Ramaswamy rethinks political giving
As a biotech entrepreneur, investor and conservative activist, Vivek Ramaswamy cuts a different profile from the veteran politicians who are also seeking the Republican presidential nomination.
With the plan he announced on Monday – in which he will receive fundraisers 10 percent of what they drum up for him — Mr. Ramaswamy told DealBook that he is also now trying to shake up the business of politics.
How it works: Called “Vivek’s Cabinet,” the system will give participants a personal connection they can share with others, and the campaign will pay them as independent contractors.
Mr Ramaswamy said he was aiming for a political standard. After announcing his candidacy in February, he said he met with professional fundraisers who promised they could find wealthy donors in Palm Beach, Fla., in Silicon Valley, and on Wall Street.
He wasn’t impressed with their work, he said, but he found their fee structure, in which they are paid up to 20 percent of what donors give, interesting. That got him thinking about disrupting the model: “Every time there’s an oligopoly, there’s a need and an opportunity to break it,” he said.
It is a new way to attract support, because it goes against how candidates traditionally spend money to get donors. (Most campaigns will spend heavily on marketing to attract donors, though Republican hopeful Doug Burgum is trying something different with handing out $20 gift cards.) News coverage of the plan could also help raise awareness of Ramaswamy, who currently is polling at about 4 percent.
Raising more donors isn’t necessary for Mr. Ramaswamy to qualify for the first Republican presidential debate — he told DealBook he has already raised about 65,000, more than the 40,000 minimum. But it could help ease his need to self-fund. his campaign, to which he has given more than $10.5 million in loans and contributions since the first quarter.
Is it legal? Campaign finance experts told DealBook that the plan did not appear to raise any legal issues. Ramaswamy said it was being checked by the Federal Election Commission.
But some experts see other problems. For example, supporters can pressure and coerce others in their networks to give to the candidate, according to Saurav Ghosh, director of campaign finance reform at the advocacy group Campaign Legal Center and a former FEC enforcement attorney. (Some on social networks jokingly compared it to a multi-level marketing campaign.)
THIS IS WHAT IS HAPPENING
China is reportedly planning stricter rules for artificial intelligence. Beijing officials will force companies developing AI services to get a license before releasing their products to the public, according to The Financial Times. Regulators are seeking a balance between controlling content while allowing domestic technology companies to innovate.
Foxconn pulls out of $19.5 billion chip in India. The electronic components giant said so would not move forward with plans to partner with the Vedanta conglomerate to build factories in Gujarat. The decision is a a blow to India’s efforts to become a center for chip creation and to capture desires by Apple and others to diversify their supply chains away from China.
Tucker Carlson’s Twitter show isn’t holding its audience. Views of his broadcasts in the social network have dropped to 85 percent since their debut last month. It’s bad news for Carlson, who counted on his strong viewership at Fox News to carry over to his Twitter show after the network fired him this spring.
Hollywood faces the prospect of a second strike. Actors are poised to join writers on the picket lines if their union, SAG-AFTRA, doesn’t reach an agreement with studios by midnight Wednesday. Another strike could shut down Hollywood entirely, disrupting local communities dependent on film and television production. At issue are disagreements over streaming payments and the use of artificial intelligence.
The heat is building on the Twitter boss
Just a month into the job as CEO of the social media platform, Linda Yaccarino had to deal with a major new competitor, unpopular limits placed on power users and the unpredictability of Elon Musk. It was by no means a smooth debut.
She set herself a difficult task. Ms. Yaccarino, the former head of advertising at NBCUniversal aims mending relations with Madison Avenue, no small feat in the midst of a global advertising slump. In her favor is her strong reputation: “Linda was a good hire and the right hire as long as she has the freedom to do what’s necessary,” Martin Sorrell, an advertising mogul, told DealBook last week.
But many suspect the Twitter owner is reluctant to give up control. Indeed, Mr. Musk didn’t make things easy for Ms. Yaccarino by tweeting youth content and apparently neglecting to copy her on his threat to sue Threads, Meta’s rival short messaging platform. (Relating to Ms. Yaccarino, Columbia Journalism School professor Bill Grueskin tweeted that he was “trying to think of a worse career decision.”)
A request for comment to Twitter’s PR team was answered with a poop emoji auto-reply.
And Threads keeps growing. The Twitter competitor has now surpassed 100 million users, setting a record for an app to reach that milestone. Analysts at Evercore ISI estimated that Threads could add $8 billion to Meta’s annual revenue by 2025. It’s worth noting that Threads currently has no advertising.
Its rise appears to be hurting Twitter: Traffic to Twitter’s website dropped 5 percent per week in the first two days of Thread’s existence, according to The Wall Street Journal, citing SimilarWeb.
Mrs. Yaccarino tried to gather the faithful of Twitter. “Twitter, you really outdid yourself!” she posted on Monday. “Last week we had our biggest usage day since February. There is only ONE Twitter. You know it. I know that. 🎤” (That’s what the technical journalist said Casey Newton expressed skepticism of her claim.)
An inflationary nation
Americans’ spending on cars, plane tickets and hotel stays appears to be cooling. Markets are anxiously awaiting whether that restraint will be borne out in Wednesday’s reading of the Consumer Price Index.
What to watch: Economists polled by Bloomberg expect the headline inflation number to fall to 3.1 percent, a huge decline from last July’s reading of 9 percent. (That said, more frugal consumers might balk Amazon’s annual Prime Day shopping that starts today.)
But progress from here is expected to be difficult. Core inflation, which excludes more volatile food and fuel prices, is expected to fall to 5 percent, well above the Fed’s 2 percent target. In an investor note on Monday co-authored by Jan Hatzius, Goldman Sachs’ chief economist, the firm said it expected further gradual progress in the inflation battle in the coming months, but did not see core inflation falling below 3 percent until 2025.
The Fed is also still worried about inflation. On Monday, three officials said more interest rate hikes were needed to lower prices. “Inflation is ours No. 1 problem,” said Mary Daly, president of the San Francisco Fed and a non-voting member of the central bank. She added that she believed two more rate hikes were needed this year.
The futures market also bets on this, prices in a quarter percent increase at this month’s Fed rate meeting and, increasingly, anticipating another hike this fall.
But that uncertainty about inflation, as well as worries about a recession and a slowing job market, has led some on Wall Street to warn that the S&P 500 is overvalued and that a stock sale is coming. (Investors will look to corporate earnings reports starting this week for more clues about how businesses are doing.)
“It’s also important to set the record straight: This is not a merger. The PGA Tour remains intact.”
– Ron Price, the COO of the PGA Tour, in a preview of his testimony today before the Senate Permanent Subcommittee on Investigations about the proposed tie-up with the Saudi-backed LIV Golf circuit. Price added that there would be no changes to the PGA Tour’s CEO or at the board level if the framework agreement moves forward.
A battle over banking rules is coming
The Fed’s top banking supervisor, Michael Barr, on Monday outlined key parts of his plan to update regulations in the wake of the regional lender’s crisis, which was prompted by the collapse of Silicon Valley Bank this spring.
Among them are tougher capital requirements intended to make banks more resilient in turbulent times – but the finance industry warns the proposals go too far.
Mr Barr wants banks to have more in capital reserves, to the tune of an additional $2 for every $100 of risk-weighted assets, he said in a speech. He also wants to extend his stricter rules to all institutions with $100 billion or more in assets; the strictest requirements currently apply only to lenders that are internationally active or have at least $700 billion in assets.
It’s a recognition of “gaps in the current rules,” he said, because even mid-sized lenders — which are more lightly regulated — can pose dangers to the U.S. financial system.
Banks threaten battle. Washington and Wall Street appear to be surprised by how tough Mr. Barr is: “It’s definitely meat,” Ian Katz, an analyst at Capital Alpha, told The Times.
But industry figures said tougher restrictions would come at a price. “Increased capital requirements on the largest US banks will lead to higher borrowing costs and fewer loans for consumers and businesses,” said Kevin Fromer, head of the banking group Financial Services Forum.
The rules are not finished yet. Next is the public comment period. If the Fed’s board approves, it will still take time to implement the rules.
THE SPEED OF READING
Berkshire Hathaway will buy control of a Liquefied natural gas export project in Maryland for $3.3 billion. (Bloomberg)
Banks including Citigroup, HSBC and JPMorgan Chase are said to be looking for potential investors for the seed giant. Syngenta’s $9 billion IPO in China, which is expected to be the biggest market debut this year. (Bloomberg)
Morgan Stanley reportedly hired Marco Caggiano, JPMorgan’s head of North American mergers, as vice president of M.&A. (Reuters)
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