| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by |  | | 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. | | | The big idea: Covid gone by mid-year? — MM knows we probably quote Pantheon's Ian Shepherdson too often. But the guy just writes smart stuff all the time. And now he's got some very hopeful thoughts on Covid-19, which if they play out will be both awesome and also further torque up the inflation risk that could require some kind of Fed intervention that could hit President Joe Biden's economy. (Fresh inflation data hit today at 8:30 a.m.) All told, of course, vanquishing Covid (or at least reducing it to annual flu-like status) is the best thing that could happen to the nation and the world. But if it happens relatively quickly AND we pump another $2 trillion into the economy, we are probably going to have to reckon with Larry Summers' overheating thesis. But this would be a decent problem to have. Certainly better than mounting death counts. Via Ian: "Could the U.S. be much further down the road towards Covid herd immunity than is popularly believed? We're asking the question because of two unexpected developments in the data, one which has emerged over the past months and one of which is very recent. "First, the drop in new cases since the holiday spike began to fade has been steeper than we expected. … [T]he combination of falling test numbers and falling positivity is what we'd expect to see when a pandemic is fading … If this persists indefinitely, Covid will be gone—as far as policymakers are concerned—well before the middle of the year." Caveat: "Reopenings, however, could slow this progress, and the risk of much more rapid spread of new variants is very real" First look: The case for a Financial Transaction Tax — Wall Street hates it. The left loves it. And The Appeal has a new paper and polling out today making the case for why it makes sense and showing how popular it is among Americans. From the paper by Lenore Palladino, assistant professor of public policy and economics at the University of Massachusetts at Amherst: "In the parallel universe of the financial industry, stock indices soared to historic peaks as Americans wished good riddance to the deadliest year in our history. … "An FTT would ensure that high-volume stock market transactions would curb, rather than reinforce inequality, and return needed resources to support vulnerable families. … FTTs are common around the globe and even have a long history in the United States." And via the poll : "[A] majority of likely voters want Congress to pass the 'Wall Street Tax Act' … 54% of overall voters—including 69% of Democrats and 53% of Independents—support passage of the measure, which would generate an estimated $777 billion in new revenue over a 10-year period." The paper and the polling memo will both be live at 8:00 a.m.. GOOD WEDNESDAY MORNING — 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 Robinhood: We're witnessing something that the stock market has never quite experienced before : an industry-wide transformation driven by the intersection of technology, democracy, and finance. What follows is an entirely new era of financial participation and market dynamics. | | | | | | Senate impeachment trial, which will end in former president Donald Trump's acquittal, reconvenes at noon for oral arguments. There are self-evident reasons for conviction. But it's not going to happen. And it's a non-market moving event either way so MM is really not spending any time on it … Consumer Prices at 8:30 a.m. expected to rise 0.3 percent headline and 0.2 percent core. … Treasury Budget at 2:00 p.m. expected to show a much bigger deficit than last January's $33 billion. PROGRESSIVES FACE HURDLES ON STIMULUS — Our Sarah Ferris and Heather Caygle: "Progressives in Congress won the early rounds in their party's high-stakes coronavirus relief fight. But they'll soon face a tougher battle: steering those initial successes through multiple looming Senate minefields. "A determined band of liberals, led by Rep. Pramila Jayapal (D-Wash.), has spent the first month of Joe Biden's presidency pushing their agenda for their party's relief bill. That paid off Monday, as House Democrats announced the bill would include the first federal minimum wage hike since 2009. … Yet each of those early victories could be short-lived: Senior Democrats caution that procedural obstacles could force them to strip the minimum wage hike from the bill in the weeks ahead." ROBINHOOD HEARING PREP — J.W. Verret, associate professor at George Mason University Scalia Law School and former GOP Hill staffer in The Hill: "The first congressional hearing is scheduled for Feb. 18. The policy discussion has become noisy as both political parties retreat to comfortable talking points before gaining a full appreciation of the problem. … "The upcoming hearings are a chance to focus attention on what's really at issue here, namely conflicts of interest. The players in this drama are Robinhood, Citadel and Melvin Capital. …
The extent to which the Robinhood CEO's defense holds up depends on specifics of any discussions that Robinhood executives had with executives at Citadel and with Robinhood's clearing agent, none of which have been made public." CHAMBER GETS FIRST FEMALE CEO — Our Caitlin Oprysko: :"Suzanne Clark will become the next chief executive of the U.S. Chamber of Commerce, the powerful business lobby announced .. making her the first woman to lead the trade group." | | | |   | | | | | | STOCKS END MIXED, ENDING 6-DAY WINNING STREAK FOR S&P — AP's Damian J. Troise and Alex Veiga: "The major U.S. stock indexes capped a listless day of trading Tuesday with an uneven finish that snapped a six-day winning streak for the S&P 500 even as the Nasdaq set another all-time high. "A late fade pulled the S&P 500 down 0.1%, just below its record high set a day earlier. The benchmark index closed with a nearly even split between gainers and losers. A mix of companies that deal with consumer services and products were the biggest drag on the broader market, outweighing gains in communications, industrial and health care stocks." NYSE CHIEF WARNS IT MAY LEAVE NEW YORK OVER STOCK TRANSFER TAX — Reuters: "The New York Stock Exchange may leave New York State if Albany imposes a transfer tax on stock sales, the president of the Intercontinental Exchange Inc-owned exchange operator said on Tuesday in an op-ed in the Wall Street Journal. "NYSE President Stacey Cunningham said she and 25 other representatives of New York's securities industry sent a letter last Wednesday to state legislative leaders warning against the unintended consequences of imposing such a tax, which would ultimately be borne by investors." WALL STREET STAYS ON CRYPTO SIDELINES — Bloomberg's Matthew Leising: "Tesla Inc.'s $1.5 billion Bitcoin purchase this week sent the cryptocurrency soaring to a record, with many of its most vocal adherents feeling validated in their 'to the moon' predictions. "For the largest U.S. banks, prospects for the digital asset are decidedly more earthbound. Top lenders still mostly shy away from crypto. While futures contracts based on Bitcoin and Ether, the second-largest digital currency, are available at major exchanges, none of the six biggest U.S. banks offer their customers access."
| | A message from Robinhood: We built Robinhood for the millions of people left behind by our financial system. We'll continue to stand right beside our customers as we break down barriers and expand access to the entire financial industry. And with a new generation of investors at the helm, the future looks a little brighter. | | | | | | DO FED POLICIES FUEL BUBBLES? — NYT's Jeanna Smialek and Matt Phillips: "Before it fueled the run-up in GameStop's stock, WallStreetBets, the Reddit message board, had another claim to fame: It helped popularize a series of memes centered on the Federal Reserve chair, Jerome H. Powell, and his central bank's policy of keeping interest rates near rock bottom while buying government bonds to bolster the economy. "'Money printer go brrrrr,' many of them read, suggesting that the Fed chair was essentially printing money and propping up markets by pumping cash into them through its program to buy government-backed bonds." SEC EXPANDS ENFORCEMENT STAFF'S POWER TO START NEW INVESTIGATIONS — WSJ's Dave Michaels: "Wall Street's main regulator will give more power to its enforcement staff to launch investigations, an early sign that it plans to become more assertive under the Biden administration. The move by the Securities and Exchange Commission allows more enforcement supervisors to authorize investigations, permitting about 36 senior officials at the agency to subpoena companies and individuals for records or testimony. "The agency during the Trump administration withdrew that authority from supervisors and allowed only two officials to approve new probes, saying it would result in more consistent decisions about which tips and complaints justified investigations." COVID MORTGAGE RELIEF ENDS SOON FOR MILLIONS — WSJ's Orla McCaffrey: "Mortgage forbearance has been a financial lifeline for many Americans navigating the pandemic-ravaged economy, allowing homeowners to eliminate what is often their largest bill for months at a time. "But the relief programs, largely designed to last a maximum of 12 months, are set to expire in the coming months, a serious challenge for borrowers who are still out of work or are earning less than they did pre-pandemic. More than half of 2.7 million active forbearance plans are set to end for good in March, April, May or June, according to mortgage-data firm Black Knight Inc." | | | | TUNE IN TO GLOBAL TRANSLATIONS: Our Global Translations podcast, presented by Citi, examines the long-term costs of the short-term thinking that drives many political and business decisions. The world has long been beset by big problems that defy political boundaries, and these issues have exploded over the past year amid a global pandemic. This podcast helps to identify and understand the impediments to smart policymaking. Subscribe and start listening today. | | | | | JPMORGAN BOARD REJECTS SWITCH TO STAKEHOLDER-FOCUSED ENTITY — Reuters' Ross Kerber: "JPMorgan Chase & Co CEO Jamie Dimon has led calls for companies to consider the needs of workers, communities and customers as well as those of shareholders. But now it is clear: investors come first. "That is how activist investor John Harrington interprets a recent decision by JPMorgan's board — chaired by Dimon — not to convert itself to a 'public benefit corporation,' a Delaware legal structure gaining attention among would-be financial reformers." WILBUR ROSS SEES FUTURE IN A SPAC, 'TRUMP CONDOS ON THE MOON' — Bloomberg's Amanda L. Gordon: "Wilbur Ross will miss the rides on Air Force One and the dinners in the White House, but he's still living a pretty good life these days. "Since mid-January, the former commerce secretary has been back in Palm Beach, Florida, rubbing elbows with Steve Schwarzman, Woody Johnson, Thomas Peterffy, Pepe Fanjul and Donald Trump himself, whom he saw recently at Mar-a-Lago. 'He's still getting a standing ovation when he walks into the dining room,' Ross said." TRANSITIONS via Daniel Lippman: Robinhood, the online trading app at the center of last month's retail trading frenzy, has registered its first in-house lobbyists as it comes under scrutiny from Washington lawmakers and regulators. Beth Zorc, a former Housing and Urban Development attorney and senior staffer on the Senate Banking and House Financial Services committees, and Lucas Moskowitz, who served as chief of staff to former SEC Chair Jay Clayton, will lobby on various bills relating to financial transaction taxes, according to a disclosure filing. | | | | TRACK THE FIRST 100 DAYS OF THE BIDEN ADMINISTRATION: President Biden's cabinet is getting confirmed, bringing change to agencies and departments across the Executive Branch. From the West Wing to Foggy Bottom, track the first 100 days of the Biden administration with Transition Playbook, our scoop-filled newsletter that chronicles the policies, people, and emerging power centers of the new administration. Subscribe today. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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