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