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Carlos Ghosn’s freedom cost $9 million
Nissan’s former chairman was released on bail today after more than three months in a Tokyo jail, Ben Dooley of the NYT writes:
• “A man wearing a grayish jumpsuit, sky-blue cap and surgical mask, whom the Japanese news media identified as Mr. Ghosn, emerged from the detention center at around 4:30 p.m. surrounded by police officers.”
• The outfit “allowed him to sneak past a crowd of Japanese and foreign reporters who had been waiting hours for him to appear.”
• “After a moment’s hesitation, Mr. Ghosn got into a small van, while the police loaded luggage and bedding into a larger black van that was the focus of reporters’ attention.”
Mr. Ghosn’s bail cost 1 billion yen, or almost $9 million. A judge approved it yesterday, and an appeal by prosecutors was rejected. Mr. Ghosn paid his bail in cash today before his release.
Things are looking up for him. Japanese prosecutors convict 99 percent of indicted defendants. But now that he has a new lawyer and has focused international attention on the Japanese criminal justice system, Mr. Ghosn’s case is “increasingly looking like it’s not a slam dunk” for prosecutors, Stephen Givens, an American corporate lawyer in Tokyo, told Mr. Dooley.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
Bloomberg won’t run for president
Mike Bloomberg announced yesterday that he won’t pursue the Democratic Party nomination next year. Instead, he’ll spend his billions on philanthropy — and working to defeat President Trump.
It’s an acknowledgment of the long odds against him, as a pro-business centrist at a time when the Democratic front-runners are embracing Medicare for all and the Green New Deal.
He had “a real but narrow path” to the nomination, according to his advisers, which could have disappeared if Joe Biden runs. Mr. Bloomberg conceded this in a Bloomberg View op-ed, writing, “I am cleareyed about the difficulty of winning the Democratic nomination in such a crowded field.”
Instead, he’ll remain focused on fighting climate change. His latest effort is on reducing and eventually eliminating the use of fossil fuels. He will also promote gun control, and maintain his political organization to aid the eventual Democratic nominee.
Mr. Bloomberg’s decision may weigh on Howard Schultz, the other centrist, pro-business billionaire considering a presidential bid. If Mr. Bloomberg, with an established political brand and an estimated $55 billion fortune, doesn’t think he can spend his way to victory, critics will ask how a less-famous, less-wealthy billionaire could.
‘Made in China 2025’ is dead. Or is it?
Conspicuously absent from Premier Li Keqiang of China’s speech to lawmakers yesterday was any mention of the nation’s plan to become a global tech powerhouse, Lingling Wei of the WSJ notes.
Mr. Li used to champion “Made in China 2025,” a plan under which the country would quickly increase its capacity to design and produce advanced technologies, reducing its reliance on trading partners and even undercutting rivals like the U.S. He gave it pride of place in his previous three annual speeches.
But that vision alarmed Washington. “Officials in the Trump administration have called the plan a threat to fair competition, saying it encourages state subsidies for domestic companies and forces technology transfer from foreign companies with the aim of driving them out of business,” Ms. Wei writes.
Now the name has gone, but the ambitions remain. Mr. Li didn’t use the words “Made in China 2025” yesterday — but he did talk about advanced computing, biotech and alternative energy. And he promised to “make China strong in manufacturing” and “encourage more domestic and foreign users to choose Chinese goods and services.”
The bigger question is what this means for Beijing’s trade talks with the U.S. Hard-liners in the Trump administration fear that China may promise policy changes, then simply go on as before.
A record windfall for investors
U.S. companies returned $1.25 trillion to investors through share buybacks and dividends last year, a new high, Robin Wigglesworth of the FT reports.
Corporate America has paid out $8 trillion through buybacks and dividends to investors over the past decade, according to data from S&P Dow Jones Indices.
How much? By Mr. Wigglesworth’s estimate, that’s “more than enough to buy all the major listed companies of the U.K., France, Germany, Spain, Italy and Sweden” at current prices. Or just about all the gold ever mined.
Those numbers will fuel the battle over buybacks. While supporters say they’re good for companies and investors, critics — including senators of both parties — argue that they come at the expense of raises for workers and investment in R.&D. That debate will rage on.
The Bank of England prepares Brexit buffers
Britain’s central bank is working to help its financial system weather the turbulence that would accompany leaving the European Union without a withdrawal agreement, the FT reports.
British banks are strong enough to withstand the potential disruption, the Bank of England says. But “financial stability does not guarantee market stability or economic stability,” Mark Carney, its governor, told British lawmakers yesterday. He predicted “significant market volatility.”
Weekly auctions of euros, as part of an arrangement with the European Central Bank, will help the bank to maintain its cash levels. It already has similar arrangements for the dollar, and recently announced weekly auctions of British pounds.
“The new swap line is ‘a further prudent precaution’ to ensure financial markets can function smoothly in the months spanning Britain’s departure from the E.U.,” the FT reports. The bank’s Financial Policy Committee has also “taken action to address the main risks of disruption for U.K. insurers, asset managers and clearing houses.”
The American trying to save Deutsche Bank
As Deutsche Bank tries to turn itself around, it is relying in large part on Matt Zames, a well-known Wall Street veteran who now works for one of its big shareholders. More on that from Jenny Strasburg of the WSJ:
• Mr. Zames rose through the ranks at Bear Stearns and then helped JPMorgan Chase move past its “London whale” trading disaster. He’s now at Cerberus Capital Management, the investment firm that has a stake in Deutsche Bank and is also a paid adviser to it.
• Soon after Cerberus was hired, Mr. Zames spent weeks at Deutsche Bank’s offices. “He quickly focused on what Cerberus considered a key to Deutsche Bank’s revival: that it move quickly to take more risk with its cash,” Ms. Strasburg reports.
• He has also met with Germany’s deputy finance minister, Jörg Kukies, to discuss a potential merger of Deutsche Bank with Commerzbank (in which Cerberus also holds a stake).
• Mr. Zames’s advice reportedly hasn’t always gone down well with the bank’s executives: “Finance chief James von Moltke last fall told colleagues he felt Mr. Zames was pressuring him to move too quickly to loosen constraints on investing the bank’s cash cushion.”
• But Mr. Zames reports directly to Christian Sewing, Deutsche Bank’s C.E.O. And, as Ms. Strasburg writes, “Some insiders and trading partners half-jokingly call Mr. Zames the ‘virtual C.E.O.’”
Goldman lets bankers loosen their neckties
Goldman Sachs is embracing a more casual dress code, according to Laura Noonan of the FT. That means bankers can shed their suits for … slightly more dressed-down outfits.
Goldman didn’t give specifics. No items of clothing have been allowed or banned; instead workers were told to “exercise good judgment” and dress to meet client expectations.
The move was announced by David Solomon, Goldman’s C.E.O., who also happens to be a D.J. on the side. It’s meant to appeal to younger workers whom the firm hopes to hire.
The bank is following rivals like JPMorgan Chase in embracing a more relaxed dress code. Goldman actually let its engineers dress more casually nearly two years ago, leading to some junior workers being advised against wearing “ripped and overly tight T-shirts.”
But business casual has limits on Wall Street. JPMorgan bankers shunned jeans for fear of their bosses thinking they had no client meetings. (That said, Goldman bankers on the West Coast have been known to occasionally dress more casually — think jeans and sneakers — to fit in with their tech and media clients.)
Scott Gottlieb unexpectedly announced plans to resign as commissioner of the Food and Drug Administration this month.
The founder of Papa John’s pizza, John Schnatter, will step down from the board after the company names his successor as C.E.O.
Anheuser-Busch InBev reportedly plans to replace Olivier Goudet as chairman amid concern that his day job at the food conglomerate JAB has created conflicts of interest.
President Trump plans to nominate Jessie Liu, the U.S. district attorney for the District of Columbia, for associate attorney general.
The speed read
• Grab, the Southeast Asian ride-hailing company, raised $1.4 billion from SoftBank’s Vision Fund. (NYT)
• Aon is weighing a takeover bid for a rival insurance broker, Willis Towers Watson, that could exceed $24 billion. (Bloomberg)
• Nestlé is said to have private equity suitors for its skin care business, which could sell for more than $7 billion. (FT)
• The activist investor Barington Capital wants the clothing company L Brands to spin out Victoria’s Secret. (FT)
Politics and policy
• T-Mobile conceded that its executives stayed at President Trump’s Washington hotel much more frequently after it announced a deal to buy Sprint. (WaPo)
• Mr. Trump’s checks to Michael Cohen and others while in office show how his personal business was been interwoven with his presidential duties. (NYT)
• House Democrats are expected to demand Mr. Trump’s tax returns in about two weeks, but the White House promises a court fight. (Politico)
• A forthcoming vote on Prime Minister Theresa May’s Brexit deal may go badly, in the reported view of the party official who has to persuade her lawmakers to back it. (Bloomberg)
• Britain’s Department of International Trade stopped holding Brexit briefings with businesses after leaks to news media. (FT)
• Facebook is being pushed to reveal who paid for a £257,000 ad campaign to torpedo Mrs. May’s deal. (Business Insider)
• Italy will reportedly endorse China’s “Belt and Road” initiative, to the White House’s chagrin. (FT)
• Arizona prosecutors won’t charge Uber with a crime after one of its autonomous cars hit and killed a pedestrian last year. (NYT)
• Amazon’s deal for a campus in Arlington, Va., reportedly doesn’t look so good for the city. (WaPo)
• Congress will reportedly introduce a bill today to restore net neutrality protections. (Hill)
• Cellphone numbers have become one of the main ways tech companies identify users — which makes people less likely to share them. (Axios)
Best of the rest
• Regulators are looking again at limiting bankers’ pay. (WSJ)
• JPMorgan Chase will stop providing loans to the private prison industry. (FT)
• G.E.’s new C.E.O. has tempered any expectations of a quick turnaround. (WSJ)
• What’s the financial penalty for falsely labeling something as “Made in U.S.A.”? $0. (NYT)
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