In a power unit, part of john flannerys turnaround plan. This is stock down 44 . Year to date, worse than 2008. Is enough tothis encourage investors ahead. Bitcoin is amazing. Over the last two days, bitcoin taking out several round numbers. Over013,00014,000, now 15,000. That, david. Bitcoin continues. Futures trade next week. It. Id mini is one word for lisa another work. [laughter] david insanity, i dont know. Morning brief. 8 30, we will get job claims. At 9 45, Bloomberg Consumer comfort data. 11 30 this morning, President Trump will meet with republican senators. Later in the afternoon, he will get together with members of the congressional leadership. Thats all coming up later today. Sign up for our daybreak first take, where we discuss the first stores of the morning. First up is tax reform. Orrin hatch is saying there is a drive to set the Corporate Tax rate of 22 instead of 20 . We will turn brexit with theresa. Ay, another proposal wildfires raging in Southern California. Joining us now is the person who oversees bloomberg, and jersey, here. All the way thank you. Its interesting. E heard 20 then they came out, maybe 22 . Now there is a steamrolling effect. Corporationst what pay in taxes. Corporate rates tend to be so much lower than that. His is a benchmark number now what theyre realizing is that you are pushing this down. Who is going to pay for it people like you and me, i live in new jersey and sx county. Alix im sorry to hear that. Lisa im sorry to hear that. Thank you very much. [laughter] there was a local tax deduction, 10 hit. Thats one of the ways in which this is becoming very, very painful for a lot of people. Lisa if you look at the bloomberg here, he can say this is an estimate of how much certain regions could be affected. Its hard to tell, but the this maysions not be as bad as yours. [laughter] i can kind of see it. Its really dark. Really dark there. I want to get from your perspective, 2220 . At the end of the day, this will grow because of tax cuts. Math onlion by higher the 1718trillion dollar economy, you dont expect this to be going crazy. A slightly higher tax rate, with offsets with effectively higher taxes for a lot of people who live in high tax states. Drag in the a economy. Its not obvious what these additional deficits are going to do for growth. This idea that we are going to see tax cuts, its not wrought that you make it clear will get higher growth, inflation, spending. The latest discussion about this 10,000 you can use this for your income or property taxes. We have high income taxes here, high property taxes that might need some compromise, so that might have a slightly less impact. People are looking for a simplified tax code. Im not hearing anything simplified. Its not popular. Point does the fed have to take account for its tax cuts . They said they didnt have to Pay Attention to it. They do, and they will. They like to see what is the actual bill come and how it will fit into our models, and into thinking . They dont even know right now what the deficit projection will be. Until they see the final plan, they want to reserve the right to not have an opinion about it until they see what the actual plan is. Lisa also, having to do with uncertainty and politics brexit. [laughter] set up, that was pretty good, right . [laughter] im glad we hear that european leaders are giving theresa may martin for the differences she is experiencing. Breaking up is hard to do. Honestly ooh. Oh. [laughter] poor ireland. It seems like it is always torn. It is the poor stepchild once again. How do you do this without a border, which it desperately needs to keep things functioning everybody . O satisfy quite frankly, i dont know. I do know that there are real economic ramifications for real euro zone wide, it probably doesnt have significant ramifications. Ireland,dictions like this has major potential impact. A lot of companies that are talking about leaving london, going to dublin, its still considered continental europe. And struggling with markets will really care. We havent seen a massive selloff. Look at the bloomberg. You can see a chart of twoyear yields. A little bit of a decline, the white line is the pound. The blue turquoise line is to your u. K. Guilt. You can see this a little bit, perhaps overtime, this is pretty well. Bank. Also have a central as they do that, this will support currency and frontend yields. Its a little bit counterintuitive. The expectation was, as we get to the brexit vote, a weaker u. K. Economy. You would expect twoyear yields to go down. He would wind up with lower Interest Rates. You havent seen that yet. You have seen inflation rise in the u. K. , and i think thats counterintuitive to what a lot of people were thinking. Thats because the u. K. Still has control of its economy. Thats part of it, absolutely. Thats what, i think, policymakers and the u. K. , a lot of people had hoped for when they voted for president. Its expected to be a longterm thing like 10 years, right . Struggling, because you are ,etting Financial Institution reserving even real estate with things like frankfurt or paris. They are not abandoning london, are they . They are hedging their bets, creating more safety in more places to do activity, but not abandoning london. It is yet to be seen, right . Will probably occur. As you mentioned, it will occur over years. If growth was going to be x, it will be x minus something. Its the idea that you have growth that it would have been otherwise. Minus something. Put that on your spreadsheet. [laughter] so, we really would be remiss if we didnt talk about the fires raging in california, moving towards a los angeles region. The images are just shocking, catastrophic. Thousands have been evacuated from the los angeles area. Disasterbeen a year of. The fires in santa rosa, so country, really painful. They came up to 9 million. I dont know what the totals going to be, since its clearly far too soon to say. When you add that to harvey, the , itsanes, the caribbean. Een a series of blows at least i do want to mention that this one estimate puts insurance claims at 100 billion for the year so far. In some cases, these premiums would rise 50 . This and others who would rely on their income, in order to pay these kinds of claims its not surprising that you would wind up seeing high merit higher premiums. Acuteas acute if not more for Interest Rates remaining as low as they are. One of the questions is how much disruption to businesses company. The power their market cap went down 3 billion yesterday. Theyre stopping production of movies and television programs. The national gdp level, its probably not overly significant for that region. Its going to be huge. Its certainly something that things like this could show up great job numbers, for example, when we get the jobs report for december you cant help wonder about insurers. There could be more catastrophic years than it might be for the bill. You have winds that are fueling this. To take this into account, are they building different models . Most are. A lot of this is based on history. As as we have more history, you will extrapolate losses in the future. We will keep an eye on that. Our thoughts go out to all the people in Southern California that are facing catastrophic time. Thank you so much. We appreciate you being here. I want to get you caught up on premarket access. Up one basis point. Dow jones down 13 basis points. Mastec up almost one quarter of a percentage point. Definitely a positive field. Nothing dramatic. Bit of a, a little rebound depending on where we go. Coming up, we are going to take a look at the Municipal Bond market and what the effect will be on the tax plan and local governments. Morgan stanley chief u. S. Pollack Public Policy described it as text from, and its impact on bond markets. This is bloomberg. Most of the jobs will be outside of the u. S. For ge, struggling to downturn in the gas and coal power markets. Bitcoin keeps on going. The Cryptocurrency Rose 15 yesterday and assumed through the 15,000 level. Bitcoin up more than 50 this month. From theboost successful testing of the lighting network, which will provide a new way to pay with bitcoin. Could be more consolidation on the way in the gambling industry. Advanced talks by british. Ookmakers the price could be as much as 5. 2 billion. They owned an Online Gambling platform. Thats your Bloomberg Business flash. Thank you. Just the threat of a gop tax overhaul transforms the lack landscape heading into year and. The plan also has local governments crying foul. Can you start by saying, what is the record supply of u. S. Bonds peopleember, and why are buying so much . Basically, the way the senate and house bill lined up, there were funding bonds. Its something foreign issuer to refinance this for the called it. This has seems to have a lot of issuers ring some sort of supply before goes away. Theres also evidence that in the house version of the bill, activity bonds, which will allow Higher Education issue bonds, those could go way. Some insurers have brought forward of supply because of that. Given the fact that the house and senate bills are likely to move production stash this would hurt certain municipalities. Im wondering, are investors taking that into account at all . Theres great debate about this. Some investors are. The obvious problem that this thates is theres concern you will make that production. Enterprises taxing this from living in that state. Texas. Leave alabama and in our view, we think that concern is overblown. Whether you look inside the academic research, some of the research we have done, wage earners which is who we are talking about here dont move for regions of tax on its own. In a morefferent simple way. If i wanted to save on my tax bill in new jersey rather than look workorrow i will from there how would they feel about that . Probably not so good. If you are an owner of a company, you can be more mobile. Otherwise, we dont think it will push jobs. It looks like we are going to get some tax legislation. Details we worked out. What are the top three consequences . This is complex. Nobody quite knows whats in this bill. What are we missing . This is the number one potential. What about the alternative minimum tax . As the head of state going to get fixed is that mistake fixedo get that was the next point is going to make. I dont know if it was a mistake, but no involved once to continue through the content the conference process. Theres no sense in talking. Bout 22 a raise is a next her 200 billion, almost the exact same amount as the last second, the corporate amt. Its almost the exact amount you need to have those provisions out. Real quick which localities do think would benefit the most from a tax plan . If you just look at where the dock dollars are going, its lower tax states. They tend to be red. Seriously, if you matched up, blue red it may not be accurate all, i wish i could predict benefits. If you look at the joint committee on taxation, people put together the most dollars if you want to be a high wage earner in a tax states, you are doing the best here. How that lined up from a political perspective, think the best way to say it is republicans decided to do it in a bipartisan way. You didnt have the voices in the room so much from those others area other areas. That was so diplomatic, beautifully done. The best way to say this is it is not a bipartisan way. [laughter] love it. Thank you so much. Successor Buffett Warren buffett has announced the board has picked his first replacement, but never disclosed the name. Who is the heir apparent . This is bloomberg. Warren buffett. Every year, he stands up and says, we know where it is. Bloomberg is out with a piece today. We enjoy no by picking . We think maybe he is the most likely candidate to succeed Warren Buffett. Succeed Warren Buffett. We believe it is greg able, running one of the biggest businesses for buffett jerry kill some has a lot of the traits they are looking for. People have moved off in terms of a buffett is looking for. Warren was there i was there this year. Warren said nice things. He loves jewish anger. They do. As she runs for complicated reinsurance groups for Warren Buffett over the years. What is happening really is this assists 66. He has said he wants a successor. Why the secrecy . One of the things is that they want to keep it flexible. At the end of the day, we dont know a buffett is potentially going to step aside, or moved to the other side. [laughter] they want some flexibility, but also buffett likes the spotlight. Its a buffett show for shareholders. If they named the successor, there is some speculation that some spotlight would turn from buffett. One of the things about buffett is his relationship to age. He says if you are 65, youre old enough to be an intern. Many on theof border in their 80s. Thats right. Ceos run their operations. They let the ceos do their thing. Deadline and they have to come up with a successor . No. They have to note the board has to know who it is. They never announced it off it passed away, they would put a name in place. He said this year, stock could go up if i left tomorrow. He believes wall street would want to break up businesses. This is amazing. To me, its fascinating. There have been so many succession plans. Theres been a push for or announced what we will be talking about later. Its definitely an interesting year for this. We will see how it goes. It doesnt affect the performance. Be evenlieves it will stronger. From, to greg able. This will continue to be a win for shareholders. Thank you so much for being here. Toing up, it was considered be a currency to avoid. Now its on everyones buy list. More on what you have to do may have to do with theresa may. How this is reflecting all the uncertainty about exit. This is bloomberg. This is bloomberg daybreak. Im david westin. We want to check with markets with abigail doolittle. Abigail good morning. We are looking at a mutual risk appetite. Take a look at the dow futures down slightly. S p 500 futures flat ever so slightly. S p 500 has her first. Downside late day. Three day so far of this. We will keep an eye on that. Offsetting that for equity futures, would basically have the yen trading lower against the dollar, gold lower. Assess suggesting lets look at the reason for this haven assets, most likely trading lower. Its the dollar. Bloomberg dollar index up nearly 3 10 of 1 . Since november 20 ahead of jobless claims out this morning. Lets find out whats going on outside the business world. We are left to turn to taylor riggs. The speculation that al franken may resign today over Sexual Harassment claims. More than half of Senate Democrats have called for him to step down. He plans to make a Statement Today in washington. On capitol hill, House Republicans are going ahead with a plan that would avert a Government Shutdown thread for saturday. House leaders are overwriting more conservative republicans who wanted longer extension. Almost no World Leaders are agree with President Trumps decision to declare jerusalem the capital of visitor of israel. He said it would move the vested interest of peace between israel and palestine. There will call a decision on helpful, and this uprising and declare that the middle east Peace Process is dead. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im taylor riggs, this is bloomberg. Lisa . Lisa thank you. A year ago before we get into this, i want to touch on this. I think its important, not only for the region, but also with resid respect the u. S. Position with its allies, a lot of big european leaders coming out, stemming the move that the embassy, toe two jerusalem. There was some resistance between europe on one hand and the United States on the other. This really is a start a sharp divergence. Tracking the muslim, arabic world, theres a live shot of ramallah. Its the de facto capital of the west bank. There are some protests going on. We will have to see how this plays out. Your name in jerusalem as the capital for the United States. We have been so focused on north korea and asia, and the middle east front and center now. There was a little bit i recall. Talking about the effect on the world equity market, and britain a year ago, it was considered to be something to be avoided. Now it is topping analysts list. There is an agreement now that the pound is to strengthen in the year to come. Sachsg us is goldman chief Global Equity strategist. The pound, really . Good morning. [laughter] we dont share the view that its aggressively to buy at this point. We have the dollar of the course of the next year. It did have quite a shock for the brexit vote. The upseen sensitive to and downs, ebbs and flows of the discussions around negotiations. We think it will still be sensitive to political developments. David at the same time, it think theres opportunity to invest in ftse. I should say we are bullish with equities in general. We think its around 4 again next year. That benefits equities in is one ofhe ftse 100 the most global nexus that there is. 80 of revenues of Companies Come from outside of the u. K. In the ftse 100. To the extent the u. K. Economy doesnt really affect a lot of these. Its important to decide when youre invest during in a foreign investor in ftse, you lost that have a view on the pound. Been looking at dollar investors hedge. Do well hundred would in local currency terms. Theres also other terms in the the next layer down and companies, up 50 . There are more companies and it. Theres lots to grow in smaller companies. Ftse, the u. K. Is one half of the brexit trade. To showe chart of now how this will go up. The s p 500, and asia since. You can see the white line at the bottom. When comes to this it doesnt turn around. There are couple of things that account for this in terms of the markets. One is that the euro has been strong this year. Important point. It would be a different line.