2019年7月8日 星期一

DealBook Briefing: How Deutsche Bank Plans to Save Itself

The troubled German lender unveiled its reorganization plan yesterday, which involves cutting thousands of jobs and reducing its global ambitions.
 
 
July 8, 2019
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Deutsche Bank's headquarters in Frankfurt.
Deutsche Bank's headquarters in Frankfurt.  Michael Probst/Associated Press
Deutsche Bank’s painful self-help plan begins
The troubled German lender unveiled its long-awaited reorganization plan yesterday, which involves eliminating thousands of jobs and severely reducing its global ambitions. But is it too little, too late?
The bank plans to cut 18,000 jobs and shrink its global equities business. Top executives will leave, including its investment banking chief, and $300 billion worth of assets will be hived off in a “bad bank” to be sold off over time. The layoffs have already begun.
The firm will refocus its efforts on serving European companies and retail-banking customers, pulling back from nearly two decades of trying to compete with Wall Street giants. But its C.E.O., Christian Sewing, said this morning that the U.S. remains a core market for the bank.
The plan will cost the lender 7.4 billion euros, or $8.3 billion, in severance payments and other expenses through 2022. Dividends will be suspended for 2019 and 2020.
But experts are unsure whether it will work. Shrinking means reduced revenue, potentially creating a vicious circle of declining income and profits. Mohamed El-Erian of the German insurer Allianz tweeted, “Big question that’s now on the table is whether DB can shrink itself to heightened competitiveness and sustainable profitability without a merger of some sort.”
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in Los Angeles, and Michael J. de la Merced and Jamie Condliffe in London.
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  Hector Retamal/Agence France-Presse — Getty Images
Huawei may have state ties, and that’s risky enough
Sometimes, simply appearing to be guilty can be enough for people to suspect you of misdeeds. That seems to be the case with Huawei.
The mere potential for Chinese government interference at Huawei is enough to have justified a law that restricts U.S. agencies’ business with the company, the Trump administration said last week.
Those concerns look increasingly justified, according to a new study of leaked employment information for thousands of Huawei employees, carried out by Christopher Balding, a professor at Fulbright University Vietnam.
• “There is strong evidence that Huawei personnel act at the direction of Chinese state intelligence, and that there exists a deep and lasting relationship between Huawei, its employees, and the Chinese state,” Professor Balding writes.
• One résumé, for instance, described a worker as a “representative” of China’s Ministry of State Security who had worked on “building lawful interception capability into Huawei equipment.”
Huawei called the report “speculative,” and insisted that employees with military or government backgrounds are “required to provide documentation proving they have ended their relationships” with their former employers.
But the news will probably reinforce the Trump administration’s view that Huawei represents a national security threat. Maybe it is, maybe it isn’t. Either way, there’s a growing body of tangential evidence that the company will find increasingly hard to overcome.
More: All four major wireless carriers in Britain are using Huawei’s 5G equipment.
Jeffrey Epstein
Jeffrey Epstein  Uma Sanghvi/Palm Beach Post, via Associated Press
Jeffrey Epstein is charged with sex trafficking
The financier had long faced accusations that he had molested underage girls. On Saturday, he was arrested by federal authorities — potentially putting onetime associates, including President Trump and Bill Clinton, under greater scrutiny.
Mr. Epstein had been accused of assaulting girls in South Florida and Manhattan, using a network of contacts to bring minors to his homes in both regions, and sometimes shuttling them between the states.
Federal investigators had previously identified at least 36 potential victims after opening an inquiry in 2005. Some victims were as young as 13.
Mr. Epstein has many powerful business partners and friends. His most famous client is Les Wexner, the billionaire who controls Victoria’s Secret. Mr. Clinton flew on his private jet several times. And Mr. Trump told New York magazine in 2002 that he had known Mr. Epstein for years, adding, “It is even said that he likes beautiful women as much as I do, and many of them are on the younger side.”
He avoided federal criminal charges in 2007, under a controversial plea deal arranged by the U.S. attorney for Miami at the time, Alexander Acosta. Mr. Epstein pleaded guilty to violating Florida prostitution laws instead. (Mr. Acosta is now Mr. Trump’s Labor secretary.)
We’ll learn more about the latest charges against him today when he appears before a federal magistrate judge in New York.
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Turkey’s leader fired his central bank chief over interest rates
President Recep Tayyip Erodgan of Turkey plunged his country’s economy into uncertainty over the weekend when he fired his central bank chief, Murat Cetinkaya.
High interest rates have long irritated Mr. Erdogan. They’re currently at 24 percent, making it harder to borrow money. But economists say the rates should be even higher, given the weakness of the Turkish economy.
Mr. Cetinkaya was in a tough spot. Investors had argued he had raised rates too slowly last year amid a currency crisis. But Mr. Erdogan repeatedly said that high interest rates cause inflation, which Peter Goodman of the NYT says is like blaming obesity on cutting too much sugar from the diet.
The Turkish lira is down more than 3 percent against the dollar on the news, ending an impressive two-month rally. And Istanbul’s main stock index plunged as well.
Experts expect worse to come. Paul McNamara, a fund manager at GAM, told the FT that he was worried about Mr. Erdogan pursuing “growth at all costs,” adding, “If they’re going to try and short circuit the recession by trying to pile more loans into a weak economy, that’s the scenario where things can start to go quite seriously wrong.”
  Jason Reed/Reuters
New controversy over the Pentagon’s huge cloud contract
The Pentagon is expected to award a $10 billion cloud-computing contract, which is supposed to go to a single provider, to either Amazon or Microsoft next month. But the program has been criticized as having being skewed toward Amazon from the start — and a new WSJ report could further fan those flames.
• The WSJ reviewed Defense Department emails released under the Freedom of Information Act.
• “The emails show that on March 31, 2017, then-Defense Secretary Jim Mattis attended a dinner in London with Teresa Carlson, vice president of Amazon’s business selling cloud services to governments, though an organizer of the dinner said cloud computing never came up.”
• “That dinner helped lay the groundwork for a meeting in August of that year between Mr. Mattis and Amazon founder Jeff Bezos, the emails show.”
• “Pentagon officials with ties to Seattle-based Amazon also helped arrange meetings for Ms. Carlson with Mr. Mattis’s chief of staff and other Pentagon officials around the same time.”
Amazon and the Pentagon deny that there has been any preferential treatment in the process.
But the program also faces a legal challenge from Oracle, scheduled to be heard in court this week, claiming that the procurement process has been influenced by a former Amazon employee who worked at the Pentagon. Oracle told the WSJ that the information in the emails lend weight to its case.
Vermont was one of several states to comply with ICE.
Vermont was one of several states to comply with ICE.  Toby Talbot/Associated Press
ICE used facial recognition to scan driver’s license photos
Immigration and Customs Enforcement officials mined state driver’s license databases using facial recognition technology, analyzing millions of motorists’ photos without their knowledge, Catie Edmondson of the NYT reports.
• “In at least three states that offer driver’s licenses to undocumented immigrants, ICE officials have requested to comb through state repositories of license photos, according to newly released documents.”
• “At least two of those states, Utah and Vermont, complied, searching their photos for matches, those records show.”
This is “the first known instance of ICE using facial recognition technology to scan state driver’s license databases, including photos of legal residents and citizens.”
Privacy experts say the practice is deeply troubling. Harrison Rudolph of Georgetown Law’s Center on Privacy and Technology told the NYT: “These states have never told undocumented people that when they apply for a driver’s license they are also turning over their face to ICE. That is a huge bait and switch.”
And it comes at a time of growing pushback against facial recognition. The cities of San Francisco and Somerville, Mass., have banned their agencies from using it. And critics have called on Amazon to stop selling its own technology to law enforcement.
Expect debate in Washington about what comes next. “There are real concerns about the risks that this technology poses to our civil rights and liberties, and our right to privacy,” Representative Elijah E. Cummings, the chairman of the House Committee on Oversight and Reform, said during a hearing last month.
Revolving door
E.U. officials are reportedly discussing naming Mark Carney, the outgoing governor of the Bank of England, as the next head of the International Monetary Fund.
Dish Network named Paul Orban as its new C.F.O.
The Swiss private bank Julius Baer appointed Philipp Rickenbacher as C.E.O., succeeding Bernhard Hodler.
Vittorio Colao, the former C.E.O. of Vodafone, will join the private equity firm General Atlantic as a special adviser.
The speed read
Deals
• WeWork is reportedly planning to raise up to $4 billion in debt financing ahead of its I.P.O. (WSJ)
• Britain’s competition regulator halted an Amazon-led investment in Deliveroo as it opened an antitrust investigation into the deal. (NYT)
• Broadcom has reportedly secured financing for a potential takeover of Symantec. (Bloomberg)
• An American national-security panel has cleared the SoftBank Vision Fund’s $2.25 billion investment in the autonomous-vehicle company Cruise. (Reuters)
• Private equity firms are overcoming a longtime aversion to investing in biotech, thanks to a need to spend $2.5 trillion in cash. (FT)
Politics and policy
• The Fed chairman, Jay Powell, spoke with President Trump in May amid the president’s criticism of interest-rate policy. Mr. Trump attacked the Fed again on Friday, tweeting that the central bank “doesn’t have a clue.” (WSJ, Business Insider)
• A case before a federal appeals court on the Affordable Care Act could give Republicans grief in next year’s elections — especially if the law is ruled unconstitutional. (WaPo)
• Congress is back in session. Its top priority: meeting deadlines for funding the government to avert another federal shutdown. (WSJ)
• Iran announced another breach of nuclear deal limits, raising tensions between Tehran and Washington. (NYT)
Trade
• The trade war may be slowing business spending, according to the Fed. (NYT)
• Why a strait next to Iran is critical to the world’s oil supply. (NYT)
Tech
• Germany’s top antitrust official is urging other countries to take on Facebook and its peers by attacking what the companies value most: data. (NYT)
• Ford and Volkswagen are expected to sign an agreement as soon as this week to share the cost of developing autonomous and electric cars. (NYT)
• Why selling your private data may be an awful idea. (NYT Op-Ed)
• British Airways is facing a record fine of 183 million pounds, or $230 million, for its recent data breach. (BBC)
• G.M. says it needs to embrace tech to survive, but thousands of workers may lose their jobs in the process. “The Weekly,” which aired last night on FX and streams on Hulu starting today, digs into the issue.
Best of the rest
• Boeing lost an order for 50 of its 737 Max jets to Airbus. (WSJ)
• Amtrak’s C.E.O is trying to make it profitable — but some train fanatics are unimpressed. (WSJ)
• The Renault-Nissan alliance is strained. How long can it last? (FT)
• Wall Street banks are struggling to hire local talent in China. (Bloomberg)
• India’s fourth-largest bank was defrauded of $555 million. (Quartz)
• Why have job ads become written so ridiculously? (Economist)
Thanks for reading! We’ll see you tomorrow.
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N.Y. Today: Commuters Wonder if the ‘Summer of Hell’ Is Back?

What you need to know for Monday.
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Monday, July 8, 2019

New York Today
Commuting Delays and Cancellations: Is the 'Summer of Hell' Back?
By AZI PAYBARAH
It's Monday. The Queens district attorney primary was nearly two weeks ago, and votes are still being counted.
Weather: A possibility of showers during the morning commute, then partly sunny skies. Expect a high around 80.
Alternate-side parking: In effect until Aug. 11.
Jeenah Moon for The New York Times
A fire near Trenton last week caused delays at Pennsylvania Station in Midtown Manhattan that were "so crazy the National Guard was needed to contain the crowds," a CBS New York reporter said.
Two days later, a garbage truck crashed nose-first on the New Jersey side of the Lincoln Tunnel, forcing a multiple-hour shutdown of the Port Authority Bus Terminal.
And New Jersey Transit canceled more than 60 trains last week, mostly because equipment or personnel were not available, my colleague Patrick McGeehan reported.
It is starting to feel like a repeat of 2017's "Summer of Hell."
A bird's-eye view
More than 900,000 people commute on New Jersey Transit trains and buses each weekday.
The commuters heading to New York usually enter the city at Port Authority or Penn Station. Because they are near each other, a problem at one location can overwhelm the other with thousands of displaced travelers.
On a day in mid-June, problems with overhead wires stopped New Jersey Transit and Amtrak service in and out of Penn Station. Delays started about 10 a.m. and lasted into the evening. "Some passengers waited two hours before their trains began moving again," ABC 7 reported.
After the fire in Trenton on July 1, the National Guard was called to the station to prevent "people from entering the tracks and, later, kick people out due to overcrowding on the few trains that did arrive," according to CBS New York.
Then two days later, the garbage truck crash forced the Port Authority shutdown.
How much money would it take to alleviate problems on New Jersey Transit?
Nick Sifuentes, executive director of the Tri-State Transportation Campaign, an advocacy group, said it would cost about $700 million to bring New Jersey Transit into a state of good repairs.
Decisions made years ago caused the current problems, he added. "Decades of underfunding have left N.J. Transit scrambling to even make money to pay the people that work there, much less do any new big projects," he said.
And there are not enough people working there.
Last year, transit officials said they had to cancel hundreds of trains because they simply did not have the personnel needed for them to run. Gov. Philip D. Murphy of New Jersey said the shortage of train engineers was "a crisis in itself, one that has left countless thousands of commuters stranded by canceled trains."
What's next?
No one is building additional tunnels or train lines between New York and New Jersey.
New Jersey Transit said nearly a dozen new engineers were driving trains, and more were being trained.
From The Times
Richard Heathcote/Getty Images
The United States women's soccer team, which claimed its fourth World Cup title yesterday, will get a ticker-tape parade in New York City.
Jeffrey Epstein, the billionaire financier, is accused of luring girls to his Manhattan mansion and abusing them.
El Chapo earned $12,666,181,704, prosecutors say. They want him to pay it back.
For the first time in six years, every Democrat in the New York State Senate is working with the Democratic conference.
[Want more news from New York and around the region? Check out our full coverage.]
The Mini Crossword: Here is today's puzzle.
What we're reading
The Prospect Park Y.M.C.A., where Mayor de Blasio exercises, was closed because of contaminated water. [NY1]
A woman who celebrated her 114th birthday in Harlem over the weekend is believed to be the oldest person in America. [New York Post]
To win a cannoli-eating contest on Staten Island, how many do you have to eat? [SIlive.com]
A high school in Queens honored an alumnus, Luis Alvarez, who died days after testifying in Congress about the health care needs of Sept. 11 emergency responders. [Queens Chronicle]
Coming up today
Dissent Magazine releases its summer issue, "What Is the Nation Good For?" Writers discuss their essays at Verso Books in Brooklyn. 6:30 p.m. [Free]
The author Pamela Nadell discusses the figures in her book "America's Jewish Women," including the labor organizer Bessie Hillman and Justice Ruth Bader Ginsburg at the Museum of Jewish Heritage. 7 p.m. [Free]
Pete Davidson, Bill Burr and Judd Apatow perform a benefit show at the St. George Theater on Staten Island for Friends of Firefighters, an organization that provides free counseling services for members of the New York Fire Department. 9 p.m. [$45]
— Vivian Ewing
Events are subject to change, so double-check before heading out. For more events, see the going-out guides from The Times's culture pages.
And finally: A New York story about Marianne Williamson (with a cameo by Jay-Z)
Supporters of Marianne Williamson at a debate watch party. Supporters of Marianne Williamson at a debate watch party.
Holly Pickett for The New York Times
In 1965, a research psychologist at Columbia-Presbyterian Medical Center thought Jesus was talking to her.
"This is a course in miracles," the voice said to the research psychologist, Helen Schucman. "Please take notes"
Ms. Schucman, who trained at New York University and was living in Manhattan, obliged. The result was a book called "A Course in Miracles."
In the years since, countless people have found comfort and empowerment in the book. Among them was Marianne Williamson, one of the two dozen people running for president.
[Read about the New York text at the heart of Marianne Williamson's philosophy.]
At a Democratic presidential debate last month, Ms. Williamson looked into the camera and, in her closing remarks, said President Trump "harnessed fear for political purposes, and only love can cast that out." Then she promised: "I'm going to harness love for political purposes. I will meet you on that field. And, sir, love will win."
Sam Kestenbaum, writing in The Times, said Ms. Williamson's closing remarks were "drawing directly" from "A Course in Miracles." He described it as "a curious New York scripture that arose during the heady metaphysical counterculture of the 1960s."
The book begins: "Nothing unreal exists. Nothing real can be threatened. Herein lies the peace of God."
I have never read the book, but those words sounded familiar. Then I realized I had heard them before … in a rap song.
In the song "Drug Dealers Anonymous," the Brooklyn-born rapper Jay-Z says, "I'm a course of miracles with this [expletive] / Nothing real can be threatened, nothing unreal exists / Therein lies the piece of God."
My mom's family is Jewish, my dad's family is Muslim and I went to an all-boys Catholic high school. But, because of my obsession with politics and rap music, I've also been exposed to copious amounts of New York mysticism.
It's Monday — please take notes.
Metropolitan Diary: Classical act
 
Dear Diary:
I grew up in a small town in Kentucky in the 1950s. My parents knew nothing about classical music, but they thought they should offer it to their children. They acquired a long-playing record for that purpose, to no avail. At college, in Virginia, I was required to take a music appreciation class. Again, it got a big yawn from me.
In 1965, having moved to New York City in an act of blind optimism, I was riding in a yellow cab when I heard something on the radio that electrified me. I had to know what it was. I asked the driver.
"That's Bach," he said.
I have to hear a lot more of that, I thought. And I did.
Years later, I met a man through the Classical Music Lovers' Exchange. We had both listed "Don Carlo" as our favorite opera. I lived near Lincoln Center, and when he went to the opera with his brother, his brother would leave before the last act, handing me his ticket on the way out.
The man, whom I later married, had second-acted Broadway plays as a Stuyvesant High School student. Now I was last-acting the Metropolitan Opera.
— Sara Wotman
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