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Speaker 1: Good morning.

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Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Here are the

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Speaker 2: stories we're following today.

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Speaker 1: Well, some saber rattling from China on Taiwan. We get

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Speaker 1: more from Dan Schwartzman in New York.

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Speaker 3: Dan Yeah Brian, China's ambassador to the US, Chifeng, says

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Speaker 3: the country has no room to compromise when it comes

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Speaker 3: to Taiwan's independence. She was speaking at the Carter Center

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Speaker 3: in Atlanta. The ambassador's comments come as Taiwan is set

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Speaker 3: to vote for president on January thirteenth. One of the candidates,

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Speaker 3: Taiwan's Vice President, Lai Ching Tay, has angered Beijing by

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Speaker 3: describing himself as quote pragmatic worker for Taiwanese independence. A

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Speaker 3: three judge appeals court panel expressed skepticism of Donald Trump's

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Speaker 3: claims that he is immune from prosecution as a former

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Speaker 3: president looks to avoid a criminal trial over his attempt

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Speaker 3: to overturn the twenty twenty election. Trump is trying to

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Speaker 3: reverse a December first ruling by US District Judge Tanya Chutkin,

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Speaker 3: who rejected Trump's immunity defense, saying it seems he was

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Speaker 3: seeking the power of a monarch. Bloomberg's Eric Larsen breaks

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Speaker 3: down one judge's hypothetical oppose to Trump attorney John Sarr.

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Speaker 4: What if a president ordered the killing of a political

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Speaker 4: rival with Seal Team six, you know, does nothing happen

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Speaker 4: to this president? And Trump's argument, or that he's lawyer pressed,

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Speaker 4: is that if the president is impeached for that conduct,

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Speaker 4: then potentially that opens up the potential for a criminal case.

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Speaker 4: But if there's no impeachment, then you know, nothing happens,

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Speaker 4: And the judges seemed pretty skeptical of that argument.

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Speaker 3: That's Bloomberg's Eric Larson. Walter Reed Medical Center has released

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Speaker 3: a statement saying that Defense Secretary Lloyd Austin was diagnosed

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Speaker 3: with prostate cancer in early December. Austin underwent a minimally

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Speaker 3: invasive surgical procedure which resulted in some complications, including nause

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Speaker 3: and severe pain in his abnominal area as well as

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Speaker 3: in his hip and leg, and the evaluation revealed that

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Speaker 3: Austin was suffering from a urinary tract infection as well

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Speaker 3: as abdominal fluids collecting, which impaired the small intestine's ability

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Speaker 3: to function. The hospital those says they anticipate the Secretary

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Speaker 3: will make a full recovery. National Security ca Ouncil spokesman

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Speaker 3: John Kirby says even President Biden didn't know why Austin

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Speaker 3: was hospitalized till earlier today.

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Speaker 5: He was not informed until last Friday that Secretary of

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Speaker 5: Austin was in the hospital. He was not informed until

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Speaker 5: this morning.

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Speaker 1: That the root cause of that hospitalization was prostate cancer.

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Speaker 3: Kirby, speaking at a briefing earlier today. Storms, high winds

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Speaker 3: and tornado warnings hitting parts of the South today, with

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Speaker 3: roofs blown off homes and campers flipped over in Florida.

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Speaker 3: In the Midwest, some cities were hit with more than

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Speaker 3: a foot of snow, stranding some drivers on highways. Areas

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Speaker 3: across Kansas, Nebraska and South Dakota, Iowa, and Minnesota seeing

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Speaker 3: snow accumulations as high as fifteen inches. More than two

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Speaker 3: hundred thousand customers were without power in Alabama, Georgia and

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Speaker 3: in Florida. That's according to Thepowerodage dot US website. Global

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Speaker 3: News twenty four hours a day and whenever you want

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Speaker 3: it with Bloomberg News.

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Speaker 6: Now.

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Speaker 3: I'm Dan Schwartzman, and this is.

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Speaker 1: Bloomberg all right, Thanks very much, Dan five and a

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Speaker 1: half minutes asked the hour, This is Bloomberg Daybreak Asia.

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Speaker 1: We take a look now at some of the top

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Speaker 1: business stories of the hour.

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Speaker 3: While the US.

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Speaker 1: Securities and Exchange Commission says it has not granted approval

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Speaker 1: of Spot Bitcoin exchange traded funds, that's despite a post

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Speaker 1: saying it had been approved on X that appeared to

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Speaker 1: be from the regulator's official account. The post included a

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Speaker 1: comment purporting to be from SEC chair Gary Gensler. Gensler

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Speaker 1: himself said on X that the SEC's account had been compromised.

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Speaker 1: About a dozen companies have applied to list ETFs backed

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Speaker 1: by bitcoin in the United States, and the SEC has

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Speaker 1: until January tenth to take action on at least one

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Speaker 1: of those applications. Now Bloomberg Shanali Bossack tells us what

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Speaker 1: comes next for the SEC.

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Speaker 4: They could always punt right. They could always push it

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Speaker 4: as they have before.

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Speaker 5: They could also deny application.

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Speaker 4: They could ask for more information as we've seen last

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Speaker 4: minute amendments to the filings just this morning.

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Speaker 1: That's Shanali boss Suk. The price of bitcoin did spike, well,

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Speaker 1: it did increase, let's say, and it's still a little

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Speaker 1: bit higher now. Right now forty six eighty three per coin.

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Speaker 2: We turn next to the latest on the Boeing seven

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Speaker 2: thirty seven Max Air safety officials are probing last week's

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Speaker 2: blowout of a door plug on a Max nine model,

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Speaker 2: and now their attention is focused squarely on four unaccounted bolts.

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Speaker 2: These bolts, you see, were meant to secure the door

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Speaker 2: plug it suddenly broke loose on that Alaska Airlines flight

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Speaker 2: last Friday. Inspections were subsequently ordered by the FAA, and

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Speaker 2: now we learn that both Alaska Air and United Airlines

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Speaker 2: have discovered more loose bolts. The National Transportation Safety Board

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Speaker 2: said it would consider broadening the probe into other Max models. Now,

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Speaker 2: despite the news on this crisis, it's interesting that Boeing

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Speaker 2: ended all of last year twenty twenty three with its

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Speaker 2: largest ever monthly sales gain for the seven thirty seven Max.

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Speaker 1: Ran Well Blackrock, we'll dismiss about six hundred employees, roughly

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Speaker 1: three percent of its global workforce. It comes as the

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Speaker 1: company seeks to reallocate resources. We get more from Bloomberg's Charlie.

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Speaker 6: Pellett, CEO Larry Fink, and President Bob Kapito said in

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Speaker 6: a memo to staff quote, we see our industry changing

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Speaker 6: faster than at any time since the founding of Blackrock.

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Speaker 6: The executive say ETFs have become the preferred vehicle for

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Speaker 6: both index and active investment strategies, that the firm is

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Speaker 6: growing across the globe, including in Europe and Asia. The

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Speaker 6: world's largest asset manager says it still expects to have

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Speaker 6: a larger staff by the end of the year, even

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Speaker 6: with the cuts, as it expands certain parts of the business.

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Speaker 6: In New York, Charlie Pellett Bloomberg Radio, we.

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Speaker 2: Are told Amazon's live streaming site Twitch is poised to

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Speaker 2: cut thirty five percent of its staff. That would equate

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Speaker 2: to around five hundred workers. These cuts could be announced,

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Speaker 2: we are told as soon as Wednesday. We are hearing

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Speaker 2: there are increased concern over the company's turning a profit

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Speaker 2: since Twitch has increased its focus on advertising in recent years.

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Speaker 1: Right well, Qualcomm says that it's pushed into automotive chips

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Speaker 1: is on course to beat sales projections. A chip maker

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Speaker 1: said that it will have about four billion dollars of

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Speaker 1: sales from its auto unit by twenty twenty six. Qualcom's

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Speaker 1: entrance into the automotive space will also decrease its reliance

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Speaker 1: on mobile phone electronics, and the CEO, Cristiano Amone, told

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Speaker 1: us that the car industry is going digital. So if

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Speaker 1: you're going to go buy a car today, you have

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Speaker 1: a fully immersive digital clck bit.

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Speaker 5: You didn't have that before. That's enabled by Snapdragon. Right

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Speaker 5: now you have those beautiful screens that are immersiving.

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Speaker 1: They bring you a lot of information about the car,

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Speaker 1: the road.

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Speaker 3: On top of that, it have safety and we have

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Speaker 3: a vision that assisted driving needs to be in every car.

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Speaker 1: That's Qualcom CEO Cristiano Amone, speaking from the Consumer Electronics

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Speaker 1: Show in Las Vegas. Qualcom is now selling more chips

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Speaker 1: for handling, driving, and entertainment functions in vehicles, along with

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Speaker 1: processors for personal computers and headsets. The hope is to

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Speaker 1: maintain growth as the smartphone market matures.

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Speaker 2: China says it has hacked into Apple's air dropped feature

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Speaker 2: and as a result, message centers can be identified. We

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Speaker 2: have more from Bloomberg zivon men in Hong Kong.

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Speaker 7: A Beijing institute has developed a technique to crack an

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Speaker 7: iPhone's encrypted device log. The log identifies numbers and emails

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Speaker 7: of senders who share air drop content. The method would

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Speaker 7: help authorities eradicate information China deems unhealthy. Activists around the

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Speaker 7: world have employed the air drop feature to spread their

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Speaker 7: messages Beijing's judicial bureaus as police have identified multiple people

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Speaker 7: via the hack. Developments add uncertainty to Apple's operations in China.

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Speaker 7: The company already faces severe constraints on content, including on

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Speaker 7: Apple TV and books. In Hong Kong, I'm Von Mann

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Speaker 7: Bloomberg Radio.

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Speaker 1: This is Bloomberg Daybreak Asia. I'm Brian Curtisy in Hong

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Speaker 1: Kong with Paul Allen in Sydney, and our guest is

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Speaker 1: Eric balchunis Bloomberg Intelligence senior ETF analyst. To take a

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Speaker 1: closer look at what happened today from the SEC. I

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Speaker 1: don't want to be splitting hairs with something, but we

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Speaker 1: said in our lead that the SEC has not yet

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Speaker 1: approved blah blah blah, And actually Gary Gensler said in

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Speaker 1: his statement that the SEC has not approved. So again,

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Speaker 1: that might be getting a little bit too technical there,

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Speaker 1: but many people think it will happen. Was this possibly something, Eric,

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Speaker 1: that was just a prepared statement that somehow made its

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Speaker 1: way in.

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Speaker 5: Yeah, Look, I'm processing this all just like you, I

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Speaker 5: was expecting a tweet like this to come out exactly

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Speaker 5: twenty four hours from when it did. We all intel

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Speaker 5: points to approval four to five pm Eastern time tomorrow,

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Speaker 5: with both the nineteen befour's in the s ones getting

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Speaker 5: approved and then issuers launching Thursday business day, and they'd

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Speaker 5: be up in trading. So I was sort of ready

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Speaker 5: they just go have dinner and have a chill night

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Speaker 5: before tomorrow's madness. But the madness came early, and it

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Speaker 5: sounds like it was hacked, but the timing was weird.

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Speaker 5: It almost seems like a scheduled tweet that they put

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Speaker 5: the wrong dat in. But let's just trust the SEC

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Speaker 5: it was hacked. This isn't the first time there's been Well, you.

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Speaker 1: Said compromised, right, Compromise is a little bit broader term.

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Speaker 5: Yeah, that's true. That's true. Look, who knows. I mean,

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Speaker 5: at some point we'll get the truth over time. You

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Speaker 5: notice when people put out tweets sometimes they always say

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Speaker 5: hacked and or compromised, But you know, half the time

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Speaker 5: they weren't. They're just embarrassed. Who knows. All I know

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Speaker 5: is that tomorrow is important because it's the deadline for

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Speaker 5: the ARC filing. They have to either approve or deny,

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Speaker 5: so if they do nothing, it gets approved. But all

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Speaker 5: signs and all our intel points to approval. So my

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Speaker 5: guess is we'll see this tweet or something come out

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Speaker 5: tomorrow after they formally approve doing the more formal way

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Speaker 5: on the website. But I've been covering this now. I've

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Speaker 5: been in a sort of one foot in the crypto

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Speaker 5: world for like six months now, and I've gotten used

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Speaker 5: to these crazy happenings and shenanigans, so this is just

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Speaker 5: like sort of another day in the roller coaster known

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Speaker 5: as the crypto world. So I shake it off. I'm

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Speaker 5: looking at tomorrow. I still think we're going to see

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Speaker 5: approval and launches and we'll look back and sort of

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Speaker 5: laugh at this in a couple of days.

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Speaker 8: Yeah, to your point, Eric, when this happened, I overheard

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Speaker 8: somebody in the office here in Sydney sort of laugh

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Speaker 8: and say this is the most bitcoin thing ever. The

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Speaker 8: language though, was very sec like. And as you say,

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Speaker 8: this isn't the first head fake, is it. What other

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Speaker 8: sort of misleading moments have we experienced?

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Speaker 2: Oh?

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Speaker 5: Man, I mean the big one was coin Telegraph put

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Speaker 5: out that I shares had been approved like I don't

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Speaker 5: know two months ago, and the price of bitcoin went

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Speaker 5: up five to ten percent instantly, and then black Rock

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Speaker 5: denied it. Then somebody went into the Delaware legal site

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Speaker 5: for registering names and registered eye shares XRP ETF and

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Speaker 5: even put the guy's name, and it looked just like

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Speaker 5: a registration like the way they registered bitcoin and ether ETFs.

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Speaker 5: So people thought, oh, Black Rocks playing a file for

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Speaker 5: an XRP ETF that turned out to be false. The

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Speaker 5: price of XRP went up and down instantly, and so

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Speaker 5: this is I know, the SEC isn't up to that

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Speaker 5: kind of shenanigans. For sure. The coin Telegraph was an

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Speaker 5: intern who messed up. Maybe this is that case. So

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Speaker 5: there's definitely been these head fakes. And then recently there's

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Speaker 5: been people over the past couple days who have gone

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Speaker 5: against the grain and said, wait, you know, Gary's going

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Speaker 5: to do a rug pull and deny them all, and

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Speaker 5: that kind of moved the price a little on the downside.

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Speaker 5: So people are able to move because everybody's skittish. This

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Speaker 5: has been a ten year build up to this one moment,

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Speaker 5: and everyone's just like it's like a you can pop this.

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Speaker 5: It's like a feeling, the mood you can pop with

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Speaker 5: of a pin, and that's sort of what this did.

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Speaker 5: And it's all just sensitive and tender right now.

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Speaker 1: We talked about this a little bit earlier with what

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Speaker 1: you know about X. Will they be able to find

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Speaker 1: out who generated this? So that's one thing. And secondly,

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Speaker 1: you know, it seems the price spike in bitcoin wasn't

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Speaker 1: that much, so is this pretty much fully discount approval?

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Speaker 5: Yeah, hopefully they find out. I don't know the goings

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Speaker 5: on of cybersecurity, but I hope they find out. If

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Speaker 5: it's them, I hope they admit it. That's will they

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Speaker 5: admit it? If the call was coming from inside the house,

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Speaker 5: so to speak, will they admit that? I don't know.

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Speaker 5: Hopefully they do. But it is baked into a degree.

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Speaker 5: There's been a huge run up in the price of

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Speaker 5: bitcoin and it doesn't take a genius to realize because

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Speaker 5: people are anticipating the ETFs getting approved. Because the ETFs

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Speaker 5: act as bridges to a large amount of money that

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Speaker 5: advisors manage thirty trillion, they love ETF so the ETF

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Speaker 5: is sort of the ultimate bridge to the sort of

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Speaker 5: traditional finance regular world and a big pool of capital

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Speaker 5: of rich boomers and the crypto world. And so that's

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Speaker 5: why the run up and prices come, and that's why

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Speaker 5: it didn't move that much to the upside. We were thinking,

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Speaker 5: you know, I was talking to another lawyer that if

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Speaker 5: you really wanted to cause a mass chaos and compromise

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Speaker 5: the SEC site, you would have said they were rejecting it.

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Speaker 5: The price of bitcoin probably would have plummeted a good

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Speaker 5: amount on that because the approval baked in rejection.

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Speaker 1: Not so.

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Speaker 5: I think that's also an interesting point on like, what

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Speaker 5: was the purpose of hacking that to just do nothing?

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Speaker 8: Eric, I just want to tease out a little more

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Speaker 8: of this idea of a bridge. I mean, to the

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Speaker 8: light person, why would you buy a bitcoin eighty if

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Speaker 8: when you can just buy a bitcoin?

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Speaker 5: Yeah, because if you look at coinbase, if you want

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Speaker 5: to go trade bitcoin, it's pretty expensive upwards a forty

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Speaker 5: basis points to two hundred and fifty basis points just

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Speaker 5: for one trade. An ETF will cost one basis point

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Speaker 5: to trade. That's the spread on ets, and the expense

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Speaker 5: ratios are now all the way down to twenty basis

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Speaker 5: points twenty to thirty. You can get already, haven't you launched?

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Speaker 5: And the sea war has already gotten them down that low.

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Speaker 5: So that's a pretty good deal. Plus you got this

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Speaker 5: sort of regulatory stamp on it. You've got big brand

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Speaker 5: names like black Rock, compatility, and it's going to track

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Speaker 5: the price of bitcoin well. Other things like GBTC doesn't

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Speaker 5: track well. Micro Strategy stock you could say, is a proxy,

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Speaker 5: but it's not a perfect tracker of bitcoin either. And

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Speaker 5: if you want to go do like your own cold

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Speaker 5: storage and wallet and all that business, you have to

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Speaker 5: remember twelve words for the rest of your natural life.

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Speaker 5: And I know, I don't know about you, but I

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Speaker 5: can't remember my Amazon passwords, so I'm not gonna go

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Speaker 5: try to do that. And just like a gold investor

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Speaker 5: isn't going to store gold in their house unless you're

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Speaker 5: really into this, in which case do that, you know.

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Speaker 5: But for most normal people who just want some exposure

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Speaker 5: because they're speculating on this, and ETF is a perfect

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Speaker 5: solution for them, and again gold probably the best parallel that.

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Speaker 1: That's what I would say, all right, Derek, thanks very

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Speaker 1: much for joining us. Eric balchunis Bloomberg Intelligence Senior ETF analyst.

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