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Sep 14, 2016

DealBook | Today´s Top News - Dodd-Frank Rollback, Bridgewater Culture, Household Gains - September 14, 2016

The New York Times

Wednesday, September 14, 2016


 By Amie Tsang


The rollback of Dodd-Frank has begun.
A House committee has approved the Financial Choice Act, legislation that calls for changes to Dodd-Frank and that would repeal the Volcker Rule (which aims to prevent banks from making risky bets with their own money).
The vote was pretty much split along party lines, and the legislation is unlikely to be adopted this year but could influence broader debate about financial overhaul.
“It has been six years since the passage of Dodd-Frank,” said Jeb Hensarling, Republican of Texas and the chairman of the House Financial Services Committee. “We were told it would lift our economy, but instead we are stuck in the slowest, weakest, most tepid recovery in the history of the Republic.”
Representative Maxine Waters, a California Democrat, described the Financial Choice Act as “so bad that it simply cannot be fixed.” The Democrats also denounced proposals for changes to the Consumer Financial Protection Bureau. They said the enforcement action last week against Wells Fargo would have been weaker if the agency had not had the authority it did.
Quotation of the Day
“We are in a world where regulators want no risk no matter the costs.
— Steven Davidoff Solomon, Deal Professor, on the proposal by the Federal Reserve to ban merchant banking. Or, as he refers to it, bank-shaming.
Ray Dalio Defends Bridgewater Culture
Bridgewater Associates has been under scrutiny recently. But as far as the billionaire founder of the firm, Ray Dalio, is concerned, there is nothing wrong with the hedge fund’s “unusual” culture and “radical transparency.”
“Some people absolutely hate it, and some people could never work anywhere else,” he said.
Meetings at Bridgewater are taped so that everybody can see that “there’s no spin,” Mr. Dalio said.
But The New York Times reported on a sexual harassment complaint against it and a former employee described it as a “caldron of fear and intimidation.”
Mr. Dalio, though, insisted that the firm was just misunderstood. Speaking at an investment conference, he said: “Because we’ve sort of kind of kept it behind the scenes in a sense.”
U.S. Household Incomes Rise
Incomes rose, health insurance coverage spread and poverty fell. Hooray!
Well, maybe just a quiet hooray.
The economic recovery is incomplete:
• The median household income is still lower than in 2007 when adjusted for inflation.
• The number of people living in poverty is still elevated.
The gains could be stronger, even though inflation adjusted incomes have finally started to rise in a meaningful way for the mass of Americans.
As Eduardo Porter notes, this undermines Donald J. Trump’s pessimism about the American economy, though it does not justify unbridled celebration.
One other thing: The richest 5 percent still kept 21.8 percent of the income pie, illustrating how difficult it is for average workers to get ahead.
Coming Up
• Members of the European Parliament will debate the European Commission’s verdict on Ireland’s tax deal with Apple.
Contact amie.tsang@nytimes.com

 
Deals
Bayer Said to Close In on Deal with Monsanto
By THE FINANCIAL TIMES
Bayer and Monsanto are on the verge of agreeing to the largest takeover deal of 2016 to date, after the German company sweetened its offer to just under $130 a share, according to people with knowledge of the negotiations.
Chinese Brewer Said to Consider Bid for SABMiller Assets
By BLOOMBERG
China Resources Beer Holdings, which makes the Snow beer brand, is considering a bid for SABMiller assets in Central and Eastern Europe worth about $6 billion, according to people familiar with the matter.
Breakingviews
Hostile Takeover Battle Can Weaken a Company’s Defenses
By ROBERT CYRAN
Companies like Perrigo, AstraZeneca and DuPont have recently fought hostile bidders, leaving an opening for activist investors to force change.
2 Top Linde Executives to Depart After Merger Talks End
By CHAD BRAY
The German company said that its chief financial officer would leave Tuesday and its chief executive next year after its talks with Praxair ended.
 
Banking
Wells Fargo Chief Faults Some Employees for Sales Practices
By THE WALL STREET JOURNAL
The chief executive, John Stumpf, defended the company and the efforts it had taken to stop the behavior, which included opening accounts for customers without permission.
 
I.P.O.s
Japan Said to Seek $5 Billion from Rail I.P.O.
By BLOOMBERG
Japan’s government plans to privatize Kyushu Railway through a share sale that may fetch about $5 billion in what would be the nation’s biggest initial public offering this year, according to people with direct knowledge of the matter.
 
For the latest updates:
Go to NYTimes.com/DealBook
 
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Legal and Regulatory
Maurice Greenberg, American International Group’s former C.E.O.
Trial Begins for Maurice Greenberg, Ex-A.I.G. Chief Accused of Fraud
By RANDALL SMITH
Mr. Greenberg and Howard I. Smith go to court in an 11-year-old case that charges they orchestrated sham transactions intended to bolster A.I.G.’s financial statements.
The founder of Facebook, Mark Zuckerberg, below center, and other guests tried out virtual reality headsets at an Axel Springer event in Berlin in February. Facebook has more European users than American ones.
E.U. Rules Look to Unify Digital Market, but U.S. Sees Protectionism
By MARK SCOTT
The rules will put new pressure on American tech companies, but European officials say they will unite the Continent’s various national economies.
From left, Shelly Peiken, Michelle Lewis and Kay Hanley are members of the advocacy group Songwriters of North America.
Songwriters Sue Justice Department Over Licensing Rules
By BEN SISARIO
The Songwriters of North America group said in its suit that a Justice Department ruling last month was unconstitutional.
The benefit to be offered by Care.com represents a new approach to a longstanding problem for workers who receive income from multiple sources.
Care.com Creates a $500 Limited Benefit for Gig-Economy Workers
By NOAM SCHEIBER
The online marketplace for nannies and caregivers will divert a portion of its transaction fee to accrue money for health care or other needs.
A natural gas leak in October near Porter Ranch, Calif., spewed thousands of tons of methane into the air and forced the evacuation of more than 6,000 people.
Southern California Gas Reaches $4 Million Settlement Over Natural Gas Leak
By CHRISTOPHER MELE
A storage system spewed thousands of tons of methane and other chemicals into the air, forcing the evacuation of more than 6,000 people.
 
Business
Robert E. Allen, left, and James L. Barksdale announcing the merger of AT&T with McCaw Cellular Communications in 1994.
Robert E. Allen, Who Led an AT&T in Transition, Dies at 81
By DIANE CARDWELL
Mr. Allen was chief executive and chairman of the communications giant in the 1980s and ’90s as it acquired wireless and computer businesses.
Joseph A. Ripp at the New York Stock Exchange in 2014 as Time Inc. spun off from Time Warner.
Time Inc. Shakes Up Management, Replacing Chief Executive
By SYDNEY EMBER
Rich Battista was named president and chief executive, and the current chief executive, Joseph A. Ripp, will continue to lead the board.
Mark Carney, governor of the Bank of England, tests a new polymer 5-pound note by dipping it in a tray of food as he buys lunch at Whitecross Street Market in London.
Britain’s New 5-Pound Note Is Chewable, Washable and Harder to Fake
By DAN BILEFSKY
The bill, printed for more than a century on cotton paper, now comes in polymer, a thin, flexible plastic film that makes it more resistant to criminals.