News : Stimulus saga drags on — The Covid hangover to come

Wednesday, October 21, 2020

Stimulus saga drags on — The Covid hangover to come — Breaking up (Google) is hard to do

Oct 21, 2020

Editor's Note: Morning Money is a free version of POLITICO Pro Financial Services' morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro.

Quick Fix

Stimulus saga continues — MM is (endlessly) on record saying getting a big stimulus bill done before the election is quite unlikely. And we are not changing our view now despite House Speaker Nancy Pelosi saying she and Treasury Secretary Steven Mnuchin are "on a path" to a giant deal. White House officials don't really buy it either.

One senior official close to the talks told MM there was "nothing real here" and accused Pelosi of just "running out the clock" before the election. Another said it was probably not possible to get a deal done and through the Senate in the next 13 days. But that official also cautioned to wait until Wednesday to see if Mnuchin and Pelosi actually close significant divides on state and local funding, liability protection and other outstanding issues.

It's a huge game of hot potato with no one (except maybe Senate Majority Leader Mitch McConnell) wanting to be the one getting burned before the election. But while the economy obviously needs significant fresh help as job gains slow and Covid-19 cases rise, it does not make a whole lot of political sense for Pelosi to deliver a big win for President Trump less than two weeks before voting ends.

She could of course be assuming that if she does a $2 trillion-plus deal with Mnuchin that Senate Republicans will simply reject it. Trump says they won't. But Trump could be wrong given that many fiscally conservative members of the GOP caucus don't think he is going to win anyway and feel much less pressure to bend to his will than they might have several months ago.

This thing has driven us nuts for months (and made investors look silly over and over) but we don't pretend to know the final answer. It could somehow still come together. But we wouldn't bet on it. McConnell has pledged only to put a deal on the floor if it clears the House and Trump promises to sign it. But that doesn't mean the voters are there.

Consumer confidence dips a bit — The latest Morning Consult data "paints a bleaker picture than the University of Michigan's preliminary reading showing incremental improvement. … Our data shows that American consumers actually grew slightly less confident this week, declining 0.22 points from last week as new confirmed coronavirus cases increased across the country.

GOOD WEDNESDAY MORNING — Wednesday? That's it? Seems impossible. Email be on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver.

THIS WEEK - NEW EPISODES OF POLITICO'S GLOBAL TRANSLATIONS PODCAST : The world has long been beset by big problems that defy political boundaries, but many of those issues exploded over the past year. Are world leaders and political actors up to the task of solving them? Is the private sector? Our Global Translations podcast, presented by Citi, unpacks the roadblocks to smart policy decisions and examines the long-term costs of the short-term thinking that drives many political and business decisions. Subscribe now for Season Two, launching Oct. 21.

Driving the Day

NEW ON THE PODS — New season of POLITICO's "Global Translations" podcast online this morning: "From closed factories to closed borders, the Covid-19 pandemic exposed the fragility of our systems, creating a period of scarcity where demand skyrocketed — from freezers to PPE — and we couldn't supply items fast enough.

"In this episode, hosts Luiza Savage and Ryan Heath take a deep dive with experts into global supply chains and what 'decoupling' and 'reshoring' are all about when it comes to America's reliance on China and the rest of the world. Listen and subscribe here.

MILKEN BURST: THE COVID HANGOVER TO COME — The 2020 virtual Milken Institute Global Conference draws to a close Wednesday and MM spoke with Melissa Stevens, executive director of the Milken Institute Center for Strategic Philanthropy, about her top takeaways from the event thus far.

Among them: The need for philanthropic money to come off the sidelines to help address multiple issues including dealing with the massive mental health toll the Covid epidemic has wrought across the world.

"Mental health is the next pandemic. So what can philanthropy do to help with access issues and de-risking technology and digital tools to deal with what will be the massive Covid hangover of mental health distress? … We also had conversations on how philanthropy can really step off the sidelines to focus investments on communities that are hardest hit.

"The sentiment across these conversations is that this is an historic moment for humanity and for philanthropy and all sectors clearly need to be rising to the occasion … And there is a recognition that the wealthiest are seeing assets accumulate faster than philanthropy is being deployed and problems are being solved. There are resources sitting in donor advised funds and not being deployed."

HIGHLIGHTS FROM TUESDAY … included Abby Wambach, Chris Paul, and Richard Sherman talking about their efforts on social justice this year (watch here). Education Secretary Betsy DeVos on K-12 education (watch here), and U.N. Ambassador Kelly Craft discussing the U.S.' approach to foreign policy (watch here). All sessions can be viewed viewed here.

Wambach: "As an athlete, as a female athlete, as a gay female athlete, I found myself on the margins. What I think is so important for people to understand why women fight so many of these battles, and this is not to say that men don't, but it's by necessity"

THE FINAL DAY … Includes discussions on the future of capitalism, deliberating how we afford our lives, and a conversation on economic cooperation and prosperity in the Middle East with Adam Boehler, CEO, US International Development Finance Corporation. And at 11:30 a.m. ET: Evening the Odds: A Conversation with Pharrell Williams

BREAKING UP (GOOGLE) IS HARD TO DO — Our Leah Nylen: "The Justice Department's suit against Google marks the first time in more than 20 years that the government is looking at splitting up a company for quashing competition. And if the judge decides that Google is an illegal monopoly, the case could be the first time in more than 100 years that a court actually orders a company breakup.

"But there's a reason why the government hasn't forced a company to break up since 1911: Antitrust cases require judges to make complicated predictions about the future and they're often afraid of making things worse."

NYT ON TRUMP'S CHINA BUSINESS — NYT's Mike McIntire, Russ Buettner and Susanne Craig: "Trump and his allies have tried to paint the Democratic nominee, Joseph R. Biden Jr., as soft on China, in part by pointing to his son's business dealings there. …

"But Mr. Trump's own business history is filled with overseas financial deals, and some have involved the Chinese state. He spent a decade unsuccessfully pursuing projects in China, operating an office there during his first run for president and forging a partnership with a major government-controlled company. And it turns out that China is one of only three foreign nations — the others are Britain and Ireland — where Mr. Trump maintains a bank account."

BLOOMBERG FOR SALE? — NYPost's Thornton McEnery: "Michael Bloomberg has been in talks to take his media empire public through an entity controlled by billionaire Bill Ackman, The Post has learned.

"The former mayor of New York City and failed presidential hopeful recently entertained an offer to sell a minority stake in Bloomberg LP … to Ackman's $5 billion blank-check company, multiple sources said. If the men reach a deal, Bloomberg's stock would trade on the New York Stock Exchange in place of Ackman's Pershing Square Tontine Holdings"

BLOOMBERG SAYS NO — Via Bloomberg LP tweet: "A report today about Bloomberg LP ownership is not true. The company is not for sale."

SPEAKING OF BLOOMBERG — Our Marc Caputo and David Siders: "Billionaire Michael Bloomberg's $100 million investment in Florida to defeat … Trump is recasting the presidential contest in the president's must-win state, forcing his campaign to spend big to shore up his position and freeing up Democratic cash to expand the electoral map elsewhere."

Markets

STOCKS CLOSE HIGHER AS COMPANIES REPORT SOLID EARNINGS — AP's Alex Veiga and Damian J. Troise: "Stocks closed broadly higher Tuesday as Wall Street welcomed a batch of solid earnings reports from U.S. companies. The S&P 500 gained 0.5 percent, recouping some of its loss from a day earlier. Technology, communication and financial stocks powered most of the gains, while household goods makers fell. Overseas markets closed mixed. Treasury yields held steady."

BITCOIN PUSHES PAST $12K FOR FIRST TIME SINCE SEPTEMBER — Bloomberg's Vildana Hajric: "Bitcoin climbed above $12,000 for the first time in more than a month, breaching a key level that chartists and advocates say might set the largest cryptocurrency up for further gains. The digital token increased as much as 2.7 percent to $12,052 in New York on Tuesday, before retreating slightly from the peak for the day. That's Bitcoin's highest level since Sept. 2."

Fly Around

LOW-INCOME LENDING RULES SHOULD PROMOTE AFFORDABLE HOUSING — Reuters' Michelle Price: "An overhaul of U.S. lending rules must boost incentives to promote affordable housing for low-and-moderate income families, a U.S. Federal Reserve governor said on Tuesday, touching on two issues which will take center stage if Democrats win on Nov. 3.

"Lael Brainard said the pandemic-induced economic slump had underscored major racial disparities in access to affordable housing which should be addressed when the central bank overhauls the Community Reinvestment Act in coming months."

GOLDMAN SACHS EXPECTED TO ADMIT MISTAKES IN 1MDB SCANDAL — NYT's Matthew Goldstein: "An Asian subsidiary of Goldman Sachs will plead guilty to charges in the United States to resolve a foreign corruption and bribery case over the looting of billions of dollars from a Malaysian sovereign wealth fund, according to a person familiar with the agreement.

"The Wall Street bank's parent company will admit mistakes, the person said, but will not itself have to enter a guilty plea as part of the deal with federal prosecutors. The bank will also avoid the appointment of an outside monitor to review its compliance procedures."

THE PLAY-BY-PLAY GUIDE TO CAPITOL HILL: With the Senate up for grabs, members of Congress are hitting the campaign trail in the final weeks of a historic election. How are the pivotal races playing out? Will control of the Senate flip? Keep up to speed on the people and politics of Capitol Hill with our Huddle newsletter, a play-by-play guide to all things Congress. Subscribe today.

For Your Radar

TRANSITIONS — Eric Pan, formerly the head of international affairs at two U.S. markets regulators, on Tuesday was named chief executive of the Investment Company Institute, the Washington-based association for the investment fund industry.

Via Talking Biz News: "Adam Samson has been named markets news editor at the Financial Times. He starts his new role on Wednesday. Samson currently leads the Financial Times' global breaking news desk with journalists in London, New York and Hong Kong."

GET SMART — "'Steptoe Financial Services University' [offers] 18 short video 'courses' about various areas of financial services regulation – derivatives, tax policy, economic sanctions, insider trading, etc."

ALSO NEW ON THE PODS — Latest She Said/She Said podcast features Maria Bartiromo.

Follow us on Twitter