Good morning.
This week is the deadline for cities to submit their proposals to become home to Amazon’s second headquarters. The company has said the new headquarters will be as large as its current Seattle operation, and could bring as many as 50,000 skilled jobs to the winner of the sweepstakes. And there’s even more at stake than that. The rising role of intellectual property in today’s business means human capital has become the biggest determinant of business success. Talent seems to move in herds. Whoever wins the Amazon headquarters will instantly establish itself as a critical tech hub, and a magnet for more talent.
This morning, New York City is throwing its hat into the ring. In an early copy of a public letter provided to CEO Daily, a long list of New York business leaders boasted a series of benefits that they say can’t be matched by places like Boston, Atlanta, Denver or Los Angeles. Among them:
- 100 universities that awarded 18,000 post-secondary STEM degrees last year;
- 2.3 million residents with graduate or professional degrees;
- $2.9 billion in R&D spending by academic institutions last year;
- 47 Fortune 500 headquarters.
Among the signatories to the letter are Morgan Stanley CEO James Gorman, Guardian CEO Deanna Mulligan, American Express CEO Ken Chenault, Citigroup CEO Michael Corbat, IAC Chairman Barry Diller, Infor CEO Charles Phillips, and Blackstone CEO Stephen Schwarzman. A previous letter from tech executives also touted New York for the honor.
Meanwhile, former Fortune colleague Allan Sloan predicts in his Washington Post column that Toronto will get the nod—given moves to restrict immigration here in the U.S..
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Top News
• Flight of the Hawks
The world’s central bankers used the fall meeting of the International Monetary Fund to warn that inflation may soon take off around the world. Janet Yellen said her “best guess” was that the recent patch of soft price data would soon end, while the heads of both the ECB and Bank of England also warned that the trend had turned. Earlier Monday, China’s outgoing central bank head rammed home the message, saying that China’s economy could grow at an annual rate of 7% in the second half of this year. That gave global stocks fresh impetus early Monday, with miners and energy companies the main beneficiaries. Fortune
• Another Dilemma for Rex
Secretary of State Rex Tillerson has another dilemma on his hands. Fighting has broken out between to of the key pillars of the U.S.’s strategy in the Middle East, the Iraqi government and Kurdistan’s regional government, the latter of which has been setting a course for independence after a disputed referendum. Reports suggest that (U.S.-trained) Iraqi forces have captured large areas of territory around the disputed oil city of Kirkuk from (U.S.-trained and equipped) Kurdish forces. Crude oil prices hit levels close to a six-month high overnight in response. Fortune
• Saudi Backs Away From Aramco Float
Saudi Arabia is reportedly close to changing its mind about floating its giant national oil company Saudi Aramco, instead opting for a private sale to a number of sovereign wealth funds and institutional investors. Saudi’s insistence on keeping sovereign prerogatives over the company’s governance (e.g., by keeping reserves data and some financial data confidential) are essentially incompatible with the principles of public markets, and its bankers had warned that they couldn’t achieve the desired valuation under such constraints. A private sale would let Riyadh keep more control of the process, while still introducing a degree of external influence that should improve management. FT, metered access
• DEA Whistleblower Takes Aim at Congress, Drug Industry Over Opioids
CBS’s 60 Minutes ran a profoundly uncomfortable interview with Joe Rannazzisi, a former DEA agent, alleging widespread collusion between the drug industry and Congress in spreading the country’s opioid epidemic. “This is an industry that allowed millions and millions of drugs to go into bad pharmacies and doctors’ offices, that distributed them out to people who had no legitimate need for those drugs,” Rannazzisi said, pointing the finger specifically at Cardinal Health, McKesson and AmerisourceBergen. CBS
Around the Water Cooler
• Europe Inches Further Right, as Catalonia Worries Persist
Austria’s right-wing populists, the Freedom Party, are set to join the government after winning 26% of the vote at national elections Sunday. The government will be led by 31 year-old Sebastian Kurz, whose mainstream center-right party only won by adopting large parts of the Freedom Party’s manifesto on migrant policy. Austria doesn’t typically influence things in Europe too much, but Kurz’s success hints at the future direction of Germany’s Christian Democrats as Angela Merkel runs down her time in office. Merkel’s party, meanwhile, fared badly in a regional election in the state of Lower Saxony. Elsewhere in Europe, Spain gave Catalonia until Thursday to decide whether its declaration of independence is in force of not. “Make me,” replied Catalan leader Carles Puigdemont, in an attempt to goad PM Rajoy into imposing direct rule on the region. Reuters
• Hail the New Age of Hollywood
Hollywood reverberated to the sound of the sinless casting stones at Harvey Weinstein. The Academy of Motion Picture Arts and Sciences expelled the disgraced mogul after an emergency session on Saturday, saying in an accompanying statement that “sexually predatory behavior” in the movie industry is over. Timestamp. Time
• Bombardier Looks For Help in Aircraft Business
Canada’s Bombardier is reportedly exploring strategic options for its aerospace operations in the wake of the U.S.’s decision to impose punitive import tariffs on its new CSeries regional jets. The effective loss of the U.S. market has undercut the logic behind the company’s current strategy, according to Bloomberg. It’s been a rotten month for Bombardier: its rail unit also faces big strategic challenges after Siemens ditched it in favor of France’s Alstom. Fortune
• Aramark Hits the Acquisition Trail
Food-service company Aramark is buying two closely held companies for a total of $2.35 billion in its first major M&A moves since returning to the public market in 2013. It’s buying Avendra LLC for $1.35 billion and AmeriPride Services for $1 billion, The Wall Street Journal reported. WSJ, subscription required
Summaries by Geoffrey Smith; geoffrey.smith@fortune.com
@geoffreytsmith
