News : Deflating Dimon

Friday, June 2, 2023

Deflating Dimon

Jun 02, 2023

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One of Wall Street's top talkers this week was Jamie Dimon's perennial flirtation with a potential second act in politics. The Wall Street Journal reported that the JPMorgan Chase CEO got an earful from a fellow billionaire about running. Bill Ackman wrote an endorsement in a 600-word tweet. "Maybe one day I’ll serve my country in one capacity or another," Dimon told Bloomberg Television. CNN dissected his intentions during "Inside Politics" on Thursday.

But on Capitol Hill, veteran politicians on both sides of the aisle questioned whether the most powerful banker in the U.S. would have what it takes if he ever got serious about public service.

"He's going to find out that all these issues that he either could sort of shunt aside — or maybe not emphasize or whatever — are now going to become front-and-center issues," Rep. Bill Huizenga (R-Mich.) told our Eleanor Mueller. "Everything from figuring out which party you're going to be in, to what your stance is on social issues — and outside of ESG, 'this is our corporate policy.’ It's like, OK, what's the practical side? How are you going to deal with everything from the debt ceiling to nuclear proliferation in the Korean Peninsula?"

Message discipline might be an issue.

"Jamie Dimon has this wonderful, absolutely great gift of saying whatever's on his mind — and that works right up to a certain level of government or public politics," Sen. Kevin Cramer (R-N.D.) told Eleanor. "I appreciate that about him, actually. But let's just say, you wouldn't want to be his handler."

Rep. Ann Wagner (R-Mo.) burst out laughing when asked about the prospect. "I'd love to see it. The world deserves more Jamie Dimon."

Happy Friday — Have a lovely weekend, and send tips: Zach Warmbrodt, Sam Sutton.

Best wishes, Ben – Ben White, who brought you this newsletter for more than a decade, is departing POLITICO for a new adventure. Ben made our news organization an indispensable resource for anyone wanting to know what's really happening at the intersection of Wall Street and Washington. Your MM host is grateful to have learned from such a journalistic giant. We'll miss you, Ben!

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Driving the day

The May jobs report will be out at 8:30 a.m.

DEBT LIMIT FIGHT

It’s done — The Senate in a 63-36 vote late Thursday sent the debt-limit suspension bill to President Joe Biden, capping off a dramatic month of negotiations over how to avoid financial catastrophe.

Senators expedited the vote — which could have dragged out through Monday’s X-date — after Senate leaders agreed to consider a series of amendments, which failed, and pledged to begin work on the appropriations process.

Stocks pop — The Nasdaq Composite and the S&P 500 Index rose Thursday as the U.S. debt drama came to a close.

What it means for 2024 — While Biden has downplayed his enthusiasm for the deal, administration officials argue that he out-negotiated the GOP with small, near-term concessions while preserving major economic policies that will support his reelection.

A budgetary paradigm shift? Not so much. — House Republicans who crafted the debt-limit compromise are casting it as a fundamental change in the direction of the federal budget. But Eleanor reports that some on the right are now questioning – at the end of the process – the decision by negotiators to sideline cuts to defense and mandatory programs like Social Security that make up about 85 percent of the budget.

“If we want to ask Democrats for discretionary spending cuts on the domestic side, we should be willing to at least have the defense conversation,” Sen. J.D. Vance (R-Ohio) said in an interview. “But look, that's not where most of the caucus is and I recognize that.”

“I support what Kevin has done,” Sen. Kevin Cramer (R-N.D.) said of House Speaker Kevin McCarthy. “I will say this: I think the whole experience hopefully has awakened some people to reality. You can't take 85 percent of the budget off of the table."

“Somebody's got to get more honest with the American people,” he said.

Economy

Jobs day – Government data out this morning is expected to show the U.S. economy added fewer than 200,000 jobs in May and saw unemployment tick up to 3.5 percent. The slight slowdown would be good news for the markets because it means Federal Reserve officials would have another reason to skip a rate hike when they meet later this month.

“I believe that we’re pretty close to where we need to be in order to hold for a little bit,” Philadelphia Fed President Patrick Harker told our Victoria Guida in a new Q&A.

Regulatory Corner

Apple-Goldman bank accounts leave customers hanging — The WSJ and The Information report that customers of Apple’s new savings account offering with Goldman Sachs are suffering weeks-long delays when they try to withdraw funds. Lawmakers and regulators didn’t have much to say Thursday but look for them to dig into what’s going on at the big bank-big tech tie-up.

Wall Street wants reprieve from EU research rule — Declan Harty reports that finance industry trade groups are urging the SEC to keep shielding brokers from a U.S.-EU regulatory conflict over how they bill investors for research. The firms face a July 3 deadline.

CFPB warns about payment apps — The consumer bureau on Thursday said customers of Venmo, PayPal and CashApp should not store their money with the apps for the long term because the funds might not be safe during a crisis, the AP reports. The services generally aren’t covered by deposit insurance.

On the Hill

House Republicans ramp up anti-ESG work — Eleanor reports that the House GOP working group targeting environmental and social investing practices is ramping up, with plans for a report, hearings and legislation, according to its leader, Rep. Bill Huizenga.

Huizenga said in an interview that the group is putting together a report of its preliminary findings and recommendations. Hearings are in the works for July.

"It's going to be moving fairly quickly," Huizenga said.

Warren pushback — Richard Hunt, the former head of the Consumer Bankers Association, questioned a decision by Sen. Elizabeth Warren and her co-sponsors to carve out small, “community” banks from their new executive pay clawback bill.

“If this effort is not just for ‘show’ but a serious, substantive effort to curb alleged abuse, why would one find it acceptable to exempt 90 percent of all banks?” Hunt said in a note to MM. “One would think the law should apply to everyone evenly regardless of a technical issue like the size of a bank.”

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