We are halfway through the trading day from one of the final trading days of the year. Abigail doolittle is with us. We got a huge tax overhaul today, but the market already knew that. Abigail yes indeed. Small declines. We do have the news of the taxcut bill being signed today, put into the law of the land. On this, very small declines. Atestors are looking past it this point, having priced it into some degree already. At gains, not huge gains, but were looking at gains. This is where we are seeing bigger action, some of the alternatives, fiat currencies. Bitcoin, we cannot get away from the bitcoin story. Down 17 . Earlier today at one point come down 30 . Bear market in one day. Tremendous volatility, the worst day since 2013. Bitcoin did come into existence in 2009 as an alternative to Financial Institutions after the financial crisis. Other alternatives to be fiat currencies, gold and silver. Even though the dollar is higher typically you dont see that. Interesting to see all of this at work. With the bitcoin down so much, cryptorelated companies are taking a big leg lower. Lots of Microcap Companies are getting into the crypto space. Overstock. Com, ecommerce retailer. They also have a crypto segment. Riot blockchain come along thin, and long island ive been iced tea, which at one on is thatp 290 they are changing the name to long blockchain. Some are saying that the bear market rule for the other Asset Classes not apply to bitcoin. When you do that sometimes from you have to wonder o whether or not that will work out. G btv 2360, to look at the air markets for bitcoin. The 50day moving average, 100day moving average, that represents mediumterm support, but a lot of the dips down to my previous bear markets this year. Look at the bear market we have going on this week, much more than the previous dips. Movinghe 100day average. Past trading action would suggest we are likely to dip to the 50day moving average. The 100day moving average is not out of the question technically. We saw that two other times in the other bear markets. Bitcoin from the top would drop more than 60 . Volatility is stunning on bitcoin. Vonnie all right, abigail doolittle, thank you for that. President trump betting that the gop strategy of deep cuts for businesses and wealthy individuals will fuel extraordinary growth across the board. Your to assess what kinds of impacts the tax cuts will have ,he economy, Paul Mortimer lee chief economist at bnp paribas. Pretty much every economist i have read seas some extra gdp growth next year due to these cuts. But are we going to preach the 3 , 4 , 5 that the president had promised . Paul i think we can get close to the three. Be a bit above. The economy was already strengthening at the end of 2017, then we have got the tax cuts on top of it, high stock prices, savings ratio today falling to the lowest level we have seen since 2005. The economy looks in good shape. Vonnie will it be because of the tax cuts . Paul tax cuts will definitely help. Tax cuts have helped stock prices. That is helping the consumer. Then we will get a boost to consumption next year. Somewhere between half a point,. 70 growth. Pretty significant. Vonnie if you are a company, how do you decide what to do with asked the money you end up paying less tax . How do you decide whether to invest some, whether to give more back to shareholders . How does each different choice impact the economy . Paul they have got to decide what they are going to do in terms of expected demand. This will boost expected demand, it will boost profitability of the demand. Many companies have decided they want to invest more. Some make distribute more to the shareholders, particularly from profits repatriated a lot of that tends to go in buybacks and m a. Vonnie you find the maker of a nameless washing machine lets not give any company if , whiteing those machines employ more people and make more . Are people going to be do many more washing machines next year because they have extra dollars . Paul they will. Conception across the board will increase. People will replace washing machines and than they might otherwise have done. Hey may upgrade their car it will added to demand, pricing to forget late. Quite significantly. Vonnie what is the Federal Reserve do . How tight can it needs to raise more quickly how titanic get before the fed decides to raise more quickly . Paul if we saw the Unemployment Rate continued to go down quickly, the fences we will get to 3. 8 by the veto of execute q1. Ill be 3. 5 at the end of if inflation fails to pick up that is the other crucial pickent will inflation up as the fed expects in the spring . In terms of doing back to back rate hikes, i doubt that very much. Larry lindsey, who has been touted as a possible vice chair of the fed, has said he doubts very much the joint committee on taxations view that the fed would react aggressively. Vonnie if everything happens as you say, and we get more demand and Companies Make more stuff, why wouldnt that lead to inflation . Paul what we have seen is that the relationship between growth, the tight labor market, and inflation has gone down in recent years, for lots of reasons globalization, low inflation expectations, much more contest ability in labor markets, technological process, competition from online retailers to the brickandmortar guy. That is a much more stable process than it used to be. Vonnie ok, lets talk about the individuals. There is obviously going to be an impact there. People get a little more of their paycheck. Do they spend it or do they save it . Paul historically they spend it. It depends on who it goes to. People with higher incomes may save more of that. People with lower incomes historically have spent a lot of extra cash. People will see these tax cuts is more or less permanent. It is not just todays income that has gone out. It is expected income in the future. That should leave them to spending more. Vonnie is there any impact outside the u. S. From these tax cuts . Clearly there will be on tax receipt and so forth. But on gdp growth . Paul yeah, there is. Historically if we boost u. S. Gdp by 1. 7 over the next couple of years, the spill over to europe could be 4 of that. Maybe 2. 3. There will be in effect. Clearly, the economy at full employment, there will be more demand. The u. S. Is going to suck in more imports, and that will boost gdp in exporting companies, whether it is germany selling cars or china selling electronics. There will be spillover to other countries. Vonnie not via the dollar. The dollar is up. 1 , and it has been week. Paul we are past the high point for the dollar. A multiyear downtrend. This tax cut slows things down a little bit, but the big picture as we will have a weaker dollar at the end of 2018. Maybe 123 against the euro. Vonnie hundred 23 against the road a big figure move. Our thanks we have to leave tore, unfortunately Paul Mortimerlee. Lets check in on first word news with emma chandra. Emma it is now official, President Trump as assigned the republican backed tax reform bill, slashing the corporate rate from 35 to 20 , doubling the standard deductions to individuals. The president signed a bill that keeps the government running through january 19. The first visit to moscow by the u. K. s top diplomat in five years took a contentious turn. British foreign secretary Boris Johnson met with his russian counterpart, sergey lavrov, today, in an attempt to encourage better cooperation on security issues. After the joint press conference, johnson address obligations of motion meddling in the u. K. Vote to leave the european union. Mr. Johnson russian attempts to interfere with our elections are , whatever they may have been, have not been successful. You can reassure yourself on that point. That is an important consideration. Because i think had it been successful, that would have been an entirely different matter. Lavrov tonight any russian involvement in business politics, saying he would like to be presented with the facts of our unsuccessful interference. The deposed head of catalonia is demanding that spain recognizes victory in Regional Elections after separatist parties won a majority yesterday. Carles puigdemont says the government must guarantee he will not be arrested if he returns to spain. Puigdemont fled to brussels to avoid jail after cattle catalan separatists declared independence in october. China is signaling it is ready to back another round of u. N. Sanctions on north korea. Security Council Voted today on whether to cut Petroleum Projects to kim jonguns regime by 19 , in response to north koreas longrange missile test last month. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am emma chandra. This is bloomberg. Vonnie thank you. World of, the idollar College Sports is going to get even pricier. Vonnie this is bloomberg markets. I am vonnie quinn. Breaking news on plans for a Crypto Hedge Fund he is showing them. Michael nova grants shelving plans to start the Crypto Hedge Fund he talked about recently. We didnt like Market Conditions. It quite may drop as much as 8,000 in the near term. This after a 25 drop in bitcoin the last 24 hours. Helpges are rushing to wealthy donors locked in terror federal tax break. The move is a result of the gop tax overhaul. Joining us now to discuss is bloombergs sports reporter. Get into the weeds a little bit. What exactly is happening . Evan for the past 30 years, colleges have relied on an of spirit tax reduction for donors to fuel the commercialization of College Sports. Stadiums, 500 million a year coaches. All of that is paid on the backs of donations from donors. It was taxdeductible, and now starting next year, they are going to lose the deduction. It has many people in College Sports athletic directors and administrators, they are scared about what happens when they can no longer take the taxdeductible pitch to the wealthiest boosters. Vonnie what do they do now . If this is costing money, do they get it somewhere else, or do they scale it back . Eben they found a creative way of getting around the issue in the near future, by letting donors prepay now. They are making phone calls from sending out emails and letters, letting donors know that you have until december 31 if you want tickets for the next five years. Past for the five years now. Pay us for the five years now. You are getting your deduction, you are paying in 2017. That is the first step, letting people prepay. Vonnie it is is it in your interest to pay up front . If you are not wealthy, it will not matter that much to you whether you get your tax eben it depends. If you are a wealthy fighting irish donor vonnie they are all wealthy. Eben 60,000 a year for your luxury suite, yeah, that tax reduction is a sizable amount of money, and that may matter to you. If you are looking at the next five years of not getting that deduction, or saying, you know what, i will pony up the money now and get my detection now, and i was going to pay any way through the next five years, so why dont i just do it and keep the direction . Vonnie lets have a listen to what this is. It means less money for all of the things were expecting to do less money for financial aid, less money for grad students, less money for research, less money for education. I mean, and is a very surprising move. Vonnie all right from a slave to us what he was trying to say. Eben this is the art all right, explain to us what he was tried to say. Eben this is the argument against the action. Theyre using it to build these stadiums and pay these coaches, that is not a Charitable Gift in the eyes of many, especially for funding system Public Education system in america is struggling with money right now. Teachers are getting phone lines cut off, research is being curtailed, because the money is not there. They would love to see donations go to that part of the institution, and if removing a deduction on the athletic site is a weight is to milley donations going into the academic side, there are plenty of people, as you just heard who think that is the smart way to do it. Vonnie does it change the Playing Field in terms of the schools that get the wealthiest, or the teams that get they wealthiest donors and the most money does it put them on a more level Playing Field, as with the number two, number three, number four, number 10 . Eben honestly, this affects the smaller schools more. Your schools like notre dame and georgia, they get so much money from espn that donations are a small part of the overall budget. If you are a small school like william mary, for example, where espn is not paying you to broadcast football games, they rely much more on donations from wealthy alumni to fuel the program. If you lose your number one revenue stream, or that is dipping down, that is a bigger deal than losing one of the top two or three. Vonnie it is a great story. For that and more ramifications of the tax bill, do have a look at his stories. It is time for our latest Bloomberg Business flash, the biggest business stories in the news right now. Nike fell by the most in nine months earlier today, overshadowing strong growth in other regions. Sales were up 16 in china and 19 in europe, but they were in america. Nike, the worlds biggest sports brand, is losing share in its home turf to germanybased adidas. World are around the scrabbling to finish off a flurry of deals today before bankers and executives break for the holidays, and the disease december in at least 12 years. Companies have announced 361 billion of mergers and acquisitions this month alone. This according to data compiled by bloomberg. Latest business flash update. Still ahead, cvs has grand additions to change the face of health care. Vonnie this is bloomberg markets. I am vonnie quinn. We have breaking news want to update you once again on this atz hasat Michael Novogr a shelved plans to start a Crypto Hedge Fund, as became news a couple weeks ago, when the Hedge Fund Manager said he was going to start a fund specifically dedicated to cryptocurrencies. We didnt like Market Conditions. He said the galaxy hedge fund, as it was supposed to be called, was due to launch december 15, seven days ago. Znce again, Michael Novograt shelving plans for the crypto fun, and he says bitcoin may drop as much as a thousand dollars in the near term. Have a listen to this soundbite that Michael Novogratz made to bloomberg couple weeks ago. This is a problem, and theres a lot of fraud mixed in. A lot of froth and fraud in anything as exciting as this will stop writing this will become the biggest bubble of our lifetimes i think as will become the biggest bubble of our lifetimes by large. The record will show i didnt say that. [laughter] mostly because it is so global. Vonnie the person who broke the story is with us, erik schatzker. Why . He didnt like the Market Conditions a week ago, or yesterday . If you week ago, and would start a cryptocurrency hedge fund, you would not like conditions either. He is a career macro trader come he has been doing this for 30 years. He predicted the cryptocurrencies would be the biggest speculative bubble of our lifetimes, and would you want to start a hedge fund in the middle of that . He himself has made a ton of money, but it is a big difference managing your own money and managing your own net worth against managing other peoples money and becoming a fiduciary for them. Vonnie but you know what . That was the problem even before he announced he was going to start one. That was always the problem in this sphere erik no no no, lets rewind the tape, if you will, few months. Bitcoin started the year just about 1000. At the time Michael Novogratz was thinking of starting his hedge fund commit was trading in the threes. By the time he spoke to me and we recorded it, it was trading in the 4s. Bitcoin has gone from 4000 in the middle of september, when he first started talking about this, to a high of more than 19,500 december 18. People have likened it to the tulip craze for great reason. Vonnie you could say that he added to that frenzy to a certain extent by saying he was going to go out and raise a bunch of money erik i think he might even acknowledge that, but going back to this business of being a fiduciary, you have to feel good about managing other peoples money. Has not given up on bitcoin, he hasnt given up on cryptocurrencies, either as a stored value or as a medium of exchange within a tokenized industry, if you will. But he says that the recent trading activity shows all the characteristic of a speculative market top. Vonnie two quick questions did he sell out of some of his bitcoin positions . He has been selling out of some of his positions, but he has been trading in and out and selling over time. He sold it going at 15,000, 60,000 comes 17,000. 600, 700,er at 800. He lost money today for sure, but he still says he is still up on the month. Vonnie last question, what will he do with the 500 million that he has raised erik no no no, he has not raised 500 million. He had commitments for how much you would not tell me but he said people told him they would invest in the fund, but he did not take the money and never got put to work. That was supposed to happen on december 15. On december 13 he called his clients and said, you know what, im putting this plan on hold. Vonnie great story, great exclusive. I do want to point out that bitcoin is trading above 13,000. It is down 13. 5 , but better than what it happened. What it had been. Cannot live without it. So if you cant live without it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Jonathan from new york city, i am Jonathan Ferro with 30 minutes dedicated the fixed income. This is bloomberg real yield. Jonathan the president signs the tax bill and the Treasury Curve stevens. Risk assets outperform a 2017. Junk bonds get left behind. In europe, the year just the way we started it, worrying about politics