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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Blueberg

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Speaker 1: Daybak podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Monday, the eighteenth of March in London.

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Speaker 1: I'm Caroline Hepke and I'm Lizzie Burden.

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Speaker 2: Coming up today, Bloomberg learns that Apple's in talks to

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Speaker 2: build Google's Gemini artificial intelligence engine into the iPhone.

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Speaker 1: Putin secures a fifth term as Russian President and warns

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Speaker 1: that his country's ambitions won't be stopped.

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Speaker 2: And we dig into the trade, targeting the remains of

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Speaker 2: Sam Bankman Freed's once fast FTX empire with a two

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Speaker 2: hundred percent payout.

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Speaker 1: Let's start with a roundup of our top stories. Bloomberg

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Speaker 1: understands that Apple is in talks to build Google's Gemini

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Speaker 1: artificial intelligence engine into the iPhone. The news sets the

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Speaker 1: stage for an agreement that would shake up the AI

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Speaker 1: in street. Bloomberg's chief tech correspondent Mark German explains why

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Speaker 1: this would be.

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Speaker 3: A blockbuster agreement that has the potential to transform this

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Speaker 3: film growing AI industry. Apple has been working on several

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Speaker 3: new AI tools and services for iosateen effects of iPhone

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Speaker 3: software pay Those are going to be based on Apple's

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Speaker 3: homegrown AI models that Apple needs a partner for generated AI,

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Speaker 3: that is the AI that all of us have been

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Speaker 3: talking about for months.

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Speaker 1: German adds that if a deal between Apple and Google

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Speaker 1: comes to fruition, it would build upon the two companies

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Speaker 1: search partnership Alphabet's. Google currently pays Apple billions of dollars

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Speaker 1: annually to make it search engine the default option in

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Speaker 1: the Safari web browser on the iPhone and on other devices.

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Speaker 2: Russias Vladimir Putin has secured a record victory and a

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Speaker 2: presidential election whose outcome was predetermined with no credible opponent.

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Speaker 2: Putin one close to ninety percent of the vote to

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Speaker 2: secure a fifth term in the Kremlin. Speaking to supporters

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Speaker 2: in Moscow, had this message for those who oppose Russia.

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Speaker 4: It's become clear for everyone whoever wants to threaten us

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Speaker 4: or Bullias, whoever wants to suppress us, they were not

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Speaker 4: successful in the past, and they will not be successful

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Speaker 4: in the future.

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Speaker 2: Vladimir Putin's word, spoken there by a translator. With his

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Speaker 2: troops on the offensive in Ukraine, Bloomberg has been told

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Speaker 2: by multiple sources that an emboldened Putin is preparing for

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Speaker 2: a long confrontation with the West. Responding to the election result,

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Speaker 2: Ukraine's president Vladimir Zelenski said, no one in the world

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Speaker 2: is safe.

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Speaker 5: This figure has simply become addicted to power and is

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Speaker 5: doing everything he can to rule forever there is no evil.

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Speaker 5: He will not commit to prolong his personal power.

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Speaker 2: Zelenski's words, also there spoken by a translator, come after

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Speaker 2: French President Emmanuel Macain warned that the European Union would

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Speaker 2: face an existential threat of a Russian invasion unless Vladimir

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Speaker 2: Putin's force are defeated in Ukraine. Russian troops have made

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Speaker 2: recent advances as the government in Kiev struggles to keep

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Speaker 2: its military supplied with munitions following delays in aid from

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Speaker 2: its US and European allies.

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Speaker 1: The Bank of Japan is widely expected to hike rates

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Speaker 1: tomorrow after stronger than expected wage outcomes. Ninety percent of

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Speaker 1: central bank watchers now expect authorities to end the negative

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Speaker 1: rate with the first interest rate rise in seventeen years.

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Speaker 1: The former Bank of Japan Deputy governor Masazumi Waka Turbe

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Speaker 1: says that the change is almost certain.

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Speaker 6: And what they are going to do is to raise

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Speaker 6: the policy rate, and they are going to end the

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Speaker 6: negative industrate to policy and I think that they are

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Speaker 6: going plobally going to raise that too to zero point

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Speaker 6: one percent. And also they are going to end the

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Speaker 6: sort of new poochase of the ETA and jer league.

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Speaker 1: Former Japanese Central banker Massa Zumi Waka Tabe speaking there,

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Speaker 1: Goldman Sachs has added itself to those who are predicting

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Speaker 1: a move, writing in a note that no further data

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Speaker 1: is needed to justify the policy change. Alongside rate hikes,

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Speaker 1: though the fate of a slew of extraordinary tools so

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Speaker 1: including yield curve control and massive asset purchases, also hangs

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Speaker 1: in the balance.

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Speaker 2: Israel's military is targeting Gaza's main hospital in the deepest

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Speaker 2: incursion into Gaza City in two weeks. According to Israeli forces,

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Speaker 2: Al Shifa hospital showed signs of terrorist activity and its

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Speaker 2: troops are now undertaking what they describe as a precise

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Speaker 2: operation at the location. The news comes as Prime Minister

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Speaker 2: Benjamin Netanyah, who pushes back on criticism from US senor

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Speaker 2: Senate Majority leader Chuck Schumer, who called for fresh Israeli

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Speaker 2: elections bmokes Ed Baxter, he's the story.

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Speaker 7: Net Yahoo first says the aid issue to Gaza is

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Speaker 7: complicated because when it does get in, Hamas lootes it

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Speaker 7: and uses it for its own gain, and on CNN

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Speaker 7: he says majority of Israeli support the government anyway.

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Speaker 8: I think what he's said is totally inappropriate. It's inappropriate

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Speaker 8: for to go to a sister democracy and try to

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Speaker 8: replace the elected leadership there. That's something that Israel Israeli

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Speaker 8: public does on its own, and we're not a banana republic.

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Speaker 7: Net Yahoo also says that forrests are trying to be careful,

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Speaker 7: but that the move to remove homage will continue. Ad

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Speaker 7: Baxler Bloomberg.

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Speaker 1: Radio, asking prices for property in the UK are rising

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Speaker 1: at the fastest rate in ten months as sellers rush

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Speaker 1: back to the market. Right Move says that its data

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Speaker 1: shows the property market is past its bottom. It's a

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Speaker 1: sentiment that was echoed last week by the All Institution

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Speaker 1: of Chartered Surveyors. Here's their chief economist, Simon Rubinson.

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Speaker 7: Terms of where we are in the market, well, I

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Speaker 7: think I would characterize it as a soft landing, certainly

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Speaker 7: as far as pricing is concerned.

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Speaker 3: The picture trough.

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Speaker 6: Declining prices looks in this cycle to have been very modest,

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Speaker 6: indeed by historical comparison, certainly in nominal term.

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Speaker 1: Despite Rubinson optimism, not everyone is so bullish. The government's

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Speaker 1: official forecaster, the Office for Budget Responsibility, expects house prices

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Speaker 1: to fall almost three percent this year, with only a

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Speaker 1: modest recovery in twenty twenty five. Now, in a moment,

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Speaker 1: we're going to talk about FTX and everything that has

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Speaker 1: flowed from the collapse of Sam Bankmanfried's Empire. But before that,

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Speaker 1: a story that caught my attention. Don't know if you've

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Speaker 1: had a look at this yet, Lizzie, about this new

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Speaker 1: slogan that has come out of China, New Productive Forces.

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Speaker 1: That's the slogan everyone's trying to figure out, Actually what

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Speaker 1: does it mean. It comes after common prosperity, socialism with

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Speaker 1: Chinese characteristics, And this was the phrase that was published

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Speaker 1: on the fifth of March in the Chinese government's annual

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Speaker 1: Statement of Priorities. So everyone's been scrambling to figure out

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Speaker 1: what does this mean for Shijingping's priorities.

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Speaker 2: Yeah, maybe that you've already seen the impact of it

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Speaker 2: in terms of the Chinese data that we got this morning.

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Speaker 2: You've got a beat on industrial production, even if there

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Speaker 2: was a bit of a slight miss on retail sale. However,

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Speaker 2: it has booted Chinese shares this morning, the CSI three

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Speaker 2: hundred nine tenths of eight percent, and that contributing to

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Speaker 2: the lift on the MSI specificated next this morning. But yes,

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Speaker 2: a slogan to watch out for.

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Speaker 1: Yeah, absolutely right now. We've also got a great scoop

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Speaker 1: for you this morning, Bloomberg has learned that Apple is

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Speaker 1: in talks to build Google's Gemini artificial intelligence engine into

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Speaker 1: the iPhone. The news sets the stage for potentially now

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Speaker 1: the big deal that could shake up the AI industry.

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Speaker 1: Our take editor Lad Savov joins us now to discuss Vlad,

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Speaker 1: good to have you with us. And what do we

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Speaker 1: know then about these talks so far?

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Speaker 9: Well, the talks are under the way. As you mentioned,

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Speaker 9: it is mark Oman scoop. What's happening is directory discussing

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Speaker 9: Apple is talking to Google. That seems to be the

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Speaker 9: company in pole position to provide the additional services. But

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Speaker 9: Apple has also talked to Open Ai the Creative Chair

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Speaker 9: GPT as an alternative service. We can't expect anything to

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Speaker 9: happen in the immediate term. The most likely timing for

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Speaker 9: any of these are now be June, when Apple hosts

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Speaker 9: its annual Developer conference, So.

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Speaker 2: That this could have huge implications for the amount of

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Speaker 2: money makes the billions of potential users. But doesn't it

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Speaker 2: show that Apple isn't as far along with it's AI efforts.

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Speaker 9: Some might have hoped that's exactly right. I would say

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Speaker 9: that practically everyone was caught flat footed, to be honest,

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Speaker 9: when chad GPT came out in novemb twenty twenty two.

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Speaker 9: Everyone has been trying to catch up. Even Google, which

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Speaker 9: for over a decade has been investing in this kind

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Speaker 9: of AI development, still is catching up the chad GPT.

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Speaker 9: I would say it's a big deal for both companies.

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Speaker 9: Let's not forget if Google gets its Gemini services onto

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Speaker 9: the iPhone it already has it, or Samsung's phones. In

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Speaker 9: terms of Europe and the United States, these are the

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Speaker 9: two leading and dominating brands. It means that Google is

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Speaker 9: the default choice for most people when it comes to

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Speaker 9: generative AI and mobil devisors. And that's really the trend

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Speaker 9: that we're heading toward. We are talking about AIS disruption,

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Speaker 9: but the place where all computing happens nowadays, especially for

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Speaker 9: consumers and users, it's happening on mobile devices. So being

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Speaker 9: the first choice is a huge deal.

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Speaker 4: Yeah.

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Speaker 1: Absolutely, and this Gemini used to be barred for everyone

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Speaker 1: us trying to think about the kind of evolution of this.

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Speaker 1: Does it also raise anti competition red flags? I mean,

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Speaker 1: does anybody going to get involved? Obviously the AI regulatory

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Speaker 1: playbook is still being written now.

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Speaker 9: Yes, I would say in the same way that Google

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Speaker 9: search being on the default on the iPhone and the

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Speaker 9: de phone and Android devices, Google is basically trying to

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Speaker 9: create that exact situation, and we've seen the EU, the

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Speaker 9: United States, regulators on both sides of the Atlantic have

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Speaker 9: paid close attention to that search situation. Google would always argue, hey, listen,

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Speaker 9: you have alternatives, you have open options like Microsoft and

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Speaker 9: it's being service, but that's not really realistic. Most people

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Speaker 9: use the default option on their devices. This is why

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Speaker 9: it's a big deal for Google to get this deal

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Speaker 9: to happen. And it's a big deal. Like you mentioned,

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Speaker 9: also for Apple, one of the things that we've seen

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Speaker 9: on based in Hong Kong out of China is the

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Speaker 9: iPhone is really struggling and that's probably because markphones are

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Speaker 9: really plateaued. There is no well factor to draw new

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Speaker 9: consumers in. And Cha gptai is the big thing that

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Speaker 9: everyone's talking about. So having that on your new device

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Speaker 9: pretty quickly is going to become table stakes. Everyone's going

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Speaker 9: to expect it. So Apple needs to be there. It

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Speaker 9: doesn't seem to have that in house, so it's looking

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Speaker 9: outside at the moment.

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Speaker 2: Okay, our tech editor with more on that fantastic scup

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Speaker 2: from Bloomberg's Mark Gum, and we thank you.

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Speaker 3: Now.

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Speaker 1: Do you remember the implosion of FTX in twenty twenty two?

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Speaker 1: Founder Sam Bankman free now facing decades in prison. He's

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Speaker 1: awaiting sentencing actually this month. But the FTX bankruptcy has

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Speaker 1: been lucrative for some who specialize in distress assets, including

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Speaker 1: a Test, which is a boutique London firm. Joining us

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Speaker 1: now to discuss this. Bluebeck's Credit reporter Luca Powley, Luca,

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Speaker 1: good morning, Thanks for joining me in the radio studio

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Speaker 1: home in London. Why are people still talking about FTX

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Speaker 1: then went bankrupt more than a year ago morning.

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Speaker 10: So the reason we're still talking about it is because

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Speaker 10: it's generated way more money than anyone would have expected

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Speaker 10: when it went bust, so you sort of Since then,

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Speaker 10: crypto assets have recovered a lot, and people have bought

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Speaker 10: into the claims of the bankruptcy trying to make money

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Speaker 10: out of it. The claims were dollarized, which means that

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Speaker 10: the claims from the actual bankruptcy, which were normally creditor

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Speaker 10: accounts customer accounts, are frozen in dollars. But the price

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Speaker 10: of bitcoin and other crypto assets has increased massively, so

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Speaker 10: now it looks like everyone's going to get paid back

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Speaker 10: all of their money, which is wild. Yeah, yeah, which

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Speaker 10: is crazy. I mean, you see this a lot and

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Speaker 10: distressed investing, but very rarely so fast and to such

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Speaker 10: a great extent. This has happened in a period of

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Speaker 10: a year and a half. The Lehman bankruptcy is another

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Speaker 10: good example of one that returned a lot more, but

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Speaker 10: that took twelve years. Here we're looking at sort of

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Speaker 10: two years.

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Speaker 3: Yeah.

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Speaker 2: But why is there lucas so much for people to buy.

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Speaker 10: But because there are customer accounts. So if you had

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Speaker 10: an account on FTX, that makes you an unsecure creditor

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Speaker 10: in the bankruptcy, so you have a claim on it.

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Speaker 10: And then if you want, you can sell out for

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Speaker 10: a discount, and a fund someone like a test store

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Speaker 10: or there are other funds involved as well, could buy

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Speaker 10: that a discount and wait for the money to be

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Speaker 10: paid back. In some cases, it's starting to look really

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Speaker 10: really lucrative. One trade that we focus on in this story,

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Speaker 10: a claim was brought for thirty five percent of its

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Speaker 10: face value. It's now like to pay out one hundred percent,

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Speaker 10: suggesting a return close to three times.

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Speaker 1: Wow. So then who stands to benefit the most? I

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Speaker 1: mean a test that We've mentioned one business, but there

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Speaker 1: are others.

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Speaker 10: Yeah, so a testore, I think, well, we'll have to

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Speaker 10: see them in the new numbers come out, but at

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Speaker 10: the moment it looks like a test to have the

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Speaker 10: largest number of claims. There's bow Post as well, which

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Speaker 10: is another distressed investor based in Boston, and Pharrell on

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Speaker 10: the really biggest, but there are an awful lot of them.

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Speaker 10: They're more likely to benefit than the actual customers themselves

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Speaker 10: because many of them would have held crypto assets and

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Speaker 10: those claims are dollarized, so they don't actually benefit from

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Speaker 10: the upswing of crypto in the same way.

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Speaker 2: I Meanwhile, there could be a bit of a spanner

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Speaker 2: in the works from South Korea tell us more.

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Speaker 10: Yeah, so a test or bought this claim. Well, sorry,

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Speaker 10: they didn't actually transact this claim. They agreed to buy

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Speaker 10: a claim off a guy called John Hoo Bang who

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Speaker 10: is in court in South Korea accused of fraud and theft.

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Speaker 10: And this is the kind of thing that happens more

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Speaker 10: often in crypto bankruptcies than in normal ones. You're buying

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Speaker 10: it from people who have some of whom have a

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Speaker 10: sort of checkered history, some of whom are less reliable,

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Speaker 10: and many of whom are reluctant to see a test

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Speaker 10: or make money or other funds to make money out

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Speaker 10: of the rise in crypto prices in the way that

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Speaker 10: they are here. And this is sort of the suggestion

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Speaker 10: of a test or is that the South Korean guy

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Speaker 10: John Hoo Bang is unwilling to sell his claim because

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Speaker 10: if he were to sell his claim later on, after

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Speaker 10: it had already gone through, then he would stand to

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Speaker 10: make one hundred percent of his money back as opposed

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Speaker 10: to thirty five percent.

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Speaker 2: Wow.

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Speaker 1: This though fundamentally doesn't change anything about Sam bankmanfreed, right,

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Speaker 1: who's going to be I mean, it's literally decades forty

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Speaker 1: to fifty years that he could face in terms of

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Speaker 1: jail time.

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Speaker 10: Yes, so no, I don't think so. Yeah, I think

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Speaker 10: he This isn't going to save him.

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Speaker 9: I don't think.

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