tv Bloomberg Markets Bloomberg May 21, 2021 1:30pm-2:01pm EDT
the cease-fire between israel and hamas seems to be holding. president biden promises to continue what he has called quiet diplomacy to keep it that way. he says the united states will help gaza with humanitarian aid in the wake of the 11 day conflict. democrats and republicans may be divided over the scope of president biden's infrastructure package. they are looking for bipartisan deals on at least one aspect of it. both parties are hoping to beef up job training for americans who lost work due to the pandemic. a record 20.5 million jobs disappeared last year as businesses shut down or laid off staff. europeans and some foreign visitors confirmed plans in the union after the european union negotiators agreed to introduce vaccine certificates that will allow quarantine free travel within europe. it is a chance for the devastated towards him industry
to salvage the season. they have recovered from the illness or have a recent negative test. hurricane watchers are keeping their eyes on two systems that could get the 2021 atlantic storms system going next week. the nassau hurricane center says there's one storm in the western gulf of mexico it has a 40% chance of becoming the first named storm of the year. texas and louisiana have been getting drenched all week. a second system east of bermuda has a 90% chance of reaching named storm strength. they are protecting up to 20 named storms as knows many as 10 hurricanes this year. on air and on bloombergquint take powered by more than 2700 journalists and analysts in 120 countries. i'm mark crumpton, this is bloomberg. ♪
amber: welcome to bloomberg markets. matt: we welcome our bloomberg audiences each day at this hour, here are the top stories we are following for you from around the world. another selloff for bitcoin. the largest digital currency tumbled as china reiterates its warning that it will crackdown on mining to control financial risk we will discuss with the ceo of blockchain.com. tim cook takes the stand, we will bring you the latest on apple versus epic court battle as the ceo of apple defends his platform. we will bring you the details on canadian national's $30 billion crib -- purchase of kansas city southern.
the first railroad could operate from at -- canada down through the u.s. and onto mexico. amber: back on track, i see what you did there. let's get our viewers on track with the market action right now. we could see the dow is the outperformer right now. that is being led by shares of boeing. we are seeing a modest pullback in tech. tech has had a banner week here in canada. it has been a rough ride for bitcoin investors. it started last week with elon musk, only a week ago -- week ago saying he's concerned about the environmental impact of bitcoin mining. they will no longer accept payments. he followed up by saying they still have diamond hands when it comes to holding bitcoin. china's regulators are making --
today talking about cracking down on mining efforts. all this coming together from big volatility. bitcoin prices are off by about 30% since that tweet last week. let's talk about where crypto goes from here and bring in peter smith. he is the cofounder and ceo of blockchain.com. thanks so much for being with us. maybe we could address the move today. the findings on the chinese headlines. a crackdown on mining. correct me if i'm wrong, this feels like deja vu. haven't we heard similar things like this from china over the past couple of years? peter: we were talking and our team chat this morning. it is almost this time of year. after 10 years of that, you are never sure about the latest announcement. matt: it feels like deja vu in
terms of the volatility as well. somebody on twitter recently was complaining about bitcoin in 2012. remember when the price crashed from $15 down to seven dollars and we all thought it was over. then from 1000 down to 75. this volatility is not unusual. why does it freak us out every time it happens? peter: it is psychological. people have a tendency to compare to it centered around something and it is hard to let that go. a new financial system will be really volatile for a long period of time. you have to think in the big picture. that is the difference between being a traitor and being an investor. being a traitor and crypto -- being an investor and crypto, being a long-term holder has been very delightful. we look at the price increase over the last four or five years.
amber: let's talk about payments as a thesis for this long-term investors. if bitcoin doesn't become a widespread use payments network, does that really matter because so many people have shifted that conversation to -- away from payments, not to digital gold value type of thesis? peter: bitcoin is a reserve asset for the internet in my mind. it is a highly liquid asset where people know the inflation, they know the monetary policy. you could sell billions of it in a day. it is a reserve asset, not a payment mechanism. they are building, finding new liars too. bitcoin is really at this point and asked that, that is a beautiful mission for bitcoin is
a protocol and a technology. matt: there are other digital currencies with different use cases. in terms of concerns, my biggest is a small group of people or wallets hold such a large share of all of bitcoin. we are seeing like to percent hold 95% of the bitcoin. does that concern you as well? peter: that number might be a little off. there is some concentration. a lot of bitcoin is held by custodians. we hold a lot of crypto on behalf of other people. that is being held on behalf of hundreds of institutions and tens of thousands, millions of people. when you see these analysis is, they are missing the fact that crypto is held on behalf of
other customers. amber: i'm curious how this downdraft impact your company's growth plan. do current market conditions push that out? peter: consistent point from us is we will go public someday when the moment is right. great companies go public in down markets, up markets, it is just a moment in time on a long journey of building companies. the price of crypto and the success of the whole crypto financial services system is important to a company like ours. it is the heart of that system. the system needs to do well for us to do well. it will be extremely profitable. we are here for the next 10 years, just like we have been here the last 10 years. matt: does that mean you will
wait until we get an upswing? it looks good for you if you pull out more than two or three months. do you want the market type to be revved up before you actually go public? peter: that has lots ado at the market hype and more to do with the undermine -- underlying fundamentals. we are at the right point to sell our story to the public market. do we feel like we are predictable? that we will be a great public company? this has to do with where the market is at. we will be thoughtful about it and pick the right moment. we are fortunate that we have investors and could afford to be patient and take a long-term approach to every decision, including this one. matt: peter smith, the ceo of blockchain.com. tim cook takes the stand here
♪ matt: this is bloomberg markets. tim cook is taking the stand today in the california courtroom showdown between apple and epic games. the case reaches its potential tipping point. let's bring in emily chang, who was standing by outside the courtroom in oakland. what do we know so far? emily: i've got you in one year and the trial in the other.
we are going into the third hour of tim cook's testimony here in oakland. it just broke for a 20 minute recess. the judge told tim cook he couldn't talk to anyone. during that recess, he is back on the stand. what they have said most of the time during the cross-examination is trying to pin down tim cook on what he and apple no about the app store's profitability. apple tried to make the case this is not about money. they don't know how profitable the app store is. many have found it hard to believe that apple doesn't know how profitable the apple is. epic's attorneys presented him with some internal occupants -- documents that shows they track profit and loss but tim cook
insisted that does not show the full context. the reason it is important is epic is trying to prove the app store is extraordinary lucrative. that is important in an antitrust case they could be a signal in monopoly behavior. it supports something very difficult to prove. to prove apple when it comes to the app store is a monopoly. we are expecting tim cook to go potentially for another hour here. meaning the testimony could go upwards of three hours. now epic is going into a discussion about whether or not apple would and should allow third parties or -- on the iphone which is what they are asking for, the epic store on the iphone so that iphone users could download apps directly from that. amber: this has been positioned as a david versus goliath sort of example. they are saying they are
monopolistic and they are the gatekeeper and it doesn't offer developers any other choice. did you hear a really concrete push back that particular argument? emily: tim cook has maintained the app store is an economic miracle and has powered millions of developers around the world. given them opportunities to create new products. to make money. another area where epic's attorney did manage to get tim cook to contradict himself was a question of whether or not apple competes with google in terms of its operating system. tim cook replied that we compete with google based on devices and not the operating system. epics lawyers replayed a quote from tim cook where he said they did compete with google. that is important trying to beef up epic's case about how they are a monopoly. it has been a very difficult thing to prove. there are multiple scenarios
here and this could go many different ways. matt: emily chang outside the courthouse in oakland. you may know of course, fortnite , i'm sure you all play fortnite. the white house yesterday wrapped up its summit to address the semi conductor crisis. pressuring everything from automakers to electronics companies. gina raimondo saying they are exploring how to help chip producers and buyers share supply chain information amid the supply chain crunch. ibm, they recently announced the first-ever microprocessor with two nanometers technology. here to discuss is ibm director of research. thank you for your time. suffice to say we are not all as fluent in semi conductor technology as you. why is a two nanometer chip
important? dario: behind the scenes of the digital universe that we utilize , computers, including our cars and appliances, there is microprocessor, a chip when you look deep down contains this. there are basically switches that allow us to create zeros and ones that power the universe . the two nanometer announcement matters because things get better, information technology gets better because we are able to buy more of these for unit area. we get them to perform faster. currently in production, proving we will have a future generation , this kind of technology. amber: where will you make these? dario: the way we work in our
semi conductor space is we create this and demonstrate the technology that is going to be created. then we have manufacturing partnerships. in our case for the microprocessor that we utilize for high-end servers and men -- our manufacturing partner is samsung. we have the collaboration and the manufacturing scale operation with that. matt: what can be done do you think from a government perspective or even from an industry perspective to really boost chip manufacturing, not only boost chip manufacturing but to bring it back to a place where you could keep an eye on it? dario: what we see across the
industry and the global supply chain. this is a very heavily skewed towards media. about half of the market share, then you see samsung. one set of policy objectives needs to be the ability to have a manufacturing in the united states for this example. this legislation moving now through congress would allocate about 50 billion dollars of funding. it is composed of two elements. one is advanced r&d. the other component is to be able to drive manufacturing onshore.
rival bid. let's bring in a senior transportation analyst. walk us through, do you think it will ultimately be successful in walking away with kansas city southern? >> it is certainly not over yet. canadian national still has to get regulatory approval for the transportation board, which is really crucial in getting these deals done while the regulators way the competitive or anti-competitive nature of the transaction. we expect that to happen in mid-june. if they say no to the voting trust, that could open up another window to reenter the picture. maybe move the kansas city board back to them. even though there bid is lower.
having more of a probability of getting approval. right now they are going with the way the market is guessing it with the way the share prices are training right now. matt: how do regulators look at this kind of deal? there are not that many railroad tracks out there, you will not be able to build new ones. this is a limited supply issue. it will run now from canada down throughhe u.s. and mexico. our regulators worried about the competitiveness of this? are they happy that we will be able to get goods through these areas with fewer hurdles? lee: they are looking for the marriage of two rails going through competition. not necessarily taking away from the competition.
it cannot be a zero-sum game. now it's canadian national and kansas city southern once they buy or get approval for the voting trust, the shares of kansas city southern, they work with the regulators to get a deal done. that is why it is so important. if the rail really wants to grow it is not like it is going to lay down tracks to acquire somebody. matt: it's amazing how little railroad track is laid across north america especially compared to europe. thanks for joining us. this is bloomberg. r joining us. this is bloomberg.
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policy act to asia. it will be his second and person meeting after hosting japan's prime minister last month. they are likely to discuss the global chip shortage as well as cooperation on vaccines. the group of 20 nations is pledging to work together in its battle against the pandemic. and to prevent future outbreaks. mario draghi's country spoke today. he said the pandemic has shown the importance of international cooperation. leaders say items like ensuring fair distribution of vaccines. british prime minister boris johnson says he's confident england's lockdown will end on june 21 as planned despite the rapidly rising case first detected in india. u.k. authorities have found