Morning Consult Finance: Industries Launch Lobbying Campaign Against Trump Tariffs


Top Stories

  • Trade organizations representing a number of industries including farming, technology and toy manufacturing plan to announce a new lobbying campaign today to oppose the administration’s import tariffs. The multi-million dollar Tariffs Hurt the Heartland campaign is the latest in a number of efforts to promote free trade as the administration pursues additional tariffs on Chinese imports. (The Wall Street Journal)
  • Regulators have rejected Wells Fargo & Co.’s plan to reimburse drivers who were pushed into unnecessary auto insurance, with the Office of the Comptroller of the Currency saying it needed more assurances that the bank would be able to find and compensate every affected customer, according to three sources. Officials have said that more than a quarter of the “forced-place” auto insurance policies in which Wells Fargo enrolled roughly 2 million customers were unnecessary. (Reuters)
  • A number of tech veterans and cryptocurrency companies are joining together to form the Blockchain Association, the first major lobbying group focused on blockchain technology. Its members include popular virtual currency exchange operators Coinbase and Circle, with Coinbase’s chief legal and risk officer, Mike Lempres, saying the group is working to “to develop a legal and regulatory system” for digital assets. (The Washington Post)

Chart Review

Events Calendar (All Times Local)

Wednesday
NAFCU Congressional Caucus 7:15 a.m.
Cato fintech regulation summit 8:30 a.m.
Brookings event on responding to the global financial crisis 10 a.m.
CSIS event on blockchain 10 a.m.
Aspen Institute event on financial health of independent workers 2:30 p.m.
Thursday
NAFCU Congressional Caucus 7:15 a.m.
SEC Investor Advisory Committee meeting 9 a.m.
CEPR event on building a high-wage America 9:30 a.m.
Senate Banking Committee hearing on the Implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act 10 a.m.
Senate Budget Committee hearing on CBO transparency 10:30 a.m.
Aspen Institute event on AI and the consumer debt market 4 p.m.
Economic Club Milestone Celebration Event feat. Jeff Bezos 5:15 p.m.
Friday
NAFCU Congressional Caucus 7:15 a.m.
AEI conference on the 10th anniversary of the financial crisis 10 a.m.

New Poll: Consumers React to Nike’s New Ad Featuring Colin Kaepernick

Real-time brand tracking data reveals a sharp drop in favorability and purchasing consideration.

General

China Woos U.S. Companies Again, Curbs Trade Threats
Lingling Wei and Yoko Kubota, The Wall Street Journal

Chinese leaders are stepping up a charm offensive with U.S. multinationals and sheathing earlier threats of retaliation as Beijing changes tack to keep the trade fight with Washington from scaring off foreign investors. Beijing is offering a reassuring message in its outreach to American companies.

China puts off licenses for US companies amid tariff battle
Joe McDonald, The Associated Press

Amid a worsening tariff battle, China is putting off accepting license applications from American companies in financial services and other industries until Washington makes progress toward a settlement, a business group says. The disclosure Tuesday is the first public confirmation of U.S. companies’ fears that their operations in China or access to its markets might be disrupted by the battle over Beijing’s technology policy.

Canada ready to allow U.S. dairy access in NAFTA talks: sources
David Ljunggren and David Lawder, Reuters

Canada is ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement, two Canadian sources with direct knowledge of Ottawa’s negotiating strategy said on Tuesday.

Trump says Canada trade talks continue ‘in good faith’ after leaked remarks
Steven Nelson, Washington Examiner

President Trump said Tuesday that U.S. trade negotiators are “dealing in good faith” with Canada, as deadlines loom for the White House to give Congress the text of a trade deal to replace the North American Free Trade Agreement. Trump made the remark in the Oval Office as he addressed hurricane preparedness, confronting a perception among Canadian officials that he has not been working in good faith during talks to replace NAFTA.

Europe Stocks Rise, Asia Extends Drop; Euro Slips: Markets Wrap
Eddie van der Walt, Bloomberg

European stocks advanced on Wednesday and Asian shares extended a losing streak as traders turned their focus to the outlook for monetary policy amid lingering worries for global trade. Treasury yields edged lower after climbing a day earlier.

Banking

A Top Goldman Banker Raised Ethics Concerns. Then He Was Gone.
Emily Flitter et al., The New York Times

By the tight-lipped standards of Goldman Sachs, the phone call from one of the firm’s most senior investment bankers was explosive. James C. Katzman, a Goldman partner and the leader of its West Coast mergers-and-acquisitions practice, dialed the bank’s whistle-blower hotline in 2014 to complain about what he regarded as a range of unethical practices, according to accounts by people close to Mr. Katzman, which a Goldman spokesman confirmed.

Mark Carney will lead Bank of England through Brexit
Ivana Kottasová, CNN

Mark Carney is sticking around for Brexit. The Bank of England said Tuesday that Carney would stay as governor until January 2020.

Financial Products and Investments

Lagarde warns of US-China trade war ‘shock’ to emerging markets
James Politi and Sam Fleming, Financial Times

Christine Lagarde has warned that the escalating US-China trade war could deliver a “shock” to already struggling emerging markets, raising the prospect that a crisis ripping through Argentina and Turkey could spread across the developing world. The IMF managing director told the Financial Times that her staff does not yet see “contagion” spreading to multiple countries beyond those currently fighting investor flight.

JPMorgan to create wealth management unit in Luxembourg
Diptendu Lahiri, Reuters

JPMorgan Chase & Co said on Tuesday it will establish a wealth management business in Luxembourg and boost offerings at its investment banking and custody and fund businesses.

Erdogan Names Himself Chairman of Turkey Wealth Fund in Overhaul
Onur Ant, Bloomberg

President Recep Tayyip Erdogan appointed himself chairman of Turkey’s sovereign wealth fund and got rid of the entire management staff that had presided over two years of inaction. Zafer Sonmez, head of Turkey and Africa for Malaysia’s government investment vehicle Khazanah Nasional Bhd, was named general manager.

Housing and GSEs

Opendoor buying Open Listings to build one-stop shop for home buying and selling
Ben Lane, HousingWire

Opendoor is about to take a huge step forward in its attempt to create a true one-stop shop for the entire real estate experience. The company, which launched as a direct homebuyer, recently expanded into mortgages and title, and is also connecting home sellers directly with homebuilders to facilitate an all-in-one home selling and buying process, which it calls a “trade in.”

The Epicenter of the Housing Bust Is Booming Again. (That’s a Warning Sign.)
Matthew Goldstein et al., The New York Times

This quiet working-class town, just beyond the glitz of the Las Vegas Strip, helped spark the global financial crisis 10 years ago. The fallout was inescapable: Nearly one in three homes went into foreclosure.

How Ginnie Mae could break stalemate on GSE reform
Hannah Lang, American Banker

Housing finance reform is still likely years away, but two major hurdles may already be cleared. A key sticking point in earlier attempts to overhaul the system was whether it will still have government backing.

Taxes

Conservative Economists Question White House’s Corporate Tax Cut Claim
Lynnley Browning, Bloomberg

Several conservative economists, including one of President Donald Trump’s campaign advisers, disputed the White House’s claim that a corporate tax cut Trump signed into law last year has already paid for itself. Trump’s top economic adviser, Kevin Hassett, highlighted economic stimulus from the tax cuts as part of a presentation to reporters on Monday intended to strengthen Trump’s claim that U.S. economic growth is due to his policies.

Trump reportedly wanted to raise the top income tax bracket to 44%, but Gary Cohn talked him out of it
Allan Smith, Business Insider

President Donald Trump reportedly wanted to raise the top individual income tax bracket by more than four percentage points, but former National Economic Council Director Gary Cohn talked him out of it, according to journalist Bob Woodward’s upcoming book, “Fear: Trump in the White House.” Business Insider obtained a copy of the book, published by Simon & Schuster and set to be released Tuesday.

Financial Technology

Olaf Carlson-Wee Rode the Bitcoin Boom to Silicon Valley Riches. Can He Survive the Crash?
Rob Copeland, The Wall Street Journal

Olaf Carlson-Wee has crammed the highs and lows of a hedge-fund career into roughly one year—all before his 30th birthday. He turned $14,502 into a $150 million personal fortune by going all-in on cryptocurrencies right before bitcoin became a household name.

PayPal COO says latest free feature is a ‘meaningful differentiator’
Emily Bary, MarketWatch

In a crowded market for online payments, PayPal Holdings Inc. thinks that giving sellers faster access to their funds will help the company’s offerings stand out. The company on Tuesday announced Funds Now, a free program that will give sellers in good standing instant access to funds earned from their sales.

‘ICO Superstore’ Among Crypto Businesses That Draw SEC Sanctions
Matt Robinson, Bloomberg

U.S. regulators brought two first-of-their-kind enforcement cases tied to cryptocurrencies Tuesday, fining a firm that promoted itself as a Walmart for initial coin offerings and a hedge fund that offered digital assets without meeting registration requirements. TokenLot LLC and its owners agreed to pay more than $500,000 to settle Securities and Exchange Commission claims that they failed to register as broker-dealers, the agency said in a statement Tuesday.

Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash
Michael Patterson, Bloomberg

The Great Crypto Crash of 2018 looks more and more like one for the record books. As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent.

Opinions, Editorials and Perspectives

Understanding the True Cost of Providing Credit to American Consumers
Mary Jackson, Morning Consult

The Trump administration recently took positive, consumer-friendly steps to update U.S. banking laws that could expand credit to more Americans. It is refreshing to see the Department of Treasury, the Consumer Financial Protection Bureau and banking regulators recognize that consumers need more innovative credit options in the marketplace and that online lenders should be central to that goal.

Backdrop for the next financial crisis is brewing
Nouriel Roubini and Brunello Rosa, Financial Times

As we mark the tenth anniversary of the global financial crisis, there have been plenty of postmortems examining its causes, its consequences and whether the necessary lessons have been learnt. So it seems a pertinent moment to ask when the next recession and financial crisis will occur and why.

Elizabeth Warren’s Accountable Capitalism Act isn’t radical – it’s a return to the roots of American economic prosperity
Ralph Gomory, The Hill

When Massachusetts Sen. Elizabeth Warren introduced her Accountable Capitalism Act it was hailed on the left as “bold new legislation to curb corporate greed,” and criticized on the right as a proposal to “destroy capitalism” and “nationalize every major business in the United States of America.” However, the reality is very different.

A $100 Million Haircut for the Buyout Crowd
Chris Hughes, Bloomberg

It’s rare to see a deal suffering a price cut after it’s been signed – even rarer when there’s a big equity fundraising on the side. This week, private equity firm Advent International Plc agreed a maximum 17 percent snip to the price of Mondo Minerals BV, the Dutch talc producer it agreed to sell to British chemicals group Elementis Plc back in June.

The collapse of Lehman Brothers changed everything and nothing
Megan McArdle, The Washington Post

In the spring of 2006, I sat in a New York cafe with a banker who specialized in credit derivatives. He was explaining why the cost of credit had fallen dramatically.

Research Reports

Actions Taken by Equifax and Federal Agencies in Response to the 2017 Breach
Government Accountability Office

Hackers stole the personal data of nearly 150 million people from Equifax databases in 2017. How did Equifax, a consumer reporting agency, respond to that event?