Running out of options to fight a trade war with America, Beijing could instead hold up or kill takeovers that require its approval.
Good Monday morning. Lloyd Blankfein of Goldman Sachs will be speaking at our “Playing for the Long Term” conference on Nov. 1 at Jazz at Lincoln Center in Manhattan. It will be his “exit interview,” as he talks about his tenure, running the firm during the financial crisis and the transformation of Wall Street. Register to attend. (Was this email forwarded to you? Sign up here .)
The trade fight between the U. S. and China is showing little sign of ending: China’s foreign minister warned Secretary of State Mike Pompeo this morning that the U. S. should “ stop such misguided activities .” But with Beijing running out of ways to fight back, it may open a new front that could decimate corporate America’s deal-making.
The Chinese government could hold up or kill takeovers that require its approval, as happened when Qualcomm tried to acquire NXP Semiconductors. But more deals now risk suffering that fate — including Walt Disney’s purchase of 21st Century Fox and United Technologies’ acquisition of Rockwell Collins. (Deal-makers already said they were worried about the trade war .)
The strategy has risks. Alex Stevenson of the NYT notes that if China is seen as increasingly inhospitable to business, its already struggling economy could suffer more. (Beijing announced yesterday that it was injecting $175 billion into the economy to help prop it up.)
As Fred Hu, the chairman of the investment firm Primavera Capital Group, told the NYT, “China is trying to cultivate ties with” American business giants. It may not be able to have it both ways.
More China news: Chinese stocks fell, even after the economic intervention. David Einhorn of Greenlight Capital told investors that he dumped his stake in Apple over trade fears.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
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As calls to break up social media companies like Facebook grow, the entrepreneur and investor writes (on LinkedIn, the social network he co-founded) that the matter isn’t cut-and-dried:
Instead, he argues that there’s a bigger problem: “We haven’t agreed on a set of goals for how social media should impact civil society.” Before we rush to tear up Facebook, he writes, we should work out if social media can be changed to improve society — as happened to newspapers, radio and TV — by demanding more from the companies.
Mr. Hoffman concedes, though, that his approach would mean “a long and never-ending process.”
The American economists William Nordhaus and Paul Romer won the Nobel in economic science this morning. More from Binyamin Appelbaum of the NYT:
The economist Justin Wolfers tweeted that both men, long favored to win the Nobel someday, have studied contradictions at the heart of capitalism:
Things might be quiet. Many American companies will observe ( the controversial) Columbus Day. It’s also Canadian Thanksgiving.
Avoiding global warming is expensive. Dealing with the damage that it causes could be financially ruinous.
A new report from the U. N.’s scientific panel on climate change predicts that if greenhouse gas emissions continue at their current rate, the atmosphere would warm by as much as 2.7 degrees Fahrenheit above pre-industrial levels by 2040. That could cause as much as $54 trillion in damage, because of effects like worsening food shortages, wildfires and droughts.
To avoid that fate, the report urges huge transformations of the world economy in the next few years. That means taxing carbon dioxide emissions (perhaps as high as $27,000 per ton by 2100), investments in clean energy (of $2.4 trillion every year through 2035), and a complete end of coal use by 2050.
But such swift and unified change is politically unlikely, especially with President Trump intending to withdraw from the Paris climate agreement.
Bonus: A guide to negative emissions technologies .
High finance traditionally donates to Republicans over Democrats, with the G. O. P. having outraised its rival by more than $50 million over each of the last three election cycles. This year is proving to be different, according to the NYT: Wall Street is turning blue .
Traditional Republican donors like Paul Singer are still giving money to the party, but others have broken rank. Seth Klarman, the hedge fund billionaire, plans to give $20 million to Democrats. Other financiers are backing obscure Democratic candidates for Congress.
Some of Wall Street’s Democratic supporters say they’re driven by opposition to President Trump. Others see something else at work: “They just want to follow winners,” the conservative economist Stephen Moore told the NYT.
Workers at companies like Google, Amazon, Microsoft and Salesforce are rebelling. Concerns about their employers’ government work are prompting them to question their bosses — and the answers they’re getting are inspiring some to quit.
Take Jack Poulson, a research scientist alarmed by Google’s efforts to build a censored search engine for China. He took his concerns to Jeff Dean, the tech giant’s head of A. I. What happened, according to Kate Conger and Cade Metz of the NYT:
The next day, Dr. Poulson quit.
It may be hard for these tech giants to find replacements, as well. The NYT added that some students are asking similar questions — before they even join the work force.
Mr. Ballmer joined Microsoft early, amassed a huge fortune, then bought the L. A. Clippers for $2 billion. Not bad. In an interview with the WSJ, the former Microsoft C. E. O. recounted his greatest hits and misses .
• His best bet: Quitting Stanford’s business school to join Microsoft, obviously.
• His worst bet: Investing in furniture. He sold tens of millions worth of Microsoft stock to buy two furniture retailers, and both went bankrupt. Had he held onto his shares, his fortune — estimated by Forbes at $43.5 billion — would have been even bigger.
Mr. Ballmer’s bottom line? “Stick with what you know. Or really dedicate yourself to learning something new.”
Bodo Ueber is stepping down as Daimler’s C. F. O.
Analysts say that potential candidates to succeed Paul Polman as Unilever’s C. E. O. include Nitan Paranjpe, the company’s food and refreshment unit, and Amanda Sourry, its head of North America.
Deals
• Saudi Arabia’s crown prince, Mohammed bin Salman, said that Saudi Aramco would go public by 2021. ( Bloomberg)
• Silicon Valley venture capitalists have backed nicotine start-ups. But Juul was a step too far. ( NYT)
• Shares in Elastic, a Dutch fintech company, nearly doubled in their first day of trading Friday. ( Fortune)
• Private equity is raising huge infrastructure funds — despite finding little to invest in. ( WSJ)
• How Fidelity plans to rule the investment industry in a time of robo-advisers and exchange-traded funds. ( Barron’s)
Politics and policy
• State attorneys general are suing Navient, because the Trump administration eased up on the student lender. ( NYT)
• The Trump administration isn’t saying if it will give the International Monetary Fund more money.
