Wealth and Politics Converge in China

WEALTH AND POLITICS CONVERGE IN CHINA  |  The official story in China is that the prime minister, Wen Jiabao, came from humble roots. But his family has had remarkable business success in the years since he came to power, controlling assets worth at least $2.7 billion, according to an investigation by The New York Times. The records uncovered by The Times provide an “unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China's fast-growing economy.” Mr. Wen, The Times report continues, “has broad authority over the major industries where his relatives have made their fortunes.”

In one example, Mr. Wen's relatives made a fortune by investing in Ping An Insurance before its I.P.O. - and after a government bod y that Mr. Wen presides over exempted the company from certain rules. The holdings were worth as much as $2.2 billion in 2007, according to The Times. This world may be unfamiliar to deal makers on Wall Street, but in emerging markets, political connections offer “the quickest path for riches these days,” wrote Steven M. Davidoff in the Deal Professor column earlier this year. (The Chinese government blocked access to The New York Times online after the article about Mr. Wen's family was posted.)

VIKRAM PANDIT'S FINAL DAYS  |  The coup at Citigroup that toppled Vikram S. Pandit was meticulously planned over the last several months, report Jessica Silver-Greenberg and Susanne Craig in The New York Times. The plan's author, Michael E. O'Neill, began private meetings with board members since becoming chairman in April, until Mr. Pandit, the chief executive, “had virtually no allies left,” Ms. Silver-Greenberg and Ms. Craig write. This effort was said to culminate in an encounter early last week, when Mr. O'Neill told Mr. Pandit that “the board has lost confidence in you,” prompting Mr. Pandit to resign immediately. He was replaced with Michael L. Corbat, who, The Times report says, was alerted by Mr. O'Neill a few weeks earlier that he might be asked to take the reins.

XSTRATA'S GAMESMANSHIP  |  Xstrata has set a date of Nov. 20 for shareholders of the mining company to vote on the merger with the trading house Glencore. As advertised, the structure of the vote allows shareholders to approve the merger while also rejecting $200 million in retention payments. But the reality isn't so clear-cut, writes Steven M. Davidoff in the Deal Professor column. Xstrata, Mr. Davidoff writes, has set up “a diabolical game of the prisoner's dilemma.”

ON THE AGENDA  |  The chairwoman of the Securities and Exchange Commission, Mary L. Schapiro, is speaking about the Dodd-Frank law at George Washington University Law School this morning. K.K.R. announces its quarterly results before the opening bell. Moody's, Comcast and Merck also report earnings before the market opens. Peter Orszag, Citigroup's vice chairman of global banking, is on CNBC at 7:30 a.m. Julian Robertson, the founder of Tiger Management, is on Bloomberg TV at 7:30 a.m. Laurence Fink of BlackRock is on CNBC at 8 a.m. The billionaire Kenneth G. Langone is on Bloomberg TV at 4 p.m. An estimate of third-quarter gross domestic product is being released at 8:30 a.m.

WALL STREET'S POLITICAL STREAK  |  With the presidential election around the corner, business leaders are engaging in some political activism. A group of more than 80 chief executives, called Fix the Debt, is pushing an agenda that doesn't fit neatly into either political party, writes Jackie Calmes of The New York Times. Jamie Dimon of JPMorgan Chase, for example, recently hosted a Wall Street lunch with lawmakers to ask how Republicans could be persuaded to drop their opposition to higher taxes. Lloyd C. Blankfein of Goldman Sachs explained that while these executives are “willing to give more revenue,” they “don't want to take on the moral hazard” of giving the government more money without a deal to cut the budget, according to Ms. Calmes.

For another Wall Street leader, Laurence Fink of BlackRock, the so-called fiscal cliff is a pressing concern. Speaking at a conference hosted by The Economist magazine on Thursday, Mr. Fink lamented that there was “not one question” in the presidential debates about the issue. Of course, it's not the only topic that's been absent from the debates. “Remember the euro crisis?” asks Floyd Norris of The New York Times. “In this week's foreign policy debate between President Obama and Mitt Romney, the euro never came up.”

If Mr. Romney is elected, he may have a willing Treasury secretary in Glenn Hubbard, his chief economic adviser. Mr. Hubbard, the dean of Columbia University's business school, “would rather be Treasury secretary than Federal Reserve chairman,” according to Bloomberg News, which cites unidentified people familiar with his thinking.

HEDGE FUND ROYALTY  |  Christopher O'Neill, a partner at the hedge fund Noster Capital, is engaged to be married to Princess Madeleine of Sweden. The pair met in New York.

Mergers & Acquisiti ons '

Random House and Penguin in Merger Talks  |  The two publishers are trying to protect themselves from the increasing clout of Amazon, Apple and Google in the e-book market.
NEW YORK TIMES MEDIA DECODER

Machinery Maker Considers Sale  |  Gardner Denver said it was exploring options that included a possible sale or merger, Reuters reports.
REUTERS

Berkshire Hathaway Wins Bid for ResCap Loans  |  Berkshire Hathaway successfully bid for a 47,000-loan portfolio held by Residential Capital, the bankrupt mortgage lender, paying $1.5 billion.
DealBook '

Next in Line at Berkshire Hathaway?  |  Ted Weschler has been busy since joining Berkshire Hathaway in January, and there's speculation that he might one day take the reins from Warren E. Buffett, Bloomberg Businessweek writes.
BLOOMBERG BUSINESSWEEK

Mayer Strikes First Deal at Yahoo With Acquisition of Stamped  |  Marissa Mayer, Yahoo's chief, announced on Thursday that the Internet company had purchased Stamped, a start-up focused on mobile products.
DealBook '

Chief of Anglo American to Step Down  |  Cynthia Carroll is leaving her post as chief executive of Anglo American, as the mining company has lagged its rivals, The Wall Street Journal reports.
W ALL STREET JOURNAL

INVESTMENT BANKING '

Tallying the Costs of Bank of America's Countrywide Nightmare  |  Countrywide Financial, the subprime lending specialist that Bank of America bought in 2008, continues to drain the bank's resources.
DealBook '

Civil Fraud Charges Possible for Bank of America Employees  |  A federal prosecutor said in court on Thursday that “the government may amend” its new lawsuit against Bank of America to “include individuals, present or former employees” of the bank.
REUTERS

S.&P. Downgrades BNP Paribas  | 
NEW YORK TIMES

As a Benchmark Loses Status, Brazil Seeks Alternatives  |  Traditional investing standards that have been in place for decades in Brazil may soon change, forcing fund managers to dive into riskier investments in order to meet performance goals.
DealBook '

Evercore Profit Falls in Weak M.&A. Climate  |  Evercore Partners said profit slipped 13 percent in the third quarter, as it grappled with a slowdown in its advisory and investment management businesses.
DealBook '

ICICI Bank of India Reports 30% Rise in Profit  | 
ASSOCIATED PRESS

A Bank C.E.O. Without Controversy  |  Jim Rohr of PNC Financial Services “looks more out of central casting for brake-pad salesman than a systemically important Wall Street C.E.O.,” writes Bloomberg Businessweek.
BLOOMBERG BUSINESSWEEK

PRIVATE EQUITY '

Returns Fall for College Endowments  |  According to a preliminary study released on Thursday, college and university endowments lost 0.3 percent on average in the fiscal year ending in June, compared with a gain of 19.2 percent in the previous fiscal year, The New York Times reports. The biggest endowments are often invested in private equity and hedge funds.
NEW YORK TIMES

Private Equity Video Promotes Environmental Impact  |  A new video from the private equity industry's lobbying group highlights an investment by TPG Capital in a ride-sharing company, vRide.
PRIVATE EQUITY GROWTH CAPITAL COUNCIL

Blackstone to Increase Real Estate Investments in Asia  | 
BLOOMBERG NEWS

HEDGE FUNDS '

Man Group Attracts the Interest of a British Rival  |  The London-based hedge fund Odey Asset Management has built up a 5.15 percent stake in Man Group, the publicly traded hedge fund giant that has fallen on difficult times, Reuters reports.
REUTERS

David Einhorn Continues His Take Down of Fed Policy  |  The hedge fund manager says the central bank's loose-money policy is hindering economic growth, an argument he expanded on during a conference in New York on Thursday.
DealBook '

Jana Partners Plans a Drawn-Out Battle  |  Reuters reports: “From Agrium Inc's perspective, a campaign by Jana Partners LLC to break up the Canadian fertilizer company is effectively dead in the water. But the $3.5 billion activist hedge fund believes it is only getting started.”
REUTERS

I.P.O./OFFERINGS '

A Closely Watched Clean Tech I.P.O.  |  Reuters writes: “The last thi ng the downtrodden clean tech industry needs is another start-up going up in flames, so it has a lot riding on the initial public offering of SolarCity.”
REUTERS

Food Company Prices I.P.O. Above Expected Range  |  WhiteWave, a specialty food company splitting off from Dean Foods, priced its I.P.O. at $17 a share to raise $391 million, Dow Jones reports.
WALL STREET JOURNAL

Government to List Japan Post Holdings  |  The Japanese government plans to offer shares of Japan Post Holdings within three years, Reuters reports.
REUTERS

VENTURE CAPITAL '

Andreessen Horowitz Backs an Education Company  |  The venture capital firm led a $15 million investment round in Udacity, which aims to offer university-level education for free, TechCrunch reports.
TECHCRUNCH

LEGAL/REGULATORY '

Lawyer Denounces Wiretaps in Appeal of Galleon Case  |  A lawyer for the former hedge fund manager Raj Rajaratnam argued before appellate judges that the government's request to secretly record Mr. Rajaratnam's conversations was riddled with problems.
DealBook '

Lawmakers Seek Urgency in Volcker Rule  |  While regulators hope to finalize the Volcker Rule by the end of the year, Senators Carl Levin and Jeff Merkley argue in a letter that some agencies should publish the final rule even if all are not yet on board.
DealBook '

Why Did Freddie Mac Oppose Refinancing Mortgages?  |  Jesse Eisinger reports in ProPublica that Freddie Mac “made it harder for millions of Americans to refinance their high-interest-rate mortgages for fear it would cut into company profits.” Mr. Eisinger adds that “two Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason, according to the interviews: They regarded it as a backdoor economic stimulus.”
PROPUBLICA

The Shift Toward Law School Specialization  |  Instead of just offering the traditional, general legal education, law schools may want to consider ing playing matchmaker, guiding students toward specialties that are likely to endure, including tax or securities law, writes Victor Fleischer in the Standard Deduction column.
DealBook '

New Taxes on Global Reinsurers Would Hurt Response to Natural Disasters  |  A new tax under consideration aimed at reinsurers based outside the United States would be punitive and could reduce aid for natural disasters by billions of dollars, write J. David Cummins, a professor at Temple University's Fox School of Business, and Bradley Kading, the president of the Association of Bermuda Insurers and Reinsurers.
DealBook '