General
Unemployment claims remain at historically high levels, as pandemic continues to drag economy
Eli Rosenberg, The Washington Post
The number of new claims filed for unemployed remained at historically high levels, according to data released Thursday by the Department of Labor. The number of initial claims inched down — from 849,000 to 840,000 last week.
Trump, Congress pursue second round of $1,200 stimulus checks in effort to revive huge federal aid program
Yeganeh Torbati, The Washington Post
The first round of checks pumped $290 billion into the economy at a time when many Americans were facing layoffs and businesses suffered, but the efficacy of those payments has so far been hard to precisely track. There are some clues, however.
‘It’s too little, too late.’ Trump’s push to give federal aid to crucial 2020 voting blocs undermined by uneven execution
Jeff Stein, The Washington Post
Randy Messelt thought little of President Trump’s recent trip to central Wisconsin to announce tens of billions of dollars in additional federal aid for farmers. Messelt, 54, a lifelong Democrat, was one of the many Wisconsin farmers who helped tip the presidential election to Trump in 2016 because he felt Hillary Clinton and other Democrats had neglected the needs of rural America.
Coronavirus Has Thrown Around 100 Million People Into Extreme Poverty, World Bank Estimates
Josh Zumbrun, The Wall Street Journal
The coronavirus pandemic has thrown between 88 million and 114 million people into extreme poverty, according to the World Bank’s biennial estimates of global poverty. The reversal is by far the largest increase in extreme poverty going back to 1990 when the data begin, and marks an end to a streak of more than two decades of declines in the number of the extremely impoverished, which the World Bank defines as living on less than $1.90 a day, or about $700 a year.
While Millions Lost Jobs, Some Executives Made Millions in Company Stock
Peter Eavis, The New York Times
Even as millions of people have lost their jobs during the pandemic, the soaring stock market since the spring has delivered outsize gains to the wealthiest Americans. And few among the superrich have done as well as corporate executives who received stock awards this year.
Labor agency closes more than half of workers’ coronavirus retaliation complaints without investigating
Eli Rosenberg, The Washington Post
The federal agency charged with upholding workplace safety has dismissed more than half of the complaints from workers who say they were retaliated against for raising coronavirus safety concerns, according to a new report. Data given to The Washington Post on Thursday showed that through the beginning of August, the Occupational Safety and Health Administration had opened up investigations for 348 of 1,744 complaints from workers who said their companies retaliated against them during the pandemic.
WSJ Survey: 43% of Economists Don’t See U.S. Gaining Back Lost Jobs Until 2023
Harriet Torry and Anthony DeBarros, The Wall Street Journal
The U.S. labor market faces a protracted recovery amid the continued spread of the coronavirus and uncertainty over prospects for another stimulus package and the outcome of the presidential election, according to a new Wall Street Journal survey of economists. More than half of business and academic economists polled this month said they didn’t expect the labor market to claw back until 2023 or later all the jobs lost as a result of coronavirus-related shutdowns.
About 60 Million U.S. Households Expect Income Losses This Month
Alexandre Tanzi, Bloomberg
Nearly 60 million Americans expect someone in their household will lose a job or take a pay cut in the next four weeks, according to survey results released Wednesday by the U.S. Census Bureau. Minority households in particular are continuing to struggle economically from the coronavirus pandemic, according to the survey conducted from Sept. 16-28.
Fed’s Rosengren Says Pre-Pandemic Risk Taking Will Likely Slow Recovery Effort
Michael S. Derby, The Wall Street Journal
Federal Reserve Bank of Boston leader Eric Rosengren on Thursday renewed his longstanding concern that long periods of very low interest rates can exacerbate economic troubles when a downturn arrives. Mr. Rosengren’s remarks didn’t appear to be a direct criticism of the policies now in place at the Fed as it seeks to help the economy navigate the coronavirus pandemic.
Global Stocks Advance With Futures; Dollar Drops: Markets Wrap
Todd White, Bloomberg
Global stocks headed toward their best weekly gain since July and U.S. futures also climbed as European companies boosted guidance and the White House signaled an openness to large-scale stimulus.
Banking
Morgan Stanley Fined $60 Million in Failed Data-Center Oversight
Jesse Hamilton, Bloomberg
Morgan Stanley agreed to pay $60 million to settle claims that the bank didn’t properly handle decommissioning of data centers tied to its wealth-management business, the Office of the Comptroller of the Currency said Thursday. The Wall Street firm “failed to effectively assess or address risks associated with decommissioning its hardware,” including improper assessment of the risks of subcontracting the work and failing to keep appropriate tabs on customer data stored on obsolete devices, the regulator said in a statement.
Wells Fargo says diversity initiatives comply with U.S. laws after Labor Dept letter
Kanishka Singh, Reuters
Wells Fargo & Co said that its diversity initiatives comply with federal employment laws after it received a letter from the U.S. Labor Department questioning whether the steps were unlawful or discriminatory. The Wall Street Journal newspaper reported on Thursday that the Labor Department is probing companies with federal contracts which have specific goals to increase diversity.
Financial Products and Investments
How Citadel CEO Ken Griffin Built a $1 Billion Private Property Portfolio
Katherine Clarke, The Wall Street Journal
In the early 1900s, the country’s wealthiest businessmen including William Randolph Hearst and John D. Rockefeller built sprawling, gilded estates. Living at that kind of boundless scale fell out of favor with subsequent generations, however, and these kinds of estates were either subdivided or turned over to the state or to preservationists.
Panic in the Parking Lot for Cash
Brian J. O’Connor, The New York Times
Money-market mutual funds are sometimes called “parking lots” because they have been safe places to store cash while earning a modest return. And most of the time they have been about as exciting as watching a flat piece of striped black asphalt.
Citadel Securities to Buy NYSE Market-Making Unit of Smaller Rival IMC
Alexander Osipovich, The Wall Street Journal
Electronic trading giant Citadel Securities will bolster its already huge presence at the New York Stock Exchange by buying the NYSE market-making business of smaller rival IMC Financial Markets, the companies said. The deal would solidify Citadel Securities’ status as the largest designated market maker at the exchange. DMM firms are tasked with ensuring orderly trading of stocks listed on the NYSE.
BlackRock, Wells See Muni-Sales Surge, Election Shattering Calm
Amanda Albright, Bloomberg
Analysts who track the $3.9 trillion municipal-bond market, where prices have barely budged since late August, are bracing for a return of volatility. The presidential race, a failure to enact another economic stimulus bill and a potential spike in Covid-19 cases during flu season could bring price swings back to the muni market, Wells Fargo Securities analyst George Huang said in an Oct. 7 note.
London Stock Exchange Group Sells Italian Exchange for $5.1 Billion, Paving Way for Refinitiv Deal
Anna Isaac and Ben Dummett, The Wall Street Journal
London Stock Exchange Group LSE +0.50% PLC agreed Friday to sell Borsa Italiana Group to a group led by pan-European rival Euronext ENX -3.80% NV, a divestment meant to smooth approval of its separate, much larger, acquisition of financial-data company Refinitiv Holdings Ltd. The deal, priced at around €4.33 billion, equivalent to $5.1 billion, is aimed at alleviating antitrust concerns about the potential bond trading dominance of the proposed $15 billion tie-up between LSE and Refinitiv.
Bill Ackman Gives Further Clues on Potential Targets for His SPAC
Joanna Ossinger, Bloomberg
Billionaire investor Bill Ackman has provided further hints on the potential targets of his blank-check company. Pershing Square Tontine Holdings Ltd., which had the largest initial public offering ever of a special-purpose acquisition company when it debuted in July, is not only looking at mature “unicorns” and private-equity-sponsored companies but also family-controlled and employee-owned businesses, Ackman said in an interview with Whitney Tilson.
Housing and GSEs
Where Trump and Biden Stand on Mortgage Finance
Andrew Ackerman, The Wall Street Journal
Donald Trump and Joe Biden have divergent views on the federal government’s role in the $11 trillion mortgage market, with potential consequences for the price of home loans for millions of Americans. In keeping with the Republican Party’s emphasis on limiting the government’s role in the economy, the Trump administration aims to return two giant mortgage-finance companies— Fannie Mae and Freddie Mac —to private hands over the next couple of years.
Taxes
Rich Americans Are Protecting Their Fortunes From a Possible Biden Win
Ben Steverman, Bloomberg
Wealthy American families are being told by their advisers that they should act now or risk losing millions of dollars later. That’s in case Democrats win back the White House and U.S. Senate in November. Former Vice President Joe Biden has proposed substantially higher taxes on the rich, including making it much harder to avoid a 40% levy on large estates.
Democrats Ask IRS to Check on Trump-Audit Political Meddling
Laura Davison, Bloomberg
Two top Senate Democrats asked Treasury Department and Internal Revenue Service watchdogs to investigate whether there’s been political interference in audits of President Donald Trump’s tax returns. Senate Minority Leader Chuck Schumer and Senator Ron Wyden, the ranking Democrat on the Senate Finance Committee, asked the inspector generals in charge of the Treasury and IRS to determine if Trump had sought to influence the mandatory audits he undergoes as president, or any outstanding audits from before he was elected.
Financial Technology
Coinbase to Lose Dozens of Staffers Over Ban on Politicking
Olga Kharif, Bloomberg
Coinbase Inc., the cryptocurrency exchange, is losing about 60 employees who balked at a management mandate barring political activism at work. Chief Executive Officer Brian Armstrong said Thursday in a blog post that about 5% of Coinbase employees had accepted an exit package offered to staffers bothered by the policy, and that the number will probably grow.
Killer Mike, former Atlanta mayor Andrew Young and Bounce TV founder Ryan Glover launch a digital bank
Jonathan Shieber, TechCrunch
A group of Black Atlanta businessmen, politicians and entertainers — including former Atlanta Mayor Andrew Young, the entertainer Michael Render (better known as Killer Mike) and Bounce TV founder Ryan Glover — have launched a new digital bank focused on developing and promoting local communities and cultivating Black and Latinx entrepreneurs and small businesses. Named Greenwood in an homage to the thriving Tulsa, Oklahoma, business community known as “Black Wall Street” that was destroyed by white rioters in 1921, the digital bank has several features designed to promote social causes and organizations for the Black and Latinx community.
Square Puts $50 Million in Bitcoin on Crypto ‘Empowerment’ Bet
Molly Schuetz and Vildana Hajric, Bloomberg
Square Inc. said it has made an investment of about $50 million in Bitcoin, cementing Chief Executive Officer Jack Dorsey’s vision of the currency as an instrument of economic empowerment. The financial payments company said it bought about 4,709 Bitcoins, representing about 1% of Square’s total assets as of the end of the second quarter.
Opinions, Editorials and Perspectives
The Covid Crisis Exposed What Financial Reformers Missed
Bill Dudley, Bloomberg
After the U.S. financial system came to the brink of collapse in 2008, Congress and regulators spent years on renovations designed to prevent that from ever happening again. More than six months into a global pandemic that has delivered another monumental shock, it’s worth asking: Were the reforms successful and sufficient?
Women are bearing the brunt of the economic crisis. They must lead our recovery plans.
Gina M. Raimondo and Mary Kay Henry, The Washington Post
The Great Recession hit male-dominated professions hard. This time around, women are bearing the brunt of the economic crisis.
Research Reports
Labor organizations and Unemployment Insurance: A virtuous circle supporting U.S. workers’ voices and reducing disparities in benefits
Alexander Hertel-Fernandez and Alix Gould-Werth, Washington Center for Equitable Growth
In March 2020, communities across the United States realized the gravity of the novel coronavirus pandemic and the deadly reach of COVID-19, the disease caused by the virus. As businesses shut their doors to prevent the transmission of the disease, the joint federal-state Unemployment Insurance program, which funds and administers unemployment benefits, provided important income replacement for people who could no longer report to work.
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