Is This the Next Leader of the Fed?

Good morning. Fears about the spread of the coronavirus whacked stock futures this morning — and led to the cancellation of Mobile World Congress. More on that below. (Want this in your inbox each morning? Sign up here.)

Judy Shelton, who has been nominated to the central bank’s board of governors, is scheduled to testify before the Senate today.

She is a contentious choice for the job, Jeanna Smialek of the NYT notes:

• Ms. Shelton has questioned whether America needs the Fed at all.

• She favors pegging the value of the dollar to something like gold, an idea the U.S. abandoned decades ago.

• She’s seen as open to bending her ideological positions to please President Trump, eroding the Fed’s political independence.

But she appears to be moving into a prime position to become the next Fed chair if Mr. Trump wins re-election, Ms. Smialek adds. The president has openly derided the current chairman, Jay Powell, and could well pick someone more in tune with him ideologically when Mr. Powell’s term is up in 2022.

Washington speculation had focused on a different candidate for Fed chair: Kevin Warsh, who was on the central bank’s board during the financial crisis. Mr. Trump has praised Mr. Warsh before, but some wonder whether a strong performance by Ms. Shelton today would give her the inside track.

BP announced yesterday that it plans to be carbon-neutral by 2050, an ambitious target for one of the world’s biggest energy companies. What that actually means, however, is up for interpretation.

The oil giant’s proposal is its latest climate-minded initiative, with a twist. Not only is the company seeking to reduce its own carbon emissions, it said, but it also wants to offset the emissions from use of the oil and gas that it produces.

The proposal is more complicated than it looks. It has to do with the “scope” of emissions targeted by the plan: The bulk of pollution created by BP’s products are generated when customers burn the fuels, which are called Scope 3 emissions. BP’s net-zero pledge covers only its more direct operations, although the company plans to reduce Scope 3 emissions significantly.

Barclays disclosed this morning that British financial regulators have opened an investigation into ties between its chief, Jes Staley, and the late financier Jeffrey Epstein.

The context: The two men had known each other since at least 1999, when Mr. Staley led JPMorgan Chase’s private bank, where Mr. Epstein was a client. The financier had helped funnel dozens of wealthy clients to Mr. Staley, and the two men stayed in touch even after Mr. Epstein was accused of sexually abusing scores of women.

Mr. Staley has the backing of the Barclays board, for now. The bank said he had been “sufficiently transparent” about the nature of his ties to Mr. Epstein, and the C.E.O. said that he hadn’t had any contact with the disgraced financier since taking up his post in December 2015.

Mobile World Congress, the annual jamboree for the telecom industry in Barcelona, was canceled yesterday over fears about the coronavirus outbreak. It raises an interesting question: Do these kinds of conferences matter?

Last year, MWC drew around 110,000 attendees (including 7,900 C.E.O.s) from 200 countries. Cancellation of this month’s edition was inevitable, after major exhibitors like Nokia, Ericsson and Amazon pulled out over the past week or so.

This presents a natural experiment in the value of industry events, seen by some as essential for networking and deal making and by others as price-gouging junkets. Thousands of meetings that would’ve taken place at MWC this year now won’t happen, which could have knock-on effects later in the year. (Or not.)

The view from a veteran: We spoke with Ben Wood, a telecom analyst at CCS Insight in London who would have made his 23rd consecutive appearance at MWC this year.

• For the companies that blow huge portions of their marketing budgets on MWC, “if you find that you can cope without going, and the costs associated with it, you may choose to deploy your resources in different ways,” he told DealBook.

• That’s harder for small companies that rely on “serendipitous moments” with big buyers or potential partners wandering the halls of events like MWC, he added.

No touching. In the meantime, conference etiquette will change. The organizers of a big tech event in Amsterdam now underway praised attendees for “safe greeting practices such as fist or elbow bumps.” Generally speaking, it must be said, handshakes are incredibly unhygienic.

Tidjane Thiam delivered his final earnings call as the Swiss bank’s chief this morning, after being pressured to resign amid controversy over a spying scandal.

He presented the growth in net income of 69 percent as the result of his changes in the structure and strategy at the company. “We’ve built something of quality, the numbers are coming through,” he said at a press conference.

There was a notable moment of reflection on his uneasy tenure at the bank, notes the NYT’s Amie Tsang, who was listening in on the call. “There are differences within Switzerland in how people feel about me,” Mr. Thiam said. “Every second I’ve done the best I could. I am who I am, I cannot change who I am.”

President Trump has openly dismissed climate change activists as “prophets of doom.” But Marc Benioff of Salesforce managed to win him over on one particular environmental initiative, Lisa Friedman of the NYT writes.

Mr. Benioff pitched Jared Kushner, a top White House adviser and Mr. Trump’s son-in-law, about the initiative to plant one trillion trees to help offset carbon emissions. The idea eventually — and unexpectedly — wound its way into Mr. Trump’s speech to the World Economic Forum in Davos, Switzerland, last month.

“Trees are the ultimate bipartisan issue,” Mr. Benioff told the NYT. “Everyone is pro-tree.”

There are two lessons to draw from this:

• Successfully lobbying Mr. Trump is an unconventional process that involves back-channeling with trusted advisers.

• The idea of one trillion trees appears to have taken hold with the president because, as Ms. Friedman notes, “it was practically sacrifice-free.”

The Amazon chief has continued his real estate splurge with two new acquisitions, according to Katy McLaughlin and Katherine Clarke of the WSJ:

• David Geffen’s palatial Los Angeles home, which Mr. Bezos bought for $165 million — setting a record for the city in the process.

• A plot of undeveloped land in the L.A. area, purchased from the estate of the Microsoft co-founder Paul Allen.

They follow Mr. Bezos’ $80 million purchase of the top four floors of a Manhattan apartment building last year, reportedly with the goal of turning them into a gigantic pied-à-terre.

It’s a windfall for Mr. Geffen, who bought the L.A. mansion — the former estate of the movie mogul Jack Warner — for $47.5 million in 1990.


• The parent company of T-Mobile reportedly wants to renegotiate the price of its takeover of Sprint. (FT)

• The venture capital firm Battery Ventures has raised $2 billion for its two latest funds, which will focus on investments in enterprise software companies. (Bloomberg)

• Meet the Korean hedge fund that scored big by backing “Parasite,” the movie that won the Academy Award for best picture. (Bloomberg)

Politics and policy

• Moderate Democratic leaders are slowly warming up to Mike Bloomberg as Senator Bernie Sanders becomes the front-runner in the party’s presidential race. (NYT)

• Larry Ellison of Oracle is doing a rare thing in Silicon Valley: hosting a fund-raiser for President Trump. (Recode)

• The Education Department is reportedly investigating Harvard and Yale over their sources of foreign funding. (WSJ)


• The Justice Department’s antitrust chief, Makan Delrahim, has reportedly said in private conversations that he expects a criminal antitrust case in Silicon Valley in the next few months. (Hollywood Reporter)

• Read up on Mark Zuckerberg’s approach to crisis management. (Wired)

• Britain plans to give its media regulator additional oversight over internet content. (NYT)

• Huawei of China is said to be in talks to fund research into 5G wireless technology at the London School of Economics — for £105,000, or $136,000. (FT)

Best of the rest

• Massachusetts’ attorney general sued Juul yesterday, accusing the vaping company of buying ads on youth-focused websites to target young nonsmokers. (NYT)

• The coronavirus outbreak cost Bernard Arnault his title of world’s richest man. (Fortune)

• Charlie Munger on the world today: “There’s too much wretched excess.” (CNBC)

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