General
Fed and Treasury urge Congress to approve more virus relief
Martin Crutsinger, The Associated Press
Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin urged Congress to approve COVID-19 relief funds without further delay, though Democrats continued to attack a decision by Mnuchin to allow five Fed lending programs to expire during the pandemic.
Bleak Holiday Ahead for Millions of Americans Seeing Income Drop
Alexandre Tanzi, Bloomberg
About 76 million Americans expect someone in their household to suffer a drop in income over the next few weeks, in a holiday season marked by the pending expiration of government benefits as well as new pandemic-related restrictions, according to the latest Census Bureau survey.
Biden top economic adviser facing accusations of mismanagement, verbal abuse
Alex Thompson and Theodoric Meyer, Politico
A former colleague of Heather Boushey, a top economic adviser to President-elect Joe Biden, is publicly airing prior accusations that Boushey mismanaged the think tank she runs and verbally abused her and other subordinates, saying she wants to prevent future White House employees from enduring a similar experience.
Biden’s economic team set to prepare ambitious recovery plan, challenging Republicans’ renewed debt worries
David J. Lynch, The Washington Post
President-elect Joe Biden’s choice of economic advisers highlights a commitment to spend whatever is needed to restore a full-employment economy, setting up a clash with Senate Republicans who are sounding alarms over a national debt they helped President Trump increase by nearly $7 trillion.
U.S. hiring slowed in November as coronavirus cases surged, ADP report says
Hamza Shaban, The Washington Post
U.S. businesses slowed hiring in November, adding only 307,000 workers to their private payrolls — missing the benchmark that analysts had expected and probably heightening concerns that companies and households will continue to struggle without further action from Congress to deliver coronavirus aid.
States race to craft their own economic relief plans, frustrated with federal inaction
Tony Romm, The Washington Post
Governors and state lawmakers across the country are racing to authorize millions of dollars in new coronavirus stimulus aid, aiming to plug gaping holes in their local economies before the end of the year.
China Has One Powerful Friend Left in the U.S.: Wall Street
Lingling Wei et al., The Wall Street Journal
Trade deal left many U.S. industries disappointed, but financial firms such as BlackRock see a potential windfall.
Pace of U.S. Recovery Picked Up This Fall, Fed’s Beige Book Says
Paul Kiernan, The Wall Street Journal
The U.S. economy’s recovery picked up to a “modest or moderate” pace this fall, while growth began to slow in November in parts of the Midwest and Northeast as coronavirus cases proliferated, a Federal Reserve report said Wednesday.
U.S. Bans Cotton Products From Chinese Firm Linked to Alleged Forced Labor
Yuka Hayashi, The Wall Street Journal
The Trump administration banned imports of cotton products from China’s Xinjiang region, saying evidence suggests the products are made with the forced labor of Uighurs.
S&P Global economist: US economy will fall into double-dip recession without stimulus
Niv Elis, The Hill
The U.S. economy will fall into a double-dip recession and take nearly a year longer to return to pre-pandemic growth if Congress fails to pass a new coronavirus relief bill, according to an economic forecast released by S&P Global on Wednesday.
Global Stocks Pause at Record Highs; Dollar Slips: Markets Wrap
Adam Haigh and Cecile Gutscher, Bloomberg
Global stocks paused near all-time highs and Treasuries steadied on Thursday as a more sober investor mood reflected concerns about fragile economic recoveries. The dollar dropped for a third day.
Banking
Gary Cohn Plays Hardball With Goldman to Defend Millions in Pay Over 1MDB Scandal
Sridhar Natarajan, Bloomberg
When Goldman Sachs declared its intent to reclaim $67 million from five former top executives over the sprawling 1MDB corruption scandal, it made clear it had already pocketed the money from all but one of them.
Cerberus pushed to install Colm Kelleher as Deutsche Bank chair
Laura Noonan et al., Financial Times
US buyout group tapped former Morgan Stanley president in an effort to replace Paul Achleitner.
Dallas Fed President Kaplan: Guidance Will Be Needed on Asset Purchases
Nick Timiraos, The Wall Street Journal
A top Federal Reserve official said the central bank will need to decide on how to communicate its intentions to continue buying government assets but that broader changes to its policy stance, including by altering those purchases right now, weren’t needed.
Financial Products and Investments
2,596 Trades in One Term: Inside Senator Perdue’s Stock Portfolio
Stephanie Saul et al., The New York Times
The Georgia Republican’s stock trades have far outpaced those of his Senate colleagues and have included a range of companies within his Senate committees’ oversight, an analysis shows.
Dyal Capital in Talks to Combine With Owl Rock Capital
Miriam Gottfried and Cara Lombardo, The Wall Street Journal
Dyal Capital Partners is in talks to merge with Owl Rock Capital Partners LP, part of a complicated deal with a special-purpose acquisition company that would take them public, the firms said Wednesday.
Bets on More Fed Bond-Buying Help Contain Treasury Yields
Sam Goldfarb, The Wall Street Journal
Some investors are betting that the Federal Reserve could start buying more long-term U.S. Treasurys as soon as its next policy meeting, a trend that has helped temper some recent selling and kept yields from rising higher.
Housing and GSEs
Mnuchin in Talks With Fannie-Freddie Overseer on Rushed Redo
Jesse Westbrook, Bloomberg
Treasury Secretary Steven Mnuchin said he’s made no decision on actions that might be taken at the end of the Trump administration to free Fannie Mae and Freddie Mac from U.S. control, while raising the possibility that the companies could be released before they are fully capitalized.
Explaining the Frenzy in the Housing Market
Issi Romem, The New York Times
One long-lasting result of the pandemic may be innovations that make home buying faster.
Mortgage Refinancing Wave Not Letting Up, to Investors’ Chagrin
Christopher Maloney, Bloomberg
Mortgage investors will carry unpleasant memories of this year’s surging prepayment speeds, yet as the calendar flips there appears little chance of near-term relief.
Mortgage applications surge in last week of November
Zack Budryk, The Hill
Mortgage applications for home purchases surged 9 percent in the final week of November, according to an analysis from the Mortgage Bankers Association (MBA).
Taxes
CFOs feel confident Biden won’t be able to raise the corporate tax rate to 28%: Survey
Eric Rosenbaum, CNBC
Wall Street’s post-election rally and the Dow Jones Industrial Average rise to a new record above 30,000 is a bet that, among other things, a divided government during a Biden administration will be a good for corporations. One of the key “goldilocks” conditions: President-elect Joe Biden’s plan to raise corporate taxes to 28% as part of a repeal of the 2017 Trump tax cuts will not be likely in the new Washington, D.C., political reality.
Financial Technology
How American investors are gobbling up booming bitcoin
Tom Wilson and Alun John, Reuters
Bitcoin has grabbed headlines this week with its dizzying ascent to an all-time high. Yet, under the radar, a trend has been playing out that could change the face of the cryptocurrency market: a massive flow of coin to North America from East Asia.
PayPal CEO Says Digital Currencies Are Set to Go Mainstream
Amy Thomson, Bloomberg
PayPal Holdings Inc. Chief Executive Officer Dan Schulman said the use of digital currencies is set to go mainstream as more merchants take a “digital first” approach to payments.
Opinions, Editorials and Perspectives
Shelton and Fed ‘Independence’
The Editorial Board, The Wall Street Journal
Judy Shelton’s nomination to the Federal Reserve Board of Governors remains in limbo, with three Senate Republicans having declared their opposition. Their stated grounds is that Ms. Shelton is a threat to Fed independence. That argument is worth addressing, especially as the Biden Administration prepares to take power.
Biden to Have a Better Economy in 2021 Than in 2009, but Worse Options
Greg Ip, The Wall Street Journal
Joe Biden has been here before. Twelve years ago, as Barack Obama’s newly elected vice president, Mr. Biden inherited an economy laid low by a once-in-a-century crisis.
Research Reports
The Beige Book: Summary of Commentary on Current Economic Conditions By Federal Reserve District
The Federal Reserve
Most Federal Reserve Districts have characterized economic expansion as modest or moderate since the prior Beige Book period. However, four Districts described little or no growth, and five narratives noted that activity remained below pre-pandemic levels for at least some sectors. Moreover, Philadelphia and three of the four Midwestern Districts observed that activity began to slow in early November as COVID-19 cases surged. Reports tended to indicate higher-than-average growth of manufacturing, distribution and logistics, homebuilding, and existing home sales, although not without disruptions.
|