Elsewhere in trade: Mr. Trump is reportedly happy to wait for as long as it takes to get a good Nafta deal. The British foreign secretary, Boris Johnson, is touring Latin America this week to gin up interest in trade after Brexit. Improving trade relations with Russia is reportedly a top priority for Germany.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
The unwinding of G.E. is moving ahead
The next deal to shrink the embattled industrial conglomerate, according to Reuters: a sale of its transportation business for more than $20 billion to Wabtec, a rail equipment maker. (The transaction would reportedly be performed using one of Michael’s favorite deal structures, a reverse Morris Trust — a similar tactic to that used by G.E. to merge its oil and gas business with Baker Hughes.)
The chief executive of G.E., John Flannery, has pledged to reduce the company’s byzantine structure and focus on its fastest-growing core businesses. Making train engines isn’t part of that equation.
Elsewhere in deals: Comcast is apparently considering very seriously a bid for parts of 21st Century Fox. Dell is reportedly continuing talks with investors about a deal for VMware. Ant Financial is said to be worth $150 billion (but investors must pledge not to back any Alibaba rivals). A breakup of Britain’s big accounting firms might be a good thing. Blackstone sold its Hilton holdings.
The new book on Theranos dives into the start-up’s scandals
“Bad Blood,” John Carreyrou’s heavily anticipated tome about the blood-testing start-up and its founder, Elizabeth Holmes, is out today. (How anticipated? Jennifer Lawrence is signed to a movie based on the book, and “60 Minutes” did a segment on the failed start-up last night.)
From Roger Lowenstein’s review in the NYT:
Even for a private company like Theranos, disclosure is the bedrock of American capitalism — the “disinfectant” that allows investors to gauge a company’s prospects. Based on Carreyrou’s dogged reporting, not even Enron lied so freely.
Andrew’s bottom line: I read the book in just two sittings — it’s a page-turner. If you love narratives like “Barbarians at the Gate,” Mr. Carreyrou’s tale gets awfully close to that feeling of being inside the room, and watching a spectacular fraud unfold.
The political flyaround
• Rudy Giuliani said that Robert Mueller planned to finish his obstruction investigation by September — but only if President Trump sits down for an interview. The Justice Department’s inspector general has been instructed to look into the president’s allegations of an improper government inquiry into Mr. Trump’s 2016 campaign.
• Donald Trump Jr.’s meeting with an emissary of two Persian Gulf states in 2016 suggests that countries other than Russia wanted to get involved in the election. (NYT)
• The British law firm Linklaters is under scrutiny for its work on behalf of Russian oligarchs. And here’s a closer look at one of them, the billionaire Viktor Vekselberg, who has been linked to Michael Cohen.
• Scott Pruitt has run into some problems in his deregulation campaign at the E.P.A. (WaPo)
• The new U.S. secretary of health and human services, Alex Azar, is the rare Trump regulator who isn’t focused on deregulating. (NYT)
• Don Blankenship may have lost the Republican Senate primary in West Virginia, but the former Massey Energy C.E.O. is still causing headaches for the party. (Politico)
Banks look to the military in their cybersecurity defenses
Cybercrime is one of the greatest risks to the American financial sector, according to the Treasury Department.
How banks are taking that threat seriously, according to Stacy Cowley in the NYT:
Former government cyberspies, soldiers and counterintelligence officials now dominate the top ranks of banks’ security teams. They’ve brought to their new jobs the tools and techniques used for national defense: combat exercises, intelligence hubs modeled on those used in counterterrorism work and threat analysts who monitor the internet’s shadowy corners.
Elsewhere in finance: David Solomon’s era atop Goldman Sachs may start at year end — and here’s an argument why Lloyd Blankfein shouldn’t stay on as chairman. Deutsche Bank’s troubles have cast a spotlight on the firm’s chairman, Paul Achleitner. A top Citigroup banker sees investment banking revenues recovering this year.
The tech flyaround
• Antonio Tajani, the president of the European Parliament, says that Mark Zuckerberg’s hearing with the legislature will be live-streamed. Separately, Germany’s online hate speech law makes the country a lab for testing how to regulate the social network.
• A close look at why Google is under the regulatory microscope. (60 Minutes)
• Tesla’s entry-level car, the Model 3, could cost much more than $35,000, making it look distinctly less mass-market. The company has made public some of the software underpinning its Autopilot system.
• Why investors in tech start-ups in the Midwest shouldn’t look for companies to emulate Silicon Valley. (The Information)
• Sony’s new C.E.O., Kenichiro Yoshida, plans to move the company away from making gadgets. (Bloomberg)
• Baidu’s chief operating officer, Qi Lu, is stepping down, raising questions about the Chinese tech company’s A.I. ambitions. (Bloomberg)
Quote of the Day
“Should we own 50 percent of every company in America? That’s ridiculous, and we are a long way from that.”
— Jack Bogle, on the need for limiting the power of the three big money managers (including his own firm, Vanguard) in Barron’s cover story
The speed read
• How the “Math Men” — engineers and data scientists — became the kings of advertising. (New Yorker)
• Google has reportedly removed “don’t be evil” from its code of conduct. (Gizmodo)
• Fewer companies are registering in Britain as Brexit nears. (Guardian)
• To understand inflation, think of the U.S. as two economies: one for goods, another for services. (WSJ)
• China is mining for gold in the Himalayas, which could aggravate tensions with India. (SCMP)
• Roman Abramovich’s soccer team, Chelsea, may have won the F.A. Cup, but Britain hasn’t renewed the Russian oligarch’s visa yet. (FT)
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