333 with nine abstentions on that resolution. The crisis has left people dead 600,000 toand driven neighboring bangladesh. In a session that ran 20 minutes over its allotted hour, Supreme Court justices peppered both sides with questions and dropped each other as they debated whether a baker bakeries trumps of speech rights freedom of speech rights. Bakers firstthe amendment claims of artistic freedom against the antidiscrimination argument for the Colorado Commission and the gay couple of the baker turned away in 2012. This is bloomberg. Julia lives, in new york, im julia chesley. Joe im joe weisenthal. Julia the s p, a brief tech rally. Joe the question is a whatd you miss . Why the inclusion of the alternative minimum rate was going to leave many tax firms with higher bills. Conference,media Mark Thompson joins us. And wall street banks on the wrong side of the law . Whether jpmorgan and others have played a crisis to attract business from hedge funds. Whatd you miss . Many are trying to read the tea leaves on the economic outlook. Bank of america and Merrill Lynch says the big story will be over inflation. That it is further tightening in the labor market. Joining us to discuss, the head of u. S. Economics. Great to have you. Talk about the rebound you are expecting and where does that put us versus the Market Pricing of what it does next year versus what the fed hopes. Our review is pretty simple. It is not going to be dramatic. Trend,going to see a that we think it comes amid labor market tightening, unemployment having it handled by next year, even though the relationship has flattened we think it is relevant. We are going to see dynamic start to play out. Sense, if we get unemployment into the inflation, people would have guessed with unemployment falling we would have guessed we would have seen inflation already picking up more. What is it in this Unemployment Rate that will be different . It is all relevant. People have been clawing for this for a wild. You should see these dynamics play out. They really disappointed this year. Degree of tightening. It is been a steady downward trajectory. Havee pretty sure they do a three handled. That relationship could start to play out. And what everybody has been talking about, these idiosyncratic issues driving down inflation, we are starting to see those reverse. We have returned to a more trend ,ike premarch of this year which should continue. Think the that we curve is simply a sleep. Caseat if that is the what is preventing it from falling asleep again . Thatleep in the sense there were other factors that offset the relationship the phillips curve would suggest. Structure. E that is where the key question is. How forceful are those elements . Play. Are going to be in the way we think about it, structural factors are still there that prevent a faster acceleration. It doesnt start the trend higher. It will be higher in the Unemployment Rate falling. Julia 4 hikes next year. What do you see . 2018 is hikes for reasonable. It is certainly possible they attempt to go faster if they see evidence inflation is accelerating and reaching the 2 target. It is not just where they are relative to the dual mandate. ,ne of the things we learned the fed was motivated by the ,act that with every high financial conditions eased and the tight end. Why not keep going in that . Reform, iferning tax we see a surge in the money that is overseas repatriated into u. S. Assets, we will see a 10 rally in the u. S. Dollar. I was looking at the headlines missing it is going to be the worst year in a decade, super divergent views. That is going to do the work for the federal reserve. How are you factoring a tax reform and Dollar Strength or weakness into your numbers . Important point when it comes to thinking about how tax reform plays into the economy. It is not just simulating investment or job creation. How do markets respond . Dollar yields increase, what does that mean for how the fed is going to handicap their hiking cycle around it . For the fed point of view, i do not think there is a gut reaction. They want to determine how is that playing out in the real economy. We will respond to those indicators and potentially change the timing. Scarlet there is a lot of excitement around the tax cuts. What about the effect on the real economy . There is focus on blue states versus red states. How does that show up in the actual growth rate of different parts of the country . That is important. There is a micro and a macro story. I think the way we are considering it in our macro forecast, it is deficit finance forecast. 1. 5 trillion of deficit expansion filtering into the economy. It will matter to a certain extent for increasing investment and supporting consumer spending. We are forecasting 2. 4 growth for next year. Once we understand what it will ultimately look like potential you can talk about another two3 10. Create somep stimulus and boost to the economy. Julia midterm it joe midterm elections next year, yet another policy regime change, is that on your mind . Whats we have to consider these risk factors. It will influence the policies forward into 2019 and 2020. Right now there is a mid geordie , that it is not a super majority, which is creating some challenges. If the outcome is the republicans get a bigger majority, rings could change with reform to Market Regulation or health care. If the reverse happens and quiteats take the house, a lot more gridlock and an environment more frustration in washington. That does feed into the economy as well. We have seen episodes in the past where we had the fiscal cliff. Throughesponded weakening of Business Confidence and investment. Scarlet what is the biggest risk to the economy in 2018 . Downside, you should worry about these global linkages. More to do with trade negotiations would be the biggest concern. Outside of that we see a synchronized Global Recovery, which should be a positive story. You can look a broad and say there are stories of upside risk if the Global Recovery continues to build momentum. , onsignal we are getting the other end, do you see friction developing around geopolitical risks as well . Plenty there have been of friction so far. Thank you. Out, the New York Times is posting a stellar year of growth. We would hear from Mark Thompson of the times. This is bloomberg. Scarlet ubs global media and Communications Conference underway in manhattan bringing together the biggest names in the business. Jason kelly is there. Jason . Jason here is Mark Thompson for the New York Times. Business is pretty good right now. I want to get to that in a minute. The company is doing good. Is alls like fake news the rage rhetorically these days. Is that part of what is driving business . Disruptive, disturbing world, and the recognition that seems to be more en vogue now than ever, bad actors, who make , the publich lies are aware of both of those things. Thatcombined with the fact brands like the New York Times are showing what they can do with the stories they are breaking, stories about the Trump Administration, the Harvey Weinstein story, the strength of the journalism and the trusted nature of the brand is helping. Jason how is that translating to subscriber growth . We disclose our subscriber whichs and the number ,ave been in some quarters which were several years worth of subscribers. A couple of months after i arrived at the New York Times, we were getting maybe 25,000 new subscribers a quarter. Bomb, now, even after the sing numbers and the 90s, 100 thousands a quarter. We have gone over 2 million to our news product. Growing numbers to our new cooking product. I know you print subscribers. Three and a half million subscribers, the biggest in company history. Beforeyou have stated your goal is 10 million. There isnt a timeline. What i was trying to say with that number is the New York Times should have an aspiration which reflects the fact that we are a global news provider. We have 140 million unique users a month. We shouldnt be bound by the legacy media. I was told by many people, periodicals can do a million and a half. We have three and a half million. Twice as many as we had at the peak. Cantot see why we continue those numbers from there. Jason how do you grow internationally . Is it different overseas . Different country by country. We have been working hard in mexico in thelia, spanish language. Using different tactics in different countries. We are doing some events to get noticed, to break some Great Stories in those countries. ,e are trying everywhere adopting new consumer revenue and consumer Marketing Tactics to learn from the best of the digital players how to do international growth. It is working. Weve got strong growth in those countries. Digital revenue could be 800 million . Still on track for that . A greatwill have been year for the growth in digital revenue. We will be in the region of 600 million of your digital revenue. We think that is more than almost any competitor. Buzzfeed. E as much as one of the interesting things is, we are seeing legacy media companies, really beginning to build significant digital revenue. 600 million in the world of digital ownership. Existing in the Digital World also means existing in the symbiotic way with the google and facebooks and twitters of the world. How do you balance that, balance the relationships you need . I think the last point is the most important one. They have Business Models and commercial priorities, and we have ours. What has been encouraging, we have found it hard to be heard in silicon valley. , for some of heat the her rent is things that have platform, noteir intentionally i dont believe, i do not think there are accidental partners with fake news and people trying to target antisemites. There has been a wakeup moment for the big platforms. We have seen some big progress. In much more favorable treatment of subscription publishers on their search platform, an example of a major platform listening and changing practices. Were in a conversation with we are very much believers that these are partners. Benefit from having highquality content and be able to access their users. We benefit to a degree at least from the exposure they give us. I go into those conversations wanting a winwin. I hope they understand, what we do, it matters to public life. Much time when there is so untrustworthy news, and fake badnd so many bag actors, trusted news providers need support from the platforms. To be with you. Thank you for your time. Scarlet thank you. Julia still ahead, a merger in the media space. Stephen lacey joins us with insight on the companys acquisition of time. This is bloomberg. Julia our stock of the hour is one example of a tiny Company Getting a huge lift. Julie hyman is here with the details. Julie this is called digital millionpw, a 70 company. It reflects this trend around cryptocurrencies. You get these various buzzy things that passed through the marketplace. Anything that is tertiary lee associated, they mention it and andsee them become volatile react to whatever that thing is. Company, thef this company says it is planning to launch systems for Digital Mining of cryptocurrencies including bitcoin. Ever since it said that, you have seen gains in the stock. Some company will say we are a company now. Some seem dubious. We are a medical Marijuana Company and now we are digital currency. At least in this, it seems the thing they are offering is kind of within the realm of their existing product. Yes. Subsidiaries, it is doing this particular mining. Mining. Lated to the if you take a look at the bloomberg, what is interesting, whether or not it is actually linked to its mission is irrelevant. Here on the talk is the stock price. I compared it with wells fargo. The number of shares being traded is higher today than the number of shares being traded in wells fargo. Scarlet yellow is dpw. Green is wells fargo. Julie it was nothing until recently. I what to highlight our social velocity monitor. It basically shows you on the top when you have flareups and mentions on social media. There have been quite a few, which shows what is feeding the beast here. It is people saying lets send this thing higher. This is anecessarily good longterm holding. Julia what are they actually doing . Joe the mind generate so much heat. The chip says they need cooling. That appears to be what they are doing. Twice other companies are like this. You have riot block chain, various other companies. We talk about chipmakers but there are these tiny companies. Scarlet it is all signs of a bubble. Joe no question. Scarlet the market closes next. Can see declines all around. This is bloomberg. Scarlet the s p seeing its tech rally ght, the that stays in. Julia chatterley. Scarlet im scarlet fu. Im joe weisenhall. Scarlet we begin with the market minute, a fade in the rally in textures, but all around, we have seen the major indexes give up their gains and lows, ff their session the dow off 111 and the nasdaq earlier ower after gaining. It looked like tech shares were finally rebounding from the out of the best performer. Joe they outperformed but still falling. Scarlet still falling. Look at some individual names here, were still keeping headlines, 24th disney because its a better strategic fit and resents fewer regulatory hurdles. Fox is holding talks with comcast about combining certain businesses with the potential buyers. The murdoches plan or hope to by yearend. On off by 7 understand, toll Quarterly Results miss analysts estimates. Expensiveles of three new york city condo units. Snap. Ays upgraded ross sandler gave the first upgrade and today he turns his upgraded to snap and to overweight and said the worst is behind snap and the company s likely to get back on track in 2018, snap up by 10 . You can see edison international, something julie hyman mentioned earlier, falling 2002. Ost since thousands are fleeing a wildfire in california. The worry is that this utility on the hook for damages. Joe lets take a look at the Government Bond market start twoyear and 10year yield. If you just look there, you see remains the same, more flattening, short end 1. 28 on twoyear and the 10year down to 2. 35 . Here, ook in my terminal i have a chart, it sort of shows the same thing as that, except looking at the 530 spread. It is flattening very at its lowest level since 2007. Down to just a 59 basis points. His is really a pretty extraordinary story right now. Scarlet especially in the last several months. Joe you really see it turning down. Real quickly, i want to give a to greece, below 5 the First Time Since 2009, a comeback. Markable scarlet crisis over. Saying e Prime Minister that with the latest sort of getting past the bailout step, theyre finally putting the era behind it. Hitting this 7. 5 level on the is a pretty significant symbolic milestone on that from to extricate itself the crisis era. Julie hugely symbolic. Definitely s most not over, i would argue. Currency. E a look at a lot deep dive to 978, of debate about what happens with the u. S. Dollar particularly in light of tax reform. I said earlier in the show, the assets could see the dollar rally next year. Most analysts are saying that the dollar is heading for its worst year in next year, decade earish projections piling on top of other bearish rojections, seeing some repatriation of u. S. Money, bringing the money back, an ccounting shift rather than with a withdrawal of actual liquidity. The debate is out there. U. S. Dollar is concerned, and what joe was saying in terms of the move in yields as well. See the dollar index by out what is point going on in the exchange rates, the dollar the dominant currency todays trade. We did see improvements in the trade deficit numbers for canada in october. Wednesday, tomorrow, weve got the bank of canada meeting, 43 january, but we have seen a run of better than expected growth. To see be interesting what the Canadian Central Bank does say, a 43 hiking by january. It will be interesting to see what they say about that better data that weve seen. Finally, on the commodities, lets take a look t oil ticking up a little bit,. 4 , gold selling off and copper 4. 4 , sort of something the interesting thing o watch there, of course, copper frequently seen as a Global Economic bellwether. Metals have done pretty well, keep an eye on copper, those are market minutes. Scape lets bring in the port editor of the nd blog crossing wall street. Its nope for selecting a high quality portfolio and has beaten the s p 500 eight times in the last decade. Lets start with the rotation hat weve all been talking about. Out of textiles, into financials, thats been the main we keep focusing on, whatd all, we are you miss, people tend not to appreciate how much consumer in the mix as well. Tech would turn around but couldnt hold on to those games. The flip side is the rotation the cyclical names, the consumer nondiscretionary doing very well. This group hasnt done well over the last two years. Its lagged the market, also for example, the transport, the dow transport. I know joe will like this. Is one of those really old indexes that broke 10,000 for the First Time Ever and another for example, the Home Builders, Home Builders doing and the, like the financials, that hit a relative the first time in steven years. So were seeing the rotation out of ech, but there is a lot areas that are doing very well right now. Joe and we have this chart as it showing this really big surge in the transport catching upr 10,000 to the performance really of the average. Industrial you also mention in your last answer, the Home Builders. Of this ink about sort cyclical story that were seeing itction in the u. S. Economy, feels like thats what were seeing with that home builder tock shooting up since early september. Absolutely right. Look at these economic reports eve seen recently, Consumer Confidence and the new home sales, good gdp numbers. His is i think with the markets confirmation of that. V. R. , this is double the yeartodate. This is a 3,400 stock. Were seeing a lot of confidence. The theme is financials and things that are bought by whats been ats rallying over the past few days. Trumping is is value growth at this point in terms of the investors momentum in the trading that were seeing. Last . Ong does it thats a very good question. He thing is, all year long, momentum has been working. What has worked, they have but what ismore so, interesting is this time people really got clocked. Time those tech names got didnt wn and they bounce back today when i think people thought they would. That has come to an end. This could be a longer term cycle. In the scarlet what did andrew luck still in the early innings . We appreciate for a moment there the gains that we have seen in facebook, amazon and apple so this year is the flattening curve, joe, you brought it up earlier, the spread between the and the 30s. Joe when you look at that pread, does that give any signal to you . It says the economy is doing well. I think is interesting is we compare what is going on now posttrump rally that happened a little over a year ago. Financialsames where were leading, did very well, tech did not do that well. Echo. Ort of an the big difference is a year bonds saw those long really got clocked and the Interest Rates moved higher and higher at the long end. Time its just not happening and those long rates stuck. St whats going to be interesting is next week, a week from going to get the blue dots. I think it will be interesting to see, are we going to get rate hikes next year, i think thats probably true. Ut we saw some backing off for plans for 2019. I think we may see more of that be i dont know if theyll quite onboard for another three 2019 because this tightening yield curve kind of that the feeling they have is perhaps lower than it is. Ink ulie your buy list has beat the s p 500 eight times in the last 10 years. Youre the man to ask. How do you make money in these markets . Right now what i would do is focus away from the high names, those names that worked so well this year. Ood time to take profits and i would redirect that into a lot consumer cyclically. That benefit from q. 4 earnings into 2018, a strong year. For next scarlet we saw from julie hyman, Union Pacific has been on tear. Julie thank you for talking to us, founder and editor of from ng wall street washington, thank you. Ig tech and the tax overyall, how will washingtons plan for offshore profits impact silicon i will. Well discuss if the plan becomes law. This is bloomberg. Scarlet after a drama filled eek and lastminute revisions, Senate Republicans passed their tax reform. Reconciled with the emily chang sion, the d at how it affected tech industry. The Trump Administration is first piecer to its of signature legislation. To my desk, id it promise all the people in this room, iy friends in this promise you i will sign it. I promise. Veto that bill. Tech companies have spent big to make sure their interests are heard. Plan to benefit in a few ways. It would slash the corporate rate from 35 to 20 . Although according to goldman achs, the tech sector benefits from a 24 effective rate. Then there is the hordes of cash stockpiled over seas. Big tech plans to benefit with legislation which lets them defer taxes on foreign earnings back to y bring them the u. S. At 7. 5 to 14. 5 down from the current 35 . This passed which i really believe we will, we have to as a country, its going to i would say 4 trillion back into this country which right now cannot come back. View, it should be a this means it should be a required tax, and so not asking the people that have had earnings from subsidiariestional if they would like to bring back money. The current bill would make voluntary repatriation, though the question stands whether bringing back this will go into any other than buybacks or m and a. Silicon firms could win big if to the deductions make final bill theoretically allowing them to have the fiber of the nation. The waiting game goes on until the final bill hits the president s desk. Emily chang, bloomberg san francisco. Into this and ve brick in bloomberg editor at large from san francisco. Us. Y, great to have you with the bottom line is for these tech if you look at the center, it falls lower than other sectors out there already. Going on for s these tech names and the pressure were seeing. I think its not so much bout what is going to happen from a tax basis, but what can happen from an income standpoint. Companies spending money to use technology, to put technology to work. Ou see that nowhere more learly than when it comes to Semiconductor Stocks and the index. S. O. X. , a bigt the selloff in the last couple of ays, greater than the s p and the other technology companies. Its a dramatic selloff when s p red to the rest of the 500. Julie we got a chart to show the relative performance between Semiconductor Index and the s p 500. A longer k at it over term, cory, the stocks, the indexelphia semiconductor has had some pretty strong years. Es, it had a bit of a dip in 23015, youre looking at gains 2012. Back to its time to take it off the table . Look at that chart. Years, k at the last two you see gains of granger 35 . Ou look all the way back, thats the entire history of the index. The only other time you see games, 30 of consecutive years is that big tall column all the way on the left. Magical year of 1999. Aftermember what happened 99, 2000, Companies Selling technology to other companies, Companies Like semiconductors. E have never seen two consecutive years with better 1999. Than in the index and stocks are the coal mine. The that is a basic Building Block of all enterprise technology, of Companies Spending money on r and d to acquire technology to businesses run better. Joe speaking of r and d, one senates thing in the version of the tax bill, it doesnt look like its going to stay in, would have taken away credit. D d explain what is going on there. Youre right, we talked about earlier,bloomberg radio joe. It doesnt exactly take away the there. D credit, it stays but added in, in the final hours of negotiations, about three the end of the negotiations of this bill, they put it in there for a reason to get it was going revenues, it was added back into the bill, the senate bill, not house bill. The senate added it back in, they needed those revenues. He alternative tax is calculated when the companies do the calculation and the regular tax with deduction calculation pay the higher amount. The problem is when you lowered the regular tax bill and take of the deductions out, you lower that tax rate down to the ame level as a. M. T. , every company has to pay the a. M. T. The tax cut wont actually let the deduction. They actually wont be able to deduction. And d tax its allowed if its greater. Hat it means is there will not be a benefit for Companies Investing in r and d, a tax benefit to do so. Its a course of business benefit, but on the margin, ompanies will spend less on r and d and less on technologies semiconductors. Scarlet disincentives there. Thank you so much. E have to return you now to radio. Get a check on the first word news with mark crumpton. Ark House Speaker paul ryan says the tax bill passed by the enate early saturday is monumental reform. The speaker and other republican eaders continue to praise the progress of the legislation. Last night we passed a motion reconcileonference to these two good bills. The conferrees led by our leader kevin brady have a lot of work to do. Theyre going to get this done. To make the legislation better than what we have already seen. Mark congressional leaders are scheduled to meet with President Trump on thursday. The u. N. Envoy for syria says United Nations is ready to assaads th president representatives as peace talks in geneva. Invitationudying the to the talks. The European Unions top says the United States stepping away from a landmark uclear deal would be counterproductive. He spoke with brussels today after meeting with u. S. Ecretary of state rex tillerson. He said it attached great on upholding the agreement. Tillerson stressed, however, a t iran is carrying out number of destabilizing activities throughout the region nd he called for joint action to counter it. Underwater vessels are sweeping area of about an 1,500 square miles to check hether an object detected at about 950 meters is part of argentinas missing submarine. Vessel went down nearly three weeks ago. Cancelledrations were monday due to bad weather. S. And russian ships carrying remotely operated vehicles have also joined the search for the crewmembers. 44 global news 24 hours a day powered by more than 2,700 analysts in over 120 countries, im mark crumpton, this is bloomberg. Scarlet thanks, mark, wall fiercely ks known to compete for business because of the lucrative profits they offer, well tell you why this causing the f. D. C. To raise a red flag on some things. This is bloomberg. Scarlet whatd you miss bloomberg has learned that the s. E. C. Is investigating whether helped ledge funds inflate their returns in exchange for new business. Enforcementn covers for bloomberg news. This is whether banks crossed hedge fundsoffering bogus price quotes on some hard to trade securities . Right, so the agency is at, you know, securities that rarely trade and thats sually based on models that come up with a number. So some Fund Managers you can trader and get a better price and then go to your Valuation Committee to say, fresher quote. I got market intel and then that they can elevate that position. Julie so where is the problem here, they could be positioned the ctually want to buy bond, lets say, so they could show you a better price for something. Here does the law or the regulation issues ride, on the valuation, you show the price, i books, we do a trade in the future, where do you draw the line because its murky . Is mostly, the Agency Concerned with using the same price, right. If you have a process in which value and the securities here, they want to see it consistently used. To tell,y is not going its very unlikely to tell a bond trader we think this is the price. Thatjust want to make sure are you giving a price to one to another a price client there. Julie something incredibly liquid intent, too. The if the fund manager is coming in knowing that the model is much they could get a better price. You get a better return for that month. Specifically do the investigators see happening on the sell side, on the banks that suggest that some of the prices that are quoted may not be kosher . Ly theyre saying, theyre investigating communications up een fund manager calling a trader a few days before. Period the month or the quarter, this bond, i have on basically and saying can we get a different sort f showing you want a different price. Scarlet so initial timing when the conversations are taking place and what kind of followup there is in the days or weeks to follow . They want to have consistency throughout. Joe it seems like an inherit Market Structure issue, if the ompany youre doing business with has an incentive to give you favorable numbers, is there ny sort of cure for this or proposed solution, whether some a t of third party entity, blended pricing with banks that could theoretically move the incentive to do this . It is a tricky Market Structure issue because unlike have, very liquid pricing, can move quite a bit, it right u can pull up. This issue is like going back to pricing d party problem, but thats why the agency is looking at it now. Julie you should always get a Second Opinion and have two that match. Here, why cant they unbiased opinion. John some dont have bonds, so but, getting those quotes, again, the agency is mostly concerned with consistency and inflating your numbers. Julie the hedge funds are value o overinflate the of the asset on the Balance Sheet as well. Theyre investigating the funds, and the hedge too. Another issue with this is that some hedge funds are because ing their book they calculate fees and bonuses at the end of the year. Can basically save those earnings until fourth quarter. Julie matt robinson, thank you that, bloombergs enforcement reporter, i like title. Coming up, a deal to reshape the landscape. We will be discussing that after the break. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Crumpton. Mark it is time for first word news. Newspaperll reports that three days of protests will be carried out over President Trumps expect a decision regarding american policy on jerusalem. Today, the president told the Palestinian Authority president and Jordans King Abdullah that he plans to move the embassy in israel from tel aviv to jerusalem. A person familiar with the matter says the president is planning to sign a sixmonth waiver on moving the embassy. In the meantime, turkish president said that moving the embassy to jerusalem was a red line for muslims. Native american leaders are sending to black President Trumps decision to cut the 80 . Aal monument by about coalition of five tribes that pushed argued the law only gives the president inability to create a National Monument, not the ability to downsize one. The president also announced plans to shrink utah grand monuments. As one of the liberal lines in the United States congress is stepping down. May be announcement during his interview on a detroit radio station. 88yearold john conyers made the announcement during an interview on a detroit radio station. I am retiring today. I want everyone to know how much i appreciate the support. Incredible, undiminished support i have received across the years from my supporters. Not only my district, but across the country as well. Mark the allegations against him, conyers said whatever they are, they are not accurate or they are not true. He endorsed his son to replace him in congress. Party leaderion irene foster said the Irish Government would not allow British Brexit negotiators to released the text agreement of a deal over borders. It gave Northern Ireland status distinct from mainland britain and was black at the last minute. Agreed in the au nearly monday on terms, including maintaining an open irish border, but the deal collapsed when the dup, which keeps theresa may government in power, refused to back it. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Scarlet lets get a recap of todays market action. We started off with gains and they slowly faded through the trading day. Now we can see the dow and s p and nasdaq closed down off of their lows of the session but the nasdaq still the performer here. Tech stocks did not fall as much. Julia whatd you miss . Lets go back to the global media and Communications Conference in manhattan, where our new york bureau chief and executive editor jason kelly is standing by once again. Taken away. Away. E it jason here i am again, and i am joined by a man very much in the news of late permanent that is the chairman and ceo of meredith. Nice to be with you. Thank you for having me. Jason you have been in the news about one of the most talked about acquisitions of the year of time magazine. What are we missing in this deal . What have you been telling the group here . Is a well, i think there number of amazing opportunities as a result of this combination. First of all, the ability to serve over 200 Million Consumers each and every month in a multiplatform way. What i have been emphasizing today is aside from a very strong legacy magazine and television business, we will now reach 170 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 very excited about. Jason when you think about a 700 million, is in a different growth rate their on the digital side than there is in traditional print . What does that look like . Stephen the Digital Businesses have been going nicely in a low doubledigit environment. Ours last year grew up 20 , but that is not what we would probably predict going forward. That has created a wonderful opportunity to again returned to organic growth in revenue for meredith in our fiscal 2017. Jason as you have spent time really getting into the portfolio of time, what do you think youre going to keep, and what do you think you may look to dump . Stephen first of all, when we get the opportunity after we get regulatory approval, we will do a very detailed review of all of the assets in the portfolio, the assets that come from the time side and meredith for duplicate look at the and quantity and frequency of these activities and they make some decisions. They have announced some divestitures they are working on that hopefully will be finished before we close, and we will look at the portfolio in a very holistic way. Jason obviously, you have had a lot of success at meredith in womens titles, rachel ray being one of them, Martha Stewart as well. Is the business better for womens magazines or mens magazines . What are the opportunities . Stephen women are much better acquirers of this kind of content. We have loved that business, but it now gives us the opportunity to serve men and young men in particular through the news and sports activities, but fundamentally, this will be a business focused on all adult women and especially millennials. We will now have the opportunity to reach 85 of the millennial consumers in the marketplace. Highly desirable by our advertisers and a lot of fun to create content as they move into adult life space. Jason one of the reasons this deal grabbed headlines is the mention and involvement Koch Brothers as financiers. What was their role . What do you expect their role to be moving forward . Stephen . Come i never met the Koch Brothers, and neither has anyone at the meredith corporation. They had the most attractive Financial Arrangements of the eight different providers we looked at and also a much more passive activity. No desired board seats. No involvement in the daytoday so ings of the Company Think it will be a Good Opportunity for us and them. Jason you see them looking at this as a Business Opportunity rather than an editorial opportunity . Stephen yes, they have a private equity arm that is run by a group of smart young people, and they are looking for a good return on their investment. They have a believe this combination is going to do well and that they are going to make a good return. Has beenlot of ink spilled on it the magazines in the digital side of the business. You also control some tv stations. Is that an opportunity to make some acquisitions on that side . Stephen absolutely. Thatied to be very clear we love that part of the business. It has had strong growth in our fiscal 2017. We have been in that business i guess about 60 years so that was another reason we wanted a lease from dry powder in our debt passing. We hope to bring to fruition and have the opportunity to bring more stations into our portfolio. We are now moving again into another year where as we go into will have another advertising cycle related to the political activity. We think it will be a hotbed, and we have some market where we think there will be a lot of revenue. Jason where are the markets where you see the most opportunity for rent an revenue . Stephen we have a wonderful revenue performance in our phoenix market, where we have a fantastic duopoly. We had an opportunity in nevada. We own the station that is number one boomer station in the market. Also in georgia as well. We own the affiliate in kansas city and st. Louis. Missouri is always a great political opportunity. Jason your stock had a nice run based on the announcement of this deal to the extent that you even got analyst downgrades. Whatdo you need to do to keep your investors happy . Stephen first of october we have to be very clear about our financial metrics and what we expect going forward. Of course we need to deliver on the promise. There is a lot of synergies that we believe and know we can achieve, and we have to make that happen. We have to make sure that revenue and profit goes up as we go forward. Jason do you imagine you will be looking to cut costs in including personality put everything together here . Stephen this is an interesting situation because there are two publicly Held Companies so there is a lot of duplicate them Company Expense duplicat ive Company Expense. Those are the places where we have the most opportunity. We have a history of leaving creative activity alone. That is in fact the way we look at this, but we look at places where both companies are doing the same thing, and we can do it more efficiently together. Jason got it. A lot of work ahead of you in 2018. Thank you so much for joining us. Stephen thank you for having me. Jason absolutely. Back to you in the studio. Scarlet great job. Here fromme headlines the ceo undermine capital. He is holding his webcast or hosting his webcast and make comments about the Corporate Credit cycle, saying we are getting near the end for the Corporate Credit cycle, and he also says it looks like janet yellen will end up with a good legacy. We will keep you posted on any for the headlines, but for the moment, those are the noteworthy headlines. We are getting very near the end for the Corporate Credit cycle. Coming up, bitcoins meteor and rise has come with explosive territory. It. Big questions around we will discuss. This is bloomberg. Scarlet whatd you miss . The currentbehind economy says that every tether is back by one u. S. Dollar. That stability and ease of conversion may help fuel bitcoins spring to exceed 11,000. Does tether actually have a 2 million to back up its currency . Lets bring in matt, bloomberg reporter on our structure team. I know i gave a brief introduction about tether, a company that sells currency. Break it down for us first. What exactly is tether . How does it work . Matt there is a lot of volatility in cryptocurrencies let bitcoin the other day with atlas as dollars and fell to 9,000 within a couple hours s 12,000 and fell to 9,000 within a couple hours. Tethers 814 million outstanding. That should mean there iis 814 million in a bank somewhere. There are questions about whether that is the case as i put them out today. Joe lets get into them because this is one of the really crucial questions here. Does the company tether present any evidence that they have the dollar for dollar match up all of the tethers out there in a bank account . B, what causes some people to question whether they do . Matt sure. They are not as transparent as a lot of people would like. On their website, they do daily updates how many tethers are outstanding. There is no real information there. They do not disclose who they bank with, like what Bank Accounts they have, which is troubling. Earlier this month or this year in march they lost wells fargo,. Wells fargo acted as a Correspondent Bank between customers and the banks they had in taiwan. They have not had that relationship since march when they said they had about 50 million worth of tether outstanding. They now say it is 814 million so you can see the jump there without u. S. Banking. They did release a sort of memo, an audit, that claimed to have looked at Bank Accounts on september 15. The names of the banks were blocked out. A lot of questions have been raised about the audit report and some of the language that said this is not an audit and not meant to be actionable. That is sort of where the questions are coming from. People want more transparency because these claims are important to the market. Joe lets talk about the crucial connection here to bitcoin. As we were talking, bitcoin is very volatile. Tether is stable. It is not what they are really in competition, and the theory among many is somehow tethers are being used to artificially inflate the price of bitcoin. Is the explain why this nexus of the two and why people are concerned about that . Matthew sure. The concern comes from there is no transparency and we dont know for certain that this money is in the bank account before a tether is created. What is stopping them from creating tethers and releasing them out into the market . Because the market gives them a one dollar valuation from so now you are in effect printing money and you can take those tethers and exchange them for bitcoin. That is buying pressure on bitcoin, which should drive the price up. We get into that a little bit in the story. What we did not get into is there has been evidence that what a lot of tether is created, you will see almost immediate jump in the price of bitcoin. That is out there online. That is what we are really talking about here. That is a serious challenge to this idea that tether is viable and onetoone with u. S. Dollars. Julia there are accusations being thrown around, halt claims, related activities false claims, related activities by various parties. How do we get more clarity on precisely what is going on . Matthew well, the company is promising they say they are in the process of a full audit that will be released. Well see if that happens. They could tell the world what banks they use. That seems to me that would be something to go a little bit with some goodwill from them. One of the people we talked to in our story today said that after his experiences with tether, he alerted the Justice Department and Treasury Department to his concerns. There could be regulatory action. We really do not know. So much of this is new, and a lot of it is offshore. There is not much known about the folks behind Companies Like tether. It is rather up to them to release this information. And we andrk times a lot of people have been reporting on it, and that will continue. Julia yes. I feel sorry for the regulators. I have to say it. Head in hands. Great story. A sign of weakness . Our guest joins us to share his outlook for the company. That interview coming up. Highlights from my interview. From new york, this is bloomberg. Julia whatd you miss . A negative rating on hotspot this morning, citing price cuts and a deceleration of their business. , and heto andrew left said investors are at a crossroads on the stock. Remember 1989ple committed thousand, you saw stocks go down maybe 40 , 50 . A company that does not make money, they have to watch out in this rotation. There will be opportunities to my expense of stockton become less expensive but still somewhat expensive, and that will be the interesting time now, deciding what is becoming cheap and what is becoming uninvestable. Julia talk to me about hotspot. Use of these guys have no Pricing Power. Offering is down to zero, but the marketing that we see now sprint people with advertising is a good model. You can pay zero for a very basic model, but if you want the stage they offer, you have to operate, so surely what you think about the Pricing Power is it is true. Andrew it is. They have decided to focus on the small and mediumsized business. When you focus on that and not enterprise, you deal with a higher churn customer and you have to deal with the price. I compare that to another. Ompany here, shopify as much as i was not thrilled with their marketing techniques, they were able to raise prices on their customers last year because they have a producttive offering. The only way to attract new customers is to take your color product offering, the only thing that makes you you and you drop to shows a weakness zero, it shows a weakness. Julia if i can compare them to salesforce. Com, the growth projected we we are seeing, even the decline you are talking about in growth is better than salesforce. Com at this stage. Are you expecting something more from them . Andrew they are working because an are working off of extremely small number. I has it in this chair and say warren buffett, warren buffett. Julia they are part of the market. Andrew we are not salesforce. Julia i am talking about the gross trajectory, the attendance we are talking about is actually better. Andrew it is not. I dont have the salesforce numbers of the conference, but it is not at all. For a company that loses money the way they do for the inbound conference to go from 35 growth to 10 growth shows they are hitting up to the law of large numbers. Towerre going to buy the of optimism thinking they are going to turn the corner because we are only in the beginning stages of this curve, you are not, and you also see that coincided with the deceleration of domestic revenue, so that is not the only metric by itself. It is a full mosaic that i present that shows why the business is decelerating. They are already losing money. What is worse in a rotation, a decelerating business in america that loses money that is offering a product for free right now that you see corporate defection that is also on the other side of bigger internet trends. Julia that was andrew left speaking to us earlier on bloomberg markets. Scarlet it is time now for the Bloomberg Business flash, a look at the biggest business stories in the news right now. The owner of the New York Stock Exchange has regrets about bitcoin. He says waiting on futures may have been stupid. Vehemence he does not know what to make of cryptocurrencies. Bitcoin is being treated as of december 10. Ubs says there are slight delays in the package deliveries following the cyber monday surge. Online orders overwhelmed its network, causing a oneday or to a delay in delivery delivery. Lay in th joe coming up, what you need to know for tomorrows trading day. This is bloomberg. Scarlet whatd you miss . Stocks closing down just off of session lows. Coming up, do not miss this. The adp report for november. Joe after they go tomorrow, broadcom earnings. Lots of interest in them and all of their acquisition attempts. Julia dont miss this. David addresses the brexit parliament. We are watching that. Scarlet that does it for whatd you miss . Julia Bloomberg Technology is up next. Im in washington, and you are watching Bloomberg Technology. Lets start with a check of your first word news. President trump plans to sign a sixmonth waiver on moving the u. S. Embassy to jerusalem. He reportedly told Palestinian Authority president has plans to move the embassy from tel aviv. Abbass reportedly warned the president against taking that step, moving the embassy is said to be a redline for muslims. The u. S. Is ordering personnel and their families not to conduct personal travel in the jerusalem area. Palestinian groups have threatened widespread protests if President Trump recognizes jerusalem as israels capital or advances plans to move the u. S. Embassy. A white house announcement could come tomorrow. Gop leaders delete a house vote for a shortterm budget bill to buy more time to Sell Division to avert a government shutdown. By leaders plan to vote tomorrow. Federal funding runs out midnight on friday. The bill would keep agencies open until december 22. Native american leaders are suing to block President Trumps decision to cut utahs National Monument by about 85