Erence in seoul. He struck a different tone from previous fiery rhetoric on north korea. Andring in Kevin Cirilli bloombergs chief content officer. Marty, when we say he struck a different tone, he wants north korea back on the negotiating table, but declined to comment on whether he wants direct talks with kim jongun. What is President Trump want . Marty it changes hourly. He famously tweeted about rex negotiationsirect with north korea being a waste of time. He is suggesting maybe it is not. Koreau. S. Ace north negotiation would be a change in policy. Many people including the chinese impressions think russians think that is the answer. David is there any realistic prospect of talks anytime soon . Marty no indication. Donald trump shows up in china tomorrow. There are no Public Events on the schedule. Those talks are critical if he wants to make progress on north korea. Shery the carrot has been bageled for decades regarding Foreign Policy dangled for decades regarding Foreign Policy on north korea. President trump is taking a very business approach toward his allies in asia. The pentagon is already giving prices out for Missile Defense systems to japan. How are asian leaders were suffocating business for friendship reciprocating business for friendship . Kevin you will remember back during the United Nations meeting when the u. S. Announced a round of economic sanctions against north korea. It was juxtaposed with chinas announcement regarding your central bank their central bank. Leadersseen how foreign have decided to bolster the u. S. Sanctions, in this case with north korea, through sanctions of their own. Ast was a scene of seen positive development with u. S. China relations. Many folks in washington want china and russia to do more with regards to north korea. We have seen north korea overshadow the president s first couple of days on this foreign trip, most notably his meeting in japan. The president is also talking about trade. In japan, south korea, and china. Is there anything concrete that will come out of the strip . Marty the operative word is talk. There is a lot of intentions, nothing concrete. Leaders are happy to make donald trump the president ial and are just as happy when he leaves and they dont have to make commitments. Shery let us turn the conversation to domestic politics. Getting this surprise of this new provision in tax reform, the 20 excise tax on payments for companies with offshore affiliates. To the comparing that bat tax. Marty it would tax Companies Offshore to protect them from u. S. Taxes. Drunk Companies Use this extent drug Companies Use this extensively. It came as somewhat as a slow surprise out of this tax bill, that companies are beginning to realize what the implications are. It is a big deal. David shouldnt have come as a it have comeshould as a surprise, kevin . It sis a big hole in the boat. Kevin absolutely. How at apple, in terms of this has gone on for quite some time. I spoke with several sources andected to tim phillips, those working with retail groups who are against it. There is a growing consensus that all of these special interests inside the beltway endll seen them at the of the day, there is a growing consensus they need to move this through. I have spoken with top democratic aides on the Senate Finance committee were going to be meeting with gary cohn from the white house later this afternoon at about 4 00. It shows the white house understands they might lose a conservative or three on the tax package and if they can get someone to organize this meeting in west virginia, that could be interesting. Shery we are now getting the latest headlines from senator hatch, saying this tax bill is still coming on thursday and the markup will be on monday. We are hearing tensions in the house. How far along are we getting there and getting these tax reforms done by the end of the year . Kevin they are on track and we are closely monitoring. Though the carried Interest Rate and the mortgaged action, even though they are divisive, they are not stalling. David thank you to Kevin Cirilli and marty schenker. Shery let us get a check on the major market averages. We are seeing declines accelerating in the afternoon session. Taylor riggs has more. It looks like we were going to be opening up after the have those records yesterday. Now, we are seeing a little bit of a decline. The major indices i want to focus on. The nasdaq is down 4 10 of 1 . Here are priceline. Russell down 1. 3 . This is as you were talking about politics and tax reform. I can talk you a little bit of what is happening as we tight in this intersection of markets and politics. Look at the intraday board of the s p 500 index. Had down into the lows of the session around 12 30 head lows of thee session around 12 30, once we heard that there was a good chance we would see that tax bill on thursday. Maybe there is some reluctance on if we are going to see that. Let us talk about earnings in fundamentals, looking at priceline. Fundamentals,d looking at priceline. Guidancered the profit for next quarter and they are working on their own brand of marketing, not spending as much on trip advisor and try votto trivago. To wrap it up, let us look at sky works, the fifth worst performer in the nasdaq. They are positioned well for the outlook was inir line with expectations, which doesnt do much to boost the stock performance. Shery taylor riggs, thank you. David it is election day in america. Urgent ins are picking their irginians are picking their next governor, and we will talk with the former virginia governor. This is bloomberg. Shery welcome back. This is Bloomberg Markets balance of power. Let us check in on the bloomberg first word news with mark crumpton. President trump calls north korea a threat that is a danger to the entire world. The president is in seoul where he met with the south korean president. He called on other nations to stop doing business with pyongyang. He said it is time for kim regime to come to the negotiating table. The anticorruption crackdown in saudi arabia is expanding. The kingdoms central bank is ordering ledgers to freeze hundreds of accounts after they were linked to the investigation. The Saudi Arabian Monetary Authority has put as much as early 3 billion in personal wealth at risk for the richest 33 billion in personal wealth at risk for the richest detainees. The shooting at the texas church has revived the gun control debate in congress. Thatryan told reporters gun laws it should be enforced. This man should not have gone a gun. He was a domestic abuser. We have laws in the books that say you are not supposed to own a gun if you are a domestic abuser. How did this slip through the cracks . Mark Authorities Say the shooter was a military veteran who received a bad conduct discharge in 2014, but the air force failed to report his Domestic Violence conviction to the database that conducts background checks. A kentucky man who was charged with assaulting rand paul said he met with capital representatives to sit to discuss a security matter. Was charged with misdemeanor fourth Degree Assault with a minor injury all in fridays incident, which left senator paul with five broken ribs. He was ordered to have no contact with senator paul or his family. Global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Shery thank you. It is election day in america. The president isnt on the ballot, the trump agenda is. Virginia Gubernatorial Race is gaining national attention. Democrats are desperate for a win, while republicans are struggling to find her footing within the establishment there footing within the establishment candidate. For more now, we have the former llen. Nia governor, george a will this be a referendum for President Trumps Political Capital . The governor can set a good agenda or the or a negative one for the state. There are some good ideas to make virginia more competitive, Regulatory Reform, Productive Energy policy. To the extent any of those issues fit in with what is going on in washington, that will be eight referendum. A referendum. Virginia voted for hillary 6 overby 5 or President Trump. There are certain policies that have been put into effect, Regulatory Reform in washington. Productive energy policy, and ending the sequester, which allows the military to strengthen. That matters. The military and military readiness and defense contracting is widely important. That is a big plus for a gillespie. Ed gillespie. David a lot of the things you have talked about our federal issues. What is being talked about on the campaign trail . Been hearing about confederate statues and whether they should come down. Sanctuary cities, even though there are none in virginia. Mr. Allen everyone was the despicable neonazis in charlottesville and at the university of virginia. They cannot talk about that mningut conducting conde those white supremacists. Ed gillespie did. Opponent said, remove the confederate memorials. It is particular niche. On the century cities issue, in northern virginia, sanctuary cities issue, in northern virginia, there has been eight murders in the last year. Of theorcement is one top responsibilities of a state government, along with education. There is a difference of opinion in the two of them. Done,he democrats have that has really fired up republicans. That is a question of whether ed get 7 with a touchdown. Gillespie withd an ad they had to take down because it was so awful. Shery the Political Climate right now is very charged. I am not surprised that at gillespie has been keeping a edtance from president gillespie has been keeping a distance from President Trump. He did well in the north side of virginia in 2014. Work, whenuld this he is continuing to keep his distance from the president . The north and the democrats have drawn all the. Rdent Trump Supporters turnout this year will not be as big of a turnout as the president ial election. We have the record high turnout when i ran for governor. The last election for governor have the lowest in 2013 had the lowest in 2013. Precinct said it should be higher than it was last year. The president ial race is 35 of the vote in virginia. The governors race may be 33 . This election will be that close. Matter. Ference might the democrats are trying to energize their base. Virginia is the independent voters, people who pay taxes and care about their families, its not red versus blue. Take care about who has the best ideas they care about who has the best ideas. Shery thank you so much for your time. George allen. Ahead, the gop tax bill has a lot of details. How would major investors be affected . This is bloomberg. David this is Bloomberg Markets balance of power. Earlier today, i spoke with sam of Equity Group Investments about the plans for tax reform and how proposed changes could change the business of investing for fund managers. Tweaks,re are a lot of and obvious attempt to lower the Corporate Tax rate, which is detrimental to the United States. We have the third highest Corporate Tax rate in the world. It doesnt make sense. From my perspective, that is the most significant change that we should all be encouraging. David do you pay a fair amount of Corporate Taxes . Will you make more if the Corporate Tax is reduced to 20 . Sam some. One isy companies a full taxpayer. Think that puts it in a negative Competitive Position with competitors around the world. David what about the business Interest Deduction if it is limited to 30 . Sam hard to say. That is likely to be a minor problem. David when you talk about the interest provision . The amendment would extend the amount of time you would have to hold the interest in order to benefit. Why is this a big surprise . It was a surprise they kept it in the bill because the president did campaign against it. It doesnt raise a whole lot of money for the treasury so the president could get rid of it. The change they made is it will still be there, but you have to hold on to the investment for three years before you can claim the benefit. How do you feel about that . What we are talking about is carried interest to the sponsors of funds. There are few funds that start and finish in one year. Very few end in three years. I have a couple of major funds that started in the 90s. One was nine and the other was ten. The fact that i was a tenure investor in my own funds t enyear investor in my own funds suggests that a Capital Gains treatment is most appropriate. This is symbolic. It became an issue for the president. There are a lot more things in this bill. The streets a lot of different businesses in different ways. You have real estate investments, which will do very well because of the already percent cap on Interest Payments payments. On interest keepestate also gets to local tax breaks. There is a great treatment for passthrough businesses, but if you are in private equity, the productionsest hurts you. There are many different moving parts that will make it harder for people to figure out how they will come out of this. Sam people will restructure the way they do transactions, as they always have, to a comment whatever the government does. To accommodate whatever the government does. Zell, onat was Sam Bloomberg daybreak earlier. Shery dont forget the new show. Bloomberg etfiq, who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Shery very dark picture on capitol hill. Not much sun in there. Its a lot of fog. Shery just like the Political Climate. This is Bloomberg Markets balance of power. Im shery ahn. David im david westin in for david gura. Election day for two states could test the political influence of President Trump. In virginia polls show democratic Lieutenant Governor Ralph Northam with a slight edge over republican ed gillespie. In new jersey democrat Philip Murphy is expected to be republican Lieutenant Governor by a large margin. Voting results could give an early indication about how next novembers midterm elections could play out. President trumps fed chair nominee Jerome Powell have to wait until after thanksgiving for his Senate Confirmation hearing. The chance that powell will testify in front of a Senate Banking committee before november 23 is unlikely but hopes are to move quickly, meaning in a matter of weeks. Opec index that Shale Oil Production in north america will grow faster than expected in the next four years. The shale industry will produce 7. 5 Million Barrels a year by 2021. Thats 56 higher than opec forecast a year ago. The out put cuts this year triggered a price rally that helps american producers. British lawmakers will be allowed to see Brexit Impact studies within three weeks. The house of commons approved a motion calling for Government Research to be shown to members of the brexit committee. Steve baker downplayed expectations of what the studies will show. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Its been 40 years since the core payment infrastructure was last built in the u. S. Isnow go to mike mckee who at the clearinghouse annual conference in new york with a special guest. James aramanda is here. Talking about problems with clearing houses. Thats not you. Thats not us. What hes referring to is those institutions that take intermediary positions. Clearinghouse doesnt do that. We dont provide credit and we dont inject liquidity into the system. Although our name is a clearinghouse with clear and settle payments. It is a completely nonrisk transaction. Lets talk about the Payment System. The fed set a goal 2020 for you and others in the Payment System to produce a faster system and you are being that i significant margin. To system. Nts fore have been at this about two years. Building a realtime Payment System. Its going live in a couple weeks and we are very excited about it. First new Payment System in this country in over 40 years. How fast is fast . Immediate. Instantaneous. You will be able to send and receive funds instantaneously. Its the amount of information and messaging that can flow with the dollars that makes it really exceptional. Does this mean i have popup ads on my atm . We are building the rail. This is the Payment System that others will build applications on top of. So yes, maybe. System with a huge amount of functionality and capabilities so we expect a lot of innovation to go on top of it. What is the implication for business . For business it is huge. City, trying to get through the city is tough with delivery trucks. Most people dont know that most of that is cod. Cash on delivery. These delivery people are submitting an invoice after they have delivered the goods and are getting paid in either cash or check. In our system they will be able to submit the invoice electronically and get instantly paid electronically so will have to be paid, no checks. Thats one use case. How does this differ from Block Chain Technology in the cryptocurrencies we are hearing about . It has nothing to do with cryptocurrency. That is a technology and use case that is unrelated to the Payment System we have. Case that is unrelated to the Payment System we have. Consumers can send money right now virtually instantaneously. People are always saying then venmo me. Moving money is not instantaneously. The clearinghouse runs payment rails. Systems have been around for over 40 years. There hasnt been a new system in this country in that long. This is the first system really built for the digital age. Those applications actually ride the rails of these 40 plus year old systems. The money is and actually moving in realtime. Therein lies a lot of opportunity for fraud and risk that our system will eliminate. Its very different in that respect. It seems to me a fundamental truth that if its online, its at risk. How secure is this . System is built with the latest security measures that are in the market today. When we started we took a look at every single risk that we , every system that has ever been hacked. Into the system every safeguard known at this time. Im not going to tell you its impenetrable because there is no system that will be. It is today from what we know today. Your group is hearing from the new chief regulator for the Federal Reserve and clearinghouse has had some regulatory concerns about the way the Financial System is being regulated including the volcker rule. Like to see more of a calibration of these rules. A lot of the rules are absolutely necessary post crisis. We had to instill confidence back in our system and economy. I think that has been done. It has been so many rules so fast. 450 plus rules with doddfrank alone. To take a look at the calibration. Have they had unintended consequences because of the sheer numbers of them or because we rushed to get them into place. From a clearinghouse standpoint we are just advocating lets take a look at unintended consequences with many of these rules. Andts a globalized system you have concerns about eu regulation as well. The payment moratorium proposals. Yes. We are aware of whats going on globally. Domestic and wed rather not have our regulators unduly influenced by whats going on offshore. My money goes instantaneously from bank to bank. Does that mean the bank doesnt have a float anymore and i get my money right away . I guess that would be true. The money would leave the account instantly and end up in another account instantly. This gives such confidence to the consumers and businesses. Somebody tell the head of my bank. Aramanda, thank you. Back to you. Shery Michael Mckee in new york. Surpriseddi arabias crackdown surprise crackdown is expanding. That conversation coming up next. This is bloomberg. David this is Bloomberg Markets balance of power. Im david westin. Shery im shery ahn. The hour, the Pharmaceutical Company having a rough day. The stock down over 30 . At one point it was down almost 40 . The lowest level since the company went public in 2013. Emma chandra has more. I was telling david how scary it rate in the u. S. In japan you have a limit of 20 . Here it just continues to fall. Is a huge fall today. To add a further superlative to that see the company is the worst performer today on the russell 1000 index. It is really not a great day for the Pharmaceutical Company. It beat earnings per share but it missed on sales and declining revenue from its lead asset. Thats got investors worried. This particular drug is a itding source of revenue and is used to treat infantile spasms, multiple sclerosis. The company has come under scrutiny this year because of the price. Cost01 a file of this drug 40. It now cost 34,000. They paid a big fine earlier as part of a federal probe into drug pricing. Now the company is saying prescriptions for this drug are not being filled due to pressure from insurers. David they have also gotten caught up in the opioid crisis. Thats right. The company is the largest manufacturer of the generic opioid painkiller oxycodone and they paid the big fine earlier this year over allegations that it had failed to report suspicious drug orders. Then theres generic business as well which is facing weaker revenue and that could continue through this year into next year. Shery emma chandra, thank you. David saudi arabia surprise is expanding. The central bank ordered banks in the kingdom to freeze the accounts of dozens of individuals who arent under arrest. Is bloombergs team leader for National Security with us from washington. Tell us about this. Dozens of other people whose accounts have been frozen. Why werent they arrested . Theres a lot of mystery around all of these actions lately starting with the arrest and imprisonment in a Ritzcarlton Hotel of some of the most wellknown and wealthiest princes in the saudi kingdom. It sounds like that circle is expanding today to include Bank Accounts of people who werent arrested. The saudi government has really pitched this as a Anticorruption Initiative and something they say has nothing to do with politics in the kingdom. To a lot of other people it does look like politics. It looks like a way for the king and the crown prince to really consolidate power ahead of perhaps some sort of ascension by the crown prince to the throne. Shery despite questions on whats happening we are seeing President Trump tweeting his. Ull support for the king how will this embolden the when president me trump is getting ahead of his Foreign Policy team . Initially the u. S. Reaction was pretty muted. The state department after the initial arrest basically pointing people to the saudi government to get next relation. President trump stepped over all of that with his tweet yesterday saying that he thinks the king and the crown prince know exactly what they are doing, they are going after people who have than milking the system. The corner ofh in the saudi king and crown prince as you can get and it has a lot of risks for both the royal family and trump. From trumps this perspective is the crown prince could be ruling saudi arabia for another 50 years. Certainly he will remember who was on his side when a lot of these risky moves were taken. On the other hand hes making a lot of enemies as well very quickly. They are adding up as the central bank expands its target list of Bank Accounts. In thenothing can happen middle east without affecting a lot of other countries around the region. Give us a sense of what this qatar,or iran, to cut lebanon, jordan. Saudi arabia shakes up the regional politics in a way that is hard to imagine here in the United States. Saudi arabia is leading a block of countries that have a sickly cut diplomatic and economic ties which is a key u. S. Ally. It has a big military base the u. S. Relies on to target Islamic State it is also embroiled in a what seems to be intractable war in yemen. Thats one of the things the u. S. Has probably been a little bit disappointed about with this government in saudi arabia is the fact that they just cant seem to end this war with what is effectively the arab worlds poorest country. Theres a lot at play here. Qatar is looking at this and iran is looking at this as a major power play by the king and something they will have to deal with for many years to come. Mohammed, you said he was having new enemies as well. He seems to have adopted a very populist approach from President Trump as well. He has been organizing youth rallies. Tell us about this prince and what it means for saudi arabia. He is someone who is on the rise very quickly. I think it was early this year late last year he reduced reverse some austerity measures that were very unpopular. He is trying to take the reins of what has been more of a diffuse Leadership Team in the government for years. Is trying to rally some populist support. He made a move just a few weeks ago that he said will end up with women being allowed to drive. He has argued that that is necessary to help unlock economic growth. He said you cant really have half of your population unable to even get around the country without other people driving them. Hes taking a lot of steps that are really targeted towards the youth. Its the youth that has been most either disenfranchised or frustrated with issues of corruption and their inability to see a bright future. David thank you. Shery headlines crossing the bloomberg right now. Jeff sessions will testify on russia in front of the house judiciary committee. Thats november 14. The hearing will give the committee a chance to question sessions about reports that former Campaign Advisor George Papadopoulos told him about various meetings with and connections to russian officials. , the u. S. On the show may not be the only country stepping back in its role as a leader in fighting Climate Change. Wealthy nations are falling short of their promises to help developing nations invest in clean energy projects. This is bloomberg. In order to fulfill my solemn duty to protect america and its citizens, the United States will paris climatethe accord. President Donald Trumps announcement pulling the United States out of the paris climate afford accord lift a leadership role in the efforts to fight Climate Change. A new report finds developed nations arent living up to commitments to invest in Clean Energy Products in emerging markets. More from london. One of the numbers that really was a out at me, there commitment from developing countries to give 100 billion a year in order to have clean energy in the developing countries and they have only given 10 billion. That is a big gap. The 100 billion dollar commitment was first made in 2009 in copenhagen to encourage developing countries who need further help in terms of technical and Financial Assistance to also meet the Climate Change challenge. The 10 billion part we looked at is actually specifically the investment for Renewable Energy. It will be one of the most important things we need to rely on to combat Climate Change. The 100 billion figure accounts for other action. Reached 10at we only billion for Renewable Energy shows that we are far off the target of reaching 100 billion by 2020. There is still a lot of work to be done. Shery is this because wealthy nations are just not investing or that the responsibility also lies with the emerging economies because they are not putting forth the infrastructure needed in order to get confidence from these investors to invest in their countries . Theres a number of the best Success Stories in the Renewables Sector in general. Latin america for example has led the way with Clean Energy Options attracting vast amounts of investment from international utilities. Unfortunately those Success Stories are not being reproduced across other markets. You have the front runners that are comparable to what you would see in the most developed markets today and you have a number of countries lagging behind. The policies are missing to attract investment. David how did this work under the accords . Was specific assignment made to specific countries . Do we know who are the worst offenders . Each country was asked to come up with its own estimate of what it would like to contribute and the 100 billion figure in terms of aid by the most developed countries is supposed to encourage developed countries to commit to more emissions reduction. The fact that we are not getting close to that is going to prevent or slow the likelihood of people contributing to more ambitious targets and those will be needed to avoid the worst impact of Climate Change. Shery when it comes to investments, china seems to have followed the most. Why is that . Has been the largest investor in the Energy Sector in general whether it is fossil fuels or renewables. Now it is kind of digesting the large amount of capacity that was added. Really what we are seeing in china is both the grid from technical perspective but also the subsidy system taking time to absorb the large amount of investment and new capacity that was added in recent years. One interesting thing is china is by far the country investing the most in longdistance grid to integrate renewables which is a challenge we will also find in germany and china is doing a lot. Shery this week we get all of the countrys having another round of climate talks. How will these new figures affect discussions . One of the aims of these talks would be to encourage developing countries to commit to more ambitious goals. As these markets will be by far the largest source of electricity demand growth in the future and that is linked to the highest amount of emissions bewth, those will really about getting together and trying to convince emerging markets to integrate more Renewable Energy into their Energy Development plans and as a result able to deliver more ambitious emissions reduction goals. David thank you very much, joining us today from london. Shery sign up for the balance of power newsletter at bloomberg. Com. Get the latest on Global Politics in your inbox every day. Coming up on the Bloomberg Markets, bloombergs year ahead event where we will be joined exclusively by citigroup ceo at 2 00 p. M. Eastern. David you can catch all of our interviews on the bloomberg with the function tv. Just tune into your bloomberg for tv. Live from new york, this is bloomberg. It is 2 00 in new york, 7 00 in london. Julie welcome to Bloomberg Markets. Shery we are live. The dow 24,000, another major milestone. We will get important perspective from jeremy siegel. Touches down in south korea. And details on why walmarts mobile payment app is giving apple pay stiff competition. Taylor riggs was here. We are low for the session but also the lows, getting a boost from that, the
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