The creator of bitcoin has unmasked himself, or so most of the media think this morning. Australian tech entrepreneur Craig Wright has given the BBC and The Economist proof that he is the mysterious Satoshi Nakamoto who started the bitcoin craze. He had previously been identified by Wired and Gizmodo, but some skepticism remained. If Wright is Nakamoto, he holds about $457 million worth of the digital currency. The Economist still has some doubts.
We think bitcoin’s past, while mysterious, is less interesting than its future. Many of the companies and investors who share that view are descending on New York this week for Consensus 2016, the second annual blockchain technology summit, to explore its potential for transforming the way transactions are managed online. I’ll be interviewing former Treasury Secretary Lawrence Summers on the summit stage Tuesday.
Separately, Justin Fox at Bloomberg View did a nice job crunching numbers from recent earnings reports to see which companies are spending the most on R&D – a proxy for long-term thinking. The results? While old line companies like Chevron, Exxon Mobil, AT&T and Verizon still lead the way in capital spending –buildings and machines – tech firms starting with Amazon, Alphabet, Intel, Microsoft and Apple are top spenders on R&D. Moreover, Fox notes, spending by the top 15 companies is twice what is was in 2006. A caveat: companies have lots of leeway in deciding what to categorize as R&D. But overall, America’s tech leaders seem to be making a big commitment to the future.
I skipped the annual White House Correspondents Dinner this weekend, but pass on President Obama’s best line of the evening. Referring to Hillary Clinton’s speaking fees, the President said if his speech went well, “I’ll use it at Goldman Sachs next year. Earn me some serious Tubmans.” (If that went past you, click here.)
Enjoy the day.
• Halliburton-Baker Hughes to call off merger
Halliburton and Baker Hughes are expected to announce the termination of their merger agreement on Monday following opposition from U.S. and European antitrust regulators. The deal would have brought together the world’s No. 2 and No. 3 oil services companies, raising concerns it could result in higher prices in the sector. It is the latest example of a large merger deal failing to win final approval because of antitrust worries. Halliburton is also expected to cite the impact that lower oil prices have had on the deal’s financial appeal as a reason for ending the merger agreement, in addition to the lengthy regulatory process.
• Puerto Rico to default on payment Monday
Puerto Rico’s governor on Sunday declared a moratorium on a $422 million debt payment due Monday by the island’s Government Development Bank, the most significant default yet for the U.S. territory facing a massive economic crisis. Governor Alejandro Garcia Padilla said in a televised speech that he signed the moratorium on Saturday in what he characterized as a “painful decision” based on inaction from the U.S. Congress, which continues to debate a legislative fix for Puerto Rico’s $70 billion debt load. Garcia Padilla said the island’s American citizens had sacrificed much for the nation throughout history and asked Congress on many occasions for tools to restructure its financial liabilities.
• Oracle of Omaha’s weekend of news
Warren Buffett generated a slew of headlines over the weekend, as his insurance conglomerate held its annual meeting. Buffett kicked things off by reviewing first-quarter results, explaining insurance revenue was lower because of hail storms in Texas while railroad earnings slipped because of weakness from the energy sector. He made several other notable proclamations. A possible Donald Trump presidency? We’ll be fine. He defended his investment in Coca-Cola even as he faces criticism because the beverage giant’s sodas are blamed for health woes. And he said despite various efforts by people to get him to buy Valeant Pharmaceuticals’ stock over the years, he was never interested because he felt the company had a “deeply flawed” business model.
• Bloomberg blasts Trump, Sanders
Michael Bloomberg, the former New York City mayor who considered a presidential run, blasted the partisan politics and “demagoguery” of the 2016 race in a commencement speech on Saturday, making reference to both Donald Trump and Bernie Sanders. The billionaire business, in a column adapted from his remarks at the University of Michigan, said the country faced serious and difficult challenges. But rather than offering real solutions, candidates in both parties are blaming our problems on “easy targets who breed resentment.” For Republicans, it’s Mexicans and Muslims and for Democrats, it’s the wealthy and Wall Street, Bloomberg said. Bloomberg added: “Today, when a populist candidate promises free college, free health care and a pony, or another candidate promises to make other countries pay for our needs, remember: Those who promise you a free lunch will invariably eat you for breakfast.”
Around the Water Cooler
• ‘Jungle Book’ keeps winning at the box office
The Jungle Book” pulverized a trio of box office lightweights, racking up $42.4 million to lead ticket sales for the third consecutive weekend. Walt Disney’s live-action adaption of Rudyard Kipling’s Mowgli stories has made $252.1 million since opening last month. And this past weekend, it easily defeated some new competition. Keanu,” an action-comedy sendup from Jordan Peele and Keegan-Michael Key, nabbed third place with $9.3 million in what many considered a weak result though that film only cost $15 million to produce. “Mother’s Day,” an ensemble romantic comedy with Julia Roberts, Jennifer Aniston and Jason Sudeikis also failed to impress. It only eked out $8.3 million in a wide release across 3,035 theaters.
• Hulu is developing a cable TV rival
Hulu is developing a subscription service that would stream feeds of popular broadcast and cable TV channels, The Wall Street Journal reports, citing people familiar with the plans, a move that would make the company a competitor to traditional pay-TV providers and other new digital entrants. Hulu’s current business model is offering streaming programming from major networks, similar to Netflix. But the company is reportedly hoping to launch the new cable TV-style online service early in 2017, WSJ said. Walt Disney and 21st Century Fox, which are co-owners of Hulu, are near agreements to license many of their channels for the platform. Disney’s ABC, ESPN and Disney Channel, as well as Fox broadcast network, Fox News, FX and national and regional sports channels, are expected to be included in the service.
The Wall Street Journal (subscription required)
• Security lines at airports are getting longer
The New York Times asserts that a combination of fewer Transportation Security Administration screeners, tighter budgets, new checkpoint procedures and growing numbers of passengers has created a mess at U.S. airports. The result? Passengers have reported epic lines at T.S.A. checkpoints, causing heartburn and angst, as well as missed flights. While the T.S.A. says it is hiring and training hundreds of additional screening officers, matters are not likely to improve anytime soon. Airline and airport officials have said they fear that the current slowdown will last through the year and could cause a summer travel meltdown when travel demand peaks. Charlotte Douglas International Airport in North Carolina, for example, recently said it had experienced three-hour wait times.
New York Times (subscription required)
• China business travel spending tops U.S.
China has surpassed the U.S. in the amount of money spent on business travel, and industries ranging from planemakers to hotels to luggage companies are clamoring for a foothold in the massive new market. In 2015, business travel spending by the Chinese reached $291.2 billion compared with the $290.2 billion spent by their American counterparts, according to a report from the Global Business Travel Association. Travel spending by Chinese companies is likely to continue rising this year, increasing 10.1% to $320.7 billion vs. the 1.9% uptick to $295.7 billion spent by U.S. companies. It is also important to note that 95% of that corporate travel spending occurs inside China.