haidi: a very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's major market opens. shery: i am shery ahn. welcome to "daybreak asia." g7 leaders promised one billion extra vaccine doses, hoping to end the pandemic next year and they are preparing to call for a new study into the origins of the virus.

president biden revokes trump era bans on tiktok and wechat, ordering a review of software applications from so-called foreign adversaries. asian stocks eye a steady start after u.s. equities edge lower. investors looking ahead to a key u.s. inflation report that could provide food on monetary policy. haidi: what is really interesting, even as we continue to be laser focused on every inflation print, there are signs we are seeing that investors, when it comes to bond markets, are kind of seeing these inflation expectations just kind of rollover. we did see the treasury yield in the u.s. falling below 1.5% for the first time in about a month that was helped along by a strong auction. we are looking at a pretty steady open. sydney futures are than a bit to the offside. indicated very little early change. nikkei futures higher by just .1%. we are seeing futures unchanged

in hong kong as well. s&p futures trading in the u.s. higher by .1% as well. it seems like we are treading water a little bit but once we get that inflation report, we could get a bit more in terms of monetary policy, shery. shery: laser focused on the g7 meeting. promised to deliver one billion extra doses of vaccines over the next year. the bit to end the pandemic by the end of 2022. jodi schneider is on the line and she had just gotten the draft communique. what exactly are we talking about here? jodi: we are seeing this push to donate doses of the vaccine and for the world to give another billion doses of the vaccine, g7 countries. it helps these countries where they have had outbreaks of the virus but they do not have

enough vaccine, which is -- lower income countries and the covax initiative is partly where vaccines will be donated and some will be donated directly to the countries. this is what we are seeing from their draft communique. some of the countries like the u.s. and the u.k. have been able to vaccinate that large percentages of their population and have extra doses, particularly the u.s., and we have the biden administration saying it's going to buy up -- we will get confirmation from them. we are hearing from people familiar with with the biden administration and the 500 million doses of pfizer's vaccine to donate to the world. haidi: we are hearing as part of the draft communique the g7 call for investigation into the origins of the virus. jodi: right, and that has been somewhat controversial. the biden administration had

only recently signed on to an investigation of the origins. it had been standing by sort of earlier thinking that it had been from animals to humans. now what they're being talk of the who and other countries, the origins should be investigated more widely including allegations that could have occurred in a lab near wuhan so the u.s. had said it will be investigating and now this communique, a new study, deeper study into the origins of the virus. it looks like the g7 countries are likely to sign onto that. other countries have already said they want to investigate as well. the biden administration in the last few weeks said it wants to have an investigation into the origins and to have that start happening very soon. haidi: jodi schneider there.

the g7 also said it will target big use of force labor and global supply chains. that spring in tom mackenzie in beijing. there are appointed implications for china here. tom: absolutely. all the focus from researchers, academics, and from governments, western governments in particular, when it comes to the question of worse labor, have been focused on china, particularly the region of xinjiang. that is the allegation that we are seeing uyghurs being used as part of a forced labor program. the chinese call it there maybe transfer program. beijing says this is about trying to improve economic outlooks for that minority. but again, critics outside of china say that this is forced labor that we are seeing in the country. we have seen the e.u. along with the u.s. and others on mining to sanction some chinese officials and entities over these allegations of forced labor and that led to retaliation from

beijing. this is an area that is very sensitive to china. they will respond to this comment by the g7 by accusing them of interfering in chinese internal affairs but this is unlikely to go away anytime soon as we are seeing from the g7 until, unless, and if china opens up that region to inspectors into the media. that seems unlikely at this point. shery: we are very much focused on any talk to do with the minimum tax rate. we had heard from secretary yellen and other finance ministers releasing an op-ed today saying that instead of competing to rock-bottom corporate tax rates, competition will happen on a more level playing field and that this will eventually really benefit the citizens of the world. china could be a stumbling block here. haidi: -- tom: they could absolutely. china's basic corporate tax rate is 25% but when it comes to high-tech industries, they offer a number of tax cuts to

incentivize companies to invest particularly around things like r&d. and given the importance of high-tech for china's future growth, it is very unlikely that they are going to want to walk back for those tax incentives and they may push for carveouts. the concern is that those carveouts would undermine its broader push with the global minimum 15% tax. haidi: we have also seen president biden reversing or revoking the trumpeter a ban on tiktok or wechat -- trump era ban on tiktok or wechat. jodi: -- tom: this is right. this was challenged in the courts, both wechat and tiktok successfully challenging that in the court system in the u.s. because of the way that the trump announcement on this was construed or were construed so the trump administration is

reworking the framework. they are going to set up a review process targeting applications, tech apps, from foreign adversaries, with a specific focus on sensitive data . there is a timeframe for the commerce department to look into this and it is a more narrow focus. they have not said whether or not tiktok and wechat will be part of that review. so far, they have been removed from the trump administrator that has been welcomed by some of the advocates of these apps in the u.s. about 100 million times, that is how many times tiktok has been downloaded in the u.s. so this review process will be set up and it will start very soon. we will have to see whether wechat and tiktok fall under that process. >> tom mackenzie in beijing. let's get to su keenan with the first word headlines. su: talk about possible changes on wall street. wall street's top regulator calling for a broad based review. the rules that underpin u.s.

equity trading. gary gensler asked the agency to examine the issues tied to stock trading including so called best execution requirements. trading rules, hedge funds, and brokers have all under scrutiny after wild swings in meme stocks including gamestop and amc. with six weeks to go until the tokyo olympics, the international olympic committee says more than 80% of athletes participating in the games have been fully vaccinated. tokyo is under a virus state of emergency until at least june 20. separately, japanese prime minister says he wants everyone in the country who wants to be vaccinated to get at least one shot by november. new data meanwhile shows the u.s. taking the lead from china in the global aviation recovery. a flight tracking firm says u.s. domestic capacity is at about 84% of 2019 levels.

china had displaced the u.s. as the world's largest air travel market after reining in the virus in the first half of 2020. it's domestic travel stood above 2019 levels for most of the year but the recent outbreak has been a setback. to the u.s. and russia relations, president biden warrant vladimir putin of u.s. retribution a few menaces other democracies. the president made the remarks in the u.k. ahead of this weekend's g7 summit. biden says he has been clear the u.s. will respond in a robust and meaningful way if the kremlin engages in harmful activities. the two leaders will come face-to-face at a scheduled to in geneva. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: still ahead, we talk to -- about president biden's

ambitions to reduce reliance on asia for semiconductors. but up next, defiance etf's cofounder and cio says she is bullish on global markets. sylvia joins us with her markets outlook, just ahead. this is bloomberg. ♪

shery: a slip in bond yields buoys tack but hurts financials -- tech but hurts financials. this is all ahead of that highly anticipated u.s. consumer price report later on thursday. earlier, the imf managing director told me during a live stream health security that she is carefully watching price pressures. >> we are watchful. we have never experienced in the past recession that was

self-inflicted and coming out of it with the man picking up is something that of course we have to be careful about. shery: we are joined by the cio and cofounder of defiance etf's. sylvia, what do you expect inflation numbers to be and how does that affect your portfolio allocations, especially given that you think banks are under owned at the moment? sylvia: i think i would expect the next inflation reading to perhaps be similar to the last one and maybe a little bit higher than expected but i do believe in the narrative that it is transient and that the fed will stay the course in terms of what they are planning to do with asset purchases. if inflation does get away from us and does continue to rise systematically throughout the month, we might be having a different conversation and the fed may act in a different way.

i would expect that we are looking at these base case scenarios where we are comparing cobit lows in areas like -- covid lows in areas where you would expect to see price pressures and that is guiding the number. jay powell mentioned that could account for 1% discrepancy in the actual true inflation rate so i think it remains to be seen. if we had a high rating, it will affect the market negatively but i think we need to keep an eye on it before we decide it is transient. shery: she mentioned how she was focused on supply chain disruptions and how because of that, we could see higher inflation and worse, we have seen shortages when it comes to global semiconductors. do you invest in this sector when you know that these shortages will probably last for a couple of years? >> i do. she makes a great point.

that is certainly another factor we have in the inflation rate but i do. i think that this is a once-in-a-lifetime opportunity to get semiconductors at these levels. they have pulled back from all-time highs, particularly the hottest names in the semiconductor space have anyway. if you think about semiconductors, essentially, they are going to be required for any technological innovation in our future, whether it is the 5g rollout, which is supposed to have a growth rate of 70% for the next five years, it is required for devices for electric vehicles, ai, smart cities, for cloud computing, data centers, all of these things require semiconductors and even if it is going to take them a longer period of time to create the supply that is needed, the demand is going to keep rising and i do think that will impact semiconductors in the longer term so you will not see a return on that trade in the next couple of months but it

is a good opportunity to look at that as a longer-term trait now. >> what you are saying is that value is looking overvalued now and you are returning back to growth. that is the same as some of the big growth names. they are still not cheap even after the pullback. >> they are not cheap, but they are off of their 200 day moving average high and i think that it is all about a balanced portfolio. it is not that i do not like value. i am just picking my spots now. in terms of what is a trade that should work for the next couple of months and the next earnings season, that is the reopened trade, the hotels, the cruises, the casinos, and the airlines. i think that they will benefit. we just heard a statistic that the u.s. is back to 84% of pre-covid demand on flights. memorial day weekend was 60% of year-over-year growth.

these companies are going to benefit in the short-term but in the longer term, the faangs had their run and hit all-time highs. those prices are trading sideways and not doing a whole lot but i stick with the scenario that we need them. i don't think congress is going -- i nothing commerce is going anywhere. apple will touch everything. services, hardware, devices, laptops. i don't think these things are going away. the world has changed and that hybrid work and study scenario is probably here with us so i like those names long-term but i acknowledge that net short-term instant gratification we used to get from apple and amazon and alphabet, it is not there anymore and it will come from the travel talks. haidi: what also feels like -- the drunk by biogen and you see

the reaction in the stock price and you see expectations of a halo effect. is this game changing for pharma and biotech names? sylvia: i think it is sort of exciting for the space and i like biotech and health care in general. there is a good macro backdrop. covid has taken so much of the spotlight and you certainly have some price appreciation for the companies who have produced vaccines but overall, if you look at the biotech space, with the growth of fda approvals and preapprovals in these drugs, particularly alzheimer's, gene therapy, cancer treatments, i think that now that we are vaccinated and looking at a different world, the patients are going to start going back to the hospitals and medications so biogen is one of the most recent stories on that but i think that there's going to be massive

growth in that space and i was so bullish on it before covid and the whole idea of people sort of being stuck at home and focusing on one thing, the control of the pandemic and the virus really prevented the benefit of growth and trials for some of these biotech companies so they are probably set to soar. they tend to do well in this type of market. >> always great to have you with us. investment ideas from the cio and co-founder of defiance etf's. coming up on "daybreak asia," gamestop declines after announcing a shakeup. we have the details, next. this is bloomberg. ♪

shery: gamestop something in after-hours trade with plans for another stock sale not sitting well with investors, down more than 6% at the moment. the company disclosed an investigation into its recent trading activities and announced a c-suite shakeup. our markets critic joins us for more analysis on this. another stock sale, investigation and shakeup, not adding to a positive outlook for the stock. >> not really and it is interesting. gamestop is taking a page out of the amc playbook, saying that embrace this retail mania and use it as another fundraising opportunity. 5 million shares is how much they could be issuing to make that veil. the question is, do investors play along? do they rally the stock, knowing that gamestop is going to capitalize on it? you also mentioned a shakeup.

two new members of the c-suite, both amazon veterans, really bolstering the case for that e-commerce vision that ryan cohen has for the company. >> of course, it's hard to talk about fundamentals with companies like this. is there an idea that we are moving beyond speculative trade as we get more and more conversations about tightening and the wave of liquidity receding? is there any concern among retail constituents? >> it doesn't really seem that way but you have to make this argument that they are buying the stock on something more than just nostalgia and this is where his vision to compete with amazon.com comes in handy because the investing psychology is that gamestop is a known and loved brand for kids across the country who have been growing up with this in their malls in their hometowns but that they are going to take it to the next

level and embrace the digital age and it is the transformation that retail investors are betting on. given that they are doing it with a very different approach, it does not necessarily mean they are not doing it for fundamental reasons. the issue is simply that we don't actually have that vision that ryan cohen has outlines and references to. we need to value it more clearly. haidi: we do have some developing news when it comes to jbs. that ransomware hacking that temporarily knocked out meet production plans that roughly process u.s. production. jbs paid an $11 million ransom according to the company's chief executive. the ransom payment was made in bitcoin to shield them from further disruption from what had already happened. restaurants, grocery stores, and

from lights rely on the company. that is the chief executive of the company's u.s. division, saying that it was very pain will to pay the promoters but we -- criminals but it was the right thing to do for the country, according to reporting from dow jones. we saw the implications of that spread from australia to south america, to europe. this as part of a wave of incursions we have seen involving ransomware. multiple companies being hit by these demands to regain control of their operating systems and it also led to calls by senators on the intelligence committee in the u.s., calling for increased measures to regulate and trace cryptocurrencies and the role that crypto pays -- plays in these ransomware attack. let's get you a quick check on some of the other headlines today. credit suisse is offering bonuses to select banks in an attempt to stop a growing exodus

of executives. the move comes after a trio of senior bankers in new york and milan left for competitors. morgan stanley, bank of america, and jeffries. the bank is trying to move past recent scandals. facebook says it will let all employees work remotely from june 15 if their jobs can be done away from the office but staff may still get a pay cut if they move to a less expensive area. guidance is to be in the office half of the time with plans to fully reopen most u.s. offices in october. facebook is allowing more workers to move countries from the u.s. to canada or from -- to anywhere in the u.k.. global foundries added banks to work on its planned u.s. ipo which could value at 13 billion u.s. dollars. sources say jp morgan and bank of america have been hired to help take the public listing

alongside morgan stanley while citigroup and credit suisse have been given more junior rolls on that listing, shery. shery: up next, we will look at the chip sector with the senior semiconductor analyst. this i ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network.

shery: as the world continues to suffer from an uneven recovery, the imf says moving ahead with a massive plan to issues its hundred $50 billion in reserve assets to help the global recovery. i spoke to the managing director during a media livestream event on the future of health care about how poorer nations will benefit. >> we are very much on track. seven finance ministers confirmed that from the perspective of this sizable group of countries, this is

going forward. not only that, we are looking into ways in which we can direct some ideas from wealthier nations to those not so much need help. we expect by mid august to have the government voting. for those who may not have heard much about it, this is a reserve asset we create on the strength of our membership and it is the largest in the history of the imf issuance by far, and rightly so, because we are dealing with the worst recession we have experienced since the great depression. shery: some have criticized that these would be used to pay off the debts owned by developing nations to china and this rivalry on the world stage seems to be becoming worse right now. how is that affect in the job

that you are doing? >> let me first stress that we provide detailed guidance to countries on how best to use it and it is not easy for any nation that has a large level of debt t who is that to pay rather than restructure this. we have the common framework. we want the common framework to be the door to resolve those issues and we are also increasing the transparency of how they are being deployed by countries as a way to encourage the prudent deployment of this valuable reserve asset. one positive piece of news is that china actually would like to make sure that it works as intended and they are indicating interest to contribute some of their new issuance to a pool of

funds for the management of the imf to support countries in it. the exact opposite of trying to use that for the payment service of debt to china. haidi: the imf director speaking with shery earlier. yoshihide suga says he wants everyone in the country who wants to be vaccinated to get a jab by november, saying that has been progress made in the drive. our deputy bureau chief -- how does it play into the ongoing count down the olympic games? >> we are still on those 65 and over who are getting vaccinated

at this time. there's two reasons why the vaccination of those people sped up. there were difficulties with booking systems for the older people to get vaccinated. it has now been resolved. additionally in the past couple of weeks, we had these mass vaccination centers that can give tens of thousands of doses per day so those are all up and running. when it comes to those under 65, big companies will start vaccinating employees from june 25 and everyone else will go through their local health authority. the government never said vaccination would be complete at the time of the olympics but it is going faster than many feared so a chunk of the population will be immunized by then. shery: what will this mean for the state of emergency still in place? >> that is set to run out on june 28. it was extended in may after we had a spike of cases in may but daily virus cases in tokyo have been declining gradually since then and when you look at formal

hotspots like osaka, they have declined a lot more steeply. there could be an extension in the state of emergency. theoretically, you could run the olympics with a state of emergency in place but there is speculation they will end that emergency on june 20 as planned. >> in the meantime, we are not expecting any change when it comes to the bank of japan providing a supportive environment for the covid recovery. sophie: that's right. even though it is going faster than expected, there is still impact on the economy from the virus in the states of emergency. in the kind of programs the bank has been doing has two prongs. they have been making huge loans to banks so they can lend to japanese businesses and the boj is expected to stay on its current policy course. that does put it contact with the federal reserve and the view that there is a big gap into central-bank policies is likely to weaken the yen further this year and that is great news for

the big exporters that underpin the japanese economy. shery: sophie jackman there. let's get to su keenan with first word headlines. su: thank you. staying with the topic of vaccines, the biden administration is said to be planning to buy 500 million doses of pfizer's covid vaccine to share internationally. a bloomberg source says the government will buy about 200 million doses share to distribute through the w.h.o. back covax program. and 300 million more doses in the first half of 2022. the vaccines go to 92 lower income countries and the african union. the new york city mayor, bill de blasio, says it will be hard to reach his administration's goal of fully vaccinating 5 million new yorkers by the end of june. 4.4 million new yorkers received one dose. only 45% of the city is vaccinated.

an occupation rates vary by district and age group. the u.k. statistics office says eight in 10 adults in england have antibodies protecting them against covid-19. the data comes at a critical time with ministers due to announce monday whether the final phase of the reopening of their economy will go ahead on june 24. that plan has been thrown into doubt due to a rise in cases due to the delta covid variant. president biden issued an executive order revoking bans on chinese owned apps tiktok and wechat. -- foreign adversaries that includes risks to american sensitive data. the security threat will be blocked. and the trump order actions were aimed at chinese companies including bytedance and tencent. china has blasted the u.s. for pushing a $250 billion bill through the senate that seeks to

counter beijing's technological ambitions. the foreign ministry says china seeks to develop a win-win relationship with the u.s. and that the bill distorts the facts and treats china as an imaginary enemy. the legislation includes $52 billion for manufacturing. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: our next guest says u.s. spending on chips is a good start but manufacturing will not be resolved by capital injections alone. joining us now is the senior semiconductors analyst at the financial group. clearly, the amount of investment and ramping up of the infrastructure bill we are seeing at the moment is not going to resolve the short-term bottleneck. what more is needed to create true dominance for any of these countries, not just the u.s., when it comes to semiconductor independence and competitiveness?

>> thank you for having me on the program. it reminds you that transistors, the foundation of semiconductors, were invented in silicon valley in the 1960's so there is about 70 years of r&d that is already in the u.s., and now, we are seeing significant capital committed to scaling that r&d. the next step i would like to see is more commitment to building the supply chain. it is a great start for the scaling of r&d but the supply chain needs to be built out. it is a great start. >> it felt like the last two years has always been about dismantling the china supply chain. to what extent has that been successful and what is the focus now? >> in my humble view, what we have seen for the past five years is more driven by geopolitics.

i don't think that was really meant to enable china to become a real competitor in manufacturing semiconductors. it will take decades for china to catch up. the u.s. has been in the forefront of semiconductors. it was invented in silicon valley back in the 1960's so for china to become a viable competitor, it needs decades of r&d and foreign capital is not going to do much. what we have seen for the past two or three years is just confusion. and that combined with geopolitics has been very confusing. into the future, there is increased r&d in the u.s. and overall, the demand picture is improving. the next challenge is to build out infrastructure. you have to the u.s. more

independent. >> does that mean that the u.s. spending more does not necessarily affect china given that china's semiconductor industry is still too young? >> yes. again, china buys more semiconductors and is a big demand driver for u.s. semiconductor industry. i think what has happened here is geopolitics have -- if you look at some of the shortages, it may have been caused by restrictions on china. some of these semiconductor chips, especially what we use in other industries, may be in china. in 2018 through 2020, all we did was try and restrict china and that, combined with covid, caused a supply chain disruption. but keep in mind, china buys

semiconductors from u.s. companies. shery: greater independence in this industry. what does it mean for other, more developed industries like those in taiwan or south korea? >> if you think about samsung electronics, they are already committed to building the supply chain in the u.s.. they have been in the u.s. for several years and they will scale that. taiwan semi is following samsung. i think that this is actually good for diversification. if you think about all the chips that are used within amazon's infrastructure, microsoft infrastructure, google infrastructure, all of these chips are made in taiwan. that causes a downside risk. god forbid there is an earthquake in taiwan. to the extent that you can diversify, that actually

minimizes downside risk. >> we have seen the drought this year as well. it was great having you with us. senior semiconductors analyst at the financial group. up next, the bloomberg scoop. credit suisse is offering bonuses for select bankers. details, ahead. this is bloomberg. ♪

haidi: we have exclusive reporting that credit suisse is offering bonuses to select staff to stay. we have seen a stream of scandals blocking the lender. our wall street core extended -- correspondent is with us. what does it say about the investment banking business and are we still seeing the exodus of talent happen? sonali: certainly. we are seeing a string of departures and different groups in the investment bank, it is a consumer business. financial services so when you look at the retention bonuses, it is only to a select group of bankers to keep the best talent around to help save that

investment bank during a tumultuous time. credit suisse last year was having a very good year in investment banking so a lot of the troubles this year not only comes at a tough time for credit suisse but also in the middle of a very competitive and heated here for dealmaking. shery: what are the larger organizational issues they will have to deal with as they are still looking to settle a range of problems, right? >> certainly. a lot of these issues did not start at the investment bank to begin with. it started like places like the asset management business. it is now bleeding into the broader is in us and you reported about credit suisse cutting ties with softbank as well so you are seeing client matters being impacted and your ceiling -- seeing them deal with the fallout of their asset management group. how well the wealth managers

weather the storm with their clients and investors at the end of the day? haidi: are we seeing much of a structural shift when it comes to the big banks and the labor force of these banks given that we see the return to work on such different policies and what that looks like? sonali: it's a great question because we are looking at credit suisse today but at the same time, it is a elevated level of attrition everywhere. so banks are bidding for the best talent. because it is a record year, they seem to have the money to do so. my recruiting sources and banking tell me that they are demanding more flexibility. the ability to live in their second home and come back when they want to. we will see how that shakes out at the end of the day but people are certainly threatening to leave if they don't see that kind of possibility. >> sonali basak with us.

be sure to tune into bloomberg radio. you can get in-depth analysis from the daybreak team. they are broadcasting from our studio in hong kong. we have lots more ahead. this is bloomberg. ♪

shery:

to have a gauge of where inflationary pressures are headed. this of course after we had chinese ppi accelerating at the fastest pace since 2008. in in the meantime, we see

australian stocks trading -- waiting to trade muted as they open. ppi seeing a rise of 4.9% in the month of may year on year which is a faster acceleration than expected. month on month also beating expectations on a acceleration of 0.7%. not really that surprising given that we are coming from a very low base during the pandemic last year and also driven by higher commodity prices. and also, the previous month of april, the number has been revised upwards to 3.8 percent gain in ppi year on year, 0.9% month on month. shery: -- haidi: even that forecast was matching the high since the global financial crisis and we are seeing cpi numbers beat expectations as well. optimism over international travel could be starting to make a comeback for some nations as the e.u. approves vaccine passports and the u.s. loosens

covid travel warnings for dozens of nations. global vaccinations are on the rise and infections are falling area caroline hyde has more. >> i just made my flight from the london office to new york and even with the madness of travel with two small kids, not to mention the tests and quarantine, i cannot tell you how good it felt to be back in the air and thanks to more people being vaccinated globally and virus numbers increasing, international travel is eyeing a comeback. >> with a lot of conviction, we believe that if some of the barriers to traveling are removed, like these quarantine procedures, then we think demand could come back very quickly. >> a survey of 50,000 people globally found that 78% of respondents would travel as long as more people get vaccinated. the indonesian government is discussing plans to offer vaccines as part of the holiday packages to attract travelers.

the u.s. state department is easing travel advisories for dozens of nations including many in europe. the european parliament gave its final approval to the digital covid certificates. >> it's important for citizens to feel that they have this level of stability, that we can open up economies and travel safely. >> fears of the pandemic are not completely gone. >> we will have no hesitation in moving countries to the red list if we have to do so. >> the u.k. caught airlines by surprise last week, removing portugal from the so-called greenland, sending airfares to as high as $1000 as british tourists tried to jump on the post -- first plane home. fresh outbreaks and lockdowns have further delayed the travel revival in asia. movement remains tightly restricted, even in places where the virus has been contained. president biden will be jumping the pond as he makes his trip to cornwall, england, to attend the

g7 meetings with other leaders. president biden remains optimistic that everyone can travel, not just him. pres. biden: a dramatically different summer from last year. a summer of freedom, a summer of joy, get-togethers, and celebrations. all-american summer that this country deserves. >> we can all agree that after lockdowns around the world use, people are ready to travel, take a break from their home. international travel is still tough. domestic seems to be by far the easiest choice. shery: caroline hyde. let's get you a quick check of the latest business flash headlines. gamestop plunged after the company announced a stock sale of as many as 5 million shares. it also disclosed that they are investigating recent trading activity. that news overshadowing first quarter revenue.

it is tapping amazon executives to become ceo and cfo as it pivots from brick and mortar into e-commerce. it has postponed its anticipated deals for the fourth quarter that worked on a financial audit. the food delivery giant is the latest company to be affected by intensifying scrutiny from u.s. regulators on deals involving rational purpose acquisition companies. it is said to be one of the largest ever mergers with a blank check company and that has been expected to take place in the third quarter. brokers are planning to offer crypto trading. he says he expects the offer to be ready in the coming months. it joins a growing list of online service providers offering buying and selling of crypto's including robinhood, venmo, paypal, and another. the announcement comes on the same day that el salvador became the first country to formally adopted bitcoin as legal tender.

the crypto headlines just keep coming. we heard that jbs had been attacked by the ransomware hacking and paid $11 million in bitcoin in ransom to resolve that. we are seeing a gain when it comes to bitcoin although off session highs. we had a jump of 10%, the most since may 24. the crypto index also rising but also off their session highs that had been off by 8% with the recent dip in bitcoin, we are seeing more investors jumping into ethereum as the environmental credentials are seen to be more appealing but in a bloomberg interview, we also spoke with elizabeth warren, the democratic senator, calling crypto the wild west meeting consumer protection. we take a look at cybersecurity and further into crypto with a security officer. plus more markets insight, is next. the head of asia-pacific

financial markets research, michael, is with us. the market opens in sydney, seoul, and tokyo are almost upon us. this is bloomberg. ♪

shery: welcome to "daybreak asia ." haidi: asia's major markets have just opened for trade. our top stories, asian stocks are set for a steady start despite u.s. equities edging lower. investors turning focused towards key u.s. inflation reports that could provide clues on monetary policy. g7 leaders are set to promise one billion extra vaccine doses in an effort to end the pandemic

next year. president biden revoked trump-era bans on tiktok and wechat. instead he is calling for a review of software applications from so-called foreign adversaries. shery: take a look at the nikkei which is down .2%. dragged lower by consumer discretionary and material stocks. although utilities and real estate are higher. japanese holding at that 109 level. weaker against the u.s. dollar all week, prone to weakness. as we head towards the u.s. ppi numbers. we did get the ppi numbers coming in at 4.9% year on year, which is a faster acceleration than expected. trading for the first time since biogen got fda approval for its cancer and alzheimer's

treatment. finally for the first time it is starting to trade and rising more than 1% after fda approval of biogen's alzheimer treatment. take a look at what the kospi is doing. we are seeing a muted open, but perhaps clawing back some of the losses. we have fallen to a one-week low. the korean yuan continues to be under pressure against the u.s. dollar. it fell after data show south korea's unemployment rate rose for the first time this year in may. haidi: we are turning of course to the inflation sprint in the u.s. when it comes to implications for the aussie bond markets because we saw the aussie 10-year rally as well, falling below 1.5% for the first time since february. this is what we are seeing in the first few moments of equity trading. a pretty muted start with the staggered open in sydney. the aussie dollar trading at

77.31. kiwi stocks also looking pretty unchanged with the kiwi dollar holding steady at 71.73. also the rba will raise rates in the second half of 2023. our next guest says markets do not understand that they are treating inflation risks as a cyclical thing. he also sees a structural change taking place. joining us as michael every. janet yellen says we have been wanting reflation and inflation for the last 20 years the putting on which economy you're looking at. so what is? wrong with getting inflation? ? what are we not understanding? michael: well, as you just said, this is not really cyclical inflation. part of what we are seeing right now, as janet yellen is saying, transitory and due to base effects. that will be a large part of what we see in the report today

of course. a larger part of it is being driven by two other factors that are structural. one of them is a with effect on supply chains. -- is a bullwhip effect on supply chains. there was a story yesterday about beautiful italian tomatoes may be left to rot in the field because there are no cans to store them in. so all manner of different flow-through disruptions which will push prices higher and higher structurally due to the supply chain effect, which central banks do not understand. economists do not understand. they pretend to but they do not. economists just assume goods appear when they can. the central bank cannot really factor into that model. then we have a longer-term structural shift is evidenced by the fact yellen is using language like labor versus capital. we have an upcoming g7 meeting which will be talking about new divide between democracy and

autocracy. all of these will play into supply chain's futures as well. that will have an effect the central banks cannot into understand except when you take a look at it, very inflationary over the longer-term. haidi: the u.s. china decoupling, potentially the west versus china decoupling. we see the west pouring money into semi conductor investment. we see an alliance building to try and counter beijing. what kind of fracturing affect does this have for the global economy? michael: obviously it depends on the sector. and it depends on your timeline. because it will take a long time for some of these things to happen. others will happen more quickly. but the potential is enormous. we were discussing just the other day internally and someone said what would a world like that look like? think about the car industry. today, we still have major global carmakers, but most cars

you buy, unless you go for a very high-end electric vehicle, they pretty much look the same. they consolidated around a certain kind of ergonomic design, certain set of features, and the industry itself, while different parts are made at different places, it is pretty much a global car industry. if you think back to when i was young, i am showing my age here, i can remember it when every country went to had a very distinct kind of car. if you were in france, you knew you were in france because you had specific shapes. german cars looked at german. american cars looked american. etc., etc. that is the kind of potential model you're going to go back to. that overlaps with a time of very high inflation. shery: let's talk more about inflation, because i talked earlier today with the managing director of the imf. and she was worried about the impact that higher prices would

have on emerging and developing nations. take a listen, michael. >> we are watchful, because we have never experienced in the past recession that was self-inflicted, and coming out of it with demand picking up, is something that of course we have to be careful about. shery: if you get events economies -- if you get advanced economies moving faster on rates, you could have consequences for emerging and developing nations. how big of a threat is this to track recovery we are seeing around the world on advanced economies? is this a threat? michael: if we raise rates too fast at this stage, of course it is a threat. but i have to take issue with what we just heard. almost every session we have had over the past x number of years have been self-inflicted due to idiotic policy that got us into it, and an idiotic policy to try and prevent it. that is what the cycle looks like. one must take after the other.

unfortunately, we're in position now where we are damned if we do and damned if we don't. it would make things far worse because inflation is a supply chain-driven issue for the moment, and higher interest rates will do nothing to prevent that. if we keep throwing liquidity into a supply chain-restrained economy and throw fiscal stimulus on top, hypothetically, it will exacerbate the problem and make it worse. so whichever way you go, near term, inflation is going to go up. then it will probably come down again unless we get wages going up. but then it will go up again. shery: ok. so, where do you go from here? what do you do? ok, fine, we have near-term inflation, but how do you stop this from becoming a real problem down the line, long-term? michael: well, it depends on how

you view things in their totality. you can make an argument that we cannot at this stage, because the only model which we have ever had logically and close to in practice which delivered sustainable low prices and inflation everywhere, is the globalized model we had up until a few years ago, where production is centered in east asia, consumption is centered in the u.s. and western europe, and labor markets have no power whatsoever, so wages stay low. during that environment, yes, you have the china price, and you had sustainable low inflation, and every month you have central banks saying we would like inflation to be higher. we don't know what else to do. we cannot push up inflation, but we are trying. that worked for years. janet yellen vocally recognized that was an unfair -- it did not play out for tens of millions of people just in the u.s. alone,

and things needed to change. if they do change, inflation will go back up. you cannot address that program and deglobalize and not have inflation. you are seeing that also on the supply chain front right now, which is just an indicator of what we have to look forward to on steroids if we go down that route. haidi: i sense the panic in shery's voice. every time we speak to you it is like, what do we do? [laughter] because you say everything is a bubble, everything is vulnerable, there is no hedge. a lot of people would be like, oh, bitcoin is the ultimate hedge. you say even that is not an option. michael: look, there is a hedge. if you are worried about inflation, and you are worried about deflation, you can go for inflation-length government bonds. then you get deflation on the other side, at least you get

your full capital back. there is technically one way to cover it, but it does not generate much of a return. if we are going to talk crypto, i have had a consistent stance on this from the beginning which makes me unpopular. i think the entire field, while technologically interesting, is economically, financially, and politically, very deeply silly, if not dangerous. some of the anecdotal stories i am hearing from friends who are deep into this particular space, who are trading very reactively, across the breath and depth of it, they would make anyone's hair stand on end in terms of how idiotic it is, what is going on. yes, i'm going to get hate mail for saying it, but it is true. shery: i am going to ask you are question of the day, and haidi did not want to ask it to you because she did not want to be asked an idiot. but will the s&p 500 it 4000 or

4500 next? when do we really get into a market when valuations are this high? michael: i would say if you have to choose between those two, 4500 is more likely than 4000, provided essential banks are going to keep refusing to see the problems i am addressing, and keep saying more liquidity for everybody. is going to have to go somewhere. if it doesn't go into crypto, it will go into equities. of those two, i would pick the upside rather than the downside. haidi: so we are hearing from the g7 they want to provide these vaccinations by the end of next year. you naturally we are potentially looking to the mid to the end of next year, or further, before international borders even reopen. i am wondering if you have looked at the global labor record and the demographic implications of this. michael: of the vaccination or close to borders? -- or closed borders?

haidi: not just closed borders, but a return to more insular thinking. michael: at the moment, the leading indicators of that are in economies like australia, where you cannot bring in extra labor supply, as people have been used to for a very long time. and you have a red-hot housing market. in australia it is as red-hot as they get. anyone watching this in australia is well aware of the fact you cannot -- those guys are going to be driving around in teslas and rolls-royce is very soon. this is an indication of what happens in a red-hot labor market when you cannot ring in more labor supply to throw more money into it. that, in a way, is an overheated version of what we are trying to get back to. it does have very, very direct impacts on wage inflation, which

would flow through to inflation. but that is the final demand that we've been lacking so desperately everywhere for so many years. and now that we are getting, albeit in overheated fashion, we're getting the same people who said they want to produce it panicking, and saying we don't want that. then what do you want? shery: michael, always great having your insights. i will have to force you to say something positive next time. let's get to su keenan with the first word headlines. su: president biden has issued an executive order revoking bans on chinese-owned apps tiktok and wechat. the administration will instead review apps from for adversaries -- from foreign adversaries. those deemed a security threat will be blocked. it replaces trump-era actions aimed at apps from chinese companies. wall street's top regulator is

calling for a broad-based review of the rules that underpin u.s. equity trading. the sec chair says he asked the agency to examine issues tied to stock trading, including so-called best execution requirements. hedge funds and brokers have come under scrutiny after wild swings in meme stocks including gamestop and amc. with six weeks to go before the tokyo olympics, the international olympic committee says more than 80% of athletes participating have been fully vaccinated. tokyo is under a virus state of emergency till at least june 20. separately, the japanese prime minister says he wants everyone in the country he wants to get vaccinated to get at least one shot by november. finally, new data shows the u.s. taking the lead from china in the global recovery of air travel. u.s. domestic capacity is at about 84% of 2019 levels.

china had displaced the u.s. as the world's largest air travel market after reining in the virus in the first half of 2020. their levels were above 2019 levels for the most of this year, but a recent outbreak there has been a setback. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. haidi: next, a bloomberg's group. g7 leaders will promise one billion extra vaccine doses. also preparing to call for a new study into the virus origins. plus, paid $11 million in bitcoin to ransomware hackers. nick percoco joins us to discuss cryptocurrency and security risks. this is bloomberg. ♪ this is bloomberg. ♪

shery: president biden is

revoking trump-era band on tiktok and wechat. let's get the details from jon new. how much of a difference will this make, given it seems administration officials are not completely declining to not ban these companies in the future? >> it seems like an apparent reprieve for bytedance and tencent. the owners of those chinese apps. they will be allowed to operate in the u.s., the trump-era ban will be lifted. the two countries are still headed towards this period of intense competition. the biden administration says it will be reviewing apps from competitor nations that pose a security risk of data for americans. ultimately we could see more restrictions put in place on

chinese apps, just in a different form. haidi: we are not seeing the virus origins go away at all. we are seeing from this dropped communique they are also calling for an investigation. john: yeah. i think with a number of people that have been sickened and the number who have died from the virus, it is expected the world is going to want to know more about the origins of this virus. scientifically there is obvious value in trying to figure out what the original source was to try and prevent further outbreak. what the chinese are worried about is the politics of it. they are worried they will be left to be the ones to blame for everything. intrinsic in that lab theory is the idea of the chinese government covered up some sort of leak or exposure from the wuhan lab. haidi: john liu there. president biden is the latest g7

leader to arrive. let's look at what to expect with derek wallbank. there is a lot at stake in this meeting, particularly with a number of proliferate nonmember countries like australia coming on board as well. derek: there really is. this is joe biden's first foreign trip as president. that is a little bit late, but considering covid, it is what it is. it's meeting with all the u.s.'s top economic allies in the form of the g7. so there's a lot here on the table to talk about. there will be talk about russia, there is going to be talk about britain, brexit, and the northern island difficulties -- northern ireland difficulties. they will be quite a lot of talk, as there inevitably would any the g7 gets together, about

china, as well as what to do about covid, the ongoing pandemic, and the vaccine race. shery: the draft communique seen by bloomberg suggesting that we could see shots in financing supply by the g7. derek: i think it is worth putting into context here that the west is very late to some of the vaccine diplomacy that china and russia really got a giant head start on. if you look around the world at really developing countries and the poorest countries, a lot of them are using chinese vaccines because the chinese gave them to them, or offer them for sale at hugely discounted prices early on, when they could not get things like pfizer and moderna. so there is very much a desire from especially the u.s. to get into that vaccine diplomacy game, even though it is a little late, with some of the most

effective vaccines. because there have been questions about where the herd immunity standards are with these difference debt -- different vaccines and how much you have to do. if pfizer in moderna are more effective than some other things, we want to put those shots into arms as much as possible. further to -- so look to joe biden to promise big increases in vaccine availability and delivery. if it will be something like one billion extra koba shots to end -- extra covid shots to end the pandemic next year, it will he be about 45% of the amount of shots delivered total. it is quite a big number. haidi: what progress are we expecting to be made and it comes to the climate side of things? derek: i think on the climate side of things, i would put that in two baskets. obviously everybody wants to be

talking about climate and gold and things you are going to do. and joe biden is a president who unlike donald trump, sees climate at the forefront of his international agenda. so there is certainly room to put some things on the table, put some commitments on the table. and we are expecting some commitments. but the thing i am watching more closely than vague commitments is what you do about solar. people have been talking about wanting to crack down on supply chain issues and they want to expand those. whenever you are talking about expanding supply chain on solar it were talking about possibly moving away from china and that brings its own risks. shery: we will have plenty more to come. this is bloomberg. ♪ is bloomberg. ♪

shery: -- haidi: gamestop plunged in extended trade after the company announced a stock sale of as many as 5 million shares. it also disclosed the sec is investigating recent trading activity in its shares. that news overshadowed first quarter revenue topping estimates, and also the gamestop is tapping two amazon executives to become ceo and cfo. facebook says it will let all employees work remotely from june 15 if their jobs can be done away from the office. they may suffer a pay cut if they move to a less expensive area. there are plans to fully reopen most u.s. offices and october. -- in october. credit suisse is offering retention bonuses to select senior bankers in an attempt to stop a growing exodus. it comes after a trio of senior bankers left the lender for

competitors morgan stanley, bank of america, and jeffries. next, u.s. trade officials reportedly talking with taiwan as early as thursday. this is bloomberg. ♪ this is bloomberg. ♪

su: i am su keenan the first word headlines. china has blasted the u.s. for pushing a $250 billion bill through the senate that seeks to counter beijing's technological ambitions. before and ministry says china seeks to develop a win-win relationship with the u.s., and the bill distorts the facts and paints china as an imaginary enemy. he sweeping legislation includes 50 $2 billion for semi conductor r&d and manufacturing. the biden administration is said to be planning to buy 500

million doses of pfizer's covid vaccine in order to share it internationally. a bloomberg sources that the government will buy about 200 billion doses this year to distribute through the w.h.o .-backed covax program and 300 million more doses later. they will go to 92 lower income countries and the african union. new york mayor del de blasio -- he says more than 4.4 million new yorkers have received one dose would only about 45% of the city is fully vaccinated. de blasio also says inoculation rates vary by district and age group. finally, president biden warned vladimir putin of u.s. retribution if he menaces other democracies. the president made the remarks from the u.k. ahead of this weekend's g7 summit.

biden says he has been clear the u.s. will respond in a robust and meaningful way if he engages in harmful activities. the two leaders will come face-to-face on a june 16 scheduled a summit meeting in geneva. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. shery: the u.s. and taiwan may restart investment talks by as early as thursday. another move that will surely anger beijing. or more we are joined from hong kong by our chief north asia correspondent stephen engle. so how significant is this? stephen: they have been working on the trade and investment framework agreement with between china -- between taiwan and the u.s. since the late 1990's. but politics have gotten in the way. different administrations have gotten in the way. the biden administration is that

would wants to push these talks back up higher. official talks have not been announced but antony blinken earlier this week indicated they want to restart talks and other media are reporting those talks between the u.s. trade representative and her taiwanese counterparts could begin as early as today to begin the process of restarting negotiations or talks on this trade and investment framework agreement. some in congress want the u.s. to eventually go as far as to have talks on a free-trade agreement, a bilateral agreement between taiwan and the u.s. that is far more politically sensitive with china. but this would be a first step. it comes on the heels of the u.s. military plane landing on taiwan soil, which china considers chinese soil. that on sunday, carrying three u.s. senators to deliver a poor

it -- a pledge of 750,000 covid vaccines. this is a u.s. military aircraft. tammy duckworth, the senator from illinois in a wheelchair, she is a farmer he -- former army helicopter pilot who lost both her legs in iraq. also the republican from alaska, a former u.s. marine. there was a lot of symbolism in this as well. but again, chinese estate media response to that has been fairly muted. again, the chinese have called any kind of military provocation like this would be crossing a redline. it will be interesting to see how these trade talks will perhaps further anger beijing. haidi: this at a time we see the u.s. can to commit in homegrown semi conductors. are chips going to be at the heart of these talks as well? stephen: if they are not, they

are going to be second on the list. semi conductors is the linchpin in the relationship between taiwan and the united states. there is a global shortage, there is a competitive balance, or competitive war, if you will, for security supplies, and securing the most advanced technologies and chips, which the u.s. at this point has an advantage. but in the next five-year plan from china, xi jinping is planning $1.4 trillion over six years to boost advancement in advanced chipmaking. this blueprint for the semiconductor industry, biden pledged $52 billion. part of that is to put incentives and enticements to get private investments from abroad to come invest in the u.s., and to use their diplomatic muscle to gain that advantage to get the likes of tsmc and samsung to build advanced chip plants in the u.s., all part of this geopolitical competition with

china. haidi: stephen engle there with the latest. next, discussing cybersecurity matters surrounding crypto markets. nick percoco is with us. this is bloomberg. ♪ this is bloomberg. ♪

shery: jbs confirmed they paid

the equivalent of $11 million to hackers who crippled their business last week. u.s. regulators slammed colonial pipeline cybersecurity practices after they paid their ransom. colonial and jbs paying ransom in the last few months. how unique are these cases? >> they are unique in that they have been discussed so publicly and widely. but ransomware is a common attack method, it's an industry for criminals that is booming. we hear about far fewer cases than are actually public. of those that we do learn about, about 50% end up paying. to this is not extremely unique. what is unique is there has been so much public disclosure about these cases which we so rarely

hear about in a public domain. haidi: the fbi said they got most of colonial's money back. does that mean jbs has a hope of getting some of their money back as well? >> they said they got back more than three quarters of the money jps paid which is almost unheard of. we have been poking around, trying to find other examples of law enforcement clawing back money. i have been able to find exactly one other case from last year. so it is quite rare. it seems as though the fbi stumbled upon through some good old-fashioned police work the address where the criminals had parked the bitcoin, along with some keys that allowed them to literally follow the money through the blockchain and access that cryptocurrency to claw some of it back. this is a very rare instance.

companies should not assume when they pay a ransom that law enforcement will be able to get it back. what they can learn from these situations is the technology exists and law enforcement has the resources to pull off these operations in some rare cases. again, it is certainly in the interest of victims to disclose ransomware attack's, at least two law enforcement, with the hope that perhaps they can be the beneficiary the way that jbs was -- colonial was. haidi: we heard from the colonial ceo in his congressional testimony this week. what kind of a response that he get? kartikay: not a very warm one. lawmakers are concerned that critical infrastructure operators have not done enough to protect critical infrastructure, and that in so

many cases they are waiting to be hacked before waking up to the vulnerabilities in their networks, and then hardening their networks. there was plenty of concern and questioning about why his company had not done more to protect themselves against ransomware leading up to that case. in his defense, the company and their ir firm stated that the exploitation occurred because of a leaked password that was unrelated to a breach in colonial. so it does not appear it was necessarily a technical issue inside the company, but lawmakers certainly want to better, more explicit actions around these networks going forward to protect critical infrastructure. haidi: let's get a quick check of how cryptocurrencies are trading. we are seeing bitcoin gaining

ground, above $37,000. this, despite the fact we saw users in china not being able to search on the internet key phrases like those related to crypto exchanges. we're also seeing a theory him -- seeing etherum above $22,000, despite elizabeth warren saying cryptocurrencies are the while the -- are the wild west and consumers need to be protected. we're seeing significant downside pressure for bitcoin, which reached that peak around $60,000 and then fell from that level. let's discuss all these moves as well as the censorship and cybersecurity issues at play. our next guest runs kraken. they are taking big steps to protect itself and pushing employees to act in ways associated more with intelligence agents.

joining us from chicago is chief security officer nick percoco. thank you for your time today. before i get to the security issues, what do you make of all this news coming out of china when it comes to this crack down on crypto exchanges? we have seen the suspension of crypto accounts earlier in the week. nick: we are a global cryptocurrency exchange, and we have clients all over the world. in 90-plus different countries. our top priority is the security of our clients. that supports our mission to support cryptocurrency adoption globally, and security is a big part of that. as far as clients accessing our exchange and accessing places from around the world, that's something that we cannot control as an obit is asian if a country is going to block them from access our exchange or other places. we need to just make sure we are

available if they are able to access our exchange. shery: we have seen some measures that you are taking at your company, including having people really be careful when coming in, changing into play in looking clothes, not allowing their children to access wi-fi, and do certain things in your company. why take such drastic measures? nick: we understand security is core of everything we do here at kraken. our teams, all of our employees are what we would call productively paranoid. that means we want all of our employees and we train them to be fully present and aware of the security risks that our decisions and actions have at all-time. with this mindfulness in our personal lives and also work lives, we've identified and we know it results in a massive

reduction of likelihood our employees will be the root cause of a security incident or be the victim of one. haidi: we spoke just today with elizabeth warren, who said essentially she thinks cryptocurrencies are the wild west. take a listen. sen. warren: banks holding bitcoin, that becomes an issue we need to talk about with the bank regulators. there are a lot of different pieces to this. and i think the answer that we saw today is that right now, our regulators, and frankly, our congress, is an hourl ate -- hour late and a dollar short. we need to catch up with where these cryptocurrencies are going. haidi: we were already hearing from senators on the senate intelligence committee there needs to be greater oversight into how cryptocurrencies play into these hacking events. it is not exactly great for the image of crypto, right? it goes to the idea that it can

be used towards criminal purposes. nick: when we think about this, the primary driver between -- behind ransomware attack's is not the existence of cryptocurrency. there have always been maller attacks, there is always been -- malware attacks. they steal client data, intellectual property, financial information, or even stealing funds. there have been lots of compromises over the years. this highlights how important the security and how vulnerable many organizations are. they do not have their house in order when it comes to security. when you think about the fbi being able to recover the funds, that stamps out the false narrative it is out of reach of law enforcement. they were able to use them -- it's a publicly viewable leisure

-- ledger. in my mind, that debunks the misconception primary use is criminal activity. from a criminal perspective, using large amounts of criminal activity and being on a publicly wide open viewable blockchain is sort of akin to stealing bags of money with marked bills and dye packs and a gps in it. it may not be immediately identifiable but it is traceable. with some detective work like what you saw with the fbi, they can recover the funds and probably contract down who the criminals were as well -- can track down who the criminals were as well. haidi: we had ex-jbs employees tell us there were calls to spend more on security. it was a back burner issue. is this a common approach still even as we see an acceleration

of these kinds of attacks? nick: it is definitely not common in the cryptocurrency industry. at kraken, security is our top priority. above all else for our clients. i spent 20 years on the security industry before i jumped into the crypto world, as a security auditor, a security researcher. i have seen the worst of the worst and the best of the best. it is rather common for organizations not in the high-tech industry, not in the financial industry and not in the cryptocurrency industry to undervalue the importance of security. so when the i.t. groups from those companies go to their executive leadership and say we need to spend x millions of dollars to secure our environment better, lots of times it is the case that those budgets are slashed o rnot approved at all.

that is very common in industries not in the technology world or the financial space. haidi: nick, really great to have you with us. we appreciate your time. as we said earlier, elizabeth warren sent congress is falling short on crypto oversight. she has called the sector the wild west. she spoke with bloomberg earlier. sen. warren: banks holding bitcoin, that becomes an issue we need to talk about with bank regulators. there are a lot of different pieces to this. and i think the answer that we saw today is that, right now, our regulators, and frankly, our congress, is an hour late and a dollar short, and we need to catch up with where these capped occurrences are going. >> let's talk about the idea of a digital u.s. dollar, the idea someone could hold a digital dollar in a wallet on their

phone. lots of talk about it. still unclear to me if something like that would be implemented, what the goal would be. what do you think the purpose would be if the u.s. were to at some point -- sen. warren: that is one of the thing that came up multiple times today. i understand how a digital currency would work. instead of the u.s. government printing dollar bills or minting coins, for example, it would pay a social security check by just putting digital money in your wallet. but the question was, what is the problem it is trying to solve? because as we all know, most of what happened said i is did -- what happens today is digital, in the sense that my bank does not hold those dollars physically. right? it has a number and a ledger. and when i transfer money to pay

off my credit card, they make a transfer that happens electronically. so, you really have to kind of think through this. on the other hand, we had some really thoughtful experts who were saying, you know, you may want to integrate this into other systems for payment, for international payment, and there are questions about whether or not the united states maintains competition, say, with china, that is looking deeply into digital currency. of course the chinese want to be able to track all the purchases of all of their citizens, something we are not looking to do in the united states. but i think the answer there is it is all upon edge. here is what troubles me. cryptocurrency, the private version, has swept the earth. digital currency is not really out of the starting gate yet. and so you have got this situation where we kind of need to figure out, are we going to try to give digital currency a

little boost here? but we really need to keep an eye on digital currency while we are doing that. joe: right now if you and i wanted to transact online, we would do it through paypal or something, an entity that would look at it. do you think private transactions should be preserved in some way? this is a thing people worry about with physical cash disappearing, the idea of transaction privacy. is this a value that you have that in some way, we should find a way to continue to allow that to exist in the digital space? sen. warren: i understand the idea behind privacy. i don't want the federal government tracking how i spend my dollars. on the other hand, think about the key future -- feature of a cryptocurrency. that is secrecy. it's pretty clear right now that that secrecy really is helpful for drug dealers and for crypto warriors who are hacking into

systems around the world and demanding ransom. because it's a secret way to make payment. now, the united states has dealt with this traditionally by saying that what happens in checking accounts is secret, until someone goes before a judge and gets an order to be able to look at a checking account. that means that checking accounts are not a great way to transfer money between drug dealers. they are not great ways to collect ransom. this is one of the concerns about cryptocurrency. there's no equivalent to be able to say ok, you can be private nearly all the time, but not so much that you have created a haven for the criminals. shery: democratic senator elizabeth warren speaking to joe weisenthal. tune into bloomberg radio to hear more and get in-depth analysis from the deborah team, broadcasting live from our

studio and hong kong -- in hong kong. plenty more ahead. stay with us. ♪

haidi: a quick check of the lives headlines. grubhub postponed their anticipated spac as they wait

for a financial audit. they are lovely this company to be affected by intensified scrutiny from u.s. regulators. it's set to be one of the largest-ever mergers with a blank check company that has been expected in the third quarter. global foundries has added four more banks to work on its ipo which could value it at about $30 billion. j.p. morgan and bank of america have been hired to help take the business public, alongside morgan stanley, while citigroup and credit suisse has been given more junior roles. interactive brokers are plenty to offer crypto trading. he expects the offering to be ready in the coming months. they join a growing list of online service providers offering buying and selling of cryptos, including robinhood, venmo, paypal, and square. shery: coming up, we discussed

the markets, and we tackle chinese bonds. that is it for "daybreak asia." bloomberg markets china open his next. this is bloomberg. ♪ g. ♪

david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind i have often thought is private equity. then i started interviewing. i know how to do some interviews. i learned how leaders make it to the top. >> i asked him how much he wanted. he said 250, i said fine. did not negotiate with him