Preemptive firings

Wall Street workers are bracing for a potential flood of preemptive firings at Morgan Stanley and Goldman Sachs, all tied to a US economic downturn that’s supposedly been looming since summer. Goldman Chief Executive Officer David Solomon said the bank may have to terminate staff in certain areas and exercise caution with its financial resources amid mounting economic uncertainty. Morgan Stanley is to slash its global workforce by about 1,600 people, amounting to roughly 2% of the total. CEO James Gorman seemed to allude to the coming terminations back in October: “We’ve learned some things during Covid about how we can operate more efficiently. So that’s something the management team is working on between now and the end of the year.” It seems the ever-present fear of recession has moved full force from tech companies that fired thousands in recent weeks to financial firms—just in time for the holidays. And while it may not mollify (or save) those nervous financial professionals out there, there’s still a lot of smart money riding on their being no recession at all. —David E. Rovella

Then again, the world economy is facing one of its worst years in three decades as the energy shocks unleashed by Vladimir Putin’s war on Ukraine continue to reverberate. In a new analysis by Bloomberg Economics, growth was forecast to be just 2.4% in 2023. That’s down from an estimated 3.2% this year and the lowest since 1993, excluding the crisis years of 2009 (Great Recession) and 2020 (Pandemic Recession). On Tuesday, stocks fell amid all the gloom and doom. Here’s your markets wrap.

Contagion from the messy implosion of Sam Bankman-Fried’s crypto empire is spilling into the world of decentralized finance, after a hedge fund defaulted on $36 million in debt. Orthogonal Trading said it had been “severely impacted by the collapse of FTX.”

Bluebell Capital Partners is calling on BlackRock to replace Chief Executive Officer Larry Fink over what it says are his failures to move the world’s largest money manager away from investments in fossil fuel including coal. “We are increasingly concerned about the reputational risk (including greenwashing risk) to which you have unreasonably exposed the company, potentially fueling a gap between the ‘talk’ and the ‘walk’ on ESG investing,” Bluebell said in a letter to BlackRock’s board.

It could push America’s dented democracy past the point of no return. That’s the fear among some constitutional scholars about a lawsuit the Republican-appointee controlled Supreme Court will hear tomorrow. In it, North Carolina Republicans are asking the court to make what’s considered by legal scholars to be a fringe theory the law of the land, and with it give state legislatures near untrammeled power over elections. State courts would be powerless to stop measures that could turbocharge the GOP’s two-year-old effort to limit access to voting as well as radical gerrymandering. The most extreme version of the “independent state legislature” theory could allow state lawmakers to ignore the will of the voters in elections. Four of the six members of the high court’s supermajority have expressed some support for the theory in the past.

Jeffrey Sonnenfeld woke up to a bit of encouraging news one day last summer: He was officially an enemy of the Russian state. A professor at Yale University’s School of Management, he had inserted himself into that country’s war on Ukraine by creating a global list of foreign companies that trade in Russia. The list assigns grades to almost 1,400 of them, from an A for complete withdrawal to an F for what he calls “digging in.” It turns out the Kremlin wasn’t too happy about it.

A federal judge threw out a lawsuit against Saudi Crown Prince Mohammed bin Salman for the murder of journalist Jamal Khashoggi, citing a Biden administration claim that he is immune in his newly-appointed post of prime minister. US intelligence experts have said bin Salman approved the brutal killing and dismemberment of Khashoggi, a US resident and Washington Post columnist.

Only legal for four years, sports betting is already big business in America. With two companies dominating the industry, the risks for users may be far bigger than the rewards. On this episode of Bloomberg’s Business of Sports, we explore how the Wild West of online gambling has become a multibillion-dollar empire in which the federal government has left regulation to the states. The states meanwhile have largely left companies like DraftKings and FanDuel to police themselves. As the companies offer more and more ways for gamblers to bet, their solution for the risk of addiction is that users—not them—take the first step.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

Summer and Kam Johnson were elated when they finally found a remedy for their son’s seasonal allergies—raw local honey. In doing so, they changed not only his health, but their family’s future. In this episode of Bloomberg’s Made, we show how the Johnsons built a burgeoning brand that’s become a hit both online and in person, including in New York City’s own Chelsea Market. And along the way, you’ll get some tips on how to become a beekeeper yourself.

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive it in your mailbox daily along with our Weekend Reading edition on Saturdays.