DealBook Briefing: How Blocking Broadcom May Open a New Trade Battle
Elsewhere in semiconductors: The industry largely ignored a short seller’s report on purported security flaws in AMD chips. (Axios)
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, Michael J. de la Merced in New Orleans and Amie Tsang in London.
Credit Ruth Fremson/The New York Times
How Boeing could suffer in a Trump trade war
President Trump announced his metals tariffs to protect American makers of aluminum and steel. But that could put Boeing in the firing line — America’s top exporter, which employs nearly as many people as the U.S. steel and aluminum industries combined.
More from Natalie Kitroeff of the NYT:
“I’m really worried about what it’s going to do to us,” said James Springer, a mechanic who installs stow bins and class dividers on 787 Dreamliners at Boeing’s plant in North Charleston, S.C. “What will the E.U. and China do, especially China? They are one of our biggest customers now.”
And Mr. Trump’s attacks on Chinese metal production are in some ways a relic of past trade battles, as Beijing moves away from basic commodities.
• Elizabeth Warren’s attacks on fellow Democrats who support a loosening of Dodd-Frank regulations are annoying Chuck Schumer and Heidi Heitkamp.
• The Republican leader of the House Intelligence Committee’s inquiry into Russian electoral meddling softened his committee’s conclusion that Russia did not work to undermine Hillary Clinton. Representative Trey Gowdy said it had.
Credit Shannon Stapleton/Reuters
Bear Stearns was a decade ago. Could it happen again?
Today is the 10-year anniversary of the investment bank, on the verge of bankruptcy, seeking a lifeline from JPMorgan Chase. These days, however, there’s little appetite for an extraordinary government-assisted of a bailout of a troubled financial firm — and post-crisis regulations are meant to eliminate the need for one.
Here’s what Rodge Cohen, Wall Street’s longtime favorite consigliere, told Justin Baer and Ryan Tracy of the WSJ:
“Nobody will ever again buy a severely troubled institution,” he says. “Period.”
The problem: Wall Street’s new defenses haven’t been tested. And today’s algorithm-dominated markets give embattled firms far less time to work out their problems, as the WSJ points out.
A deregulation-minded businessman in the White House was supposed to be a huge positive for the M. & A. community. Yet investment banks have already lost out on some bigadvisory fees. And then consider:
• The blocking of the Qualcomm bid has raised uncertainty over cross-border acquisitions.
• The battle between the Justice Department and AT&T over the $85.4 billion takeover of Time Warner is heating up, with the first day of the trial set for Monday.
As Matt Levine writes in Bloomberg View, “One area where Donald Trump is more economically populist than I had expected is: He really does seem interested in blocking big mergers.”
Announced deals so far this year are up 55 percent from the same time a year ago, according to Thomson Reuters. And the Republican tax overhaul has led other deal makers to feel better about opening their wallets. A survey of 500 U.S. companies by EY found that 42 percent of respondents intended to use their tax savings on M.&A., and 73 percent said that they planned to accelerate their deal strategies this year.
One problem: “crypto-jacking,” in which scammers steal the computing power of those who view their ads and use it to mine digital money. Google removed 130 million such ads last year.
Elsewhere in virtual currencies: Blythe Masters of Digital Asset Holdings is disappointed that gender diversity in the sector is even worse than in banking (she used to be at JPMorgan). And Coinbase has a Barclays bank account, which will simplify things for British customers.
• Former staffers for The Onion, which once published “Elon Musk Offering $1.2 Billion in Grants to Any Project That Promises to Make Him Feel Complete,” are working on a secret project financed by Mr. Musk. (The Daily Beast)
• A commodity investor backed by a Russian billionaire is stockpiling cobalt. (Bloomberg)
• The political compromise that kept Angela Merkel in power could end Germany’s boom. (NYT)
• Britain’s M. & A. watchdog is celebrating its 50th birthday. (Bloomberg)
• More than half the fresh fruit and almost a third of the fresh vegetables Americans buy now come from other countries. (NYT)
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