DealBook Briefing: How Deutsche Bank Dealt With Demands for Trump Records

DealBook Briefing: How Deutsche Bank Dealt With Demands for Trump Records

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Deutsche Bank has Trump’s records ready

President Trump sued his longtime lender on Monday to block a subpoena from the House Intelligence and Financial Services Committees for documents about his finances.

David Enrich of the NYT pulls back the curtain on how Deutsche Bank has handled the situation:

• “Deutsche Bank officials have been working closely with investigators from the chamber’s Financial Services and Intelligence Committees to identify information that might assist their investigations into the president, according to people familiar with the discussions.”

• “Bank officials have told The Times that they were eager to provide the materials to Congress. In part, they said additional transparency might help squelch speculation that Deutsche Bank had served as a conduit for Russian money to get to Mr. Trump.”

• “Lawyers for the bank worked with congressional staff members to narrow the scope of the subpoena to make it easier for the bank to quickly produce the requested materials, according to the people.”

• Bank officials have “compiled reams of materials to hand over. Included in those documents are multiple pages from each of Mr. Trump’s annual federal tax returns.”

Maybe they’ll never be shared. But “the heads of the two committees that issued the subpoena, Representatives Maxine Waters and Adam B. Schiff, called the suit ‘meritless’ and an attempt to obstruct congressional oversight,” Mr. Enrich writes.

Facebook gives privacy prominence

At its annual developer conference yesterday, Facebook unveiled a revamp of its mobile app and desktop site that is designed to help it overcome criticism and shift its business toward more private communications, Mike Isaac of the NYT writes.

• “Users can more easily message one another and share news and other items with members of private groups on the site.”

• The company is “working to integrate and encrypt Facebook’s different messaging services, which include WhatsApp and Messenger.”

• It also “plans to continue emphasizing its Stories product, which allows people to post updates that disappear after 24 hours.”

• “And it unveiled a spare, stark white look for Facebook, a departure from the site’s largely blue-tinted design.”

This is the most visible sign of change yet from the company since it became bogged down in privacy and data scandals.

The features “will end up creating a more trustworthy platform,” Mark Zuckerberg told the NYT. “Everywhere you can see and connect with friends, you’ll be able to see and connect with groups; it’s going to be woven into the fabric of Facebook.”

But it also raises questions. Here’s three: How will Facebook make money from private messaging? Is this just a way of offloading responsibility for content moderation? And how quickly can it change? In an interview with the WaPo, Mr. Zuckerberg said that building private platforms “with the richness that the public platforms have had to date” could take five to 10 years.

Warren Buffett helps Occidental

Occidental said yesterday that Warren Buffett’s Berkshire Hathaway had committed to investing $10 billion to help it buy Anadarko.

Mr. Buffett’s cash (and blessing) could help Occidental beat Chevron, which has offered $33 billion for Anadarko compared with Occidental’s $38 billion. Analysts at Raymond James wrote that Anadarko’s board could consider Berkshire’s involvement “an intangible but potentially valuable factor.”

It would come at a price. Berkshire would receive preferred shares that pay an annual dividend of 8 percent, ensuring that Mr. Buffett would be paid handsomely for his approval. And Occidental couldn’t redeem those shares for at least a decade.

But it might be worth it. One of Occidental’s major shareholders, T. Rowe Price, told Barron’s after the Berkshire announcement that it still opposed buying Anadarko. But the WSJ reports that Mr. Buffett’s investment could help Occidental reshape its bid so that it no longer needs a shareholder vote to proceed.

U.S.-China trade talks approach an endgame

Treasury Secretary Steven Mnuchin and Robert Lighthizer, the U.S. trade representative, are meeting today with a vice premier of China, Liu He, for the latest set of trade talks. They say they are hopeful of a deal, but the U.S. may have to make some big compromises.

China appears reluctant to yield control of data. “Despite months of pressure from the White House, Chinese negotiators have so far refused to relax tight regulations that block multinational companies from moving data they gather on their Chinese customers’ purchases, habits and whereabouts out of the country,” Ana Swanson of the NYT writes.

America may soften its cybersecurity demands. “Donald Trump has dropped a central demand from trade negotiations with China that it halt alleged instances of commercial cyber theft,” the FT reports. “The U.S. is instead likely to accept a watered-down commitment from Beijing as an alternative.”

And the two must reach agreement on tariffs. “How and whether to remove the tariffs the two governments imposed in the earliest phases of the dispute are now at the forefront of the talks,” the WSJ reports. “At issue is how much of the tariffs the U.S. levied on $250 billion of Chinese goods will be removed.” The U.S. wants to leave some in place, while China would like them removed.

More talks next week in Washington could yet prove to be the final round of discussions required to reach an agreement that could end the trade war.

At Apple, iPhones falter and services soar

Apple said yesterday that slumping iPhone sales shrank its profit 16.4 percent, to $11.56 billion, in the latest quarter compared with a year ago, Jack Nicas of the NYT writes.

• Sales of iPhones “fell 17.3 percent from the same period a year ago, to $31 billion, in part because of a larger drop in revenue in the China region.”

• “The company’s services revenue, which includes app sales, grew 16.2 percent to $11.45 billion.”

Wall Street wasn’t worried. Traders had anticipated the iPhone slowdown. Apple’s share price rose about 5 percent after hours.

And there are signs of an iPhone rebound thanks to “price cuts, the Chinese government’s economic stimulus, and loosening trade tensions with the United States.” Apple said it expected revenue of $52.5 billion to $54.5 billion this quarter, above analysts’ forecasts.

The company also plans to buy $75 billion of its own stock. Investors will welcome that, and it’s likely to push up the share price. But critics see buybacks as a way to line the pockets of wealthy shareholders rather than raising pay or improving R.&D.

The Fed won’t give Trump what he wants

When Fed officials conclude a two-day meeting today, expect them to leave interest rates unchanged — and ignore continued pressure from President Trump, Jeanna Smialek of the NYT writes.

Mr. Trump tweeted yesterday that the Fed should lower rates by a percentage point and resume its crisis-era bond-buying program. It’s part of his effort to browbeat the central bank into juicing the economy, which would improve his re-election chances.

But Fed officials will likely remain cautious. “They’re in a good place,” Michael Feroli, the chief U.S. economist at JPMorgan Chase, told the NYT. He pointed to the American economy’s healthy economic growth as reason for the Fed to leave things as they are.

The Fed may also be keen to avoid appearing political. Jan Hatzius, Goldman Sachs’s chief economist, wrote in a note last week, “Fed officials would likely worry about the risks that a rate cut could appear political or unnerve markets.”

We’ll find out more at 2 p.m. Eastern, when the Fed releases its monetary policy statement.

Revolving door

Eric Schmidt, Alphabet’s former C.E.O., and Diane Greene, the former head of Google’s cloud business, will step down from the company’s board.

The speed read


• Altice USA, the cable operator, agreed to buy the streaming-video network Cheddar for $200 million. (WSJ)

• For WeWork, an I.P.O. could help it continue to raise the enormous piles of cash it needs to keep up its growth rate. (WSJ)

• Uber’s I.P.O. roadshow hit New York, and the company countered questions about slowing growth with promises to spend and diversify aggressively. (FT)

• The health savings company HealthEquity offered to buy the employee benefits administrator WageWorks at a valuation of around $2 billion. (Reuters)

• David Cameron, the former British prime minister, has reportedly failed to raise the cash he needs for a planned $1 billion China investment fund. (FT)

Politics and policy

• More Republican senators suggested that they would oppose Stephen Moore’s nomination to the Fed board, casting doubt on his chances. (WSJ)

• Robert Mueller objected to William Barr’s early description of the Russia investigation’s conclusions, expressing “a frustration over the lack of context.” Mr. Barr appears before the Senate Judiciary Committee today to discuss the report — you can read his prepared testimony here. (NYT, Axios)

• Mr. Barr has recused himself from the Justice Department’s deliberations on the Sprint-T-Mobile merger. (Reuters)

• Mr. Trump and Democratic congressional leaders have agreed to pursue a $2 trillion infrastructure plan. (NYT)


• President Trump accused Cuba of aiding the Venezuelan government and warned that the U.S. would impose a “full and complete embargo” and additional sanctions on the country if it continued to do so. (NYT)


• Shares of Alphabet, Google’s parent company, suffered their worst performance in over six years after its quarterly results on Monday, which showed growth slowing. (WSJ)

• A federal judge approved a new deal between Elon Musk and the S.E.C. on how the Tesla chief executive can use Twitter. (WSJ)

• Sri Lanka’s president lifted the nation’s ban on social media. (NYT)

• Amazon has introduced a new Middle East marketplace, by rebranding Souq — an e-commerce company it bought in 2017 — in some countries. (CNBC)

• Huawei seeks acceptance in the West, but its structure and value system — patterned after the Communist Party’s — could stand in the way. (NYT)

Best of the rest

• The eurozone economy defied trade conflicts, a slowdown in China and uncertainty over Brexit last quarter to register its best growth since early last year. (NYT)

• G.E. is burning less cash as it continues to streamline its operations. (WSJ)

• Government economists are sizing up a new way to track the economy: Big Data. (WSJ)

• Wynn Resorts will be allowed to open a new casino in Massachusetts, but is being fined $35 million by the state’s gambling regulators over the way it handled allegations of sexual misconduct against its founder and former C.E.O., Steve Wynn. (WSJ)

• A former Barclays trader claims that the bank fired him for misconduct after he blew the whistle about internal risk controls. (Reuters)

• An Apollo Global Management executive secretly worked on a bid for a life insurance company — in competition with Apollo. (FT)

• The British news outlet The Guardian made an operating profit for the first time in 20 years. (BBC)

• The Obamas’ production company unveiled its projects for Netflix, including several documentaries and a movie about Frederick Douglass. (NYT)

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