Wall Street/Warren react

WALL STREET/WARREN REACT — Lot of response to our piece Monday reporting that big Wall Street donors might pull their financial support if Hillary Clinton picked Sen. Elizabeth Warren (D-Mass) as her running mate.

One top progressive emailed: “If Warren were VP, it would more than recoup any money lost by Wall Street by raising tons in grassroots donations — and likely tons more in big checks from Warren donors to the DNC, etc. Would actually save the Clinton fundraising people a lot of time. Evidence: Sanders outraised Clinton.”


Another top Dem: “I can't think of a dumber strategy to derail Warren than a bunch of Wall Street execs saying she's unacceptable. Literally. Like that story couldn't be better for her if she planted it.”

Tyler Gellasch, a former senior Democratic policy advisor: “Picking Senator Warren would be the easiest way for Secretary Clinton to demonstrate that she's committed to an economic policy agenda for everyone, not just her wealthy donors. And the mountain of Wall Street pushback may well be the biggest selling point for picking Senator Warren — not a detractor.

“In one move, Secretary Clinton could unify the Democratic Party and completely foreclose Trump's attempts to exploit her Wall Street ties (and speeches) with his own populist-sounding attacks. Besides, are the majority of financial services executives really going to back Trump or want to risk it? Good luck with that."

Cenk Uygur did a piece on the Warren story on The Young Turks: https://goo.gl/JsMEBM

MOODY’S: TRUMP’S PLAN WOULD CRUSH ECONOMY — Via the latest Moody’s Analytics analysis of Donald Trump’s economic proposals: “Quantifying Mr. Trump’s economic policies is complicated by their lack of specificity. The publicly available information is not sufficient to fully quantify all of his proposals. … Broadly, Mr. Trump’s economic proposals will result in a more isolated U.S. economy. Cross-border trade and immigration will be significantly diminished … foreign direct investment will also be reduced. …

“Mr. Trump’s economic proposals will also result in larger federal government deficits and a heavier debt load. … [T]he economy will be significantly weaker if Mr. Trump’s economic proposals are adopted. … By the end of his presidency, there are close to 3.5 million fewer jobs and the unemployment rate rises to as high as 7%, compared with below 5% today. During Mr. Trump’s presidency, the average American household’s after-inflation income will stagnate” https://goo.gl/HCBk1r

YELLEN PREP — Keefe, Bruyette & Woodss’ Brian Gardner on today's Senate testimony: “[W]e expect Yellen will mostly reiterate what she said at last week's press conference while possibly putting a slightly more optimistic spin on the economy and keeping interest rate hikes in 2016 on the table. On regulatory policy, we expect Yellen will get hammered from both sides — from some Democrats who think the regulators have not done enough … and from some Republicans who think the Fed has actually perpetuated TBTF. Since most of Dodd-Frank's rules have been implemented or proposed, we do not expect she will break new ground on the regulatory front”

Pantheon’s Ian Shepherdson: “Back in the dim and increasingly distant past the semi-annual Monetary Policy Testimony — previously known as the Humphrey-Hawkins — used to be something of an event. Today's Testimony, however, is most unlikely to change anyone's opinion of the likely pace and timing of Fed action.

“No significant data have been released since last week's FOMC meeting, when the FOMC backed away from the previously threatened June hike, citing the apparent slowdown in payroll growth and, in the press conference, fear of Brexit. The risk of Brexit appears to have diminished in recent days, but it is has definitely not evaporated wages”

ANOTHER VIEW ON BREXIT IMPACT — American Bankers Assoc.’s Wayne Abernathy emails: “Not to differ with [Mohamed A.] El-Erian, he may be right. But it is also worth keeping in mind another financial markets maxim: Sell on the predictions, buy on the news.

“With something so extensively covered in the news, the British decision is likely to be already priced in the markets, so far as predictions go, particularly from the sell side. Once a decision is made, markets tend to ‘get on with it,’ and markets bounce back. Not a sure thing, but a realistic possibility.”

POLLS TIGHT — Bloomberg: “Britain’s referendum on European Union membership remained too close to call two days before the vote, with separate polls showing leads for both sides … A YouGov poll of 1,652 voters for the Times newspaper published late on Monday showed ‘Leave’ at 44 percent and 42 percent for ‘Remain’, while a survey of 800 people by ORB for the Daily Telegraph had ‘Remain’ at 53 percent and ‘Leave’ at 46 percent among those certain to vote.” http://goo.gl/J1RsD1

POUND SURGES — FT’s Dan McCrum and Peter Wells: “The pound posted its biggest gain in eight years on Monday after a series of polls showed that Britons are increasingly likely to vote to remain in the EU … Stock markets also moved higher in the UK and across the globe, reversing some of the most tangible signs of unease which had accompanied swelling support for Leave before the murder last week of Labour MP Jo Cox prompted a suspension of campaigning” http://goo.gl/CWnF9q

SOROS WARNS — George Soros in The Guardian: “British voters are now grossly underestimating the true costs of leaving. Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking. It would have at least one very clear and immediate effect that will touch every household: the value of the pound would decline precipitously. It would also have an immediate and dramatic impact on financial markets, investment, prices and jobs.” https://goo.gl/GoUvNK

POLITICO AT THE CONVENTIONS — Live programming originating from the POLITICO Hub during both the Republican and Democratic National Conventions this July will feature a range of conversations from headline interviews and policy discussions to watch parties and performances. Sign up to receive notifications about live programming: http://politi.co/1Ulse19

GOOD TUESDAY MORNING — Welcome to the first full day of summer. Email me on [email protected] and follow me on Twitter @morningmoneyben.

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES – Zachary Warmbrodt on Neel Kashkari’s next target after “too big to fail” -- and to get Morning Money every day before 6 a.m. -- please contact Pro Services at (703) 341-4600 or [email protected].

DRIVING THE DAY — Fed Chair Janet Yellen testifies before Senate Banking at 10 a.m. … Treasury Secretary Jack Lew delivers remarks at the 2016 SelectUSA Investment Summit. In the afternoon, Secretary Lew will chair and Deputy Secretary Raskin will attend a meeting of [FSOC] … Hillary Clinton gives a speech in Columbus, Ohio in which she is expected to rip Trump’s business record …

BREXIT WOULD NOT BE ABRUPT — Glenmede’s Director of Investment Strategy Jason Pride: “The likelihood of a ‘Leave’ vote in the Brexit referendum is material but should not be the base case assumption … Even if the referendum vote favors the ‘Leave’ camp, an exit would not occur suddenly. We suspect that UK political leaders will explore all opportunities, potentially including a protracted timetable for their exit from the EU, to avoid a disruption of foreign trade and other business arrangements”

CLINTON CAMP RIPS TRUMP ECON PLANS — POLITICO’s Nolan D. McCaskill: “Trump’s economic policies wouldn’t just move the U.S. backward; they would drive the country into an ‘economic ice age,’ according to Hillary Clinton’s campaign. Clinton campaign manager Robby Mook slammed the presumptive Republican presidential nominee’s economic proposals, adding that in addition to being unfit for the White House, the billionaire is also an economic threat.

“Mook argued that Trump’s tax plan would increase the national debt by more than $30 trillion over two decades and blasted him for suggesting that his administration would allow the U.S. to default on its debt, ‘which would literally cause a global economic catastrophe far worse than anything we saw in 2008,’ he said” on Sirius” http://goo.gl/vC80bi

CONSUMER CONFIDENCE FAVORS DEMS — CFR’s Benn Steil and Emma Smith: “Going back to 1952, consumer confidence has been a fair guide to presidential election outcomes. Confidence has been 12 points higher on average in years the incumbent party has won than in years the opposition party has won. he difference is statistically significant at the 1 percent level. …

“[A]verage confidence over 2016 to date is right at the average level for an incumbent party victory. This is good news for Hillary Clinton — though there is still plenty of time for bad news to boost Donald Trump.” http://goo.gl/Xgipex

TRUMP’S FUNDRAISING DISASTER — POLITICO’s Isaac Arnsdorf: “Donald Trump's campaign had a paltry $1.3 million in cash on hand in May — a mere fraction of Hillary Clinton's $42.5 million war chest — leaving the GOP frontrunner at a sharp disadvantage heading into the general election against Clinton's money machine. On the same day that Trump fired his campaign manager, Corey Lewandowski, amid a steady stream of reports of campaign infighting and disorganization, the latest batch of [FEC] filings show that the real estate mogul has a long way to go if he hopes to establish a financial operation that can compete at the national level.

“The Trump campaign raised just $3.1 million from donors (including almost $2 million i amounts less than $200) and relied on another $2.2 million loan from Trump himself, who said he won't continue self-funding his bid through the general election. … Even the defunct campaigns of Ted Cruz and Ben Carson had more cash on hand than Trump's. In fact, several House members running for reelection has more cash on hand than Trump's campaign.”

TWEET OF THE NIGHT — Bloomberg’s Jennifer Epstein: “Clinton had 3 $raisers today in NY. In all, about 135 people each gave $33.4k+. So, at least $4.5m raised today. More than Trump in May.”

NYT’s Nicholas Confessore and Rachel Shorey: “Trump enters the general election campaign laboring under the worst financial and organizational disadvantage of any major party nominee in recent history, placing both his candidacy and party in political peril. … The Trump campaign has not aired a television advertisement since he effectively secured the nomination in May and has not booked any advertising for the summer or fall.

“Mrs. Clinton and her allies spent nearly $26 million on advertising in June alone, according to the Campaign Media Analysis Group, pummeling Mr. Trump over his temperament, his statements and his mocking of a disabled reporter. The only sustained reply, aside from Mr. Trump’s gibes at rallies and on Twitter, has come from a pair of groups that spent less than $2 million combined.”

STOCKS SNAP BACK — WSJ’s Riva Gold and Mike Bird: “Stock markets around the world and the British pound rose sharply after polls tilted toward a U.K. vote to remain in the European Union, swings that portend further volatility in the days ahead. … Monday’s snapback was remarkable. Stocks had fallen for six of the prior seven trading days through Friday’s close as the Leave side gained ground in polls, while government-bond yields in the U.K., Japan, Germany and Australia reached all-time lows.

“Last week, bookmakers had estimated the odds of a vote to leave the EU at more than 40%. By Monday evening, the odds had tumbled to 23%, according to betting exchange Betfair. As the odds of an exit fell, stocks,sterling and oil jumped, while safe government bonds and gold retreated. To gauge the market, ‘on any given day, all you have to know is what the betting odds are,’ said Sebastian Raedler, head of European equity strategy at Deutsche Bank AG. Assessing what the market will do after the vote is less straightforward” http://goo.gl/l7dQMa

WHY UBER KEEPS RAISING BILLIONS — NYT’s Andrew Ross Sorkin: "If you add up all the money Uber has raised since it started in 2009 … the ride-hailing app company is on its way to amassing a colossal $15 billion. That’s real cash, not some funny-money, paper-based valuation. (That figure is $68 billion.) It has done all this while still managing to remain a private company, and its chief executive, Travis Kalanick, has insisted that a public offering is not coming soon. …

“So what exactly is Uber doing with all that money? … Uber has to finance an all-out war to gain market share in China and India. But there is more to it than that: Uber’s money-grab is seemingly part of an unspoken strategy to mark its territory. Every time Uber raises another $1 billion, venture capital investors and others may find it less attractive to back one of Uber’s many rivals: Didi Chuxing, Lyft, Gett, Halo, Juno" http://goo.gl/l0NvZO

MORE RUMBLINGS OF A TRUMP COUP — WPs Ed O'Keefe: “A campaign to stop Donald Trump from becoming the Republican presidential nominee has the support of nearly 400 delegates to the GOP’s convention next month, according to organizers, quickly transforming what began as an idea tossed around on social media into a force that could derail a national campaign. … While organizers concede their plan could worsen internal party strife, they believe they are responding to deep-rooted concerns among conservatives about Trump, who is suffering from declining poll numbers after weeks of missteps and embarrassing headlines.

“‘Short-term, yes, there’s going to be chaos,’ said Kendal Unruh, a co-founder of the group, Free the Delegates. ‘Long-term this saves the party and we win the election.’ … Unruh, of Colorado, said her cause is winning support from ‘the non-rabble rousers. The rule-following, churchgoing grandmas who aren’t out protesting in the streets. This is the way they push back.’” https://goo.gl/jVV426

MM SIDE NOTE — Does this mean we might NOT have to eat a bag of rusty nails (which we promised to do if Trump got the nomination)?

CLINTON ECON SPEECH PREP — POLITICO’s Gabriel Debenedetti: “Broadly speaking, polls show Americans think that Donald Trump would be a pretty solid steward of the economy. Hillary Clinton is planning to light that notion on fire. In a strike at the presumptive GOP nominee at one of the most politically vulnerable points of his campaign, Clinton is set Tuesday to use Trump’s public policy pronouncements and private business record to paint him as too dangerous to oversee the American economy.

“The address here in Ohio's capital is intended to serve as a sequel to her early June anti-Trump speech on national security. The Clinton campaign is hoping it will garner the kind of glowing reaction from Democrats that greeted the former secretary of state after the San Diego speech that was widely seen as kicking off the strongest stretch of her campaign — and sparking a broader questioning of Trump’s credentials for the White House” http://goo.gl/k0nGlf

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