The BIG Immigration Debate

BestsellerMagazine.com - CATEGORY Headline Report: TITLE

THE TICKER

BlackRock Inc. CEO Laurence Fink. (AP Photo/Mark Lennihan)

Some of the tax cut’s most ardent fans work on Wall Street, where the new law has helped turbocharge the stock market rally and is set to deliver a major boost to the bottom lines of the biggest banks. 

So, investment titan Larry Fink sounded like a wet blanket Tuesday when he called on top CEOs to spell out how they plan to use their tax windfall, while bearing in mind that his firm, BlackRock — the largest asset manager in the world, overseeing more than $6 trillion — will now insist that they contribute to the broader social good rather than just maximize profits. 

Fink, in his annual letter to more than 1,000 global chief executives, signaled his firm wants to see the tax cuts produce more than just stock buybacks or dividend payments. “What will you do with increased after-tax cash flow, and how will you use it to create long-term value?” Fink wrote. “This is a particularly critical moment for companies to explain their long-term plans to investors.”

The missive comes as business leaders are navigating a potentially tricky path in the wake of enactment of the GOP tax package. Republicans are eager to see them hand out bonuses, wage gains and other new benefits to workers as evidence that the deep cut to the corporate tax rate is proving its value to average Americans. 

Democrats, meanwhile, are deriding those benefits as crumbs, no more than a rolling public relations campaign by corporate giants to thank the GOP for the windfall

(a new poll shows it may be working, with support for the tax overhaul nine points, to 46 percent, over just a month ago). Executives and shareholders, Democrats say, will still claim the lion's share. 

Among the big banks themselves, the fate of their surprisingly large tax breaks remains an open question. Citigroup, in announcing its fourth-quarter earnings on Tuesday, reported taking a one-time, $22 billion hit from the reconfigured tax code. But the bank expects to see a significant lift. “Tax reform not only leads to higher net income and increased returns,” CEO Michael Corbat said in a statement, “but also serves to strengthen our capital generation capabilities going forward.”

As the New York Times’s Jim Tankersley notes, more than 70 financial institutions have announced higher wages and bonuses for workers, accounting for about half of all companies that have promised to share the wealth from the cuts with employees. But, he writes, those goodies “reflect a small slice of the windfall that banks large and small are in line to receive.”

People pass the JP Morgan Chase & Co. Corporate headquarters in Manhattan. (Reuters/Mike Segar)

Take JPMorgan Chase and Wells Fargo, which announced their earnings Friday and revealed they stand to collect a combined $7 billion in tax relief. Bloomberg News's Hugh Son and Laura J. Keller summarize the competing demands on that haul: “Borrowers including small businesses and big corporations will want better pricing. Employees from tellers to rainmakers will press for raises and bigger bonuses. And then there’s the political pressure banks face to invest more in communities, particularly those with the least access to credit.”

JPMorgan’s chief financial officer, Marianne Lake, pledged to unveil a plan in the next few weeks to support local investment — “really constructive, thoughtful things for all of our constituents” — but added that most of the windfall will end up elsewhere, with much of it going to the bank’s bottom line this year and later. 

It’s hardly clear that Fink, for all the pull that BlackRock’s size would seem to confer, is going to meaningfully reshape conversations in boardrooms on Wall Street and beyond.

For one, BlackRock is still working through what to do with its own tax windfall. On its earnings call last week, the firm’s chief financial officer projected it will make $1.2 billion in stock buybacks this year, plus more divided payments, in addition to evaluating “our ability to more aggressively seed and co-invest in new products.” 

So, could Fink’s letter be its own public relations maneuver? Bloomberg Gadfly’s Stephen Gandel suggests as much, noting the investment chief has used the annual message to call for greater corporate social responsibility before, with little apparent follow-up. “Fink's bark is always going to be louder than his bite,” he writes. “BlackRock does nearly all of its stock market investing through index funds. So, no matter how much it disapproves of a company's stance on the environment or whatever, it can't actually sell.”

I asked BlackRock on Tuesday how it intends to follow up on Fink’s letter and didn’t hear back. Fink and Barbara Novick, a BlackRock cofounder he’s named to oversee the firm’s investment stewardship efforts, will both be in Davos next week, and I will, too, so I’ll do my best to get an answer then. 

You are reading

The Finance 202,

our must-read tipsheet on where Wall Street meets Washington.
Not a regular subscriber?

SIGN UP NOW

MARKET MOVERS

> Get There Dow starts day with a bang and ends in a whimper Dow climbs a record 1,000 points in seven sessions.

Thomas Heath

> U.S. Stock Market's Broad Rally Is Bullish Sign for Believers U.S. investors tempted to book profits after the S&P 500’s successful start to 2018 might be wise to hang on a bit, according to an analysis of historical trading patterns.

Bloomberg

> Stock market peak still at least a year away, fund managers say in Bank of America survey Professional investors are going all in on the bull market, reducing cash allocations and putting the most money in stocks in two years.

CNBC

> U.S. inflation, wage expectations jump: NY Fed survey U.S. inflation expectations rose in December to the highest level in months as younger and middle-age workers expected higher prices and earnings, according to a Federal Reserve Bank of New York survey published on Tuesday.

Reuters

MONEY ON THE HILL

House Speaker Paul Ryan (R-Wis.) speaks during a news conference. (AP Photo/Pablo Martinez Monsivais)

Shutdown watch. The Post's Erica Werner and Mike DeBonis: "House Republican leaders presented their rank and file with a one-month spending bill Tuesday aimed at keeping the government open ahead of a Friday night deadline, as hopes for a deal on young undocumented immigrants faded. The bill would extend existing spending levels through Feb. 16 and include an extension of a popular children’s health insurance program — aimed at winning Democratic votes — and a new sweetener for conservatives and Democrats alike in delaying several taxes included in the Affordable Care Act. Few lawmakers were enthusiastic about the legislation, but several described it as a necessary evil to avoid the first government shutdown since 2013... [Leaders] planned to test support Wednesday and bring the bill to a vote Thursday, according to multiple members. It was not immediately clear whether they would be successful."

House GOP may target Obamacare. Politico's Rachael Bade and Jennifer Haberkorn: "House GOP leaders may load up a temporary government funding bill with Obamacare tax delays in a bid to win over reluctant Republicans and avoid a shutdown at week’s end. Speaker Paul Ryan and his team will huddle with rank-and-file GOP lawmakers in what’s expected to be a contentious conference meeting Tuesday night. Senior Republican sources say GOP leaders will float several options to try to secure Republicans votes on what will be the fourth spending stopgap since September — an embarrassing practice that Republicans say puts the military at risk."

Chamber to push gas tax. The Post's John Wagner: "With President Trump and Congress turning their attention to infrastructure in the coming weeks, the U.S. Chamber of Commerce is preparing for an uphill battle: a push to raise the federal gas tax by 25 cents per gallon to help pay for the initiative.

The proposal, which will be formally introduced later this week, is part of a series of principles the nation’s largest business lobby will offer in a bid to help shape the debate about upgrading U.S. roads, bridges, airports and other critical infrastructure. Chamber President Thomas J. Donohue said his organization wants 'to put our oar in the water' and acknowledged that it would be 'a tough vote' to raise the gas tax for the first time since 1993. But he said that support has been building in the business community and elsewhere."

Former Minnesota Gov. Tim Pawlenty. (AP Photo/Charles Dharapak, File)

No Sen. T-Paw. Politico's Kevin Robillard: "Former Minnesota Gov. Tim Pawlenty said Tuesday he won't run in a special election for the Senate later this year. Pawlenty, now the CEO of the Financial Services Roundtable, a powerful bank lobbying group, ruled out a run during an appearance on Fox Business Network. 'I'm interested in continuing to serve,' Pawlenty said. 'There's a variety of ways to do that, [but] running for U.S. Senate this year won't be one of them.'... 

Minnesota, traditionally a blue state, has trended Republican in recent years, and Democratic presidential nominee Hillary Clinton won it by just two percentage points in 2016. Democrats, however, thought they would be able to use Pawlenty's post-gubernatorial career as a conservative presidential candidate and bank lobbyist as a way to convince Minnesotans their former governor was out of step with the state."

> Business groups key-vote miscellaneous tariff bill Two business groups will key-vote House passage of a measure that would eliminate duties on imported raw materials needed for production that aren’t readily available in the United States.

The Hill

> Maryland Politics Maryland Democrats unveil bills to offset changes in federal tax law Bills would create state-run charity to benefit public schools, establish new personal exemption and keep estate tax in place.

Ovetta Wiggins and Josh Hicks

POCKET CHANGE

A man watches a screen showing the prices of bitcoin at a virtual currency exchange office in Seoul, South Korea on Tuesday. (AP Photo/Ahn Young-joon)

CRYPTO CHAOS:

Cryptocurrencies slump. Bloomberg's Eric Lam: "Bitcoin continues to wobble, trading near $11,000 a day after losing a quarter of its value as traders sought a floor for pricing amid growing concern regulators around the world will move ahead with new rules to restrict the burgeoning cryptocurrency industry. The largest digital currency rose 1 percent to $10,831 at 12:20 p.m. in Hong Kong after slumping as much as 26 percent Tuesday, according to Bloomberg composite pricing. Rival cryptocurrencies Ripple and Ethereum swung between gains and losses... 

Speculators across the globe are struggling to determine when or how market watchdogs may rein in an industry that’s decentralized and derives much of its value from anonymous ownership. Many assertions that digital coins represent a bubble have triggered double-digit selloffs over the past year, only to be followed by rebounds. In South Korea, shutting down cryptocurrency exchanges is still an option amid ongoing discussions, Finance Minister Kim Dong-yeon said in an interview with TBS radio Jan. 16. Kim said there’s irrational speculation and that rational regulation was needed."

>

Beyond the bubble. NYT's Steven Johnson: "You may be inclined to dismiss these transformations. After all, Bitcoin and Ether’s runaway valuation looks like a case study in irrational exuberance. And why should you care about an arcane technical breakthrough that right now doesn’t feel all that different from signing in to a website to make a credit card payment? But that dismissal would be shortsighted. If there’s one thing we’ve learned from the recent history of the internet, it’s that seemingly esoteric decisions about software architecture can unleash profound global forces once the technology moves into wider circulation... The Bitcoin bubble may ultimately turn out to be a distraction from the true significance of the blockchain. The real promise of these new technologies, many of their evangelists believe, lies not in displacing our currencies but in replacing much of what we now think of as the internet, while at the same time returning the online world to a more decentralized and egalitarian system."

> The Antitrust Case Against Facebook, Google and Amazon Facebook, Google and Amazon dominate their worlds just as Standard Oil and AT&T once did. Critics say they should get the same treatment. The answer to the antitrust question depends on a narrow test: Are consumers worse off?

WSJ

> Bank of America Earnings Hurt by Tax-Related Charge Bank of America’s fourth-quarter profit fell from a year ago, hurt by a $2.9 billion charge related to the tax bill, even as the bank ended a year that put its crisis-era issues firmly in the past.

WSJ

> Goldman’s Commodity Revenue Drops 75% to Lowest on Record Goldman Sachs Group Inc. suffered the worst commodities performance in its history as a public company as a drop of about 75 percent in net revenues in 2017 put it behind long-time rival Morgan Stanley, according to people familiar with the matter.

Bloomberg

TRUMP TRACKER

General Motors CEO Mary Barra meets with Trump last February. (AFP / Brendan Smialowski)

— 

Barra to Trump: Don't blow up NAFTA. NYT's Neal E. Boudette: "General Motors’ chief executive urged the Trump administration on Tuesday not to scrap the North American Free Trade Agreement, and said any changes in the pact should account for the effect on American automakers and workers. 'There could be unintended consequences, changes made, that would directly impact jobs in the United States,' the G.M. chief, Mary T. Barra, said at an investor conference on the sidelines of the Detroit auto show. 'Nafta needs to be modified,' she added, but she rejected the idea that 'we need to walk away from it.'"

RUSSIA WATCH: 

Former White House strategist Steve Bannon leaves a House Intelligence Committee meeting where he was interviewed behind closed doors on Capitol Hill yesterday. (AP Photo/Jacquelyn Martin)

Mueller subpoenas Bannon. The Post's Karoun Demirjian, Carol D. Leonnig and Roz Helderman: "Special counsel Robert S. Mueller III’s office has subpoenaed former White House chief strategist Stephen K. Bannon to appear before a grand jury, a move that indicates his broad investigation into Russia’s interference in the 2016 campaign is far from wrapping up. The subpoena was issued last week, according to a person familiar with the situation, who said that Bannon expects to be able to persuade the special counsel’s office to accept a voluntary interview of Bannon by prosecutors in place of a grand jury appearance. The news of Mueller’s action, which was first reported by the New York Times, came on the same day that the House Intelligence Committee issued a subpoena to Bannon for refusing to answer a range of questions from investigators during a combative closed-door interview, frustrating members of both parties who are probing the Trump campaign’s alleged Russia ties."

— Manafort trial in Sept. The Post's Spencer S. Hsu: "Former Trump campaign manager Paul Manafort will face trial no sooner than September, the judge hearing his case indicated after an hour-long hearing Tuesday in which prosecutors and defense attorneys sparred over his continuing house arrest and a separate lawsuit challenging the appointment of special counsel Robert S. Mueller III. Prosecutors told the court Friday that they intended to ask for a May 14 trial date for Manafort, 68, and his former business partner, Rick Gates, 45, whose Oct. 30 indictments on fraud, conspiracy and money laundering counts were the first disclosed in Mueller’s probe of Russian influence in U.S. political affairs."

> Politics ‘We’re not going anywhere.’ Trump’s company fights efforts to shed the president’s name The Trump Organization is using warnings and legal threats against properties seeking to end their affiliation with the brand.

David A. Fahrenthold and Jonathan O'Connell

> Trump Anxiety, Harassment Fallout to Dominate Davos Forum The World Economic Forum’s annual meeting in Davos, Switzerland, next week will host its usual line-up of industry titans, globe-trotting financiers and politicians of all ideological hues. The gathering is still almost certain to be dominated by just one of them: Donald J. Trump.

Bloomberg

THE REGULATORS

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau. (AP Photo/Jacquelyn Martin)

CFPB reviews payday lending rule. WSJ's Yuka Hayashi: "The Trump administration’s acting head of the Consumer Financial Protection Bureau plans to reconsider federal restrictions on high-interest payday loans, a step that could lead to the easing of a rule opposed by the industry and some Republicans. The rule, completed last year when the bureau was still under Obama-era leadership, clamped down on small, short-term consumer loans that can have interest rates as high as 400%. Among other things, it would require lenders to limit loan rollovers and assess whether borrowers can repay the short-term loans.

The CFPB completed the rule in November, days before White House budget chief Mick Mulvaney, a critic of the agency appointed by President Donald Trump as CFPB acting director, succeeded former director Richard Cordray. As a South Carolina congressman, he opposed the CFPB’s regulatory efforts on several fronts, including payday lending. Payday lenders have said the rule would upend the industry."

CFPB short-lister stirs controversy. American Banker's Ian McKendry: "National Credit Union Administration Chairman J. Mark McWatters has not even been announced as President Trump's pick to run the Consumer Financial Protection Bureau, but his potential nomination already is uniting several diverse groups in opposition. Since news of McWatters’ potential pick first broke in American Banker in December, banking industry representatives have criticized the idea of appointing him to the CFPB post over concerns that his past backing of the credit union industry poses a problem. As NCUA chairman, McWatters has publicly stated support for credit unions getting preferential regulatory treatment over banks, due to what he suggests is a safer business model."

CHART TOPPER

From The Visual Capitalist: "The Most Valuable Companies of All Time:"

DAYBOOK

Today

  • The House Financial Services Committee holds a markup of various bills.
  • The Senate Finance Committee holds a hearing on United States Trade Representative nominees.
  • The Senate Banking, Housing and Urban Affairs committee holds an executive session to vote on Jerome Powell to be chairman of the board of governors of the Federal Reserve System and Randal Quarles to be reappointed as a member of the board of governors of the Federal Reserve System.

Coming Up

  • The American Enterprise Institute holds an event on “New thinking about poverty and economic mobility” on

     Thursday

  • The Cato Institute Policy Perspectives 2018, including a discussion on “A Fiscal Rule to Tame Federal Debt?”, takes place on 

    Thursday.

  • The SEC-NYU Dialogue on Securities Markets – Shareholder Engagement will be held in New York on 

    Friday. 

THE FUNNIES

From the New Yorker: 

A cartoon by @jeremywins. #TNYcartoons

A post shared by The New Yorker Cartoons (@newyorkercartoons) on

BULL SESSION

Here's what you need to know about the latest DACA decision: 

President Trump says "black unemployment is the best it's ever been in recorded history:"

Sen. Lindsey Graham (R-S.C.) says the conversation around Trump's contentious immigration meeting and remarks "has turned into an s-show:"

Trevor Noah takes on the president's health following a report from the White House physician:

BestsellerMagazine.com, Site News Today\\\'s world Presenting Daily News Latest News and Latest Regarding News Politics, Business, Sports Up Celebrity Gossip.

Source : https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2018/01/17/the-finance-202-big-banks-debate-what-to-do-with-tax-windfall/5a5e730d30fb0469e8840196/

The Finance 202: Big banks debate what to do with tax windfall
Lindsey Graham called Mexico, other countries ‘hellholes’ in 2013 immigration debate
These Are the Important Questions Raised in the Immigration Debate
GOP should recall its welcoming roots in immigration debate | Opinion
Brit Hume drops stat bomb on immigration debate showing just how criminal illegal aliens actually are
How three elections are snarling the immigration fight
The four big fights Trump and Congress must resolve to avert a government shutdown
It’s Time To End The Trump Media Circus And Get Back To Public Policy for Grown Ups
It’s a Big Day for the Immigration Debate: Here’s What You Need to Know
Trump opponents rail over the president's 's---hole' comments to avoid the truth about immigration
[LIMITED STOCK!] Related eBay Products