General
Trump Has Few Options to Juice the Economy Ahead of November
Laura Davison and Ben Holland, Bloomberg Businessweek
Governments up for reelection typically do what they can to nudge the economy into high gear just as voters are starting to pay attention. On that front, things already look pretty good for Donald Trump.
Fed Nominee Faces Questions Over Iconoclastic Views and Loyalty to Trump
Nick Timiraos, The Wall Street Journal
President Trump’s bid to install economist Judy Shelton on the Federal Reserve’s board of governors could turn on how she explains to lawmakers her heterodox views on policy issues including central-bank independence, interest rates and the gold standard. The president last week formally nominated Ms. Shelton, a former U.S. envoy to the European Bank for Reconstruction and Development, and St. Louis Fed economist Christopher Waller to the Fed board.
Fed’s Mary Daly says current interest rates put economy ‘in a good place to weather the storms’
Jesse Pound, CNBC
San Francisco Fed President Mary Daly said Wednesday that she did not think the Fed needs to lower interest rates to offset the effects of the coronavirus outbreak or other economic headwinds. Appearing on CNBC’s “Power Lunch,” Daly said she did not think the outbreak would do anything “material” to the U.S. economy, even with heavy travel restrictions in China potentially denting global growth.
US Treasury provides details of plans to revive 20-year bond
Colby Smith, Financial Times
Auctions to be held in the third weeks of February, May, August and November.
White House adviser accuses Amazon’s Jeff Bezos of backing out of meeting on fake products
Jeff Stein and Abha Bhattarai, The Washington Post
White House adviser Peter Navarro was walking to his seat in the grand ballroom at the glitzy annual Alfalfa Club dinner on Jan. 25 when he spotted Amazon CEO Jeff Bezos, clad in a tuxedo among hundreds of people mingling with appetizers and drinks. The day before, the Trump administration, led by Navarro, published a 54-page report alleging that e-commerce giants such as Amazon have become marketplaces for counterfeiters, undermining U.S. firms and hurting consumers.
Global shares rally after China pledges tariff cuts on US goods
Hudson Lockett and Ryan McMorrow, Financial Times
Beijing seeks to cushion the economic fallout from concerns over the impact of coronavirus epidemic.
FDIC not consistent in assessing impact of rules: Watchdog
Brendan Pedersen, American Banker
The Federal Deposit Insurance Corp.’s process for determining the impact of new rules has been inconsistent, opaque, and has failed to assess the cost of regulation after it was finalized, according to a report from the agency’s Office of Inspector General released Wednesday. “The FDIC had not established and documented a process to determine when and how to perform cost benefit analyses,” the report said.
New Warren ad touts Obama’s 2010 praise for consumer bureau
Sylvan Lane, The Hill
Sen. Elizabeth Warren (D-Mass.), a 2020 White House hopeful, released a campaign ad on Wednesday highlighting former President Obama’s praise for her work designing a polarizing consumer watchdog agency. The 45-second digital ad features 2010 remarks from Obama touting Warren’s working-class background and successful creation of the Consumer Financial Protection Bureau (CFPB).
Puerto Rico Bondholders Reach Tentative Deal With Oversight Board
Matt Wirz and Andrew Scurria, The Wall Street Journal
Competing bondholder groups and the oversight board supervising Puerto Rico’s debt restructuring have reached a tentative compromise that moves the U.S. territory closer to leaving bankruptcy, people familiar with the matter said. The deal settles a dispute between holders of Puerto Rico general obligation bonds that were issued before 2012 and owners of general obligation bonds issued more recently.
Sens. Warren, Brown call on CFPB to suspend task force
Kate Berry, American Banker
Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, have asked the director of the Consumer Financial Protection Bureau to suspend a seven-member task force charged with updating consumer credit laws, claiming the hiring process was “not fair, credible, or transparent.” In a letter sent to CFPB Director Kathy Kraninger Wednesday, the lawmakers argued that some task force members, including its chair Todd Zywicki, a law professor at George Mason University’s Antonin Scalia Law School, cannot be trusted to protect consumers because they have represented payday lenders or Wall Street banks, or worked at law firms that do so.
U.S. Futures Climb With Stocks on China Tariff Cut: Markets Wrap
Yakob Peterseil, Bloomberg
U.S. equity futures rose with stocks on Thursday as China’s plans for tariff cuts on American imports added to optimism the global economy will weather the hit from the coronavirus. Treasuries edged up.
Banking
Frozen Wells Fargo Bonuses Show a Peril for Bankers After Crisis
Hannah Levitt, Bloomberg
A new religion swept Wall Street after the 2008 crisis: Pay executives with stock, make them wait to collect it, and there will be fewer problems. Now a generation of executives retiring from Wells Fargo & Co. is experiencing what can happen to those payouts when new scandals arise — even for people uninvolved in wrongdoing.
JPMorgan’s Role in Metals Spoofing Is Under U.S. Criminal Probe
Tom Schoenberg and Liam Vaughan, Bloomberg
U.S. authorities that accused six JPMorgan Chase & Co. employees of rigging precious-metals futures are building a criminal case against the bank itself, two people familiar with the situation said. The previously unreported investigation of the global bank’s parent company, part of a wide-ranging federal clampdown on market manipulation, raises the prospect of criminal charges and significant fines against America’s largest bank.
Financial Products and Investments
Where you attend college could be costing you more to borrow and refinance education loans, report says
Danielle Douglas-Gabriel, The Washington Post
Two college students. Same credit profile.
Allstate, Chubb Profits Rise on Disaster Claim Decline, Premium Growth
Leslie Scism, The Wall Street Journal
Property-and-casualty insurance giants CB 7.15% Chubb Ltd. CB 7.15% and Allstate Corp. posted strong profit gains in the fourth quarter, thanks to fewer catastrophe claims and premium volume growth. For U.S. property-casualty insurers, the most-recent quarter included Texas tornadoes and California wildfires, but the damage was light compared with the fourth quarter of 2018.
Why House Democrats are at odds over rate cap bill
Neil Haggerty, American Banker
A House hearing Wednesday made public a lingering split among Democrats over a bill that would cap the annual percentage rate on consumer loans at 36%. House Financial Services Committee Chairwoman Maxine Waters, D-Calif., is pushing a bill that would extend the Military Lending Act’s interest rate cap of 36% to all consumer loans.
Housing and GSEs
What will it take to see housing take center stage in the 2020 election?
Ben Lane, HousingWire
In the run-up to the 2020 presidential election, there are a number of issues being discussed. Everything from the economy, health care, immigration, national security and many others frequently take center stage on the campaign trail for the numerous Democratic candidates and President Donald Trump alike. But there’s one major issue that isn’t discussed enough: housing.
Surprise for New York Renters: No More Broker Fees
Matthew Haag and Luis Ferré-Sadurní, The New York Times
In New York City’s intensely competitive rental market, tenants usually deal with middlemen known as brokers, who have near absolute control over apartment listings, viewing appointments and leases. In return, brokers collect fees that can be as much as 15 percent of the annual lease, typically paid in one lump sum by tenants before they can move in.
Taxes
2020 Democratic candidates vow to beef up IRS
Naomi Jagoda, The Hill
Democratic presidential candidates are proposing to give the IRS more resources for enforcement as they seek to combat inequality and raise revenue for their spending priorities. Candidates are interested in shrinking the “tax gap” between the amount of taxes owed and the amount of taxes paid on time.
Financial Technology
Fedcoin? The U.S. central bank is looking into it
Ann Saphir, Reuters
The Federal Reserve is looking at a broad range of issues around digital payments and currencies, including policy, design and legal considerations around potentially issuing its own digital currency, Governor Lael Brainard said on Wednesday. Brainard’s remarks suggest more openness to the possibility of a Fed-issued digital coin than in the past.
PayPal’s crackdown on human trafficking
Penny Crosman, American Banker
PayPal has committed money and other resources to a new initiative to detect human trafficking. It has formed a financial intelligence unit with Polaris, a nonprofit organization that runs the U.S. National Human Trafficking Hotline, and with Freedom Network USA, an anti-trafficking coalition.
Opinions, Editorials and Perspectives
Skills Gap’s Financial Implications Call Business Leaders, Educators to Action
Shaun McAlmont, Morning Consult
Young people graduating into today’s economy have some of the best prospects in a generation. Unemployment is at record lows, the nation’s longest economic expansion shows no sign of letting up, and businesses are desperate for qualified workers.
The Economy Is Not as Good as It Looks
Steven Rattner, The New York Times
Every few days, fresh economic statistics roll out, each one almost invariably reinforcing the perception of a solid economy. In his State of the Union address on Tuesday night, President Trump reinforced that impression — and took credit for it.
Trump Wants a Referendum on the Economy—and Sanders May Oblige
Greg Ip, The Wall Street Journal
In his State of the Union address Tuesday night, President Trump put the economy front and center in his bid for reelection. The speech had its share of hyperbole, but the economic case Mr. Trump laid out was sound and the political appeal obvious.
Research Reports
Complexity in Large U.S. Banks
Linda Goldberg and April Meehl, The Federal Reserve Bank of New York
In the wake of the global financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (hereafter called Dodd-Frank) identified bank size and complexity as determinants of systemic importance, with both features viewed as contributing to risks to financial stability. Since Dodd-Frank, big U.S. banks have not shrunk in size.
|
