Dan Doctoroff in 2007, when he was New York’s deputy major for economic development under Michael Bloomberg.Credit…Oscar Hidalgo for The New York Times
Dan Doctoroff on his life’s work
We have some difficult news to deliver today. Dan Doctoroff, who runs Alphabet’s Sidewalk Labs and who has been a major force in New York City’s economic development for decades, tells DealBook that he recently learned that he probably has amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease. The progressive neurodegenerative disease usually results in death within three to five years after symptoms appear. His father and uncle died of A.L.S.
“I’m still processing,” said Doctoroff, 63, who said the diagnosis has changed how he thinks about his priorities:
The “one exception,” he said, is his goal of promoting A.L.S. research, and he has big plans.
“I’m going to dedicate my life to battling this disease,” Doctoroff said, describing the diagnosis and informing his family about it as “brutal.” In 2010, he started a foundation to fund such research, Target ALS. He hopes “to scale it up dramatically,” he said, and raise $250 million. “I know exactly what the disease does,” he said, and “it is horrible.” He added:
Doctoroff, who worked as Mayor Michael Bloomberg’s deputy mayor for economic development and was later chief of Bloomberg L.P., is planning to announce today that he will step down as C.E.O. of Sidewalk Labs, which focuses on urban planning and infrastructure. He was recruited to start the division in 2015 by Larry Page, Google’s co-founder. The unit is planning to be subsumed inside Google’s urban sustainability product efforts.
Doctoroff started his career on Wall Street working at Lehman Brothers and later Oak Hill Capital Partners. He rose to prominence when he led New York City’s bids for the Olympic Games. While his efforts were unsuccessful, the planning led to the creation of Hudson Yards and the extension of the No. 7 subway line. As deputy mayor, he oversaw the development of the High Line, Brooklyn Bridge Park and Governors Island.
Doctoroff said he was in no pain and has only minor symptoms that aren’t noticeable to others. He says there is about a 20 percent chance that his symptoms won’t turn into A.L.S.
“I have always been an optimist,” he said. “I still am.”
HERE’S WHAT’S HAPPENING
The former C.E.O. of McDonald’s repays $105 million in cash and stock. Steve Easterbrook, who was ousted in 2019 for having an inappropriate relationship with a subordinate, returned the money to the company in one of the largest clawbacks in the history of corporate America. As part of the agreement, McDonald’s will drop a lawsuit against Easterbrook.
The Bank of England raises interest rates. In announcing a 15 basis-point rise in its target rate today, to 0.25 percent, it became the first major central bank to raise rates. Policymakers are trying to contain rising inflation despite the economic uncertainty posed by the fast-spreading Omicron variant of the coronavirus.
Closing arguments begin in the trial of Elizabeth Holmes. The Theranos founder has pleaded not guilty to 11 charges of defrauding patients, doctors and investors. The fraud trial for her former boyfriend and business partner, Sunny Balwani, was recently postponed because Holmes’s trial, which began in early September, has dragged on for so long.
Katie Haun is leaving Andreessen Horowitz. The former federal prosecutor and co-chair of the venture capital firm’s $2.2 billion crypto fund, which began in June, said she would start a new crypto fund outside the firm next year.
The F.T.C. is considering a rule to fight bias and discrimination in algorithms. A filing on regulatory priorities revealed the move, and a spokeswoman told DealBook that the commission was “prepared to use all of our tools to combat harmful commercial surveillance practices and protect Americans’ privacy.”
Omicron is “a really serious threat”
Britain yesterday reported 78,610 new coronavirus cases, the highest single-day tally since the start of the pandemic. Officials said a majority of cases in London were from the Omicron variant. “This is a really serious threat,” England’s chief medical officer warned. Today, France announced a ban on nonessential travel to and from Britain over Omicron fears.
In the U.S., Dr. Anthony Fauci urged Americans to get vaccinated if they haven’t, and boosted if they’ve been fully vaccinated. The Biden administration has warned coronavirus test makers and labs that demand for tests could double or triple over the next two months, according to Politico.
The rapid spread of Omicron continues to upend companies’ plans and force changes to policies:
JPMorgan Chase’s huge health care conference is going virtual. The event, set to begin on Jan. 10, is moving online “out of an abundance of caution,” the bank told attendees yesterday.
Goldman Sachs reportedly told teams in New York to cancel holiday parties. The bank has already held several parties over the past few weeks. JPMorgan and Morgan Stanley are reportedly allowing individual teams and departments to go ahead with holiday parties (for now).
Apple delayed its return to office “to a date yet to be determined.” The company told employees yesterday of the change in plan after already pushing back its return date three times. It also temporarily shut stores in Annapolis, Md., Miami and Ottawa in response to a rise in Covid-19 cases.
Several Broadway shows were canceled and the Metropolitan Opera will require booster shots. The cancellations came after cast or crew members for shows, including “Hamilton,” tested positive. The Met’s new rule mandating boosters for staff and audience members, which takes effect on Jan. 17, makes it the first major performing arts institution to introduce such a measure. “Everyone is going to be doing this,” said Peter Gelb, the Met’s general manager.
“We are a free-market economy. They should be able to participate in that.”
— Speaker Nancy Pelosi, when asked by reporters whether members of Congress and their spouses should be banned from trading individual stocks while in office.
Taper, no tantrum
The Federal Reserve announced yesterday that it would taper its pandemic stimulus efforts more quickly than expected and raise interest rates soon. In 2013, when Ben Bernanke, then Fed chairman, announced a similar pullback, the market tanked. The drop was dubbed the “taper tantrum.” This time around, the Fed’s taper came without tears: Stocks jumped after the announcement.
Here’s why the market seems more tolerant now:
Inflation is a much bigger problem. In 2013, there was little sign of significant inflation, though many warned it was coming. Jay Powell, the current Fed chair, has delayed tapering until the upward trend in inflation was undeniable. “The market wanted to see that Powell was taking inflation seriously,” Dean Baker of the Center for Economic and Policy Research told DealBook.
Stocks are getting support from low bond yields. Despite rising inflation, the yield on the 10-year Treasury has remained low, at less than half of what it was in 2013. Cheap money has helped prop up stocks, but the bad news is that low long-term yields can also be a recession warning sign. Some market watchers say this isn’t the signal it once was. Vincent Deluard of StoneX said that the growth of funds that automatically shift retirement accounts into bonds over time, as well as the U.S.’s growing trade deficit, have resulted in a lot of extra bond buying. “People make a mistake when they think of the bond market as an economic oracle,” he said.
Sequels are alway less dramatic. Bernanke was the first Fed chair to try buying bonds to bolster the economy. Many predicted it would lead to another crash, but — besides the brief taper tantrum — it didn’t. “Investors have seen this movie before,” said David Wilcox, a senior fellow at the Peterson Institute for International Economics. “It’s much easier for all involved the second time around.”
The S.E.C. wants to hear from you
The S.E.C. advanced a series of potential rule changes yesterday, reflecting the wide-ranging agenda of the commission’s chair, Gary Gensler.
The proposals are aimed at preventing insider trading, revealing more information about share buybacks, stopping runs on money market funds and protecting against fraud in swaps. The rules now go out for public comment and, depending on the feedback, it could take months for them to be approved (or not).
The proposal on executive stock sales fills “critical gaps in the S.E.C.’s insider trading regime,” the agency said. The amendments to 10b5-1 plans, which company executives and directors use to schedule stock trades, would impose a delay before trading could start, prohibit overlapping plans, require insider certifications and more. This was the only proposal that received the votes of the S.E.C.’s two Republican commissioners on the five-member board. Marc Steinberg, a former S.E.C. enforcement lawyer who’s now a law professor at Southern Methodist University, called it “a good start,” but he would also like for shareholders get a vote on these policies, he told DealBook.
More information is needed about corporate share buybacks, Gensler said in a statement.The S.E.C.’s proposed rule would require companies to disclose share repurchases promptly and provide the reasoning, among other things. Buybacks can prop up stock prices but leave less money for wages, research and other priorities.
Money market funds need bigger buffers and swaps could use more oversight, according to the commission’s proposals. The new money market rules would increase liquidity requirements and alter practices on pricing, fees and redemptions. The agency is also proposing more disclosures for users of security-based swaps.
THE SPEED READ
Reddit has filed for its long-awaited I.P.O. (NYT)
Bruce Springsteen sold his music rights to Sony for an estimated $500 million or more. (NYT)
In his annual letter, LionTree’s Aryeh Bourkoff said “we are entering a period of discernment, where growth alone is no longer sufficient.” (LionTree)
Senator Elizabeth Warren, Democrat of Massachusetts, asked the S.E.C. to investigate pay practices at energy companies. (WaPo)
“Meadows and the Band of Loyalists: How They Fought to Keep Trump in Power” (NYT)
Airline chiefs said in a hearing that 5G wireless services could disrupt flights and lead to delays. (Reuters)
Best of the rest
Smaller ships are swarming U.S. ports as retailers try different ways to get around supply bottlenecks (WSJ)
What you need to know about coronavirus testing and travel. (NYT)
“The Photos That Ghislaine Maxwell Didn’t Want the Jury to See” (NYT)
Is Amazon’s cloud-computing division too big to fail? (The Information Opinion)
The boom in outdoor dining is a boon for New York City’s rats. (BBC)
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