DealBook Briefing: The Fall of Theranos Is Nearly Complete


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He supports a strong dollar and tariffs that make exceptions for allies like Canada and Mexico. And he’s in favor of permanently extending the Republican tax cuts for individuals.

As for his stance on China, here’s what he told CNBC:

“A thought that I have is the United States could lead a coalition of large trading partners and allies against China, or to let China know that they’re breaking the rules left and right.”

One thing to watch for: whether his past admission of substance abuse would affect his work. “We’ll see how that plays out,” Mr. Kudlow said.

Critics’ corner: Mark Hamrick,’s senior economic analyst, writes, “It remains to be seen whether Kudlow can step into the role of a virtual moderating influence in this administration.” And Noah Smith of Bloomberg View asserts, “It also seems like there are just so few credible economic thinkers willing to stand up and sign their name to the Trump economic agenda.”

Elsewhere in economic policy: U.S. companies have few ways around the proposed metals tariffs. And U.S. allies might emphasize their toughness against China to win tariff exemptions.

Some of Mr. Kudlow’s economic predictions that did not bear out.

Mr. Kudlow has prognosticated on many economic and political issues, often in a way that mirrors his future boss. His predictions, which will soon carry new weight as the president’s top economic adviser, have not always been on the mark.

Our colleagues Deborah Solomon and Kitty Bennett take a look at some of Mr. Kudlow’s not-so-on-the-money calls. Here are a few of the ones they found:

In 2005

“All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Fla., to bring down the consumer, the rest of the economy and the entire stock market.”

(Well, we all know what happened. By 2008, home prices were in a free-fall, threatening to plunge the financial system and the economy into the abyss.)

In 1993

“There’s no question that President Clinton’s across-the-board tax increases on labor, capital and energy will throw a wet blanket over the recovery and depress the economy’s long-run potential to grow.”

(The period between 1990 and 1999 was the longest bull market in history. The S&P 500 more than tripled during that time.)

In 2015

“Given the recent rise of presidential candidate Donald Trump, we should all be thankful that stocks haven’t plunged. Trump’s agenda of trade protectionism, dollar devaluation, and immigrant deportation is completely anti-growth. It’s like Fortress America in an economy that is completely globalized and where the U.S. must compete in the worldwide race for capital and labor. Trump’s policies don’t fit.”

(President Trump was elected and the stock market has only climbed. )

The politics flyaround

• How Steve Schwarzman of Blackstone became a close adviser to President Trump on China — but lost the tariff battle. (WaPo)

• After Rex Tillerson’s firing, Washington is wondering if H.R. McMaster, John Kelly or Jeff Sessions might go next. And allies are hoping that the cabinet reshuffle will clarify American foreign policy.

• Moving from the C suite to Washington is tougher than it looks. (WSJ)

• The Democrat Conor Lamb narrowly won a special House election in southwestern Pennsylvania, an area that Mr. Trump carried handily in 2016. (NYT)

• The administration is considering Randy Quarles, the Fed’s vice chairman for supervision, as the next head of the Financial Stability Board, unnamed sources say. (FT)

• Mr. Trump has discussed including protections for Dreamers in a spending bill. (WSJ)

• A Trump Organization lawyer was involved in an arbitration proceeding involving Stormy Daniels, according to documents. (WSJ)

• Jeff Sessions is considering whether to fire the former F.B.I. deputy director Andrew G. McCabe days before he would retire, unnamed sources say. (NYT)


Drew Angerer/Getty Images

Why did John Skipper leave ESPN abruptly?

An extortion plot related to his cocaine addiction.

Mr. Skipper told The Hollywood Reporter:

“In December, someone from whom I bought cocaine attempted to extort me.”

“They threatened me, and I understood immediately that threat put me and my family at risk, and this exposure would put my professional life at risk as well. I foreclosed that possibility by disclosing the details to my family, and then when I discussed it with Bob, he and I agreed that I had placed the company in an untenable position and as a result, I should resign.”

Alibaba is exploring a China listing.

The WSJ reports that the Chinese online shopping giant is working on a plan to list shares in its home market. Such a listing would come nearly four years after Alibaba went public on the New York Stock Exchange, in what is the still the world’s largest initial public offering.


• A secondary listing could happen as soon as this summer, The WSJ reports.

• China’s security regulators would have to change rules that bar foreign companies from listing in the country. Alibaba is incorporated in the Cayman Islands.

• China also doesn’t allow companies with dual-class share structure to list in the country.


Alibaba’s plans come as “Chinese authorities are trying to lure some of the country’s technology stalwarts back to its capital markets,” The WSJ reports. Alibaba’s stock has jumped nearly 200 percent since it went public in 2014, gains that most Chinese investors have missed out on.

Shares of Alibaba are up 3.1 percent Thursday.


Representative Jeb Hensarling of Texas is among those who will decide whether to push for a more aggressive rollback of Dodd-Frank.

Al Drago for The New York Times

The Dodd-Frank rollback takes an onward step

The Senate, in a rare show of bipartisanship, voted 67-31 to relax regulations on small to medium-sized banks. What the bill includes:

• Raising the threshold for “systemically important” banks to $250 billion in assets, up from $50 billion

• Exempting firms with less than $10 billion in assets from the Volcker rule

But the House may want a more aggressive version that would curtail the power of the Consumer Financial Protection Bureau. That could endanger the proposed overhaul, with the analyst Brian Gardner telling the NYT, “If the House overreaches in its effort to amend the Crapo bill, it could slow down the bill’s progress.”

Elsewhere in banking: Why another Bear Stearns-like collapse isn’t likely, but another crisis is. And Wells Fargo paid its C.E.O., Timothy Sloan, $17.4 million last year.


Eduardo Munoz/Reuters

Toys “R” Us is one of Amazon’s biggest casualties

The 70-year-old company’s plans to close or sell its stores in the U.S. and Britain show how hard life has become for bricks-and-mortar retailers. The collapse could put over 30,000 U.S. jobs at risk.

More on what happened from Michael Corkery of the NYT:

Weighed down by the debt that its owners heaped on the company when they bought it, Toys “R” Us has not adequately invested in its fading stores and e-commerce operations. Unable to compete with other retailers, it has lost market share to better capitalized toy sellers.

Speaking of Amazon: The company has become shorthand for “disruption” across industries.


Glenn Harvey

Tech companies are growing up (slowly)

The current generation of Silicon Valley giants started out with an ethos of revolution first, fixes afterward. (Remember Facebook’s “move fast and break things” motto?) But Facebook, Google and others are becoming more bureaucratic, according to our columnist Kevin Roose — and that’s a good thing.

Among the latest signs of change in their attitudes:

• Facebook’s taking down accounts related to Britain First, a far-right group accused of inciting anti-Muslim hatred, and talking about the limits on its commitment to being an open platform.

• YouTube plans to put info from Wikipedia alongside conspiracy videos (even if it didn’t tell the Wikimedia Foundation).

The tech flyaround

• Siri made its debut before it was ready, former Apple executives assert, and internal struggles at the iPhone maker have left its voice assistant behind Amazon’s Alexa and the Google Assistant. (The Information)

• As President Trump toughens his trade stance, the European Union is increasing scrutiny of U.S. tech companies. (WSJ)

• Dropbox expects its gross margins to eventually exceed 76 percent, it told potential investors at its I.P.O. roadshow. (CNBC)

• Lyft will work with the auto supplier Magna International on self-driving car systems. (NYT)

• Bitcoin is losing its buzz. (Bloomberg)

• Spotify has struggled to turn a profit: Revenue is up, but so are royalties and other costs. (FT)

• Antitrust regulators in Japan raided Amazon’s offices. (FT)

• The Air Force has split $640 million in satellite-launch contracts between SpaceX and a joint venture of Boeing and Lockheed Martin. (WSJ)


Deidre Schoo for The New York Times

Warby Parker takes yet more steps toward an I.P.O.

The signs that the hip eyewear emporium is heading toward a public market listing (timing T.B.D.):

• It raised $75 million at a valuation of about $1.75 billion in a new round led by T. Rowe Price, which has invested before but is known for putting money in at the pre-I.P.O. stage.

• It has added Prof. Youngme Moon of Harvard Business School as an outside director.

• It expects 2018 to be its first year of profitability.

What Neil Blumenthal, a Warby Parker co-founder, told Michael:

“Our objective is to build a brand that will have large-scale impact on the world, and we think being independent is important to that. But we don’t have a timeline in place.”

The deals flyaround

• Parachute Health, which makes software for ordering medical equipment, has raised $5.5 million from a group of investors, including Greater New York Hospital Association Ventures and Loeb Holding.

• iHeartMedia finally filed for bankruptcy protection after reaching a deal with creditors to reorganize its $20 billion debt. (WSJ)

• Disney is restructuring to accommodate the assets it expects to acquire from 21st Century Fox. (NYT)

• Airbus said it would be nearly impossible to work with Melrose Industries if it succeeded in a hostile bid for British engineering firm GKN. (FT)

• Atlantia and ACS are buying Abertis of Spain together. (FT)

• SJW Group is reportedly in talks to buy Connecticut Water Service, creating America’s third largest publicly traded water provider. (WSJ)

• First Cobalt of Canada has agreed to combine with U.S. Cobalt; electric car batteries are raising demand for the metal. (FT)

• Nordic Capital is buying the Scandinavian payment firm Trustly, valuing it at about $867 million. (FT)

• Credit Karma is buying Penny, an instant-message bot. (Recode)

Revolving Door

• Société Générale’s deputy C.E.O., Didier Valet, has stepped down as the U.S. investigates what role the bank had in Libor manipulation. (FT)

• The investor Josh Elman is joining the stock-trading app Robinhood as chief product officer. He will remain a partner at Greylock. (TechCrunch)

The speed read

• More stock trades are taking place in the last minutes of trading each day than ever before. (WSJ)

• Unilever will make Rotterdam in the Netherlands its sole headquarters; the other one was in London. (NYT)

• How C.E.O.s manage under pressure. (FT)

• Och-Ziff Capital Management Group is closing its European hedge fund. (Bloomberg)

• CNN is moving Chris Cuomo to evening from morning to shore up its prime-time programming. (NYT)

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