| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by U.S. Bank | 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. | | | Meme stocks crash back to earth — Hate to say we told you so. Well, actually we never hate to say that. But we did write yesterday about the likelihood of the meme-stock phenomena ending in pain for many small investors who hopped on GameStop, AMC and other shares late in the chat-room driven frenzy. As Bloomberg notes, 50 stocks including GameStop that Robinhood originally put on its restricted list have now lost $109 billion in value from their lofty peaks in recent days. GameStop itself tanked 60 percent to $90 on Tuesday. AMC dropped 41 percent. Eventually fundamentals generally reassert themselves. The entire saga could easily fall off the Washington radar given everything else going on with Covid, stimulus and the Trump impeachment trial. But the rapid declines suggest if the focus does remain on recent market manias, targets will not just include the Robinhoods of the world but whether some kind of new disclosure or other requirements should apply to people pumping up stocks in chatrooms. It's a challenging area to get into given the righteous desire to allow small investors to buy and sell as they see fit when they see fit and to avoid any appearance of trying to protect hedge funds or brokers. But plenty of average folks are getting hammered by these meme manias and some protections may need to be considered. Dems going it alone on stimulus — Our Marianne LeVine and Burgess Everett: "Senate Democrats are increasingly confident they will deliver a coronavirus relief package in the coming weeks, even if it means moving forward without Republican support. "Democrats took the first step Tuesday toward passing a $1.9 trillion stimulus bill with a simple majority, holding a vote to start the so-called budget reconciliation process. The procedural move, which passed 50-49, is a sign that leadership expects to have the full Democratic caucus on board for the final package. Senate Democrat voted to move forward on the process, including Sen. Joe Manchin (D-W.Va.), who opposes raising the minimum wage to $15." GOP courts blowback — We've banged on in this space for a while that there isn't much of a public constituency for NOT going big on stimulus and sending out checks and boosting unemployment benefits and aiding struggling states. Republicans who eventually oppose a reconciliation package may win some credit from corporate donors and deficit hawk groups. But it's not even close to where the majority of the country is, as our Sam Stein notes in POLITICO Nightly. 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 U.S. Bank: Relationships may look different now, but they matter more than ever. That's why we've been partnering with local organizations to empower those who know their communities best.
Like in Arizona, where we helped the Hispanic Chamber of Commerce support a local photographer who lost 90% of his income due to COVID-19.
When the photographer reached out to say thank you, we gave him more business – by hiring Everardo ourselves. Learn more. | | | | | | Dems will continue to move forward on a unilateral Covid relief package … ADP private employment at 8:15 a.m. again likely to be pretty bad with consensus for a gain of 60K but a decline quite possible. NEW: YELLEN TO MEET WITH REGULATORS ON MEME STOCKS — Our Victoria Guida: "Treasury Secretary Janet Yellen will meet with key financial regulatory agencies to scrutinize recent price surges in GameStop stock and other companies, the latest move by policymakers to respond to market maneuvers tied to a group of investors on Reddit. "The meeting, which will take place as soon as Thursday, will focus on findings from the Securities and Exchange Commission, according to a Treasury official. It will also include the Federal Reserve, the New York Fed and the Commodity Futures Trading Commission, which oversees derivatives." PATRICK STEEL TO LEAVE POLTICO — Just a brief point of personal privilege to express our thanks and respect for POLITICO CEO Patrick Steel who will leave this summer after a terrific run. Patrick has been a friend and confidant and a relentless advocate for the brand. MM will miss him greatly. Look for more exciting news from Patrick soon. From Patrick's email: "[W]e doubled the size of our company, expanded into new geographies, produced incredible and impactful journalism, launched valuable new products, and completed our largest acquisition with E&E News." And from POLITICO owner Robert Albritton about Patrick: "Your tireless energy and boundless optimism helped make us better. We are grateful your indefatigable promotion of our journalism and pride in our people. And personally, I am grateful for your friendship." OUR VACCINE FAILURES — Via PIIE's David Wilcox: "Too many jurisdictions appear to be allowing too much vaccine to sit idle for too long before getting it into the arms of residents. The data in this posting show which jurisdictions have been putting their doses to work most quickly and which have been lagging behind." | | | | THE UNOFFICIAL GUIDE TO OFFICIAL WASHINGTON: Washington hasn't slowed down in 2021. A new administration and Congress are off and running, and our new Playbook team is two steps ahead of the pack to keep you up to speed. The new Playbook foursome of Rachael Bade, Eugene Daniels, Ryan Lizza and Tara Palmeri is canvassing every corner of Washington, bringing you the big stories and scoops you need to know—and the insider nuggets that you want to know—about the new power centers and players. "This town" has changed. And no one covers this town like Playbook. Subscribe today. | | | | | NEW NAMES FOR TREASURY — Bloomberg's Saleha Mohsin: "The Biden administration is looking at adding several veterans of global financial diplomacy to its ranks, as Treasury Secretary Janet Yellen and the White House staff their teams and seek to bolster international ties amid the coronavirus pandemic. "Yellen is eyeing former Treasury official Marisa Lago, who now works for New York Mayor Bill de Blasio, and Heidi Crebo-Rediker, a former chief economist at the State Department, for undersecretary of international affairs at the Treasury … Federal Reserve Bank of New York markets chief Daleep Singh has been offered a job at the White House to be a deputy director on the National Economic Council and join the National Security Council" LIPTON TO TREASURY — Reuters' Andrea Shalal, David Lawder: "David Lipton, an economist who served as a senior official at the International Monetary Fund and U.S. Treasury, will return to government service as a senior adviser to … Yellen "Lipton will focus on the U.S. role within the Group of Seven advanced economies and the larger Group of 20 economies in a temporary role … It comes as the world's top economies are struggling to manage the coronavirus pandemic and ensure a nascent global recovery stays on course." DEMS KEEP DC GUESSING ON CORP TAX RATE — Our Brian Faler: "Democrats' sweep to power has inaugurated a new Washington guessing game: What's the corporate tax rate going to be? Lawmakers are widely expected to raise it, but no one can say when or by how much. "Progressives like Sen. Bernie Sanders (I-Vt.) are itching to return it to the old 35 percent rate that prevailed for years before Republicans knocked it down to 21 percent under the Trump administration." | | | |   | | | | | | DOW RISES AHEAD OF AMAZON, ALPHABET EARNINGS — WSJ's Joe Wallace and Amber Burton: "U.S. stocks rose Tuesday, reflecting a steadier tone for markets this week despite fireworks in GameStop shares and silver futures. "The S&P 500 rose 52.45 points, or 1.4 percent, to 3826.31 a day after the broad stocks gauge posted its biggest one-day advance since November. The Dow Jones Industrial Average gained 475.57 points, or 1.6 percent, to 30,687.48. The technology-heavy Nasdaq Composite Index climbed 209.38 points, or 1.6 percent, to 13612.78." MEME STOCKS LOSE $167B — Bloomberg's Sarah Ponczek, Katharine Gemmell and Charlie Wells: "The 50 stocks that Robinhood originally put on its restricted list had added $276 billion in value from the end of 2020 to the height of the recent mania, according to data compiled by Bloomberg. But now, $167 billion has been wiped out in just a matter of days, and there's little sign the pain is easing." But it's not just GameStop worry Wall Street about a bubble — AP's Stan Choe: "All the fervor has Wall Street openly debating whether the market is in a dangerous bubble, after months of batting away the possibility. A bubble is what happens when prices for something run much, much higher than they should rationally be: They've been a regular occurrence through history, going back to tulips in the 17th century and pets.com at the close of the 20th." FED POLICY IS JUST ONE FACTOR IN THE REDDIT-FUELED FRENZY — Reuters' Ann Saphir: "The Federal Reserve's massive asset purchase program is one reason for the recent Reddit-fueled trading frenzy in stocks including Gamestop, Dallas Federal Reserve Bank President Robert Kaplan said on Tuesday, though he said that so far he does not see any systemic financial stability risks." | | A message from U.S. Bank: At U.S. Bank, community matters.
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At U.S. Bank, we're small enough to care and big enough to make a difference. Learn more. | | | | | | BEZOS TAKES NEW ROLE — Our Cristiano Lima: "Jeff Bezos' decision to step down as Amazon's CEO comes as the online retailing giant is facing unprecedented scrutiny in Washington — from antitrust probes and criticism over its tax and labor practices to its role as a gatekeeper granting other companies access to the web. "And his chosen replacement has been in the thick of some of Amazon's highest-profile battles. As chief of Amazon Web Services, the company's lucrative cloud division, Andy Jassy played a role in Amazon's decision last month to boot the conservative-friendly social media platform Parler from the internet after last month's Capitol riots." WARREN ASKS ROBINHOOD TO EXPLAIN WHY IT RESTRICTED GAMESTOP TRADES — CNBC's Dan Mangan and Thomas Franck: "Sen. Elizabeth Warren on Tuesday asked Robinhood in a letter to explain why it restricted trading in red-hot shares of GameStop after hedge funds suffered huge losses in a short squeeze. "Warren, D-Mass., noted that the online brokerage last week abruptly changed trading rules for individual investors in certain stocks on its no-fee platform, while hedge funds and Wall Street institutional investors were allowed to keep trading in GameStop, Koss, AMC Entertainment, Express, Naked Brand Group and other companies." ICYMI: WHY ARE THERE SO FEW BLACK ECONOMISTS AT THE FED? — NYT's Jeanna Smialek: "J. Monroe Gamble IV was the first Black research assistant to work at the Federal Reserve Bank of San Francisco. He started in 2018. "That one data point speaks to a broader reality: Even as America's central bank dedicates research and attention to racial economic outcomes and publicly champions inclusion, it has had a poor record of building a work force that looks like the population it is meant to serve." EUROPE'S ECONOMY FALLS FURTHER BEHIND U.S., CHINA — WSJ's Tom Fairless, Eric Sylvers and Harriet Torry: "The eurozone's economy is diverging sharply from the U.S. and China, as stubbornly high coronavirus infections, extensive Covid-19 restrictions and a painfully slow vaccine rollout delay Europe's recovery from last year's historic economic downturn. "Fresh data Tuesday highlighted an economic gap between the eurozone and the U.S. and China that is likely to widen this year, given that the U.S. is proceeding more quickly than the European Union in rolling out vaccines and China remains largely free of the virus." | | | | JOIN THURSDAY - BUILDING PUBLIC TRUST AROUND THE VACCINE: How do we overcome the trust gap around the Covid-19 vaccines? How do we craft and deliver messages to break through fear and misinformation, especially in diverse and underserved communities that are particularly vulnerable to the coronavirus? Join for a conversation with policymakers and public health experts about the urgent need to soothe fears and get Americans vaccinated. REGISTER HERE. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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