• Chinese companies listed on U.S. stock exchanges have to disclose the risk that Beijing could interfere in their businesses, Democratic Securities and Exchange Commission official Allison Lee said in an interview, after the Chinese government has increased its scrutiny of domestic tech companies that have gone public in the United States, such as Didi Global. (Reuters) Amid fears that the United States could pass rules regulating investments in China and Hong Kong, Kong Kong-listed Chinese stocks dropped as much as 10 percent and the yuan fell to its weakest point since April against the dollar. (Bloomberg)  
• After talks last night, negotiators failed to reach a deal on infrastructure following disagreements on transit funding, how much to spend money on water projects and how to use leftover COVID-19 economic relief funds, among other issues. Senate negotiators still thought the two sides could reach a deal, with Sen. Mitt Romney (R-Utah) saying that Republicans “need to make sure the White House and Democratic leadership are on board with the agreement we’ve reached.” (Bloomberg) 
• Aon PLC and Willis Towers Watson PLC, two of the world’s largest insurance brokers, have scrapped their $30 billion merger following the Department of Justice’s lawsuit to block the union more than a month ago. The move is a win for the Biden administration, which signaled a crackdown on consolidation with an executive order designed to bolster competition among a variety of industries including finance. (The New York Times) 

How ‘Buy Now, Pay Later’ Consumers Differ From Credit Card Users

Morning Consult

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Chinese Officials Blame U.S. for Stalemate in High-Level Talks

Chao Deng, The Wall Street Journal

Senior U.S. and Chinese officials sparred over Covid-19, human rights and cybersecurity during a tense exchange Monday in the highest-level meetings between the two countries on Chinese soil since Joe Biden became president. Chinese Vice Foreign Minister Xie Feng, meeting with U.S. Deputy Secretary of State Wendy Sherman in the port city of Tianjin on Monday, said American perceptions of China as an “imagined enemy” were responsible for a stalemate in relations between the two powers.

Big Pharma Quietly Pushes Back on Global Tax Deal, Citing Covid-19 Role

Jenny Strasburg and Laura Cooper, The Wall Street Journal

Big drug companies and their lobbyists have a message for Congress: Don’t raise taxes on the industry that brought you fast-tracked Covid-19 vaccines. Pharma executives, lobbyists and consultants are mobilizing to fight what has become a threat to drug companies’ bottom lines: a sweeping agreement by many of the world’s biggest economies to better harmonize corporate taxation around the globe.

Progressive group launches $2M ad campaign to call for tax hikes on the rich

Naomi Jagoda, The Hill

The progressive group Tax March announced Monday that it’s launching a $2 million ad campaign that urges Congress to raise taxes on wealthy individuals and large corporations. Tax March said it is kicking off the campaign with an event Tuesday in New York City’s Times Square, where it will unveil a billboard.

Inflation Has Arrived, but Washington Isn’t Racing to Limit Price Pops

Jeanna Smialek, The New York Times

Inflation has long been the boogeyman haunting the nightmares of economic policymakers from both parties — and controlling it has been a top economic priority. But as the economy reopens from pandemic shutdowns and prices spike, it is becoming clear just how much that conventional wisdom has shifted in recent years.

Biden Administration Moves to Tilt Pay and Power Toward Workers

Amara Omeokwe, The Wall Street Journal

President Biden is advancing a series of regulatory changes aimed at increasing workers’ pay and gaining them other benefits, moves that opponents say could burden businesses amid an uneven economic recovery. The rule changes, most of which are still in progress, would affect workers such as federal contractors, tipped employees and workers who are jointly employed, such as those with jobs at franchised brands.

Fed Chief Powell Has Won Fans Among Senior Senate Democrats

Steven T. Dennis et al., Bloomberg

Federal Reserve Chairman Jerome Powell has won over a number of influential Senate Democrats who are prepared to back him for another term, though a key pair remain holdouts and are unhappy with his leadership on regulation. A number of Democrats praise his handling of the coronavirus crisis in particular and say they trust President Joe Biden’s judgment should he choose him for another term. Powell’s present term expires in February.

The economic recovery has no playbook. But it may get a few notes in the margin this week.

Rachel Siegel, The Washington Post

There’s no playbook for this pandemic recovery. The economy is either taking off and will continue its upward climb, or it’s hitting a bumpy patch that may even get worse — but we just don’t know it yet.

States that cut unemployment early aren’t seeing a hiring boom, but who gets hired is changing

Heather Long and Andrew Van Dam, The Washington Post

The 20 Republican-led states that reduced unemployment benefits in June did not see an immediate spike in overall hiring, but early evidence suggests something did change: The teen hiring boom slowed in those states, and workers 25 and older returned to work more quickly.

Tether Executives Said to Face Criminal Probe Into Bank Fraud

Tom Schoenberg et al., Bloomberg

A U.S. probe into Tether is homing in on whether executives behind the digital token committed bank fraud, a potential criminal case that would have broad implications for the cryptocurrency market. Tether’s pivotal role in the crypto ecosystem is now well known because the token is widely used to trade Bitcoin. 

Credit Suisse Taps Goldman Executive as Post-Archegos Chief Risk Officer

Margot Patrick, The Wall Street Journal

Credit Suisse Group AG CS 2.19% hired a top executive from Goldman Sachs Group Inc. GS 0.49% as its chief risk officer, part of an effort to get a better grip on risks after losing $5.5 billion from family investment firm Archegos Capital Management. David Wildermuth, formerly deputy chief risk officer at Goldman, will join the executive board and take over from Joachim Oechslin, who held the role temporarily. Credit Suisse’s former chief risk officer, Lara Warner, was pushed out in April after the Archegos loss and the separate collapse of a financing partner, Greensill Capital.

Wall Street enforcement to get tougher as SEC’s new top cop gets to work

Chris Prentice, Reuters

When former New Jersey Attorney General Gurbir Grewal starts work at the U.S. Securities and Exchange Commission (SEC) on Monday, he will be the agency’s first incoming enforcement director without recent ties to corporate America since 2005. For two decades, the Wall Street watchdog has largely drawn its top enforcement cops from the white-collar defense attorneys bar, which critics say creates conflicts of interest that deter officials from properly punishing misconduct.

Global markets regulators team up to keep watch on SPACs

Reuters

Global securities markets regulators said on Tuesday they have begun monitoring special purpose acquisition companies, or SPACs, due to potential regulatory concerns. SPACs are shell companies that list themselves on the stock market and use the proceeds to buy other companies.

How SoftBank’s dalliance with Greensill ended in disaster

Robert Smith et al., Financial Times

After coming unstuck on WeWork, the Japanese group pulled out all the stops to save its next investment.

500,000 New Yorkers Owe Back Rent. What Happens When Evictions Resume?

Matthew Haag, The New York Times

After hitting the pause button during the pandemic, the eviction machinery in New York City, one of the world’s most expensive housing markets, will likely soon start firing up again. For roughly 16 months, the city’s renters have been shielded from eviction under broad protections imposed by the federal government and New York State to keep people in their homes during the coronavirus outbreak.

Sales of new homes tumble to 14-month low

Naomi Jagoda, The Hill

Sales of new single-family homes fell in June to the lowest level since April 2020, the Commerce Department said Monday. Sales were at a seasonally adjusted annual rate of 676,000 in June, down 6.6 percent from the revised estimate for May.

‘I was panicking’: the high-risk bets sparking a backlash at Binance

Adam Samson and Joshua Oliver, Financial Times

Crypto exchange slashes leverage after customers and regulators balk at high-voltage derivatives.

PayPal to research transactions that fund hate groups, extremists

Anna Irrera, Reuters

PayPal Holdings Inc (PYPL.O) is partnering with non-profit organisation the Anti-Defamation League (ADL) to investigate how extremist and hate movements in the United States take advantage of financial platforms to fund their criminal activities. The initiative will be led through ADL’s Center on Extremism, and will focus on uncovering and disrupting the financial flows supporting white supremacist and anti-government organizations.

Bitcoin Miner Crusoe Energy Seeks Loan to Expand Operations

Rachel Butt and Katherine Koherty, Bloomberg

Data center company Crusoe Energy Systems Inc. is sounding out investor interest in a potential debt deal that would help grow the firm’s Bitcoin mining business, according to people with knowledge of the matter. Crusoe is seeking a $100 million to $125 million loan, said the people, who asked not to be identified because talks are private. 

Digital bank Starling makes first acquisition in quest for faster growth

Stephen Morris, Financial Times

Goldman Sachs-backed start-up to buy landlords’ mortgage provider Fleet for £50m.

Capping 1031 Exchanges: The Juice Just Isn’t Worth the Squeeze

Daniel Wagner (senior vice president of government relations for The Inland Real Estate Group of Companies), Morning Consult

As Congress considers President Joe Biden’s $1.8 trillion American Families Plan, one proposed funding mechanism – a cap on 1031 like-kind real estate exchanges – would cripple commercial redevelopment at a critical time when our national economy needs that investment. A $500,000 cap on 1031 exchanges — or for that matter at any amount – falls far short as a realistic “pay for” for even a portion of the plan. Consider that the president’s own estimates project a cap would raise $1.95 billion annually, while an Ernst and Young study projects that 1031 exchanges if left intact would produce nearly $5 billion a year in direct and indirect federal taxes alone.

America Shouldn’t Compete Against China With One Arm Tied Behind Its Back

Robert Lighthizer, The New York Times

The Senate recently passed a bill intended to bolster America’s technological and industrial capacity as we compete against China. The bill, called the U.S. Innovation and Competition Act, began as a serious, bipartisan effort to meet one of our country’s greatest challenges.

How to close the wealth gap from the bottom up

Editorial Board, The Washington Post

More taxation of capital gains and estates could help shrink the United States’ wealth gap from the top down. The gap must also be closed from the bottom up, by bolstering access to the three key ingredients of middle-class wealth: owner-occupied homes, which represented the majority of household wealth for most people in 2019; financial assets, such as stocks, whose value, measured by the Dow Jones industrial average, has increased sevenfold since 1989; and human capital, in the form of training and education, which is highly correlated with household wealth.

A Socialist Chairs the Budget Committee

Chris Jacobs, The Wall Street Journal

President Obama sold the Affordable Care Act by claiming it would reduce the average family’s healthcare costs by $2,500 a year. Instead, premiums have risen unabated, and healthcare spending has grown as a portion of the economy.

The IRS Is Targeting the Poorest Americans

Dorothy A. Brown, The Atlantic 

Senate Republicans recently killed a proposed increase in funding for the IRS that would have helped pay for the Biden administration’s infrastructure bill. The beneficiaries of that omission will be wealthy taxpayers, who regularly manage to stay just beyond the law’s reach with their tax-avoidance strategies.