Good Wednesday morning. This just in: Bank of America reported $2.4 billion in fourth-quarter profit, as well as a $2.9 billion charge tied to the new tax law. Goldman Sachs reported a $1.9 billion loss, and a $4.4 billion tax charge. And whither tech giants and antitrust?
That’s the provocative question posed by Greg Ip of the WSJ. And it reflects governments’ growing wariness toward the tech industry.
Google, Amazon and Facebook aren’t like the Standard Oil or AT&T of old, gouging consumers on price. (Indeed, many of their services are free.) But if the question is “Are consumers better off?” then could there be an opening for regulatory action?
More from Mr. Ip:
Where tech has support: In its efforts to keep net neutrality regulations, with a lawsuit against the F.C.C. by 22 state attorneys general and a bill by Senate Democrats to undo the repeal using the Congressional Review Act.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.
Let’s recount the hits that U.S. banks took from the tax overhaul:
• Citigroup: $22 billion
• JPMorgan Chase: $2.4 billion
• Goldman Sachs: $4.4 billion
We’ll ignore Wells Fargo for now (it gained). The bigger point is that, thanks to lower corporate rates and preferential treatment for pass-through entities, financial institutions are some of the new code’s biggest winners.
More from Jim Tankersley of the NYT:
The conglomerate itself isn’t planning on going that far just yet.
Here’s John Flannery, its chief, on a conference call yesterday:
Mr. Flannery didn’t say anything out of line with his past remarks. It’s just that he said it as G.E. announced an unrelated $6.2 billion charge connected to its legacy insurance portfolio.
Other conglomerates, from Honeywell to United Technologies to Tyco, have explored restructuring to varying degrees, as Wall Street analysts question the viability of the model.
G.E. and its advisers are still thinking about how to reshape the 125-year-old group, whose complexity may mask yet more problems. The company promises an update in spring, and is unlikely to announce something that only fiddles around the edges. But don’t expect plans for it to become three or four fully separate companies.
Critics demand more boldness
• Lex writes, “Once a paragon of management acumen, it is now a rolling train wreck of unexpected and expensive blunders.” (FT)
• Brook Sutherland writes, “The reasons for keeping G.E. together — shared resources and technology — look increasingly tenuous.” (Gadfly)
• Justin Lahart and Spencer Jakab write, “The problem is that G.E.’s parts might be worth a lot less than even the company’s sharply diminished value today.” (Heard on the Street)
The deadline: 12:01 a.m. Eastern on Saturday
• Immigration, of course: President Trump still insists on funding for a border wall and Democrats are fuming over his comments on African countries.
• Republicans are weighing whether to use funding for the Children’s Health Insurance Program as a carrot — or stick — for Democrats to join a stopgap funding measure.
The state of play
Red-state Democrats are uneasy about allowing a shutdown in an election year. Some Republicans are irked by a stream of temporary funding resolutions, rather than a full agreement that would permit more military spending.
House Speaker Paul Ryan’s proposal for a continuing resolution — which includes delays to several health care taxes in addition to CHIP funding — has support among many, but not all, Republicans. It has little among House Democrats.
The politics flyaround
• Steve Bannon has been subpoenaed by both Robert Mueller and the House Intelligence Committee. (NYT)
• The C.F.P.B. will reconsider rules on high-interest payday loans, in a potential win for the industry. (WSJ)
• N.Y. Governor Andrew Cuomo unveiled a state budget meant to counter the tax-code changes that hurt high-tax states: “Washington hit a button and launched an economic missile and it says ‘New York’ on it, and it’s headed our way.” (NYT)
• Support for the new tax code has grown, according to a SurveyMonkey poll. (NYT)
• G.M.’s chief, Mary Barra, urged Mr. Trump to be cautious about withdrawing from Nafta. (NYT)
• How Michael Wolff got into the White House. (Bloomberg)
The biggest thing about virtual currencies isn’t how much their prices rise (or fall). It’s the technology that makes them work, argues Steven Johnson in the NYT Magazine.
More from Mr. Johnson:
We’ll count him as a skeptic: Dick Kovacevich, the former Wells Fargo C.E.O., told CNBC that he thinks Bitcoin is “a pyramid scheme” that “makes no sense.”
Beware cryptoheists: North Korea looks to be using the same malware found in the Sony Pictures hack and the Wannacry assault against digital currency investors.
Virtual currency quote of the day, from Bloomberg:
Issue one: Some potential buyers may want to pick up the troubled studio through the bankruptcy process, to cleanse it of legal liabilities.
Issue two: Advocates for women who have brought allegations against Harvey Weinstein worry that could deny them justice.
More from Jonathan Randles and Peg Brickley of the WSJ:
But it’s complicated. A bankruptcy filing could provide legal structures for Mr. Weinstein’s accusers, like a judge’s supervision of sales and settlements.
A suitor from the past: Among the bidders is the previous studio founded by the Weinstein brothers, Miramax, according to Bloomberg.
What about RICO? DealBook’s White Collar Watch takes a look at using the racketeering law against Mr. Weinstein and his company:
• Nestlé finally struck a deal to sell its U.S. confectionary business, with Ferrero paying $2.8 billion. Gadfly asks if Hershey should jump on the deal bandwagon. (NYT, Gadfly)
• Qualcomm had a busy deal day yesterday. It made its case against Broadcom’s $105 billion hostile bid, as its own $38.5 billion offer for NXP Semiconductor was rejected by the money manager Ramius. (Qualcomm, Ramius)
• Silver Lake put up a hefty $1.7 billion equity check as part of its $3.5 billion bid for Blackhawk Network. (NYT)
• Celgene is in talks to buy Juno Therapeutics, maker of a cancer treatment, according to unidentified people. (WSJ)
• Bill Miller, the value investor who beat the S. & P. 500 15 years running (and whose faith in banks was mocked in the movie “The Big Short”), has donated $75 million to the philosophy department of Johns Hopkins University. (NYT)
• YouTube said it had altered the threshold at which videos could accept advertisements and pledged more oversight of top-tier videos. It’s said similar things before. (NYT)
• Amazon has advertised for an expert in health privacy regulations, suggesting it plans to work with outside partners that manage personal health information. (CNBC)
• A federal judge indicated he would approve a $290 million settlement by Pershing Square Capital Management and Valeant Pharmaceuticals with Allergan shareholders who accused them of profiting improperly from a failed takeover bid. (WSJ)
• Informa, which owns the shipping journal Lloyd’s List, is in talks to buy the exhibitions and events company UBM, creating a company worth more than 9 billion pounds, or about $12.4 billion. (FT)
• The National Retail Federation’s annual trade show is starting to look more like CES. (NYT)
• Joseph A. Rice, who fought a hostile takeover of the Irving Bank Corporation as its chairman and chief executive in the 1980s, died on Jan. 8 at 93. (NYT)
• Greenlight Capital’s David Einhorn is betting on Twitter, saying revenue should grow after user-experience improvements. (Bloomberg)
• Melrose Industries, which specializes in turning around manufacturers, has made a hostile public bid worth about $10 billion for GKN, a British maker of aerospace and automotive parts that could face trading issues as Brexit looms. (Bloomberg)
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