I’m in Washington this morning, where the presidential race is coming into clearer focus.
After the South Carolina results, Republicans now have three viable options:
-Donald Trump, the front runner, who is anti-trade, anti-immigration, and believes he can save Americans more money on prescription drugs than they actually spend on them.
-Ted Cruz, whose fierce commitment to the conservative cause, and to himself, has alienated virtually all of his Senate colleagues.
-And Marco Rubio, who everyone agrees has a bright future… but not that much of a past.
Billionaire Stan Druckenmiller is unhappy with these options and making a last-ditch effort to resuscitate John Kasich. But in this election, billionaires count for less (unless you are Donald Trump).
After Nevada, Hillary Clinton once again has emerged as the clear Democratic front runner. The talk here is that the person now standing between her and the nomination is not Bernie Sanders, but James Comey, the FBI director who ultimately will decide whether to recommend an indictment on her email machinations. Comey is widely regarded as one of the most principled and independent men in Washington, and won’t hesitate to recommend an indictment if justified. The Obama Justice Department doesn’t have to accept that recommendation. But this is Washington, and the odds of such a recommendation remaining secret are small.
That’s the same James Comey, of course, who is now tousling with Tim Cook over encryption. While Cook was number one on FORTUNE’S World’s Greatest Leaders list last year, Comey, at number 13, was not far behind. Comey put up a blog post last night that avoided mentioning Cook or Apple, but said that he and his colleagues “can’t look the survivors in the eye, or ourselves in the mirror” if they don’t try and get information out of the encrypted iPhone of the San Bernardino killer.
Cook and Comey have been invited to appear before Congress to debate the encryption issue. That’s likely to be the first of many face offs in a long legal wrangle ahead. Apple has hired super lawyer Ted Olson to argue its case. My colleague Norm Pearlstine suggests this morning that the Justice Department hire super lawyer David Boies to take the other side. Olson and Boies teamed up to defeat Proposition 8, the California voter initiative designed to ban same-sex marriage, but took opposite sides in the historic Bush v. Gore case that determined the 2000 election. Boies’ involvement would make an already epic battle more so.
More news below.
• Uber driver goes on shooting spree
Six people are dead and two are injured after a man went on a shooting spree in Kalamazoo, Mich., with the shooter reportedly an Uber driver who was taking passengers on high-speed rides across the city in between the slayings. The shooter, Jason Dalton, was arrested on Sunday and will be arraigned on charges of murder and attempted murder. Uber confirmed that Dalton was a driver for the service. It also said the company was "horrified and heartbroken at the senseless violence." Uber added it intends to help police with their investigation. Fortune
• HSBC under investigation
Europe’s biggest lender is under investigation by U.S. regulators in relation to hiring practices of people tied to government officials in Asia, the bank said on Monday. A number of financial institutions are being probed by the Securities and Exchange Commission, which is looking into recruitment practices in Asia. HSBC on Monday also said it would stick to plan to expand in China, though it also warned an economic slowdown was making the environment more challenging. Reuters
• Samsung debuts first VR camera
Samsung debuted its first virtual reality consumer camera at Mobile World Congress, a device that should open up new bundling opportunities for the South Korean tech giant to offer consumers a way to film in 360-degree video and then watch that content. The camera, which will ship in 2016, will also complement Samsung's Gear VR headset – which has been a hot seller since it debuted last fall. LG is also showing off a VR headset and camera this week, and both will be competing with several competitors in the explosive market. Fortune
• Rubio is winning over Wall Street
Republican Marco Rubio's presidential run has drawn more money from Wall Street donors than any other candidate, according to a Reuters review of campaign finance disclosures, helping to shore up his position as the party's establishment alternative to front-runner businessman Donald Trump. Rubio received more than $4 million from the employees of banks and investment firms since launching his bid for the presidency, while Jeb Bush – who dropped out of the race on Saturday – came in second. Democratic hopeful Hillary Clinton took third place. Reuters
• China ousts stock regulator
China replaced its top securities regulator in a move to apportion blame for the government’s bungled policies during and after the country’s stock market crash this summer. Xiao Gang is out as head of the China Securities Regulatory Commission, news that was announced over the weekend. Xiao was perhaps best known for China's infamous stock circuit breakers, an idea he championed and which lasted only four (down) trading days in early January before being abandoned. The move to replace Xiao is reportedly the first of many in a reshuffling of economic positions in China following criticism of how recent events have been handled. Fortune
Around the Water Cooler
• Zuckerberg: VR is a social platform
The Mobile World Congress certainly dominated business news coverage over the weekend. Facebook, for example, generated headlines when CEO Mark Zuckerberg made a surprise appearance at Samsung's press conference to talk up progress in virtual reality and to promote VR in the future as the "most social platform." He added that, soon, we will live in a world where everyone "has the power to share and experience whole scenes as if you're just there, right there in person." Facebook is invested in the space, as it paid $2 billion to buy Oculus, which has been working with Samsung on its Gear VR consumer headsets. USA Today
• 5G is the new frontier
A global standard for 5G wireless technology will not be finished before 2019, at the earliest. But that hasn't stopped the tech world from anticipating the new frontier. The efforts around 5G are to be on display at Mobile World Congress, a four-day tech and telecom event in Barcelona that begins on Monday. Many of the world's largest devices makers are planning to unveil their latest technology, including smartphones and wearable products. Meanwhile, telecom manufacturers are expected to showcase their 5G credibility. New York Times (subscription required)
• Mastercard expands "Selfie Pay"
The credit card company said on Monday that it is expanding its facial recognition capabilities to 14 countries this summer, a way to make it easier to verify transactions as consumers make more purchases online and on mobile devices. The capabilities, which allows cardholders to authorize transactions by taking a selfie and blinking, were first were tested in the United States in October. It is a way Mastercard can cut down on false declines, which occur when a legitimate transaction is rejected because of suspected fraud. Fortune