• In a 53-45 vote, the Senate confirmed Gary Gensler as the new chairman of the Securities and Exchange Commission. Gensler, a Wall Street critic who led the Commodity Futures Trading Commission following the 2008 financial crisis, has suggested he will increase scrutiny of companies over their climate risks and political spending. (The Washington Post) 
• Coinbase Global Inc. went public yesterday through a direct listing, fetching an $85 billion valuation. Coinbase, the first leading bitcoin-focused company to try its hand on a U.S. public market, ended the day as one of the largest tech debuts based on market capitalization, comparable to Facebook Inc. in 2012 and Airbnb Inc. in 2020. (The Wall Street Journal)  
• Bernie Madoff, who orchestrated the largest and one of the most devastating Ponzi schemes in the country’s history, died in a federal prison hospital in North Carolina at the age of 82. The fraud executed by Madoff, who was serving a 150-year sentence, totaled $64.8 billion in paper losses. (The New York Times)
• Bank of America Corp. released $2.7 billion from its loan loss reserves and announced a $25 billion stock repurchase plan. The bank’s first-quarter profit totaled $8.1 billion and it earned $22.9 billion in revenue. (CNBC)

‘Dramatic’ Round of Regulation Seen Coming for Cryptocurrencies
Bloomberg

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A bloc of Senate Republicans prepare their own infrastructure plan as Biden tries to ramp up outreach

Tony Romm et al., The Washington Post

A group of moderate Senate Republicans on Wednesday signaled they are preparing to offer their own proposal to reform the nation’s infrastructure, as GOP lawmakers seek to significantly pare back the roughly $2 trillion in new spending endorsed by President Biden. The Republican alternative is expected to be less than half the size of the White House’s plan, according to party lawmakers, who in recent days have suggested its total price tag could ultimately cost between $600 billion and $800 billion.

U.S. to Sanction Russia, Expel Diplomats Over Alleged Election Interference, Hacking

Michael R. Gordon et al., The Wall Street Journal

The Biden administration will impose a range of retaliatory measures against Russia on Thursday in response to Moscow’s alleged election interference, a widespread hacking campaign and other malign activity, according to people familiar with the matter. Using a new executive order, the measure will expand the existing prohibitions on U.S. banks trading in Russian government debt, two of the people said.

Libor Contracts Caught in Limbo Spur Calls for Congressional Fix

Alex Harris, Bloomberg

President Joe Biden’s administration and the Federal Reserve are pushing for U.S. lawmakers to ease Wall Street’s transition away from the London interbank offered rate and help head off legal headaches for many contracts that risk being left in limbo under present plans. In testimony set to be delivered at a House Financial Services subcommittee meeting Thursday, officials from both the Treasury Department and the Fed will voice support for federal legislation that would allow for an orderly way to shift existing financial products from the discredited set of reference rates, which currently underpins trillions of dollars in securities, derivatives and other contracts.

Biden Energizes Global Effort to Keep Multinationals From Dodging Taxes

Peter Coy, Bloomberg Businessweek

When I interviewed Kimberly Clausing in 2017, she was an economics professor at Reed College in Portland, Ore., with intriguing but seemingly unachievable ideas for how to make multinational corporations pay taxes. I wrote that her plan was worth studying “if only to see how much better things could be if politics didn’t get in the way.”

Central Bank Will Begin Reducing Bond Purchases ‘Well Before’ Raising Interest Rates, Powell Says

Paul Kiernan, The Wall Street Journal

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will begin to slow the pace of its bond purchases “well before” raising interest rates. The Fed has been buying at least $120 billion a month of Treasury debt and mortgage-backed securities since last June to hold down long-term borrowing costs. Since December, the central bank has said the economy must make “substantial further progress” toward its goals of maximum employment and 2% inflation before it scales back those purchases.

Fed Says U.S. Economic Activity Has Picked Up to Moderate Pace

Alister Bull, Bloomberg

U.S. economic activity has picked up pace and consumer spending has improved, the Federal Reserve said. “National economic activity accelerated to a moderate pace from late February to early April,” according to the Fed’s Beige Book released on Wednesday, which was based on information collected by the Fed’s 12 regional banks through April 5. 

Forget identity politics: economics is what matters now

Simon Kuper, Financial Times

‘The battlefield for preventing climate change and delivering American racial justice is now government spending.’

Covid-19 Stimulus, Vaccinations Likely Spurred March Retail Sales Surge

Amara Omeokwe, The Wall Street Journal

U.S. shoppers likely boosted retail spending sharply in March as federal-stimulus funds made their way to households, warmer weather set in and the economy reopened more fully from pandemic-related restrictions. Economists forecast that the Commerce Department will report Thursday that retail sales—a measure of purchases at stores, at restaurants and online—increased by 6.1% last month, compared with a 3% drop in February.

Unemployment Claims Likely Fell as Covid-19 Recovery Picked Up

Sarah Chaney Cambon, The Wall Street Journal

Unemployment claims likely resumed their decline as the U.S. economic revival picked up speed. Economists surveyed by The Wall Street Journal expect that the Labor Department will report that jobless claims, a proxy for layoffs, fell to 710,000 last week from 744,000 a week earlier.

Wells Fargo starts to emerge from sales scandal as first-quarter profit jumps

Noor Zainab and David Henry, Reuters

Wells Fargo & Co beat Wall Street profit expectations on Wednesday as it reduced bad loan provisions and reined-in costs, signaling the bank may finally be emerging from a sales practices scandal that has dogged it for nearly five years. Profits at the country’s fourth-largest lender rebounded to nearly $5 billion in the first quarter of 2021 as the improved economic outlook allowed it to cut its cushion for losses on pandemic-hit loans by $1.6 billion, and as it got a grip on costs relating to fixing its product mis-selling scandals.

With Earnings Soaring, Wall Street Banks See Economic Boom Ahead

Kate Kelly et al., The New York Times

The mood on Wall Street is decidedly jubilant. Just a year ago, as the coronavirus raged across the country, the nation’s largest banks were anticipating economic devastation.

Goldman’s Libor Transition Chief Exits Ahead of Benchmark’s Retirement

William Shaw, Bloomberg

The executive tasked with disentangling Goldman Sachs Group Inc. from the London interbank offered rate is leaving the firm after 20 years. Jason Granet’s retirement was announced this week by the firm’s global treasurer, Beth Hammack, in an internal memo seen by Bloomberg. 

JPMorgan shoots for green finance stratosphere as ESG target tops peer plans

Elizabeth Dilts Marshall, Reuters

JPMorgan Chase & Co aims to lend, invest and provide other financial services for up to $2.5 trillion of banking business to be done for companies and projects tackling climate change and social inequality over the next decade. In a statement on Thursday, JPMorgan said green initiatives will account for $1 trillion of that total – the largest environmental, sustainable and governance (ESG) financing target announced by a U.S. bank to date.

Banking regulators start climate stress tests

Laura Noonan, Financial Times

Lenders are being assessed on risks arising from extreme weather and the energy transition.

BlackRock quarterly profit jumps as assets rise over $9 trillion

Reuters

BlackRock Inc, the world’s largest asset manager, reported a 16% jump in first-quarter profit on Thursday as investors poured more money into its diverse funds and fee revenue jumped. The company’s net income rose to $1.2 billion, or $7.77 per share, in the three months ended March 31, from $1.03 billion, or $6.60 per share, a year earlier.

After Bernie Madoff’s Death, Efforts to Recover Ill-Gotten Funds Go On

Alexander Gladstone and Justin Baer, The Wall Street Journal

Bernie Madoff died Wednesday in a prison medical center in North Carolina. For many of the victims of Mr. Madoff’s Ponzi scheme and lawyers still pursuing his ill-gotten assets, the fallout continues to affect their lives. More than a decade has passed since Mr. Madoff confessed to his crimes and began serving a 150-year sentence.

As U.S. watchdog steps up scrutiny, Grab deal signals blank-check party peak

Katanga Johnson and Joshua Franklin, Reuters

While the blank-check deals market reached new heights this week with Grab Holdings’ record $40 billion merger, some lawyers and regulatory experts said the exuberance was unlikely to last as the U.S. securities watchdog steps up scrutiny of such deals. Southeast Asia’s largest ride-hailing and food delivery firm on Tuesday clinched a merger with special purpose acquisition company, or SPAC, Altimeter Growth Corp, paving the way for a U.S. listing and the biggest-ever blank-check company deal.

Hedge funds post best start to year since before financial crisis

Laurence Fletcher, Financial Times

Market shake-up has created ‘fertile’ environment for managers to make bets.

Hedge funds rethink after GameStop pain

Laurence Fletcher, Financial Times

January’s surprise attack by retail investors has sparked new efforts to detect emerging threats.

Live Well Financial CEO Used Lenders ‘Like an ATM’ U.S. Says

Bob Van Voris, Bloomberg

The chief executive officer of defunct reverse mortgage provider Live Well Financial Inc. used lenders “like an ATM,” enriching himself by borrowing against bonds whose value he conspired to inflate by more than $200 million, prosecutors said at the start of Michael C. Hild’s fraud trial. Hild, 46, schemed with other Live Well executives to increase the reported value of a pool of bonds used as collateral for loans, Assistant U.S. Attorney Jordan Estes told jurors in opening statements on Wednesday.

Coinbase CEO Says Listing Is a ‘Shift in Legitimacy’ for Crypto

Joanna Ossinger, Bloomberg

The direct listing of Coinbase Global Inc. on Nasdaq is a turning point for the whole cryptocurrency sector, according to the firm’s Chief Executive Officer Brian Armstrong. Banks used to hang up on Coinbase’s calls and many people thought the digital-currency platform was a bad idea, Armstrong said during a discussion on the Clubhouse app after the stock’s debut. 

What’s at Stake in the U.S. Case Against a Crypto Rebel

Benjamin Robertson and Edward Robinson, Bloomberg Businessweek

Ever since Arthur Hayes became a star in the Bitcoin universe, he’s been called many things, from trailblazer to anarchist. On April 6 the former chief executive officer of crypto exchange BitMEX surrendered to U.S. authorities in Hawaii to face a more consequential label: alleged criminal. 

Coinbase Floats All Crypto Boats With Wall Street on Notice

Matthew Leising and Vildana Hajric, Bloomberg

After Coinbase Global Inc. hit a valuation above $100 billion Wednesday, the question for the broader crypto world is, Who’s next? BlockFi Inc., a crypto-lending startup, and Kraken, a competing exchange with Coinbase, are two U.S. firms in the $2.2 trillion cryptocurrency market that are considering going public.

While Coinbase Savors Listing, Bitcoin Die-Hards Voice Disdain

Brandon Kochkodin, Bloomberg

Coinbase Global Inc.’s trading debut ushered in a new era for cryptocurrencies on Wall Street, bringing the oft-mocked asset class closer to mainstream acceptance. But that’s just the sort of attention that generates outrage among a small, disgruntled cohort of the Bitcoin community.

Affordable Housing Forever

Michael Friedrich, The New York Times

If anyone knows how gentrification has displaced Black working-class residents in Atlanta, it’s Makeisha Robey, a preschool teacher. During her two decades living in the city, she has watched affordable apartment complexes vanish as new developments arise and wealthier, white residents move in. After being priced out of renting in a series of neighborhoods, Ms. Robey, a 43-year-old single mother, became determined to buy a house of her own.