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Speaker 1: Good morning. It's Thursday, the eighth of February here in London.

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Speaker 1: This is the Bloomberg Daybreak youurate podcast. I'm Caroline Hepki.

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Speaker 2: And I'm Stephen Carroll. Coming up today, our finance team

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Speaker 2: uncovers claims that former Barkley CEO Jess Daley used to

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Speaker 2: go between to stay in touch with disgraced financier Jeffrey Epstein.

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Speaker 1: Disney posts better than expected results as Bob Eiger's turnaround

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Speaker 1: plan show signs of delivery.

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Speaker 2: And in search of a power up. We have a

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Speaker 2: special report on why Chinese bitcoin miners are heading to Ethiopia.

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

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Speaker 2: The former Barkley CEO Jess Day has long maintained that

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Speaker 2: he cut off his friendship with Jeffrey Epstein once he

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Speaker 2: became boss of the UK Bank, where of a legal

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Speaker 2: documents seen by Bloomberg claim he had indirect contact with

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Speaker 2: the late pedophile financier for years after that. Bloomberg's Chris

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Speaker 2: Pitt has more.

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Speaker 3: According to documents that formed part of a now settled

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Speaker 3: US Virgin Isles lawsuit against Jess Staley's former employer, JP

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Speaker 3: Morgan and intermediary was used by the two men to

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Speaker 3: stay in touch. The filings contradict what Staley told the

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Speaker 3: Barclays board about his relationship with Epstein. It also contradicts

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Speaker 3: a UK regulatory probe that found no evidence of contact

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Speaker 3: between the two men. After October of twenty fifteen, representatives

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Speaker 3: for jess Staley and JP Morgan didn't respond to requests

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Speaker 3: for comment on the claims. Spokespeople for Barclay's and the

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Speaker 3: FCA also declined to comment. In London, Chris Pitt Bloomberg Radio.

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Speaker 2: Jess Day left his role as CEO of Barklays in

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Speaker 2: twenty twenty one over the scandal, and was later banned

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Speaker 2: from the UK Finance Industry for having quote recklessly misled

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Speaker 2: the regulator by allowing the banks board to downplay his

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Speaker 2: interactions with Epstein. Ess Day is appealing that decision by

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Speaker 2: the Financial Conduct Authority.

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Speaker 1: Now Citadel has been identified as one of the recipients

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Speaker 1: of Morgan stan Lee's leaking of upcoming stock traits. According

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Speaker 1: to people with knowledge of the matter, a trader at

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Speaker 1: the Hedge Fund was among a number of executives described

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Speaker 1: anonymously in Morgan Stanley's settlements with the US government. The

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Speaker 1: original probe faulted Morgan Stanley for giving hedge funds advance

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Speaker 1: warning when clients plan to sell enough stock to move

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Speaker 1: the market. Prosecutors haven't accused by side participants that allegedly

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Speaker 1: received tips of any wrongdoing.

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Speaker 2: Disney reports learnings that beat expectations in the last three

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Speaker 2: months of twenty twenty three. The media company also issued

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Speaker 2: a rare profit forecast, predicting more outperformance. CEO Bob Iger

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Speaker 2: signaled bigger awards for investors and.

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Speaker 4: Pleased to share that The board declared that our next

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Speaker 4: semi annual dividend, to be paid in July will be

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Speaker 4: fifty percent higher versus the last dividend paid in January.

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Speaker 4: The board has also authorized the company to begin repurchasing

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Speaker 4: shares for the first time since fiscal twenty eighteen, and

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Speaker 4: we plan to start by targeting three billion dollars this

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Speaker 4: fiscal year.

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Speaker 2: Barbiker was speaking as quarterly revenue and Disney Plus streaming

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Speaker 2: subscriber is felt below estimates, despite earnings rising to one

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Speaker 2: dollar twenty two a share ahead of expectations thanks to

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Speaker 2: cost guarding, Disney says its profit this year will rise

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Speaker 2: at least twenty percent, which could help defend off activist

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Speaker 2: investors on the company's board.

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Speaker 1: It seems that the European Union is already preparing for

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Speaker 1: a second chance presidency. A formal evaluation of potential trade

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Speaker 1: restrictions that could hit member states is underway. Bloomberg's Tiba

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Speaker 1: at Abayo has the details.

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Speaker 5: We may be over eight months away from the US

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Speaker 5: presidential election, but European officials are making plans for its aftermath.

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Speaker 5: The European Commission, the bloc's executive arm, is working on

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Speaker 5: an impact assessment charging the consequences of a victory for

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Speaker 5: Donald Trump. According to a senior official, a broad to

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Speaker 5: a minimum ten percent tariff, as well as possible countermeasures

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Speaker 5: against European digital services taxes could come with a second

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Speaker 5: term for the Republican front runner. The news comes as

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Speaker 5: some European officials embark on a charm offensive with the

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Speaker 5: presidential hopeful in a bid to improve relations in London.

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Speaker 5: To a added Bayo, Bloomberg.

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Speaker 2: Radio shares and softh Bank have jumped by more than

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Speaker 2: eleven percent after chip designer ARM forecast revenue far higher

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Speaker 2: than had been expected. The investment firm holds a stake

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Speaker 2: of about ninety percent in ARM shares jumped by forty

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Speaker 2: percent at the end of last year. The chip maker

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Speaker 2: also predicted up to nine hundred million dollars of revenue

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Speaker 2: in the first three months of twenty twenty four, up

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Speaker 2: from the average estimate of just under it seven hundred

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Speaker 2: and eighty million. While ARMS share price increases no direct

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Speaker 2: impact on the Japanese company's bottom line, it does increase

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Speaker 2: the likelihood of new investments well.

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Speaker 1: Europe's earning season is off to one of the worst

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Speaker 1: starts in at least ten years, is with a majority

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Speaker 1: of companies publishing weaker than expected results. But as Mark

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Speaker 1: Daniel Davies reports, companies delivering positive surprises are reaping big

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Speaker 1: rewards with traders.

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Speaker 6: Investors who feared that European firms would disappoint in the

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Speaker 6: fourth quarter are richly rewarding those that buck the trend.

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Speaker 6: That's according to Bank of America strategists, who estimate that

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Speaker 6: European shares are displaying the biggest positive reaction to EPs

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Speaker 6: beats since twenty twenty. Firms on the winning signed include ASML,

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Speaker 6: which sought to a record high after its results, Santander,

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Speaker 6: Deutsche Bank, Shell, and Luxury Giant LVMH also enjoyed rallies

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Speaker 6: after their results shot past estimates. The biggest reason, though,

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Speaker 6: maybe that the bar of the season was set pretty low.

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Speaker 6: Estimates for European earnings had been revised lower for four

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Speaker 6: months straight. In London, Mark Daniel Davies, Bloomberg Radio.

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Speaker 1: Now, in a moment, am we going to talk a

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Speaker 1: bit about one of our key priority features this morning,

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Speaker 1: why cryptome miners are moving to Ethiopiah. It's a really

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Speaker 1: great story. So we've got one of our reporters to

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Speaker 1: speak about that in a moment. But first, our Bloomberg

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Speaker 1: opinion columist Dave Lee has been writing about the end

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Speaker 1: of the Internet. Cookie.

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Speaker 2: Yeah, it's been called the Great cookie Crumble, Cookie Apocalypse.

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Speaker 2: Cookie Geddon mcgeddon, Cookie Geddon, I have forgotten possible to look.

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Speaker 2: Everyone knows the pop ups that you got on websites,

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Speaker 2: and as Dave puts it in the piece, he could

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Speaker 2: be knocked unconscious instead instinctively managed to click. Except all

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Speaker 2: they are something that are on the way out, though

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Speaker 2: they've been disabled already. Third party cookies anyway, which the

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Speaker 2: ones that are used by advertisers been disabled already by

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Speaker 2: Apple and Mozilla, with their browsers, but Google's Chrome are

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Speaker 2: going to phase them out by the end of September

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Speaker 2: as well. This can't I cheer at that, you can,

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Speaker 2: But as Dave points out, it doesn't mean that there's

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Speaker 2: going to be an end to you being tracked on

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Speaker 2: the Internet, as as he says, this is Google we're

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Speaker 2: talking about, or more up to the point, this is

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Speaker 2: the Internet. Ads and data are its lifeblood, and there

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Speaker 2: will still be ways worked out by advertisers and by

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Speaker 2: companies to be able to share this data to give

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Speaker 2: better targeted advertising. He points to a deal between Amazon

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Speaker 2: and Reach, the publisher behind The Daily Mirror, which will

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Speaker 2: see them share data on what articles people are reading

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Speaker 2: as well, so there'll be a way around the cookies even.

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Speaker 1: If okay, so I still feel like I'm being followed

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Speaker 1: ominously online.

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Speaker 2: Let's catch always work thinking about it.

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Speaker 1: Yeah, absolutely, all right, it's a good piece on the

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Speaker 1: terminal for you to read. Now let's talk about then

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Speaker 1: our top story this morning. Legal documents seen by Bloomberg

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Speaker 1: claimed that the former CEO of Berkley's, Jess Stay, had

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Speaker 1: in direct contact with the disgraced financier Jeffrey Epstein for

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Speaker 1: years after the executives said that he'd actually cut off

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Speaker 1: their friendship. The filings contradict what Staley told the Barkleays

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Speaker 1: Board about the Pairs relationship, as well as a UK

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Speaker 1: regulator inquiry that found no evidence of contact after October

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Speaker 1: twenty fifteen Bloomberg's journey. Saran, who leads our team of

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Speaker 1: finance reporters here in London, joins us now to discuss this. Jenny,

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Speaker 1: good morning. What exactly do we know about these documents?

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Speaker 1: What do they show?

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Speaker 7: Yeah, so these are really interesting documents that are reporters

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Speaker 7: on Earth and obviously a really voluminous legal case. And

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Speaker 7: they basically outlined that for years after he had assumed

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Speaker 7: the CEO role at Barclays, jess Daley was actually still

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Speaker 7: communicating with Jeffrey Epstein, but using in an intermediary. So

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Speaker 7: the documents basically show that when Epstein wanted to get

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Speaker 7: into contact with jess Day, he would email this intermediary,

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Speaker 7: who would then go and verbally asked jess Day whatever

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Speaker 7: it was that Jeffrey Epstein was asking him about. And

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Speaker 7: so that directly contradicts, you know, years of what we've

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Speaker 7: heard about his reports to both the Barclays Board and

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Speaker 7: the UK regulators where he said that there was no

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Speaker 7: contact after he had assumed control of Barclays.

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Speaker 2: So what have jess Day and his former employers said

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Speaker 2: about these revelations?

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Speaker 7: So unfortunately, you know, Staley has actually not responded to

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Speaker 7: our requests for comments. JP Morgan has also not responded.

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Speaker 7: Barclay's and FCA both declined to comment for our story.

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Speaker 7: So you know, this is largely based on these legal

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Speaker 7: documents that came out kind of in the aftermath of

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Speaker 7: all of the of obviously Jeffrey Epstein's arrest and then

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Speaker 7: his death by suicide. So it's all based on these

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Speaker 7: legal filings that our reporters have kind of relentlessly flew

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Speaker 7: through these past few months.

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Speaker 1: Yeah, and the go between is unknown because that information,

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Speaker 1: as the team of reporters has been saying, has been redacted,

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Speaker 1: So we don't know who the individual might be. But

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Speaker 1: what do you think the broader implications of this reporting

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Speaker 1: might be. Does this reopen then the questions around Epstein

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Speaker 1: and his contacts with the financial world?

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Speaker 7: I think so.

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Speaker 4: So.

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Speaker 7: I think the one ongoing thing we have in terms

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Speaker 7: of just Dalley's involvement all of this was that he

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Speaker 7: was actually appealing the regulator's findings that he should be

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Speaker 7: from the financial industry, and so I do think that

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Speaker 7: that kind of throws a lot of that process into question,

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Speaker 7: because I think even just that finding that he would

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Speaker 7: be barred for life from the financial industry was based

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Speaker 7: upon the fact that they were under the impression that

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Speaker 7: he had no contact with Jeffrey Epstein after he took control,

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Speaker 7: and so the fact that no, in fact, he was

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Speaker 7: using this intermediary, kind of using this roundabout way to

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Speaker 7: still maintain contacts and his friendship with Jeffrey Epstein, I

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Speaker 7: think that's certainly going to be something that regulators will

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Speaker 7: have questions about as they review his appeal. So I

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Speaker 7: think it definitely throws things into questions for him. And

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Speaker 7: then absolutely, I mean I don't think really anything was

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Speaker 7: ever put to rest in regards to, you know, Jeffrey

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Speaker 7: Epstein's ongoing friendships and contacts with the top echelons of

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Speaker 7: power in both the UK and the US. But this

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Speaker 7: is just kind of further evidence that, you know, that

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Speaker 7: was maintained long after different accusations against him. Arose.

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Speaker 2: Okay, Jenny Sarah, you're leading our finance team here in London.

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Speaker 2: Thank you very much for joining us the details of

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Speaker 2: that story.

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Speaker 1: Now to our priority feature, Chinese bitcoin miners, which were

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Speaker 1: thrown out of their own government three years ago, are

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Speaker 1: rushing into Ethiopia in search of cheap power and benign regulations.

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Speaker 1: Our senior crypto editor, Philip Logenkranzer, joins us now for

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Speaker 1: more on this story. Philip, good morning. What is Ethiopia's

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Speaker 1: current stance on bitcoin mining, on cryptocurrencies in general? Why

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Speaker 1: is this a country of interest?

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Speaker 8: Yeah, so it's a bit of a mixed bag when

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Speaker 8: it comes to Ethiopia. They actually banned cryptocurrency trading, so

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Speaker 8: you can't get on finance and entrade bitcoin and ether there. However,

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Speaker 8: they made a bit of an exception into twenty twenty

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Speaker 8: two for bitcoin mining, so they allowed it under a

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Speaker 8: kind of what they call a sandbox regime. And the

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Speaker 8: reason is the bitcoin miners pay in dollars for the

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Speaker 8: powers that they for the electricity that they use, and

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Speaker 8: Ethiopia's government does need foreign exchange. It has a lot

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Speaker 8: of foreign exchange that and so it was sort of

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Speaker 8: a marriage of convenience here and for the bitcoin miners,

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Speaker 8: it's one thing above all, and it's cheap power. Ethiopia

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Speaker 8: has some of the cheapest power in the world, and

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Speaker 8: it's almost entirely renewable.

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Speaker 2: What makes Ethiopia so unique from a mining perspective.

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Speaker 8: There is also the political angle. So bitcoin miners were

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Speaker 8: thrown out of China in twenty twenty one. It was

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Speaker 8: a total ban on bitcoin mining and a lot of

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Speaker 8: them had to leave in a hurry. Some of them

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Speaker 8: had to leave millions of dollars worth of equipment behind. Now,

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Speaker 8: Ethiopia and China have very strong political and economic ties,

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Speaker 8: so China is the biggest source of foreign direct investment.

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Speaker 8: China is also the biggest creditor to Ethiopia, and so

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Speaker 8: they've sort of taken I guess what amounts to a

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Speaker 8: political bet that they will be welcome there, even after

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Speaker 8: some other countries like Kazakhstan and Iran and to an

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Speaker 8: extent Russia cooled on the industry. So there is a

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Speaker 8: kind of political gambit there as well. The other thing

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Speaker 8: is parts of Ethiopia also have perfect climate for bitcoin mining,

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Speaker 8: the right temperature and the right humidity.

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Speaker 1: Hmm, okay, so the physical conditions are important too. What

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Speaker 1: are some of the biggest global challenges though for bitcoin

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Speaker 1: miners right now.

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Speaker 8: Well, the biggest one is they use a tremendous amount

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Speaker 8: of power. These rigs or computers that they use are

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Speaker 8: very power consuming. They're very powerful, but are also very

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Speaker 8: electricity consuming. That's caused problems from I guess two perspectives

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Speaker 8: you could say. One is that some governments just you know,

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Speaker 8: basically tell them you're competing with industry for power and

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Speaker 8: we can't have that, or you're competing with household for power,

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Speaker 8: which is probably even worse. The other one is the

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Speaker 8: global warming phenomenon. So in an in you know, in

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Speaker 8: this era, when you know you have rising temperatures around

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Speaker 8: the world, it's kind of seen politically as why should

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Speaker 8: you use the equivalent to Argentina's power consumption a year,

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Speaker 8: say to mine bitcoin, which doesn't really have any I

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Speaker 8: guess productive use like a car making factory or something

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Speaker 8: like that. So it's it's it all boils down to

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Speaker 8: the amounts of power that they consume.

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Speaker 2: But what are the risks, then, Philip, for minors going

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Speaker 2: into Ethiopia. Are there concerns for those that are moving

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Speaker 2: into that country.

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Speaker 8: Yeah, it is a bit of a gamble because Ethiopia's

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Speaker 8: in regulations around mining they're not really set in stone.

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Speaker 8: It's they've adopted this directive, which the regulator wouldn't say

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Speaker 8: even whether or not they've actually communenicated to the industry.

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Speaker 8: And so the other thing is will they go the

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Speaker 8: way that for instance, Kazak standard, which is basically open

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Speaker 8: arms in the beginning, and then when you see how

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Speaker 8: much energy the sector consumes, you cannot get cold feet

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Speaker 8: and say I'm sorry, you know we're gonna pull the

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Speaker 8: plug on this. So it's both. It's mostly a regulatory issue.

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