♪ >> coming up on "bloomberg best," the stories that shaped the week in business around the world. the brexit deal. have the deal. >> while in washington, the challenge is keeping washington open. and the details of tax reform as congress heads to congress. that taxmly believe reform will lead to wage growth. media moguls assess their industry. >> there has been a wake-up moment for the platform. absolutely looking to

execute by, sell, and swap strategies. >> and check out what is coming down the pie. for twodoes it mean massive giants to have some which money? >> more and more market share in the hedge industry. >> because they are number one in the industry, it is hard to find growth. >> all straight ahead on "bloomberg best." >> ♪ mike: welcome. i am michael mckee. this is "bloomberg best." high hopesgan with for brexit breakthrough, hoping that the u.k. anti-e.u. head made some headway. the dream was quickly dashed on monday.

the expected breakthrough failing to materialize. commissionn president john paul juncker. : despite our best efforts and significant wereess, we and our teams not able to reach complete agreement today. >> this lunch started around 1:30 brussels time. point,rstood that it one theresa may actually broke away from the lunch to call the leader of the democratic union that props up her government in london. washis point in time, it mostly the issue of the irish border. that sort of put in end to any possible breakthrough. >> what happened today is an

indication of the weakness of theresa may. the prime minister in the middle of international negotiation having to break off to call the leader of an obscure northern irish party government. this is where we are. the tax overhaul last week was all about getting a bill to the senate. this week, it is about reconciling. >> we are going to conference. there are more bumps along the road. the house and senate have a number of differences between their bills. the senate has an issue they recently found out is in their bill, dealing with the alternative minimum tax for corporations that would a sickly render moot a number of breaks they wanted to offer to tech firms. so they have to work that out. everyone seems to be speaking optimistically, but they have a number of challenges they need to confront to make sure the

house and senate are on board with the final package. >> the late change to the bill could bes the 20% amt partially responsible for the recent weakness in tech. driven by reallocation. you are going to keep the amt and hurt the tech sector. it will hurt the utilities. but of course, the beneficiary -- the consummate beneficiary -- or the essentials. also, there is intense lobbying at this point to fix this. many people think that the 20% that stayed in was basically by mistake. ♪ >> theresa may once again facing a revolt from insider cabinet. prime minister is said to have pressure from senior minister keep aligned with

the european union after breaking away. the eu has given her until the end of the week to present a proposal it finds satisfactory in what an official called the deadline. are both concerned that tying the regulatory regime to close will tie the uk's hands in the long term when it comes to negotiating new free trade agreements with other countries, such as the united states. at the same time, if she does not get the dup on her side, that could bring down her entire government. ♪ trump: i have determined that it is time to officially recognize jerusalem as the capital of israel. >> president trump in this case based a deadline, congressionally made, to sign a

waiver against moving the u.s. embassy to jerusalem. it is something presidents deal with every six months. trump was clearly frustrated with facing that deadline after promising on the campaign trail to recognize jerusalem as the capital and move the embassy. take the step to basically you know i to be the capital. he says the state department will start hiring architects and designers and people to begin planning the move. it is hard to know if this is the first step in what the administration as a broader rollout of the mideast these plan. they say it is not ready yet. this is effectively renders to be aed states not moderator in the process. we have heard from european allies as well but this is not something they see as in the interest of peace. >> the federal government runs out of money tomorrow night. the threat of a government

shutdown is looming over capitol hill. can we expect another last-minute deal with democrats? it is not looking likely. trump: it could happen. the democrats are really looking at something that is very dangerous for our country. >> the joint resolution has passed. >> the congress is expected to pass a bill to avoid the shutdown for now, funding the government through december 22. us to three days before christmas. not much of a victory, is it? >> it is in the one sense that they were able to come together and agree to get this rather than push into the brink of friday night or through the shutdown. but it does differ a lot of big decisions. on defensivee caps that wouldh

destabilize the obamacare markets. have a lot of work to do over the next two weeks. even then, they will be deferring it until january. they will have out a fiscal plan for the entire government for the year. the eu havend broken the deadlock over brexit. news it's morning. the two parties have reached an agreement on three sticking points. citizens rights, ireland, and the divorce settlement payments. talk to now continue on to trade. >> i believe we have what we need. >> millions of jobs depend upon the future relationship. i am optimistic about the discussion ahead. >> now, the really hard work starts. union is still flexing its muscle, letting it do for now. there may be more problems to come when they really get into

the details. because we still do not know what the solution for ireland is. whenever that is proposed, we have no idea when that might be, the dup may still cause trouble. ♪ >> a stronger than forecast jobs report. the unemployment rate holding steady at 4.1%, on almost 17 point year low. average earnings came in a bit low. >> the top line number was spot on. wages are little week, but 2.5% is edging up. we believe it is moving in the right direction. >> you have said before that if this administration drove those payroll gains, it would not improve in way people wanted to. >> we do. we accept that. that is why we need tax a form. we been saying this consistently. tax reform. we need to allow workers in this

country to keep more of what they earn. more importantly, we need to be able to drive more wages to our hard-working citizens of this country, and we firmly believe that tax reform will drive wage growth. we review the as week on "bloomberg best," bitcoin futures start trading on sunday. plus, interviews with jack bogle and ken mullis. bloomberg kicks off a special series on the future of investing. up next, more of the week's top business stories. >> we believe this company is rotten to the core. >> this is bloomberg. ♪

♪ >> this is "bloomberg best." i

am michael mckee. let us continue our global tour of the top business stories with a momentous merger bringing together a drugstore chain and a health insurer. cbs will acquire health insurer aetna for $67.5 billion. that will transform the health care industry in the united states. >> it will essentially condense a huge part of the supply chain existing between, you know, patients on one end and their money on the other. will have is an insurer combined with a drug benefits manager combined with a retail pharmacy that also runs a lot of clinics and other stores. you are really taking a lot of pieces that exist and almost essentially making middlemen in the health care supply chain and combining them into one big piece. it will resemble something like unitedd health care -- health care in the separate pieces did. fed namingmond

thomas barkin to succeed jeffrey lacher. he will walk in the door and become a voting member. on january 1. we do not really have a good feel for his monetary policy views. we know a lot about his background. he got a degree in economics from harvard, then went to harvard business go. he has worked at mckenzie most of his career. he was the chief financial officer at mckenzie. he is now chief risk officer out of the atlantic office -- atlanta office. in the past, he is been treated to democrats, so perhaps you should read something into that. we do not know exactly where he will come from. that is however a tradition of being a hawkish federal reserve bank, so it the board of directors was looking for someone like that we may expect

that for mr. barkin. ♪ >> robert mueller's investigation has expanded and is now reaching deutsche bank. ofy demanded documents president trump his family. mueller and his team are investigating the roughly $300 million owed to the bank. why has deutsche bank not handed over? >> the democrats in congress have been pushing for them to release those documents for a while. deutsche bank has also said -- always said we cannot. it is a confidential client relationship. we need a formal request from congress or, now, a subpoena. ously told me they would release these. pinto has named simon as its chairman after shareholders were

said to reject earlier candidates. who is simon thompson? what is he bring? >> he is an experienced money executive. he has a lot of banking experience, so he is work at companies including newmont, anglo american. he is the senior director at tito. essentially, he has an annuity ticket. >> attempts to forge trade talks between china and canada fell apart in beijing with sticking points on both sides. justin trudeau indicated that while his candidate preference for so-called progressive tax, the two sides would only enter formal talks if they are confident of deal could be reached. are those the real reasons why these talks are not working? >> i think we should clarify that exploratory talks between toada and china continue

go on. there was an optics problem. it appears the canadians and chinese had their wires crossed before prime minister trudeau's plane ever landed. the chinese abruptly canceled a joint news conference that had been planned for justin trudeau and premier li. there was a bit of space lost on both sides. ♪ it is an osi systems, which most people better know as the maker of rapid scan. is the issue with this company? >> this company is rotten to the core. not mincing words. we actually have always think a smoking gun proof that when this company got a key turnkey contract a few years ago in

toward $150 million, they paid a bribe or kickback of almost half of that concession. so to me, that is damning evidence. really the major contract they have is a turnkey contract in mexico that is up for renewal next year, probably the early part of the year. the pricing on that is egregious. one contract in mexico is worth about 55% of the company's stock. stock, you are basically owning it for the one stock in mexico. >> we reached out to osi. a spokesman declined comment. ♪ >> warren buffett. every year at his annual

meeting, someone stands up and says what is your succession plan? we think maybe we have some hint of who it might be. who is it? >> we believe it is greg gable. been running brookshire hathaway, one of buffett's biggest businesses. were oner people that the list we think have sort of moved off in terms of what buffets rollers. moran says great things about greg every time. have and charlie munger praised and as well as gregory able. affett says he wants successor to stay in the ceo role for a decade. one of the key factors as age. ♪ the battle of boxes assets is heating up days after it was reported that the murdochs would defer to south comcast disney.

who is driving it on the box side in what will happen with leadership at disney? >> i would have to believe it is rupert who is driving it on the fox side. the question is, does bob iger stay? we do not know. we just recently heard bob saying he is leaving. june of 2018. he has not said anything since. i would imagine that if they are going to win these assets, he may stay on for another year just to make sure the integration is ok. this is his legacy. he has to make sure this works. ♪ >> general electric will cut nearly one out of five positions , resulting innits 18% of ge powers workforce lost. to become leaner as customers turn away from foss i'll feel based energy sources. >> they are cutting cross.

--they're cutting losses. it was part of a plan they announced. they are in the process of billion in5 structural costs across the company. there's definitely a lot of action being taken. >> how long will investors give plenary? >> nobody knows for sure. you need to show results soon. ♪ >> banks ever merged relatively unscathed from the final batch of post crisis capital rules with few lenders meeting to raise new funds. the committee on banking supervision broke a deadlock curve. 10 years in the making, as this it? what do we see her? what is the in product? there is a, yes,

small chance this could go and fall apart. what couldn't fall part world today? we are basically there. it is a deal which the europeans are not happy with. americans are unhappy with it. maybe it is a good deal. it is a compromise that no one likes. ♪

♪ >> welcome back to "bloomberg best." i am michael mckee. be $15,000op to market in trading this week. the cryptocurrency will enter a new phase in its development. at 6:00 p.m. new york time, bitcoin futures will begin trading. that is a whole week of

exclusivity before its rival gets in the game. why ahead of the nasdaq's plan to offer bitcoin futures next year. scarlet and julia chatterley spoke with ceo ed tilly about the upcoming launch. we know what it takes to bring new contract in the market place. it is a slow build. we start the futures here. open interest builds over time. we have reliable settlements. we have oversight from the cftc and her own regulatory department. that builds over time. when i think the institutions will make more moves into bitcoin. it will take time. >> you started working at sea bow as a clerk. you've seen it introduce lots of things over the past 30 years. compared -- compare and contrast what you see in bitcoin with other products in the past. >> they're very small. especially compared to the markets we build in the past.

to your point, co has a history of new tools to manage risk to the marketplace. vix is the best example. week,n the coverage last we set a daily fix options record. one million contracts in the low volatility environment. bitcoin moved $500 or $400. so this is -- we are pretty realistic on her expectations, but to your point, this is relatively small. relatively new. really, the market is what they are looking for. the global benchmark is the measure by vix. the word i could use his cautiousness. is there an advantage even if it being the first to set up this exchange? it was not a race.

rather, we started about six months ago. from all of the accounts that we followed, they came late in the game. this is just the normal course. an incredible and deep conversation with the regulator at the cftc. both a collaborative effort to get the cftc comfortable with us being able to move forward and launch futures. i'm happy to be launching sunday. our crosstown competitors will come after that. this was an effort for both of us. still plenty left on this edition of "bloomberg best." editors take a look at the futures of investing, and up next, more compelling conversations including ken mullis. 10 or 15% of m&a, that is a

lot of activity. >> this is bloomberg. ♪

♪ a strong economy, and all member states of the eurozone are growing at 1.5% for the first time in many, many years. we have a balanced budget overall. the positives included. we have the ability to make the area grow a little bit faster, and for a longer. of time. michael: that was mario sent tino, who this week was chosen to have the so-called euro group.

beating exclusively with mayor and iteris pitch. media executives gathered from around the world for the communications conference. several of the industry's biggest names, starting with stephen lacey, this company recently agreed to purchase time incorporated. there is a number of amazing opportunities as a result of this combination. worst of all, the ability to serve over 200 million consumers each and every month. today,e been emphasizing a size from a very strong legacy 100 70 million unique visitors in the digital business and have over $700 million of revenue. that is the hidden gem in this transaction that we are excited about. >> you have spent time getting into the portfolio of time.

goingo you think you are to keep? what do you think you may look to sell? stephen: when we get the opportunity after regulatory approval, we are going to do a detailed review of the assets in the portfolio. the assets that come from the time side and meredith. duplicative audiences, and also look hard at the quantity and the frequency of these activities and then make decisions. we really have not -- they in fact have announced some divestitures that they will hopefully finish before we close. and then we will look at the portfolio in a very holistic way. ♪ >> the fcc compares to be loosening rules. more m&a coming. are you a buyer in this market? >> we are absolutely looking to execute our buy, sell, and sought strategy. it is a terrific opportunity is result of the loosening of these

regulations for us to take a look at our portfolio of television stations and identify ways we can, you know, stick -- sit with peers of the table and both walk out of the room with a more profitable operation. because of the technological innovations that these rules have had to change. you know, it is just some of the rules that were outdated. todid it is a welcome result loosen those ownership rules for in-market. we intend to execute as much as we can. to pick up a set -- the second station. maybe a third. it could be more profitable and invest in journalism. that is what scripps has been known for. >> radio is roughly 7% of your business, i believe. at this point, does that stay the same? what you do? >> radio is a consolidated marketplace already.

we ended up in the radio business as a result of a where wet transaction brought in a bunch more tv stations, and the radio stations came with it. i do not see us going long in the radio business in terms of being one of the consolidators, but we like the business for now. radio and away, you made acquisitions to deals i believe in the podcasting space for expansion? >> we very bullish about podcasts. >> what are the economics there? here in new york was walking down the street. you cannot walk a block without seeing half of the people wearing earbuds. listening to something. it is not always streaming music. we see podcasting is the next important medium of storytelling, news and information. ♪ legacyre seeing companies, even legacy newspaper companies.

we are looking to build significant revenue, $600 million, and the world of digital publishers. this is comparable to us. the digital world also means existing in the the googlesy with and facebook and twitter's of the world. how do you balance that? how do you balance the need to drive traffic with, you know, business models that are not always usually includes? i think the last point is the most important. that business models. they have commercial priorities. we have ours. inis been encouraging that recent months, with found it hard to be heard in silicon valley. heat, presumably to rend us things that have happened on their platforms and watch. not intentionally.

accidentalhas been that we are partnered with fake news and god knows what. there has been a kind of wake-up moment for the big platforms, and we have seen some real progress. google has announced a much more favorable treatment of subscription publishers on their search platform with their search algorithm. that is an example of a major platform listening and changing practices. we are conversations where we have not seen that kind of breakthrough with facebook. but, we very much believe that these are partners. highbenefit from having quality content, and being accessed by users. we benefit to a degree at least from the exposure they give us. i certainly go into those conversations wanting a win-win. i hope they understand that what

we do, and i do not want to be pompous about this, but it matters to public lives and democracy and america and around the world. at a time when there is so much newsstworthy news and fake and bad actors at work behind the scenes, you know, trusted news providers need support from the platforms. ♪ shifth like the ship -- from old to new business models, the switch between passive and active investing is shaking up wall street. tok bogle joined scarlet fu discuss how index funds are deepening their involvement with companies they invest in. ♪ jack: i believe the index funds have to get there stuff together and be actively participating in corporate governance.

american vanguard has done exactly that. we released a few weeks ago a 45 or 50 page folder talking about our activism and corporate ourrnance, how we voted shares, the issues we looked at. we've seen progress from the beginning for the long-term. the reality is, corporations without owners will fail. somebody has got to be minding the store, because the managers have been taking advantage of the stockholders. we need organized institutional groups to take care of it. you probably remember this, air. quite a few years ago, the formation of a long-term federation of investors. resources andl one intelligent votes options, dividends, mergers, but not the company's business. that is not a job. scarlet: there is a panic in the

space. what do you say they should do? you advised them to do nothing but stand still. what is that mean? do they collect their fees and hope for an exit strategy? active managers are in a tough business. don't forget what is happened to the indexing business. investings a passive by passive investors. now, we have passive investors passive investing for active investors, and better etf's and trading vehicles and speculative vehicles. .any of them so we have a different kind of stock m werea people cannot suppress the urge to gamble. .ke

that is her performance very badly. ♪ >> taxes and driven dealmaking for years. what does this tax bill have on it? of m&ainteresting part is that so much of it is strategic. positioning your company to be a winner in an economy that is changing so rapidly that i do not believe people have held off on 90% of the m&a. toause the opportunity position yourself correctly is beyond taxes. >> is it talking about technology? >> every industry is a technology industry. believe to inlly technology segregating into its own world. if you show up at -- >> every banker is a tech banker. >> every tech company is it tech company. at the board and

ceo level revolves around moreal data, and becoming -- making sure they are in the right position as technology comes in. as a big issues everywhere. so look, i think most people are more interested in positioning yourself to win and not being left behind. but look, on the margin there are probably 10 to 15% of m&a held off by uncertainty around tax. that is a lot of activity. >> what role is antitrust going to play in m&a? >> durban rulings that are hard to understand. i would've thought this would be m&a administration. we're early and it. >> are you surprised by the position this administration has taken on at&t and time warner? >> i have to be careful because

we are involved in that. but yes, it is hard to understand. --there was an irrational eight rationale and reasoning you could see behind it, it would be helpful. but actually, it does not: side with any precedent. and so, it does not make sense and leaves me with a very -- it is a difficult to get a vision from it. ♪

♪ watching "bloomberg best." i and michael mckee. the future ofng investing. one of the trends that are shaping what are people around the world put their money, and how the assets are managed going forward. reporters and editors shared their analyses on bloomberg television.

vanguard.awk and the numbers one and two money managers on the planet. they're on their way to doubling assets. black rock currently around $6 trillion worth. vanguard, $4.2 trillion. they could double that to more than $20 trillion by the year 2023. it is huge. good question. we are looking at two key areas. the first is market efficiency. two huge it mean for investment giants to have so much money? does it change the way price discovery happens in the market. the second matter is corporate governance. what does that mean for corporate governance? blackrock and vanguard have pushed their fees particularly love.

-- particularly low. why would you choose a fund that is more expensive if you can get one for three or five basis points? add to that the fact they are such large asset managers with so many platforms. you can buy them online or through the warehouse or through advisers/ . how far behind are they? who is number three? they are around i think $3 trillion at the moment. there still fairly slow. ♪ a i will creep into every part of investing in the long-term. from big players to smaller of how, give us an idea much money is invested with ai

strategies. >> it is very hard number to forecast or tell because there are only a few dedicated ai firms. most of them do not report anywhere. technique use ai as a to generate signals. is that quant has been getting more over investment communities. therefore, their total estimate is around $1.5 trillion. >> how about returns. are they performing? they have performed better than hedge funds based on very limited data that we have, which

is based on 13 funds. they are outperforming hedge funds. they will outperform this year, and in the past as well. struggling to outperform, for example, the s&p 500. they are suffering the same problems that nominal hedge fund industries suffer. ♪ onfor years, the big money wall street threw its money around these proposals. talk to us about how this is faring, because it feels like this discussion has been had over and over. is picking up in terms of traction for diversity proposals that shareholders have. one of the reasons why is the

big weight on wall street. the passive investor. etf investors. people were passive investors for a long time. they owned shares of different companies across the u.s. because they were part of the index, a benchmark. like the olden times when you could pick apple or ibm and pressure the company by saying i will drop your stock out of my mutual if you do not add women to the board. the passive investors that is been trickier. they have sat on the sidelines a little bit trying to figure out how the activists while being passive investors. we are seeing more momentum from the big three you're actually in some cases voting with shareholder proposals and in to sayd more companies hey, if you have an all-male board, think about adding women and minorities. they're in some ways having success with turning the

companies around. goldman sachs, black rock and blackstone are cornerstones of the industry. what about the future? how will these companies confront the age of technology and retail investment? the premise of that i'm sure some people would argue with, the titans is there's nobody else checking out their fleas? the three are certainly the top of their industry. whether goldman is the preeminent investment bank, some people may disagree with maybe the folks who cross the street at morgan stanley for example. blackstone, the best private equity shop, or black rock. we needed to pick three. these are the three we picked. the challenges they all have are challenges of success.

they've risen to the top. that's why we're writing about them in the first place. but because they are number one it is harder for them to find growth. they have to look elsewhere. goldman has been the top ranked m&a advisor for over a decade. etfk rock has this huge business that they have. blackstone had hundreds of billions of dollars in money from institutions that they are put to work. but at some point, you run out of green field in those industries. what we are seeing is that they are starting to move into each other's industries. goldman has an asset management arm that there had for quite a putting someey are investment into it and trying to build up. they've started an etf business that is challeninging some of

blackrock's products. and then blackstone and blackrock have similar moves. so it is interesting. over the next decae wde we will see more of that. course question of becomes, how does that change the landscape? ♪

♪ >> check out my new favorite unction. you know it by now. tells you everything you need to know about the rising today. >> i just want to bring up a function that we use. , 24 hours, all asset classes. you get a look at how the money is flowing. about 30,000 functions on the bloomberg. we enjoy showing you our favorites on bloomberg television. maybe they will become yours. here's another one you will find useful. to you i see go. here's a quick take from this week. -- quic go.

ramped up its struggle for independence. violence broke out in october after the block of an illegal referendum vote calling for an dependence. catalonia would've had an economy the size of finland. the standout triggered a political crisis. here's the situation. on october 1, 2017, catalans boated. the vote was not recognized by spain. .ebel separatists they feel their independent identity has been marginalized by madrid for centuries. the spanish government tried to suspend the boat by sending troops to the region. turnout for the vote was less than 50%. but 90% of the people who did vote backed a breakaway.

catalonia's lawmakers declared independence from spain. minister wasrime having none of it, and fire the entire catalan government. here is the argument. the problems there from the start. pickeringhas been with madrid since the 1700s. the breakaway in the 1930's lasted only a day because spanish forces bomb the government regional offices. more poweras given then and a new law, the parts of them were struck down in 2010. many catalans were asking yet again if they would be better off apart. there's a problem. the country's 1978 constitution does not allow any region to vote on independence. what is unclear is what would cataloniamonically if said adieu to the rest of spain.

movedatalan banks have their headquarters out of the region. barcelona'scity of famous team could be kicked out of it breaks away. ♪ >> that was just one he of the many quick takes you could find on the bloomberg. you could also find them on bloomberg.com. best"s all for "bloomberg this week. thank you for watching. i am michael mckee. this is bloomberg. ♪

alisa: i'm alisa parenti in washington, and you are watching "bloomberg technology." let's start with a check of your "first word news." president trump continues to fund the government through december 22. the two week extension was passed last night. presiding over the ceremonial swearing-in of kirsten nielsen as secretary of homeland security at the white house today, president trump's praised statistics showing the declining rate of illegal immigration to the u.s.. nielsen's nomination was confirmed by the senate on monday. vice president mike pence administered the oath of office. nikki haleydor