Trump is announcing a huge $1.5 trillion infrastructure plan — here’s what’s in it

Trump is announcing a huge $1.5 trillion infrastructure plan — here’s what’s in it

Another focus is streamlining the approval process for bigger projects to two years from the current five to 10, removing some regulatory red tape. The plan would allow one agency to make the final decision on permitting, something the White House is calling a "one agency, one decision" approach. Create a fund to repair infrastructure on public lands like parks and forests using money generated from "mineral and energy development on federal lands and waters." Expand the use of toll roads and loosen restrictions on the use of revenue from them. Expand the use of Pell grants to help pay for postsecondary programs, including short-term programs, apprenticeship programs, and more. While the plan is set to dominate the policy agenda in Washington this week, almost no one expects Congress to pass anything resembling it this year. Isaac Boltansky, a policy analyst at the research firm Compass Point, summed up in a note to clients the reasons he thinks it's dead on arrival: "Despite bipartisan conceptual support for infrastructure projects, we doubt that a sweeping infrastructure bill will become law in this Congress for 3 key reasons: (1) the deep policy divide over the funding mechanism; (2) unclear pay-fors as repatriation was included in tax reform and raising the gas tax remains unpopular among Republicans; and (3) the timeline is difficult given the already overburdened legislative calendar and the gravitational pull of the midterms." He said in a note on Monday: "$1.5 trillion for infrastructure on the heels of $2 trillion in deficit-financed fiscal stimulus in the past two months is … unlikely." Democrats have already come out against the plan, saying the private-public partnerships are a "scam" designed to enrich private contractors. "This is not a real infrastructure plan — it's simply another scam, an attempt by this administration to privatize critical government functions, and create windfalls for their buddies on Wall Street," Rep. The White House on Monday unveiled President Donald Trump's long-awaited infrastructure plan that aims to rehabilitate the nation's roads, bridges, tunnels, and more. Meanwhile, Republicans have expressed concerns about the effects of the new tax law and recent budget deal on the federal deficit, meaning another $200 billion spending proposal is unlikely to get much support. The plan includes $200 billion in federal funding over the next 10 years and aims to raise up to $1.5 trillion in total by incentivizing investment from state and local governments, as well as private firms. $50 billion to projects in rural areas in the form of block grants. $20 billion to large projects to "lift the American spirit." $30 billion for miscellaneous existing infrastructure programs. The proposal is a departure from typical spending on infrastructure, as the federal government usually covers a bulk of the cost.

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Jio effect: Airtel revamps Rs 93 prepaid plan to offer 1GB Data, unlimited calling For 28 Days

Jio effect: Airtel revamps Rs 93 prepaid plan to offer 1GB Data, unlimited calling For 28 Days

Under the offer, subscribers will get 1GB of 4G/3G data along with unlimited local and STD calls for 28 days. The Jio Prepaid plan now offers 2GB 4G data, free local and STD calls with 300 SMS and complimentary access to the company’s suite of apps like JioTV, JioMags, JioMusic and more. Previously, Jio subscribers would get the same free voice benefits and data, but with a daily limit of 150 MB after which the speed was reduced to 64Kbps and it came with 140 SMS at a validity of 14 days.  Alongside refreshing its prepaid plans, Reliance Jio recently announced a new cashback offer exclusive to its Prime subscribers. They will get up to 200 percent cashback (worth Rs 799) after recharging their connections with prepaid plans starting at Rs 398 and above. The new offer is eligible for both new and existing customers and is valid till February 15.  Apart from Jio and Airtel, Idea also offers a prepaid pack priced at Rs 93. Under the recharge, a user gets 1GB of 3G/4G data along with unlimited calling capped at 250 minutes per day and 1,000 minutes per week.

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Another factor for Rick Scott to consider for Senate bid: Disclosing, managing his money

Another factor for Rick Scott to consider for Senate bid: Disclosing, managing his money

Florida allows public officials to create a blind trust rather than revealing their assets on a financial disclosure form, as most officials do. The idea is that if the public official doesn't know how his money is invested, he can't have a conflict of interest when making decisions. Critics see two major flaws: First, that keeps the information away from the public, even though the state Constitution requires "full and public disclosure" of elected officials' assets and debts of more than $1,000. The Florida Bulldog, a nonpartisan watchdog site, has reported several instances of Scott making investments that intersect with his decision-making as governor. Skeptics also question Scott's decision to put a longtime business associate in charge of his investments (as well as Scott family members). A pending lawsuit against Scott from a Democratic attorney in Tallahassee asserts that the governor still controls a family trust with his wife and has failed to disclose all the assets in it. It also claims that federal records indicate Scott approved the sales of stock included in the family trust and that Scott retains control over some of his blind trust assets. Bill Nelson, one factor for him to mull is his willingness to change how his finances are disclosed and managed. Assets in the name of First Lady Ann Scott, for instance, are not required to be disclosed under Florida's blind trust law, but would be for a U.S. Likewise, Scott no longer would be allowed to use a longtime business associate and partner to manage his blind trust because the Senate requires a "completely independent" trustee. Scott used to lead health care company Columbia/HCA, which paid a record $1.7 billion in fines for Medicare fraud that occurred under his watch. He left the company in 1997, before the company admitted guilt, and received a $300 million severance.

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Public Protector report into #VredeDairy project slated

Public Protector report into #VredeDairy project slated

Instead, she ordered Magashule to institute disciplinary action against provincial agriculture head of department Peter Thabete and other officials for the illegal issuing of the more than R220 million tender to the Estina Dairy company in 2012.  But her evoked outrage amongst opposition party ranks and other organisations, with many calling it a sham. The South African Federation of Trade Unions (Saftu), in a statement, said: "The report is an insult to the intelligence of all South Africans, which confirms the view that she has betrayed the principles of her office, and who has been captured by those corrupt individuals she is supposed to be exposing. "Her report is nothing but a feeble attempt to exonerate the main politically prominent figures in the scandal and switch attention on to minor players who have committed relatively minor offences and are now convenient scapegoats." Mkhwebane had found that black farmers who were due to be the beneficiaries of the project had been pushed aside, and “implied that they were used as pawns to justify the project”.

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The White House Plans To Bail Out Obamacare And Fund Abortion Coverage

The White House Plans To Bail Out Obamacare And Fund Abortion Coverage

Apart from the fact that the budget abandons any attempt to get to balance within ten years (or ever), a footnote buried deep in the document hides key proposals: Bailing out Obamacare health insurers to the tune of tens of billions of dollars, and taxpayer funding of abortion coverage. To prevent the Obama administration from using funds from elsewhere to subsidize corporate welfare to insurers, Congress enacted restrictions prohibiting the use of taxpayer funds to bail out risk corridors. Under these restrictions, insurers with losses could only receive as much money from the risk corridor program as insurers with gains paid into the program. In Obamacare’s first few years, most insurers suffered massive losses, so the money coming in to the risk corridor program by no means equaled the requests for funds from the program. As a result, several insurers sued in the Court of Federal Claims, requesting payment from the Judgment Fund of the Treasury for their unpaid risk corridor obligations. While both the White House and HHS budgets include few details about this proposal, it appears that they would pre-emptively surrender the pending legal cases by paying insurers more than $11.5 billion in risk corridor obligations that insurers claim they are owed. President Trump himself cancelled the cost-sharing reduction payments (CSRs) to insurers in October, correctly noting that the Obama administration made these payments without a legitimate congressional appropriation. Rather than conducting scrutiny of the Obama administration’s unconstitutional actions, or examining why both insurers and state insurance regulators assumed for far too long that these unconstitutional acts would continue, the budget instead proposes a return to the status quo, pretending like the events of last fall never happened. The White House’s proposal on CSRs looks downright conservative, however, compared to the budget gimmick being contemplated by Speaker of the House Paul Ryan (R-WI). On page 141, footnote 6 of Table S-6, showing the president’s policy proposals, includes the following admission: “The Budget requests mandatory appropriations for the risk corridors program and for cost-sharing reduction payments.” The White House budget indicates that spending on CSRs would have no deficit effect, because the Gramm-Rudman-Hollings statute requires budgetary agencies to assume full funding of entitlements (including CSR payments) when developing their fiscal baselines. He wants to direct the budget agencies to raise the spending baseline artificially, so Congress can then “lower” the spending baseline right back to where it is now—and spend the phony “savings” from this gimmick on more corporate welfare to insurers. This episode represents but the latest attempt to bail out Obamacare without even considering the implications on the life community. The budget proposal means Trump administration is now actively working to codify not one but two Obamacare bailouts that a Republican Congress denied to the Obama administration—doing liberals’ bidding for them. Moreover, the failure to include any pro-life protections on these bailouts represents at best a massive managerial oversight, and at worst an insult to the pro-life community. The Obamacare risk corridor program intended to provide a financial cushion for the first three years of the law’s exchanges (2014-16). Plans with high profits would pay some of the excess back, to subsidize plans with outsized losses. The text of Obamacare never included an explicit appropriation for risk corridors.

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More businesses are closing the gap between AI ambitions and implementation

More businesses are closing the gap between AI ambitions and implementation

In 2017, MITSloan Management Review (MIT SMR) conducted a global survey of more than 3,000 executives, managers, and analysts on the current state of AI and its potential. People can opt to interact with the chatbot, as opposed to talking to a person, and enter their symptoms into the app. By streamlining customer service and automating the first point of contact, companies can devote more human resources to the most important issues and concerns. Yet less than 20 percent of respondents had actually incorporated AI into their processes and/or product offerings at the time of the survey. In the world of security, this comes in the form of surveillance-based facial recognition. At one point last year, the New York department of motor vehicles had already made more than 4,000 arrests with the assistance of facial recognition, which allowed law enforcement to access driver’s license photos. As the technology improves and AI algorithms get more sophisticated, businesses could actually identify individual people in security footage in real time. Hashmi says BP is also hard at work automating root-cause failure analysis, so the system trains itself over time and quickly moves from description to prediction to prescription. The early indicators are that businesses are finally recognizing the value of AI, consumers are getting over their fears, and leading businesses are leveraging advanced technology. Expect significant evolution on this topic throughout the calendar year and don’t be surprised if the business world looks a little different come December 2018. As recently as 2015, studies showed that 34 percent of the marketplace feared AI, with those in business services scoring above the average in terms of apprehension. When asked about AI in relation to business, very few companies said they were actually using AI, and only seven percent planned on implementing it within the next year. While one in four businesses were evaluating how to apply AI, 49 percent had no plans to use AI in the future. When you look at the current state of AI in business, it’s clear we’ve come a long way in a relatively short amount of time. But the more light we shed on misconceptions, the more positive development we can expect to see in this area.

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City planners green light housing project for students, faculty at Conservatory of Music

City planners green light housing project for students, faculty at Conservatory of Music

The project is slated to rise in place of two adjacent buildings: a three-story residential building at 200 Van Ness Ave. that contains 27 rent-controlled apartments, and a vacant office building at 214 Van Ness Ave. that formerly housed the Lighthouse for the Blind. Advocates working with the tenants also voiced their approval, but urged the Commission to demand transparency and clear communication from the developers should the project’s construction exceed the expected timeline. The project will provide 420 units of housing for students of the nearby Conservatory of Music, at 50 Oak St., as well as three residential units reserved for music school faculty and 27 replacement units for rent-controlled apartments currently at 200-214 Van Ness Ave. On Thursday, the commission voted to adopt a General Plan amendment that will allow the music school to build up to 120 feet in an area zoned for a height limit of 96 feet, as well as a host of other items that required approval for the project to move forward. The music school bought the property in 2014 and has since worked with community stakeholders, city leaders and the current tenants of 200 Van Ness Ave., who face temporary displacement, to shape the project’s plans. At the core of the project’s proposal is a “tenant protection” package that promises modernized, rent-controlled replacement units inside of the proposed music dorm to some 60 tenants at 200 Van Ness Ave.

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Secrets of success from people who love, love, LOVE their jobs

Secrets of success from people who love, love, LOVE their jobs

“My biggest advice for career seekers would be to keep an open mind and decide what aspect of your job is most important to you! Though account manager at The Avenue West, Frances Blount loves managing everything from public relations strategy and client relations to new business development, it’s her team that makes the greatest impact on her endorphin level. “Surrounding myself with such creative, talented and driven co-workers means that work doesn’t feel like ‘work’ and I actually enjoy being at the office. I don’t even mind working late because I know my team is there to support me and to support each other,” Blount says. “No matter if you’re working on a professional goal or a personal goal, having co-workers that motivate and support you is so important if you want your career to be fulfilling. Instead, she wanted to help women find accessories on a manageable budget, inspiring her to build her own company that allows brides-to-be to rent veils, jewelry, and other must-haves. Witnessing women have their dreams come true brings joy to her life, even if she had to work hard at developing the brand. That’s why she says it’s less important to choose a career simply because it comes easy to you, and instead, find out what you’re passionate about and stay focused on developing the skill sets you need to accomplish your goal. “There are ways I can use my strengths in my everyday job, but I’ve catered it in a way to fulfill the passion I have for fashion, and the passion I have for creating magical customer moments. Considering she believes economic security is the key to a stable life, Dr. Firestone says helping female entrepreneurs reach their potential every single day is one of the qualities she values the most in her job. “The precious ability to tap into the wisdom of their peers offers business wisdom, as well as support, empowerment, and inspiration. Though she may, ahem, be a bit biased, for those who are looking to achieve fulfillment and happiness in their careers, Dr. Firestone challenges women to take that leap of faith into the unknown of entrepreneurialism. “The future of our global economy will be fueled by the rising number of women entrepreneurs who bring life to business across the economic spectrum. If you are worn out by the demands and hours of corporate life and want to be paid what you deserve, think about starting your own business,” she explains. Liz Toombs, C.I.D., and owner of PDR Interiors has found a niche in fraternity and sorority housing, working with a number of Greek organizations and college campuses nationwide. Since she runs the company, Toombs says many aspects bring her joy — from working with a variety of people and enjoying days that are never the same as the ones before, she derives happiness from her career. “Pay attention to what excites you and then determine how to parlay that into a career. While sometimes you might have those butterfly twangs when you’re working on a certain project or deadline, other times you might be overflowing with toxicity, dreading heading into the office. Since you arguably spend more time working than with your partner, your family or friends, having a mostly loving attitude toward your career will ensure you are fulfilled for decades.

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The Lakers are growing up together as the trade deadline looms

The Lakers are growing up together as the trade deadline looms

playLakers hand Thunder 4th straight loss (2:18)Brook Lopez scores 20 points as the Lakers defeat the Thunder 108-104. (2:18)8:32 AM ETOKLAHOMA CITY — Brandon Ingram was running point and staring down Carmelo Anthony defensively, rejecting Melo's shot as if he were the grizzled vet who knew what move was coming.Julius Randle was playing bully ball against an Oklahoma City Thunder team that had pushed and intimidated the Los Angeles Lakers twice this season.Brook Lopez was knocking down 3-pointers, blocking shots and even dishing assists. Vets like Randle and Clarkson probably will continue to draw interest from contenders who can help Los Angeles get closer to its goal of clearing more cap space to shop in free agency.These Lakers, though, put aside the uncertainty of the future and saw what they're capable of doing when they play together, focused and inspired.Sunday's game was fun to watch. They flinched but didn't fold when George scored seven points in the last two and a half minutes and nearly rallied the Thunder at the end, slicing a 10-point Lakers lead to three with 24 seconds left.Perhaps most important, they didn't allow Steven Adams to push them around again like the playground bully that he can be. The Lakers held Adams to five rebounds, this after the Thunder center outrebounded the entire Lakers' starting five and nearly had as many offensive rebounds (seven) as the Lakers' starters had total rebounds (eight) the last time they played in OKC."We got pushed around again today, which is fine as long as we push back," said head coach Luke Walton, who drove the point home to his team that they had to be physical. "That is when it is fun, guys going at each other, but the first two times it was just them pushing us. We stayed strong and fought back."Even without their injured rookie playmaking point guard, the Lakers shared the ball with purpose as they repeatedly found areas in the Oklahoma City defense that they wanted to attack. Six Lakers, including the starting five, scored in double figures.No one knows what the future holds for the Lakers this season or whether Randle, Clarkson, Larry Nance Jr. or any other Laker who has been mentioned in trade rumors will remain in purple and gold by Thursday night, when they host the Thunder for the last meeting between the teams this season. Those three have done their best to block out the rumors and keep playing.Brandon Ingram dropped 16 points in a win over the Thunder. AP Photo/Sue OgrockiAt times this season, the Lakers have looked like a mess; a team that was going to fracture due to the understanding that management will make changes this summer. This young roster can still produce some of the worst stinkers you'll see, as it did just three games ago when the Lakers lost to the Orlando Magic, who had entered that game having dropped 20 of 23 games.And then they can do what they did Sunday and stand up to the star-powered Oklahoma City Thunder.Several of these Lakers know they might not be on this team next season after Magic and Pelinka go shopping in free agency. The players don't know what will happen this week.No matter what this week holds, the Lakers saw what they're capable of doing together when at their best, and they enjoyed one another like a team whose bond seems to be growing tighter.After the locker room nearly cleared out, Ingram talked about why he kept playing through a sore groin injury that continued to bother him."This game today meant more to my teammates than anything," Ingram said. "So it was important for me to stay out there."Now, we wait to see if everyone remains a Laker for the remainder of the season. Without Lonzo Ball, the Lakers' stirring upset victory in Oklahoma City on Sunday over a team that had dominated them by 24 and 37 points in their two previous meetings was easily one of their best."Just resilient," Randle said. "It's a great win for us. We are growing up as a group."Fatigue took over the NBA in January. They were heading back to the West Coast with a victory that might rank only behind earlier wins over Houston and Boston this season.If this young Lakers team is indeed growing up as a unit, it remains to be seen if management will allow it to keep maturing together.

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Morgan Stanley’s CEO Gives Himself an A-Minus

Morgan Stanley’s CEO Gives Himself an A-Minus

When then-CEO John Mack hired Gorman in 2006 to run wealth management, Morgan Stanley was still reeling from a vicious internal struggle that ousted CEO Philip Purcell. And that set a tone and a standard, to everybody, that we were serious. We thought this business had tremendous potential, but it needed to be done in a first-class way. The core DNA, in my mind, had to be the Morgan Stanley DNA, because that was a culture of smart people dealing with complicated issues. We have aggressively moved toward the more complex, more affluent segment, because that fits best with our culture, with our DNA, and with our capabilities. When I took over, I think the most important decisions were to buy Smith Barney; to take the old Dean Witter platform and the Smith Barney platform and convert them into one; to convert [Japanese bank] MUFG to a common shareholder, which removed the preferred [share] payment but locked their partnership in essentially forever; to take very aggressive decisions on the problem issues we had out there: the MBIA exposure, the Revel Casino—we took the attitude that these were never going to age well and we had to rip the Band-Aid off—the settlement with the Department of Justice. Then the talent decisions, the key operating decisions—Ruth [Porat] first as my CFO, Colm [Kelleher] to run the business, Greg Fleming, who helped a lot, to lead wealth management during a difficult period. Putting Ted Pick in [as head of equities and then as head of all sales and trading]. “Nobody likes to be unpopular, but you have to accept that as part of the job” ES I remember seeing you sometime in the first few months of 2012, when you were trying to forestall a three-notch downgrade by Moody’s. JG That wasn’t a decision so much as a sort of an existential challenge. And that was a war to the finish. I believed fundamentally that we were not being given credit for how the firm had transformed itself. We are not the same firm.” Everything about the organization had changed. We had global risk committees, we’d shut down our prop businesses, many of the key leadership roles had changed, the leverage had dropped from more than 30 times to 11, the fixed-income risk-weighted assets had dropped from nearly $400 billion to $100 billion. It’s very hard for someone who’s been scarred by history to dismiss that and put it away and say this time it’s different. JG It was during July, the White Nights or whatever they call it when the sky is still light at 11, and I got a call from New York. I was looking outside–I don’t know why I remember this—and there was a soldier on the canal running through St. Petersburg, standing guard. I was thinking about what it was like for him to be standing out there on his own, guarding no one in particular, and what it was like for me to be sitting in my room alone, with the best news I’d received probably in my whole professional career—and yet nobody but this anonymous soldier to celebrate it with. He was the only physical human being I could see. So I thought, I’m going to go downstairs and celebrate. I went down to the bar, had a glass of wine to toast Morgan Stanley. JG I came from a very large and gregarious family. I keep a little distance between myself and the employees. Whether that’s right or wrong, and depending on how they translate that, I’d hope they describe me as a fair person. ES How did your background growing up in a large family in Melbourne shape your values, your outlook, and your ambitions? JG Living with that many people, you have to beat a path of your own. And I think it causes you to drive a little harder. I also think it’s readily apparent that there are people better than you at everything. Somebody is more attractive, somebody is more athletic, somebody is more intelligent, somebody is more intellectual. I think it causes you to understand that you have strengths and you have weaknesses. So hopefully you develop some modesty from knowing you’re not the bee’s knees. JG We inherited an organization that had many very significant issues to be dealt with, as did many of the banks. I think most people would say, and I would agree, that I’m very calm under pressure. The more complex and the more volatile, the calmer I become and the more I enjoy being in that position. I like to be able to make decisions, to make the call. You have to live with the consequences, live with being unpopular. Nobody likes to be unpopular, but you have to accept that as part of the job. And if I know something about a topic and someone is just trying to get one past me or pretending they know more than they do, then I might well ask them a couple of follow-up questions just to expose them and let them know that I know that they don’t know. And we were dealing with them in an environment where the markets were not very trusting of the business model in the sector. One time my father gave us all IQ tests, and he published the results. He wrote them up and stuck them up on the wall in the living room. And next to each result he put the prospective career of whoever was at that particular IQ level. We used to compete over tennis, over swimming, over who could catch a Frisbee the best. ES What did he put next to your name on that list? But we were forced to plow through and make some very difficult decisions quite rapidly. I had the probable career outcome of middle manager. ES You appeared to be on something of a fast track at Merrill Lynch. JG I had spent a lot of my career working as a strategist and advising CEOs and organizations on complex strategic issues. I moved from that to operating a business, which I really loved doing. Moving back to a strategy role was not what I wanted to do. I wanted to own and operate businesses. ES There’s a persistent view on Wall Street that the best CEOs can only come from banking or trading. JG There should be a strong bias to having people who’ve grown up in the business. There should be a strong bias inside these kinds of firms for bankers and traders running them. You never have a control function to say, “What if I’d done it differently?” So you can only look at what actually happened—and I think the record would show that the big decisions turned out to be the right ones. I was a consultant for 12 years of my career. I’m very proud of it. I worked for what I think is the No. 1 consulting firm in the world. The reality is I’ve been on Wall Street now for 18 years, and I was a consultant for 12. I’m also a lawyer. JG How will it reshape the M&A advantage our bankers lend to global cross-border transactions? How will it shape the potential for more electronic trading aided by various algorithms in our fixed-income businesses? If you looked at the trading floor 15 years ago, there was very little electronic trading. If you looked at the role of the so-called strats—the technology strategists and the people that write the programs to enable better client trading, better activity—they’re ever-present on the trading floor. If you look at the branch offices in wealth management, the old cashier rooms, they used to manually match trades at the end of the day. ES What’ll be gone in the future? It seemed impossible that Morgan Stanley would ever let another former McKinsey & Co. consultant lead the firm. But we have as much revenue and profit as we had 10 years ago. JG Doing analysis, compiling spreadsheets, looking at industry trends, machines will do that better than humans, because they’ll do it perfectly and faster. The leadership team is cohesive and as apolitical as I’ve seen during my 18 years on Wall Street. To the extent you’re using intuition—How will this person respond if there are three of us in the meeting or one of us in the meeting? Should I do this on a Friday afternoon or a Monday? Should I present my best case at the outset or my worst case at the outset?—I think that’s very, very hard to replace. You could have a machine tell a client who’s panicking in a market down cycle, “Do not sell,” and show them a thousand risk-return models mapped out beautifully on the screen. And then that person gets a phone call from a friend saying, “Hey, I just sold my stock. What are you doing?” And they immediately jump on the phone and sell. You can look at the models, but I’m telling you from experience,” that has value. We’re spending several hundred million dollars protecting us on cyber, and a few years ago we spent less than $50 million. So relative to the size of the organization, it’s one of the biggest threats we have. ES Restructuring and expanding wealth management was the strategic imperative 10 years ago. JG It took quite a long time to get the team that I wanted at the top. For Morgan Stanley to have become a bank, to have built a deposit business, to have built a consumer-­lending capability, in addition to our wealth and investment-­management business, is a very powerful thing. We’ve been as high as the 10th-largest bank [by deposits] in the U.S. A lot of investing seems to be going in two different directions—more complicated and alternative-focused or more passive and index-focused. We’re good at the complicated, alternative-focused side, and we have the client base. The combination of intellectual property, global distribution, global client base, local licenses, local trading capability—it’s going to be very hard for somebody to start up over the next five years and beat that. The universe of banks that can do the kinds of things we do is relatively small. What remains unclear is how the Googles and Amazons and Facebooks will develop. They have global reach, they clearly have the financial resources, and they have information. But they don’t have the DNA behind a lot of things that we do. A lot of their activity is based upon mass execution. A lot of institutions have backed away from trading as the balance sheets have had to shrink. I think we’ve repositioned ourselves as one of the few equities and fixed-income global sales and trading shops for the next five years. ES The conventional wisdom says scale matters in asset management and to be a scale player you need a trillion dollars of assets or more. I really think these organizations have a certain amount of momentum on their own. Asset management is a series of many businesses, some in which scale matters a lot, some in which scale doesn’t matter at all. So if you’re in the indexing business, it matters—everything is scale. You don’t have to be huge to have a successful Asian private equity fund. ES You don’t see the need to do anything that people might call transformative? JG I don’t feel the need to. There’s consolidation taking place across the industry, but they’re hard transactions to do. Culturally, they’re hard to do. One thing I’ve learned: Culture matters when you’re doing M&A. Management either amplifies that momentum or really screws it up. We took a few years to get to a really cohesive team. JG I don’t think it’s likely we’re going to be a consolidator of physical property. We’re more likely to be a consolidator of our clients’ accounts and money. We have hundreds of billions of dollars of our clients’ money sitting inside banks. Is that something you think you need to acquire? So I am very interested in finding ways to partner and buy technological capabilities. The measurement of a great management team is competence and cohesiveness. We’re not providing for people to buy and sell cryptocurrencies directly through Morgan Stanley. We are building a trading desk to support various derivative forms of cryptocurrency. There’s a lot of work on how blockchain technology will impact various parts of our business. A large part of the global economy is the black-market economy. It’s not good enough to be tribal and loyal—you’ve got to be good at what you do. And it’s not good enough to be good at what you do—you’ve got to be cohesive. This presents a safer alternative for many people in that part of the economy. JG I doubt it. I think we’re likely to wake up and find there’s no cash. The irony is that countries are moving to remove large-denomination bills to cut down on criminal activity. So if you can’t use large bills and you don’t want to carry around thousands and thousands of dollars in small coins, why not buy a piece of Bitcoin? I think it’s unlikely I will be in this job until I’m 65. You’ve got to think about what’s good for the organization, and partly what’s good for the organization is to move along with enough time for others to be developed. If you stay too long, you run the risk of wiping out a generation. If you stay too short, you run the risk of not developing the next generation. We sold a couple of businesses in the asset-management space. ES If we look at the first part of your tenure as CEO as repairing the damage and repositioning the firm, and the next part of your tenure, the part we’re in right now, as harvesting the fruits of those efforts, what’s the third stage? JG The next segment is a lot about the future—how we embrace technology, what kind of leadership we need, and what businesses we’ll amplify and what we’ll carve down. Leadership in these organizations is probably the most important thing to focus on. Too often on Wall Street, leadership changes happen around events. What we’re trying to build is a disciplined management succession, something that is maybe a little more stable than Wall Street has been traditionally. JG If you look at fixed income, the irony is that could be our biggest winner in the next several years. We restructured it a couple of years ago under the leadership of Colm and Ted and Sam Kellie-Smith, and they’ve done a great job. The markets have been unbelievably light in fixed income, in volume and volatility. We’re going to have lower corporate taxes, we’re going to have higher interest rates, and we’re going to have a more balanced regulatory environment. We took quite a long time to dispose of our physical commodities business, which disproportionately weighed on our fixed-income results, which disproportionately implied we had weaker fixed income than we do. If we’d been more aggressive in getting rid of those earlier—maybe at some cost, higher cost, there’s always a trade-off—fixed income might not have looked as weak and wouldn’t have attracted the glare that it did. So after 10 years of having zero interest rates, extremely demanding regulatory processes—a lot of which were needed—and very high corporate tax rates in this country, all of that is changing at the same time. So the banking sector is in for a very interesting run in the next few years if the global economy cooperates. ES There was a theoretical limit on what the return on equity (ROE) could be in the post-crisis environment. JG The leverage ratios limit for a large trading business what the ROEs are. What’s different now is half the firm has got nothing to do with total balance sheet size, or very little to do with it. So it’s now for us a question of mix. ES It took a long time for Morgan Stanley to get back to 10 percent ROE. ES What yardsticks do you use to measure yourself day to day, quarter to quarter, year to year? You can’t do it. Not with the leverage ratios, not with the amount of capital. By the way, during the crisis, a lot of those earnings were given back. So, no, our aspiration is not to be a 20 percent ROE firm. JG Funnily enough, I have three sheets of paper that I try to run the business by. Which sounds ridiculous, but it’s actually what I do. One is to record every night before I go to bed the numbers of our businesses from around the world and then to use that to engage with managers about why we’re doing well or not doing well in certain areas. The problem with constantly looking at competitors is you start wanting to mimic them. What I care about is, given the resources we have, given the DNA that we have, given the talent that we have, are we optimizing that? We care about what’s going on in the industry. Unless you could generate more velocity of assets on the balance sheet, you’re going to do less well in that industry. What you see over many, many quarters and years are patterns, seasonality, aberrations—aberrations caused by good things happening, aberrations caused by bad things happening, taking losses in a certain part of the portfolio. Unless you had a global macro business where you were the natural player in a lot of the G-10 currencies, you weren’t going to participate at the level of the big banks. Some of our competitors, including the one you named, did exactly the opposite. JG We already own part of a joint venture, and we took our ownership from 33 percent to 49 percent. That gives you a tactile feeling for how we’re doing on a day-to-day basis. The Chinese economy is the second-biggest economy in the world. We shouldn’t have a minority business in that economy. It’s not a game changer for Morgan Stanley over the next several years, but it’s more than symbolic, going to 50-plus percent. JG Every market’s got local champions that almost by definition have a massive information and position advantage, because they’re helping finance local companies. And if you’re trying to do a global deal, you probably want someone who can take your clients globally. On an annual basis, the second sheet of paper is a summary of 10 goals that I put aside for myself, separate from the board, CEO, organization. MUFG—as big as they are, and they’re enormous—see the great advantage in the access to the global economy that Morgan Stanley brings. I think it’s very hard to have cross-border equity holdings in banks for regulatory and cultural reasons. So you’d only do it if you really found something you thought was compelling and could materially change your position in the market. ES Why shouldn’t China be more of a game-changing opportunity? JG The vast majority of the economy is state-owned. It’s not as big as the size of the economy implies. That said, it’s big and important and will only get bigger and more important. JG The obvious place for infrastructure financing is right here in the U.S. ES The financial crisis taught us to worry about tails, but there are tails on both sides of the histogram. So if you’ve spent several hundred million dollars against something that hasn’t happened, it’s because you’re worried about the low-probability outcome. And the positive, which is not low, but low-ish, is this trifecta coming together. We’ve got corporate tax reform, rates are starting to rise, and the regulatory environment looks like it’s changing. If global economic growth keeps going, that combination, that multiplier effect of all those happening, that could be big. Saved in part by an infusion from Japan’s Mitsubishi UFJ Financial Group Inc. (MUFG), Morgan Stanley pivoted toward Gorman’s wealth-management business with the acquisition of Citigroup Inc.’s Smith Barney, and he became CEO in 2010. And two, they’re reflective of the skills, strengths, and weaknesses that you bring to the seat. A different CEO, faced with the same environment, would have a different set of goals, because they’d have different skills, strengths, and weaknesses. The third is a sheet of paper that summarizes our strategy—­it’s more of a mission statement than a true strategy statement—in about 72 words. When we make strategic decisions, I go back to the sheet of paper and think, Does it fit? ES What was on the list of annual goals for 2017? JG To pass my annual fitness test, which I do the night before my birthday [July 14]. I’ve now done this for about six years since I started rowing on the ergometer, and it’s like an annual mark-to-market of how you’re aging. For me, physical fitness—not at a crazy jock level, but strong and healthy—is a really important part of keeping on top and in the game. After building a deposit base and staving off a potentially fatal credit downgrade, Morgan Stanley reengineered its fixed-income business and even beat longtime archrival Goldman Sachs Group Inc. in debt trading in the first half of 2017. Put it this way: I’m not surprised by what the stock has done. In fact, I predicted it at the management offsite a couple of years ago. I thought we would be a $50 stock, and we’re going to be a significantly higher stock over the next couple of years. I have the stock on my screen. I have it on my iPhone, I have it on my personal iPhone, I have it on my iPad. I have four ways I can find the stock price within about 2 seconds, and I would freely admit I look at it on each of those screens more than once a day. ES How long do you think it’s going to take before Morgan Stanley stock sets a new high-water mark? JG That was a time when the world thought Morgan Stanley and some other institutions were behaving like internet companies. For a point of reference, during the financial crisis we traded at less than 0.2 times book value, so 30 times less in terms of valuation. I’m sorry if that’s going to disappoint an investor out there, but that would be a very bad sign. The Australian-born Gorman, 59, now sees a possible scenario of global economic growth, lower taxes, higher interest rates, and easier regulations ahead. That would mean that we’d done something to engineer a rate of growth that implies we’re a massive growth stock company. Historically in this industry, you bought these shares at 1.25 times book value and sold them at 2.5. Below that you really had to question what you were buying. ES So what’s on the list for 2018? And he’s beaten the consultant label. “The reality is I’ve been on Wall Street now for 18 years, and I was a consultant for 12,” he says. “I’m also a lawyer.” They relate to management, development, use of new forms of technology, automation, AI, digital, and how they’re impacting our business. Certain financial metrics in areas I think we can improve—I won’t publicly say what they are, but they’re areas where we can improve. I’m conscious about how to build the institution for the next 10 to 15 years, not just the next year. ES What are the hardest things you’ve had to do in this job? Deciding who gets which job, what roles they play, how you develop the people, how they live up to your expectations. Some of the execution with Smith Barney, you could argue there are things we should have done differently. But having the people in place to drive and lead that execution—far beyond myself and the top couple of lieutenants, having the top 10, 20, 30, 40 people in place to lead it—that’s hard. And to make real-time people decisions when the Earth is moving under your feet makes it even harder. When the world is not static, and the world hasn’t been for most of the last decade, people decisions are exponentially harder. Had we not done that, we wouldn’t have had a business fit for purpose to do the Smith Barney deal.

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