tv Bloomberg Markets European Close Bloomberg December 1, 2017 11:00am-12:00pm EST
and mark barton. vonnie: in new york, i am vonnie quinn. this is bloomberg markets. mark: here are the top stories we're covering from the bloomberg and around the world. u.s. senate republicans trying to smooth out differences over tax reform and the vote cast changing quickly, will they get a deal done? of the u.k., how much ongoing uncertainty over brexit harming the u.k. economy and what about impacting the boe? our guest is charles bean. foroin gets approval future trading which sends it higher today and regulators -- we will explore why.
have a look at where european equities are trading 30 minutes away from the finish of the friday session. what a week it has been. a next session for european socks -- stocks, slightly down this week. retail the best performing sector after the benchmark stoxx 600 fell 2.2% in november, the worst month since june. currencies, sovereign bonds are your final columns. global stocks have risen for 13 straight months. love this chart. the green bars are the monthly increases we have seen for the country world index, the biggest winning streak since the index was formed in 1988. should it rise in december, it would be the first time in its three decade history it gets through an entire year without a monthly decline.
this year, the country world index up by 20%, the best year since 2013 and it closed at a record high on thursday. japan,on improving, in speeding up in october but price rises from this chart still well below the boj 2% target. tightening labor market. core cpi, which excludes fresh fruit, tepid consumption making companies cautious about raising prices with sluggish wage gains keeping consumers reluctant to spend. that is what happened in japan today. this is the final chart, short-sellers may be aggravating china's biggest bond selloff and four years as the nation's debt market has no official measure of short sales. analysts sales a surgeon bond lending has been partially
fueled by rising short bearish bets, a record 1.8 2,000,000,000,001, $274 billion of those have been went out, 18% more than the total for all of last year, according to clearinghouse china bond. we are 90 minutes into the trading day in the u.s., how is it looking? >> a bit next with the dow and s&p 500 trading slightly higher with the nasdaq down just a bit. 500,ive to the dow and s&p this represents the idea that we could see these indexes close at record highs. we have not seen any all-time highs and the nasdaq rebounding from wednesday's selloff and the tech selloff is continuing and much of it coming from the this is the dow, on
pace for its best week of the year. a big divergence. day.of the drags on this declines for the likes of cypress semiconductor, qualcomm. macron down 8/10 of 1% on lower demand pricing. this follows comments out of morgan stanley talking about pricing and we could see the first downturn since 2016. cypress semiconductor down about 3% on a downgrade to hold on fading growth concerns. broadcom and qualcomm, broadcom is saying they will hold off on their bid for qualcomm until 2018, a potential bit and the acquirer broadcom down 3% of a potential acquired company down less. an interesting dynamic suggesting investors are waiting with absolute certainty around
this and perhaps they would like to see broadcom make this acquisition. energy complex, oil spiking 2.4%, perhapsl up a delayed reaction to opec extending production cuts. down slightly on the week. a weekly chart of natural gas, 10%, the bestup week and about one year on reports that the weather could be very cold in december. especially in the northeast. something we are not looking forward to. gas traders like it a lot. vonnie: we will have to turn up the heat. to capitol hill, developments about the senate -- senate tax debate and let's get to kevin cirilli. of the 8 senators we were closely watching, five have now decided they are for the bill. three are left. what happens next? kevin: i was just speaking with
senator bob corker, a republican from tennessee in the hallway downstairs. he was making his way to a private republican senate luncheon where they will continue discussions on this are merging tax plan. he told me he does not know if there will be a vote today or early next week. senator corker was the driving force behind the so-called trigger provision that fell apart last night when senate majority leader mitch mcconnell spoke with the senate parliamentarian and that was not able to be brought into this legislation in the senate version. it has criticism from conservatives, including ted cruz, likely, who feel -- mike lee, who feel this will just be another tax and the house conservatives who have issues with it as well. , itstors are watching for looks like momentum is on the side of republican leadership of getting this through, if not
today, early next week out of the senate. number 2 -- look at which members in the house are going to be a part of the conference committee, because they will negotiate the differences between the house version of the tax plan and the senate version of the tax plan. those differences will be where a lot of the sausage gets made. jockeying in of anticipation already. the three senators, bob corker, jeff flake has distance themselves from the gop in terms of comments they have been making. and the trigger is that it looks like. is there, susan collins key to the buckpassing and she said in the last few minutes and there is progress being made on her two remaining concerns. she got the grilling and her remaining concerns are the salt production and the individual mandate. does that mean we will get a bill with both of those in their? kevin: the comments she made are being interpreted among
reporters that this is a step in the right direction and momentum is on the side. the senate majority leader has of getting this through. her comments suggested the issue of the state and local tax deduction which impacts her stake is a concern also of several prominent house republicans who have concerns about that. in california. i think that is a preview of the looming conference we will see next week. yes, momentum on the side of the republican leadership of this getting done. even if senator corker and senator flake vote against the majority of republicans, and the president, they can afford to lose two votes but not a third vote and that is where senator collings gets interesting -- senator collins gets interesting. vonnie: we will be back to you before long. our chief washington correspondent.
let's check in on the first word news. >> president trump's former national security adviser michael flynn is expected to plead guilty to line to federal agents about communicating with the russian ambassador. he was fired after revelations he allegedly live to vice president mike pence about the contacts. a fully may be cooperating with special counsel robert mueller. investors in the u.s. will now have a way to bet big on bitcoin as regular readers have clear the way for them to offer futures contracts. kent of fitzgerald exchange will offer binary options. u.s. ambassador to the u.k. insist that president trump primus or theresa may have a good relationship despite the dispute over the president's fleet. that no dateberg has been set for the president to visit the u.k. there were tentative plans for him to go to london next month
but the trip is now off. oil is rising today after opec agreed to keep production cuts in place until the end of next year. libya and nigeria have joined the agreement this time and have been exempted so far. opec and allies like pressure are trying to reduce global stockpiles to their five-year average and oil prices are up more than 20% in september -- since september. global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. this is bloomberg. vonnie: thank you. turn lower taken a with the dow down a quarter of a person as is the s&p 500 and the nasdaq was down .5%, headlines a few moments ago from abc. they report that former national security adviser michael flynn would be prepared to testify against the president. he would say that donald directed him to contact russians.
the dollar is taking a tumble on the news, below 93, 2.88. abc reporting just moments ago that michael flynn will be prepared to testify against donald trump. perhaps recording is coming from comments he made within the courthouse. we are watching that very closely. michael flynn was a president trump directed him to contact russians. this is a serious development. mark: markets clearly react in. the charge adding another prominent defendant. very important to robert mueller's investigation as he is already secured indictments against former campaign german paul manafort, his deputy -- chairman paul manafort. this leads to other questions -- will there be further indictments?
vonnie: a downturn for the market in the u.s. for the dow jones down 8/10 of 1% and the s&p 500 down as the -- we learn the abc that michael flynn former national security adviser to donald says he is prepared to testify against the president. they say michael flynn would testify president trump directed him to make contact with russian officials. this goes back to the charge
that michael flynn had been in contact with the russian foursador and more about days after the president had taken office. right after the inauguration of president donald trump. very serious charges. that which isng moving the market. indexes lower. mark: a similar story. michael flynn has entered a guilty plea in federal court in washington which has been confirmed. a guilty plea has been made. big market moves. haven playthe clearly, always in times like these which is rising against most of its major peers. we will keep an eye on this
story. monetary policy, the challenges facing the bank of england among many central banks across the globe with the brexit process putting pressure on the u.k. economy. joining us is professor at the london school of economics and the deputy governor at the boe, charles bean. >> this could be an important development. mark: on top of the tax vote. you gave a lecture this week. there was some lovely questions. was -- are we passing through a time of purgatory before normal service is resumed? give me the answer. what did you mean by purgatory? >> the context is that we have seen this remorseless downward trend in long-term interest rates going back a couple of decades.
post crisis phenomenon. to highpartly connected levels of savings and weakness in investment. , areuestion going forward we going to see the underlying real interest rates in the world economy picking back up and productivity growth rates go back up? my answer to that is yes, but it will take time. a longtime. reaction, arket developing story with the headline on your bloomberg television screen. michael flynn agreeing to cooperate with report -- prosecutors in the pressure probe. this is an abc story. this comes on top of the tax vote that is taking place in the senate. what can you say about this? this is a massive developing story.
charles: this will create political uncertainty. that will feedback presumably into market volatility. this could lead to very big political changes. mark: if you are the central bank, could this put off the proposed interest rate hike in september -- december? >> at the end of the day central banks look at the underlying economic fundamentals. if there is an increase in volatility in the markets because of, uncertainty or something else, it may be something that encourages the central bank to stay their hands. and wait to see what happens. some say raise rates and a month or two later, we said we have to cut them again because of how things have handout.
-- handout. out.nd out -- panned it does not change the big picture of what central banks are facing because we are now in the early exit phase from the time of highly stimulative policies. central banks are feeling their way, going cautiously, i think that is the right thing to do. assuming the recovery we have seen in most of the advanced continues, you would expect to see some further increase in policy rates over time. i would expect them to be pretty gradually a central banks do not know what the consequences exactly will be of raising rates after a long time of having policy rates on the floor. very clearly, we have sharp reactions to quite small increases. they will be caught just of the 1994 -- cottages of the 1994
episodes when it was carnage in the bond market and the fed raised interest rates. i expect them to try to go slowly. make it clear that the movement needs to be gradual. contingent on what is happening in the economy. inflation pressures generally remain pretty subdued at the moment. u.k., u.s. and in the unemployment is back around the levels that you think of as corresponding to how the economy operates with normal intensity. you should be thinking of policy rates going back towards a more normal level. less than the race we are used to. -- rates we are used to. vonnie: i want to paint the picture at 11:20 eastern in new york.
expected to be talking about tax as we saw a sharp market spiking with the vix and the dollar index on the decline and the dollar-yen rate below 112 and 6, 7 basis point in the -- on the news michael flynn who was fired as the national security adviser pleaded guilty to line to the fbi and will talk about -- will implicate the president. turn?this be the market why should the market reacted this piece of information when it has not been reacting to the possibility of tax cuts? charles: clearly, this is something that -- it could lead to donald trump being impeached. departing from office. it could be something that turns out to be the start of something very big. i am not surprised you have seen big market reactions. if i was a trader, i would be
struggling to think, what other possible ways this could unfold? at the moment, you just have the flynn isof how michael pleading and what he may say. in thetill fairly early story and who knows how it will unfold. from my experience of being a central banker and working with markets, they can often react violently to things like this. when they digest the news, settle down and maybe return to grow they were before, so i think a little bit of volatility is likely for the next few hours and possibly days. it will take a wild to work out what the full implications are. mark: thank you for joining us and i'm sorry we did not get more time to talk about central bank policy.
charles: you are welcome. atk: charles bean, professor the london school of economics and former policymaker at the bank of england. vonnie: thank you and thank you to charlie. we want to bring in our white house editor and our market strategist who work with us at bloomberg news. a bit of a bombshell, abc reporting that not only has michael flynn pleaded guilty but will talk against the president, implicate the president. >> that is how it looks right now. this is not good for the president. according to abc news, michael flynn will tell the grand jury that the president directed him to make contact with the russian ambassador before he took office. vonnie: yes, exactly. we have seen a sharp market reaction with the vix above 13.
it does not sound like much but a major spike. the dollar index as well well below 93. the market does not like this development. >> this week has seen equities trade quite well on hopes of this tax-cut bill being passed. instead, we are confronted with smoking guns for the first time, linking the president with the russians. instead of the good news we were hoping for, we have bad news and i agree with charlie that markets should first and ask questions later with these headlines. we have already seen half the loss we first had. vonnie: i do not know, the 10 year -- >> more referring to s&p futures . we complain about the lack of volatility with nothing going on and when something happens, the market reacts or overreacts and we complain, what are people
doing? mark: we have been asking for weeks and months what will be the trigger, if there is one, that ends this record-breaking rally we have seen in u.s. stocks. political events could well do it. we do not how -- we do not know how this love old. worth considering, isn't it? >> on the surface, you have seen some nascent signs of weakness in the stock market. we look at performance this week, the s&p 500 has done well. on the outside, everything looks fantastic. at the composition of those returns, maybe a little less positive for your average equity holder. technology has been the star performer in the stock market this year. down on the week, even prior to the michael flynn headlines. poorly, thingsed
like energy, telecommunications have done it ordinarily well this week. -- extraordinarily well. there has been a lot of pain in the sector level which may suggest that there is some degree of caution entering the marketplace. mark: i am looking at president tweetedtwitter feed, he that republican senators working hard to pass the biggest tax cuts in the history of our country. he has not yet responded to the abc news report. what juncture do we expect some sort of comment from the white house on this? >> i suspect that the presidents lawyers are working very hard to try to prevent him from tweaking about this -- tweeting about this. he cannot help himself by publicly commenting. there will probably be an official statement from the white house. we have called everybody at the white house and his legal team
to solicit a comment but have not heard back yet. i think they are sort of processing this. figuring out the implications and where it could go from here. vonnie: how will congress respond? this is not something they can ignore on a day when they are trying to get tax out of the senate. >> i think they will ignore it for now. quite honestly. even if flynn tells the grand jury that donald trump told him to contact the russian ambassador before inauguration, it is not clear what the president's legal liability is. the law cited is something called the logan act which forbids private citizens from conducting foreign policy. nobody really has ever been prosecuted under the logan act in over 100 years since somebody was charged. it is an archaic law. it has never been used.
in a criminal proceeding. to turn it against the president would be a big deal. there would be some question as to whether the president elect enjoys a different classification than a random, private citizen who may try to conduct foreign policy. storygiven the abc news and the fact that flynn has agreed to cooperate as part of the deal in which he pleaded guilty in washington, what stage of the robert mueller pro could we be entering -- probe could we be entering? >> i am having trouble seeing a bigger fish that robert mueller can go after beyond the president himself. near, that from here, if the -- from near, if the investigation is not wrapping up, the only place for
him to go is the president and his family and to do that opens into significant liability. if robert mueller goes after the president or his family, that is when we could really see a constitutional crisis that has been discussed. the president may respond by firing robert mueller which would cause a political catastrophe in washington. vonnie: as luck would have it, we are getting tax news. state and local tax deduction added to the senate bill according to permit students from a with the -- people familiar with the matter, a concern of susan collins that the state and local tax reduction would not be there and if it would, it would get her vote and would bring it to 50 and you would need a tiebreaker from mike pence to get it on the senate. the state and local tax reduction added to the senate bill according to a person familiar with the matter. , down 1.1%still over
for the major indexes and 1.5% for the nasdaq and the vix around 14th. dollar index below 93. a major market reaction. let's bring in our investigative reporter. what happened during the hearing with michael flynn? >> he went ahead and did it. once it was announced this morning, we knew where it was going and the big story is who directed flynn to do this? about the logan act and this obscure law, it is less of a threat to the president that an obstruction charge. rather than go after the president or the administration on a violation of the old, hardly ever enforced law, i think the focus will be on attraction. -- abstraction. -- obstruction. vonnie: abc reporting he will be implicated as the person who did
the direction, four days into the job, apparently. no,our days into the job -- the contact was earlier, in december as president-elect. that is where the logan act comes in, he was not yet president. isi say, the bigger question -- the timeline of covering up other people in the white house theflynn and flynn making statements after sally yates informed the white house and after flynn resigned is when the president basically reached out to james comey and said, maybe we can let this go. according to james comey's testimony. the: the light -- vonnie: lying happened four days into the presidency. if you were the president's defense counsel, would you be thinking, what is the best line of defense? can they go on the attack and call flynn a liar?
that was their defense with papadopoulos. this will be difficult to do. flynn is near the heart of the trump family throughout the campaign. that is why this will be such a big problem for the white house. vonnie: hold on. the market reaction is pretty steep. let's get to abigail doolittle for more on the markets. >> a big risk off reaction to the news that michael flynn has pleaded guilty and agreeing to cooperate any rush of rope and abc reports he is prepared to testify against president trump. massive decline for the major averages with the dow down 1.26%. 1.4%, on pacewn for its worst day since august. the nasdaq down nearly 2% and the russell 2000 is down more
than 2.5% and on pace for its worst day since may. we have had big weekly gains going into today and now they have been paired and the nasdaq on pace for a big weekly decline and he wrestled 2000 -- the russell 2000 on pace for a weekly decline. the brutal selling action as investors react to the news, a risk off reaction, not knowing will it mean, will president trump be impeached and what could the next steps be? the nasdaq now down 2%. investors are trying to figure this out. we may have had some clues around uncertainty with an increased volatility on the week with a big tech selloff on wednesday. these are the higher names. sometimes they react more so and some investors may have suspected there could be something along these lines. markets typically tend to lead when the news comes out. we are also seeing haven reactions and a big way, the 10
year yield, intraday chart, look at that, dropping, represented in green. bonds are rallying in a very big way as investors seek safety as they try to figure out what all of this will mean. they are thinking it is not good for risk assets. we will look at the yen and gold. other haven assets, gold and the yen, the yen rallying in a big white against the dollar. gold of 1%. vix higher by about 10%. low historical levels but worth year, theseon the haven assets were already higher, even know we had record highs. we had a tension between risk assets rallying and haven assets rallying, and perhaps some of the uncertainty around president trump could have been a piece of the current divergence. vonnie: thank you, abigail doolittle.
i want to bring you a statement from general michael flynn, the former national security adviser. he says after 33 years of military service to our country including nearly five years in combat away from my family, and in my decision to continue to serve the united states, it has been a score nearly painful to endure these any months of false accusations of treason and other outrageous acts. such false accusations are contrary to everything i have ever done and stood for. i recognize that the actions i knowledge in court -- i acknowledged in court were wrong and through my faith i got i am working to set things right and my guilty plea and cooperation with the special counsel's office are the best interest of my family and country and i accept responsibility of my actions. that was a statement by michael flynn. other headlines, he says he is the russian ambassador not to escalate after sanctions and
asked the russian ambassador not to escalate after sanctions. we will continue to bring all of the headlines coming out about michael flynn. mark: let's stay with this massive market political story nith allen higgins -- ala flight to safety, gold up in rising, dollar down. what is your initial reaction? initial reaction is that it reflects market positioning come in particular a very big treasury move, the 10 year treasuries coming back. that is the big move. stocks were overdue a selloff is rather modest. the stock market barometer of donald trump popularity for policies -- he would think it is what is not -- it is embedded into that, we believe built into the u.s. premium rate.
a believe that lower taxation on its way. mark: does this completely overshadow the possibility of the tax bill being passed by the senate and then maybe by the house? is this the story? >> it could be but too early to say, i was a not because there is a wider interest and lower corporate taxes. there is wider interest of the big tech money, primarily tech money offshore and bring it back to the u.s. a wider thing than just donald trump. i would not be surprised to see stocks come back, we see stocks often come back into the close. the u.s. treasury move is a big one and people have been caught short treasuries and the levels will not break that level. vonnie: more headlines about what flynn did or did not do, he was asked by a transition official to look for a country the united nations security council stands on sanctions about russia, considering he
asked the russian ambassador not to escalate things after sanctions. clearly, there is a lot of detail on what flynn was asked to do. asked to do something for specific. >> appears he was asked to determine what the russians know , a new ballgame in a month, a logical assumption we can make. it is a logical assumption we can infer that the conversations were recorded by the justice department or the national security service. therefore, four days after the inauguration when asked by the fbi and lied, it was clear on generally 24th, the fbi, he made false statements. that explains why sally yates later went to the white house to warn them that general plan may be compromised. vonnie: a statement from the white house. mirrory that the flynn
the false statements to the white house. the white house is going on the offensive and saying he did the same thing to us. is that a good enough dissent? he was a transitional official -- >> that is a quick statement from the white house and depending on what michael flynn says and who he spoke to any direction he got, i will say that the emigration has come out with other statements that have been -- administration has come out with statements that have been disproved in less than a day. they do not have a great track record. vonnie: the guilty plea does not implicate anyone but flynn. alan thatny danger this may spread and may be influenced things outside of the united states? alan: alan: -- alan: i do not think so. the dollar is generally weaker
and strength and he said haven's. he ruble is going -- if we look at stocks in the calendar year, barely been a setback and it would not be a surprise to have the setback. short run momentum players come in. -- the stock market is a barometer of corporate profits, not donald trump and those are very healthy worldwide, especially in the united states. mark: you are sure dollar against euro -- short dollar against euro. does this influence trade? >> it is working for us today. not really. , the are many reasons reasons we are short dollar is we move away from the narrative it is all about rates.
we say no, there is more to currencies than rates, valuations, current accounts, and tremendous growth in the eurozone. there is value there, including the ruble. why is it weaker? probably because it is one of the more crowd trades in the em space. a popular high yield. classic -- very classic, get me out. mark: sorry. it is still me. currencies, we have discussed, bonds, we have discussed. 100 year bonds, a strange time to talk about it but you have been going on about them for a while. mexico and oxford were in the news. oxford university hear what does it tell us about the current
climate? hold for year bonds we behavioral reasons because people recoil at the 100 year bonds without realizing the final payment is worth a lot when you do the math. not to get to geeky. oxford university, aaa rated, better than government risks, massively oversubscribed 100 your debt. a sign of the times, maybe people up are getting over these behavioral facts and the macro picture is a curve flattening. on want the longest possible -- bond. mark: some investors recoil at 100 years. >> behavioral. some of the bonds we have, we own portfolios where we can, mexico and sterling's and dollar at 100 years part of the em trade. the performances are not
correlated and they do not move with rates or credit. they are idiosyncratic. vonnie: we are seeing a recovery in some asset classes in the united states in the last few minutes. the dow and s&p 500 down 8/10 of 1%. vix up 13.5. a sharp spike. the dollar index moving quite substantially at 92.78. the president's lawyers is saying that the full statement involved, referring to a full statement that michael flynn made to the fbi, "mirror the fall statements to white house officials which resulted in his resignation in february of this year." nothing about-" the guilty plea org charts implicates anyone other than michael flynn." let's bring back in our investigative reporter who has been following the special counsel investigation. where are we right now?
11:45 eastern on tax day when the senate is hammering out taxes and michael flynn is in a washington, d.c. court? >> in terms of the mueller investigation, this is a huge step. people have been wondering if anything is there. with this plea by michael flynn, there is much more there than paul manafort and more so than the guilty plea announced a month ago against or for papadopoulos. -- george papadopoulos. i think that this is -- there is concern with members of the donald trump family and senior white house officials who interacted with michael flynn over the campaign and during the transition. vonnie: jared kushner met with michael flynn in the last few days. do we know more about that? close andushner was was a big supporter of flynn in the campaign a year ago. flynn also met with jared
kushner and try to arrange a back channel with russia last december. jared kushner -- we were not sure whether he would come center stage at this puts them closer to central stage. vonnie: breaking news. let's get to the washington, d.c. court where michael flynn is walking out. he pleaded guilty earlier today to lying to fbi agents four days after president donald trump took office. according to reporting from abc, he will implicate president donald trump, saying that president trump asked him to make contact with some russians. after leavingment the courthouse but released a statement earlier which included an apology and the president's lawyer said that these flynn statements mirror fall
statements he made to the white house. he was directed to figure what were united nations security stances on things like israel and directed to figure out what he may say to the russian ambassador in terms of asking him not to escalate things with russian sanctions. how serious are these directions, if they came from the very top? >> it is very serious and i doubt flynn went on his own initiative but was the directive from the top or a president-elect, or if it was from people who credibly, relatives or white house advisers representing the interests of the president. annie: we just had interesting hour and 15 minutes and will go down in the history of the united states. the best and worst scenario back to play out? >> you have to sit -- separate political from legal risks, politically dark times, the immigration as a huge day and
week ahead with trying to get signature tax reform through today. on the legal standpoint, it goes what he just said, how far up did this go and was there lying involved on the contacts that michael flynn has admitted? , the president himself or other members of his very close inner circle? this is not equivalent to a lower-level figure on the campaign. this is someone who was close and spent hours with the president on an almost daily basis. what was said and how extensive these contacts and the direction were will be looked at over the next days, weeks, and as weak trickle out over what will happen over the investigation. vonnie: what will the special counsel over next? >> the pressure point will be interesting to see. michael flynn has said he was directed by someone in the campaign to make these contacts. the obvious direction is who was that?
what specifically was set about russian sanctions? and the next steps? how many other people have made false statements about these alleged contacts that now may go much broader and much deeper? this takes the investigation into the true heart, not only of the campaign but into the administration itself, who knew what when and what was said and who has lied about it? mark: one name we have not mentioned in the last 20 minutes is jeff sessions, the attorney general. the charge against flynn must cast a renewed spotlight against him who recused himself on any investigation on russia's attempt to influence the election. on himspotlight firmly as well as many white house participants on jeff sessions? >> the spotlight never left the attorney general. is also being closely looked at in terms of contacts. jeff sessions has already walked
back his statements three times about his contacts with russians during the campaign and has been forced and is still accused of being not forthcoming about the extent and nature of the contacts. the spotlight will be on him. the net is widening and will encompass other figures in the donald trump family, the extended family, that we will be looking at to see if anything further breaks. how bob mueller has conducted this investigation, starting low and working high and anyone he knows him looks at the track record and the people he has around him and knows that is what he was doing. mark: are we looking at a further indictment and give me some sort of timeline, especially for those who are not familiar with these types of probes? give me the timeline from here. >> it is impossible to put a specific timeline on it, he has been methodical and lawyers will tell you that this has operated
at a quicker pace is that people would have expected with this level of an investigation, the complexity. it is the gravitas involved. it has proceeded more quickly than journalist expected. this is a job dropping moment today. -- john dropping moment today. -- jaw-dropping moments today. mueller is directing by evidence, a methodical point by point person by person statement by statement, contact mike contact, in terms of what happened before the election. --nie: if you are lower michael flynn could be painted different things but your credibility is under question to begin with. >> this is standard with a corporate or -- they started with george papadopoulos, you
have material on the other side that says how do you believe him , he admitted in court he is a liar. the problem is, george papadopoulos, a 29-year-old was at forgive me, flynn the center of it and close to the donald trump family. close to everybody at the center of the decision-making, including the president and self. -- president himself. vonnie: the president's lawyers says -- the president's lawyers will try to castigate his character. >> good luck with that. theseer, it will be isolation, what documents are there and what emails are there and conversations people are aware of. look at the markets. this is a stunning fall. this indicates there is a concern, risk, a confidence concern about just how deep and
high this may go. fundamentally, that imperils significant legislative priorities including the tax reform bill. youie: let's bring up-to-date with headlines on the tax reform bill as senator johnson said the repatriation rates will match the house version. the salteard that reduction is said to be in the senate tax plan. that sounds like a concession to susan collins it would be the 50th about if we were -- 50th vote after corker and flake look like they are out. if susan collins is a yes, it would just take michael pence and the bill would be out of the senate. ,et's bring in a special guest the former fbi assistant director joins us on the phone. if we have an admission of lying to the fbi, what is the next step? >> he obviously will have to , he mayan information
have already done so. -- is this aion is complete clear agreement that basically -- plea agreement that basically makes the charges against him and his son, if it is, it is a sweetheart deal which means that he is solidly in the camp as a government witness. vonnie: give us some examples of revis times when people have lied to the fbi in these situations -- previous times when people have lied to the fbi in the situations? >> a charge for use a lot after 9/11 is not used commonly. it is in the toolbox. it is not a booming, resounding charge. it is usually reserved for, does not carry big penalties, usually reserved for plea deals like this. in this case, not facing much time. at some point the details of the
plea agreement will leak out. this is not the most serious charge he can face in terms of the scope of charges he could have faced. mark: clearly, he is providing cooperation and it will take special counsel robert mueller deep into donald trump's administration. what do you suggest and guess what happens next? >> i have set in the past and this is based on my experience as head of the fbi criminal division that, whenever there is a complex conspiracy, you cannot make the case just with paper. not with a paper chase. you have to have somebody who has the playbook and was inside the conspiracy, if there is one. if there were one. what robert mueller is doing is lining up the insiders, the people with the potential playbook for broader conspiratorial activities. you have to have someone who can
pull all the documents and the males -- emails together. this is a step in a building block to build a story i guess they conspiracy, if there was one. vonnie: good friction in the inter-agencies -- >> that could be a defense. lying to the fbi -- there is really no defense for it. charged withget that offense unless the facts are actually known and provable. vonnie: we have to leave it there but we appreciate your contribution. thank you for joining us.
former fbi assistant director. we want to think megan murphy. businessweek as an important issue on the stand right now, the bloomberg 50. and our greg farrell, our investigative reporter. a serious market reaction, the 10 year yield down to 2.33. vix spiking. gol up and the dollar is dealt with stocks downd. treasury yields declining today. flynn admitted to lying. ♪
we also have comments from susan collins, one of the holdouts. she will announce her decision in a few hours on the tax bill but good progress being made. this is a few moments ago. thatof the provisions susan collins was holding out for are now in the bill. shery: that was about the salt tax the reduction, the state and local tax reductions. susan collins wanted them. and a cap in the property taxes and the senate bill could include that. it may be included. holdingllins has been out because you want separate legislation to support individual health care mandate. vonnie: of the eight senators we did not know, five we knew change their