Subject: POLITICO's Morning Money: Ted's last stand — Froman, Obama on TPP — Bernie hopes to hold on — Big banks not eager to sue over fiduciary rule
From: Morning Money <[email-masked]>
To: <[email-masked]>
Date: Tue, 3 May 2016 06:03:33 -0600

By Ben White | 05/03/2016 08:00 AM EDT

TED'S LAST STAND - Sure looks like Texas Senator Ted Cruz's last presidential rodeo on Tuesday in Indiana. Cruz himself marked it as must win and polls suggest he will lose and perhaps badly. That's likely to bring his campaign to an end and ensure a first ballot nomination of Donald Trump in Cleveland. M.M. really can't believe we just typed that sentence. Donald Trump will be the Republican Party's nominee for president of the United States. Let it sink in. 

The guy who fired people for a living on a reality TV show, called Mexican immigrants rapists and murderers, wants to build a giant wall with Mexico (somehow paid for by Mexicans), wants to block Muslims from entering the United States, has no understanding of how international trade actually works, said Hillary Clinton would only get 5% of the vote if she didn't play the "woman card" and has no apparent interest in learning any actual facts about critical policy issues facing the country. 

This man will have a chance to be president of the United States. Granted, it's not a very good chance. But at this point who really knows? Even many of the assorted senators, governors, CEOs, foreign leaders and other potentates gathered out here at the Milken Conference in Los Angeles think there is at least a 25% chance that Trump could win. 

The general hope here is that if that happens, Trump will jettison the angry stuff he heard on talk radio and used to win the GOP nomination and actually surround himself with serious policy experts and run a responsible government. If that doesn't happen the best case would likely be a national embarrassment and the worst case a global catastrophe. 

SPEAKING OF MILKEN ... If you'd like to see me talk Trump, Clinton, debt, deficit and tax reform with Senators Mark Warner (D-Va.) and David Perdue (R-Ga.) along with Ernst & Young CEO Mark Weinberger and the Committee for a Responsible Federal Budget's Maya MacGuineas, you can do so here: http://go.politicoemail.com/?qs=f6d556fcffc1c81aa1acebe927e43cf26bc9ccef1e6d2cc5503094abf62758f3

FROMAN ON TPP - M.M. also did a session with US Trade Representative Michael Froman who reiterated his confidence that TPP will pass the current Congress - likely in the lame duck session - given that it has the support of both the House Speaker and the Senate Majority leader and can't be filibustered. Froman wouldn't say it but the general belief is that if the lame duck can't send TPP to Obama it could be dead for years. In Froman's very careful and on message way he suggested the current favorable window for TPP may not be open for all that long. No question about that. 

Trump has castigated the deal and Clinton - after initially supporting it very strongly - now says she opposes it. Clinton would take massive heat from labor unions and other core constituencies early in her presidency if she moved quickly on TPP. The best scenario for Clinton is for the lame duck to approve TPP so she wouldn't have to deal with it in 2017. 

OBAMA ON TPP - President Obama in a WP op-ed: "Today, some of our greatest economic opportunities abroad are in the Asia-Pacific region ... Increasing trade in this area of the world would be a boon to American businesses and American workers, and it would give us a leg up on our economic competitors, including one we hear a lot about on the campaign trail these days: China ... 

"Of course, China's greatest economic opportunities also lie in its own neighborhood, which is why China is not wasting any time. As we speak, China is negotiating a trade deal that would carve up some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk. ... If we don't get the TPP done, American goods will continue to face high tariffs and other trade barriers in the region" http://go.politicoemail.com/?qs=f6d556fcffc1c81a1e1f3a66cc00ef3522992dbaccbc5d252d066639f09eafe4

BERNIE HOPES TO HOLD ON - POLITICO's Daniel Strauss: "Indiana won't have a dramatic effect on Bernie Sanders' fortunes - win or lose, he's said he's fighting on through the convention. But a win Tuesday would be a much-needed respite from a week of headlines suggesting his campaign is sputtering and his path to the nomination is all but gone. ... First came news of hundreds of staff layoffs. Then came word that his April fundraising had declined considerably compared to March - his haul dropped from $44 million to $26 million. 

"The Northeastern primaries were unkind to him as well: Hillary Clinton won four of five states last week. This week, though, all evidence points to a nail-biter in Tuesday's only primary. Sanders has barnstormed the Indiana college campus circuit. Clinton has worked the state's biggest cities, hoping to lock down the African-American vote. She's got strong support from the state's top Democrats, but Sanders has an ace-in-the-hole: Indiana's open primary format" http://go.politicoemail.com/?qs=f6d556fcffc1c81a661d9ad983d8dd4b529422d67bfce7547067e5f7c070275a

GOOD TUESDAY MORNING - Thanks for all the great L.A. restaurant recommendations. The better half and I had an amazing dinner at Gracias Madre, an entirely organic and vegan Mexican place on Melrose. Sounds so L.A. right? It is. But it's also fantastic. Email be on [email-masked] and follow me on Twitter @morningmoneyben. 

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES - Patrick Temple-West and Zachary Warmbrodt on how big banks are balking at a fiduciary rule lawsuit-- and to get Morning Money every day before 6 a.m. - please contact Pro Services at (703) 341-4600 [email-masked]

DRIVING THE DAY - Indiana votes and may coronate Trump as the GOP nominee. Dem race could be very close but it doesn't really matter ... Treasury Secretary Jack Lew is in L.A. today where he will talk Puerto Rico as well as appear at Milken for a conversation with Jared Bernstein ... Auto sales in the afternoon expected to rise to 17.3M from 16.5M ... 

ALSO TODAY: DATA EVENT - "Protect My Data, a consumer education campaign, is hosting a panel discussion on Tuesday, May 3, from 12:00pm - 1:30pm, to discuss credit card security" http://go.politicoemail.com/?qs=f6d556fcffc1c81ab856c7128defe3f07a190e50286d5700efce7fce72c40fe3

MUST SEE TV - Bernie Sanders as George Costanza http://go.politicoemail.com/?qs=f6d556fcffc1c81a5b0b399b942c8277a4685d92475bb679b21b624bce9d5d36

PUERTO RICO NEARS DEFAULT - POLITICO's Rachael Bade and Colin Wilhelm:
"When Puerto Rico took its first major step toward a catastrophic default on Monday, lawmakers on Capitol Hill - where Puerto Rican officials looked for help - were nowhere to be found, having gone home for a one week recess last Friday. The island began defaulting on most of a $422 million debt payment Sunday at midnight, but much bigger problems are just around the corner. 

"Congress has just a handful of weeks to hammer out a legislative fix to save the island from financial ruin ahead of a second default on a $2 billion debt payment due in early July. But while GOP congressional staff is working through the break to sketch out a Plan B - with an eye towards unveiling it around May 10 - getting a fix off the ground before July could be a major lift" http://go.politicoemail.com/?qs=f6d556fcffc1c81aff1a5a58ca1712b01dd2ebdc8ad49c9236aa29bcbbd2d80b

THE END OF "NEVER TRUMP" - NYT's Alexander Burns: "The coalition of Republicans opposed to Donald J. Trump's candidacy braced Monday for a debilitating setback as he appeared poised for a victory in Indiana that would put him on track to seal the Republican nomination by the time primary voting ends next month. ... Mr. Cruz has signaled that he intends to forge ahead irrespective of the outcome in Indiana in a bid to block Mr. Trump from winning the 1,237 delegates required to claim the nomination. 

"He spent part of the weekend campaigning in California, which is among the last states to vote, on June 7, and collected the endorsement of former Gov. Pete Wilson, who warned that Mr. Trump would doom the party as its nominee. But Mr. Wilson conceded in an interview ... that a defeat in Indiana would imperil Mr. Cruz's path forward. To win California, Mr. Wilson said, 'the first thing he needs to do is win in Indiana.' Without such a victory, Mr. Wilson said, 'I think it's much more difficult'" http://go.politicoemail.com/?qs=f6d556fcffc1c81af2525182566f4ab6a19eda96d79c89c22256762f565a488f

TRUMP UP YUGE IN CALIFORNIA - Via KDSK: "Donald Trump is leading Ted Cruz by a whopping 34 percentage points - 54%-20% - among likely Republican voters in California, a SurveyUSA poll for KUSA found. That's a significant gain for the Republican frontrunner, whose lead was only 8 percentage points in the last SurveyUSA poll a month ago. And it's a significant loss for Cruz. The two were 40%-32% last month." http://go.politicoemail.com/?qs=f6d556fcffc1c81a0cb80abb9e64e5b9c89397e508e55f8b3cdcf41e0519e67d

APPLE LOSING STREAK GETS WORSE - Bloomberg's Luke Kawa : "So far in 2016, Apple Inc. is the dog of the Dow. After an underwhelming earnings report led to the shares' worst week since January 2013, Apple stock extended its losses to kick off May, closing down 0.18 percent on Monday. The benchmark index's laggard has declined by nearly 11 percent so far this year heading into today's session: Bespoke Investment Group notes that Monday's negative close marks eight straight sessions in the red for Apple - something that last happened in July 1998, and has now happened only four times in the company's history.

"More than $79 billion in Apple's market capitalization has been erased over the past eight sessions. The company's heavy weighting in major sector and benchmark indexes, coupled with the stock's terrible two-week stretch, has made $4 billion in assets of exchange-traded funds evaporate over this stretch. ... There's a possible silver lining for Apple bulls, and investors who own those market-cap-weighted ETFs: The stock tends to bounce back in earnest following these rare stretches of rotten performance." http://go.politicoemail.com/?qs=f6d556fcffc1c81a5d281178a2bef486e56c27418c996e1b7e9b4909dee55975

CHINA CRACKS DOWN ON SHADOW BANKING - FT's Don Weinland in Hong Kong and Gabriel Wildau in Shanghai: "China's banking regulator is cracking down on financial engineering that Chinese banks have used to disguise trillions of dollars in risky loans as investment products. The clampdown, which will force banks to make provisions they previously avoided by disguising loans as investments, is designed to deflate one of the fastest-growing areas of the vast shadow banking apparatus, where bad debts are increasing.

"Shadow banking emerged as a force five years ago, ranging from interbank transactions through to wealth management products, which promise inflated returns often backed by loans to struggling companies. ... During the past three years, banks in China have used complex accounting techniques to move loans off the balance sheets and into a category of investments that requires less provisions than loans." http://go.politicoemail.com/?qs=f6d556fcffc1c81afc26932c9033a01872002ebcf736866472f79b138a08b07e

GOP IN TROUBLE EVEN WITHOUT TRUMP - WP's Chris Cillizza: "Politico reported today on a Florida poll conducted for a business group in the state that shows Hillary Clinton beating Donald Trump by 13 points and Ted Cruz by nine. Why is that important? Because if Clinton wins Florida and carries the 19 states (plus D.C.) that have voted for the Democratic presidential nominee in each of the last six elections, she will be the 45th president. It's that simple.

"And here's the underlying math. If Clinton wins the 19 states (and D.C.) that every Democratic nominee has won from 1992 to 2012, she has 242 electoral votes. Add Florida's 29 and you get 271. Game over. The Republican map ... is decidedly less friendly. There are 13 states that have gone for the GOP presidential nominee in each of the last six elections. But they only total 102 electorate votes" http://go.politicoemail.com/?qs=f6d556fcffc1c81aba972dff5cacca1f2fc7b8e06318f9030af4e603cfe8c6f0

CAPITALISM IN CRISIS? - NYT's Andrew Ross Sorkin from the Berkshire meeting in Omaha: "A poll released last week by the Harvard Institute of Politics found that among 18-to-29-year-olds, only 19 percent identified themselves as 'capitalists,' and only 42 percent said they 'supported' capitalism. The number was slightly higher for those in the next age group, 34 to 49 years old, with 31 percent identifying as capitalists and 50 percent saying they supported capitalism.

"In Nebraska, where Bernie Sanders beat Hillary Clinton by a wide margin in the Democratic caucuses, the juxtaposition between this weekend-long tribute to capitalism and the skepticism expressed by a generation that questions the very premise of the system, was stark. It is an issue that Mr. Buffett said he was well aware of. 'You should be questioning it at that age,' he said in an interview. Mr. Buffett, perhaps surprisingly, spoke positively about Mr. Sanders" http://go.politicoemail.com/?qs=f6d556fcffc1c81a609d2e10441c983e08fc7eaf39e987e6f0154b1ca28a6ec1

THERANOS BULLIED THE WSJ WITH POWER LAYERS - Vanity Fair's Nick Bilton: "Over the past few years, when media outlets reached out to Theranos about whether its wunderkind founder, Elizabeth Holmes, would have time to sit for an interview, her P.R. team generally responded with two questions: What time and where? ... Yet in April of 2015, when John Carreyrou, an investigative reporter with The Wall Street Journal, reached out for an interview with Holmes, he said he got a very different response. After two months of being stonewalled by the Theranos P.R. team, Carreyrou told me an entourage of lawyers arrived at the Journal's Midtown Manhattan offices at one P.M. on June 23. 

"The pack confidently sauntered past editors and reporters in the fifth-floor newsroom and was led by David Boies, the superstar lawyer ... Four other attorneys and a Theranos representative accompanied him. Before anything was said, the lawyers placed two audio recorders at either end of the long oval wood table, and recalcitrantly sat across from Carreyrou, his editor, and a Journal lawyer. Then they hit record ... The Theranos legal team then did their best to discredit dozens of independent sources whom Carreyrou had interviewed. The legal team roared, they showed teeth, they tried to intimidate" http://go.politicoemail.com/?qs=f6d556fcffc1c81a778cb268a605d4f7c0f667a36c601da0ff839ac4d0498c64

ALSO FOR YOUR RADAR - 

SEC STILL COLD ON EMAIL PRIVACY ACT S - POLITICO's Alex Byers: "The Securities and Exchange Commission is still fighting a House-passed bill to require law enforcement to get a warrant before obtaining messages from email providers. "[The Email Privacy Act] would create a dangerous digital shelter for fraudsters," SEC Enforcement Director Andrew Ceresney said in a statement to POLITICO. 

"'The privacy interests the bill addresses can be fully achieved without blocking civil law enforcement agencies like the SEC from obtaining the evidence it needs to protect investors.' The agency's stance - it opposes the bill because it doesn't contain a carve-out that would let civil law enforcement agencies get around the warrant requirement - isn't new, but the stakes are much higher, since the House unanimously passed the measure last week"

CREDIT CARD USE UP IN Q4 - Via ABA's Credit Card Market Monitor out this a.m.: "The report found a steady year-over-year increase in credit card use in the fourth quarter. The number of new credit card accounts jumped to 80.3 million - up 16.3 percent from a year earlier" http://go.politicoemail.com/?qs=f6d556fcffc1c81a54540d7ccd34a038891e386bbdba288f5f9cc9b2867314b5

CLEARING HOUSE ON NSFR - Via the Clearing House on the Fed meeting today on the net stable funding ratio (NSFR): "On Tuesday, the Federal Reserve Board will hold an open meeting at which they are expected to discuss and consider the same NSFR proposal. Open Board meetings are open to the public, but the public doesn't get to ask questions. In the attached document, The Clearing House identifies four questions worth asking" http://go.politicoemail.com/?qs=f6d556fcffc1c81af3aa81d0536ade38dc25e5cc9fc93e3279f21bff032d849b

WHAT WOULD THE FIRST GENTLEMAN DO? - POLITICO's Nick Gass: "When it comes to what Bill Clinton's job would be in the White House, Hillary Clinton offered a hint on Monday - and it doesn't involve picking out the curtains. During a discussion in Kentucky about manufacturing and jobs, the Democratic front-runner talked up the need for a manufacturing renaissance and suggested that her husband would be a big asset in that department.

"'I've told my husband he's got to come out of retirement and be in charge of this, because you know, he's got more ideas a minute than anybody I know,' Clinton said, as people smiled and laughed. 'Gotta put people back to work and make it happen. So we're going to give it all we've got absolute full-in 100 percent effort because I worry we won't recognize our country if we don't do this.'" http://go.politicoemail.com/?qs=f6d556fcffc1c81a84fb84cc2b735d8d41238e751ee9a6a1169656ad59e463b0

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