other than mr. flynn." the former national security adviser pleaded guilty in court today for lying to the fbi. the news sent shockwaves through congress. >> this is seismic in proportion, frankly. this means that mr. mueller is getting very high up in the front change. the reality is, there are very few people left for him to get to between former general flynn and president trump. so it's all closing in on the resident. ,ark: as part of a plea deal flynn has admitted a senior member of the trump transition team directed him to make contract -- contact with russian officials in 2016. according to sources, that person is jared kushner. former fbi director james comey tweeted a bible verse shortly after mr. flynn's guilty plea.

he tweeted -- let righteousness flow like an ever flowing stream. congressman john conyers is the michigan democrat will decide within days whether he will resign -- a longer for congressman john conyers says -- the michigan democrat will decide within days whether he will resign. h isdded that conyers' healt not the best right now. party leaders, including nancy pelosi, have called on 80-year-old conyers to step down. the eu says that british prime minister theresa may has until monday to present its final offer so we can be assessed ahead of a summit in two weeks.

tusk spoke alongside the irish prime minister. the irish prime minister says that they must guarantee there will be no northern border between ireland and the irish republic after britain exits the bloc. day,l news 24 hours a powered by over 120 journalists and analysts. i am mark crumpton. this is bloomberg news. ♪ julie: live from new york, i am julie hyman in for julia chatterley. scarlet: i am scarlet fu. joe: and in joe weisenthal. julie: john mack in washington ways on investors. joe: but the question is "what'd you miss?" nationalousted

security adviser michael flynn pleading guilty to lying to the fbi. he admitted to communicating with the russian ambassador, directed to buy a very senior senior member of the trump transition team. that number was jared kushner according to sources. in allublican tax plan would cost over $3 billion over 10 years. let's get a check on where markets stand. abigail doolittle -- no, i am doing it -- abigail is here with the latest. abigail: we are having an interesting day. the dow, s&p, and the nasdaq all sharply lower. -- lower i should say. they had been sharply lower. the s&p in the nasdaq down .5%.en .3% and the dow at a low, shutting to do

points. the s&p 500, a 45-point range. the largest drop since brexit, uncertainty around what those michael flynn headlines could mean for president trump. and of course we also have tax reform and played. , the small 2000 down cap down more than 2.5%. , it is the worst since may. there had been a weekly gain at the lows, but now the dow and s&p 500 -- the index -- the nasdaq is the odd index out. this is an intraday chart of the dell, to really see what that roller coaster ride looks like. before 11:00, a small gain for the dow, and as those headlines at about michael flynn cooperating with the russia probe came out, and that he may

be testifying against president down 1.4 saw that dive percent at the lows and then coming off the lows, trying to determine what does that mean, the uncertainty. now they are moderating the losses in a pretty significant way. however, when we look at the world markets, we are going to see an interesting picture. tos goes all the way back 2008. what we are looking at here are themonthly declines in red, monthly gains in green. we see the monthly decline after monthly decline, and then in the bull market we have mainly monthly gains. this year up until this day, the first day of december, we have months of gains, but december off to a shaky start. everyone wondering what could stop the bull market we have

been in the middle of, and brexit it will be this political uncertainty that has certainly started today. finally, we have a selloff -- or, excuse me, a rally, confirming the selloff that we have seen for stocks. the 10-year off for basis points. we are showing that in green. bonds are rallying. we have the yen rallying against the dollar, gold up half a percent and the vix. the vix at its height had been at 35%. there is about 4%. at definitely uncertainty on the part of investors going into the weekend as more news and headlines is made on everything. know what isver going to happen next. thank you, abigail doolittle. trump administration official putting tilting after lyingading guilty after to fbi agents. this is not just any senior

trump administration official. this is michael flynn. we are joined now by megan , andy and jeffrey wright he is joining us from washington. jeffrey, let's start with you. this is not just any -- this is not papadopoulos. this is not manafort. this is the highest administration official buspar. what is the significance of all of this? >> i think it is extremely significant for trump, especially that flynn is connected to obstruction of justice and the other, the potential for collusion with russia during the campaign, and a beasley, the involvement of kushner makes a quite personal for trump given his family -- connection to kushner. i think is the worst day yet in the russia probe for trump. joe: megan, would you agree? yes, it is dialed into a very

senior figure in the administration. even more significantly, there is an indication that a plea deal has been breached in terms of ongoing cooperation, in terms of what michael flynn might say about conn's direct involvement, what jared kushner might say, what he was instructed to do, what contacts he was instructed to carry out. that all goes into an obstruction case, a lying case. more dominoes are likely to come on this. a truly extraordinary friday. scarlet: absolutely. the thinking is michael flynn will testify against the president, which will reveal something that will incur a lot of damage. but we know that the president was loyal to flynn up into the end with that stay strong message. what is the likelihood that michael flynn might throw jared kushner or jeff sessions under the bus to save the president? >> hmm.

this point, the deal he has reached with prosecutors tellres him to them everything he knows. i do not think that flynn has any discretion. faces to be honest or he the possibility of putting himself and more hot water. the fact that he has reached an agreement with prosecutors indicates he will be honest about what he knows, regardless of who it implicates. julie: megan, it's interesting. we have been on for couple hours waiting for reaction from the white house -- >> we just got one. julie: a tweet from the president. it has nothing to do with this. it is about rex tillerson and whether he is leaving. administration official saying that tillerson is meeting with sergey lavrov next week, the russian foreign minister. does that tell us anything about how seriously they are taking these allegations? is it just a coincidence? >> we have two discrete

statements. one is the statement from the present the lawyer, ty cobb, saying there's nothing in these single charges against michael flynn that appliqués the present. they were very careful to call him a former obama administration official. say thatare going to he was a liar and he continues to be a liar now. the has been speculation in the media, including ourselves, that rex tillerson, the incredibly beleaguered secretary of state, who has vast differences with the president, is on his way out as soon as christmas. the president repudiating that today. there is speculation this late change of plans is actually because tom cotton and mike pompeo have gotten cold feet in the wake of today's allegations. joe: way to preserve your job if

you are rex tillerson. jeffrey, for a while there has been speculation that trump may just fire mueller. at every turn, is he going to fire mueller? it never seems to happen. i guess the question here, is this the catalyst were you can see trump firing mueller, or is trump boxed into the fact where he cannot fire mueller because it would look to ridiculous t --oo -- too? >> i think there are two sets of concerns. he would have to fire people at the justice department given that sessions has already recused himself. he would have to fire people until he found one willing to fire mueller on his behalf. the other is the political problem. the issue he is facing is the perception he obstructed justice firing james comey. this would make that certain because he would have done it again for a second time. i think he has no good options

here. if he waits and let the investigation play out, it seems likely to come for his family, if not for him. if he takes action and tries to fire mueller, he makes the situation worse. it's a very difficult position. >> he's in a horrible position on both counts, as you said, but this is happening at the time the senate tax bill is playing out, something that you would expect the president to tweet about. it looks like they have enough votes. but such major changes going through this bill at the 11th hour. i was stunned when i saw the alternative minimum tax come back, major changes, medical expense deductions -- you know, this is the biggest change to tax policy in a generation and still major, major changes. he will be 20 about the tax code later on. joe: not even the biggest story. scarlet: minute by minute. thelaire mccaskill,

democrat, saying she got the latest changes from the lobbyists, not her the public and colleagues. "what'd you miss?" a lot. [laughter] scarlet: i'd with that, megan coming thank you both -- up, senate majority leader mitch mcconnell says republicans do have enough votes to pass the tax bill. so what remains to be changed? a lot apparently. this is bloomberg. ♪

scarlet: "what'd you miss?" so the majority leader mitch mcconnell says he has the votes to pass the tax overall with

jeff flake voting yes. senator susan collins has not announced which way she will go p ricci seems to be on board. she tweeted that it will include her amendment to allow taxpayers to $10,000 for state and local property taxes. never say never because this is far from over, isn't it? a lot more can be crammed in at the last minute. reporter: that's right. they have the votes, but they do not have the bill. we have not seen legislative text. they have not finalized it. they are still crafting it. they are still working to make sure the numbers add up and the deficit does not blow beyond $1.5 trillion in a decade. they have not even released that yet. senators hadring different issues. concerned about

the pass-through, others about state and local stuff, like collins, and some who care about the deficit, and originally they wanted some kind of trigger to raise taxes, but the parliamentarian in the senate next -- nixed that. does it seem like they are getting anything through? reporter: it is hard to overestimate how badly the deficit hawks have been shafted. concessionslight with a phaseout on the business expenses. that makes congress less likely to extend it. the only person still holding out on deficit concerns is bob corker. he has said repeatedly he will not vote for the this bill if it adds a penny to the visit, thereby 120 trillion pennies added to the deficit through this bill. it will be a hard to see how he squares that circle. but other senators like susan collins have gotten everything

that she wants. ron johnson has gotten the pass-through with tax rates up to 23%. you know, so people are getting various concessions and that seems to be enough right now. even if collins and corker into being no. is people onre capitol hill do not have copies of the bill, how are american supposed to know how this is going to affect them? one would imagine the american people would like to know if their taxes are going up or down or what is happening, and it does not seem like really have an idea this point, do we? yes, this is precisely what democrats are coming about. senator claire mccaskill of missouri got a list of amendments that republicans are planning to make to the bill at the last minute, before they pass it, from a lobbying shot on k street. p on k street.o

they are blasting the process. she called that "disgusting." senator wyden demanded to know when we would see the final text. senator mcconnell, the republican leader, said there would be plenty of time to read it to read we do not know what that means. it is getting late in the day and they hope to wrap this up, if not the ring today, then in the late hours of the night. this will be a ridiculous question because you keep reiterating there is no bill yet, but from the outlines, from the concessions we have seen, the pass-throughs, some of the concessions, we have seen what senator collins tweeted about that's in the bill -- doesn't seem that there is a big difference between the senate's version and the house version? reporter: i think the is onerough provision significant gulf. the house version imposes a 25% rate with some exceptions in the senate version goes a different way. there are other differences,

too. thesenate bill is expanding medical deductions that the house eliminates. there are things they will have to get ironed out in a conference committee while keeping house and senate republicans on the same page. of how: give us context frenetic and frantic negotiations are going. how does it compare to other legislation that has been pushed through in the senate? i wonder when this extra level of dealmaking in negotiating suggests that passage is more likely, because you would not go through all of these machinations unless it was going to lead to something? reporter: the dealmaking in negotiating is normal. that happens all the time on every piece of legislation. there's nothing unusual in the slightest about that. what is unusual is how quickly they are trying to pass this group. they thought the initial -- we

saw the initial version of the senate will 10 days ago and they want to pass it now. the affects 100 percent of united states economy. this could affect every taxpayer in some way, shape, or form. that is unusually fast. the house took a between 10 at 14 days between releasing its bill and passing it. they are trying to pass this bill before lobbyists and interest groups can really mobilize to take it down. u.s. economy. the that's a very good way of describing how important this bill could be. thank you so much. up next, our stock of the hour go throughs shares the worst day of the year. the political effect on this stock. from new york, this is bloomberg. ♪

scarlet: it is time for the bloomberg business flash. the opioid addiction drug approved by the fda -- available next year, it eases withdrawal symptoms and addict to parents patients. -- i am addicted patients. becausehave pushed back the drug itself is an opioid. former pharmant shkreli to-- martin forfeit a rare wu-tang album. and that is your bloomberg business flash. the time no fear stock of hour, selling off right about the time the michael flynn headlines were coming through where many big names -- north rock off 3%, the of come back a

bit, now down to .4%. now we have more with what this has to do with president trump. >> is interesting. they started to sell off. other defense company started to sell off about the time of the michael flynn headlines, especially the headlines that michael flynn might be willing to testify against president trump. the question whether president trump might be impeached. there is the sense that president trump is a strong defense spending person, but i am trying to set up the surprise i have given up a little bit -- you can see all of these defense stocks out of the election up in a huge way. northrop grumman up the least. now the surprise here -- i was speaking with george ferguson, bloomberg intelligence analysts, and he says it does not have to do with defense. it has to do with tax reform. now that it looks like salt will

be added back in the mortgage, property tax deduction, that could widen deficits, so in the future if something will be caught, it could be defense. he thinks that president trump if he is out of office, if another republican comes into play, that republican will probably be a stronger defense commander-in-chief and probably would have budgets ratchet up. there is a national defense authorization act back in september of $700 billion which is more than the trump administration had actually requested. the defense stocks selloff today may have more to do with tax reform -- but certainly those headlines caused it. to be a lot of ambiguity about the future of defense spending. trump is seen as a hawk, but maybe some people want to spend more? >> it's hard to say. back in the day, he was actually a democrat. all right, abigail

doolittle, thank you so much. the market closes next. let's look at the major indexes. the dow down 37 points. at one point it was off by 350 points. this is bloomberg. ♪ is this a phone?

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[ they go back to my caring

about anything. let's look at a couple individual names. top six automakers -- analysts were looking for a 3.7% advance. you're also looking at ulta

salon cosmetics. double-digit sales. beauty, even though same wase sales rose 10%, that less than analysts anticipated and tighter margins are hurting profits. these things are holding back ulta stop right now. joe: let's look at bonds in the u.s. we see the bounceback in and goodies. there's a fairly substantial dip in the yield. course, more flattening off the curve. and i want to mention the short-term rails in -- rate in canada jumping up nicely. we kind of forgot about canadian jobs today. joe: the canadian jobs coming in nicely. julie: there are a few other

things happening as well. i want to start with the japanese yen. we saw the michael flynn headlines. and really currencies -- the dollar in particular has been a proxy risk. shrugged offve not have minds. we have the dollar fall versus the japanese yen. is the dollar index on the week. even with the decline today, still marginally higher on the week. and i have to unfortunately talk about bitcoin as well. it has been a big week for bitcoin. they are trading just above $10,000. now, finally let's look at commodities. a fair amount of green on the board. intermediate crude is up -- yes, up 1.6%.

wake of opec -- still not up much. the industrial commodities that are often linked to chinese growth, stuff like that, iron ore, zinc, having very nice days as well. iron ore up 5%. scarlet: with more on the market reaction to developments out of washington -- many, many developments, we have our guest. theretoo much to say that was a tumble because of the and thenlynn headlines we ratcheted back those losses and we could get the tax reform bill passed by the senate as early as tomorrow? bei don't think that would

wrong at all. all year long we wanted to focus we shrugged it- off with the policy agenda from the administration, and really, the markets wanted to look at tax reform fast. even with the russian probe, that was a side story for what the markets were focused on. today, with tax reform, and it looks like it will have to senate in go to conference, we have the headlines where the may have a real impediment for the administration going into next year. there are implications of what plea deal michael flynn agreed to, how this will slow down what has been a very slow agenda for the administration going into 2018, which is also going to be a midterm election year, how republicans can actually affect policy going into next year. about taxtalked a lot reform and its interplay with stocks over the past week or so,

but to take another crack at it -- when we talk to economists, they are not super excited about this tax reform. they talk about it being -- a percentew tenths of on gdp, not think sustained. why is the market so excited? for the markets, it's really about the competitiveness of corporate profitability. what it does work operations is, we modeled it out, and the s&p have aht now, it will 25%, 26% tax rate for earnings next year -- it's an automatic 7% increase. for the equity market investor focused on profitability, the biggest driver of what helps stock prices, that is what is really important for them and that's what gets the market excited. selloff.not much of a

the day before was very interesting because there was the mass divergence between tech stocks and everything else, a divergence that has continued with tech stocks performing today -- would you make of that? headlines aside, what you make of the rotation we are seeing? to taxes?ribute it is there something going on with the end of the year? what is the story? >> i think taxes at the start of the week was an excuse to make this rebalance going into the year-end. really we saw this massive .ivergence in performance it was across safety markets. the tech sector was up 30% on the year. so, i think coming through folks will be able to potentially lock in some profits, use the tax reform news to sell off some lofty tech

positions. 1928, going back to december has never been the worst month for the s&p 500. is this year going to be? that could be negative because we have had this streak of gains every single month except for march -- it was marginally lower. so does that tell us anything to judge from history? >> not really. seasonality is always a hard gauge. overalllly the economic, policy trend we want to focus on. is december going to be a down month? maybe. i will have my crystal ball .eady and set for you but it's hard to say with these major crosswinds of policy. today is a perfect example. tax reform looks like it will potentially pass the senate and we get these major headline saying the administration may be

obligated and further collusion with russia and it reversed everything and going through the course of the day, it looks like tax reform will pass the boat and go to conference and that recovered markets. it's hard to say, but i would not count it out, to be fair. scarlet: would not count it out. in terms of the interplay with stocks and bonds and bitcoin, how much attention are investors paying to what treasuries are doing, what bitcoin is doing? were talking about the excitement over tax reform and what it means for corporate profitability. i don't know to what extent --ity markets are focused except for the investors investing in bit come. the implications are probably a lot better for equity investors. -- the investors investing in the groin. bitcoin.ing in

rise, that rates does the pressure on valuations. any kind of selloff in the bond market will potentially derail valuations. to peter chung for walking us through this action in the stock market. coming up, turmoil in washington. we will analyze the aftershocks of michael flynn felt guilty plea. from new york, this is bloomberg. ♪

mark: in mark crumpton with first word news. protesters shouted "lock him up" theichael flynn as he left

courtroom in washington as he pleaded guilty to lying to the fbi about context with the russian ambassador. as part of a plea deal, and has admitted a senior member of the trump transition team direct hit him to make contact with russian officials in 2016. a bloomberg view columnist has learned that person is president also in law and senior adviser jared kushner. trump's son-in-law and senior adviser jared kushner. thetillerson has dismissed idea the white house is considering have him removed. >> it is laughable. cited plansals have to replace them with cia director mike pompeo. president trump tweeted that any talk that tillerson would leave soon is "fake news." senator collins has come out in favor of

the republican tax bill. she had been one of the holdouts. earlier today, senate majority leader mitch mcconnell said there are now enough votes to pass the legislation. party leaders have been working on a holdouts since last night. pope frances asked for forgiveness from refugees in bangladesh over suffering they have endured and pronounced the avoided only aly day earlier in myanmar -- rohing ya. he apologized for the "indifference of the world to their plight." the pontiff added "the presence of god today is gya."called rohin i am mark crumpton. this is bloomberg. julie: thank you, mark.

two major stories we are closely, michael flynn pleading guilty to lying to federal agents, and then there is the gop inching closer to passing a tax bill. bloomberg's deputy managing editor for the u.s. government joins us. kevin, it appears that the republicans have 51 votes, susan collins the latest to sign on. it looks like she is getting concessions on the health care from because she was concerned about the health care mandate repeal. >> some of these confessions of to do with legislation that would help with health care costs, others have to do with tax reductionl for she is claiming she got a handful of deductions, some that are in the bill, some better promises for the future. what we are waiting for is a revised text to come out with changes added in so people know if they are voting on in the hours ahead. so, they have the votes.

so, whatever. but here is what i am curious about. she is getting this stuff on the state of local. some of the other senators are getting stuff on pass-through. don't they have to balance this out somewhere per their own rules? you know, pay for it? do we know what those are going to be? >> that is what we are waiting for to get the final idea of they are making the numbers work. they will make some changes that obviously will cost more money, which will make the bill violate some of the senate budget rules. they will have to find things to offset that. some of that might have to do with monkeying around with the things.er we will go through the full list of changes in the bill comes out. it's not good that no senators have seen that. 51 republican senators have said that they will vote for it. no one has actually seen it. they will have to look at it and see if it will accomplish what they expected it to. scarlet: the last couple

stragglers who said they would sign on say it is because they got something they wanted. bob corker, as you mentioned, is still not committed. he is concerned about the cost of these tax cuts and adding to the deficit. do get the texans the they have to pay for a lot of these goodies and it -- if they do get the text and they see they have to pay for a lot of these goodies, will they be hiding behind bob cooker -- bob corker? could they do the bill? >> at this point it looks like bob corker has lost this is he is even still fighting it. to the degree he had allies, last night, in the fight, they have melted away. if anything, the bill has gotten more expensive. of those allies, jeff flake was one of them, have largely caved. i think you can soundly bell that sounds the end of the

deficit hawks in the republic and party because that is not what this bill is about. there are no more deficit hawks in the report can party. that is a huge story. but i want to turn to the other major story of the day, the flynn news. right now, what teens to be the white house's approach to responding to this in -- to this development? house,ar, in the white they are suggesting themselves from plan, saying, look, this to bes fired for lighting vice president about this meeting. it's not surprising he pleaded guilty to a charge related to that. the most damaging thing with the -- it's what else he is telling mueller. we know he has been talking about conversations with various , regardingofficials the conversation with the russian ambassador during the transition.

so, i think you will see the administration tried to say, hey, these were wide open. there is nothing to be seen here. but they were very strong questions about exactly what was known -- what exactly was known, why flynn was asked to go speak to the russian ambassador, what was said during those meetings, and that might just be the beginning. because then you raise the potential set of questions down the line about how did the president, his team, his advisers respond to the investigation? and obviously we are starting to see charges like lying to investigators come into play. that starts to get you down the road toward obstruction of justice. think we are i hearing there is a holiday party or christmas probably party at the white house going on. is this a media party? what can you tell us? the reason i am curious is, because typically when we have gotten developments in the russian investigation, not only

do you have the president angrily tweeting, but you have reports from inside the white house of the mood there. and i'm curious about this party and what we know. >> the party did happen. it is over. the president came down for about two or three minutes, made a very brief set of pretty generic welcoming remarks and left. one of the advisors at the party, mcglynn, talking, all trying to pretend situation normal, nothing to see here. these guys know how to show their poker faces when they are of public and that's what everybody did. but i think everyone has to have a certain amount of concern thinking about, what exactly does this mean? we are starting to see obviously someone in the middle of the campaign, at the center of that transition team, and obviously held a very senior position in the white house for a time, is now, you know, talking at great length with the special counsel. the real question they have to

be asking themselves is, what is he saying and what they know in a -- and what do they know, and am i going to have to answer questions? scarlet: thank you. markets were fretting earlier, but there does seem to be in next one nation. we get to the bottom of the mystery. this is bloomberg. ♪

joe: "what'd you miss?" europe's overnight england a great known as eonia, has jumped overnight and despite speculation about what was the trigger for this -- we are now learning it may have been caused liquidity into the

market injected by greece's second biggest lender -- i know, very comforted itself, but i am our global macro strategy -- it is a weird story. first of all, what is this? >> it's basically the european fundsn of the fed's market where they lend to each other on a secure basis overnight. it's a relatively small market because a tremendous amount of excess liquidity in the banking system -- generally speaking banks do not need to raise money in this market. joe: if you have a lot of liquidity you do not need to spend a lot. typically when you see the spikes in the past, they are associated with real financial markets? no.es and prior to the ecb qe program when there was less liquidity you would see these where a bank needed to cover its liquidity

situation over what is known as the turn in the money markets. chart wehe fed eonia just showed, i think we see here and there. >> not really. a little bit further. to put it in context, in the fed funds market you typically see that move by 10 basis -- in fact, it works the other way in the fed funds market, with an excess of liquidity. joe: got it. >> and you will see -- you will see a dip by about 10 basis points. it used to rise by 10 basis points. joe: ok, let's get to the answer. so, there's nothing really going wrong in europe right now. the banking system seems to be fine. no real stresses. than the last few days -- yeah, since the qe program,

this thing has been flatlining. we are in a bull market were literally nothing is going on and all of a sudden you see it -34 from -36 two -30, -32 -- -20 four and there were a number of possibilities. someone interesting is is in real trouble and they need to reach up for funds, no matter what the price. there's also more technical issues. maybe someone missed what is called the medium-term refinancing operation on tuesday. and then there is the greek bond swap that is going to happen. you have to announce your per dissipation by november 28. you have to announce your participation by november 28. as quick -- greek bank to turn this into the great government and then they would

have to finance and raise money in the eonian market. but then they have got what they think is a pretty good handle on this story, which is what contrary to someone being in trouble. they have a surplus of cash. and they decided, well, let's try to lend it, see if we can get someone to borrow it from us in this market, and real quickly, -- shock you to hear greek banks are not exactly credit worthy on the street. for them, darling at minus seven basis points is a heck of a lot cheaper than they can get if they ring the doorbell and say, brother, can you spare a dime? mystery great eonian solved. thank you for explaining it. julie: thanks for getting to the bottom of that, joe and cameron. will be ian shepherdson

here to break down global economic growth. from new york, this is bloomberg. ♪

mark: as senators prepared to vote on a republican tax reform shows 51loomberg count senators in favor of the legislation, with maine senator susan collins announcing she will vote yes. that gives republicans 51 votes. the lone holdout is tennessee's bob corker. the white house lawyer says nothing about michael flynn's guilty plea and locate anyone other than mr. flynn. the former national security adviser today pleaded guilty in federal court to making false statements to the fbi. today's news sent shockwaves

through congress. >> this is epic. this is seismic in proportion, mainly, because it means director mueller is getting very high up in the food chain. the reality is there are very few people left for him to get to between former general flynn president trump. it is all closing in on the president, there is no doubt about it. has admitted that a senior member of the trump transition team directed him to make contact with russian officials in 20 16. eli lake has learned that person is president trump's son-in-law, white house advisor jared kushner. saysyer for john conyers the michigan democrat will decide in days if he will design. conyers, who faces sexual harassment allegations from former staffers, will be the one who decides his political

future, not anyone in washington. as that conyers' health is not the best right now. the congressman has been hospitalized with stress-related symptoms. house democrats, including minority leader nancy pelosi, called on the democrat to step down. the u.s. ambassador to the u.k. trump andesident prime minister theresa may have a good relationship despite the dispute over the president's tweets. no date has said been set for the president to visit the u.k.. there were tentative plans for the president to go to london next month for the opening of the new u.s. embassy, but that trip is now off. a series of failures -- that's how a former federal prosecutor describes law enforcement's response to a deadly white nationalists rally in charlottesville, virginia. the lack of preparation and poor coordination between cities and state police.

global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. stocks clawing back many of their losses. as you can see, they are closing down 41the dow closing points. the big trigger for today's decline was the headlines, michael flynn pleading guilty to charges that he lied to federal agents. joe: momentary brief panic on that. scarlet: but then tax reform took over. you can see we finished the day down, but not the week. julie: we are just one week away from the u.s. jobs report. remember that? remember the economy? these will be the numbers that policymakers look closely at before the federal reserve makes it next rate decision on december 13. janet yellen's last press

conference is expected to bring news of another hike. you also have the ecb and boe making their rate decisions the same week. what are the prospects for global economic growth? we are joined by the founder and chief economist at pantheon macroeconomics. i say that because obviously, we are distracted by what is happening in washington today, but if you take a step back, not just from the michael flynn situation, but from the tax overhaul or tax cut here in the united states and look at the global growth picture, what do you see? scarlet: it does not get much better than this. it is pretty much everywhere with one or two exceptions, but really, this is strong growth everywhere. it is a services story, and industrial story, a trade story, everything we have wanted to see for the last six or seven years happening. this is great. the flipside is that the labor market, especially here in the u.s., is getting very tight now.

this is what policymakers are worried about. they're looking ahead thinking that if this carries on, this time next year, we could be's hitting with an unincorporated 3%. joe: that sounds like good news. mr.rlet: up to -- a point.on: up to joe: saying unemployment was a 6%, would you have guessed we would be down at 4.1% with as little inflation as we've got? mr. shepherdson: i got that one wrong, but we are beginning to see wage inflation creep higher. businesses are saying they cannot find the people they want to hire. so they are starting to have to pay more. they're expecting to pay more, they are paying more, and this makes the fed nervous because the fed historically has been much more concerned about the tightness of the labor market than the current inflation numbers because in their view, the tightness of the labor market shows where inflation will be in a year's time or 18 months time.

you pull that interest rate lever, the economy does not slow down immediately. you have to be thinking ahead constantly, so this is what janet yellen talked about recently. we cannot win for unemployment to get to 3.5% or whatever before they take action to dampen things. skied: what is the inflation pick up going to look like? will it be slow and steady or moved pretty quickly where you go from here to here in a matter of months? mr. shepherdson: a bit of both, actually. the euro for your core inflation rate and the headline inflation rate will start to rise quite quickly. that is just math. the question is what happens to the numbers on top of it, the monthly gains? that is also tied in pretty closely with what happens in the labor market, to the wage numbers, because a huge chunk of the cpi is rent. rent is driven by wage growth. if we see faster wage growth, we will see a big pickup and numbers.

everyone is expecting this year-over-year anniversary affect. what worries me is if we see we just pick up quickly, we have that at a push. by next fall, we could be looking at core inflation rates of 2%, andwell north that is not in the market right now. julie: do you think new federal reserve chair powell will be a sponsor the low enough or not just responsible enough, but see it enough in advance? think staffson: i will be pushing in that direction and howell has been at the fed for five years now. he is new to that seat but is not new at the fed. he has made noises about the tightening at the labor market. we are also seeing some of the regional fed guys getting more aggressive as well. there is talk just this week about the risk of overheating in the labor market. this is the sort of language you expect when the fed is pushing a

tightening cycle, but the market does not quite believe them, and this is where the conflict comes .ext year joe: what do you make of the tax-cut? mr. shepherdson: it is the wrong bill at the wrong time. the economy does not need fiscal stimulus of any sort right now. for five years ago, i would say do something. i would not say do this because the structure of the bill is terrible, but it just makes no sense. joe: defenders of the bill say this is really not supposed to be procyclical policy or even stimulative. there is a bunch of inefficiencies in the corporate tax code. they have it now. they can lower the rate, broaden the base. what is wrong with that argument? mr. shepherdson: it's not true, mostly. u.s. corporate taxes pay on

value average. joe: it is inefficient. if the actual rate is fairly low, then there's opportunities. absolutely.son: businesses have to pay accountants to game the system -- i get all that, but that is not what this bill is about. most of the benefits are going to big corporations, private equity funds, rich individuals. it is about a big tax cut, a giveaway for the donors rather than a fundamental restructuring in an economically efficient way. you could spend this next trillion dollars in a much more efficient way than this, but even if you are doing that, do not do it now when unemployment is 4.1 or heading to 3.3. maybe save it for the next downturn. there's going to be one. julie: maybe republicans will not be in control in. mr. shepherdson: well, yes. my guess is they will not be in control november, but it's the wrong structure of bill at the

wrong time. we have breaking news now on american airlines. american and its pilots entered agreement to settle agreements on overtime for pilots. the allied pilots association says american airlines should maintain its full the summer schedule. these were comments that were posted on its union website. we do not have the exact details yet. the american airlines pilots union did not discuss details but they reach an agreement to staff to summer flights, so good news for anyone flying american over the holidays. coming up, another sexual harassment allegation making headlines, this time in silicon valley. emily chang has more on what kind of charges a leading tech investor faces now. this is bloomberg. ♪

scarlet: it's time for a look at some of the biggest business stories in the news right now. blackstone teaming up with its brazilian partner. according to people familiar with the situation, it's one of three bids for the natural gas network in brazil. the deal is expected to close in the first half of 2018. we should mention the chairman of bloomberg lp is a nonexecutive director at blackstone. anpbell's soup is starting online delivery service next month. the pilot program will be -- bring food to customers' doors to heat up at home. the company is also making packaged soup in glass containers, trying to rebound

from a slump. the average warehouse size is now 180 8000 square feet. that, in turn, is triggering another industry boom, which is warehouse automation -- 188,000 square feet. julie: "what'd you miss?" investorilicon valley shervin pishevar has been accused of sexual misconduct. he faces allegations from a total of six women, one of whom an uber executive, who allegedly was groped by pishevar at parties and later subjected to unwanted sexual advances. joining us is bloomberg asked emily chang -- bloomberg costs emily chang.s we've seen allegations making their way across hollywood,

washington. silicon valley now part of what has been going on and what has been coming out. in silicon valley, we've been doing our own investigating of powerful men who we have been told behave badly, and shervin pishevar is one of those men. we've been told this story for many months, and we now have the accounts involving six women who received unwanted advances or were sexually harassed by him. a longtime executive at uber, a current and former colleague at uber say she was groped by uber's pishevar at holiday party and 2014. he denies the allegation. he says the two always had a friendly and professional relationships and referred us to a source who was at the party who says he could not have groped her because he had arrived to the party with a live .ony wearing a santa hat

he had the pony leash in one hand and a drink in the other. it is an interesting statement -- it is an interesting different. we got a statement from his attorney, who said, "we are confident that these anecdotes will be shown to be untrue. mr. pishevar is confident he will be vindicated." we also reported the accounts of five separate women who declined to let us use their names out of fear retribution -- fear of .etaliation discussn met him to career opportunities, and he toited her back to his home discuss career opportunities where he forcibly kissed her. she pushed him off and left. these stories are quite graphic. you can read the story for yourself, but six accounts

reported in this story of unwanted advances. these accounts pretty much indicate that behavior. tell us a little about shervin pishevar. who is he? he is linked to uber, and that's partly why it grabs our attention, but is he well-known in silicon valley or is he known overseas as well? emily: he is well known in silicon valley, across the country, and overseas. he has documented his relationship with russian president vladimir putin. he is a major democratic party donor. he has given money to hillary clinton, to barack obama, to senator cory booker. he is very well connected in hollywood. good friends of leonardo dicaprio and edward norton. as for his tech investments, he is a big early backer of uber. he is very close friends with travis kalanick. lawsuit by the

benchmark. his also an investor in airbnb. he has his own fund now called sherpa capital and is also the one, whichhyperloop as you know is an idea put out by elon musk, and he put up the funds to make this futuristic technology a reality. we have been calling folks all been callinge have folks all day long and will update you with more information as we get it. julie: you said these women do not want to give their names out of fear of retaliation, which is interesting given the wave of women we've heard in different industries, some of whom have named themselves and some of whom have not, but what does that say about still the environment in silicon valley that they did not want to reveal their identities? relationships are

everything here, and many of these women expressed concerns for their careers. there is something that makes lotshervin pishevar story a more, located. he was arrested for sexual assault in london in may. he was released and no charges were ever filed. he later filed a lawsuit against a company he calls a republican , forition research firm claiming to smear him in regards to the incident, and that that lawsuit actually discouraged a number of the women we had been speaking to from speaking out. they had originally agreed to speak to us on the record. after they saw that lawsuit, they decided not to. he is, as we have seen, willing to be fairly litigious, and many of these women we spoke to consider that when speaking out. joe: we've seen an extraordinary number of development over the last several weeks, several months, in all kinds of industries, as julie mentioned

in the beginning. aboutre anything distinct the way this is playing out in silicon valley right now? how does this look from your perspective? we see lots of media stuff here. what is the silicon valley perspective on all of this? emily: all the things you see happening in the media industry and politics, those things are happening here as well. you have reporters working on these stories from all angles, asking for names, asking women to come forward. we are having many conversations behind the scenes about particular investors whom we have been told have been behaving that way. it is a difficult story to report, difficult to even ask around without spreading rumors, so we have all had to be very careful in how we report this story and how we ask our sources about these stories, but the floodgates opened here. you will remember back in june when an investor of binary

capital, the information came out with a story about him in which six women said that they were sexually harassed or assaulted by him, and three of those women went on the record. that story, we're told, would never have been told or publicized, the information, if those three women had not come forward. that was a very critical moment. the women who did come forward have received a lot of support. so that has given others more confidence to pursue these stories, speak out about these stories. we hope that more women will come forward when it comes to as i saidshevar, but earlier, the circumstances here are very specific and many of the women we spoke to are very scared. : unfortunately, that is true of all too many women in these situations. thank you for bringing us this story. we have breaking news out of washington. bob corker, republican from

tennessee, is a no on the senate tax bill. he has been consistently concerned about what it would add to the deficit. he talked about that in his statement, he talks about his concern about the impact a rapidly growing $20 trillion national debt will have on our children and grandchildren. he said he wanted to get to yes on this legislation and does believe that senate leadership negotiated in good they've but could not quite get it there. remember, corker is not running for reelection. also recall that the senate now is at 51 votes. even if he were running, it them not necessarily cost anything for him to vote no on it. scarlet: although susan collins has not quite said yes yet, has she? joe: no, she is a yes. it's been a long day. corker may be jeopardizing his future in lobbyist circles. skied: he already determined that by going to war against

president trump. him being concerned about the deficit would been he would be fine and traditional fiscal conservative circles -- in traditional fiscal conservative circles. we will be right back. this is bloomberg. ♪

scarlet: we want to take a moment now to remember our colleague and friend who passed away this week. toexemplified what it meant be a bloomberg columnist. ♪

>> now joining us, bloomberg rich.ist richie amaral -- good morning to you. >> i have to wear orange every day. >> bloomberg economist here. analyst,as a gifted author, and lecturer, and as a columnist, he was a contrarian and often on the money. >> bloomberg economist rich yama rone seen there with his orange book. scarlet: he is survived by his wife and mother. he was 55 years old. something referred to on the bloomberg, that rich essentially

invented, which is to gather from various earnings calls and statements comments from ceo's that pertain to the economy in some way, and he was really enthusiastic about the project. it was also a beloved project and very popular -- julie: his baby. scarlet: exactly. joe: we know about the fed beige book. similar idea, go around, talk to people, hear what people are saying. the idea you can get an economic signal by listening to ceo's, a really cool example i think what we can do and what he did. >> this is a testament to what he invented and contributed. he also has a gift for being able to translate economic jargon and what i thought of as things that into made sense. i remember emailing him asking what transitional mechanism meant early on, and he was able to give me a really clear answer .

joe: a real polymath, beyond economics to piloting and fishing, and he was a great singer. pretty impressive person all around. i want to mention also something that happened today. he was given the award of best overall forecaster. i guess it was the end of last year looking ahead to this year. again, speaks to his professional acumen as well as he was a great guy and we are going to miss him. scarlet: rich yamarone,

elisa: i'm a alisa parenti in washington. you're watching "bloomberg tech nology." former national security advisor michael flynn has pleaded guilty

to cooperating with russian agents. bloomberg view columnist eli lake has learned jared kushner, the president's senior adviser and son-in-law, is said to have told michael flynn to contact russia. includeto the tax bill a larger tax break for so-called pass through businesses. shows 51rg count senators now favor the legislation. an attorney for one of the women alleging sexual harassment by john conyers says her client is expected to testify next week before the house ethics committee. house democrats have called on 88-year-old conyers to step down.