what we see from russia's they continue to go through their weapons. what vladimir putin is going after now and what we've seen is vladimir putin strategy for the winter which is weaponizing the winter which is what he's doing for ukraine, going after civilian infrastructure and making sure there is a power deficit in ukraine and making sure they don't have access to energy, access to clean water. this is what vladimir putin is doing and that's why president zelenskyy has begged the united states for these types of missiles so they can stop that barrage especially going into the winter. going into the winter is a key factor of why you are seeing this and this could signal a
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change from the west in terms of their help to ukraine. lisa: the idea of an escalation we've been talking about for a long time. does this more directly bring the west into the war in a way that vladimir putin will seize on annmarie: annmarie:? he will say it does but any direct influence from the united states and the west you rain is a direct escalation. that is a risk and just last week, we heard from vladimir putin yen. he signaled there wouldn't be more conscription's of the 300,000 he already called up which would agitate his society with a massive brain drain. individuals are fleeing russia but he also mentions nuclear. this is something he continues to fall back on. lisa: the nato secretary-general said the risk of a full-blown war is rising and it cannot be ruled out.
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he said it's a real possibility. how is your preparing for this in addition to increasing some of the budgets of the military but also preparing for a strategy? will this escalation lead to this possibility? annmarie: the escalation was forefront when president biden was at the g20 and he had a quick meeting and arranged as the missile landed on the polish side of the ukrainian polish border. it became a real scenario for many individuals about how the work and spread outside ukraine's borders. in europe, 15 or so countries including the united kingdom are joining up and talking about a more sophisticated alliance around air defense. leica many nato -- like a mini nato. tom: are people saying we should
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have done this eight months ago? is that a dominant theme? annmarie: not really, for the patriot missile -- tom: the in general build up. annmarie: before the war, there was criticism that the united states should have potentially done more in terms of sanctions against russia. 100,000 troops are waiting on the lines and we have seen what vladimir putin has done in the past. it's not just crimea but other countries surrounding russia and the former soviet union countries. they thought maybe that's when you go after central bank reserves, that's when you start cutting up tanks from swift and that's when they should have potentially hammered down on the lifeblood of the russian economy which is how vladimir putin continues to fund this war which is russian commodities.
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there is also a huge risk to giving the ukrainians anything they want. nobody wants to start a world war iii. when there is pushback, you have to look at the other side of those risks and why decisions are made. jonathan: one final word, have we had an official response to the oil cap? annmarie: we are waiting for this decree that russia wants to come out with but they maintain they will not sell to anyone that signs up for the cap. it becomes an interesting fudge because that cap is set at $60 per barrel. the russian crude products, the oil the grocery pipeline, the ones that were on the ships that need european shipping and insurance backing are going for about $50 a barrel.
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maybe they will not technically sign up for the cap of you are not selling to me above that cap anyway. tom: did you understand what she said? jonathan: i will go back over it and listen to it several more times. tom: i heard cap like three times. jonathan: russian sanctions in china reopening and opec that's willing to cut production keeps energy prices high. that's the call next year for 2023 on brent. averaging $100 per barrel and a spike in the second half of the year at $110. what do you make of that? tom: i think people are moving consensus on the axis which is a tried and true heritage of strategy. they are just moving out to where they were and the china
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demand is in the mix. jonathan: the keyword and there was average. it should average $110 per barrel. lisa: can we get north of that? what does that do after people got used to gasoline prices in america that are the lowest going back to tober. -- going back to october? jonathan: futures on the s&p 500 0.1%. adam ruskin from deutsche bank coming up. ♪
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jon: you wouldn't believe it, so rude in the commercial break. tom can confirm. futures on the s&p up .1%. nasdaq 100 up .1% also. the equity market punching higher over the last couple of days. bond market, twos, tens, 30's look like this. two days after the last fed decision, 4.20 going into the december decision. 3.50 on the 10 year. about an 80 basis point move lower from the highs of the
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year. this dollar is a whole lot weaker. dollar index between the two meetings has gone from 1.11 at the start of november all the way down to 1.04. it's a real move. tom: it's a 7% move. the conversations we have had this week on dollar have been very nuanced. wide set of opinions on this. jon: dxy, 103.88. lisa: it shifts into this debate about next year and whether it will be the same. we were talking about delta earlier, coming out with earnings-per-share that blew out of the water the particulars. increasing their expectation for revenue 15 to 20% next year. what recession? united and jetblue both rising.
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i also want to just touch on tesla shares. since september 19, shares are down almost 50%. year to date, more than 50%. the twitter risk bleeding into some of the shares, we have been hearing about twitter possibly not paying the bills for their buildings in san francisco. the elon musk reputational risk have been borne out in tesla shares. dan ives has been big on this, pulling back. i want to note how much of a deterioration has been felt in tandem with the plight of twitter. jon: hard to break it down to the components, but how much is about leadership, how much of it is it because of things happening in china? lisa: there could be some
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challenge from other auto manufacturers, but there is a feeling this doesn't help when it comes to reputational risk, especially if elon musk begins pledging tesla shares against their debt. jon: in the premarket, down a quarter of 1%. hours away from the final fed decision of the year. one of the piston notes iran read came from alan ruskin who said about the futures market is pricing in a 4.43% december 2023 event funds, the market will also probably take the higher end of the 2023. come as a way for the fed to try to signal they do not expect a cut rates in 2023. something the market will continue to view with skepticism. does this raise a credibility question for this fed, reshaping expectations? tom: the third rail for those people, along with the a semester risk, supply-side shifting over to demand-side, is
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credibility. every second of this press conference this afternoon, that is the back story. jon: do we get a shift, do we get some dissent? i wonder if we do get some dissent later. tom: i think you may be right, you may think clearer than i do because i am greenspan-ian, and years ago, he said, you don't dissent. the bank of england does it so much better. jon: to be clear, it is the board of governors that do not like to dissent, and that on the same page. tom: we will find out at 2:00 today. alan ruskin, chief strategist at deutsche bank. the former vice chairman, alan blinder, how do central banks talk with this dot plot?
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alan: i think they try to steer the markets where they think rates should be. basically, they have a bit of a problem right now because the markets are very persistent it is thought process that the fed will be cutting rates in 2023. the intriguing aspect of what you have right now is, we thought the fed could lose control of the back end of the curve because yields were too high, qt would push yields higher. we have exactly the reverse problem with yields more consistent with a 3% funds rate than a 5% funds rate. the market is not really listening to the fed. it is not the worst problem the fed could have. the fed is still trying to steer the curve higher in terms of yield. jon: do you see them being successful in doing so?
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alan: not at this meeting necessarily. the czar that the 2023 dot is between 4% and 4.75%. i think that is probably a reasonable guess on where that median dot will be. that is not far from where many believe the peak will be anyway. the discrepancy is in the rate cuts that followed soon after. the market thinks this will be a more traditional cycle, you get to the beat, don't spend much time there, and you start to see rate cuts. the fed is saying this is a different cycle. the more the back end yields are low, the more you could see fed funds plateau for some time. jon: i remember a note that you put out months ago where you calculated the average duration
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of staying at peak. we put a similar story over the weekend, the average was 11 months. what is it about the economic backdrop that influences your thoughts about how long they will stay at peak? alan: i think it's all about how much the economy slows, how much that slowing in the labor market leads to a reduction in wage inflation that is consistent with the 2% inflation rate. the supply side is coming together nicely, getting a positive supply-side shop developing. it is really the demand that needs restraint. it is not obvious what will happen here. you can imagine a situation where if employment remains pretty resilient and inflation comes down, that mix of employment resilience driving nominal wages, and inflation being lower, means real incomes
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will be growing again and demand could be quite resilient. there is a lot to play for here. the recession will seem like a complete gimme, a couple months ago, at worst, looking like a soft recession, as it were. lisa: does yesterday's cvi print gave --cpi print make a soft landing more plausible to you? alan: i think it does at the margins. i think you are seeing the goods disinflation that we have all been anticipating is definitely feeding through. we do some nice calculations on the cpi, ex energy, food, shelter, you lose have of cpi, and lo and behold we have disinflation. maybe that is a bit of an exaggeration but you are getting some constructive signals there
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that the supply-side is without question helpful. i think you'll see it right now. the import data coming out at 8:30, look at the ex petroleum numbers. they have been down the last six months. strong correlation with ppi finished goods. i think that side is actually very constructive as far as the soft landing is concerned. you have to be cautious on the wage inflation side. powell lay this out in his speech when he suggested that there was excess demand in the tune of 4 million workers. i think that is key to getting inflation done quickly. what you have is not inflation coming down but can we make that transition from a 3.5% core inflation rate to a 2% rate? lisa: we were speaking with sarah house earlier, and she said all things being equal, a
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reopening of china would be inflationary. we were looking at that rapid opening that anywhere expecting. do you see this boosting inflation in ways that are not accounted for by current protections? alan: i think if the opening is successful, and that is a big if. you could think about revising up chinese gdp numbers. you could think that a successful opening could raise that number up to 6%. base metals, cyclicals are all very depressed, if anything, over the last six to 12 months. you could see that commodities inflation start to pick up to a degree. but i'm not particularly worried that is the big driver at this time. if you look at the import prices today, inflation pressures from china are quite muted. import prices are quite muted,
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running roughly 2%. jon: briefly, at the top of your note that you put out yesterday, you indicated that for the last year, the 2-year has sold for every fed meeting. i was not aware of that. do you believe today will be different? alan: i think powell will try angling in that direction. at least you have the fed chair pushing in that direction. is it going to be successful for more than 24 hours? probably not. balance, the bias is in that direction, slightly higher to year yields. jon: fantastic. over the last year, the two year selling off after every fed meeting. quite the stat. tom: it is. frankly, i'll spend a lot of time watching france-morocco during the press conference. mckee, jeanna smialek, others
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asked some pointed questions. tom: the multimedia network promo. jon: i think you are already distracted by france-morocco now. tom: i just got a wonderful note in, i want to keep it private. he is a missile expert. he says don't forget about the iron dome of israel. thank you for listening in tel aviv. jon: thanks for reading that as we were interviewing alan ruskin and sharing the details. tom: going back and forth on missile trajectory. jon: torsten slok, coming up. looking forward to catching up with him. lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. it could be a long legal battle to get sam bankman-fried back to the u.s. to face fraud charges
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now that the disgraced founder of ftx told a judge in bahamas he plans to fight extradition. it was his first court appearance since his arrest monday night. the judge denied his request to be released from custody on bail. the u.s. is set to fulfill a key demand from ukraine once there is final approval from president biden. the pentagon will send patriot air and missile defense batteries. they say they are needed to counteract the barrage of russian missiles. capitol hill budget negotiators say they have reached a framework to avert a got -- government shutdown. house and senate leaders have not released any details but they say the agreement would let them pass a full year spending package by december 23. train strikes and freezing weather have left london's business district deserted this week. according to a workplace data tracking company, office occupancy in london funds 19% on
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monday, down from 33% a week earlier. thousands of financial professionals chose to work from home to avoid those disruptions. apple is allowing alternative app stores on its iphones and ipads. it is part of an overhaul to comply with strict european union requirements coming in 2024. the laws are aimed at leveling the playing field for third-party developers. software makers and regulators have complained that apple and google have too much power as gatekeepers. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg. ♪
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>> we have lost $8 billion of customer money. by definition, i don't trust a single piece of paper in this organization. i certainly think there have to be more controls in this sector.
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jon: that was the ftx ceo. this is the guy that oversaw the fallout of enron, and look at how he is talking about ftx. it is unreal. this guy, saying these things about this company. tom: the adults showed up yesterday, that is how i would put it. that is where we are. i had a lunch a million years ago in enron, when was houston powerlite, and i was sitting there at lunch thinking, you have to be kidding me, what do you mean? i could never predict a scandal like madoff. all i know is that the adults showed up yesterday. jon: here is the latest from our side. sam bankman-fried fighting tradition from the bahamas after phasing eight counts of criminal fraud. he is defending his role on abc
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and the media tour in the last couple of weeks. >> i did not know that there was any improper use of customer funds. i was not spending any time or effort trying to manage risk on ftx. at the end of the day, it is not my call what happens. the world will judge me as it will. jon: this one will go to the courts and the sec has a different version of events to tell based on the last week. tom: what we know is there will be a movie, there will be a reel of cheerleaders for all of this. i am sure sonali basak will not be in that movie. she had been trying to report as an adult on this. thank you for your work yesterday as the story unfolded. the adults showed up yesterday. what does mr. gensler do now about bankman-fried, jail, the
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bahamas, but what does mr. gensler do about binance, their challenges, all those other names that i don't know? sonali: one conversation i had was with her present a different channel. he says lawmakers and regulators should feel badly that americans lost money it this -- at this scale. at the beginning, crypto exchange is should have been treated like any other exchange with some sense of regulatory oversight, some sense of disclosure with anything listed on those exchanges, so that people knew what they were investing in. tom: i don't want to cut you off, but you are at the heart of the matter. the work of the sec is audit. i see no evidence whatsoever of legitimate big four audits at
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these accounting firms. sonali: there are some who are audited -- an important point you are making -- but those firms are publicly traded and listed in either canada or the united states. a lot of these exchanges are privately held companies. when you listen to a lot of the testimony being made in congress today, you'll hear a lot about this idea that the venture capitalists let these firms fly away with this behavior. if you are a venture capitalist in the u.s. and you are listing a firm publicly, there is a lockup period. one of the professors testifying today says that extra time that you are required to hold onto your securities, rather than just buying tokens and selling them, will allow you to have a greater alignment of interest here and when you are seeing in the crypto community, both from big and small money. lisa: peter shearer earlier said
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he was surprised there was not broader fallout. he said give it time. how much, behind closed doors, not necessarily on the record, when you talk to officials at these big, financial institutions, are people starting to question their commitment to the crypto networks they have been dabbling in and more? sonali: how much more needs to happen? lawmakers conceded yesterday that the losses sustained from ftx will be larger than what was sustained during bernie mad off. at least half a dozen firms looking to file for bankruptcy or raise money across the street. there has been a lot of contagion. for ftx it cell, we don't even know who their top 50 creditors are. there are firms tied to this, it will take time to play out, but the damage that's been done already has been very material. what happens from quick to from
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their? another thing weighing heavily on senders here is the idea of stablecoin regulation, seeing what to do about central-bank digital currencies. is there a greater digitization of currencies here that make sense in the frame of the current regulatory system? these are questions that should not be conflated amongst each other. there's a difference between buying tokens -- jamie dimon calls them pet rocks -- and the digital currencies tied to real money. lisa: before we let you go, the human story of this, why is sam bankman-fried fighting extradition when the jail he is in is pretty disgusting? sonali: [laughter] you should ask him. this exhibition process will take a long time. it will depend on where he thinks he will get better treatment. another big thing to keep an eye out for as we move forward from this, remember what the said yesterday.
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they are not done. he is not alone. he did not act alone. everything from family members over to his deputies at ftx are now under the spotlight. by the way, many have been seeing here for months in washington, so lawmakers are frustrated as investigators continue to look around and see who else was involved. jon: tremendous over the last month and more. thank you. to her point, this has been a dramatic unraveling in the last month or so, but it looks like we might just be scratching the surface and there is more to come. tom: i am in that camp. i take the lead from kenneth rogoff. what this reminds me, talking to sonali, talking to mr. haynes earlier, the big eight was the big five which included arthur anderson, and they were blown up
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out of enron. i don't know if that happens here because nobody is getting audited. some people allege a questionable audit of binance. lisa: the pet rock comment from jamie dimon is telling because a lot of people don't believe in this. but there are people that do. some of the big investors where the biggest pension funds around the world. how do they deal with the reputational risk, their faith and something that was not regulated, overseas-based companies? this is a harder nut to crack because there were people who bought on that group they rather than having some thesis or auditing skills from historical precedent. jon: how much of that fate has been damaged in the last month? lisa: based on the price action, it doesn't look like that much.
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based on how much people have at stake, perhaps not much. year talking about the potential whales in the market. but it seemed longer-term there has to be some consequences. tom: how does this dialogue change at a price? how does this discussion change at 11,000? jon: you know you are driving people nuts with that bitdog s tuff. lisa: he does it on purpose. tom: get the surveillance cork and put it in my mouth. people know where i am on this. jon: perhaps you should tell them. tom: where is the audit process? why isn't binance saying, we are getting blown up, let's get audited? jon: i don't think they want to say they are blowing him if they are not getting loan. you don't want to say that you
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are getting blown up. tom: where are the liabilities in the balance sheet of these people -- in the bloomberg, it is the currency key, f11. lisa: is has been one of the main complaints of the likes like thether, a stablecoin benchmark to the dollar. where are the demonstrations of what is backing that? i am not saying it is all fluff, etc., but to your point, why not more transparency at a time of real questions? tom: federated, the reserve funds, give them great credit out of pittsburgh. there were points where there was a tension about breaking the book. there is no transparency. jon: bitcoin, 17,088. equity futures down a little more than .1%. counting down to a fed decision in america. big game later this afternoon.
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in new york, this is bloomberg. ♪
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♪ >> very clear that one good anything report isn't going to change his mind. >> getting down to 2% i think is difficult. >> we will come out of this but
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i think the trajectory of how we can out of this depends on the fed's resolve. >> if there is a pathway soft landing, it helps to optimize that. >> we need federal reserve pausing after the final increase in march. announcer: this is "bloomberg surveillance" with tom keene, jonathan ferro lisa abramowicz. tom: it is a fed day, we will be with you at 2:00 p.m., we will have team coverage of both major events this afternoon. right now focused on what we are talking about, the continuing story here. can we just talk some fed here at this hour? i would say he is moving post-pandemic out to where he is, and it is a success, but there is a massive "now what" after that. jonathan: it is a three-part story here. 75 to 50 to 25.
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then, may cuts come down the road. i don't even think they want to talk about the pause just yet, but maybe that starts the news conference later. but how he characterizes the risk around inflation is a skew to the upside. around policy, they still believe they are doing too little, and that final point has been really important and i'm very interested to see how he explains that it is conference later. tom: he didn't mention this last time and maybe he is doing this cagey, now is where he starts talking about cumulative. we did not hear that in the last press conference. jonathan: the language in the statement is the ongoing rate hikes, the ongoing hikes. that signaled there are still more hikes to,. does the market respond to any of this? it starts to push back against rate cuts in the future. does the market listen to any of that?
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for me, we are all focused on the next 100 basis point hiking or more on the rate cuts we are pricing. lisa: and there is a big point underlying this, and credibility. is this the meeting where we see the fed credibility go out the window and everyone knows they are playing some sort of game here? because right now, the fed has said for separately we are not going to cut rates, we are going to hold rates high. they are pricing in a peak of 4.8% in terms of funds back in may, and two months later, three months later, already the cuts. tom: a base of 3.38% because of that statistic you have right now. i am going to go where the market is already doing a parlor game. this idea of wells fargo on the last mile. he is focused on the next mile. jonathan: it takes a long time to get down from seven to 5, 5
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to three. that is the conversation we are basically having at the moment. it has been about 11 months. tom: this is critical. the idea that they come up and they pause and that duration of pause includes -- not going to, but implies the peak in that a larry in, dudley and bullard are talking about. jonathan: there is a lot of pushback. on the street. to lisa's point, people see a difference between what the fed thinks they will do and what the fed is trying to signal. the fed is trying to signal 5% rate because the fed wants to keep financial conditions tight. but a lot of people in this market struggle to believe they will keep it there through next year. lisa: and to your point, are they going to keep them there as they get to the next mile? right now, some people estimate we've only seen about one third of the cumulative effect of fed
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tightening play out in the economy. tom: i would have a higher frame rate. lisa abramowicz has really come on here with the knowledge. brief me and jon about the ability to miraculously shutdown those lanes, particularly on the left side. lisa: morocco has not allowed one goal to get through. their defense has been incredible. how much can they continue the defense, especially considering the fact that they are the first african nation to come out? honestly, i think this is testing. jonathan: they are serious about this. trying to walk on the right side of the fence. fantastic. so the big match this time is hakeem e against but they -- tom: i saw one story, the
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goalkeeper -- lisa: i love that they are all friends, that they give each other hugs on the field as they passed by. jonathan: they are old mates. argentina and the netherlands got a little bit tasty, didn't? tom: back on the board of our fed hour, let me just cut to the chase. that is a number chairman powell doesn't want to see. who is that, first of all? who said that? i would like to respond.
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tom: i don't know, did we do the data check yet? i did the data check, help me out. give me some love. liz young joins us, head of investor strategy. it is about the time continuum which is moving averages and liz young has written about something i can't stand which is the gloomy death cross. liz young, what is the death cross and what does it matter for chairman powell? >> i don't know that it matters for chairman powell, but it matters for investors and it has something that signaled earlier this year with a 50 day moving average goes below the 200 day moving average. that is the death cross. at that point, it is widely believed that the 200 day moving average becomes our top point, a resistance level. and if you watch what the s&p 500 has done this year, we have not been able to break above those resistance levels.
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you can draw those in a couple different ways, but the point is that they have held strong. we got right up to about 4100 and gave a lot of it back, so the market just has not gotten out of that range. jonathan: how does that pushback against what we have felt about disinflation, the fed moving away from some of the more hawkish proclamations? >> i think there is a desire by a lot of investors to be done on this negativity and find some durable upside in the market. but when we sit here with three different yield curve conversions that are very meaningful, and many of those are meaningful to the fed, we've got the three-month 10 year, and now it is called the near-term forward spread inverted, that keep a lid on equity market. and when you look at just the upside opportunity, it is difficult to get past certain levels of valuation and really feel like we deserve to be at that p.e.
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so when you get up to where we are now, it is difficult to really say ok, we are doing that based on strong earnings momentum or strong fundamentals in the economy. it is just not the case right now. lisa: how do you talk with investors in terms of how they should look at next year, how they should look at the fed, how they should look at what may or may not be a recession if you take a look at some of the increasing pullback from recessionary types of scenarios. even alan ruskin saying it is pointing more toward a soft landing many previously thought. lisa: look, yesterday's data was good. that was a positive report in the sense that we surprised to the downside. it signaled to the market that it is possible we avert catastrophe. but we are still not done with this. and here's what i want to hear from jerome powell today. i expect that we will do a 50 basis point hike. i would like to hear how they decided to downshift because it
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will give us a signal of exactly what indicators they are watching the choose whether or not they need to slow down or pause. and that will give us a bit more certainty going into 2023. i also -- sorry, real quick. i'd also like to hear what his definition of restrictive is. tom: yes, interesting. is the stock market one of his indicators as it was for chairman greenspan? >> i think it is one of the indicators for financial conditions, but what we've heard from them is that they are laser focused on inflation and the labor market. the more likely narrative shift will be that we stop hearing so much about ration and we started hearing at the tight labor market much more. jonathan: brilliant as always. thank you. in the bit later, with attention shift from inflation to growth and on that point, delta in the premarket. delta by more than 4% now and
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early trading. in the last hour or so, raising the outlook for profit into year-end for next year as well. lisa: it is a session. this is a pushback. 15%-20% increase in profits, after all of the expenses, they are able to? prices. tom know this intimately. tom: frankly, it is other industries as well. i mean, i kick off the jobs coverage at jp morgan, johnny says the gloom out there is not anecdotally tangible among business. look at that. that is even more important, frankly. jonathan: i've talked about it a million times. said precisely the same thing. tom:tom: to market players, i'm not going to mince words. i hate the death cross with a passion.
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moving averages on a weekly chart, spx gave a signal november 30 and is well-contained right now. that is how adults speak. jonathan: you love your technicals, don't you. why do you bury them, why don't we hear more of them from you? tom: because we don't want technical analysis. we get that from chris verrone. do you want to see me or chris verrone? jonathan: i want to hear from the head of ethics strategy. equities right now down to tense of 1% on the s&p. yields trying to climb higher on the u.s. 10 year. the fed decision coming up a little bit later this afternoon. >> keeping you up-to-date with news around the world with the first word, i'm lisa mateo. ftx co-founder sam bankman-fried plans to fight being sent to the u.s.. he told a judge in the bahamas tuesday that he will not waive his right to an extradition hearing. it was his first court
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appearance since being arrested after prosecutors filed criminal charges. a judge refuses request for bail, calling him a flight risk. the federal reserve is set to moderate its aggressive tightening today. at the same time, the central bank is likely to signal that interest rates will ultimately go higher than is the forecast. policymakers are widely expected to writz -- to raise interest rates by 50 basis points. in the u.k., there is a possibility that the worst of the cost squeeze is over. inflation dipped from a 41 year high in november. consumer prices rose 10.7% from a year earlier, down more than 11% in october. british households are desperate for relief after a big jump in energy and food bills. the biden administration is about to deepen tensions between the worlds's two economic superpowers. it will put china as the leading maker of memory chips and more than 30 other chinese companies on a trade blacklist.
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that will prevent them from buying certain american technology. elon musk reportedly is taking drastic steps to cut cost at twitter. according to the new york times, twitter has not paid rent for its san francisco headquarters or any global offices for weeks. it is also considering not paying severance packages and has refused to pay the almost $200,000 bill for the flights the week of musk's takeover. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
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♪ >> inflation is coming down in america. prices are still too high. things are getting better, headed in the right direction. i hope i the end of next year -- jonathan: the president of the united states following what i is our best fed chromosome far. over the weekend -- tom: i think you missed this on radio. i'm not sure about the switching between radio and tv. there was -- and i was
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suggesting not to the ball over the crossbar as we saw -- jonathan: did you make him make that? tom: my people may have, but i didn't. lisa: what does that mean in terms of fed policy? jonathan: can you make sense of it for us. can't wait for that. joining us now, the head of strategy for north america capital markets. just to go first on the weakness we've seen in the u.s. dollar more recently, since the last fed meeting, is that something that you think the head can pushback against, or do you think the fed should pushback against? >> no, not really. i think the fed's primary concern right now is the inflation rate and the fact that there isn't really too much of a conflict. labor markets are still too tight, prices are still too high for consumers. that means the fed has got to keep policy tight. i don't think there is going to be much today.
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tom: i love, love, love how you say can we just move on from this afternoon? what do we move onto our analysis? >> there's a couple of things happening outside of the united states. outside the united states, with pay attention to what is happening from a lack of perspective in terms of china potentially opening up. that is probably the more important thing for the dollar, and also, we got a lot more drama when it comes to the bank of england, and potentially the ecb. tom: how do you express that? what is the chosen pair? if you see the tensions in london? >> frankfurt and london, the tension is there. the obvious potential is going to be disparity.
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but if we are talking about disparity with the federal reserve, it still could be further into the top side, not least as the ecb is preparing its balance sheet with low repayments. this is without even entertaining q p, which i think is going to be a more important thing as we get into march and april. being further offset i think makes sense in the near term. i do think there are some structural things we need to monitor. lisa: i'm glad that you mentioned it, because it is sort of surprising how quickly they are reopening despite the surge in virus cases and hospitalizations. how much is that not being priced and like you think it should in certain markets? >> that is a very prominent
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concern that we are looking at now. that is why it to 23, we think as we move past this printer and of course the rise in cases from the reopening of the economy, that should dissipate into the background. really, we should return to the cyclicals which, in our view, which will become far more constructive. lisa: how does that affect europe? one of the reasons why we had seen zero strength perhaps is because people see disinflation in the u.s., but also because of energy store piles and this idea that europe is going to get through this winter just fine. if china reopens and that really clipped some of the global demand for increases demand and potentially pressures supplies, particularly of natural gas, what does that do to the euro? >> once we get to this more fair equilibrium wealth, we think it is probably closer to 1, 108.
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at that point, we have to look at more decided risks. one of the reasons why is the competition from china helps to source commodities like that. that is something we are going to be eluded more concerned about. that still doesn't say much for the dollar. the u.s. debt ceiling being triggered, and what that means for the drawdown, also the shifting liabilities of the federal reserve we think are going to be bearish. tom: the terms of inflation linked to the dollar dynamics, they framed as 3%-2% down. at what percentage point in your head do we really get to see a change in currency? is that something near a clear and present reality, or is it later on, farther down that continuum? >> it is a shift.
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this is going to be in it of a copout answer, but we are seeing it already right now. over the last month, the fed has done its job at that point. jonathan: thank you, sir. looking ahead to what is coming up next, we are going to catch up with the chief economist at apollo management in just a moment. here is the lineup for you. we will catch up with bank of america and kathy jones of charles schwab, all coming up in the next hour.
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tom: i'm really interested in what christian with his endowment responsibilities thinks about the return of 60/40. to me, that would be really linked into this fed discussion. tom: everybody has a different view. jonathan: who has a different view on credit? i keep hearing the story that the index is high quality this time around. you won't be able to get that in spreads. wait and see. lisa: the big refinancing cycle comes in 2024 and 2025. if rates stay high for longer, if there is resilience in the economy, that starts to really pressure some of that story. there are some technical issues that are making total sense. the markets basically say we are going back to the past in terms of dropping rates quickly and getting back to inflation that is low. jonathan: we talked about the resiliency of the u.s. economy. we got to talk about the
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resiliency of this market as well. the fact we might and with the s&p down something close to 15%. the fact we might end the year -- where are spreads now? lisa: the lowest since june. it doesn't make a lot of sense to me, i've got to be completely frank, if we think we are heading into a slowdown. then again you have to wonder, perhaps we don't get it. 4.26%. that spreads right now. tom: i'm glad you continued to bring this up. we keep track of our strategists, some don't. mr. cap there was incredibly gloomy a number of weeks ago in london. jonathan: so he is positive on the economy. he is not constructive on equities. it is kind of like the reverse to everybody else. everybody else is saying a weak economy. that means you have to fight -- by it to get the fed is backing away.
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ultimately, the equity market is going to struggle. lisa: that is what neil was talking about as well, that we will not necessarily get a recession. jonathan: i've got my screens ready. that one in the back, that plasma, we know what is going on that. lisa: pretty excited. jonathan: you are excited for the halfback to pass the halfback? tom: the first goal the other day. it is ridiculous.
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♪ tom: it is a different fed day, it is bloomberg surveillance and yes, we will be here this afternoon but we have been strapped in for the last 48 hours by other issues and particularly, all of this issue about cryptocurrency and exchanges. lisa and tom. mr. ferro is in preparation for his 9:00 operative that he will do later. lisa: did you just say opera? tom: well, it has happened before. usually with a beverage in his hand watching a football game. an update on crypto, and this is very important, folks, this is to mr. musk as well.
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twitter spaces is how you communicate now if you are in modest crisis. in the last couple hours, as used twitter space or spaces. to communicate. i'm fascinated by that. lisa: they range from institutions to individuals. the fallout is unclear. the moment was not a moment, it was a cascade of events that transpired over time. it will take time to understand the full fallout here. tom: i think it is new, this is something original. i have no clue what it is, but there it was. right now they are not going to use twitter spaces this afternoon for the press conference. we will wait for sharp questioning always from michael mckee. mr. mckie, i don't want you to give away what the question is today. what is the greatest mystery we need to ask of mr. powell?
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>> probably whether he is favoring morocco or france today. and why they chose to schedule a fed meeting on the day of the world cap semifinal. lisa: oh, come on. >> for those few people who are in the financial markets, they kind of want to know where we are and where we are going in the sense that we know that they are going to be a 50 basis points today and we know they are going to be continuing and a high level. does that mean 25 basis points at the meeting, 25 more? is there a chance that they cut rates if we see inflation continue to fall in the same way that it has? we are not going to do anything into the end of 2023 to key financial markets from loosening even more. those are kind of the front and
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center questions for the chairman today. lisa: how concerned are fed officials about the fact that we have gotten the financial conditions in the last few weeks? >> the looser they get, the more concerned they will be. they know that the combination of good news in terms of inflation, which is what they are looking for, and the fact that the fed is getting close to the end here are going to create these conditions. the question is how far did the conditions go, and can the fed, particularly jay powell, put a floor under that by verbally job owning wall street and suggesting don't get carried away. tom: one final question, and maybe it is with the inflation shift that we saw yesterday and the drama of good markets. can you define cumulative? i think you may actually talk about that more today now that it is going in his direction. when they say cumulative, as the vice chairman has, what exactly
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does that mean? >> that means that they have been getting ever tighter, so rates are rising evermore across the economy. as we know, london variable lags, so that is going to hit the economy at some point in 2023. and it is going to be an accumulation of all these interest rate increases over time. so how does that play out in terms of discouraging additional borrowing? that is what the fed is going to try to guess. they don't really know, but then you throw in on top of that the fact that our neighbors to the north and the ecb are all raising rates as well, and liquidity is a global thing. there is a cumulative impact of the overall economy. it is hard to measure, but they know it is there. tom: thank you so much. he will join us of 12:00 hour along with richard, the former vice chairman of the fed.
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as we said to define cumulative, let's define faster. david now at the world bank. love to use that word as a calculus substitution. what does faster mean as we look at the inflation continuing right now? >> of course, what is very important, interest rates have already gone up and the cumulative effects are beginning to show most importantly that we are seeing a slowdown because those are the sectors that require financing. at the moment, washers, dryers is slowing down. it is this service sector that the fed would like to see slow down at this point. lisa: you said it is too soon to call the all clear but you also have been talking about how there is this strong year-over-year comparison affect that is taking effect and is
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going to drive inflation lower. how should investors look at this? are we heading into the same year that we left, or is this a new, more inflationary environment that we are seeing led by services? >> there is a very important debate in circles about how much is needed. a lot of people saying they are worried inflation might be sticking at 3, 4, 5 percent, but that is not anchored in any model. and there is a very wide range of views. they are saying we will be back at 2% inflation in six months, whereas the fed is saying this will be more like three years. so the question is not whether inflation is falling. everyone agrees that inflation is falling but the question is if you know that supply chains are getting straightened out in the economy is slowing down, you
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can have the combination of inflation coming down potentially faster at the moment. lisa: would tighter financial conditions lead to a faster rate of change, or faster rate of inflation coming down and to a lower multiple? >> that is very critical. it is not clear to me, but there is a very important new want this debate. we're definitely seeing things slowing down, and that is of course helpful in both dragging inflation down and slowing growth and. tightening financial conditions is already happening, in particular on the good side. but on the service side, essentially shut down at the moment. do they want that to spread? there is a very important debate about well, do they really want to slow down financial markets? did they agree it is potentially required? maybe they want to spread this
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out longer. tom: did you see dr. hooper turning to you and saying we do make up a chart here about when the real yield, the real wage slips? part of the service sector idea here is the massive real wages. what is the dynamic as we go through this process chairman powell wants us to go through? you mentioned ig as a risk spreading over from housing. can they successfully manage a lousy, inflation-adjusted wage back to some kind of positive wage? >> about 4 million workers are missing from the labor force, 4 million below trend. that mean for the pressure on wages continues out there and the wage inflation at 5%, the labor market does need to deteriorate, meaning to soften a bit more. but to your point, there is a very important question about can we have inflation coming back to 2% without the labor market? lisa: you are talking about the
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people who are pitted on either side of that exact debate, where the natural rate of inflation will end up. where do you stand? >> from all the fed papers we have looked at, what drove inflation higher, two thirds was probably the cost of supply chains getting straightened out. we will resolve that on its own time. but the one third is going to be much more challenging. the question is the accusative rate increases we've seen, maybe this would be enough to actually slow the economy down. the growth at basically zero for the first two quarters of next year. at slowdown is required to gradually lift the unemployment rate and therefore to get to your question, this soft landing that i think if the most likely scenario. lisa: and other people are starting to agree with you more than they were three weeks ago. perhaps not for a recession in the first half of next year, perhaps pushing it back to later in the year.
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this is not a positive outcome for markets because it indicates the fed will have to keep rates at a high level. steve agree? >> i don't agree. if we do not have a deep recession, earnings will still be ok. if there is a soft landing, i do think markets could go ok. we are going from a time when the fed was saying rates are going up, to now the fed is saying well we can see the peak is insight and we might begin to see rates going sideways. that is the fault was very significant, very high when we were going up. you should begin to see more clarity about the rates, getting close of the point we will have a better idea about where we are going in terms of economic data. the bottom line with that is from having a long risk of lending, we can get this sequencing of inflation coming down. the more we will be wall -- going toward a soft landing scenario.
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tom: most people talk, including me. you do. this was a dump of a shipyard which was a grassroots rockland effort and then governor pataki and the mayor -- i can't remember his name, the mayor started this going into a gorgeous soccer field as well. you are qualified here with team denmark and brooklyn. can morocco actually get this done today? >> they have clearly been the underdog. as lisa was just mentioning, the defense is very, very good. they might lose to france. tom: you think that lisa: is funny over there? i do. >> we will see how far they get. tom: france or, quick? lisa: argentina. >> i'm going to go with france but argentina has some real players.
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i still think france has the upper leg. but let's see. both are very good. they did incredibly well yesterday. tom: would you like to comment on that, lisa? lisa: incredibly creative offense. really enjoyed it. tom: i think it really works out. lisa: but that sounded really smart, tom. that was good. any other references? is that all you've got? tom: you really played well. unfortunately, we have to continue. stay with us on radio and tv. good morning. >> keeping you up-to-date with news from around the world, it could be a long legal battle to get sam bankman-fried back to the u.s. to face fraud charges. the disgraced cofounder of
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crypto exchange ftx told a judge in the bahamas he plants a fight extradition. it was his first court appearance since his arrest monday night. the judge denied his request to be released from custody on bail. the u.s. is said to fill a key demand from ukraine. once there was final approval from president biden, the pentagon will send ukraine patriot air and missile defense batteries. ukraine says patriots are needed to counter the relentless barrage of russian missiles. president biden will try to fix the procession -- perception that the u.s. has neglected africa. he will host a summit today for african leaders. the president will meet with delegations from almost 50 african countries as well as the african union. black rock is changing leadership ranks. the world's largest asset manager is promoting its former head of starship -- stewardship to be cheap operating officer of the global client business.
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meanwhile, a new unit comprised of blackrock's trading and other functions around the firm's relationship of wall street. and an upward trend last week, the mortgage bankers association urges index climbed 4% while borrowing costs stayed near an almost three-month low. the average rate on the 30 year loan kicked up one basis point to a 6.42%. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
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from one company committed to building a world that works, to three that will focus on a future that does too. this is ge healthcare, creating a world where healthcare has no limits. this is ge vernova, helping generate and move the energy that our world needs. this is ge aerospace, advancing flight for future generations. this is the next generation of ge. >> i'm so deeply troubled to learn how common it was for bankman-fried and ftx employees to steal from the cookie jar to finance their lavish lifestyles. >> it appears to be the same
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old-school fraud, just using new technology. tom: facebook yesterday. it was interesting from los angeles, the esteemed congresswoman maxine waters. patrick mchenry, who is rising rapidly in the republican party, as well. we spoke yesterday on these matters in washington. a gentleman from the fields of western michigan, a republican who did speak about the world cup and his dutch ancestry. now, a different conversation. emanuel cleaver is someone i could say grew up in the texas prairie, did politics, and did his religion in kansas city but far more, he did the toughest thing in american politics -- he was the mayor of kansas city for longer than a cup of coffee, for a good 10 years. and i will introduce you today
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with great respect as the mayor of kansas city. you are viscerally tied to people of cities and people -- i'm going to say financially challenged, struggling in america. what are they supposed to make about a fraud and scandal that we see from fancy people, fancy educated. how should america adapt to that. if we are able to see fraud. right now, we need to be extremely prudent and informed as it relates to this new digital dollar enterprise all around the country, the nfl,
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nba, and then people struggling trying to make a living. right now, this trillion dollar enterprise is something that i don't think any person should advise an american to embrace. tom: i'm going to go to the book of james. you have littered the earth and lifted up. something you know so well. people will say in this nation republican, democrat, disaffected. it is about campaign financing. what mr. bankman-fried did in supporting obviously has favor democrats or less favorite republicans. is this another example of how we have to hit our campaign financing, power money to politicians straightened out? >> yes.
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the public is going to have to demand that elected officials vote for campaign finance reform. right now, people are walking around washington who understand how ugly it is, and there are some synonyms of ugly that probably should be used, because it is far worse than the word ugly. and we know that it is a big mess and the people are being purchased. we just saw bankman-fried bragging in some ways about delayed purchases on both sides of the aisle. tom: congressman, do you think that it is important that anyone who received a contribution from him return it? how much progress has been made on that front? >> i think there are some members who are trying to return
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their dollars and there are some saying they didn't know, which is very likely. you may not know who gave it all but right now, everybody knows what is going on. that money should be returned. i think it will send a signal to others who think they can buy a seat in congress that when you do wrong, congress is going to step on your foot and people are going to go to jail. and it is also time for us to seriously consider putting in place some kind of regulations. tom: -- lisa: were you concerned about the timing of the indictment considering the congress members were not aware of that? >> yes, i think probably all of us were surprised.
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i'm told that there was some concern at the department of justice that sam bankman-fried may have wanted to leave the bahamas and go elsewhere. it may have been one of those situations where we had better act now. i don't think any of us know. but it was weird. it shows you how horrible his judgment is. if you just read the opening page, the second line in his statement to the united states congress, unbelievable. tom: i will state that you are a staunch democrat, i believe your record shows that right now. there is immense focus on the
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dynamics of the republican party. after this election and the relative historic success of president biden in your party, what would be the prescription for the democrats to capture centrist voters in america? >> first of all, i think we have to acknowledge that we are moving toward being a party of everyone. we have not been very good in rural america. we have not done very good in --. but i think we can do both of those things. but i think we need to call something if all of nothing when we see it. we also have to understand that people in rural areas are a lot more open about their religion. democrats tend to want to run away from anything even remotely
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close to being religious. so we don't come across as people who can relate to them, people in small communities around the country. lisa: do you want to see president biden run again in 2024? >> yes. i was one of the first individuals in congress to endorse president biden. and i will tell you why. john kerry and i in iowa before the primaries were over, we would have to whopping crowds of about 14 people. and the big crowd that about 25 people showed up. but i stayed with the president because i believe, and i think the facts will prove now, that
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of all of the individuals who wanted to run for the presidency , joe biden was the only one who could defeat donald trump. i think they would have plummeted anybody else except joe biden. i still believe he can win now. tom: thank you for joining us today. i just think we've got to drive forward to the news flow today. we have this hearing coming up which is completely underplayed again, it is going to be more of what we saw today. i'm focus forward. you mentioned the bahamas jails seem to be horrific. and that is the story right now. lisa: congressman cleaver indicating that perhaps the reason why the department of justice moved as quickly as they did was because he potentially was going to move somewhere that didn't have an extradition treaty with the united states
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like the bahamas does. going forward, you raise a great point with respect to finance. this is what peter was resolute into. there may be more shoes to drop. at what point does the end of easing really continue to pressure some of these areas that have grown up under a very accommodative fed? tom: making clear they have a relative calm or at least a lessening of concerns. our day doesn't end. we have to go to radio but lisa, there is a fed meeting this afternoon. lisa: and also a game. honestly, it is an important one. this is going to be an important fed meeting after two consecutive softer than expected cpi prints. does that shift the fed viewpoint? tom: diane swonk.
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jonathan: the fed decision is just around the corner and equity fuses are a little softer, the count down to the open starts now. >> everything you need to get set for the start of u.s. trading. this is bloomberg, the open with jonathan ferro. ♪ jonathan: live from new york city, we begin with investors looking to get a year and rally emboldened by a soft inflation print as fed chair jay powell is coming up next. t


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