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Citi’s Ray McGuire Makes Pitch for New York Mayor



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The veteran deal-maker Ray McGuire announced Thursday that he was stepping down as Citigroup’s vice chairman to join the crowded race for New York City mayor. His fellow finance executives sing his praises, but it’s unclear whether that helps or hurts his bid to run a city whose voters have shifted away from the centrist politics of leaders like Mike Bloomberg toward the progressive views of Representative Alexandria Ocasio-Cortez.

Mr. McGuire is well-connected on Wall Street — and beyond. Raised by his single mother and grandparents in Dayton, Ohio, he won a scholarship to the private Hotchkiss School and then earned three degrees from Harvard. Mr. McGuire then became an M.&A. rainmaker at First Boston, Morgan Stanley and Citigroup, which he joined in 2005 as global co-head of investment banking.

• He has close ties to Black civic and political leaders, including the Rev. Al Sharpton and the former top Obama administration official Valerie Jarrett. He has spoken out about social justice issues, saying “I could easily be George Floyd” and calling Mr. Floyd’s death “coldblooded murder.”

His pitch is fixing New York City’s economy. He is focusing on the city’s fragile financial state as it faces a $9 billion revenue shortfall. “New York is in a financial crisis that has exploded into a whole bunch of crises — educational, health and criminal justice,” he told The Times. “If there is a moment in history where my skill set can help lead, this is it.”

Fellow financial executives are big supporters. “We need someone who is going to walk into the room and say, ‘Let me see the spreadsheets, and let’s deal with the crisis at hand,’ ” said Bill Lewis, a co-chairman of investment banking at Lazard who has known Mr. McGuire since they were undergraduates at Harvard. The former Infor C.E.O. Charles Phillips, whom Mr. McGuire met when the two were at Morgan Stanley, is a co-chair of his campaign.

But those ties could hurt him with left-leaning voters. Mr. McGuire has resisted comparisons to the last financial tycoon to run for mayor, Mr. Bloomberg, and supporters point to his socially liberal credentials. But New York’s Democrats have moved leftward, as the party’s primary elections this year showed, and may resist having another Wall Streeter in Gracie Mansion.

• Mr. McGuire is opting out of the city’s public finance system, which allows him to accept larger donations and avoid limits on spending — but that could increase skepticism of his run among the party’s progressive wing.

🗽 For more about Mr. McGuire’s candidacy, check out the latest edition of our sister newsletter, New York Today.


Today’s DealBook Briefing was written by Andrew Ross Sorkin and Lauren Hirsch in New York, Ephrat Livni in Washington, and Michael J. de la Merced and Jason Karaian in London.


ImageRemdesivir failed to show significant benefits in a recent large study.
Credit…Zsolt Czegledi/MTI, via Associated Press

Republicans fight over a stimulus package. President Trump said that he “would go higher” than the $1.8 trillion proposal his administration has put forward in negotiations with Democrats. But Senator Mitch McConnell, the majority leader, said that would be “a much larger amount than I can sell to my members.”

Pfizer will not seek approval of its coronavirus vaccine until late next month. It’s a shift in tone for the drug maker, which had previously emphasized the month of October, aligning itself with Mr. Trump’s push for a vaccine before the Nov. 3 election. In other vaccine news, Gilead’s high-profile antiviral drug, remdesivir, failed to prevent deaths in a 11,000-person W.H.O. study. The company disputed the findings.

Europe’s aviation regulator says the Boeing 737 Max is safe to fly again. It could return to service in the region before the end of the year, Bloomberg reports. Analysts expect U.S. regulators to allow the plane to return to the skies early next year; it has been grounded since March 2019, following two crashes that killed 346 people.

Twitter reverses course on a New York Post story about Joe Biden. It will now allow the unverified story to be shared, after originally banning it, but will add a label to provide context about the source of the information. Republicans on the Senate Judiciary Committee said they would subpoena Jack Dorsey, Twitter’s chief, to answer questions about it.

Businesses push back on a Trump executive order limiting diversity training. In a letter to the White House, more than 150 companies and nonprofit groups, including the U.S. Chamber of Commerce, said the order was having a “broadly chilling effect on legitimate” training programs. Earlier in the day, the Business Roundtable (which also signed the letter) announced a range of actions that C.E.O.s of the country’s largest companies pledged to put in place to “advance racial equity and justice.”

Credit…Josh Haner/The New York Times

Many companies don’t expect their workers to return to offices until next summer, and even then things may never be the same as before, judging by the comments executives made this week.

Offices are still mostly empty. On earnings calls, executives from Goldman Sachs said that about a third of workers in New York and London were coming in regularly; at JPMorgan, it’s around 20 percent in both cities; and Citigroup said “a small percentage” of employees in North America had returned.

• ”Being together enables greater collaboration, which is key to our culture,” said David Solomon, Goldman’s chief.

They may never return to their previous capacity. Jamie Dimon of JPMorgan acknowledged that some working habits may have changed permanently, which “will ultimately reduce the space you need for your employees.” Terrance Dolan, the finance chief at U.S. Bancorp, told analysts that the bank will most likely “consolidate” its corporate real estate.

Is that a problem? Steven Goulart, the chief investment officer at MetLife, said at an S.E.C. round table that the “pressure to de-densify” offices to support social distancing could support demand for real estate even if buildings aren’t as full as before. (See, for example, the interest in low-rise “groundscrapers.”)

• As executives conduct more business remotely, going back to in-person meetings and pitches seems less urgent. Natarajan Chandrasekaran, the chairman of Indian conglomerate Tata Sons, said in an interview with The Times that he used to fly from India to the U.S. to pitch a $50,000 project. But recently, he said, his firm’s consultancy business closed $2 billion worth of deals in “five or six Zoom calls.”

Consider the perks. BlackRock’s Larry Fink is excited about what employees could do with the two hours they save on daily commutes by staying home. “They spend that two hours to do more work,” he said on a conference call. “They could spend two hours improving their health by exercising. They could spend two hours more in building a deeper, stronger, more resilient family.”

Credit…Little, Brown and Company

Reeves Wiedeman is a contributing editor at New York magazine and the author of the book “Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork,” which comes out next week. It’s been a year since Mr. Neumann was ousted from the co-working company he founded, seemingly with billions in tow.

Mr. Wiedeman talked to DealBook about the man, the myth and the money.

We have to start with the title of the book.

There were two reasons for the title. Neumann became a theoretical billionaire at the moment when his company failed. “Billion Dollar Loser” captures that contradiction and speaks to larger themes. WeWork lost billions in pursuit of growth, but it wasn’t alone. It was typical of an era that may seem distant during the pandemic, when investors really believed in unicorns, a time that might not be over. SoftBank backed WeWork and is now subsidizing DoorDash, which is planning an I.P.O., in the hope the financials will someday make sense.

So, was Mr. Neumann sincere or just selling a story for a fortune?

I thought a lot about his sincerity and talked to many people. Was it just a sales pitch?

He took the decent but ordinary business of co-working and gave it a feeling of magic with charisma and a founding myth. Neumann’s time on a kibbutz gave him a useful talking point, and WeWork’s buzzword — community. Community is something we all want. Ultimately, WeWork learned community is hard to scale and maintain around the world. But I came to believe that he believed the story that he was changing the world and was more qualified than governments to solve its big problems. This thinking is endemic to Silicon Valley and venture capitalism. Neumann was just more open about expressing his grand ambitions.

What should we make of this epic tale of success and failure? Are there lessons?

Well, I hope people don’t read the story like a how-to. I didn’t intentionally write a guide to being an ambitious entrepreneur. But it could be read that way.

For me, as someone who is conservative about career choices, the lesson is that it is worth thinking about taking risks, in addition to knowing when to stay the course. Generally, it may be that we need to think about how we define success culturally. We only pay attention to growth, not to satisfaction. But you can build very nice businesses without trying to be a world-famous billionaire. And, interestingly, when I talked to Neumann’s competitors, I discovered most weren’t jealous of him even when he was at his most successful.

Is “loser” a temporary judgment? Could Mr. Neumman “win” again?

He promised and wanted a lot and it was hard to deliver. But given his ambition, charisma and work ethic, he won’t retire early. I think people will give him a second chance.

“The medium to longer term is still highly uncertain in particular as it relates to future stimulus. And so we remain heavily weighted to our downside scenarios.” — Jennifer Piepszak, the C.F.O. of JPMorgan Chase

“The consumer number in my view is going to be highly dependent on whether they provide more fiscal stimulus, which I think they absolutely need to do.” — William Demchak, the C.E.O. of PNC Financial Services

“For both sides, I think what they need to keep in mind is that there are Americans that need them, that don’t really care about politics, aren’t really tied up in this election and they just need some help.” — Doug McMillon, the C.E.O. of Walmart, on CNBC


• Talks to sell J.C. Penney’s retail operations to its biggest landlords, Simon Property Group and Brookfield Property Partners, have reportedly stalled. (Bloomberg)

• Blackstone plans to sell BioMed Realty Trust, which supplies office space to health care companies, from one of its funds to another at a $14.6 billion valuation. (Reuters)

• Blank-check funds have accounted for nearly half of proceeds raised by I.P.O.s in the U.S. last quarter, and well over 40 percent of money raised so far this year. (EY)

Politics and policy

• Fact-checking Thursday’s Trump and Biden town halls. (NYT)

• The Trump administration rejected California’s request for federal aid to clean up the damage from recent wildfires. (L.A. Times)


• Amazon said that third-party merchants earned over $3.5 billion from this year’s Prime Day, but the company didn’t disclose total sales from the two-day event. (CNBC)

• Google’s former C.E.O., Eric Schmidt, called on the U.S. to adopt a national strategy to compete with China on A.I. (Politico)

Best of the rest

• A former Deutsche Bank executive who exposed accounting fraud at the lender, and refused a $8.25 million whistle-blower award, said he’s going broke. (FT)

• The latest training for retail store workers: how to handle fights between customers over face masks. (NYT)

• “A lot of your children and grandchildren do not respect your work”: The writer Anand Giridharadas let rip at the National Association of Corporate Directors’ annual summit. (Business Insider)

We’d love your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.


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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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