We face many dangers and critical challenges from north korea, to iran, to venezuela. We thank spain for its recent decision to expel its north korean ambassador, and for standing with us in our efforts to isolate the brutal north korean regime. It is time for all responsible nations to join forces to isolate the north korean menace. North Korean Nuclear weapons and Missile Development threaten the entire world with unthinkable loss of life. Act now to must ensure the regimes complete. Enuclearization i appreciate the United Nations Security Council voting twice , toimously, 150, twice adopt hardhitting resolutions against north korea. I initially we initially initiated tough new sanctions for those who do business with this outlaw regime, and applaud chinas action to restrict its trade with north korea. And in particular, i applaud alla for breaking off banking relationships with north korea, something that people would have sought unthinkable even two months ago. I want to thank president xi. Here in the western hemisphere, we have seen the heartbreaking madurosajoras socialist rule in venezuela. Spain has been promoting the interests and wellbeing of the venezuelan people, and we thank you for your efforts. E. U. Pe our friends in the will soon follow the United States, canada, and many latin american nations in sanctioning the maduro regime. We need everybody involved. The citizens of venezuela have endured suffering, starvation, and dangerous political unrest under maduros oppressive socialist regime. Together, spain and the United States hope for peace, for the restoration of democracy, and for the release of all political prisoners. Wherever socialism spreads, misery follows. The people of venezuela deserve a future of freedom. These are great people. In the economic arena, we support trade that benefits oath spain and the United States, which means it must be fair and reciprocal. Such an important word. Has not been used very much in the United States reciprocal. Spain is the 10th largest investor in the United States, and i commend spanish Business Leaders for their competence in america and the american worker. Considering the fact that our stockmarket market has just hit alltime highs, i think they probably like the United States very much right now. This is a time for tremendous opportunity for our world, but also serious dangers. ,s i said at the United Nations which future really is up to us. If we empower our citizens, serve their needs, and appeal to all that is best in the human spirit, then i have no doubt we will succeed like never, ever before. Mr. President , i look forward to working with you to build this future of prosperity and peace for both spain and for the United States of america. Thank you very much. Thank you. Ladies and gentlemen, good afternoon. I would like to start by expressing my solidarity, that of my government and that of the spanish people, with the people m the u. S. Government after the terrible events President Trump just referred to that took place in texas, florida, and other u. S. Regions, and puerto rico. That even ife wish what happened cannot be changed, we hope that in the future we as possible for everyone. President trump and i had a working meeting today which was very productive, and we went through our bilateral relations. Spain and the United States are great partners. We share values democracy, freedom, respect for human rights, the rule of law. And we have institutional, cultural, corporate ties which are very important. Relations between the countries have been excellent, and we must continue to work to strengthen those relations even more, especially in the economic arena. Oft is why our priorities strengthening the economy and job creation are key. Trade between the countries is growing, sustained. The United States is our second top training partner outside of europe. The United States is our top destination of experts outside the European Union. Regarding investments, it is the second toughest nation of topish investments, and the investor of spain. For many years, Spanish Companies have invested in the u. S. They are creating many stable and highquality jobs in different sectors such as the financial industry and energy. This has been possible thanks to the establishment of subsidiaries in the United States by 600 Spanish Companies, and they will continue to create jobs. They follow closely Investment Opportunities in the United States and can contribute their technology and experience to the United States. Withe also been in detail President Trump on spains role different crises which are important to all. He referred to our participation in the coalition regarding Nuclear Proliferation and north korea. Combating terrorism is something we talked about at length. Spain has a longstanding experience in this area. Just like the United States, we have been hit by terrorist attacks on our soil. Agreed onries have antiterrorist policy and we cooperate very closely in the police, military, and intelligence areas. I have also said i am sure we still need to do a lot in the area of intelligence. We need to include the coordination mechanisms in the area of cybersecurity or presenting recruitment and financing of terrorism. I also underscored spains role as a member of the Global Coalition against terrorism, and our deployment in iraq which is very large we are the fourthlargest contributor and have trained over 32,000 officers. In addition to that, i have told President Trump that we will increase our commitment with the new phase after the fall of mosul, by contributing an aid package to rebuild iraq. We also have long relations both , witho and bilaterally the spanish bases used by both of our countries, which are increasingly important strategically. Our Defense Agreement goes back to 1988. At that time, spain was in the backseat of the alliance. Right now, we are at the forefront, in libya. The security relationship is excellent. We would like that to spill over into other areas of the bilateral relation. President trump and i have gone through the political and Economic Situation in our countries. Regarding the international situation, we have agreed that the challenge by north korea to the nonproliferation regime is an intolerable violation of international legality. I have expressed the full support of the Spanish Government to the stepping up of sanctions, as approved by the United Nations the other day. We know the European Union is working on new additional measures. And in that concept, spain will continue to press for a firm common stance, supportive of the u. S. And its regional allies. Reminded President Trump that the Spanish Government has taken measures that have reduced the diplomatic presence of north korea in our country. President trump has thanked me for the Firm Position my government has taken and the measures. Regarding venezuela, we have exchanged words on the worrying totalitarian direction the country is moving in, and its impoverishment, with the applications it has in the humanitarian area. We have noted that there is a internationaln pressure on the venezuelan government so that it commits to negotiations which will enable ,s to find a democratic negotiated, and peaceful solution to the current crisis. I have also reminded that President Trump that spain, in the e. U. , spearheaded the adoption of sanctions, which were first individually targeted. We have gone through the political and Economic Situation with our countries. Spain and the United States are democracies, friends, and allies with many common values and interests. Have agreed to Work Together in the area of those values, with a comprehensive and cooperative vision. I would like to thank the warm welcome that was extended to us by President Trump and his team at the white house. I would also like to underscore the friendship that exists between the United States and spain. Thank you. Pres. Trump thank you. Steve holland, please, reuters. Dont get nervous, steve. Steve [indiscernible] preoccupied with the nfl instead of dealing with puerto rico. Pres. Trump i was not preoccupied with the nfl. I was ashamed of what was taking place. To me, that was a very important moment. I dont think you can disrespect our country, our flag, our National Anthem. Very, the nfl situation is important. I have heard that before, about, was a preoccupied. Not at all. I have plenty of time on my hands. All i do is work. Had to be honest with you. That is an important function of working. It is called respect for our country. Many people have died many, many people. Many people are still horribly injured. I was at Walter Reed Hospital recently and i saw so many great young people and their missing legs and missing arms, and they have been so badly injured. They were fighting for our country, fighting for our flag, fighting for the National Anthem. That byle to disrespect kneeling during the playing by our National Anthem i think is disgraceful. I read youy part of the quote, but the governor of puerto rico is doing a great job. We did a great job in texas, florida, louisiana. We hit little pieces of georgia and alabama. And frankly, we are doing and it is the most difficult job, because it is on an island in the middle of the ocean. It is out in the ocean. You cannot just drive your trucks there from other states. The governor said we are doing a great job. He thanked me specifically for fema and all of the First Responders and puerto rico. We are also mentioning, with that, the u. S. Virgin islands. It was devastated. We are totally focused on that. At the same time, it does not take me long to put out a wrong, and maybe we will get it right. I think it is a very important thing for the nfl to not allow people to kneel during the playing of our National Anthem, to respect our country and to respect our flag. Thank you. If i could ask the crime minister if i could ask the Prime Minister a question, is it going to take a war to rein in north korea . What is your advice to the president on dealing with this . Rajoy minister rejoin [speaking spanish] no one wishes for there to be a war anywhere in the world, but it is true that the recent events in north korea, with implications in the neighboring countries very important we alles means that have to be forceful, and those of us who defend the values of democracy, freedom, and human rights have to let north korea korea is not going anywhere in the direction. Sanctions have been adopted. Any politicalport decision which will contribute to putting an end to this situation, which has nothing to do with the principles and in most of western and global democracies. [speaking spanish] we dont know whether during your conversation you discussed the alanalone the cat situation. This is a question for President Trump. Do you support what the Spanish Government is doing regarding catalonia . I would like to ask the president of the Spanish Government whether he fears there might be a universal declaration of independence in catalonia, and what would the government do then . Pres. Trump i think that spain is a great country and should remain united. We are dealing with a great, great country, and it should remain united. I have been watching that unfold. It has actually been unfolding for centuries. I think that nobody knows if they are going to have a vote. I think the president would say they are not going to have a vote. The people would be very much opposed to that. I can say, only speaking for myself i would see spain continuing to be reunited. P. M. Rajoy the decision to unilaterally declare independence is not something i would it is not a decision i would make. It is a decision which will have to be made or not by the cut catalan the government. I think it would be very wrong. One everyone knows the referendum cannot take place because there is not an electoral committee, a team at the government organizing the referendum there are not ballots. There are not people at voting stations. T is just crazy all this will lead to is noise. With minimum guarantees, i think what would make sense in a situation such as this is to go back to common sense and put an end to this whole story. The only thing it is doing is generating division, tensions. It is not contributing in any situation. Citizen i want this to be resolved as soon as possible, and i want us to go into a new stage where the rule of law, dialogue, and common sense will prevail. Thank you. Pres. Trump thank you. Major garrett, cbs . In puerto rico, [indiscernible] hours away. [indiscernible] are you satisfied with what the government has done so far . [inaudible] and you have an official meeting and are you contemplating the deployment of special naval assets or air assets to puerto rico to address problems there . And on north korea, very quickly the foreign minister said you have declared, effectively, war on north korea, and the north korean government has threatened to shoot down or aim at american planes in international airspace. I would like your reaction. The. Trump i will answer second one first. We are totally prepared for the second option. Not a preferred option, but if we take that option, it would be devastated. I can tell you that devastating for north korea that is called the military option. If we have to take it, we will. He is acting very badly. He is saying things that should never, ever be said. We are replying to those things, but it is a reply. It is not an original statement. It is a reply. The things he said over the last year, and if you look back, the things he said to past administrations north korea is a situation that should have been handled 15 years ago, 10 years ago, and five years ago. It could have been handled much more easily. There are various administrations, many administrations, which left me a mess, but i will fix the mess. We will see what happens with north korea. As far as puerto rico is concerned, i think just the opposite. Reviewshad tremendous from government officials, as we have in texas and louisiana, and as we have in florida, as you know from governor scott. Greg abbott. Great governors. This morning, the governor made incredible statements about how well we are doing. We understand it is a disaster. It is a disaster that just happened. The grid was in bad shape before the storm. Puerto rico did not get hit by one hurricane. It got hit i two by two hurricanes, among the biggest we have ever seen, with the second being even worse. The second hit puerto rico as a category 5. I do not believe anybody has , it landappen before with that kind of velocity. The governor was generous, and i appreciated it. Our top people have been there. President donald trump speaking in that press conference with the spanish Prime Minister, mariano rajoy. In d c after the gop lunch, they are talking about Graham Cassidy and the decision not to vote. Senator graham the opinion of republicans has been, we know what we do not like. Obamacare is not working. We have made that case effectively. But we have had a hard time articulating what we are for, until now. Now, we have something to talk to 50that makes ends republican senators, a lot of governors, and i hope the American People. If you are a singlepayer believer, god bless you. I just respectfully disagree. But what we are proposing is the end of singlepayer health care in washington. That worked with welfare reform. In 1996, the congress, in a bipartisan fashion, under bill clinton, took the welfare system and block granted him back to the state with guidelines and guardrails, and achieved a lot of success. I am convinced that innovation and flexibility is the key to sustainable highquality health care, that obamacare is the exact opposite of innovation, flexibility, and highquality. We are down to one provider in my state. In 2014, we had five. A 31 increase in South Carolina alone. This system is failing. The good news for america is republicans are not just going to deliver on a campaign promise. We are actually going to improve your health care by giving you access to people who care more about you at home than any bureaucrat here could in washington. It is a simple proposition taking basically the same amount of money in it are way, allocated to the states. You have to spend it on health care, not football stadiums, not roads or bridges. You have flexibility, but there are guardrails. I believe with all my heart that a governor, a state house member, is going to listen closer to you and care more about your family when it comes to your health care then some bureaucrat here in washington who will never know your name. To the leader, thank you. It is complicated. It is difficult politics. Instead of quitting, you allowed us to move forward. And all my god, how far we have come in such a short time. Two President Trump, thank you for engaging. Vice president pence, you have move mountains. With flexibility, governors, with the right attitude, can improve holiday. The Leadership Team has done everything we have asked them. We are coming back to this after taxes. Toare going to have time explain our concept. We will have a better process. We are going to take this show on the road. Unlikesidy has a heart anybody i have met for reform and understanding about people when it comes to health care, that i could never hope to match. For decades, he worked in a hospital, nonprofit serving underprivileged people. And he has convinced me that when the patient is the focus of the exercise, the outcomes are better. N heller has been a tough is in a tough political race. Givenraced the idea that the money, we can do better if you let us. Ron johnson has been a guy, mr. Smith goes to washington. All i can say about this team, including rick santorum, who sort of started this process i have been up here 20 years. I never enjoyed anything more. I believe this is the most important thing i can ever do for the country, working with my colleague. He is not to just repeal obamacare, but to replace it with a system closer to where you live, controlled by people you can vote for. We are going to get there. Wemy republican colleagues, are going to fulfill our promise to repeal and replace. To the American People, we are going to improve health care for you. At the end of the day, that is the only promise that matters. To be clear, through events that are under our control and not under our control, we dont have the votes. Speaking to the leadership, speaking to the president , i and him are on speed dial. Since we do not have the votes, we will postpone. Am i disappointed . Absolutely. It is a disappointment for myself. Just today, there is am ehealt. Com report that the average family at 141 of the american Poverty Level will pay 20,000 per year for their policy, which means they cannot afford it. That is not just a few families. It is the average family of three making 82,000 a year. When folks vote that we did not define affordability, no one can afford it. We heard yesterday that pennsylvania has a gap in the state legislature. News reports that michigan will. Louisiana does. Give themng to relief. We will not be able to. That is too bad for state legislatures. Lastly, for those working families in nonexpansion states like texas, utah, maine, virgin you, missouri, georgia, florida, South Carolina, utah i could go down the list who right now do not have access to the dollars that will give them coverage. We were going to give them access. Access to the health care screens, the treatment they otherwise will not have. I am also disappointed for them. Dollars that will givethose whoe fact that we do not have the vote just yet think of those families making 120 of federal Poverty Level, those states, and those patients in nonexpansion states, as you celebrate. They are not celebrating. They are morning. But we will keep working at it. Our democratic friends said, if we give them a chance, they will be bipartisan. They now have the chance to be bipartisan. Thank you very much. Senator corker and senator toomey have reached an agreement on the parameters of the budget resolution for tax reform. The Budget Committee will be marking up next week. We will plan to move forward on our next priority, which is reforming the american tax code in a significant way for the first time in 30 years. At our meeting today, senator rubio, just back from puerto rico, reported to us on the devastation of that island. It reminds us of our responsibilities to step up and help our fellow american. Senator schumer this morning said it was imperative that we provide additional Hurricane Relief for the victims of hurricane maria, yet yesterday in the house, nancy pelosi blocked Hurricane Relief that would benefit not only the victims of hurricane maria, but also irma and harvey as well. I would hope that she would reconsider and listen to senator schumer. Ms. Ars that ms. Pelosis compassion we are looking to the Republican Leadership talk about the gramcassidy bill that they do not have enough votes on. Lindsey graham began by saying, we have had trouble articulating what we wanted. What they are proposing is the end of singlepayer health care. Of course, that bill will not be voted upon. But they are still committed to the principles within the bill, given more flexibility to states when it comes to choosing health care. Lets get more analysis from kevin cirillo, who is at the white house, as well as bonnie. Hen kevin, let me start with you. This was an admission of defeat by Lindsey Graham and bill cassidy, yet they are certainly making the case that they are not done with health care. Admission ofan defeat from capitol hill, with the president insisting he will continue to move forward to try to pass through his legislative plans. We heard President Trump responding to criticism that he is preoccupied with the nfl and not handling puerto rico. The president saying he is not preoccupied and he has ordered the deployment of naval assets to puerto rico, reiterating that he will be there on tuesday to help with the devastated island. He noted the islands governor saying that he has done a good job, despite local government officials on the island saying that they want more. Thehe issue of north korea, president again thanking government officials for their actions to their central bank. Jongun,riticized kim saying his rhetoric was unprovoked. The president reiterating his criticism against nfl players and nfl officials, saying that he believes they should not be kneeling during the National Anthem. Vonnie on north korea, he said the military option remains on the table. He said that is not the preferred option. He was clearly calling for more international response. We got Prime Minister rajoy saying he would support a political response here if that is what it takes. Will keep this quick because i know we are wrapping up at the white house. That was a great point, julia. It is worth noting that he had again has said that sanctions potentially there are still more sanctions that could happen. We heard from u. N. Ambassador nikki haley last week that the aim of the sanctions is to slow down the pace of what is happening out of north korea. Quickly,so note, just the president offering the spanish people. Or against catalonian offering the spanish people for support against the Catalonian Independence referendum. Julia plenty going on in scarlet plenty going on in washington, the Republican Leadership finishing their weekly luncheon, graham and cassidy talking about the deal that will not be voted on. Lonnie chen of the uber incident ver institute. The message was, they will continue to push on health care, but it will not be this week. Forward for path health care, given the three senators who came out against bill had Different Reasons to oppose it . The reason this bill was not able to get further his you have republican senators on different sides of this issue. You have Susan Collins, who wants to see more money for medicaid, opposes the fundamental changes to medicaid. Contrast that with ted cruz, who wants more deregulation. He wants fundamental medicaid reform. I do not see where those sides reconcile in this discussion. While they say they want to come back to health care, that means they want to move on to something else. Maybe at some point, if Something Like that dynamic changes, they will revisit it. Like bringing the democrats on board and trying to thrash out something that enough of both sides can agree on, in order to actually reach a deal. Lanhee that is one potential pathway. The reason they need ted cruz and Susan Collins to be on the same page is because the republicans were using a budget reconciliation vehicle, which is a Straight Party vehicle to get health care across the finish line. If they are able to get democrats on board with some fixes to the Affordable Care act, things that are may be a temporary set of solutions, maybe they get some democratic votes. The problem with that is, it is going to be very difficult for Republican Voters who are evaluating this Republican Congress to see that as a victory, when republicans have been promising for seven years to repeal and a place obamacare. A budgetyou mentioned resolution. There is a mention they will fold it into the budget resolution that will already include reconciliations for tax reform. Is that too much . Lanhee i think the concern, scar, is the end up polluting the tax reform issue. There is overlap between Health Care Policy and tax policy, so the opportunity to try to do them together or figure out a way to work changes together is not entirely out of the realm of the possible. But we need to be very careful. If tax reform is the goal for republicans, the concern is, if you Bring Health Care into it, are you making it that much more difficult to get something that is already hard done . Are talkinghing we about and the theme that came out was the greater flexibility at the state level. If you are talking about trying to achieve great flexibility at the state level there seems to be agreement about that in theory. Actually able to reduce costs in the short and mediumterm . I do not see how that works. Lanhee julie, i think the answer is in some states, it states moved toward regulatory reform, which it would have allowed them to do i think you would have seen lowering of premiums in some states. But you raise a good point. If you look at republicans, one thing they pretty much all agree on is more flexibility for states. Maybe if the republicans had cassidy, the graham discussion would be in a different place, but we had all these attempts that expose how many fishers there are f issures there are in the coalition. Scarlet obamacare is still the law of the land and Insurance Companies need to firm up their pricing so they can put out options, so consumers can choose different plans, or accept or not accept an existing plan. Lanhee Big Questions that need to be resolved. What is the Trump Administration going to do as it seeks to implement the Affordable Care act . Do the Trump Administration pay the subsidies to keep people in coverage . Do they continue to work with the insurance plans to keep plans and some of these states . The second question is, what is the dynamic going to be in some of these states . You have declining to the patient and rising premiums. Is that going to create in the political pressure at some point to force republicans and democrats to address these issues . These are issues that need to be looked at. Julia the insurers have no further clarity. The talk today in the gop that they will try to revisit that at some point what did they do for the individual markets in terms of their offerings . Do you expect premiums despite . They will have to price for ongoing uncertainty. Lanhee that is why you have seen insurers decide they do not want to participate in these marketplaces, because of the regulatory uncertainty. Ones whattraded you are seeing is a situation where continued uncertainty exists. Are these insurers going to get the right mix of patients in their risk pools . Are they going to get subsidies from the government . Without resolutions, it is difficult for the insurers to plan. I would expect you are going to see some bipartisan efforts to resolve stability in the next six months. They literally do not have the plan for this. That makes the argument for needing to Work Together. Lahnee chen, thank you for joining us. Puerto rico that makes bonds. Porter the hurricanes with through the commonwealth. What is next for the island that is mired in financial trouble . Julia this is bloomberg markets. I am julia chatterley. Scarlet i am scarlet fu. Julie hyman is focusing on biotech spots, in particular, one of the worst performers. Lets start big, looking at health care shares. If you zoom in on biotech, a big decline, down by more than 1 . A lot of it has to do with individual Biotech Companies with disappointing results, but also a general downdraft within the industry. Performers,orst analysts are highlighting a competing product that is now being made by general electric. The others do not have specific news. There is a Company Called ptc therapeutics. Millionalmost a 700 company, even with todays declines. It does not have many products, but one of the experimental products is called translarna, treating duchenne my schiller dystrophy, muscular which affects mostly young men and is mostly fatal in their 20s. , on sale in the European Union, had been rejected by the fda. Tc got another review with a rare clause. But reviewers at the fda are casting doubt on the companies on the drugs ability to treat this type of muscular dystrophy. A j. P. Morgan analyst called the report very negative, the tone of the report very negative, in a note to clients. It seems as though the prognosis for this drug is not very positive. Julia what happens next . Julie this was the first report coming out from the fda. On october 24, the fda is scheduled to give a formal yes. R no vote given the content of this, it does not look good. One thing at uninteresting is, if you look at the bloomberg, analysts are less positive than the used to be, but there are no sell ratings. Holdf this beige color or ratings not many analysts cover the stock. Is at abouthich 16. 50, is below the 12 month target price from analysts, which is 22. Unless something changes, they might have a little catching up to do. Scarlet under pressure. Thank you so much. Julia puerto rico is appealing to congress to avoid a humanitarian crisis. In theand is reeling aftermath of devastation from hurricane maria. The bonds have toppled by the most in two years. That compounds economic woes for the commonwealth. It defaulted on its bonds and filed for record see in may to escape more than 70 million 70 billion of debt. Michelle cash. Y set the scene for us. The have been talking already about the difficulties that the region is facing, in light of the damage that was done. We have seen suggestions of damage to the tune of 30 billion. We are talking about a company that a country that is effectively bankrupt. What do they do next . if puerto rico already faced challenges, they are going to have even more Going Forward. Right now, it is still an issue of rescuing lives, getting waters,ut of the flood getting the electricity back online. Almost the entire island is without power. Hospitals are running on generators. It cannot stay like that. That is completely unsustainable. Scarlet and if you are applying for federal aid, there is costsharing between puerto rico and fema. What is going to happen . Michelle puerto rico are asking for a waiver, hoping they will those matchinge funds on a shortterm basis. It is unclear what the federal government is going to decide. Scarlet do you not have anyone in congress to speak up on their behalf. Michelle there is a congressional representative who cannot speak on the house floor. Julia there is the state utility company, which has also been declared effectively bankrupt. This is obviously dramatically shinning the ability to produce electricity. This is a country that would try improve funds to try to infrastructure and repair the damage. But it is not allowed to go to the market. Michelle puerto rico and the big electric utility cannot go to the market and raise funds that way. The biggoing to be question. How much aid are they going to get from fema and the federal government . And what can it do, financingwise, Going Forward . Senator marco rubio has suggested puerto rico should have access to low income loans. Maybe that could be potentially through the Federal Reserve or the u. S. Treasury. But details of that we just dont know yet. Julia we introduced you by mentioning the bonds are trading in certain cases the 17 year bonds are trading at just over . 50 to the dollar. Done, talksk being on a broader restructuring deal that needs to take place. In light of the story that you set out here, surely this makes the likelihood of restructuring that much more likely, because there is simply no other route for them to go down. Michelle they were already on the path to restructuring in the bankrupt the process. The problem is that gets more complicated. Hurricane maria made that more complicated. That might be a longer process now. Money puerto rico actually has to pay bondholders over the long term that is a big question. Scarlet in the meantime, you are seeing the brain drain continue in puerto rico, which was already happening before the hurricane. Who is left to get this economy going when electricity returns . Michelle that is the risk, that this could prompt even more people to leave the island. They dont want that. A lot of doctors have already left the island. They need to keep People Living there and to attract new people to move there. That is the challenge. Julia solution needed desperately. , thank Michelle Kaske you so much. Michelle is our inhouse puerto rico reporter. A macro fund manager putting up a whopping 150 million of his own money to start a 500 million fund around bitcoin. We hear why he believes in the cryptocurrency this much when others are shouting double bubble. Nearly two years after Fortress Investments shuttered its macro fund, the former manager, michael no regrets vogratz, is reinventing himself as king of bitcoin, investing 150 Million Dollars of his own to start a 500 million hedge fund. Dell exceed Digital Asset fund would be the biggest of its kind. Yesterday, he sat down with editor at large Erik Schatzker to describe why bitcoin is appealing to macro traders. Of ways, this is a market like any other market. Of you see the psychology in the charts, the same yet the same as you would see in the ruby or treasuries. Because ofaggerated and because he cannot get short. There is not a real good way to short. When they fall, jamie dimon makes a comment, china bans the exchanges, the trendline breaks they fall a lot further than they would in other markets. Basis tonot a short cover. You reach a new level of support and rebuild your base. Erik how do you know when to buy and sell . How do you trade this thing . Mike there are multiple ways to trade. One is just macro. Of the the ballet charts. I tell people i need a story and a chart. There is a lot of information. Part of it is eventdriven. And access to information. I put myself at the center of the ecosystem. It is still a relatively small world. You know what is happening. Alliance got announced it was well telegraphed. And the priceced goes way up. I would call that an eventdriven trade. The broad trading of it is macro, though. You see many zeniths or euphorias. Some bitcoin and three weeks later tried to buy it in the low three thousands. If you are good at that and a trading junkie, it is a lot of fun. It does increase your tax bill. For some people, that is a different strategy. Erik you are trading bitcoin, ether, jesus coin . Mike not jesus coin. All sidesticipated in of the ecosystem. I have mines. Erik to create new coins. Mike that has been an interesting business. It has been a money loser or us. In local currency terms, i spend mine. Ns to buy a bitcoin if i spend dollars, i would have made a lot of money, but you were better off owning the bitcoins. Either, you are far better owning ether than buying an ether mine. We are fairly large, so we trade at lots of different exchanges. One of the tricks are risks in this business right now is, the riskiest money in the system is being left on the exchanges, because erik central clearing. Mike they are not that wellcapitalized. You do not leave that much money on the exchanges. We traded lots of them. , thei here in new york cameron and tylers exchange, is the exchanges. O if something really bad happens, i need my shot. Scarlet that was delicacy Investment Partner founder mike novogratz. Erik schatzker, congratulations on the scope. What did you learn . There are reports he is starting a Fund Investing in bitcoin and hecoin infrastructure, but is unable to confirm or deny that. There areaid regulations around that, so he can neither confirm nor deny. If i were in the same position, i would say the same thing. But what i learned is that he is raising 500 million for this fund. Invest not just in cryptocurrencies, but with a broader mandate to do arbitrage, marketmaking, to invest in initial coin offerings and pre icos on a Venture Capital basis. He is something 150 million of his own into it. From raising 500 million some of his macro buddies, presumably, and from High Net Worth individuals. He is hoping to have all of that done by january. Julia he said it is going to be the largest bubble of our lifetime. He is not denying it. He just wants to make money. Why did he get into cryptocurrency and this potential fund in bitcoin . He made inay recall on voluntary exit from fortress, where he was running the macro product. He had a couple of years of performance and there was a lot of redemption, and he has been on a self imposed exile. He decided to take a vacation in india to clear his head. Julia [laughter] erik not what you think. Before he left for india, he took a call from a guy named joe lubin, who helped create the ethereum network. A College Roommate of his at princeton. He went to see joe and said, i expected an assistant and a dog, and instead it was this thriving startup in bushwick, in brooklyn. He thought on the basis of that alone, something is happening. People talk about a revolution. A believer. Me of he wanted to invest in the start up. Instead, he bought ether and tom million,and made 250 the best fall of any trade in his whole career. Julia i love this story. Erik he was a goldman partner since 1992. Julia he said he paid a lot of tax. Taxes. E paid his a lot of people do nothing bitcoin is taxable. Some libertarian types do not think it should ever be taxable. Scarlet this is remarkable, especially the timing. If he started a little bit later, who knows where it would go from here . Erik looking at the volatility of bitcoin relative to the equity market scarlet we could pull it up quickly. Bitcoin has been more volatile. Erik i have it on my bloomberg terminal. It does show you the yellow line versus the purple line purple being equities how all over the map bitcoin has been. Just this month, in fact. Julia a great interview as well. Erik schatzker there. Qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq its 3 00 p. M. In new york. I am julia chatterley. Scarlet i am scarlet fu. Welcome to bloomberg markets. Julia we are live in bloomberg World Headquarters in new york. Here are the top stories we are covering on the bloomberg and around the world. Senate republicans, suffering another defeat on health care. Dropping their plans to vote on the gray himcassidy bill to repeal obamacare. Meanwhile, Mitch Mcconnell is looking to move on after the health care failure. He says tax reform is next. Congressman mike kelly of pennsylvania met with the president and members of the house ways and Means Committee can money committee, and he joins us shortly. The head of pimcos canadian Portfolio Management gives his take on the state of affairs. Lets check on markets with julie hyman. Slightly green, at least. The dow and s p are little changed by popping a little bit after shaky session yesterday. The nasdaq recovering the most, as it fell the most yesterday. We are seeing gains in stocks that were weaker yesterday, recouping some of their losses today. One headline event today was janet yellen, speaking earlier abecleveland at the n conference and she said, the fed it should not be too behind the ball when it comes to raising rates. Raisingpect for the fed rates before the end of the year are in white. We see the probability being priced in a federal rate increase. The dollar, meantime, has bounced off lows although it is still not reflecting, at least by that measure, much of the probability of a rate hike by the end of the year. It did see a little bit of a leg up today as we heard from janet yellen. The dollar is subject other factors though, including geopolitical concerns. Up and down movers, we have al brands higher. Graded today. May set rich, which is a Real Estate Investment trust, upgraded by jpmorgan. Knalysts say overall, wea fundamentals have held up better than the harsh narrative implies. Third quarter adjusted, coming in below estimates. And finally, the big lunch of the day, the company that was developing, as it made hope, and experimental treatment for alzheimers disease. It failed a critical trial. That accounts for the plunge. That was the main product expected from this company. Scarlet breaking news. That saudi arabia will allow women to get drivers licenses in the kingdom. The saudi ongoing reform drive. A fascinating move. Scarlet lets move on to health care. The Graham Cassidy Health Care Bill is dead. However, senator Lindsey Graham says he is hopeful it will get past before the end of this congress. Meantime, everyone else is turning their focus to tax reform. See aicans, though, may familiar foe within their caucus. Senator john mccain of arizona. He is demanding a bipartisan vote, much as he has been demanding on health care. Joining us now is correspondent kapur. ll sahil do you think mccain will adjust his strategy when it comes to tax reform do you think mcconnell will adjust his strategy when it comes to tax reform . Yes and no. He is crafting legislation mostly in secrecy, and on a strictly partisan basis. There is not much member acknowledgment from the rankandfile as to what is in this tax bill. So they have learned that lesson. They want to get the house in the white house on board before they start moving legislation. Through are doing it the fasttrack reconciliation process, which allows them to bypass the filibuster and therefore do it without bipartisan support, which is what senator mccain just told me, about an hour ago. He is going to make the same demand on health care, regular order, bipartisan support, and input. Democratic scarlet thank you for joining us with that. The canadian finance minister is sanguine about the countries hot economy, despite Rising Interest Rates that threaten to slow growth. Toneau took an upbeat ofut the resilience canadas fastgrowing economy. Joining us now is added develin, ed devlin of pimco. You say conditions are not as healthy as the numbers suggest. What is everyone missing . Littlehink it is a premature talking about this recovery starting to expand into business and exports. The surprise, about 1 of gdp that we got last year, one third of it was in inventories and two thirds of it was in consumers who are over indebted and continuing to spend. The uncertainty of nafta, the appreciation of the dollar, i think it was a onetime transitory effect in there, as well. Us that, in a world where the u. S. Is growing at 2 canada at 3 is just unsustainable. We are going to come back down to earth. Yes, the economy does have some momentum. Bump up now, but we think it is just a bump, and we dont think the trajectory has changed. A you think the confidence among businesses and consumers is pretty fragile. And if the numbers turn south will be shifting gears strategy, they will start to clamp down. Absolutely. And minister morneau alludes to consumers are spending because the government has been giving them tax breaks, child benefits, etc. But that happens once and goes away. At some point the government is going to start to pull back on fiscal expansion, and that is going to be a headwind to growth. Have seen trade, headwind to growth. We think it is premature to declare victory on exports and investments. We see the consumer facing tougher mortgage rules, higher Interest Rates, and they are already over indebted. None of this looks particularly rosy, so if you look under the headline numbers, im not saying it is terrible and i do think the cop the economy has momentum in the shortterm, but if we look a year and beyond, it doesnt not look sustainable to us. You can understand the Central Banks concerns centralbanks concern about overheating. Rates are so low, and kennedy and many other countries, in addition to that. And they say, you know what, we strike while the iron is hot and try to take back some of that stimulus. Do you think the central bank is doing something the right here is doing the right thing here or are they being somewhat precipitous . Thinking back to 50 basis points and cuts when we had it oil shock when we had an oil shock, i think that is fine. They thinking that world at is, around the people are taking this opportunity. What isadians look at going on in europe and the u. S. , even though we are not seeing inflation, people are striking when the iron is hot, as you would say. But canada, given the communication of the bank, when you look at Canadian Business canadian Interest Rates versus american Interest Rates, canada relative to the u. S. , canada has tightened at 100 basis points. Say, that that and doesnt look quite right to us. You can argue cause and effect but i would say the in first the Interest Rate differential is driving the dollar higher. Canada outpaced the fed, and tightening, when you have the currency it went 23, or whatever it is today i down 1. 23, or, whatever it is today. Julia lets check headlines with mark crumpton. Mark julia, thank you. Facing certain defeat, Senate Republicans leaders decided today not to even hold a vote on the gops latest attempt to repeal and replace the Affordable Care law. Senator Lindsey Graham, who cosponsored the legislation with louisianas bill cassidy, said the fight is not over. We are going to get there. To my republican colleagues, we are going to fulfill our promise to repeal and replace, to the American People. We are going to improve health care for you, the guys at the end of the day that is the only promise that matters. From one end of america to the other, the cassidygraham billld have been would have been a health care disaster. The American People saw it, rose to the occasion, and our colleagues had no choice in the face of opposition from one end of the land to the other, to withdraw their bill. Mark the abandoned bill would have transformed much of obamacares spending into grants that state would spend with few constraints. The Trump Administration is using new sanctions to punishing north korean banks and. 6 bank workers living abroad. The sanctions rely on an executive order President Trump to targett week, north koreas access to the International Banking system. The eighth banks are all in north korea. The Treasury Department says the 26 individuals are north korean nationals employed by those banks who work and russia, china, libya, and the united arab emirates. Top Republican Leaders in congress are promising help for hurricane devastated puerto rico. House Speaker Paul Ryan and Senate Majority leader Mitch Mcconnell said they are working with the Trump Administration, awaiting word on what resources and Disaster Relief will be needed. I want the people of puerto rico to know we are in this with them. Right now, this is a rescue mission. I also want the people of puerto rico to know they are going to get the kind of support and aid that texas and florida half enjoyed. The built we passed a couple of weeks ago for fema equally applies to puerto rico. Maria has left millions of u. S. Citizens in puerto rico without food, water, housing and electricity. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Coming up, President Trump is promising to unveil a very detailed tax plan tomorrow. We will talk to a member of the house ways and Means Committee, republican mike kelly of pennsylvania. From new york, this is bloomberg. Trump metay president with a Bipartisan Group from the houses chief taxwriting committee. Us now is republican representative mike kelly of pennsylvania. Kelly is also a house ways and means tax policy subcommittee member and attended todays meeting with trump. Congressman, thank you for joining us. Get your view on health care failure, that we have seen announced today. Do you think that helps focus minds on the need to best tax reform, now. Mike i think tax reform is something we all agree needs to be done and it needs to be done very quickly. Committed to that. The precedent was wonderful the president was wonderful today at the white house, with a group of democrats and republicans. Julia do you think we could get democrats voting for this tax reform . In the room today there was a lot of agreement on what we could do. But once you get on the floor things start to go in different ways. But the president made a great effort to ensure that every person in that room felt relevant, felt necessary, and felt engaged. He was talking as a president , not so much as a party leader, but as a president , and as the leader of the United States. He had a great message for america today, to a bunch of legislators. Given how we saw a health care attempt unfold, what is the best way for the president to contribute to this process of tax legislation . The white house was engaged but perhaps the president was not talking about the nittygritty, the details of the legislation. Did that helped or hurt the effort and do what extent to what extent do you apply that to tax reform . I think he felt that the republicans had at these, the health care reform. A continues to stumble in the senate, and this latest attempt ended up where it ended up. But this is a president who looked very carefully at what i did with health at what happened with health care, and said we are not going to let this happen with tax reform. Every american out there has takehome pay, and from a corporate standpoint, that we can complete that we can compete anywhere in a global economy. This is all about jobs. Scarlet this is something the white house has come back to, again and again. Are there any redlines for you . Because mark meadows said he would only vote for tax changes if the corporate rate goes to 20 , and reduces the passover rate to 25 . Where do you stand on specifics . Not going to have the specifics until tomorrow and Everybody Needs to be a little bit cool on this. Dont get yourself going down the road to you cant come back by making statements saying, unless it is this im never going to be on board. Lets look at something that will make sense to every single american. Lets look a something that raises our level of awareness at where we are in global trade and the global economy. And lets make sure that we are making every Single Person in america have more takehome pay. I think anybody doing anything preemptive, before they actually know what is in the bill, i think theyre being reckless with that and putting himself in a corner they may not be able to get out of. The American People expect us to work on these things and we are going to get done. Julia when you say every single american, are you talking about the highest earners, to . Are, ihoever the wealthy think we are going to see now that this is a plan that middleincomen america, lower income america. The wealthy are not going to see tax cuts. Who do participate, 90 of our revenue comes from hard working, middle income people and lower income people. We are going to watch what we can do to help them. I think the wealthy are pretty much on board. They are saying, you dont need to help us by you need to help all those other people let their. That is what makes America Great. Julia we will see when we get more details of the framework tomorrow. Scarlet can house up for the tax bill by october . Antenna reach the senate by years end . Congressman kelly the Health Care Debacle is something we should have learned from. I think we are able to get to october. And again, when you have chambers working together, it is a little more difficult than when people say, im going to just get this done. It is a very complicated issue. But we are aiming in the right and our president is bringing us all together as the president of the United States, as americas president. Easier this is a lot than saying this is the majority leader, other minority leader, other majority whip, and we start bouncing back and forth about republican versus democrat, versus a president who says we are going to make America Great again. And we are going to do it by fixing our broken tax code. As much as the republicans are a party by tax reform, different republicans want different things. And that is exactly what we saw with health care form. Ys tax care reform different why is tax care reform different is tax reform different . Fixing a taxmes to code that is broken, a tax code that puts us in a bad position thinklobal economy, i people understand that. And it comes down to, are we willing to keep losing market share . Are we willing to keep losing jobs . Are we willing to keep hardworking americans earning less and saying, that is ok. If we are concentrating and looking at the issues here, make america more competitive again, and put us in a position to win. This is important. Its is not about republicans versus democrats. Us is about elected officials coming together to fix a broken tax code. Congressmanublican mike kelly of pennsylvania, thank you. Toll ahead, it might a off go shopping for amazon. That is next in our options inside. This is bloomberg. Time now for options inside with julie hyman. Julie kevin kelly is a managing partner at kelly and company. One of the things we are learning today is earnings from nike. You are sort of extrapolating what it could mean for amazon. What do you expect nike to tell us . Kevin the last earning cycle they had to confirm that they are doing something with amazon, because they need to get products to their customers faster. Not only do they need to develop them, they need to get them there. So this was a capitulation, when you look at this space and see what is happening at foot locker. And you saw amazon do a deal with calls, as well. They are going in and you can actually do returns at kohls. See thee starting to brickandmortar stores, the brand names, whether they are advertising with amazon, which they just started. They are going to hire 2000 people here in new york. They are going to open an office. That is the next leg of growth or amazon. It is really kind of the advertising. So, i want to see the read through that is happening here. Because of nike is going to spend money on branding and marketing with amazon, what are they going to do with google . What are the going to do with facebook what are they going to do with facebook . This is a story that is going to happen over the next few cycles. Julie most of the time it feels like investors and analysts look at amazon to learn about suppliers. And this case you are looking at what a supplier could mean for amazon. But you are not looking at amazon, tomorrow, for example. You are looking a little bit further out, and you employ a strategy that you call elite. Walk me through what that is . Kevin a leap is a longterm note. This leap goes out to january 2019. So you have over 450 days. Youhe recent, 2 pullback, can actually get upside on amazon here, from 900 and 80 up 980 up. So this gives you up to a year, to talk through the cycle very. Julia just ahead, republican lawmakers hope to score a win with tax reform, after their failure with health care. First wordow for news. President trump today met with a Bipartisan Group of house ways and Means Committee members. The president outlined his plan to simplify the tax code. We will cut taxes tremendously, for the middle class. Little bit, but tremendously. That includes nearly doubling the standard induction that most families take on their taxes, and increasing the child tax credit. Added thatresident it is time for both parties to come together on taxes. Longtime trump associate roger interviewconcluded an with the house intelligence committee, after more than three hours. Stone says he told law makers he is aware of no evidence whatsoever that there was coordination between the trump president ial campaign and russia. To the panel as part of an investigation into russian interference into last years elections. Says hissh president countrys considering all options, ranging from military intervention to economic sanctions, against iraqs
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