WEBVTT - Bloomberg Daybreak: November 23, 2022 - Hour 2 (Radio) 0:00:01.520 --> 0:00:06.160 By from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:00:06.240 --> 0:00:10.559 Daybreak for Wednesday, November two. Coming up this hour. Fd 0:00:10.760 --> 0:00:13.840 X founder Sam Bankman free To apologizes to staff in 0:00:13.880 --> 0:00:17.480 a letter. Credit Sweet warns of a massive fourth quarter loss. 0:00:17.960 --> 0:00:20.959 HP is the latest check company to slash jobs and 0:00:21.079 --> 0:00:24.119 investors away to half does it Economic reports ahead of 0:00:24.120 --> 0:00:27.440 Thanksgiving but deadly mass shooting at a Virginia Walmart. Plus, 0:00:27.480 --> 0:00:29.840 the suspect accused of gunning down people in a gay 0:00:29.880 --> 0:00:33.240 Colorado nightclub has a court appearance today. I'm Michael barr 0:00:33.360 --> 0:00:37.360 More Ahead, I'm John Stashon sports, Ben Simmons returned to Philadelphia. 0:00:37.440 --> 0:00:39.680 The Sixers beat the Nets, the Rangers beat the King. 0:00:39.800 --> 0:00:45.680 St John's beat Syracuse in overtime. That's all straining. Ahead 0:00:45.720 --> 0:00:49.320 on Bloomberg Daybreak on Bloomberg. He Living Free on New York, 0:00:49.479 --> 0:00:54.160 Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:54.440 --> 0:00:58.880 Bloomberg nine sixties and Francisco Sirius x M one nineteen 0:00:59.120 --> 0:01:02.040 and around the world. Old on Bloomberg Radio Dot Carmen 0:01:02.440 --> 0:01:09.520 the Bloomberg business Side. Good Wednesday morning. I'm Amy Morris. 0:01:09.640 --> 0:01:12.520 I'm Nathan Hagar futures are holding study this morning. We're 0:01:12.560 --> 0:01:14.440 coming up to six o one on Wall Street, and 0:01:14.440 --> 0:01:16.920 we checked the markets every fifteen minutes during the trading day. 0:01:17.319 --> 0:01:20.040 On Bloomberg, S and P futures are up three points down, 0:01:20.040 --> 0:01:23.479 futures up twenty three, NASTAC futures are higher by three points. 0:01:23.640 --> 0:01:25.800 Sen Your treasury is up one thirty second. The yield 0:01:25.800 --> 0:01:27.959 three point seven five percent, yield on the two year 0:01:28.040 --> 0:01:30.920 four point five two percent. I'm x screws down one 0:01:30.959 --> 0:01:33.839 point six percent, down a dollar twenty eight at seventy 0:01:33.920 --> 0:01:37.160 nine dollars sixty seven cents. A barrel comex skull down 0:01:37.200 --> 0:01:39.600 one tenth percent or two dollars thirty cents at seventeen 0:01:39.640 --> 0:01:43.039 fifty two fifty announced Amy Nathan will have more on 0:01:43.120 --> 0:01:45.160 the markets in a minute, but first, the latest on 0:01:45.200 --> 0:01:47.520 the fallout from f t X. The founder of the 0:01:47.560 --> 0:01:51.520 collapsed crypto exchange is now apologizing. We get the latest 0:01:51.600 --> 0:01:54.680 with Bloomberg Steve Rappapord, Good morning, Steve, Good morning, Amy 0:01:54.720 --> 0:01:57.640 and Nathan. In the Mia culpa two employees disgraced ft 0:01:57.840 --> 0:02:00.640 X founder Sam bankman Fried said he'd didn't mean for 0:02:00.680 --> 0:02:03.040 any of this to happen and he would give anything 0:02:03.080 --> 0:02:05.560 to go back and do things over again. The crypto 0:02:05.640 --> 0:02:08.200 exchange went belly up about two weeks ago, fueled by 0:02:08.200 --> 0:02:11.080 a credit squeeze, virtual coin sell offs, and what bankman 0:02:11.160 --> 0:02:13.919 Freed calls a run on the bank. He also disclosed 0:02:13.960 --> 0:02:17.919 collateral crashed by fifty one billion dollars as ft X spiraled. 0:02:18.160 --> 0:02:21.400 Bankruptcy proceedings so far paint the company with poor record 0:02:21.480 --> 0:02:24.639 keeping and other questionable practices. Live in New York. I'm 0:02:24.639 --> 0:02:27.440 Steve Rappaport, Bloomberg Bay Break all right, Steve, thank you. 0:02:27.480 --> 0:02:29.520 The collapse of f t X shocked much of the 0:02:29.520 --> 0:02:33.560 financial world, including Cathy Would. The Arc Investment CEO, says 0:02:33.600 --> 0:02:37.360 the exchange clearly lacked oversight. The fact that so many 0:02:37.480 --> 0:02:45.160 people were completely fooled um is quite shocking. And you know, 0:02:45.360 --> 0:02:48.640 I think he had this aura around him or something 0:02:49.280 --> 0:02:54.079 that caused people to to to ask fewer questions than 0:02:54.160 --> 0:02:56.560 might otherwise have been the case. Cathy Would made the 0:02:56.560 --> 0:02:59.079 comments in an interview with Carol Master and Tim Stenovic 0:02:59.160 --> 0:03:02.399 on Bloomberg Viz this week. Catch the show live on 0:03:02.560 --> 0:03:07.200 YouTube weekdays from two to five Eastern. Another major story 0:03:07.240 --> 0:03:10.320 where a following comes from overseas Credit Sweets warning of 0:03:10.400 --> 0:03:13.200 a massive fourth quarter loss. Let's go to London and 0:03:13.240 --> 0:03:15.560 get the latest with Bloomberg's You in Parts, Good Morning 0:03:15.560 --> 0:03:18.200 You in Good Morning, Amy and Nathan. Credit Swiss clients 0:03:18.240 --> 0:03:21.440 pulled as much as eight billion dollars from the bank 0:03:21.560 --> 0:03:24.360 during the first few weeks of this quarter, underlying the 0:03:24.400 --> 0:03:28.919 ongoing concerns over the bank's restructuring efforts after years of scandals. 0:03:29.120 --> 0:03:31.720 The Swiss Bank is warning today it's facing a loss 0:03:31.800 --> 0:03:34.400 of up to one point six billion dollars for the 0:03:34.440 --> 0:03:37.040 final three months of this year, and in China, the 0:03:37.040 --> 0:03:39.360 company is said to be acting at least a third 0:03:39.520 --> 0:03:42.800 of its investment banking workforce. Credit Sweet shares currently down 0:03:42.840 --> 0:03:45.560 almost five percent in London, I'm you in Parts Bloomberg 0:03:45.600 --> 0:03:47.920 day Break, are you in Thanks? Job cuts are continuing 0:03:47.960 --> 0:03:50.280 here in the US as well. The latest in HP, 0:03:50.560 --> 0:03:53.080 the tech company says will eliminate as many as six 0:03:53.120 --> 0:03:56.680 thousand positions over the next three years. HP says declining 0:03:56.720 --> 0:04:00.240 demand from personal computers is cutting into profits and ethan. 0:04:00.280 --> 0:04:03.440 Twitter has also been cutting jobs sharply ever since the 0:04:03.440 --> 0:04:06.080 Elon Musk took over that company, and now we're learning 0:04:06.280 --> 0:04:09.160 it has lost more than half of its in house lawyers. 0:04:09.360 --> 0:04:12.400 Bloomberg's Ed Baxter has that story from our nine sixty 0:04:12.480 --> 0:04:16.599 news room in San Francisco. This includes several senior attorneys, 0:04:16.600 --> 0:04:19.800 and it raises some concerns about the depth of legal 0:04:19.880 --> 0:04:23.320 knowledge that remains with the company. Bloomberg sources say this 0:04:23.440 --> 0:04:27.400 leaves only Head of Litigation James Baker and international legal 0:04:27.480 --> 0:04:30.880 chief for Gina Lima in leadership roles in the department. 0:04:31.279 --> 0:04:33.760 There is enough concern that, the sources say, there may 0:04:33.760 --> 0:04:37.080 not be enough legal expertise remaining in house to know 0:04:37.200 --> 0:04:41.720 which outside law firms are handling certain matters in San Francisco. 0:04:41.800 --> 0:04:44.800 I'm at Baxter Bloomberg Daybreak, Thanks Ed. We're three weeks 0:04:44.839 --> 0:04:47.520 away from the next decision from the Federal Reserve. Central 0:04:47.520 --> 0:04:51.080 Bank officials are speaking on policy. Kansas City Fed President 0:04:51.240 --> 0:04:54.680 Ester George says significant US household savings can have implications 0:04:54.839 --> 0:04:58.160 for how high rates need to rise. While high savings 0:04:58.279 --> 0:05:02.039 is likely to provide momentum a consumption and require higher 0:05:02.080 --> 0:05:05.479 interest rates, it's certainly positive that we see that these 0:05:05.480 --> 0:05:10.560 households are wealthier, less financially constrained, and better ensured. But 0:05:10.720 --> 0:05:15.000 that said, reduced inflation will mean we have to incent 0:05:15.160 --> 0:05:19.479 saving over consumption. Kansas City FED President Ester George made 0:05:19.480 --> 0:05:22.360 the comments in Santiago during a panel discussion hosted by 0:05:22.360 --> 0:05:25.200 the Central Banka Chile. We have a slew of economic 0:05:25.200 --> 0:05:28.360 reports this morning, more than usual ahead of the Thanksgiving 0:05:28.440 --> 0:05:31.600 Day holiday. We get a preview now from Bloomberg Economics 0:05:31.640 --> 0:05:34.960 correspondent Michael McKee, who can't have a holiday until the 0:05:35.040 --> 0:05:38.120 data dump is done. Seven different indicators will be released 0:05:38.120 --> 0:05:42.080 on Thanksgiving Eve. They vary in importance. The capital goods 0:05:42.080 --> 0:05:45.320 section of durable goods orders represents business spending trends, so 0:05:45.560 --> 0:05:48.840 that will get attention. Wall Street watches jobless claims as 0:05:48.920 --> 0:05:50.480 sort of a canary in a coal mine for the 0:05:50.560 --> 0:05:53.039 labor market, and the Fed has made a big deal 0:05:53.080 --> 0:05:57.599 out of the University of Michigan's inflation expectations numbers. Slightly 0:05:57.680 --> 0:06:01.640 less important mortgage applications and new home sales. We know 0:06:01.839 --> 0:06:04.920 higher interest rates are crippling the housing markets. Of interest 0:06:04.960 --> 0:06:08.040 will be whether home prices keep falling. The S and 0:06:08.120 --> 0:06:11.360 P Purchasing Managers indexes will be overshadowed by next week's 0:06:11.440 --> 0:06:14.520 I S M report, and, barring surprise, the minutes of 0:06:14.520 --> 0:06:17.359 the FEDS November second meeting won't likely add much to 0:06:17.400 --> 0:06:20.120 the rate outlook. They're three weeks old and almost everyone 0:06:20.160 --> 0:06:23.200 on the FED has offered their views since that meeting. 0:06:23.440 --> 0:06:26.680 Michael McKee, Bloomberg Daybreak, All right, Mike, thanks, and other news. 0:06:26.720 --> 0:06:29.719 This morning, violent protests broke out of Apple's main iPhone 0:06:29.720 --> 0:06:32.279 making plant in China. Hundreds of workers at the Fox 0:06:32.320 --> 0:06:35.600 con factory battled security personnel after almost a month of 0:06:35.640 --> 0:06:38.680 tough restrictions intended to quash a COVID outbreak. Videos show 0:06:38.760 --> 0:06:40.720 hundreds of workers breaking out of dorm rooms at the 0:06:40.760 --> 0:06:43.839 facility today, and Disney set for a major box officer 0:06:43.839 --> 0:06:45.880 to turn in China. Sours to say it will release 0:06:45.880 --> 0:06:49.200 its latest Avatar film on December six. That would be 0:06:49.240 --> 0:06:51.839 a big lift and a key market for Disney. Previous 0:06:51.880 --> 0:06:56.120 blockbusters have been denied entry amid deteriorating relations between the 0:06:56.200 --> 0:06:59.200 US and China. And we're watching earnings from deer across 0:06:59.200 --> 0:07:03.520 the Bloomberg minal Amy, the agriculture equipment maker, is raising 0:07:03.640 --> 0:07:07.560 its forecast for next year more than an analysts expected. 0:07:08.000 --> 0:07:10.960 SMP futures are higher by four points, staff futures up 0:07:11.000 --> 0:07:14.560 twenty five NASTAC futures higher by five points straight ahead, 0:07:14.600 --> 0:07:17.600 your latest local headlines, and the check of sports. This 0:07:18.200 --> 0:07:24.800 is Bloomberg, all right, Thank you, Nathan, six oh seven 0:07:24.800 --> 0:07:27.040 on Wall Street. Now, let's bring in Michael Barr with 0:07:27.080 --> 0:07:28.920 more on what else is going on in New York 0:07:28.920 --> 0:07:31.560 and around the world. Good morning, Michael, Good morning Amy. 0:07:31.600 --> 0:07:34.960 Authorities in Chesapeake, Virginia are investigating a mass shooting at 0:07:34.960 --> 0:07:39.440 a walmart last night. Six victims were killed. Police spokesperson 0:07:39.560 --> 0:07:42.760 Leo Kazinski says several others are injured. It's sad, you know, 0:07:42.760 --> 0:07:45.200 we're a couple of days before but Thanksgiving holiday, I mean, 0:07:45.240 --> 0:07:47.000 anytime this is said, I mean, it's just it's just 0:07:47.200 --> 0:07:48.640 just a bad time all around. You know, it's just 0:07:48.720 --> 0:07:50.960 for everybody involved, you know, especially the victims, Like this 0:07:51.120 --> 0:07:54.640 is a horrible Police spokesman Kazinski says it's believed there 0:07:54.680 --> 0:07:57.720 was only one shooter, who was also dead. The FBI 0:07:57.880 --> 0:08:01.400 is now assisting in the investigation. The alleged shooter is 0:08:01.440 --> 0:08:04.600 facing possible hate crime charges in the fatal shooting of 0:08:04.760 --> 0:08:08.200 five people at a Colorado Springs gay nightclub. He has 0:08:08.200 --> 0:08:12.600 a court appearance today. The suspects defense team is Lee 0:08:12.720 --> 0:08:16.400 Anderson Aldrich, but they have listed him as non binary. 0:08:16.600 --> 0:08:19.760 New York Governor Kathy Hokell signed two pieces of legislation 0:08:19.800 --> 0:08:22.720 and trying to prevent hate crimes. Hocal says it aims 0:08:22.760 --> 0:08:25.840 to educate people about what is considered hate speech and 0:08:25.880 --> 0:08:30.000 how that speech could potentially turn into violent acts. Ordinary 0:08:30.040 --> 0:08:33.600 New Yorkers are out there seeing the same thing. I 0:08:33.679 --> 0:08:36.240 want them to be part of our team. I want 0:08:36.320 --> 0:08:39.080 others to come with that early warning system when they 0:08:39.120 --> 0:08:41.560 see this or they hear someone in their schools saying something. 0:08:41.960 --> 0:08:44.600 This is what red flag laws are also all about. 0:08:44.880 --> 0:08:48.600 One bill that Governor Hocal sign requires people convicted of 0:08:48.640 --> 0:08:52.720 a hate crime to undergo hate crime prevention training. Governor 0:08:52.760 --> 0:08:55.360 Hokel has also signed one of the most restrictive laws 0:08:55.360 --> 0:08:59.360 in the US on regulating cryptocurrency mining. The bill triggers 0:08:59.440 --> 0:09:02.920 a two year moratorium on new permits for crypto mining 0:09:02.960 --> 0:09:06.319 companies that are powered by fossil fuels. New York City 0:09:06.320 --> 0:09:09.280 Mayor Eric Adams unveiled new plans to close more streets 0:09:09.280 --> 0:09:12.920 in Midtown Manadano traffic in December. Adams says one part 0:09:13.000 --> 0:09:15.400 calls for a section of Fifth Avenue to be closed 0:09:15.400 --> 0:09:18.640 completely to allow holiday shoppers to walk about but this 0:09:18.679 --> 0:09:21.720 cab driver says, that means less room for cars. But 0:09:21.760 --> 0:09:24.280 I think it's horrible to close it, because you're just 0:09:24.320 --> 0:09:27.240 gonna create great luck everywhere else. You know. It's like 0:09:27.559 --> 0:09:32.440 it's like it's like having a blood clock over here. Meanwhile, 0:09:32.480 --> 0:09:35.319 millions of Americans are hitting the roads for the Thanksgiving 0:09:35.320 --> 0:09:38.880 getaway today. Nearly fifty five million Americans are expected to 0:09:38.920 --> 0:09:41.920 travel at least fifty miles from home. An accountant who 0:09:42.000 --> 0:09:45.480 handled the tax returns of some of the Trump organization 0:09:45.559 --> 0:09:48.880 executives told a jury that Donald Trump reported a total 0:09:49.120 --> 0:09:51.920 of about nine hundred million dollars in operating losses over 0:09:51.960 --> 0:09:55.120 two years. Global News twenty four hours a day on 0:09:55.320 --> 0:09:58.600 air and on Bloomberg Quicktake, powered by more than twenty 0:09:58.679 --> 0:10:01.320 seven hundred journalist and antally to more than twenty countries. 0:10:01.440 --> 0:10:04.560 How Michael barn this is Bloomberg game. All right? Thank you, Michael, 0:10:07.480 --> 0:10:09.840 Now for the sports report, brought to you by Price 0:10:09.880 --> 0:10:12.240 State Outy. Here's John's dash our all right, Amy. The 0:10:12.240 --> 0:10:15.040 Philadelphia seventy six ers took Place Simmons with the first 0:10:15.040 --> 0:10:16.960 pick of the draft, and Simmons became an all start 0:10:17.040 --> 0:10:20.400 for them. But things went sour, especially in the playoffs. 0:10:20.520 --> 0:10:23.320 Trained last season to Brooklyn. Last day, his first game 0:10:23.360 --> 0:10:26.200 back in Philly, he got booed. He said he expected 0:10:26.200 --> 0:10:28.439 the booze to be louder. He played fairly well eleven 0:10:28.480 --> 0:10:31.000 points eleven assists, though he was held scoreless in the 0:10:31.080 --> 0:10:33.800 fourth quarter as the Sixers beat the Nets one fifteen 0:10:33.840 --> 0:10:36.480 to one oh six. Philly was without its stars. Center 0:10:36.600 --> 0:10:39.240 Joe l emvied he had been very critical of Simmons 0:10:39.320 --> 0:10:41.800 at the end of his time there. Rangers continued the 0:10:41.880 --> 0:10:44.360 road trip in l a down tune up in second period. 0:10:44.400 --> 0:10:46.880 They scored three in the second, the game was three 0:10:46.960 --> 0:10:52.080 three in the third. Jat Sinjin far corner set play 0:10:52.200 --> 0:10:57.240 the license score Chris Pryder. They worked on that for 0:10:57.280 --> 0:10:59.560 a couple of years. We've seen it from time to 0:10:59.640 --> 0:11:03.600 time at it pays off as a banta. Jat set 0:11:03.640 --> 0:11:06.439 the puck in far side prior to gains the guy 0:11:06.559 --> 0:11:10.080 seat and beats Peterson. The Rangers go back off t Yes, 0:11:10.160 --> 0:11:12.199 being the New York aadic Rider added an empty Netta. 0:11:12.360 --> 0:11:15.480 Rangers beat the King's five three plate tonight in Anaheim. 0:11:15.520 --> 0:11:17.800 Devils Tonight host Toronto, New Jersey. Win would be a 0:11:17.800 --> 0:11:20.480 club record fourteen win in a row like the old 0:11:20.559 --> 0:11:23.440 days of the Big Yet St. John's and Syracuse in Brooklyn, 0:11:23.520 --> 0:11:26.959 they went over time the Red Storm one seventy sixty nine. 0:11:26.960 --> 0:11:29.600 They're now six and oh Giants late today for Dallas 0:11:29.720 --> 0:11:32.160 Big Game tomorrow, both teams seven and three Giants, having 0:11:32.240 --> 0:11:35.360 won in Dallas in two phousand sixteen. Bloomberg News reported 0:11:35.440 --> 0:11:38.120 last summer the Glazer family was considering still in at 0:11:38.160 --> 0:11:40.960 least a minority stake in their ownership of Manchester United, 0:11:41.040 --> 0:11:44.080 the Premier League family now admits the air quote exploring 0:11:44.160 --> 0:11:47.600 strategic alternatives. Their ownership has been criticized by fans of 0:11:47.600 --> 0:11:50.640 the team. John Stash were Bloomberg Sports team all right, 0:11:50.679 --> 0:11:53.200 thank you, john S and p Futures two points higher, 0:11:53.280 --> 0:11:58.079 del Futures up thirteen, Nasty Features down five. This is Bloomberg. 0:12:07.559 --> 0:12:09.880 The Bloomberg Sports Report was brought to you by Audie. 0:12:09.960 --> 0:12:12.200 Don't let someone else drive off in the outie model 0:12:12.240 --> 0:12:14.880 you've always wanted. Visit your local try state autie dealer 0:12:14.880 --> 0:12:16.800 to get behind the wheel of yours today, or visit 0:12:16.840 --> 0:12:23.160 autie Offers dot com for more information, markets, headlines and 0:12:23.360 --> 0:12:26.600 breaking news twenty four hours a day at Bloomberg dot Com, 0:12:26.720 --> 0:12:30.240 The Bloomberg Business Out and at Bloomberg Quick Tape, he's 0:12:30.280 --> 0:12:39.680 a Bloomberg business Flash, Nathan Hager. Futures are holding steady 0:12:39.720 --> 0:12:41.800 ahead of the latest Fed minutes and ahead of a 0:12:41.920 --> 0:12:45.120 slew of economic data this day before Thanksgiving. We checked 0:12:45.120 --> 0:12:47.480 the markets every fifteen minutes during the trading day on 0:12:47.520 --> 0:12:50.560 Bloomberg SMP futures are up a single point right now, 0:12:50.679 --> 0:12:54.280 DALT futures up ten, NASAC futures are lower down by 0:12:54.559 --> 0:12:57.400 one point ten. Your treasury is down one thirty second. 0:12:57.400 --> 0:13:00.000 The yeld three point seven six. You'ld done the two 0:13:00.040 --> 0:13:02.640 year four point five three. Nim X screwed is down 0:13:02.640 --> 0:13:05.200 two percent now down at dollar sixty four seventy nine 0:13:05.200 --> 0:13:07.920 dollars thirty one cents, and barrel comex skull down two 0:13:07.920 --> 0:13:10.079 tenths per cent or two dollar sixty cents at seventeen 0:13:10.120 --> 0:13:12.680 fifty two. Twenty announced the year a one point zero 0:13:12.720 --> 0:13:15.000 three one six against the dollar. The yen one forty 0:13:15.080 --> 0:13:20.320 one point for three. Deer shares are something we're keeping 0:13:20.320 --> 0:13:22.679 an eye on now. With a profit expected to search 0:13:22.760 --> 0:13:25.839 to a record next year, Soaring farm profits continue to 0:13:25.840 --> 0:13:29.400 stoke tractor demand. The world's largest maker of agriculture Machinery 0:13:29.400 --> 0:13:31.559 says NIT and net income for the fiscal year will 0:13:31.600 --> 0:13:33.800 be between eight and eight and a half billion dollars. 0:13:34.160 --> 0:13:36.640 That's after Deer reported fourth quarter earnings that beat the 0:13:36.679 --> 0:13:39.720 average analyst estimate. That's a Bloomberg business flash. And now 0:13:39.760 --> 0:13:42.000 here's Michael Bart the quorum. What's going down around the world. 0:13:42.040 --> 0:13:44.959 Michael Nathan, thank you very much. Seven people, including the 0:13:44.960 --> 0:13:47.880 gun men, are dead and several injured in a shooting 0:13:47.960 --> 0:13:51.280 last night at a Walmart store in Chesapeake, Virginia. A 0:13:51.360 --> 0:13:54.400 statement from Walmart says it is praying for those impacted 0:13:54.520 --> 0:13:58.520 and that it is working closely with law enforcement. Ukrainian 0:13:58.559 --> 0:14:01.640 authorities saying overnight row an attack has struck a hospital 0:14:01.679 --> 0:14:05.760 maternity ward in southern Ukraine, killing a newborn baby. The 0:14:05.760 --> 0:14:08.560 baby's mother and a doctor were pulled alive from the Rebbele. 0:14:08.880 --> 0:14:11.800 In the NBA, the Nets lost in the NHL, the 0:14:11.880 --> 0:14:14.600 Rangers won at the World Cup. Four games are on 0:14:14.640 --> 0:14:18.559 the slate today, including Morocco and Croatia playing right now. 0:14:18.679 --> 0:14:21.880 It is nil nil. Global News twenty four hours a 0:14:21.960 --> 0:14:25.200 day on air end on Bloomberg Quicktech, powered by more 0:14:25.280 --> 0:14:28.080 than twenty seven under journalist analysts in more than a 0:14:28.200 --> 0:14:31.640 hundred twenty countries. How Michael Barr and this is Bloomberg Amy, 0:14:31.880 --> 0:14:34.360 All right, thank you, Michael. It is six nineteen on 0:14:34.520 --> 0:14:37.520 Wall Street Live from the Bloomberg Interactive Broker studios. This 0:14:37.520 --> 0:14:40.840 is Bloomberg Daybreak. Credit Sweets warning of a massive fourth 0:14:40.920 --> 0:14:43.640 quarter loss. We want to talk about that now. Bloomberg's 0:14:43.680 --> 0:14:47.000 Charlie Wells joins us from London. Charlie, good morning to you. 0:14:47.120 --> 0:14:49.680 Thank you for taking the time with us. Credit Sweet 0:14:49.680 --> 0:14:53.760 says it expects losses in wealth management and in investment banking. 0:14:53.840 --> 0:14:56.520 What is going on and how damaging is this? Amy? 0:14:56.600 --> 0:14:59.280 This is not good and it is very damaging. Credit 0:14:59.280 --> 0:15:03.320 Sweet has in how having a horrific it just really 0:15:03.360 --> 0:15:07.200 cannot escape negative headlines. That actually last month it announced 0:15:07.200 --> 0:15:09.840 a turnaround effort, and part of that effort was to 0:15:09.960 --> 0:15:13.120 retreat from Wall Street, to back away from investment banking, 0:15:13.120 --> 0:15:16.680 and really to lean into wealth management, into private banking. 0:15:16.920 --> 0:15:20.760 And so what we're seeing today is massive outflows of 0:15:20.800 --> 0:15:24.560 money from wealth management at Credit Sweee, and that bodes 0:15:24.960 --> 0:15:27.760 very poorly for this turnaround effort, at least at this point. 0:15:28.240 --> 0:15:30.600 Massive out blows because of the lack of trust what's 0:15:30.640 --> 0:15:33.320 the issue. Trust really is a big part of it. 0:15:33.400 --> 0:15:36.760 So we are seeing, um, you know, the bank, excuse me, 0:15:36.960 --> 0:15:39.640 try to regain some of this trust. There was a 0:15:39.640 --> 0:15:42.720 point earlier in the autumn when Credit Squeeze had a 0:15:42.720 --> 0:15:45.200 lot of social media rumors circulating around it. It It was 0:15:45.240 --> 0:15:48.360 almost treated as a meme stock, and some of that 0:15:48.480 --> 0:15:51.400 negative narrative really seems to have taken an impact on 0:15:51.440 --> 0:15:54.000 the way that clients felt about their money in this bank. 0:15:54.520 --> 0:15:57.200 Earlier this morning, we were talking on Bloomberg Radio about 0:15:57.200 --> 0:15:59.840 the extraordinary general meeting in Zurich. What are some of 0:15:59.840 --> 0:16:02.480 the beams to consider from that? Well, the big theme 0:16:02.560 --> 0:16:05.800 here really is to think about existing shareholders in this bank. 0:16:05.840 --> 0:16:08.240 So just this morning we are seeing that share price 0:16:08.320 --> 0:16:10.920 hit a record low. That is not going to be 0:16:11.040 --> 0:16:13.520 very good news for these shareholders. But the other huge 0:16:13.560 --> 0:16:16.520 theme that they're really thinking about is dilution, because in 0:16:16.640 --> 0:16:19.080 order to turn this bank around, one thing that they're 0:16:19.080 --> 0:16:21.560 going to need to do is to raise four billion 0:16:21.680 --> 0:16:24.680 dollars and they're going to do that by issuing potentially 0:16:25.000 --> 0:16:28.720 by issuing new shares to large investors, but also to 0:16:28.840 --> 0:16:31.760 give the rights offering to existing shareholders. Now, what that 0:16:31.840 --> 0:16:35.160 does is it potentially it potentially dilutes the value of 0:16:35.160 --> 0:16:37.520 these shares by up to about a third um and 0:16:37.520 --> 0:16:39.160 so that is not going to bode well for these 0:16:39.160 --> 0:16:43.119 existing shareholders. But proxy advisors have been saying that shareholders 0:16:43.120 --> 0:16:46.960 should vote in favor of this development. That's Charlie. Is 0:16:47.000 --> 0:16:49.800 this a symptom of trouble with other banks as well 0:16:49.840 --> 0:16:52.920 as this isolated credit suites, what's going on throughout the 0:16:52.960 --> 0:16:55.880 industry as a whole? That this is happening. I mean, 0:16:55.920 --> 0:16:58.000 that's a really good question because it sounds like really 0:16:58.040 --> 0:17:00.440 bad news. And when we think back to the financial crisis, 0:17:00.600 --> 0:17:02.040 you know, we think of a layman and we think 0:17:02.040 --> 0:17:05.080 about the contagion that can come um from you know, 0:17:05.119 --> 0:17:09.320 financial difficulties at a single financial institution. Now, what executives 0:17:09.320 --> 0:17:11.320 have made really clear is that this is not a 0:17:11.400 --> 0:17:14.840 layman moment. The bank is capitalized in a healthy way. 0:17:14.840 --> 0:17:17.520 It's a capital ratio is very healthy. Um. So this 0:17:17.600 --> 0:17:20.920 doesn't necessarily speak to you know, broader problems in the 0:17:20.960 --> 0:17:23.440 banking industry. And actually, when you look back to earnings 0:17:23.440 --> 0:17:26.040 from banks in the third quarter, they were doing pretty well. 0:17:26.119 --> 0:17:28.840 And so there are some themes here that are very 0:17:28.920 --> 0:17:31.320 much unique to Credit Suite, which you know has really 0:17:31.359 --> 0:17:34.320 suffered blow after blow, scandal after scandal in a way 0:17:34.320 --> 0:17:37.520 that other Wall Street giants just have not. Because this 0:17:37.600 --> 0:17:41.639 does not seem sustainable. I'm curious what happens next and 0:17:41.680 --> 0:17:43.760 what you are going to be watching for. We have 0:17:43.800 --> 0:17:46.719 about a minute here, Yeah, so really what we you know, 0:17:46.760 --> 0:17:50.080 most immediately want to see how these shareholders vote today 0:17:50.119 --> 0:17:52.480 that um has been that meeting has been going on 0:17:52.560 --> 0:17:54.399 for a few hours now. UM. You know it is 0:17:54.440 --> 0:17:57.040 expected that they will vote in favor of this four 0:17:57.160 --> 0:18:00.000 billion dollar capital increase, but you know, on a day 0:18:00.040 --> 0:18:02.320 like today, you know, expect the unexpected. But we should 0:18:02.359 --> 0:18:04.760 be hearing about that soon. In the longer term, I 0:18:04.760 --> 0:18:07.520 think something that we really need to focus on is 0:18:07.520 --> 0:18:10.600 is this turnaround strategy strategy that was announced just a 0:18:10.640 --> 0:18:12.680 few weeks ago, is that going to stay the course 0:18:12.760 --> 0:18:15.840 or will it be changes? Those outflows of assets are 0:18:15.960 --> 0:18:19.440 very concerning two banks, and the last time that has happened, 0:18:19.440 --> 0:18:21.080 it seems like there was a bit of a strategic 0:18:21.160 --> 0:18:23.400 shift as far as that capital raise that could put 0:18:23.440 --> 0:18:26.480 this today. This news could potentially bring about a change 0:18:26.480 --> 0:18:28.840 in strategy, but that remains to be seen. When you 0:18:28.880 --> 0:18:31.000 talk about a change in strategy. We have another minute here. 0:18:31.040 --> 0:18:33.240 When you talk about a change in strategy, are you 0:18:33.280 --> 0:18:37.320 talking about in personnel or in restructuring. There's you know, 0:18:37.480 --> 0:18:40.159 there's a lot that that could potentially be done. I 0:18:40.160 --> 0:18:42.840 mean when we think about restructuring, when we think about talent. 0:18:43.119 --> 0:18:45.080 Credit Sweez is a bank that has been you know, 0:18:45.200 --> 0:18:48.960 losing staff left, right and center. Um, they are planning on, 0:18:49.200 --> 0:18:53.280 you know, significant layoffs through to the tune of nine 0:18:53.320 --> 0:18:56.080 thousand people. Um. So you know, is there room to 0:18:56.160 --> 0:18:59.400 maneuver there? I'm not sure because costs are so important 0:18:59.440 --> 0:19:01.600 to to nage up this time as well. But I 0:19:01.600 --> 0:19:05.399 think what this really comes to as well is cultural change. 0:19:05.480 --> 0:19:07.800 So what's at least striking about Credit Sweets. They didn't 0:19:07.800 --> 0:19:10.320 need to take a government bail out during the financial crisis. 0:19:10.359 --> 0:19:13.679 That may actually have encouraged risk taking that you know, 0:19:13.840 --> 0:19:16.080 was unhealthy for the bank, and that cultural change is 0:19:16.119 --> 0:19:18.520 something that they will probably need to focus on very seriously. 0:19:19.160 --> 0:19:21.359 All right, Charlie, thank you very much for bringing us 0:19:21.400 --> 0:19:23.439 up to date on what's going on with Credit Sweets. 0:19:23.440 --> 0:19:25.439 We're going to continue to watch this with you. This 0:19:25.480 --> 0:19:28.000 story is not over yet, and it's going to be interesting. 0:19:28.040 --> 0:19:30.600 To see how it plays out, especially as we approach 0:19:30.640 --> 0:19:34.439 and get into Charlie Bloomberg's Charlie Wells. Thank you for 0:19:34.480 --> 0:19:37.080 taking the time with us this morning. Let's check the 0:19:37.119 --> 0:19:40.160 futures markets now S and P futures up three, DAL 0:19:40.280 --> 0:19:45.560 futures up twelve, Nasdaq futures up five. Ten year Treasury unchanged, 0:19:45.600 --> 0:19:48.680 the yield at three point seven five percent. Two year 0:19:48.720 --> 0:19:53.200 yield at four point five three on Wall Streak. Now 0:19:53.240 --> 0:19:55.719 still ahead on Bloomberg Daybreak, We'll check the markets and 0:19:55.760 --> 0:19:59.320 we'll bring you the latest news in business, economics and finance. 0:19:59.480 --> 0:20:02.320 Stay with it on this Wednesday morning. This is Bloomberg 0:20:07.640 --> 0:20:10.520 Bloomberg eleven three oh weather, mostly sunny. We're going up 0:20:10.520 --> 0:20:13.120 to fifty five degrees today with clear skys tonight down 0:20:13.119 --> 0:20:15.800 to thirty five and then for Thanksgiving Day, mostly sunny, 0:20:16.040 --> 0:20:25.920 fifty degrees crimecasting live from the Bloomberg Interactive Broker Studio 0:20:26.000 --> 0:20:29.200 in New York, Bloomberg Elving Freon to Washington, d C. 0:20:29.400 --> 0:20:34.080 Bloomberg to Boston, Bloomberg one oh six, one to San Francisco, 0:20:34.160 --> 0:20:37.600 Bloomberg sixty to the country Sirius XM Chad A one 0:20:37.680 --> 0:20:40.760 nine and around the globe. The Bloomberg Business app and 0:20:40.880 --> 0:20:50.760 Bloomberg Radio dot com. This is Bloomberg Daybreak. It's six 0:20:50.800 --> 0:20:53.399 thirty on Wall Street. Good morning. I'm Any Morris, I'm 0:20:53.480 --> 0:20:55.800 Nathan Hagar. We're about three hours away from the open 0:20:55.840 --> 0:20:57.959 of US training. Time for the five things you need 0:20:58.000 --> 0:21:01.080 to notice start your day. Brought to you by Interactive Brokers. 0:21:01.080 --> 0:21:03.120 Their clients are in interest up to three point three 0:21:03.200 --> 0:21:06.119 three on the idle cash and their brokerage accounts. Visit 0:21:06.160 --> 0:21:09.240 ib kr dot com slash interest rates to earn more 0:21:09.640 --> 0:21:12.159 Up First, the founder of the collapse crypto exchange f 0:21:12.320 --> 0:21:15.880 t X is issuing an apology. Bloomberg Steve Rappaport joins 0:21:15.920 --> 0:21:18.240 US Live with the latest Morning Steve, Good morning, Nathan 0:21:18.240 --> 0:21:20.880 and Amy. In a letter to employees, Sam Bankman Freed 0:21:20.960 --> 0:21:24.159 expressed regret for his oversight failure, adding he wishes the 0:21:24.200 --> 0:21:27.440 company had done many, many things differently. The disgraced ft 0:21:27.640 --> 0:21:30.920 X founder described the perfect storm of credit squeezes, virtual 0:21:30.960 --> 0:21:32.840 coin sell offs, and a run on the bank that 0:21:32.880 --> 0:21:35.800