caroline: from bloomberg's world headquarters in new york. indexe: the s&p 500 rebounding from its longest losing streak since september. the s&p 500 index closing at eight record high. caroline: as we wait for the fed decision tomorrow and u.s.

stimulus talks, you might it it a pretty massive global cyberattack. a pretty global campaign. hackers expected to be tied to the russian government went after solarwinds, the company softwarewidely used and places like all five branches of the u.s. military and corporations out of the fortune 500. this attack may have started as early as this last spring. as when ae the risk key provider of infrastructure is undermined and is a vector of attack. you see it in the market. shares of solarwinds over the past few days, the company plunging. it had been a star performer but on this news of its software being connected to the attack,

major concerns about the company. the attention has to turn back to the u.s. government, whether they were prepared for it. joe: joining with more insight, bloomberg news cybersecurity reporter. what is the latest head of key development that you are paying attention to? developmenttest key is figuring out exactly how many agencies have been hacked. there is reporting coming out about exactly which agencies have been hacked. healthional institute of may have been hit. more to have a lot learn about who is actually affected. ironically, it was embarrassing for fireeye, the

cybersecurity company, to be hacked, but perhaps if they had not been hacked, we would not know about this for more months. will: we think this might have been going on since march but it definitely could have been earlier than that. agencies plan these attacks methodically and do it with a lot of planning. company,curity fireeye, was hit. themompany says that themselves being hacked is kind of what unraveled this entire secret operation and they were able to figure out what is behind it. theine: we had some news, national security advisor. this comes at a time when we are supposed to be in the middle of a transition to a new administration.

i wonder how much that complicates the investigation and -- the transition -- the investigation and the remedy? will: if you wanted to pick a better time to carry out this attack, i think it would be impossible to find one. by donalds was fired trump not too long ago for correctly stating the results of the election. i think the federal government is in disarray right now in terms of responding to the attack. it was a private company that found this major vulnerability. it was not the national security agency or the u.s. government as far as we know now. so, the u.s. government is on the back foot here. solarwinds software is not just for the u.s. government. is there another shoe to d

our more private corporations exposed here and could see more potential leaks of corporate and private data? caroline was talking about the customer list, which is incredible. thear as we know, we expect number of victims to be in the category of dozens of a not necessarily thousands, but all of those victims are supposedly high-value victims. important government agencies but also there are reports that private sector companies have been hit although we don't actually know which ones have been successfully act yet and whether that information will come out. romaine: some of the past major acts we have had have also involved third-party vendors. will turton. we will pivot from that to google.

you may have heard of our next guest. he is a software engineer who has been researching the extent of google's monopoly. knuckleheads club founder. zach merrill has important thoughts coming up next. this is bloomberg. ♪

caroline: today, we are focused on all things tech. we just discussed a massive cyberattack that hit solarwinds. and, the eu's major effort to reel in tech reach. joe: more and more regulators everywhere, eu unveiling what it is: the digital marketing act and digital services act. affecting companies like

alphabet, amazon, and apple. potentially could be forced to sell off businesses and pay fines. everywhere you look, we see this crackdown continuing to emerge. romaine: we saw the eu publish those rules. of course, the person spearheading all of this, the european competition commissioner, had more to say. >> it is what you expect, if you are an investor, that the business you invest in is by the book. fines, are not, it is behavioral commitments. there is the opportunity eventually to ask for a divestiture. joe: new york times reporting that google could be targeted in its first monopoly case. i want to bring in the founder of an organization and entity

called the knuckleheads club. spent years researching google's search engine. why is it called the knuckleheads club? zack: because you kind of have -- that is part of the reason why we founded it. i wanted -- caroline: you wanted to continue raining in google in some way. zack: right, i think the thing to know here is google is this terribly complicated entity. we looked at the heart of google and founded something called the natural monopoly. what google has to do is this process called web crawling where they collect all this information on the internet. websites all across the internet, all across the web,

give google extra special access. to collect information faster. -- we have provided a lot of evidence about why google gets this advantage and how much of this advantage they have. this has particular implications for antitrust. romaine: when you are focused in on this web crawler, the folks that may be don't understand it here, how do we get to your general technical knowledge and square that circle of the legal bar, the relatively high bar to prove monopolistic behavior. i have spent two years researching this topic alone. it is a fairly technical topic. i think one of the best things you can do today if you are really interested in this, you can read all the research.

recently, this research was cited in the big tech antitrust report that got published in the subcommittee on antitrust. what you are reading there is what i sent to them. me, romain, that and caroline wanted to start our own search engine to compete with google. your essential assertion is that we would have to crawl the web, create our own index of the entire internet, but that because websites all want to be featured high on google, google gets special priority through all of their internal data. so, just the cost of doing that would inherently be prohibitive, meaning that that map of the web cannot really easily be replicated by any competitor?

zack maril -- zack: it will be difficult if not impossible for you to go out and crawl the way that google does. you might get a couple of webpages here and there but there are software engineers out there watching what you are doing if you are crawling their websites. because it is expensive. if you are crawling too much or crawling too fast and you are not google, you will get blocked. there will be a firewall. caroline: why does it matter for me? why should it matter that there is one player who is so efficient at search? zack: i think it utters for you because what google has is this moat around the google search. because of this, this natural monopoly on web crawling, it is allowed to reap all of these profits from the ads that it sells on search results.

with those profits, it is able to expand into other markets and kind of be not so great. an example i will give is the stadium project. a video game thing that they tried and just continue to fail at. i don't think another company could get away with that. but when they came into that market, it kind of took out the air from the room. if you're into video games like was a little disappointing to see them come in and be really helpful, google has all these resources, but it was really pretty disappointing. me and my friends were not all that happy with it. i think it did setback that market a little bit. the point i am trying to get across for you and your listeners is that google has all this power and it is squandering it. we as a society are giving them

the power by not regulating web crawling. romaine: what is the remedy that you would propose? zack: i think the remedy is regulations passed at the national/international level that gives regulators that. once you say crawling the web is an international monopoly, you can -- is a natural monopoly, you can put that into the regulation machine. we know how to regulate natural monopolies. i think the thing that we did not know prior to this research being published is that crawling the web is a natural monopoly. romaine: very interesting perspective here. viewers to urge our check out your research. --zack maril the head of the knucklehead club.

some news, this on marijuana stocks. advanced merger talks. mega canadian companies out there, really two of the hottest stocks. the twoline is companies right now in advanced merger talks. joe: coming up, the final fed decision of 2020. with the economy starting to soften, is there more that the fed will do? that is next. this is bloomberg. ♪

romaine: we are going to switch gears from -- switch gears to the fed. joe, this is a funny story. do you remember five or six months ago when everyone said the fed is going negative.

ae: years ago, the ecb was real innovator with negative rates. some people thought the fed would go there. not so much anymore. we sell rates really peak in july. since then, they have come down. now from austin, texas, president and founder of macro policy perspectives. the last fed decision of the year tomorrow. the one thing that they might do perhaps is extend the weighted average maturity of assets. what is your outlook for tomorrow. newe expect them to issue guidance that ties the asset purchases to economic

objectives. they have been less clear about signaling whether they will add a dose of accommodation through the weighted average maturity extension. we expect them to address what is the reality of the near term, which is a raging pandemic, a wave of shutdowns and restrictions on activities, a lot of pain and suffering. if you have a tool that has a positive delta i don't know why you are holding back. we take our cue from the tone that chair powell struck in front of congress. again, the risk is doing too little, not too much. if you have something that does something good, you go ahead and use it now. caroline: julia, you still wait on fiscal stimulus, something that fed chair powell has fought for time and time again. thinkort of affect do you

looking at this asset purchase would have as we remain without that sort of support. >> i think the benefit of doing the extension now is picking out an insurance policy on market conditions. partly, they are buoyant because the fed has backed them up with a very dovish reaction function if they start looking hesitant or like they are trying to fine-tune policy now, then market may be less sanguine in the face of what may be some very real risks in the near term. i think there are a lot of stars aligning somewhere in the middle of 2021 when the vaccine is widely available. it is a long road. isyou know, fiscal support still very much in the area. it looks like they are closing in on a package. it may be substantial, it may be

less substantial. the fed will not have that certain the when they make their announcement on wednesday. romaine: let's cross our fingers on that. i am curious about, the previous forecast they have given has been centered around the idea that we just don't know. it is hard to forecast economic conditions until we get a handle around the health crisis. atyou think that now with least two vaccines out there, they can be a little bit more definitive in their forecast? the word ive is not would use. like all of us forecasters, they have learned humility the hard way. new will be giving us charts with the risk and uncertainty around the forecast.

i think what they will show is less downside risk, less uncertainty than september. still, there will be net downside risks. message, itof that , not perfect tools, but if they are good tools, why don't you use them in light of downside risks and drag on the economy. potentiallyry brewing perhaps next summer is as we get herd immunity, as the reopening happens, that we get a bout of inflation. all that noted at

all the members of the fomc will be able to do that. >> they know the difference between inflation and one-off changes, resets in price levels. i think they have shown a great deal of unanimity around the new reaction function. i am not worried that they are going to back off their support because of a head fake on inflation. inflation will be really volatile next year. ofer that, another bout volatility as the economy

reopens and you get downward pressure on prices and pressure on service prices. as the fed sorts through the wheat from the chaff, they will look for the trend. the building block of support is nearing full employment. that is going to be the first metric we are watching, is the labor market covering? are wages rising? is there broad-based recovery prosperity in the labor market? that is the underpinning that would lead them to recalibrate policy. i don't see us getting anywhere close to that by the middle of next year. romaine: always great to get your thoughts. can catch all of our coverage here tomorrow at 2:00 p.m. eastern time. joe: what are you guys watching tonight? that's all, no time for chad.

bloomberg technology is up next. ♪

♪ chang in sanily francisco and this is "bloomberg technology." , a second the fda covid vaccine officially saying is safe moderna shot and effective. this comes as the u.s. surges