Speaker 1: Good morning. It's Thursday, the eighth of February here in London.
Speaker 1: This is the Bloomberg Daybreak youurate podcast. I'm Caroline Hepki.
Speaker 2: And I'm Stephen Carroll. Coming up today, our finance team
Speaker 2: uncovers claims that former Barkley CEO Jess Daley used to
Speaker 2: go between to stay in touch with disgraced financier Jeffrey Epstein.
Speaker 1: Disney posts better than expected results as Bob Eiger's turnaround
Speaker 1: plan show signs of delivery.
Speaker 2: And in search of a power up. We have a
Speaker 2: special report on why Chinese bitcoin miners are heading to Ethiopia.
Speaker 1: Let's start with a roundup of our top stories.
Speaker 2: The former Barkley CEO Jess Day has long maintained that
Speaker 2: he cut off his friendship with Jeffrey Epstein once he
Speaker 2: became boss of the UK Bank, where of a legal
Speaker 2: documents seen by Bloomberg claim he had indirect contact with
Speaker 2: the late pedophile financier for years after that. Bloomberg's Chris
Speaker 2: Pitt has more.
Speaker 3: According to documents that formed part of a now settled
Speaker 3: US Virgin Isles lawsuit against Jess Staley's former employer, JP
Speaker 3: Morgan and intermediary was used by the two men to
Speaker 3: stay in touch. The filings contradict what Staley told the
Speaker 3: Barclays board about his relationship with Epstein. It also contradicts
Speaker 3: a UK regulatory probe that found no evidence of contact
Speaker 3: between the two men. After October of twenty fifteen, representatives
Speaker 3: for jess Staley and JP Morgan didn't respond to requests
Speaker 3: for comment on the claims. Spokespeople for Barclay's and the
Speaker 3: FCA also declined to comment. In London, Chris Pitt Bloomberg Radio.
Speaker 2: Jess Day left his role as CEO of Barklays in
Speaker 2: twenty twenty one over the scandal, and was later banned
Speaker 2: from the UK Finance Industry for having quote recklessly misled
Speaker 2: the regulator by allowing the banks board to downplay his
Speaker 2: interactions with Epstein. Ess Day is appealing that decision by
Speaker 2: the Financial Conduct Authority.
Speaker 1: Now Citadel has been identified as one of the recipients
Speaker 1: of Morgan stan Lee's leaking of upcoming stock traits. According
Speaker 1: to people with knowledge of the matter, a trader at
Speaker 1: the Hedge Fund was among a number of executives described
Speaker 1: anonymously in Morgan Stanley's settlements with the US government. The
Speaker 1: original probe faulted Morgan Stanley for giving hedge funds advance
Speaker 1: warning when clients plan to sell enough stock to move
Speaker 1: the market. Prosecutors haven't accused by side participants that allegedly
Speaker 1: received tips of any wrongdoing.
Speaker 2: Disney reports learnings that beat expectations in the last three
Speaker 2: months of twenty twenty three. The media company also issued
Speaker 2: a rare profit forecast, predicting more outperformance. CEO Bob Iger
Speaker 2: signaled bigger awards for investors and.
Speaker 4: Pleased to share that The board declared that our next
Speaker 4: semi annual dividend, to be paid in July will be
Speaker 4: fifty percent higher versus the last dividend paid in January.
Speaker 4: The board has also authorized the company to begin repurchasing
Speaker 4: shares for the first time since fiscal twenty eighteen, and
Speaker 4: we plan to start by targeting three billion dollars this
Speaker 4: fiscal year.
Speaker 2: Barbiker was speaking as quarterly revenue and Disney Plus streaming
Speaker 2: subscriber is felt below estimates, despite earnings rising to one
Speaker 2: dollar twenty two a share ahead of expectations thanks to
Speaker 2: cost guarding, Disney says its profit this year will rise
Speaker 2: at least twenty percent, which could help defend off activist
Speaker 2: investors on the company's board.
Speaker 1: It seems that the European Union is already preparing for
Speaker 1: a second chance presidency. A formal evaluation of potential trade
Speaker 1: restrictions that could hit member states is underway. Bloomberg's Tiba
Speaker 1: at Abayo has the details.
Speaker 5: We may be over eight months away from the US
Speaker 5: presidential election, but European officials are making plans for its aftermath.
Speaker 5: The European Commission, the bloc's executive arm, is working on
Speaker 5: an impact assessment charging the consequences of a victory for
Speaker 5: Donald Trump. According to a senior official, a broad to
Speaker 5: a minimum ten percent tariff, as well as possible countermeasures
Speaker 5: against European digital services taxes could come with a second
Speaker 5: term for the Republican front runner. The news comes as
Speaker 5: some European officials embark on a charm offensive with the
Speaker 5: presidential hopeful in a bid to improve relations in London.
Speaker 5: To a added Bayo, Bloomberg.
Speaker 2: Radio shares and softh Bank have jumped by more than
Speaker 2: eleven percent after chip designer ARM forecast revenue far higher
Speaker 2: than had been expected. The investment firm holds a stake
Speaker 2: of about ninety percent in ARM shares jumped by forty
Speaker 2: percent at the end of last year. The chip maker
Speaker 2: also predicted up to nine hundred million dollars of revenue
Speaker 2: in the first three months of twenty twenty four, up
Speaker 2: from the average estimate of just under it seven hundred
Speaker 2: and eighty million. While ARMS share price increases no direct
Speaker 2: impact on the Japanese company's bottom line, it does increase
Speaker 2: the likelihood of new investments well.
Speaker 1: Europe's earning season is off to one of the worst
Speaker 1: starts in at least ten years, is with a majority
Speaker 1: of companies publishing weaker than expected results. But as Mark
Speaker 1: Daniel Davies reports, companies delivering positive surprises are reaping big
Speaker 1: rewards with traders.
Speaker 6: Investors who feared that European firms would disappoint in the
Speaker 6: fourth quarter are richly rewarding those that buck the trend.
Speaker 6: That's according to Bank of America strategists, who estimate that
Speaker 6: European shares are displaying the biggest positive reaction to EPs
Speaker 6: beats since twenty twenty. Firms on the winning signed include ASML,
Speaker 6: which sought to a record high after its results, Santander,
Speaker 6: Deutsche Bank, Shell, and Luxury Giant LVMH also enjoyed rallies
Speaker 6: after their results shot past estimates. The biggest reason, though,
Speaker 6: maybe that the bar of the season was set pretty low.
Speaker 6: Estimates for European earnings had been revised lower for four
Speaker 6: months straight. In London, Mark Daniel Davies, Bloomberg Radio.
Speaker 1: Now, in a moment, am we going to talk a
Speaker 1: bit about one of our key priority features this morning,
Speaker 1: why cryptome miners are moving to Ethiopiah. It's a really
Speaker 1: great story. So we've got one of our reporters to
Speaker 1: speak about that in a moment. But first, our Bloomberg
Speaker 1: opinion columist Dave Lee has been writing about the end
Speaker 1: of the Internet. Cookie.
Speaker 2: Yeah, it's been called the Great cookie Crumble, Cookie Apocalypse.
Speaker 2: Cookie Geddon mcgeddon, Cookie Geddon, I have forgotten possible to look.
Speaker 2: Everyone knows the pop ups that you got on websites,
Speaker 2: and as Dave puts it in the piece, he could
Speaker 2: be knocked unconscious instead instinctively managed to click. Except all
Speaker 2: they are something that are on the way out, though
Speaker 2: they've been disabled already. Third party cookies anyway, which the
Speaker 2: ones that are used by advertisers been disabled already by
Speaker 2: Apple and Mozilla, with their browsers, but Google's Chrome are
Speaker 2: going to phase them out by the end of September
Speaker 2: as well. This can't I cheer at that, you can,
Speaker 2: But as Dave points out, it doesn't mean that there's
Speaker 2: going to be an end to you being tracked on
Speaker 2: the Internet, as as he says, this is Google we're
Speaker 2: talking about, or more up to the point, this is
Speaker 2: the Internet. Ads and data are its lifeblood, and there
Speaker 2: will still be ways worked out by advertisers and by
Speaker 2: companies to be able to share this data to give
Speaker 2: better targeted advertising. He points to a deal between Amazon
Speaker 2: and Reach, the publisher behind The Daily Mirror, which will
Speaker 2: see them share data on what articles people are reading
Speaker 2: as well, so there'll be a way around the cookies even.
Speaker 1: If okay, so I still feel like I'm being followed
Speaker 1: ominously online.
Speaker 2: Let's catch always work thinking about it.
Speaker 1: Yeah, absolutely, all right, it's a good piece on the
Speaker 1: terminal for you to read. Now let's talk about then
Speaker 1: our top story this morning. Legal documents seen by Bloomberg
Speaker 1: claimed that the former CEO of Berkley's, Jess Stay, had
Speaker 1: in direct contact with the disgraced financier Jeffrey Epstein for
Speaker 1: years after the executives said that he'd actually cut off
Speaker 1: their friendship. The filings contradict what Staley told the Barkleays
Speaker 1: Board about the Pairs relationship, as well as a UK
Speaker 1: regulator inquiry that found no evidence of contact after October
Speaker 1: twenty fifteen Bloomberg's journey. Saran, who leads our team of
Speaker 1: finance reporters here in London, joins us now to discuss this. Jenny,
Speaker 1: good morning. What exactly do we know about these documents?
Speaker 1: What do they show?
Speaker 7: Yeah, so these are really interesting documents that are reporters
Speaker 7: on Earth and obviously a really voluminous legal case. And
Speaker 7: they basically outlined that for years after he had assumed
Speaker 7: the CEO role at Barclays, jess Daley was actually still
Speaker 7: communicating with Jeffrey Epstein, but using in an intermediary. So
Speaker 7: the documents basically show that when Epstein wanted to get
Speaker 7: into contact with jess Day, he would email this intermediary,
Speaker 7: who would then go and verbally asked jess Day whatever
Speaker 7: it was that Jeffrey Epstein was asking him about. And
Speaker 7: so that directly contradicts, you know, years of what we've
Speaker 7: heard about his reports to both the Barclays Board and
Speaker 7: the UK regulators where he said that there was no
Speaker 7: contact after he had assumed control of Barclays.
Speaker 2: So what have jess Day and his former employers said
Speaker 2: about these revelations?
Speaker 7: So unfortunately, you know, Staley has actually not responded to
Speaker 7: our requests for comments. JP Morgan has also not responded.
Speaker 7: Barclay's and FCA both declined to comment for our story.
Speaker 7: So you know, this is largely based on these legal
Speaker 7: documents that came out kind of in the aftermath of
Speaker 7: all of the of obviously Jeffrey Epstein's arrest and then
Speaker 7: his death by suicide. So it's all based on these
Speaker 7: legal filings that our reporters have kind of relentlessly flew
Speaker 7: through these past few months.
Speaker 1: Yeah, and the go between is unknown because that information,
Speaker 1: as the team of reporters has been saying, has been redacted,
Speaker 1: So we don't know who the individual might be. But
Speaker 1: what do you think the broader implications of this reporting
Speaker 1: might be. Does this reopen then the questions around Epstein
Speaker 1: and his contacts with the financial world?
Speaker 7: I think so.
Speaker 4: So.
Speaker 7: I think the one ongoing thing we have in terms
Speaker 7: of just Dalley's involvement all of this was that he
Speaker 7: was actually appealing the regulator's findings that he should be
Speaker 7: from the financial industry, and so I do think that
Speaker 7: that kind of throws a lot of that process into question,
Speaker 7: because I think even just that finding that he would
Speaker 7: be barred for life from the financial industry was based
Speaker 7: upon the fact that they were under the impression that
Speaker 7: he had no contact with Jeffrey Epstein after he took control,
Speaker 7: and so the fact that no, in fact, he was
Speaker 7: using this intermediary, kind of using this roundabout way to
Speaker 7: still maintain contacts and his friendship with Jeffrey Epstein, I
Speaker 7: think that's certainly going to be something that regulators will
Speaker 7: have questions about as they review his appeal. So I
Speaker 7: think it definitely throws things into questions for him. And
Speaker 7: then absolutely, I mean I don't think really anything was
Speaker 7: ever put to rest in regards to, you know, Jeffrey
Speaker 7: Epstein's ongoing friendships and contacts with the top echelons of
Speaker 7: power in both the UK and the US. But this
Speaker 7: is just kind of further evidence that, you know, that
Speaker 7: was maintained long after different accusations against him. Arose.
Speaker 2: Okay, Jenny Sarah, you're leading our finance team here in London.
Speaker 2: Thank you very much for joining us the details of
Speaker 2: that story.
Speaker 1: Now to our priority feature, Chinese bitcoin miners, which were
Speaker 1: thrown out of their own government three years ago, are
Speaker 1: rushing into Ethiopia in search of cheap power and benign regulations.
Speaker 1: Our senior crypto editor, Philip Logenkranzer, joins us now for
Speaker 1: more on this story. Philip, good morning. What is Ethiopia's
Speaker 1: current stance on bitcoin mining, on cryptocurrencies in general? Why
Speaker 1: is this a country of interest?
Speaker 8: Yeah, so it's a bit of a mixed bag when
Speaker 8: it comes to Ethiopia. They actually banned cryptocurrency trading, so
Speaker 8: you can't get on finance and entrade bitcoin and ether there. However,
Speaker 8: they made a bit of an exception into twenty twenty
Speaker 8: two for bitcoin mining, so they allowed it under a
Speaker 8: kind of what they call a sandbox regime. And the
Speaker 8: reason is the bitcoin miners pay in dollars for the
Speaker 8: powers that they for the electricity that they use, and
Speaker 8: Ethiopia's government does need foreign exchange. It has a lot
Speaker 8: of foreign exchange that and so it was sort of
Speaker 8: a marriage of convenience here and for the bitcoin miners,
Speaker 8: it's one thing above all, and it's cheap power. Ethiopia
Speaker 8: has some of the cheapest power in the world, and
Speaker 8: it's almost entirely renewable.
Speaker 2: What makes Ethiopia so unique from a mining perspective.
Speaker 8: There is also the political angle. So bitcoin miners were
Speaker 8: thrown out of China in twenty twenty one. It was
Speaker 8: a total ban on bitcoin mining and a lot of
Speaker 8: them had to leave in a hurry. Some of them
Speaker 8: had to leave millions of dollars worth of equipment behind. Now,
Speaker 8: Ethiopia and China have very strong political and economic ties,
Speaker 8: so China is the biggest source of foreign direct investment.
Speaker 8: China is also the biggest creditor to Ethiopia, and so
Speaker 8: they've sort of taken I guess what amounts to a
Speaker 8: political bet that they will be welcome there, even after
Speaker 8: some other countries like Kazakhstan and Iran and to an
Speaker 8: extent Russia cooled on the industry. So there is a
Speaker 8: kind of political gambit there as well. The other thing
Speaker 8: is parts of Ethiopia also have perfect climate for bitcoin mining,
Speaker 8: the right temperature and the right humidity.
Speaker 1: Hmm, okay, so the physical conditions are important too. What
Speaker 1: are some of the biggest global challenges though for bitcoin
Speaker 1: miners right now.
Speaker 8: Well, the biggest one is they use a tremendous amount
Speaker 8: of power. These rigs or computers that they use are
Speaker 8: very power consuming. They're very powerful, but are also very
Speaker 8: electricity consuming. That's caused problems from I guess two perspectives
Speaker 8: you could say. One is that some governments just you know,
Speaker 8: basically tell them you're competing with industry for power and
Speaker 8: we can't have that, or you're competing with household for power,
Speaker 8: which is probably even worse. The other one is the
Speaker 8: global warming phenomenon. So in an in you know, in
Speaker 8: this era, when you know you have rising temperatures around
Speaker 8: the world, it's kind of seen politically as why should
Speaker 8: you use the equivalent to Argentina's power consumption a year,
Speaker 8: say to mine bitcoin, which doesn't really have any I
Speaker 8: guess productive use like a car making factory or something
Speaker 8: like that. So it's it's it all boils down to
Speaker 8: the amounts of power that they consume.
Speaker 2: But what are the risks, then, Philip, for minors going
Speaker 2: into Ethiopia. Are there concerns for those that are moving
Speaker 2: into that country.
Speaker 8: Yeah, it is a bit of a gamble because Ethiopia's
Speaker 8: in regulations around mining they're not really set in stone.
Speaker 8: It's they've adopted this directive, which the regulator wouldn't say
Speaker 8: even whether or not they've actually communenicated to the industry.
Speaker 8: And so the other thing is will they go the
Speaker 8: way that for instance, Kazak standard, which is basically open
Speaker 8: arms in the beginning, and then when you see how
Speaker 8: much energy the sector consumes, you cannot get cold feet
Speaker 8: and say I'm sorry, you know we're gonna pull the
Speaker 8: plug on this. So it's both. It's mostly a regulatory issue.
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 2: stories making news from London to Wall Street and beyond.
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Speaker 1: I'm Caroline Hepka and.
Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all
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Speaker 2: on Bloomberg Daybreak Europe.