Good morning.
I'm Brian Curtis and I'm Doug Krisner. Here are the stories we're following today.
Well, some saber rattling from China on Taiwan. We get more from Dan Schwartzman in New York.
Dan Yeah Brian, China's ambassador to the US, Chifeng, says the country has no room to compromise when it comes to Taiwan's independence. She was speaking at the Carter Center in Atlanta. The ambassador's comments come as Taiwan is set to vote for president on January thirteenth. One of the candidates, Taiwan's Vice President, Lai Ching Tay, has angered Beijing by
describing himself as quote pragmatic worker for Taiwanese independence. A three judge appeals court panel expressed skepticism of Donald Trump's claims that he is immune from prosecution as a former president looks to avoid a criminal trial over his attempt to overturn the twenty twenty election. Trump is trying to reverse a December first ruling by US District Judge Tanya Chutkin, who rejected Trump's immunity defense, saying it seems he was
seeking the power of a monarch. Bloomberg's Eric Larsen breaks down one judge's hypothetical oppose to Trump attorney John Sarr.
What if a president ordered the killing of a political rival with Seal Team six, you know, does nothing happen to this president? And Trump's argument, or that he's lawyer pressed, is that if the president is impeached for that conduct, then potentially that opens up the potential for a criminal case. But if there's no impeachment, then you know, nothing happens, And the judges seemed pretty skeptical of that argument.
That's Bloomberg's Eric Larson. Walter Reed Medical Center has released a statement saying that Defense Secretary Lloyd Austin was diagnosed
with prostate cancer in early December. Austin underwent a minimally invasive surgical procedure which resulted in some complications, including nause and severe pain in his abnominal area as well as in his hip and leg, and the evaluation revealed that Austin was suffering from a urinary tract infection as well as abdominal fluids collecting, which impaired the small intestine's ability to function. The hospital those says they anticipate the Secretary
will make a full recovery. National Security ca Ouncil spokesman John Kirby says even President Biden didn't know why Austin was hospitalized till earlier today.
He was not informed until last Friday that Secretary of Austin was in the hospital. He was not informed until this morning.
That the root cause of that hospitalization was prostate cancer.
Kirby, speaking at a briefing earlier today. Storms, high winds and tornado warnings hitting parts of the South today, with roofs blown off homes and campers flipped over in Florida. In the Midwest, some cities were hit with more than a foot of snow, stranding some drivers on highways. Areas across Kansas, Nebraska and South Dakota, Iowa, and Minnesota seeing snow accumulations as high as fifteen inches. More than two hundred thousand customers were without power in Alabama, Georgia and
in Florida. That's according to Thepowerodage dot US website. Global News twenty four hours a day and whenever you want it with Bloomberg News.
Now.
I'm Dan Schwartzman, and this is.
Bloomberg all right, Thanks very much, Dan five and a half minutes asked the hour, This is Bloomberg Daybreak Asia. We take a look now at some of the top business stories of the hour.
While the US.
Securities and Exchange Commission says it has not granted approval of Spot Bitcoin exchange traded funds, that's despite a post saying it had been approved on X that appeared to be from the regulator's official account. The post included a comment purporting to be from SEC chair Gary Gensler. Gensler himself said on X that the SEC's account had been compromised.
About a dozen companies have applied to list ETFs backed by bitcoin in the United States, and the SEC has until January tenth to take action on at least one of those applications. Now Bloomberg Shanali Bossack tells us what comes next for the SEC.
They could always punt right. They could always push it as they have before.
They could also deny application.
They could ask for more information as we've seen last minute amendments to the filings just this morning.
That's Shanali boss Suk. The price of bitcoin did spike, well, it did increase, let's say, and it's still a little bit higher now. Right now forty six eighty three per coin.
We turn next to the latest on the Boeing seven thirty seven Max Air safety officials are probing last week's blowout of a door plug on a Max nine model, and now their attention is focused squarely on four unaccounted bolts. These bolts, you see, were meant to secure the door plug it suddenly broke loose on that Alaska Airlines flight last Friday. Inspections were subsequently ordered by the FAA, and now we learn that both Alaska Air and United Airlines
have discovered more loose bolts. The National Transportation Safety Board said it would consider broadening the probe into other Max models. Now, despite the news on this crisis, it's interesting that Boeing ended all of last year twenty twenty three with its largest ever monthly sales gain for the seven thirty seven Max.
Ran Well Blackrock, we'll dismiss about six hundred employees, roughly three percent of its global workforce. It comes as the company seeks to reallocate resources. We get more from Bloomberg's Charlie.
Pellett, CEO Larry Fink, and President Bob Kapito said in a memo to staff quote, we see our industry changing faster than at any time since the founding of Blackrock. The executive say ETFs have become the preferred vehicle for both index and active investment strategies, that the firm is
growing across the globe, including in Europe and Asia. The world's largest asset manager says it still expects to have a larger staff by the end of the year, even with the cuts, as it expands certain parts of the business. In New York, Charlie Pellett Bloomberg Radio, we.
Are told Amazon's live streaming site Twitch is poised to cut thirty five percent of its staff. That would equate to around five hundred workers. These cuts could be announced, we are told as soon as Wednesday. We are hearing there are increased concern over the company's turning a profit since Twitch has increased its focus on advertising in recent years.
Right well, Qualcomm says that it's pushed into automotive chips is on course to beat sales projections. A chip maker said that it will have about four billion dollars of sales from its auto unit by twenty twenty six. Qualcom's entrance into the automotive space will also decrease its reliance on mobile phone electronics, and the CEO, Cristiano Amone, told us that the car industry is going digital. So if you're going to go buy a car today, you have a fully immersive digital clck bit.
You didn't have that before. That's enabled by Snapdragon. Right now you have those beautiful screens that are immersiving.
They bring you a lot of information about the car, the road.
On top of that, it have safety and we have a vision that assisted driving needs to be in every car.
That's Qualcom CEO Cristiano Amone, speaking from the Consumer Electronics Show in Las Vegas. Qualcom is now selling more chips for handling, driving, and entertainment functions in vehicles, along with processors for personal computers and headsets. The hope is to maintain growth as the smartphone market matures.
China says it has hacked into Apple's air dropped feature and as a result, message centers can be identified. We have more from Bloomberg zivon men in Hong Kong.
A Beijing institute has developed a technique to crack an iPhone's encrypted device log. The log identifies numbers and emails of senders who share air drop content. The method would help authorities eradicate information China deems unhealthy. Activists around the world have employed the air drop feature to spread their messages Beijing's judicial bureaus as police have identified multiple people via the hack. Developments add uncertainty to Apple's operations in China.
The company already faces severe constraints on content, including on Apple TV and books. In Hong Kong, I'm Von Mann Bloomberg Radio.
This is Bloomberg Daybreak Asia. I'm Brian Curtisy in Hong Kong with Paul Allen in Sydney, and our guest is Eric balchunis Bloomberg Intelligence senior ETF analyst. To take a closer look at what happened today from the SEC. I don't want to be splitting hairs with something, but we said in our lead that the SEC has not yet approved blah blah blah, And actually Gary Gensler said in his statement that the SEC has not approved. So again, that might be getting a little bit too technical there,
but many people think it will happen. Was this possibly something, Eric, that was just a prepared statement that somehow made its way in.
Yeah, Look, I'm processing this all just like you, I was expecting a tweet like this to come out exactly twenty four hours from when it did. We all intel points to approval four to five pm Eastern time tomorrow, with both the nineteen befour's in the s ones getting approved and then issuers launching Thursday business day, and they'd be up in trading. So I was sort of ready they just go have dinner and have a chill night
before tomorrow's madness. But the madness came early, and it sounds like it was hacked, but the timing was weird. It almost seems like a scheduled tweet that they put the wrong dat in. But let's just trust the SEC it was hacked. This isn't the first time there's been Well, you.
Said compromised, right, Compromise is a little bit broader term.
Yeah, that's true. That's true. Look, who knows. I mean, at some point we'll get the truth over time. You notice when people put out tweets sometimes they always say hacked and or compromised, But you know, half the time they weren't. They're just embarrassed. Who knows. All I know is that tomorrow is important because it's the deadline for the ARC filing. They have to either approve or deny, so if they do nothing, it gets approved. But all
signs and all our intel points to approval. So my guess is we'll see this tweet or something come out tomorrow after they formally approve doing the more formal way on the website. But I've been covering this now. I've been in a sort of one foot in the crypto world for like six months now, and I've gotten used to these crazy happenings and shenanigans, so this is just like sort of another day in the roller coaster known as the crypto world. So I shake it off. I'm
looking at tomorrow. I still think we're going to see approval and launches and we'll look back and sort of laugh at this in a couple of days.
Yeah, to your point, Eric, when this happened, I overheard somebody in the office here in Sydney sort of laugh and say this is the most bitcoin thing ever. The language though, was very sec like. And as you say, this isn't the first head fake, is it. What other sort of misleading moments have we experienced?
Oh?
Man, I mean the big one was coin Telegraph put out that I shares had been approved like I don't know two months ago, and the price of bitcoin went up five to ten percent instantly, and then black Rock denied it. Then somebody went into the Delaware legal site for registering names and registered eye shares XRP ETF and even put the guy's name, and it looked just like a registration like the way they registered bitcoin and ether ETFs. So people thought, oh, Black Rocks playing a file for
an XRP ETF that turned out to be false. The price of XRP went up and down instantly, and so this is I know, the SEC isn't up to that kind of shenanigans. For sure. The coin Telegraph was an intern who messed up. Maybe this is that case. So
there's definitely been these head fakes. And then recently there's been people over the past couple days who have gone against the grain and said, wait, you know, Gary's going to do a rug pull and deny them all, and that kind of moved the price a little on the downside. So people are able to move because everybody's skittish. This has been a ten year build up to this one moment, and everyone's just like it's like a you can pop this.
It's like a feeling, the mood you can pop with of a pin, and that's sort of what this did. And it's all just sensitive and tender right now.
We talked about this a little bit earlier with what you know about X. Will they be able to find out who generated this? So that's one thing. And secondly, you know, it seems the price spike in bitcoin wasn't that much, so is this pretty much fully discount approval?
Yeah, hopefully they find out. I don't know the goings on of cybersecurity, but I hope they find out. If it's them, I hope they admit it. That's will they admit it? If the call was coming from inside the house, so to speak, will they admit that? I don't know. Hopefully they do. But it is baked into a degree. There's been a huge run up in the price of bitcoin and it doesn't take a genius to realize because
people are anticipating the ETFs getting approved. Because the ETFs act as bridges to a large amount of money that advisors manage thirty trillion, they love ETF so the ETF is sort of the ultimate bridge to the sort of traditional finance regular world and a big pool of capital of rich boomers and the crypto world. And so that's why the run up and prices come, and that's why
it didn't move that much to the upside. We were thinking, you know, I was talking to another lawyer that if you really wanted to cause a mass chaos and compromise the SEC site, you would have said they were rejecting it. The price of bitcoin probably would have plummeted a good amount on that because the approval baked in rejection.
Not so.
I think that's also an interesting point on like, what was the purpose of hacking that to just do nothing?
Eric, I just want to tease out a little more of this idea of a bridge. I mean, to the light person, why would you buy a bitcoin eighty if when you can just buy a bitcoin?
Yeah, because if you look at coinbase, if you want to go trade bitcoin, it's pretty expensive upwards a forty basis points to two hundred and fifty basis points just for one trade. An ETF will cost one basis point to trade. That's the spread on ets, and the expense ratios are now all the way down to twenty basis points twenty to thirty. You can get already, haven't you launched? And the sea war has already gotten them down that low. So that's a pretty good deal. Plus you got this
sort of regulatory stamp on it. You've got big brand names like black Rock, compatility, and it's going to track the price of bitcoin well. Other things like GBTC doesn't track well. Micro Strategy stock you could say, is a proxy, but it's not a perfect tracker of bitcoin either. And if you want to go do like your own cold storage and wallet and all that business, you have to remember twelve words for the rest of your natural life.
And I know, I don't know about you, but I can't remember my Amazon passwords, so I'm not gonna go try to do that. And just like a gold investor isn't going to store gold in their house unless you're really into this, in which case do that, you know. But for most normal people who just want some exposure because they're speculating on this, and ETF is a perfect solution for them, and again gold probably the best parallel that.
That's what I would say, all right, Derek, thanks very much for joining us. Eric balchunis Bloomberg Intelligence Senior ETF analyst. It is Bloomberg gave Break Asia your morning brief on the stories making news from Hong Kong to Singapore and Wall Street.
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