Fire Scarred LA Braces for More Wind; DOJ Trump Election Case Report Released
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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 well with the latest on the wildfires in Los Angeles. The death toll remains at 24, with at least three active fires still raging across the area. Another round of dangerous weather is in the forecast today for wind gusts as high as 50 miles an hour. Los Angeles County Deputy Fire Chief Robert Harris says people need to be ready. Severe weather conditions will continue through Wednesday.

Please be assured that the Los Angeles County Fire Department is prepared and we are anticipating winds and low humidity and low moisture, which will be a threat to the Los Angeles County area. Deputy Fire Chief Robert Harris says that threat extends north to Ventura County as well. At the White House, President Biden is looking ahead to the recovery. The federal government is going to cover 100%.

cost for the next 180 days for things like firefighter overtime pay, removal, temporary shelters. It's going to cost tens of billions of dollars. The president spoke at a White House briefing. Wells Fargo and Goldman Sachs estimate the insured losses alone could top 30 billion dollars.

Meanwhile, Nathan, officials are still looking into what could have caused these fires. L.A. County Sheriff Robert Luna says they're investigating whether power lines owned by Southern California Edison could have sparked the Eaton fire that's devastated Altadena.

But the CEO of Edison's parent company, Pedro Pizarro, tells Bloomberg there's no evidence the lines were having any issues. Typically, when you have a fire caused by electrical infrastructure, you do see a signature voltage dropping, current increasing. We have not seen that in our study.

CEO Pedro Pizarro's Edison International is facing a lawsuit over the Eden Fire. Residents have also filed a lawsuit against the L.A. Department of Power and Water over limited water supplies to fight the Palisades Fire. Well, Karen, another developing story we're following this morning is the release of part of special counsel Jack Smith's report. He says President-elect Donald Trump could have been convicted for trying to overturn the 2020 election. We get the details from Bloomberg's Gina Cervetti.

The DOJ released Smith's 137-page report after a week of legal wrangling over whether the document could be made public. Trump's team had made emergency requests to federal courts to block it from being released. Had they succeeded, the new administration could have buried it for good. The report details Trump's efforts to pressure Vice President Mike Pence to reject congressional certification of the 2020 election, including a deadly attack on the U.S. Capitol on January 6th,

2021. The report also highlights Trump's refusal to help stop the riot and his continued support for those who attacked the Capitol, which Smith sees as further evidence of Trump's guilt. Trump and his allies have long railed against Smith's investigation and findings, saying they represent a baseless political attack. Gina Cervetti, Bloomberg Radio.

All right, Gina, thank you. Well, turning now to the Middle East, the Wall Street Journal reports this morning that Israel and Hamas are finalizing terms on a ceasefire deal that could be announced as soon as today. Both sides are warning, however, that talks could still fall apart. It follows comments from President-elect Trump and President Biden, who both say a pause in fighting could come before Inauguration Day next week. U.S. National Security Advisor Jake Sullivan told Bloomberg he's also optimistic about a deal.

I think the pressure is building for Hamas to come to yes. I think Israel also has achieved a huge amount of its military objectives in Gaza, and therefore they are in a position to be able to say yes. So there is a distinct possibility that we can get this deal done this week before President Biden leaves office.

And despite progress, U.S. National Security Advisor Jake Sullivan still urged his caution about a possible ceasefire. The proposed deal would involve a 42-day truce, with Hamas releasing 33 hostages in its first phase, according to senior Israeli officials. Palestinian prisoners would be released from Israeli jails in a buffer zone established in Gaza, with further negotiations to fall.

Now, Karen, a Bloomberg News exclusive. Some of President-elect Donald Trump's economic team is considering a plan to gradually increase trade tariffs. Sources say the discussions are looking at ratcheting up levies by about 2 to 5 percent each month. And we get more from Bloomberg's Kriti Gupta. This, of course, is still a proposal that's being reported on. It's not official yet. And it's also being proposed by people who are not

Bloomberg's Kriti Gupta says Scott Bessant, Kevin Hassett and Stephen Moran are working on the plan, but the gradual tariff hike proposal is in its early stages and has not yet been presented to Trump. A spokesman for the transition team referred to the president-elect's previous public comments in social media posts about tariffs.

Well, Nathan Elon Musk will continue to have major access to Donald Trump when he takes office. The New York Times is reporting Musk is expected to use office space adjacent to the White House as he launches the Department of Government Efficiency. Musk owns companies with billions of dollars in contracts with the federal government. And could the world's richest person be in line for another business, Karen?

Bloomberg News has learned Chinese officials are evaluating the possible sale of TikTok's U.S. operations to Musk. We are told it is one option being explored if TikTok fails to fend off a U.S. ban.

from Bloomberg's Annabelle Droolers. This is a potential deal that possibly does hold some appeal for the Chinese government, which does, of course, have say over whether TikTok is ultimately sold. The deal value of this, I mean, Bloomberg Intelligence, again, it's very difficult to say, but last year they were saying TikTok's U.S. operations could be worth something to the magnitude of $40 to $50 billion. And it's also not sure what sort of structure the deal could take either. But it would certainly be

a very complex process. That's Bloomberg's Annabelle Droolers. Last week, the Supreme Court signaled it is likely to uphold the law that would ban the app in the U.S. on national security grounds. Well, we turn to the markets now, Nathan, and futures are higher following yesterday's later turnaround on Wall Street. Today's trading could be impacted by the first of this week's key inflation reports.

We get a preview of the producer price index with Bloomberg's Michael McKee. Economists see further proof coming that disinflation has paused, if not ended. Rising monthly prices will mean significant jumps on an annual basis, something which might scare already nervous investors. While the PPI doesn't directly correlate to Wednesday's consumer price report, several of its components feed into the Fed's preferred inflation indicator, the PCE index.

Bloomberg Economics sees portfolio management and airfares continuing to drift higher, while health care gains are muted ahead of January's cost resets. Michael McKee, Bloomberg Radio. And it's 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. Good morning, Karen. New York City's first in the nation congestion pricing appears to be working. Let's get the story this morning from Bloomberg's Jeff Bellinger.

Traffic on New York's busiest streets dropped by 7.5% and morning travel times fell on most major crossings into Manhattan during the first work week of the city's congestion pricing plan. The preliminary data from the Metropolitan Transportation Authority is the first glimpse into how the new charge is impacting commuting patterns. The early data follows a week of social media postings and reports of residents and drivers enjoying easier flowing traffic.

An average 539,000 vehicles drove into the toll zone each day during the first work week of the program. That's about 43,000 fewer than before congestion pricing began. Jeff Bellinger, Bloomberg Radio. President Biden touted his foreign policy accomplishments in a speech aimed at burnishing his legacy before he departs office next week. My administration is leaving the next administration with a very strong hand to play in America. More friends.

Strong reliance. His adversaries are weaker and under pressure. Biden also reflecting on the competition with China, saying we expect China and everyone to abide by the international rules. Special Counsel David Weiss got the last word after leading the investigation into Hunter Biden and the president's decision to pardon his son. Weiss's final report was released yesterday. The president said Hunter was treated differently and singled out because he is his son. Weiss fired back, saying those baseless accusations

have no merit. And rescuers were sending a cage-like structure into one of South Africa's deepest mines today. It's an attempt to bring out survivors among hundreds of illegal miners trapped underground for months in an abandoned shaft. More than 100 are believed to have died of starvation or dehydration.

Global News, 24 hours a day, whenever you want it. We have 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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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Sports is back in Los Angeles. First time since the fires broke out. Home games last night for the Lakers who lost and the Clippers who won and the Rams.

had their playoff game with the Vikings. It was moved out of L.A. into Phoenix, and the Rams won with surprising ease against a Minnesota team that went 14-3 in the regular season. L.A. up 24-3 at halftime. Went on to win 27-9, a dominant defensive effort. They sacked Sam Darnold nine times. He threw an interception. He had a fumble. It was returned for a Rams touchdown. Matthew Stafford threw for two TDs, then talked about the extra meaning of the victory. We knew what we were playing for today, you know? It was go get this win, but, man, it was sort of people allowed

I'm just struggling right now. It's been unbelievable to watch the whole community, you know, the state, the country kind of get behind them. It's a tough time to be back there and

We're just happy that we came out and played like this tonight to get, you know, something to be happy about. Rams will now play Sunday afternoon in Philadelphia with his contract expired. The Dallas Cowboys cut ties with coach Mike McCarthy. Dallas just went through an injury ravaged seven and 10 season. They won 12 games. Each of the previous three McCarthy's now free to pursue other jobs. Cowboys had previously prevented him from an interview with the bears. Meanwhile,

ESPN reported last night Cowboys owner Jerry Jones has already spoken with Colorado coach Deion Sanders. At the guard, much improved Pistons beat the Knicks 124-119 led by Cade Cunningham. He scored 36 points. Jalen Brunson led the Knicks with 31. At the Australian Open, first round straight set victories for Americans Taylor Fritz, Ben Shelton, Emma Navarro, and Madison Keyes. John Stashower, Bloomberg Sports. Karen Anthony.

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 on another very challenging day in store for the Los Angeles area after now a week of deadly wildfires. More punishing winds are in the forecast today.

But Los Angeles County Fire Captain Sheila Kelleher says they're as ready as they're going to be. We have crews where they belong. Everybody's in place. Everybody knows the mission. Everybody knows the game plan. Because when the winds start blowing, we will have our hands full. But we are ready for what's coming our way. And for more, we are joined this morning by Bloomberg's Derek Walbank. Derek, good morning. Let's talk about what is coming their way. Up to 50 mile an hour wind gusts and continued dangerous conditions. Good morning.

Good morning. Yeah, that's exactly right. You know, you're talking about some conditions here that are going to mirror over the next little while the conditions that were in place at the start of the Palisades fire. This has a lot of people, officials in the area on edge.

And that's going to be the situation that we're facing for the next little while, as I say. At the same time, we're getting accounts of exactly how much this is going to cost. The estimates keep going up. AccuWeather's overall estimate

Now somewhere around $250 billion, billion with a B dollars. The insured losses on this, I've now seen two estimates that put that around the $30 billion mark. That's continuing to rise as well.

And, you know, that's just sort of, Nathan, where we stand right now. The more that you have fire conditions like this that prevent these from getting put out, that maybe put new ones in new areas, the more those totals may rise. And when you think, Derek, about the human toll and the economic toll, you have to wonder what the overall knock-on effect on the U.S. economy is going to take from these fires.

Speaker 2 : Yeah. And you know, we saw, we saw one, one estimate that said that you could have a small effect on the, on the jobless rate.

That is certainly something that's in play. You also could have a somewhat smaller effect on overall GDP. I think the main thing is that you have a little bit of a sectoral concentration, right? We've written extensively, my colleague Lucas Shaw particularly has written extensively about the effects on the entertainment industry,

you know, productions are generally shut down in the L.A. area. Even if it's not fire affected, you know, you're not necessarily getting the permits. You know, if you need police or something else to be at your production, how are you going to go do that? So there's going to be some of those. I mentioned insurers, particularly home insurers, are potentially exposed there. So there will be some sectors that are

particularly gravely hit. And then that all raises the question, does it not, of what the federal response is going to be in terms of reimbursing, right? You know, President Joe Biden has talked about a potential federal bill for this in the tens of billions of dollars. And at the same time, we're hearing Republicans start to talk about the word offsets. Remember, there's going to be universal Republican control of Congress, right?

In the not too distant future, Congress and the White House in the not too distant future, they already have universal control of Congress. So that's going to be a really keen question that we're going to have to look at going forward. As we continue to ask those questions and monitor the wildfire situation, we got the report.

dropped overnight from the Justice Department's special counsel Jack Smith's investigation into 2020 election interference. How much of an impact could this have now with less than a week to go before President-elect Trump becomes President Trump again? Got about a minute.

Well, Nathan, I don't think that it's going to prevent Trump from becoming president, right? And I think that a lot of this stuff, this report, our listeners will have a chance to read this as they wake up and they get into work. They will find a very compelling and detailed tale of what Trump was doing in and around those events at the Capitol January 6th and his efforts to try and reverse

reverse the results of the election. Those have already been well litigated. I think the American public was very well aware of all of that. It factored into people's votes where they thought it ought to, and Trump was elected anyway. Trump is walking in here...

as I say, into a situation with universal Republican 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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