Smaller amount. Fed volume at a low today. We should mention the nasdaq, we are seeing tech sector drag things down led by apple. A number of analysts have been out, with low project deshler projections for the iphone x, citing lack western demand. Analysts seeing a 22 drop from the prior estimate. Apple falling today, it is having an impact on apple suppliers. Down by 4. 4 . It actually gets 40 of revenues from apple, which could be the reason it is having a tough day today. We look at retail where things are looking a lot greener today. Out saying the Holiday Shopping season better than it is dated, better than i event in a number of years. Likely to be the best since 2011. Analysts have a strong sales momentum. Really moving on this closeup of over 6 . Perhaps they saw the little wood under the Christmas Tree yesterday. Look at g btv 7362. I want you to look at volatility. This chart shows we are set to see the lows devil to influence everyone to of 2017. Back to you. Joe thank you. We are joined by brad, head of Global Technology for bloomberg. Thank you for joining us. To break it down a little bit here. What is spooked investors in apple right now. Yes. Happy holidays. We have this discussion every year around this time. Wobbly are going back to just becausee in iphone x is not selling as analyst expected, that does not mean bad news for apple. Apple is selling the eight and eight plus, seven and said plus. The iphone x is called the future of the smartphone. Mean people are necessarily abandoning apple. Lets put this in context. Right. It is hardly a massive selloff when considering the move overall. How accurate do they have a read on apple or a demand for apple devices . Do they really get the full story on demand for apple . They are usually tuned in. Apple puts in a big order at the beginning of the selling season beforey for this quarter the First Quarter of 2000 1918. They want to be ready for demand. Investors are looking at revenue. Apple forecast that for the first time. It is not necessarily the numbers that investors will look you much like other tech stocks. Does that heighten anxiety . Any bad news, that the companies are priced . Sure. Willss for apple in 2018 be the next iphone, whether they can generate a new round of demand for people to upgrade their already eczema excellent phones. Talked about augmenting the audi for a couple of years, as drives matters at the end of the day. I what it comes down to for event investors and analyst is the question of whether apple crimson of technology in to justify this. Was this brandnew technology or new to apple specifically . It was brandnew and for early adopters, they really love it. Is it enough for mainstream customers, clearly not. They will buy the eight, the seven, or stick with what they have. That is why apple makes those. Attend is not for all. Joe it is like a treadmill with all these products. A soon as there is a latest and greatest, people want to know what the next thing will be. What is the next big thing you and your team will have an eye out for apple that will drive their sales to the iphone x as old news . Yes. I think augmented reality is a big thing. Tim cook has talked up technology for a long time. The smartphone and the iphone, can make can make harriet can they pare it . I think they have got a lot in that respect and then turning apple tv into a mainstream product, the apple connected speaker, amazon Just Announced tens of millions of powered devices sold over the holiday season. Apple is playing from the position of being an underdog and we will have to see them make anspeaker, impact as well. Joe thank you very much. Scarlet all these press reports of reduced orders for the iphone x could be reducing the market. It may actually the referring cuts and notuction the iphone x. A little bit of drama this week going into the new year. We will not know until apple reports its results on the 30th. Nebula . Donald trump wall actually promoted throughout his campaign amounts to no more than 30 feet long, eight outside of san diego. It has an approved by congress to advance the project and saying mexico would pay car murder country has not contributed. Officials in yemen say a Coalition Airstrike on a crowded market killed at least 25 people , including children. There are reports of at least 30 wounded. The coalition was accused of bombing hospitals, and residential areas. Since the beginning of its air campaign back in march of 2015. That has killed more than 10,000 civilians and pushed the country to the brink of famine. Today,polls in liberia reportedly a solid favorite to become the countrys next president. In 1995 rolled Soccer Player of the year defeated the Vice President in the first round on october 10. Debt ent president down in january. Top diplomats from afghanistan and pakistan to alleviate a long simmering conflict between the countries. Dialogue in beijing comes as china expands economic interests in pakistan. And in the forthcoming it continues across the globe box office. About 15et i may see million in foreign markets on Christmas Day and about 27. 5 million in the u. S. The movie has tough the 100 the second day in a row. About 790 2 million. It opens in china january 5. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Scarlet thank you coming up, our tax cuts finally going to affect after all the talk, we speak with the former u. S. Deputy labor secretary Christopher Luke for his take. This is bloomberg. Joe this is Bloomberg Markets. I am joe weisenthal. Deceleratinglibate job creation. Does it pick up momentum as companies digest the benefit of tax cuts . Fromus truly us washington, the labor secretary under president obama. Now that the tax cut or the bill has been passed, the fight will be over the economic impact. Where it easy Companies Moving when it comes to digesting the impact of the tax cuts . They made an initial announcement of giving workers those bonuses, but how will they fold in the in cap the impact of tax cuts into their spending plan . Of as you mentioned, we followed job growth but it is decelerating and that notwithstanding the president s to be the7 is shaping weakest year of job growth in 2011 or 2012. It is less in my mind about job growth than about wage growth. Several companies have given these, which they have tied to the tax bill. That is great. More money and workers pockets is always good but i would rather see wages go up across the board instead of a one time bonus. Attacks pill the tax bill passed is unpopular. Polls showed massively benefits the risk the rich. But most workers will see their tax bill decline next year versus this one. Do democrats risk a backfire if people are led to believe they would not get a tax cut that ultimately, even if it is not huge, they see an increase in take home pay . Any money in pockets is good down. Should not talk it having served in the Obama Administration in 2009, we paid a tax cut as part of the stimulus package that was geared towards lower middleclass workers than this one was. When you look at that, most people did not realize they got extra money. It is not about just getting a tax cut but what happens to Health Insurance premiums now that they have taken away the individual mandate . If speaker ryan succeeds in cutting social security, what impact does it have . You have to look at average workers, the whole basket of what they pay. Few mentioned those people did get tax cuts but did not realize it. It was a long, slow, painful recovery. Few mentioneddoes it ultimatelt of how workers feel, just what the economy does in general . Say they continue to do well, it will be happy . You are exactly right and this is why go to wage growth rather than jobs growth. It has been averaging 2. 4 in the last couple of years. Tois good but not enough make up for home prices across the board. There needs to be a dramatic pickup. With the Unemployment Rate at one 4. 1 , you would expect it now in a tightening job market to see a faster wage growth. It. Ad not seen example and the correlation have not been particularly strong. Either way, this tax cut will have to be for republicans to the American Public and for companies to spend it a certain way. I want to bracket out a little bit. How do youyou sit, think the Republican Party is when it comes to vision and a sense of mission after passing legislation . Mcconnell both mitch really reading off of different pages as to what the 2018 agenda should be, whether it should be a bipartisan agenda or a more attisan one looking entitlement reform, which is what speaker ryan wanted. In january, we have to face issues like immigration and stabilizing the Affordable Care act and keeping the federal government running and those will expose the differences between the Freedom Caucus and establishment republicans. They win is a win for republicans but i think that differencesdeeper existing within the Republican Caucus right now. Joe in your experience, how much more time to republicans have to pass legislation before we are in full on 2018 midterm mode and that is the only thing that dominates the town . I think the time has passed. If the president is serious about bipartisan infrastructure, there is potential. I would have preferred he would have done that instead of dangling it out now as we move to elections. Most of 20 will be about continuing to skirmish. The taxes on popular now. Statements hes made at maralago congratulating people from getting rich, it is not help his messaging. No, our thanks for joining us from washington. Biggest banks are preparing for tax reform. Up 23 onshares are the year and this is bloomberg. Quite it is not yet what did you miss. That will come shortly. The gop tax overhaul is a done deal. Have the nations biggest banks been preparing . Reached into the archives with michael corbat, who spoke to bloomberg in november and shared his hopes. Lets start with the u. S. Economy. You look at what is going on. Is trying torm spur some incremental growth. Probably slated to come in in the low tos. Clearly below where we have been historically and where we would like the economy to be. On the corporate side, u. S. Companies are among the highest taxpayers in the world. If we get a reduction, that may be the catalyst that changes some psychology. Opposed to a bit of topline growth, being stingy in terms of cap x, we see some of that come back in and we can get more jobs and more growth. M the perspective that of of what is being proposed, the map is not done yet but making u. S. Companies competitive in that we are kind of moving somewhere near the global average. Companies are paying above in tax rate for an competitors. On the consumer side, a consumer who is asked in relatively good shape, but we look at unemployment, 4. 1 . Savingsok at credit and and spending, looking at to the catalyst, from the u. S. Perspective, two thirds of the economy is driven by the consumer. If we can get more engagement out of the consumer, we can shake some investment loose and we may have a chance of pushing the economy with us. I hear two things. X, if cap on the cap it happens, on the consumer side, higher wages. On the cap backside, companies will barletta low rate. Moneyhey taken the instead and paid dividends and shares . Ack their classy have to go back and look at what the growth has looked and felt like. Lowou are doing singledigit topline growth, how excited are you about a big project . Probably trying to get positive, probably trying to grow revenue which does not leave you much latitude or rome for investment. I can tell you as i travel not just around the United States but around the world, it is very similar in terms of people and notclose to home wanting to get to extended in terms of getting out with Big Investments and have uncertain returns. Quite you have the advantage of talking about big businesses around the world. Economists raised questions around this. Do we really believe companies will pay their workers more . Will that drive wage pressure . We have had an impressive lack of it. It is remarkable when you quantitative easing and stimulus and what all the saints have done, it has been very effective on the jobs front , and it is a very challenging in terms of wages. We really see in 4. 1 Unemployment Rate, a real lack of wage growth. Butave seen some pieces happens as part of this, i am not saying everyone comes grants workers and increase the next day, but a couple of things, as people go out and try to get workers to do creates wages, it inflation, which would be nice. Is we stilliece have 95 Million People choosing be in the workforce for whatever reason. If we could get them engaged and get them earning and get them as growingthe workforce the base, that is part of it as well. That was ceo michael speaking to bloomberg last month. Time out for a look at some of the biggest business stories in the news right now. Planning and making it pickup truck according to elon musk. He tweeted today that he has court Design Elements from most five years and he is dying to know that. Of the next generation of autopilot are blowing me away. Aircraft available next year if u. S. Terrorists stop deliveries to delta. The carrier is also considering short range claims. That is your business flash update. That missed the mark. We take stock of the deal that did not happen. 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. Wifiso if you cant live without it. T 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. Scarlet this is Bloomberg Markets p are i am scarlet fu are closing in new york. Lets check out some of the days big movers. Spiking today, the big reason was a pipeline blast in libya. It carries about 75 thousand barrels of crude per day. Saudi arabia seeking oil revenue 80 percent in years. At least 75 per barrel. Under 60. Ust moving onto precious metals, gold is solidly higher today, gaining as the trading day continues. There are concerns of the election could lead to negative political effects across europe. For many softains commodities, whether it is coffee, cocoa, or sugar. Cocoa is the big winner there. Joe lets get a check on the headlines with first word. Rebels and opposition groups are rejecting by russia. In a series of statements, rebel groups and political opposition parties said the talks expected next month are an attempt to circumvent the process. Moscow has asked them to give up their demand. The Russian Parliament voted to extend for 49 years. A similar endorsement by the Lower Chamber next week. It began the campaign in 2015 and helped turn the tide of the civil war in favor of assad. They still need putinsignature before they come into effect. Of the provednt Soccer Federation is not guilty of corruption according to two other officials in paraguay in the scandal. The ruling cap the trial in which prosecutors looked to expose greed and corruption. And the former peruvian president serving a 25 Year Prison Sentence for the murder of 20 50 apologized to his countrymen two days after being parted. He was moved to a clinic saturday. He paid for forgiveness from his people. Took tos of peruvians the streets to protest this. Critics say it was part of a backroom deal trying to protect the current president from impeachment. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Joe. Joe what about the missed ills of 2017 . Time warner, comcast, fox, julia, media analyst for bloomberg intelligence. Thank you for joining us. Speculation obviously. Before we get to specific nondeals come want you about the moment in media causing so to tie up. Ies thank you. What we have seen is so many things are happening in the media space. Is thatg emerging traditional or old media is in decline and there is no denying it. While we are seeing cord cutting and more more consumers giving it traditional paytv images for streaming alternatives, hulu and netflix. Is the catalyst behind the urge to merge if you will. Classic sounds like it is being done from a defensive posture ahead of theetting curve. Absolutely. Versus foxdisney moves, it is a defensive and not disney cementing dominance in the old media landscape. It is them bulking up to take on new tech giants to remain relevant for as long as they can and future proof their business. A lot of people saying disney went after those assets to better compete against netflix. Comcast obviously did not get it. Do they continue to pursue content are go down another path . Could comcast really, we know there is no secret about their ambitions. We know they were very interested in those assets. Well diversified country. I think what has happened is with the Justice Department blocking at t time warner ofger, it has create a sense anxiety and discomfort in the minds of industry watchers and they want to wait and watch and see how it plays out before making a big move. Joe what are people looking forward to with a viacom and cbs . People have talked by those Companies Getting back together for years ever since they split. Is that still possible . The deal will trigger many different chess moves on the board. If i come and cbs are the first names that come up. Those talks were in 2016 after the company decided they were not not proceed. Highlights the need for Smaller Companies to get together and build scale and add to negotiating leverage with operators. I definitely think it will be back on the table in 2018. Joe in all the conversations, we are not talking much about acquisition of startups here years ago, there was a report that disney was going to buy buzzfeed and weiss austin gets names named. We had not heard about the idea lately. Are they really just much more focused on consolidating Legacy Assets . It is a little both. We have seen comcast and disney. Nd they all make investments they have all had one billiondollar investments. And we saw disney make a sizable investment in a streaming platform for them. That will help them, so it is a little it of both. A presence with all of the new startups. We talk abouts fox selling off its assets. Is Rupert Murdoch done or making targeted asset of his own . Ofgives them some amount flexibility and makes them lean and mean in their asset focus. It is likely Rupert Murdoch could go ahead and make acquisitions and potentially possibly recombined the leader fox with news corp. His first love. Joe thank you very much. Coming up, handling the holidays. Heres a look at how their shares fared this year as well. From new york, this is bloomberg. Joe this is Bloomberg Markets. I am joe weisenthal. And we i am scarlet fu are looking at a transport etf, set to outperform the broader for a strict second straight month. What better time to talk about the Holiday Shopping month. Joining us is jonathan, a senior credit officer and you are just telling us how fedex and ups for a strict secondrge straight month. During the holiday season. Is this the first time they have done it . That is correct. Is the tension the intention to add to the bottom line . It is twofold. It will not be a Large Revenue driver. 200 million of wrench of revenue and the important thing is to share the cost with stakeholders. It is increasing the company cost and rather than subsidizing to cost, you want to pass it the transaction fee of the customers. It reminds me of net neutrality. Content providers. If you look longterm, it is obvious that people are people are buying it online. You hear about amazon in particular dipping into the last mile of logistics. Is that a risk in the long term if the giants to set the giants decide to deliver them deliver themselves . Themportant is having infrastructure. You really need the volume. Amazon represents less than 3 of fedex volume. It be a realave successful challenge, they need significant volume the aunt beyond their own. When we look today, if it is inc. Shift from the city, a majority of our orderings are coming from the country and it is really that network. In drones . Investing you hear about amazon but are fedex and ups already looking into that . If they are not already, they will soon. The companies are looking at. Very angle to lower that cost the packages increase the cost relative to business to business. They need to look at all angles to manage the cost. You say amazon is not a threat right now. How much shared this the Postal Service have . Service will delivery hundred 50 million packages this year. Fedex and for ups, 660 million. It is a three player market and in terms of risk, years ago, in the u. S. , i dont remember the exact time frame. But it left. It had trouble making money in the market, something to consider when you look at a new player coming in. 2018 and the continued growth of ecommerce, that will be a big factor. What else should we be watching with these companies . Tax reform and on the expecting side, growth again in 2018, these companies are spending significantly to manage their volume. Systemsd to make these in their infrastructure, to maintain the higher volumes. That will be important. Those investments will not grow margins. It is to maintain margins because of increasing cost. On the tax reform side, increased tax flow and an expectation of increased investment. The Companies Invest 5 million a year and at the beginning of the year, they give their guidance for catholic. The end of the year, it is hard for them to spend. They typically underperform the target. It is just hard to spend that much money. If you want more airplanes, to have themave available for a the company installing the software and the centers, it takes time. How to on how do Automated Vehicles change the game here . Ups,forget if it is with tesla,s electric vehicles, so it will be helpful but i think the technology, there has to be a driver. Exactly. They still need to deliver the package itself. Rather than the last mile delivery, i do not think it will take meaningful people out of the equation but there will be environmental benefits. Joe it does not likely people will be removed from the equation anytime soon here in wage pressure is always a popular topic. How important is that for these companies . We have heard a lot about Truck Drivers and things that. The labor cost will be addressed through the union contract, presently being discussed for the next contract. We do not have a meaningful concern about labor at importane companies . We have heard a lot about Truck Drivers and things ups. To ground drivers, there are contractors and thirdparty drivers managed by the provider for these two companies, we are not overly concerned about wage pressure in 2018. Scarlet we started with holiday surcharges. Lets ended as well. Helping increase revenue, not necessarily in a meaningful way, but helping with margin pressures, do you see them betting on where there is a lot of concentrated shipping during mothers day or fathers day or valentines day . Great question. If they look to do that, i think it will be through regular rates rather than surcharge. Around this time of year to influence Customer Behavior and how big a package to ship. I think it will be through regular rates. Joe timeout for a look at some of the biggest business stories in the news right now. The pharmaceutical industry. Pharmaceuticals half for 1. 2 billion in cash, a drug for chronic constipation and. About irritable bowel syndrome. Housing crisis in 20 u. S. Cities in october. Prices rose 6. 4 , the most since mid2014 as inventories continued the demand. And that is your business flash update. Scarlet coming up, why asianamericans, why more are not making it to the top of corporate american latter. Stockslooking at u. S. Drifting lower. The dollar little changed at the moment. Crude oil of 2. 4 getting to the 60 level. The 10 year yield is coming down. Yields coming down 2. 47 . Ism new york, this bloomberg. Garland asianamericans get hired at a much higher rate than their share of the population but are notably absent. In todays horses walk the talk, our ongoing conversation about policy and the workforce, colby punch some of the numbers i asked her why tech group is not making it to the top of any corporate ladders. That is very surprising. Say itd staff and represents an enormous group of all different backgrounds. We broke it down that way because that is way that it is broken down. Representing 6 of the u. S. Population, there is Something Like 12 of all professional organizations nationwide, a higher percentage on wall street and Silicon Valley. Collects there are plenty of asians at the lower rung. What kind of problem is it. A great question here there are different schools thought. Collects there are plenty of many asian executives i spoke to themselves say they are for them not being as aggressive as perhaps might be considered necessary to show, you want to advance in corporate america, and that there is a program at Stafford University teaching, focusing on asianamericans from them becomeand help bigger leaders, you know. That was one thing that came up and though the classes are the same that everyone else is business school, there was a lot of talk and aboutsion among students how their own background had prevented them from putting themselves forward from a higher level positions. Group. Retty huge a lot do really well and Silicon Valley and wall street, such as microsoft, berkshire hathaway. Compared to may the asians. There is a distinction between these different groups. There are obviously people with high profile positions and one of the at one of those gives a false impression because there are a handful of people at highlevel positions but it does not represent a proportionate percentage of the total management. People in top management. To meet usbeing done halfway . People can do what they can to improve their own prospects. If that is happening only on one end, what is happening on the other end . A great question. Unfair toit is really expect a group to just change themselves to make it to the top of a corporation. Many companies, particularly firms, have Management Development programs and there are some programs out there, but several of the people i spoke with said you know, you really have to make a point of engaging all of the groups in a corporation, not focus on a specific group, or blame people for their own lack of being able to climb the ladder, when it might be the latter itself that is tilted and preventing them from getting where they want to get. Problemally a twosided and corporations can do quite a lot. Ellen, who was firms, have Management Development programs and there are some programs out famously suing for gender discrimination also been the victim of discrimination for her ethnicity. She has got a group called project include, and they work and all kinds of countries, a list Something Like 80 Different Things a company can do to make themselves more inclusive. And inclusive is the key, operative word. It is not so much saying that asians have to be more aggressive in putting all of the onus on them. For corporations, it needs to be inclusive of everybody. Todays lock the talk, the ongoing conversation about diversity in the workforce. Joe coming up, bitcoin rebounds weeks epic selloff, gaining. Talk about it next. From new york, this is bloomberg. Joe it is 3 00 p. M. In new york, 12 00 p. M. In san francisco, and it 00 p. M. In london. Im joe weisenthal. Scarlett and im scarlet fu. Welcome to Bloomberg Markets. We are live in bloomberg World Headquarters in new york. Over the next hour, here are the top stories were covering on the bloomberg and around the world. Bitcoin is on the comeback trail. The cryptocurrency rallying as much as 16 17 . Is the rebound sustainable . The wilt 2018 bring for Hedge Fund Industry . How to profit off low volatility. We look at how to trade the vxx as we complete yet another year of calm in the markets. Speaking of calm, we are one hour away from the close of trading. Emma, no volatility today. Emma we are seeing small moves of anything at all off of low volume. The day after christmas, traders taking in a day off. The nasdaq is still down, or fall in the most in a week. It is the tech sector dragging things down today if we can talk about things being dragged down, and that is being led by apple. Analysts rollover their projection for the iphone x, first shipment in the quarter of next year might be lower than expected. On the flipside, everything is in the green. The bloomberg commodities indexes on his longest winning streak thousand thousand five. Gold and silver both uptodate. Offer up for its 14th straight day. That is time for his longest ever winning streak. Set for the highest Closing Price since july, 2014. One reason for this, china has temporarily shut down its biggest copper producer to investigate environmental concerns. Is about 59 a barrel. At 60 a barrel. A couple of bits of news driving that an explosion at a pipeline in libya, and we heard from saudi arabia them say they expect oil revenue to jump by 80 by 2023. The miners are also doing well. All of today. ,l dorado up more than 7 actually almost 8 there. Finally, i want to take a look into what might also be driving this commodities rally. This is g btv 568. What you can see here is the s p gcs i totally turn index relative to the s p 500 near alltime lows, suggesting commodities might be chief to cheap. Scarlett lets check first word news. The measures aimed to cut steel imports while most 90 and expand previous restrictions on should shipping. South korea is on watch for a longrange missile attempt. The uss russia and north korea need to talk without preconditions. Russia wants additional sanctions could pose bigger dangers to do that here in state of relations between the nations. France is scrambling to meet emmanuel macrons deadline to get migrants off the street. The government is tightening the screws, raising pressure on economic migrants and allowing divisive id checks in emergency shelters. The stop the tough stance has crossed a line tested by no other president. Caughtpeople have been camping on sidewalks in paris over the last two years. The White Christmas across most of the northeast and midwest was a prelude to bitter cold expected to last until the new year. Temperatures hovered around zero degrees in chicago today, and meteorologists are warning of subzero, frigid, arctic air. Winter winds are also in effect for north dakota and wisconsin, as well as parts of south dakota, and a soda, iowa, and indiana. Parts of new hampshire, vermont, a new york are also affected. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am nabila ahmed. This is bloomberg. Scarlett thank you so much. It is frigid out there today frigid out there today. Joe i came back from texas and i want to go back and turnaround. Scarlett soon, joe. To bitcoins bounce. It is back about 15,000, almost getting to 15,000. On the dollar and rights the most to bitcoins important e most important question facing it is the recent price correction. Lets bring in bloombergs julie for age julie for hedge. Has anything changed . Julie has anything changed over the course of the year . Cme,tly we have had the launching futures the changes, but recently there was not that big of a change for bitcoin. Joe i get a kick out of what people call a healthy correction. Here bitcoin plunges 60 in a matter of two days, and it is just a healthy correction. Scarlett a 25 move in five minutes. Julie you come in when they come it is 9000, the next day it is 15,000. This is where bloomberg is known for. That is why i really like bitcoin is really known for. That is why i relaxed mohamed elerians, today. Every this is a stability point right now. Joe one of the phenomenon i been fascinated by is the role recent holidays have played gosh everyone going back for thanks giving, someone coming back from college, telling the uncle invest in bitcoin, and suddenly there is this fervor. I wonder if we saw Something Like that. I talked about it because it is the nature of what we do. Scarlett i have the conversation about that quick, who has not got guest gotten in at. The bloomberg has shown relationship between coverage and price. It,e when you think about other clients we have not done much in terms of coverage have seen bigger rises than bitcoin has. Joe do you send that back to them . Julie no, i am nice, and i do not respond, but if i did respond, that would be my argument. Scarlett engaging with those guys at your own risk. When it comes to bitcoin, everyone talks about and we have been mesmerized by its present form. Are there any Analysts Covering going . Er alt julie it may be mentioned, but there are not people covering it. Joe it does not seem at the definitive part of the actual story, or that there has been fervor to trade contracts among institutions. I think its attention to are waiting. Institutions are waiting. People want stability before they died in. Scarlett dive in. Scarlett it is probably the holidays more than anything else. Julie vehage, to our. When we look at bitcoin, is it on the currency, commodity . Joe the endless debate. Some say currency, some say, the. Coming up, jim 11 no longer levin nohe jamie longer getting the top job. More on the successor plan next. This is bloomberg. Joe this is Bloomberg Markets. I am joe weisenthal. Scarlett i am scarlet fu. Time for the Bloomberg Business flsh. Four Companies Sold more than 1 billion in stock this year. 49 more Companies Went public this year than last. The average amount raised also increased 175 million despite fewer landmark large listings. Apple analysts have lowered iphone x shipment projections for the fiscal First Quarter, citing weak demand at the end of the holiday season. 10 million fewer units will be sold in the current q1 2018 compared to the current quarter. High blaming the phones price and lack of interesting innovations. U. S. Natural gas sales to china are booming. The company snatched up a record volume of fuel to meet surging demand of heating and industrial use. Chinas natural gas use could triple to about 600 billion cubic meters by 2040. It could overtake the u. S. As the worlds biggest consumer by 2050. That is your business flash update. Joe we have two wl bloomberg scopes in the world of had lunch. Star trader jimmy levin will not get the job at ochziff after all. Ets start with arch view broke this news and joins us now. Thank you very much. Why are they shutting down . Look, there is nowhere to hide in an environment like this in a market where easy money has lifted all assets, it is becoming hard for hedge funds to outperform indexes. Meanwhile, investors have grown impatient with high fees they are paying and for a Third Straight year you have more hedge funds closing down and starting up. Joe from the perspective of a distressed debt hedge fund, is the issue there is not enough distressed debt, or everyone can . Eep growing things over sridhar look at the backdrop. It has been hard to find opportunities. Arch view was up 5 for the year, that is acceptable, respectable, even when it comes to peers. When you look at the high quality investment bond index outperforming you, that will make for hard fundraising conversations. Scarlett are there any examples of distressed debt hedge funds that are surviving or even surviving . Sridhar there are some that have done well, and there are folks that are getting their 10 , 50 up for the year. Overall, 15 up for the year. Overall, in general, you have 6 , 7 of average returns. Underlying indexes have done so much better. Scarlett you talk about index funds doing well. The s p 500 is up 20 . What is the benchmark here for distressed debt . Sridhar if you look of a highyield index, that is a 10 . Of the distressed part is up 20 . Hedge funds are no way nowhere close to it. Joe theyre taking riskiest assets and underperforming. Scarlett negative, not even underperforming. Joe lets talk about ochziff, the star trader that will not be taking the reins. Tell us about the difficulties of hedge fund succession. Sridhar ochziff has been battling its own set of issues. They had the massive bribery scandal. At the start of the year when they were when jimmy levin was elevated to the cio position and awarded him a two under Million Dollars package, everyone thought they were handing over the keys to the kingdom. It does come as a surprise and a shocked they ruled him out for a ceo plans. Having said that, one thing they not in mind, is 56, has indicated he is leaving. There is no real panic, but the fact theyre sending out an investor letter two days before christmas makes you think there is more here we need to find out. Scarlett who exactly is jimmy levin . Young, so is quite perhaps when he was promoted to coceo in february, that ruffled a lot of feathers. Sridhar at that time he was 33, or just turning 34. He had been awarded an incentive package could a 280 million a year incentive package will raise eyebrows. That will make a tough conversation when stocks are down another 20 . Joe it is, kind of, like a recurring segment of the show. We talk to someone about a hedge fund that is underperforming, closing, struggling is this ultimately the long cycle . This is what you see at the very worst, and eventually the Broader Market cycle changes, rates get higher, volatility picks up, and then life will be breathed into the firms once again . Trillionit is a 3 industry. It is not going to whip it a lot of these hedge funds are convinced of that. The fed pulls back, the ecb. You cannot keep throwing money at the index and hope they outperform. It could be wishful thinking. Scarlett they are waiting for the cycle to turn. Thank you so much. It is time to bring you more of our best conversations from 2017. Mosh ioc son is the founder of softbank and one of the most successful entrepreneurs. Davidn october he joined rubenstein of the Carlyle Group and host of the David Rubenstein show, and they discussed his biggest wins and losses. David one of the investments you made is considered to be my the most successful investment in the history of mankind. You invested roughly 20 million in alibaba. At the time it went public it was worth roughly 90 billion. It is a return of 4500 . Jack ma is a distinguished individual right now, one of the most successful entrepreneurs in the world. What made you feel this was worth putting in 20 million . Well, he had no Business Plan and zero revenue. Employees, maybe 35, 40 eyes were but his very strong. Strong, shining eyes. I could tell from the way he looked, he way he has charisma, he has leadership. His Business Model was wrong. It was the way he talked, the way he can bring Young Chinese people following him. David before yahoo was so famous you made an early investment that was spectacular spectacularly successful. . Ow do you hear of yahoo 15ayoshi son it was still employees, i convinced them to take the investment. We grew from 15 to 35 people. We invested hundred Million Dollars to own 35 , and actually, went to the ipo admitted great return. At the same time, i convinced him to start in the board of japan. 2 million of startup capital. We own 60 . David columbus talk about one big mistake you made overall obvious the you are successful in almost everything you touch. You are making a lot of investments around the turnofthecentury. Techarket went down in the crash. It is said that you personally t 70 billion of net worth the greatest loss any human being has ever suffered financially. How did you feel losing 70 billion of net worth . David Masayoshi Son before that, my personal net worth was increasing 10 billion per week. For three days i became richer than bill gates. [laughter] david did that upset him, or [laughter] Masayoshi Son before i talked to anybody else, our stock started crashing. So, in six months after that, our share price went down 99 . Bankrupt, andwent somehow i survive. There is a man that has expressed quite a bit of volatility. Of. Asayoshi son of softbank speaking of volatility, ways to make money when there is virtually no volatility. Here is a check on the vix so far this year. We are pretty much at lows of 10. 2. This is bloomberg. Joe this is Bloomberg Markets. I am joe weisenthal. Scarlet fu i am scarlet fu. It is time for options insight. Lets talk about volatility or lack thereof in this current market. Xx, it hase long v been painful because there is not a lot to go on here. It has been extremely painful. If you look at the vix, which most of us are familiar with, it is its lowest average. It measures the cost of options. If you look at how markets are moving, look at the doubt average daily move, it is 30 basis points. Less than 131 . That is the lowest volatility we have seen since 1954. Joe it is just a function of reality that nothing is really moving. Are we going to be sitting here we talked all your we would be sitting here next year at this time asking the same questions about 2018 . Pravit it is entirely possible. Volatility, it tends to go on for longer than we think it can. A couple of years ago, we were sitting here having the exact ine thing, and here we are the vix is even longer. A lot of people think the best way to trade is the selling of volatility. Pravit absolutely. It is basically like selling financial insurance. If nothing happens, you will collect the Insurance Premium, but if something that happens, losses could be very high. A year like this, where volatility has been very low, it is up Something Like 200 , but you should not extrapolate going for because it can be externally severe. Scarlet right. The siv has been a home on. The vxworks, if you look at performance since 2009, there is a seasonal pattern, but it is pretty clear the direction is down right now. Absolute or the union lawyer, it will be down 70 , and that reflects the cost of owning volatility. The cost if nothing happens, that is the Insurance Premium i have paid out. Joe what is the trade next year how do you play the current regime . Pravit that of bet on more of the same. I like buying long did it puts on the vxx. Were buying the 20 strike put. How much can you make here, and what is the potential downside . Pravit potential downside is 4. 30, the upside, i would say make a call of 20 , 30 on this. Do not that your entire net worth, but put a small percentage and hopefully make a little bit of money. Scarlet do you see anybody looking for volatility outside of the United States, any other asset class or geography . Pravit the focus recently has been on rates volatility. The thinking has been if you get more volatility in rates that will bleed into other asset classes. Scarlet we shall see. Hasnt worked so far. Thank you, Pravit Chintawongvanich of macro risk advisors. Joe still ahead the macro strategist with bespoke management group. This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. 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. Nabila lets get to first word news this afternoon. Attorney generals in eight used in seaboard states are suing the Environment Protection agency over air pollution blowing in from upwind states. The leading attorney general in the lawsuit said it was filed today to force the Trump Administration to take action. Tens of thousands of puerto rico without power. N it is more than three months after Hurricane Maria destroyed the u. S. Islands electrical grid. Promise topite the have 95 of electricity restored by december 15. A study conducted by local engineers estimated roughly 50 of the 3 Million People remain without power. The u. S. Army corps of engineers does not expect electricity to be fully restored until may. Minister israeli prime benjamin and yahoo are pushing through a bill critics say could be used to Benjamin Netanyahu are pushing through a bill critics say could be used to silence