Los Angeles Fires Rage; Blue Origin Launch Delayed
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the latest on the wildfires in Los Angeles. The death toll is now up to at least 24, and more than 12,000 buildings have been turned to ash in the Pacific Palisades and Daltadena regions.

Over the weekend, firefighters got a brief break from the punishing Santa Ana winds that have spread these flames across nearly 38,000 acres. But another round of wind gusts is in the forecast this week. Here's Los Angeles County Fire Chief Robert Luna. The fires may be closer to being over. You hear that from our fire chiefs if it goes that way. But we do have this pending weather event.

We are not going to de-escalate the number of people that we have out. L.A. Fire Chief Robert Luna, the National Weather Service has issued its most severe alert, a particularly dangerous situation warning for Malibu, the San Fernando Valley, and much of Ventura County. More than 7.7 million people in Southern California are facing critical fire weather conditions today.

Well, Nathan, this disaster is on track to be the costliest in U.S. history. AccuWeather has raised its estimate for total economic losses to between $250 and $275 billion. FEMA Administrator Deanna Criswell says things will need to change

when it comes to rebuilding. We have a lot of science and technology out there that shows ways that we can make these homes stronger and more resistant against these fires. That's really where we need to focus our efforts as we move into the rebuilding phase. And that's FEMA's Deanne Criswell, who appeared on CBS's Face the Nation. California Governor Gavin Newsom has issued an executive order suspending some environmental and regulatory hurdles to speed up the rebuilding process.

He and other local officials have faced heavy criticism for their response, but Newsom tells NBC's Meet the Press they're up to the challenge. We have 14,000 people working the line right now. We doubled the National Guard. We have 1,680 there helping on the logistics side. I was just with folks from Mexico, 73 folks will be relieving some of our hand crews. We've got nine states that are now providing under this EMAC system support. So we've got the resources.

And you can hear Meet the Press and Face the Nation every Sunday on Bloomberg Radio. Let's turn now to politics, Karen. Justin Trudeau says Canada is ready to respond with counter-tariffs if the U.S. imposes tariffs on Canadian products. The outgoing Canadian Prime Minister said his government is not looking for a trade fight but will have to retaliate if the U.S. tariffs Canadian products.

We are the number one export partner of about 35 different U.S. states. And anything that thickens the border between us ends up costing American citizens and American jobs. That's not what President Trump got elected to do. I know he got elected to try and make life easier for all Americans, to support American workers. These are things that are going to hurt them.

Justin Trudeau made those comments on MSNBC. Canada buys more U.S.-made goods than any other country.

Meanwhile, Nathan, Jamie Dimon is speaking out about tariffs in an interview with CBS News Sunday morning. The JPMorgan CEO says they can help the U.S. To me, tariffs are a way, every tool properly used that can help get some of those issues resolved. Unfair competition, national security issues, you know, like any tool, if it's misused, yeah, it can do damage to them.

And JPMorgan Chase CEO Jamie Dimon says he has not spoken with President-elect Donald Trump about tariffs. Well, Karen, President-elect Trump's cabinet choices will begin facing Senate confirmation hearings this week. On Thursday, Treasury Secretary nominee Scott Bessent answers questions. We get more from Bloomberg's Doug Krisner.

Bessent is founder and leader of the macro hedge fund, Key Square Group. If he's confirmed, Bessent will immediately resign. And a document released by the Office of Government Ethics indicates Key Square would be wound down at the end of March. Bessent will also divest underlying assets to avoid conflicts of interest.

He's disclosed assets worth at least $521 million. Some of Besson's potential conflicts will take longer to resolve. He's invested at least a quarter million dollars in three funds that allow him to withdraw no more than 25% of its holdings each quarter.

In New York, I'm Doug Krisner, Bloomberg Radio. All right, Doug, thank you. Well, Vice President-elect J.D. Vance is dialing back on his running mate's promise to pardon all protesters involved in the U.S. Capitol riot on January 6th, 2021. If you committed violence on that day, obviously you shouldn't be pardoned. And there's a little bit of a gray area there, but we're very much committed to seeing the equal administration of law. And there are a lot of people we think in the wake of January the 6th who were prosecuted unfairly. We need to rectify that.

And Vice President Delec Vance made the comments on Fox News Sunday. You can catch the program Sunday afternoons on Bloomberg Radio. Well, Karen, you're going to have to wait a little longer, so are the rest of us, actually, for the next space launch. Jeff Bezos' Blue Origin has delayed the inaugural takeoff of its new flagship rocket.

to deal with an unspecified issue on the vehicle. The company says it is reviewing opportunities for the next launch attempt for the new Glenn rocket. The Jeff Bezos-backed firm is trying to mount a challenge to Elon Musk's industry-leading SpaceX.

Well, we do have a milestone for one of Elon Musk's other businesses, Nathan. Tesla has overtaken Audi in global car sales for the first time. Audi sold 1.67 million vehicles in 2024, down 12% from a year earlier. Tesla delivered almost 1.8 million vehicles last year. Turning to markets now, Karen, futures are lower following Friday's job-related sell-off on Wall Street. The drop came after the economy in December added the most jobs since March, and the unemployment rate

unexpectedly fell. Cameron Dawson is chief investment officer at New Edge Wealth. It is that question of is good news good news or is good news bad news? We think at the end of the day strong jobs are overall good for the equity market but we have to take a hit to the valuation first to digest these higher yields if we continue to see this labor market hold in better than expected.

New Edge Wealth's Cam Dawson notes the S&P 500's one and a half percent drop on Friday wiped out the index's advance for the year. Well, Nathan, let's turn to the economy now. And former Federal Reserve Vice Chair Randall Quarles believes the Fed's independence is not going to be threatened by President-elect Donald Trump. And Quarles spoke with Bloomberg's Stephen Engel. Structurally, the Fed can't really be affected by the president's bully pull. But

And, you know, the people who are appointed to the Fed generally have fairly thick skin. So while there's certainly political pressure, there's not really political levers that someone can pull to affect their independence. And Randall Quarles was a Trump appointee to the Fed. He served as vice chair of supervision until 2021.

Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's John Tucker. John, good morning. And good morning, Karen. House Republicans from New York, New Jersey, and California unhappy with a cap on state and local tax deductions say talks on the issue with Donald Trump over the weekend were positive. Let's find out more this morning from Bloomberg's Jeff Bellinger. Representative Nick LaLotta of New York said in an interview, Trump is willing to engage in a solution.

Representative Nicole Malliotakis, another New Yorker who attended the gathering of about 16 House Republicans with Trump at his Mar-a-Lago resort in Florida, posted on X that the meeting was productive. Significant expansion of the SALT deduction cap is already emerging as a potential demand by some Republicans in return for their support of any larger tax-related package.

Jeff Bullinger, Bloomberg Radio. Hospitals across the country dealing with a wave of respiratory illnesses. The CDC says at least 35 states are seeing high levels of flu, COVID, RSV, even the common cold. So far this season, the flu alone has sent more than 63,000 people to the hospital and caused at least 2,700 deaths, including 11 children.

President Biden delivers a foreign policy speech today at the State Department. White House Press Secretary Karine Jean-Pierre. He has some thoughts on the future, not just of the country, but how this country moves forward as a leader. This is one of several appearances the president has been making as he prepares to leave office January 20th.

A top aide and president-elect Donald Trump's incoming administration signals Ukraine will be asked to lower the conscription age to strengthen its battlefield position. Michael Walz, a former Army Green Beret whom Trump tapped as his White House National Security Advisor, suggested the expanded draft age would help Ukraine overcome a shortage of troops. Right now, the draft age is 25.

Global News, 24 hours a day, whenever you want it, with Bloomberg News Now. I'm John Tucker, and this is Bloomberg. Karen. All right, John Tucker, thank you. Trust isn't just earned. It's demanded. Whether you're a startup founder navigating your first audit or a seasoned security professional scaling your GRC program, proving your commitment to security has never been more critical or more complex. That's where Vanta comes in.

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This episode is brought to you by Intuit Enterprise Suite, helping your business grow smarter. All right, let's chat to all the CFOs and business leaders out there.

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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Last time there was an NFL playoff victory by Washington was 19 years ago. The team had a different owner. They had a different name. And their current quarterback was five years old. A rookie QB, Jaden Daniels, who led the commanders to 12 regular season wins, eight more than they had a year ago, led them down the field in the final minute at Tampa Bay. And they kicked a field goal on the final play. So

From 37 to send Washington to the final eight. A Washington contact. A tight round. I've seen it all.

NBC, the call. Commanders won a back-and-forth game with the Bucs, 23-20. They'll now play Saturday night in Detroit. The first two games of the day like the games this past Saturday. Won easily by the home team. Buffalo beat Denver 31-7. The Bills are 9-0 at home. They'll be home Sunday night against Baltimore. Philadelphia down Green Bay 22-10. The Eagles await the winner of tonight's game, Vikings and Rams.

moved from Los Angeles to Phoenix. To no one's surprise, Mike Vrabel, named the new coach of the New England Patriots. He was a Pats linebacker for eight years, coached the Titans for six, replaces Gerard Mayo, who got just one season after Bill Belichick coached the Pats for 24. At the Garden, an offensive explosion by the Knicks.

They shot 58%, beat Milwaukee 140-106. Jalen Brunson, 44 points. He had 23 in the first quarter. The Nets lost a heartbreaker at Utah. Jazz scored with two seconds left in overtime and won by a point. The Celtics beat New Orleans by a point. In Melbourne, they're playing now. Opening round of the Australian Open and 10

Time champion Novak Djokovic lost the first set to 19-year-old American Nishesh Basavareti. They're now tied one set all. Straight set wins for Carlos Alcaraz and top seed Yannick Sinner as well as Coco Ga. John Stanshauer, Bloomberg Sports, Cameron and Nathan.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. As the wildfires continue to rage in Southern California, firefighters could struggle to catch a break from the winds that have spread the flames across an area more than two and a half times the size of Manhattan.

Los Angeles County Fire Chief Anthony Maroney says dangerous conditions are in the forecast for much of this week. The next predicted red flag ends on Wednesday.

So please rest assured that first thing Thursday, we will start talking about repopulation in evacuation order and warning areas. And this morning, we were joined by Bloomberg News senior editor Bill Ferrys. Bill, good morning. I know you've been following this situation as closely as anybody. I guess the firefighters got a little bit of a break from the winds over the weekend, but it's not lasting long. Good morning.

Good morning, Nathan. That's right. Firefighters started to make some progress over the weekend. That Palisades fire is about 13% contained as of Sunday evening in L.A. The Eaton fire, 27% contained. But as you were suggesting there, the conditions don't look good in the days ahead. National Weather Service has its most severe alert out there for places like Malibu, San Fernando Valley, parts of Ventura County.

They're warning about what they called explosive fire growth potential beginning late Monday and carrying on through Wednesday. So I think people who are out there are going to continue to be glued to those fire tracking apps.

Seven and a half million people or so are facing this critical fire weather condition, and they could have additional evacuations and movements. The fires have already burned 40,000 acres. More than 100,000 people have been had to leave their homes so far. So it looks like a rough start to the week, really beginning in the afternoon or evening on Monday in Southern California.

Just to talk about the scope of this disaster, 40,000 structures destroyed just puts a tip to the iceberg of the kind of damage, the kind of economic loss that we could see from this.

Yeah, the area that's been burned, I mean, it's already a larger area than cities like San Francisco or Pittsburgh, Boston or Miami. So that's just the area that's been burned. AccuWeather Inc., which looks at disasters and the costs, they've put out an estimate of $250 to $275 billion in total costs.

That includes the damage and rebuilding and lost wages and things like that. But that is up. It's almost double their previous estimate of $50 to $150 billion just a few days ago. What does this mean for the insurance industry? How can Southern California rebuild from this kind of disaster? I mean, are we going to have to face the question about whether Southern California is insurable?

It's going to be just a brutal blow to the insurance industry. And remember, you know, broadly as an industry, it comes after a series of major hurricanes that hit the southeast United States last year. That's going to be a real question going forward. What happens to those rates? Does it make sense?

Living in Southern California, even more costly going forward. And how many years will it take to rebuild? Remember, L.A.'s hosting, you know, they're hosting the Olympics in just a few years. Typically, these kind of disasters, it could take a decade or more to fully recover from this kind of a natural disaster event.

And to see the response that we've seen so far and the questions that have been raised about how this even started, what can be done to prevent this kind of thing from happening. I mean, we've seen some pretty withering criticism for some of the local leaders in that region. Got about a minute left.

Yeah, Mayor Karen Bass coming under a heavy fire for her budget cuts that hit the fire department. In the end, I think the fire department got more money this year than last year. But there's a lot of deferred maintenance. You hear union fire union leaders saying that, listen, there's a lot of trucks.

that are still waiting for repairs, that could be out there doing some fighting. Of course, like everything, it's getting heavily politicized, but right now the focus is really what might be coming in the next 72 hours for Southern California and whether they can get past and whether firefighters can kind of get a stronger grip.

and get more of this under control. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen.

You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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