| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by The Great Courses Plus | 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. | | | Stimulus talks come to life (a little) once again — Not surprising that both President-elect Joe Biden and his Treasury Secretary nominee, Janet Yellen, spoke during the economic team roll-out of the critical need for more stimulus spending between now and the inauguration in January as we hit a dark Covid-19 winter that could see the death toll from this miserable disease double by March. Worth reading Yellen's words again, via our Victoria Guida: "Lost lives, lost jobs, small businesses struggling to stay alive are closed for good. So many people struggling to put food on the table and pay bills and rent. It's an American tragedy. And it is essential we move with urgency. Inaction will produce a self-reinforcing downturn causing yet more devastation." Current Fed Chair Jerome Powell, a Trump nominee who will be critical to the incoming Biden White House, made similar remarks before the Senate. And he will likely repeat them today before House Financial Services: "The risk of overdoing it is less than the risk of underdoing it … People are always worried about doing too much, and you look back in hindsight and say, 'Well, we didn't do too much. We might've done a little more and a little sooner.'" This is called learning the lessons of 2008-2009 when a failure to pump even more emergency help into the economy made the recovery weaker and helped drive even greater economic inequality. The exact same thing is happening now on an even larger scale as the top does well and millions suffer. There seems to be a large degree of willful denial of just how bad things could get before they better. There is at least some action … though not that much hope that Congress might come around to something before the lame duck session ends, via our Burgess Everett and Heather Caygle: "After months of stalemate, there's finally a flurry of congressional activity as the coronavirus crisis worsens. But with lawmakers proposing dueling measures and Hill leaders divided over the best path forward, a major relief package approved in December remains elusive. "A bipartisan congressional group struck a broad coronavirus compromise on Tuesday, a significant breakthrough after months of failed negotiations. And Speaker Nancy Pelosi restarted her talks with Treasury Secretary Steven Mnuchin after they fell apart before the November election. But congressional leaders remain on very different paths with just days to strike an agreement. A forcing action? — The jobs data are clearly going to continue to slow. There is at least a CHANCE that today's ADP private sector payroll number turns negative, though consensus is for a gain of over 400K. Via Pantheon's Ian Shepherdson: "We find ourselves out on a very long limb .. with our forecast of a 250K drop in the ADP measure of private sector employment. … Our estimate is based largely on the Homebase small business employment data, which weakened sharply between the October and November payroll survey weeks … "As people retreated from voluntary social interactions, especially in restaurants and bars, in the face of the Covid third wave, and as state and local governments began to impose restrictions—these will have a bigger impact on December payrolls—businesses began to lay off staff." GOOD WEDNESDAY MORNING — Happy Hump Day! Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver. | | | | A message from The Great Courses Plus: Don't be stagnant, keep your mind active with The Great Courses Plus . Learn at your own pace with the ability to stream lectures like the Art of Investing anytime, anywhere. Tap into an expansive selection of over 13,000 video streaming lectures from some of the world's greatest minds. Learning should be enjoyable, so start learning today with The Great Courses Plus! | | | | | | Fed Chair Powell and Treasury Secretary Mnuchin are back on the Hill, this time before House Financial Services at 10:00 a.m. to talk about the pandemic response. Certainly possible news could be made though, again, we would not bank on anything getting done pre-Biden … ADP private payrolls at 8:15 a.m. expected to show a gain of 430K … Fed beige book at 2:00 p.m. NASDAQ PROPOSES LISTING STANDARDS FOR BOARDROOM DIVERSITY — Our Kellie Mejdrich: "Nasdaq has proposed new listing standards to require greater diversity on public company boards of directors and more disclosures related to the subject, according to an SEC filing … by the stock exchange. "After a phase-in period, the proposal would eventually require most companies listed with Nasdaq to have at least two board directors who self-identify as having diverse backgrounds: one female, another either an "underrepresented minority" or "LGBTQ+," the exchange said in a news release." SBA NAMES MILLIONS OF BUSINESSES THAT TOOK EMERGENCY AID — Our Zachary Warmbrodt: "The Trump administration … published a trove of data identifying millions of businesses that received emergency loans during the Covid-19 outbreak, giving the public the first comprehensive look into who tapped into the massive aid programs. "The Small Business Administration published the names of employers that received money under the Paycheck Protection Program and Economic Injury Disaster Loan program as it sought to comply with a federal court order requiring it to do so. The SBA approved $525 billion of forgivable loans to 5.2 million businesses under the PPP, with the recipients only having to maintain payroll to have the loans converted to grants." CHINA LOOKS TO BUILD A WALL — Our Gavin Bade: "The Chinese government views itself in a 'global competition for power and influence' with the U.S. and is building a community of like-minded nations to challenge the global order, a congressionally mandated commission warned … "The Chinese Communist Party 'seeks to revise the international order to be more amenable to its own interests and authoritarian governance system,' the U.S.-China Commission told Congress in its annual report . 'It desires for other countries not only to acquiesce to its prerogatives but also to acknowledge what it perceives as China's rightful place at the top of a new hierarchical world order.'" BANK PROFITS SHRINK 10.7 PERCENT — Also via Zach: "Bank profits in the third quarter fell by 10.7 percent from the same period a year earlier, the Federal Deposit Insurance Corp. said … as lenders experienced a record decline in interest income during the pandemic. "In the agency's quarterly banking profile, the FDIC said that the more than 5,000 banks it insures reported $51.2 billion in profits for the three month period ending Sept. 30, down by $6.2 billion from the same time in 2019. More than half of all banks reported lower net income from 12 months earlier. The share of unprofitable lenders increased to 4.7 percent." | | | | A message from The Great Courses Plus:   | | | | | | STRONG START TO DECEMBER AS S&P 500 INDEX SETS ANOTHER HIGH — AP's Damian J. Troise and Alex Veiga: "Stocks scored more record highs on Wall Street Tuesday, a day after the S&P 500 closed out November with its biggest monthly gain since April. The benchmark index climbed 1.1 percent while the tech-heavy Nasdaq added 1.3 percent. Both beat the all-time highs they set on Friday. "Stocks have been ramping higher in recent weeks as investors focus on the possibility that coronavirus vaccines could soon help usher in a fuller global economic recovery. The Dow Jones Industrial Average hovered just below 30,000. Treasury yields rose in another sign that investors were feeling more optimistic about the economy." CREDIT TRADERS POSED TO SEE BIGGEST WALL STREET RAISES IN 2020 — Bloomberg's Hannah Levitt: "Credit traders may be the luckiest lot on Wall Street as banks set bonuses after a banner year for trading. "Desk jockeys who make their living matching buyers with sellers of company bonds are poised for a 16 percent jump in total compensation, on average, the biggest gain among Wall Street trading desks, according to a compensation report from recruiting firm Options Group. Managing directors in credit trading will typically pull in over $1 million in 2020, said the firm's chief executive officer, Michael Karp." | | | | A message from The Great Courses Plus: Are you an inquisitively curious individual that loves learning? Join a community of life-long learners, and learn more about any topic with The Great Courses Plus. Stream thousands of videos by some of this world's brightest minds. From the Art of Investing to the Theory of Everything, quench your thirst for knowledge with courses designed for the endlessly curious cat. With The Great Courses Plus, you'll enjoy being able to learn anytime, anywhere at your own pace. Now there's nothing keeping you from starting your educational journey. Learn now with The Great Courses Plus! | | | | | | POWELL SAYS FED ACTIONS UNLOCKED $2T TO SUPPORT ECONOMY — WSJ's Nick Timiraos: "Federal Reserve Chairman Jerome Powell said the central bank's actions to backstop a range of credit markets after the coronavirus convulsed Wall Street this past spring had unlocked almost $2 trillion to support businesses, cities and states. In testimony prepared for delivery at a congressional hearing Tuesday, Mr. Powell said the Fed's unprecedented steps to stabilize financial markets had largely succeeded in restoring the flow of credit from private lenders. "Treasury Secretary Steven Mnuchin on Nov. 19 told Mr. Powell that he would not grant extensions for five lending programs that have backstopped markets for corporate and municipal debt and to purchase loans made to small businesses and nonprofits when those programs expire on Dec. 31." PARTISAN FIGHT OVER FED LENDING PROGRAMS ESCALATES — WSJ's Nick Timiraos and Kate Davidson: "The Treasury Department's decision last month not to renew a suite of emergency Federal Reserve lending programs touched off a partisan fight over whether and how the Biden administration should be allowed to use the programs. "Lawmakers pressed Treasury Secretary Steven Mnuchin over his decision at a hearing Tuesday with Fed Chairman Jerome Powell before the Senate Banking Committee. It was their first joint appearance since last month's decision, which drew a rare objection from the Fed." | | | | TUNE IN TO OUR GLOBAL TRANSLATIONS PODCAST: The world has long been beset by big problems that defy political boundaries, and these issues have exploded in 2020 amid a global pandemic. 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 for Season Two, available now. | | | | | BIDEN'S NO. 2 TREASURY PICK OFFERS MODERATE VOICE, BREAKS RACIAL BARRIER — NYT's Alan Rappeport: "Speaking at a Washington think tank in the summer of 2016, Adewale Adeyemo, President Barack Obama's international economics adviser, warned about the perils of protectionism, explained how a growing Chinese economy was good for the world and talked up the Trans-Pacific Partnership, a trade deal he helped negotiate that Democrats ultimately rejected. "Four years later, such talk might sound out of touch with a Democratic Party that has become even more hawkish on China and increasingly wary of sprawling international trade deals. But that was not a concern for President-elect Joseph R. Biden Jr., who this week tapped Mr. Adeyemo to be deputy Treasury secretary, solidifying his team with another stalwart veteran of the Obama administration who would bring center-left economic ideas, deep experience and diversity to Mr. Biden's top ranks." PEOPLE NEWS — Katie Koch, co-head of the Fundamental Equity (FE) business within Goldman Sachs Asset Management, has been named Investment Manager of the Year by Professional Pensions as part of their Women in Pensions Awards. | | | | NEXT WEEK - DON'T MISS THE MILKEN INSTITUTE FUTURE OF HEALTH SUMMIT 2020: POLITICO will feature a special edition Future Pulse newsletter at the Milken Institute Future of Health Summit. The newsletter takes readers inside one of the most influential gatherings of global health industry leaders and innovators determined to confront and conquer the most significant health challenges. Covid-19 has exposed weaknesses across our health systems, particularly in the treatment of our most vulnerable communities, driving the focus of the 2020 conference on the converging crises of public health, economic insecurity, and social justice. Sign up today to receive exclusive coverage from December 7–9. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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