>> we will cut taxes tremendously, for the middle class. little bit, but tremendously. that includes nearly doubling the standard induction that most families take on their taxes, and increasing the child tax credit. added thatresident it is time for both parties to come together on taxes. longtime trump associate roger interviewconcluded an with the house intelligence committee, after more than three hours. stone says he told law makers he is aware of no evidence whatsoever that there was coordination between the trump presidential campaign and russia. to the panel as part of an investigation into russian interference into last year's elections. says hissh president country's considering all options, ranging from military intervention to economic sanctions, against iraq's

kurdish region. he said he hoped the kurdish leadership would abandon names of creating a separate state, and not forced turkey into enforcing sanctions. he added that the landlocked kurdishrdish region would not be able to survive without turkish support. hillary clinton spoke to charlie rose. >> i believe he either has something on donald trump, or trump thinks that putin helped him so much that he is not going to turn on putin. either one is horrifying. at can see the interview 6:00 p.m. and 10:00 p.m. new york time. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪

julia: live from bloomberg world headquarters in new york, i'm julia chatterley. scarlet: i'm scarlet fu. abigail: i'm abigail doolittle. the s&p 500 is turning toward that level of 2500. scarlet: but the question is, "what'd you miss?" holding --akers are are hoping tax reform will pick up steam. chair markng weinberger weighs in, next. what is most uncertain is janet yellen's future at the fed. and nike reports earnings after the bell, and shares of adidas take a hit after an investigation into sports

bribery. "what'd you miss?" the senate is moving on to tax reform, again. ceo's are pinning their hopes on tax reform that is 30 years in the making. president trump has called it a once in a generation opportunity, and executives are taking note, with the business roundtable taking on a multimillion dollar ad campaign. mark weinberger, ceo of earnst & young, joins us now. mark, thanks for joining us. health care failed because republicans couldn't agree, and we are talking about collins and paul. the uc more unity when it comes to tax reform, which is just as complicated if not more, then health care? mark: any legislation has to hit the four p's.

priority, politics, process. the republicans were not united on health care. they did not have agreement on the policy. politics were very difficult. and the process did not work well. they came out with a leadership-led plan and try to sell it to the committees and got rejected and then they were touching up the rest of the year. i think that is a lesson learned. when it comes to tax reform they are operating differently. they are starting with, working with the house and senate, working with all the republicans on a unified plan, and then bringing it through committees instead of having it come from down -- come down from on high. julia: what should be included? you have to separate the signal from the noise. the business community is united by lower rates, competitive rates, and a competitive international system. which means moving toward a territorial system to get that

$2.6 trillion back into the united states. it has got to be fiscally responsible. we know it has to meet the budget window from the process standpoint. but you can't lose sight of the business side. lower rates and a territorial system. the president promised middle-income tax relief and he has to deliver on that. . complicating this is that it requires the budget resolution and the debt ceiling. p.k: that is my fourth process. it helps if you can get the 51 votes. where it is hindered is that you have all these rules for instance, they can't lose every -- can't lose any revenue after year 10. and that is very difficult to design. but the problem is they are probably not can get 60 votes. if they don't use the budget resolution, that is the first

test. then it will go to the house. -- after they do that they start crafting the rules. scarlet: everyone is fond of round numbers when it comes to tax reform. ken griffin of sifted out says rateuld like to see tax that, he says shrinking it from 35% to 50% is unrealistic, given the deficits. rate you're looking at a in the low 20's, or 20, at the end of the day. they're going to repeal of lot , and theeductions credits. and they are going to see if politically, that can survive. startdoesn't, then they putting stuff back in and the rate climbs up from the 20's into somewhere in the low 20's.

speaking of that third includeverall might repealing state and local tax adoptions, something that california and new york rely on. is this wishful thinking? a lot of congressman from those of have already said, no way? mark: this is why it hasn't been done in 30 years. everybody has some issue that they care most about. to get rates down for the middle-income people, to get pass-throughs, they're going to have to get some offsets to get to the lower rates. state andg rid of the local income tax reduction is one of them. let's see if it survives the political system. you are at happens if congressman in one of those blue states and you have to sell that message? upper income people are not going to get as big a

tax cut, or maybe even have a little increase. that will still sell well in the districts if middle-income people get relief. the president is talking about doubling the standard induction, putting childcare in their which is really important to families and women. that will be very beneficial. how does all this play into conversations with your clients? how much does it actually affect business decisions? mark: the business roundtable found 76% saynd if we have tax reform this year, we will are more people. a 6% say they will invest more -- 86% sayequipment they will invest more in capital equipment. and if we don't have tax reform, 96% expect a slowdown in the overall economy. they are relying on this tax cut. reform --ined tax

define tax reform. because if we end up with some watered down version in the end, do they still make those decisions? mark: it has to have a low rate, in the 20's. it has to compete overseas. it has to have middle income tax relief. those of the main things i think president -- the president is looking at. scarlet: there are so many things to keep in mind here. you see a pass through getting lower rates and a more simplified tax code, or are we doomed because of all these special interests? for upper income people and large corporations, the world is not simple. and if he tried to calculate where incomes are, where you can with the click of a mouse, move

something around the world, it is very complicated. but remember, if they double standard reduction is the president proposed, some 80% of americans won't itemize. they will pay their taxes very simply. the other 20% will still have complicated taxes. and corporations, if you get away from some of these deductions and credits that are hard to enforce by the irs, that would simplify it, but i would not say was double. mark weinberger is going to stick with us. from new york, this is bloomberg. ♪

"what'd you miss?"

tax cuts in the bottom line. of honeywell said tax policy that said policy would not be driven by tax cuts. he said, in general, tax planning would not be what drives my capex. david coteike does not make decisions based solely on tax policy. he doesn't say it is a driving force. had you square that with this theory that tax cuts will prompt companies tire more -- to hire more? >> the tax system can distort any decision you have to make.

the forbes 500 u.s. companies have been reduced by 20 for -- been reduced by 25% since 2000. we look back over the last 12 years, and close to 5000 companies would have stayed in the nine states instead of going overseas, if we had a 20% tax rate. they are going to go where the after-tax return is at the highest, but it will be based solely on taxes. one point is important. when you have a tax cut, what is the company going to do with it? the company can't go on vacation. and asked to either increase capital expenditures, they were mages -- pay more wages, or create jobs are in all her positive for the growth, to get to that 3% growth number. the u.s. lost $500 billion in business assets, over that. period. that oeru

so, 4700 companies would have remained in america. is a problem. no ceo wakes up in the morning and says, i want to move my company overseas. but how many companies in the u.s. were acquired by foreign companies in the last 12 years, and headquartered outside the u.s. for tax purposes? the 4700 companies. you should not be worried about where the headquarters is unless it is distorted by the tax code. this does also -- this tells us that the tax code distorted where they headquarters would be? should they actually be forced to be allocating for some of these capital decisions, rather than pushing a shareholders? to forceis hard companies to put their company -- to put their money in one place. but this was a discussion back in president obama's day, when

republicans and democrats were talking about that. today, there is definitely going to be a proposed lower tax on foreign earnings. that money is probably going to go into reducing rates and providing for other tax cuts. and then, going forward, there would be a limited or no tax, especially -- except for attacks on foreign earners. can we talk about the trump administration. you have had various roles in the administrations of george w. bush and bill clinton. that advisoryn council before it was disbanded. what did you learn briefly on that counsel that could offer clues to business leaders on how to engage with the trump administration? mark: i really believe the business community has a responsibility to engage, to bring our expertise and knowledge to the table and help shape their decisions. they are to take the information and use it how they want. so i believe we should be at the

table even when we disagree, and we should speak up when we disagree. i didn't agree with every president on everything, but i thought it was important to be there. the problem with the current administration's advisory councils is that they have been so public. that was distracting from our ability to work with them, because the story became us as opposed to the policy objectives. none of us are walking away from the table and saying, you decide all of this on your own. we are not going to be helpful. the cousin would want to be. we want to get jobs created and bring the economy back to close to 3% growth. julia: will it reform? mark: i don't think we are waiting for that phone call to restart the policy forum, anytime soon. scarlet: if you're going to advise the white house on how to respond to the echo faxed cyber hack, what would you say?

that is kind of a cautionary tale on how to handle private data. mark: we are all of the same side. this is an issue that is not going away. it is one of the biggest threat to companies, governments, individuals. it started out coming after your credit card information and now is going after countries during the public and private sectors have to work together. we have to share information. we have to be able to do things that laws don't allow us to do things -- allow us to do today. this is one of the most important issues we have to address. julia: are people panicking enough? mark: yes. this is almost always a business issues that the companies are talking about. if they are not, they totally should be. scarlet: and what is the best way to advise on the company -- how the government can get involved and should get involved? doctor lookvernment

at the rules and see where we are prohibited from working with them. witty and measly a government if we have a breach of security. they get involved and help trying to shut it off and recover what the data may be, or prevent any further theft. so, they are all active in helping out. i would say we just have to share more information and work together because we are on the same team. great to chat with you, mark. mark weinberger, thanks for joining us. our stock of the hour, next. this is bloomberg. ♪

♪ headline just had a across the bloomberg. bob corker will not seek reelection to the u.s. senate.

bob corker will not seek reelection to the u.s. senate. there has been speculation about this and we have now -- and we now have confirmation. he has said tax reform will be harder than health care reform. time for thes bloomberg business flash. morgan stanley expects more times on the road, three as many, as they launched the model three. the company says it has been generations since we have seen such growth from an auto firm. by 2040 estimates 30 million teslas will be in use. acrossnd executives from europe think italy has done a good job reducing risk in the banking sector. from thee to bloomberg european banking conference in milan. >> -- with two major this trend of

negativity towards italy. >> the vast majority of the problem has been fixed. i don't see the risk anymore, but i see a weak banking sector. >> it is not enough yet but it is definitely progress. i think they had hit an inflection point, were banks in italy are becoming an investable again. sayail: the executives italy still has a long way to go, although jamie dimon says he is bullish on europe area that is your bloomberg business flash. julia: time now for our stock of the hour. bloomberg's oliver renick joins us now.

oliver: we are talking about vapes.ttes and by -- was raised this is a sector that has been hit pretty hard. the fda surprise them, a couple of months back, when they said they were going to investigate e-cigarettes. the stock is headed down by about 20%. gains, were as of nice reprieve for some in the market that otherwise, we are looking at a company that has had a rough summer. oversight -- fda that fda overhang is going to trouble investors. oliver: this is their main

product, this is the product tria and others have. let's jump back into the bloomberg. i'm looking at the financial analysis page and open up the earnings to chart that out. here's what you want to look at for the fiscal, annual earnings. au can see the dbs adjusted, solid climber. in don't see that kind of trajectory, often, over the course of a five-year term. if we jump in and look at the year-over-year growth, this is where the picture becomes more muddled. butbottom line is growing, the year-over-year changes put it, abigail, the kinds of concerns about this industry, overall, which is what happens with traditional cigarettes, who is competing in vape space.

stack upw does altria against its rivals? the rvri am looking at function, relative to value, and it is in the top percentile in terms of cash that covers dividends as well as their operating margin. that is going to go a long wait for investors. scarlet: oliver, thank you. julia: breaking news. german industrial group siemens and all stone confirm they are in a packed to merge their rail units. alstom confirming that they plan to merge in their rail units.

let's take a look and the major indexes. a little changer your. the dow, creeping lower and the nasdaq recovering a little bit, up one half of 1%. this is bloomberg.

♪ julia: "what'd you miss?"

u.s. stocks inching higher, markets not entirely shrugging off janet yellen's speech. a 70% probability of a hike in december. i am julia chatterley. scarlet: i am scarlet fu. abigail: i am abigail doolittle. joe weisenthal is on assignment. if you are viewing us from twitter, we want to welcome you to our live coverage. with ourwe begin market minutes, little changed for the major indexes, with the nasdaq coming up a bit after yesterday's decline of 0.9%. i am looking at sector groups. technology is the big gainer when it comes to the groups within the s&p 500. fairly tepid, only up 0.1%. abigail: a rebound after yesterday's risk off. scarlet: in terms of individual stocks, what we have? abigail: we're looking at apple, a five day chart, but for the

first time in five days. four days down, around the iphone 8. demand was relatively weak. investors have released, thinking it won't be that bad. that tech rebound extended to facebook and alphabet. facebook yesterday had its worst day of the year, down 4.5%. but today up about 1%. nvidia the chipmaker, rebounding a little after a big selloff yesterday. helped out probably by ai technology that is going to be provided to drones. take a look at tesla. all these big tech names had been up about an hour ago, now closing not so high. morgan stanley had a bullish comments that tesla could spike. let's look at this, this two day chart. look at that plunge, down 75%. this, after the company's

alzheimer's disease drug failed. yesterday, this and been out greater than $1 billion market cap. now, less than. scarlet: pretty ugly. julia: let's take a quick look at what is going on, you can see a couple basis points for the u.s. and 10 year. one simple basis point. a different following trump's announcement there and be an announcement wednesday on tax reform. we're looking at a two-year auction. 1.46, the highest since october 2008. a quick check on what is going on as far as europe is concerned, a cross-reference in terms of germany, 41 basis points for the 10 year yield for .he bond -- bund a bit of cautiousness surrounding your.

117.58, around 118 now. a lot of questions being asked if this is braced lower. we saw janet yellen speaking, we do not want to be too cautious about the lack of inflation. but there are the german election results. i also want to show you my chart, because i do not often talk about what is going on in eastern europe. i have talked in the past about concerns about poland and the judicial overhaul plans. get excited. name -- the polish zloty might test the lows. poland is the greatest net recipient of e.u. aid. --s that fly in the face

there are concerns about the ruling party and their efforts with this judicial overhaul and consolidating power. a thank you for sticking with me on that one. scarlet: love it. oil with a breather, gains after yesterday. the bti climbed to a five-year high, just below $52 a barrel. prices supported because of lingering concern turkey may disrupt kurdish oil supply. despiteded on its gains raw ore. this includes think, aluminum, copper and nickel. gold slipping by almost 1%. north korean tensions simmering and traders turning their attention to central banks. cause of an increase in december are now up. those are today's market minutes. abigail: "what'd you miss?" a little job owning from janet yellen.

she struck a middle ground, hike,ing the fed rate despite missing the 2% target. >> a gradual approach is appropriate in light of subdued inflation, and the low neutral real interest rate. which implies the fomc will have limited scope to cut the federal funds rate, should the economy gets hit with adverse shock. we should also be wary of moving to gradually. abigail: her ecb counterpart mario draghi took a more dovish tone. bank of england mark carney will speak thursday. how should investors manic -- navigate? joins us from london. thank you for taking the time. her comments are classic said talks. she says because of uncertainty they have to taper off

gradually, on the other hand, they want to be wary of doing it to gradually. why is that the strategy the fed uses so often? what do think she means there? strategy is toe migrate policy from post level financial crisis wartime policy to peacetime monetary policy. peacetime monetary policy moves to the best guess of neutral interest-rate, but not taking too long to get there. and starting the process of shrinking the fed's balance sheet. they just want to get back to normal. janet yellen in particular ones to get more on her watch, take monetary policy. go with more or less done with the extraordinary policies of the financial crisis. leaving theone is door open, data dependent, which makes sense at this age.

what does this mean for the dollar? of aaid, is this the start broader euro correction, given the move we have seen over the last few days? what he or thoughts on the cross trade? kit: if not now, never. the euro when him faster than we thought. two weeks ago we probably felt we had massive -- maximum has a muslim about the -- maximum pessimism about the u.s. economy, with hurricanes and whatnot. now we are shifting to refocusing on neutral policy as an idea. again, in europe, we have gone from pessimism at the start of the year, too, there are no political clouds on the horizon. the last few years, there are political clouds on the horizon, in italy, germany. all of that means everything is in place for this big euro rally to correct. if not now, never.

the dollar has a chance to make a move higher with decent economic data. optimism about some sort of tax plan, the highest 2-year note in a while. without altering a long-term view about what is happening to it dollar or global economy, will be at least this strong. scarlet: especially if the fed decides to move in december with the fed increase. at the same time, janet yellen had -- what is the word -- she's not quite sure why inflation cannot get the 2%. how does this play into how investors put their money in different asset classes? point, they are not sure what is driving inflation, has got to have repercussions. kit: they are not sure where the phillips curve is.

they do not know if it will turn up and they are worried about being to dovish on monetary policy in then suddenly, the relationship between unemployment and inflation kicks themin, which would leave trying to catch up with what is going on. investors at the moment are viewing the world and saying, free fed funds above 2%, probably not higher than 2.5%. bond yields in a range. i need more yields and that. any time we get a selloff in asset markets generally, the automatic reaction is, i need to find something with yields to survive. emerging assets do well. corporate bonds do well. equities clearly continue to do well. the global investing base looks at that idea that the peak fed something.is 2%

we do show increasingly nervously, we in -- we know this is dangerous. sticking withkes us because we are talking about the outlook for europe and the german election. what that will mean for the functioning of your. this is bloomberg. ♪

mark: republican senator bob corker of tennessee says he will not seek reelection.

in a surprise announcement, he said after discussion with his family, he has "decided i will leave the united states senate before my term expires at the end of 2018." it was the fifth day of no power in puerto rico. hurricane maria devastated the country's power grid in the hottest season of the year. they are working on the aging electricity system. rico'san 1/2 of puerto towers may be down, at least 90% of its distribution line destroyed. it could be weeks if not months before full services restored. basketballant coaches from austin, university of southern california, oklahoma state were among 10 people arrested on federal corruption charges, after they were caught taking thousands of dollars in bribes to steer nba-destined college's ours toward certain agents and financial advisors. -- men,hese men's,

braiding coaches was a business investment. they knew the corrupt coaches, in return from bribes, would pressure players to use their services. they also knew that if and when those young players turned pro, that would mean big bucks for them, in professional fees and profit. mark: those charged include chuck -- you played 13 seasons in the nba, and director of global marketing at adidas. some of the biggest names in finance and real estate are expected to gather it new york city's restaurant as president trump raises money for the republican national committee. knowledge say, for 250 thousand dollars a couple, donors can attend the private roundtable with the president. $100,000 guarantees the vip access. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton.

this is bloomberg. ♪ we have had earnings crossing the bloomberg. third-quarter earnings better than expected in terms of adjusted etf at $2.02, the estimate there $1.84. net sales at $6 billion, the estimate under that at $5.97 billion. they have increased their adjusted revenue forecast and forecasts and adjusted gross margin forecast. 54%, the estimate, 49%. taking the stock higher by 2.4% in after-hours. crossing,ike reporting profit that beat analysts estimate. revenue slightly higher than

what analysts were looking for, $9.1 billion. the question here, we have to dig into the report, is how north american sales looked. that is the big question because there has been a lot of uncertainty, a shift in consumer sneaker preferences from lifestyle to performance. upuess people have built their wardrobe, and it is more replacement of what they already own. and the fact that people are buying a lot of adidas sneakers. that is been weighing on nike shares. julia: doubling market share in the u.s., they really are feeling it. both companies look to asia as a source of growth. yes, u.s. focus, but what they are managing to achieve in asia, as well. scarlet: we will discuss that in about a half hours time. nike shares up.

abigail: "what'd you miss?" we're back with kit juckes societe generale from societe generale. you were writing this morning about how oil is one of the most important markets now, brent crude up 11.5% on the month. its best monthly performance of the year, and you are talking about the idea a stable global economy is behind this. at what point did this become a headwind for the fed or other central banks? it has been a tailwind for investors. but at a certain point, it could be a tax for consumers. how does the fed and other central bankers after this into their policy decision? kit: they are going to look at what it does to consumer prices and see a pickup in inflation. a look at the united states and what it means for the oil producers, the shale firms, that will do well. you are right, this broke out of the range. everyone would be more alarmed

about what it would do to consumption and demand in general. that seems unlikely. concernshis is due to about supply coming from iraq as a result of what is happening with the referendum for a kurdish state and things like that. it suggest we will not go too far. if we are moving higher in the range, it is a symptom of more balance, global economic activity. it is important with a japan doing better, china doing well, europe doing better, the year -- the u.s. trundling along. that is all supported with this idea of said normalization. $70 a barrel for brent, everything changes. but for now, it is ok. the magic mentioned word, i am excited what is going on in japan. abe talking this election stacked. kuroda doing, more

what he has been doing? . what is the target for dollar-yen? kit: it is not very high, it has the closest correlation with u.s. bond yields of any currency in the world. if i cannot see 3% on the tenure know, i am struggling to think about 120 on dollar-yen. [laughter] the value is close to 100. there is going to be a day in the future that i want to be awake for, when the bank of today we have decided to move our target, to, we want to target 1.1% instead of zero. today we have decided to move ouron that day,d to 100 like something being pulled by a elastic. in that direction i think -- elastic in that direction. i think that is more than 12

months away. abenese economy is good, has been optimistic. we will see where we go. if u.s. yields cannot get above 3%, the dollar-yen cannot get above 1.20. abigail: kit juckes thank you so much. we talked to finance minister bill morneau about his plan to tackle the deficit. this is bloomberg. ♪

abigail: "what'd you miss?"

canadian finance minister bill morneau is optimistic that the country's global economy despite a rising dollar, rising interest rates, and slow growth. we had an exclusive interview today at a conference. >> the dollar is always going to be an impact in our trade with the united states. to is a're referring fairly recent increase in the canadian dollar. the investments we made in middle-class canadians and infrastructure, they did help the economy to grow. the dollar was helpful for exporters because it was at a lower rate. do see the current state of the dollar is a reflection of our positive economy. expect as athing we ramification of doing well. but we think we can continue to be successful with that will let -- with that level of the dollar. it will clearly mean we continue to invest in productivity, so

businesses are successful, and we will continue to invest in infrastructure. so that when businesses come here they can see the country works for not only the businesses, but the employees they have. that will help us to continue going on what has been a positive track. >> if not the dollar, what about interest rates? are you worried interest rates theheir current levels and rate of increases we have seen since july and what may lie ahead, will act as a brake on the economy? >> you ask me, do i worry about things? the job of a finance minister is to worry about a lot of things. i would say that the increase is really an expected outcome from a positive economic situation. what we had is 225 basis point increase which is taking off the reduction that was put in place by our central bank governor, when we had a significant

decrease in oil prices. situation where the positive economy has triggered change in interest-rate. we are still at historically low numbers. believe canadians are appreciative of the fact the economy is doing well. we put in stress tests around mortgages. againstre being tested interest rates that are even higher than where we are at right now. there was always going to be some headwinds. but things are positive right now. the increase in rates is a reflection of that positive economic situation. >> canadians what you to be managing the economy. that is one reason they elected you. and foreign managers want you to be monitoring growth, as well. but both groups want to know, given the fact a promise or commitment in your words was made, want to know when you can

get back to those levels. a deficit of $10 billion or less. and at some point in the future, a balanced budget. >> i appreciate that is was some commentators would ask us. what i think is most important is for us to show that we are being fiscally responsible, showing that declining debt as a function of the gdp. to put it in international context, under 1% of gdp this year, that is better than all the other g7 countries except for germany. i would also identify the amount of our debt as a function of gdp, puts us in the best balance sheet of g7 countries. when we decide how we are best going to manage the economy for growth, we need to think about what our advantages arm. having a great balance sheet is in an -- is an advantage. an opportunity to make our country more productive.

that is what we will continue to do. and him and sitting fiscal responsibility is critical along that path. i do think as people see the growth rates we have achieved, they will see that downward is action on our deficit very positive indicator of the kind of government we are. making investments in the right place, but technology -- in the right place, but aknowledging we are in the right place. abigail: that was bill morneau speaking with bloomberg at the fixed income congress -- conference. julia: the end of the line for the gop obamacare repeal efforts? a deeper look at what went wrong. this is bloomberg. ♪

so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. mark: facing certain defeat,

senate republican leaders today decided not to even hold a vote on the gop's latest attempt to repeal and replace the affordable care law. , whoor lindsey graham cosponsored the legislation with bill cassidy, said the fight is not over. >> we are going to get there. to my republican colleagues, we are going to fulfill our promise to repeal and replace. to the american people, we will improve health care for you. at the end of the day, that is the only promise that matters. >> from one end of america to

another, the cassidy-graham a health care disaster, rose to the occasion, and our colleagues had no choice in the fate of opposition from one end of the land to another to withdraw their bill. mark: the abandoned legislation would of transformed much of obamacare spending into grants that states could spend on health programs, with few constraints. in alabama, voters are headed to the polls in a special senate election, for the seat once held by jeff sessions. president trump is supporting luther strange, tweeting this morning, luther strange has been shooting up in the alabama polls since my endorsement. vote today for big luther. strange is being opposed by former alabama chief justice roy moore, known for public we displaying the 10 commandments and opposing gay marriage.

ryan zinke uses nearly 1/3 of his employees are not loyal to him and president trump. speaking to an oil industry group, secretary zinke said he is working to change the department's regulatory culture to be more business-friendly. he says are good people at the interior department, but "the direction has to be clear, you have to hold people accountable." spain's prime minister met with trump at the white house, canceling plans to attend the european summit union this week. this is after tensions from an illegal referendum october 1 derailed plans to pass a budget. leader willled the be ousted if he presses on with the referendum. spanish courts could also suspend catalan leadership. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. ♪ as marc was reporting, senate republicans giving up on their lettuce -- latest bid to replace obamacare. let's get to katherine baicker, from the harris school of public policy. great to have you on the show. i have yet to see anyone surprised by this latest failure. you also see it is nothing to be shocked about? katherine: the politics of it are very complicated. what does seem clear is that a dramatic rollback of medicaid coverage would have left a lot of people without insurance coverage to improve their health. that was of concern to a lot of senators. julia: one area where we can see broader agreement is the need for greater flexibility, to be able to design their own programs, their own coverage, and allow insurers to do the same. the problem with that is that that is surely not going to allow cost to come down, short

or medium term. that is a longer-term play. katherine: there was a lot to be said with giving states and localities flexibility in designing insurance plans that meet the needs of their population. particularly with the rise of comp located chronic conditions, we can do a lot better with insurance plans that really target improvements in those types of health care. the problem is, that comes with a cost. when you expand medicaid, a cost money to give people access to more care. you may slowly bend the cost curve, but one cannot be surprised there is a hefty price tag associated with covering millions of people. scarlet: and then there is the politics of it. even though they control congress, republicans could not agree on how to proceed with a fix for health care. thought the new plan would mean people would lose coverage. on the other hand, rand paul said he did not go far enough. and senator mccain is worried it is too hasty and too partisan.

if the white house and if republicans want to make sure obamacare collapses under its own weight, as they have said in the past, what would be the first way to do that? forhat cannot make payments cost sharing, to refuse to endorse the mandate, to sabotage the next open enrollment? katherine: there are a lot of different segments of the health insurance market that were affected by the aca. there was expansion of medicaid, creation of private health insurance exchanges, reforms to vast majoritythe of privately insured americans to get their insurance through their employer. the issues you are pointing to her all about that small segment, the private health experience -- insurance exchanges where they are subsidized to buy from private insurers, and that market is extremely unstable for some of the reasons you pointed to. if it is unclear to insurers whether cost-sharing subsidies will be in place are not, if it

is unclear to them whether they will get larger role may the exchanges are heavily advertised or not, if they are unclear of the rate setting playing field, it will be very hard for them to set premiums for the next year. and therefore, an appealing to participate in those markets. that kind of uncertainty about the playing field in terms of regulation and subsidies really would drive further instability and potential collapse of that health insurance exchange market. julia: we are already seeing that, hearing insurers say they will have to raise premiums because of the uncertainty. even aside from whether or not they get the subsidy support from the government, and if donald trump signed off on that. what is the fix? what is the short-term fix, to stabilize those markets? does that have to be a bipartisan pull together, and you think this administration is capable of doing that? katherine: the capability is a question beyond my knowledge. but there are readily available, short-term fixes.

those would involve being clear about whether they will be paid, and at what level. not just for this year, but years to come. being clear about advertising and hurdles to enrollment for populations, particularly in states that do not have that much insurers participating in the exchanges. is it going to be a well advertised and easy to sign up for program that would bring in both healthy people and sick people for a good risk pool for those insurers? and what are the rules they will be playing under? knowing that for this year is crucial, but they need to know it for a couple years to come to get the good kind of network contract setup up, to invest in the local market and plan to save -- plan to stay there. is notthe government giving that clarity, perhaps grading a greater problem. abigail: indeed. going forward, what do you think the role of lobbyists for both the insurance industry and health care companies will be? there are a lot of

different stakeholders and the health care system. when you're talking about something pushing 1/5 of gdp, there is a lot of money at stake and many different players from health care providers, doctors, hospitals, nursing homes, to insurers, to device manufacturers, to drug innovators and manufacturers. there are a lot of different people who are very much affected by how much money we're spending on health care and where it is going. it is not surprising they have strongly vested interests. that said, i think we need to think about getting the health peopleto cover the same -- cover more people with the same amount of money. the world would be easy if it was either free to ensure people and benefited their help, or if they did not do any good for people. that expanding subsidies for insurance improves people's health and comes with a price tag, and that makes for a much thornier set of questions.

scarlet: yes, because you to argue over who pays for it. katherine baicker, thank you so much. nike's first quarter earnings eating analyst estimates. and the stock is up a touch. how they are facing increased competition, particularly from -- this is bloomberg. ♪

scarlet: "what'd you miss?" rated it a fraud, another called it a bubble. they are talking about bitcoin. we have an exclusive interview with the famous macro trader to settle this debate. >> there is a big debate, a

raging debate, over cryptocurrencies. what are they, really? are they each traded currencies? >> they are not currencies. >> at least we have resolved that. >> currencies need to be stable. as much as i have spent years, hours,, weeks looking at dollar-yen and the euro. the dollar-yen has been plus or -50% for much of the last 15 years. the euro, the same way. on any given year, this is the biggest year for the dollar, 10%. >> bitcoin drop to 30% in two weeks. >> there is so much instability. i'm not going to buy this class one day for a dollar and will be seven dollars a week later. bitcoin, it of becomes digital gold.

we do not buy and sell -- gold. what are we doing in google shares? for half athat sued google share -- no. but you could. fussed up around bitcoin as a currency. it is a limited supply. do not supply currencies work, they are too easily manipulate a bull -- manipul atable. to buy them.e want >> how high? >> the hard part about speculation, they can go to places you cannot think of. if you think about 1999, we did not have these things. what is interesting about a cell phone is that it gives everybody

tothe planet access participating in this ecosystem. bubble, during the tech if you were an upper-class taiwanese or indian, you could not by cisco or play in the stock market. everybody in the planet can play in this. >> you're making it sound to me that you buy into the metcalf's law that cryptocurrencies, the value of the network is the square of the number of participants? asking, what valuation models applied to bitcoin? >> the way i think about itereum valuation, i think -- think of it as a commodity, a field. you need fuel for each commodity blockchain.eum

i think, how many transactions? i multiply that by a little bit of fuel. the market cap should be the discounted value of the cash flows. what will constrain the price growth is how fast the network and grow. both bitcoin, blockchain and ethereum blockchain have issues with speed at this point. but that you make is, there are a lot of smart people working on that problem. scarlet: that was galaxy gratztor partner mike novo speaking with bloomberg. abigail: a look at the biggest business stories in the news. and france'smens -- will merge. there will be headquarters in the paris area. they own 50% of the new shares. thannta agreed to pay more $1.4 billion to resolve more

than 100,000 cases filed by farmers. the farmers claimed the company improperly marketed its genetically modified corn -- corn seed that caused contamination of u.s. crops and the cut off of chinese imports. dyson, best known as a manufacturer of vacuum players -- cleaners, will build an electric car by 2020. -- they arebesting investing over $1.3 billion, plus batteries to power it. they say it will be "radically different from those designed by other carmakers, including tesla." apple and fitbit are joining the fda's mission to provide health technology to customers. they are among nine major tech companies testing these products. it would allow companies to gain easier approval or to bypass the fda completely. that is your business flash update. julia: authorities bringing

charges against an executive and premier college basketball programs. we will discuss all the details. this is bloomberg. ♪

scarlet: "what'd you miss?" is out with first-quarter earnings that beat analyst estimates. this comes as the company faces stiffer competition from adidas. today's on this and ncaa bombshell. the adidas to scandal shortly. but let's talk about nike, the result.

revenue is pretty much in line. but the bigger story for nike is that it has competition from its rivals. >> if you step back, the revenue was flat. nike did not have sales last quarter, which is significant. they were far and away the market leader for years, often by itself. adidas was clearly struggling in the u.s. and globally for the better part of a decade. now, nike posting flat revenues is considered a win. -- abigail: if we look at these for august, it was disastrous. it looked like athletic consumer where was dropping off. july and august, into a black hole. is that a what we are seeing? businessheir wholesale to foot locker, finish line, was not good. there is a beat on earnings.

they cut some expensive on marketing. maybe are an investor, you want the short-term on that. in the long run, there are big questions about this company and what it will do in the u.s.. julia: they're going direct to consumer, they signed on with amazon. all sorts of things they are trying to do to tackle this to send off what we were talking about earlier, the encroaching on market share, particularly the footwear space of adidas. >> it is more profitable to cut out the minuteman, go outside the retailers. they want to go -- grow online revenue. it is not great news for their retail partners. a bit of a battle between retail partners on themselves. scarlet: in today's headlines, nike responded to the probe by u.s. federal authorities do criminal influence, saying they strongly oppose any form of

manipulation. this comes as someone from adidas was named in this charge from new york prosecutors. you have been writing about this. talk a little bit about what this case looks like to you. the new york prosecutors office, the southern district of you new york -- new york, is talking about laws broken. >> they say this is bribery. assistant coaches were bribed by agents to steer players to that particular -- scarlet: college players. and adidas, the marketing guy at adidas, was giving money to high school kids and their families to send them, to steer them to places like the university of louisville. since when it is illegal to give someone money to send someone to

a school? isn't that a college scholarship? scarlet: you are treading on -- >> this is the whole point. ncaa is not the law. they have rules that are different from federal law. what it looks to me like, is that the fbi has decided to do the ncaa's job and basically criminalize the laws of amateurism. julia: where is the line between bribery and a deal? >> that is a good question. for many years, nike, adidas, reebok, would pay coaches to get their athletes to wear the shoes. using the logic of today's indictment, that is a bribe. they bribe to the coach. abigail: if you are questioning the appropriateness of this, what is the motivation? who is behind it? >> i really want to know. how to the fbi get onto this in the first place?

is this one school ratting out another school, which by the way happens all the time, only they went to the feds. a lot of the bribes were made by fbi agents and by the cooperating -- witness, whoever that is. you have to wonder how much of this was a setup. julia: someone disgruntled, they paid someone a load of money. is, they can make it sound like bribery. but i think it is hard to say these were bribes, because they look like they were transactions that, without the ncaa involved, would be perfectly legal. it is just that we are all kind of brainwashed with this idea that college players cannot get money, high school players cannot get money, and you can't get it out of your head. when you hear this you think, it must be illegal. it does violate ncaa rules, but isn't necessarily illegal?

scarlet: it does not necessarily break the law. a comes up with the issue that college players should be paid by the school, should be able to keep the rights to their on like this. where are we on that debate? that has shifted. >> it has shifted a little bit. they really do not want to pay the players, even as they all make millions of dollars. what has happened, the players are getting better treatment. they are getting a little more money to pay for college, better health care, more food. they are getting treated better, but they aren't going to get paid unless something truly, truly dramatic happens. julia: you are real skeptic on the story. giving prosecutions will take place as a result? >> absolutely. they will be in court, and i will be there to watch it. it will be a lot of fun. [laughter] scarlet: ncaa hasn't responded yet, have it? >> yes, they have said, these are horrible things and we look forward to watching the federal investigation.

scarlet: they are falling in line, not challenging it. >> there is a college bribery hotline now and you can call hotline to report a bribe. julia: takes away investigative work. you. we have breaking news from twitter. characters, perhaps no more because twitter is looking to extend the limits of 280. it will test the ability to tweet with 280 on a small group. "what'd you miss?" this. this is bloomberg. ♪

scarlet: president trump speaks in indiana tomorrow on tax reform.

alisa: i am a alisa parenti in new york, and you are watching "bloomberg technology" first word" is good the senate will not announce a vote --

advance a vote on the graham-cassidy health care bill. federal prosecutors unveiled criminal charges against university coaches, financial advisors, and representatives for sportswear companies accused of mutilating young athletes and and college of stores towards certain sports agents and managers. president trump plans to visit puerto rico next we come after the administration came under blistering criticism for its response to the damage on the island. president trump says it is the earliest he can visit without disrupting recovery operations. hillary clinton says there is more than meets the eye regarding the relationship between presidents trump and vladimir putin. i believe he has something on donald trump, or trump thinks he helped him so much that he will not turn on him. either is horrifying. alisa: y