Subject: POLITICO's Morning Money: Trump and Wall Street — Court throws out Bank of America penalty — Trump leads on economy — North Koreans say no thanks to Trump
From: Morning Money <[email-masked]>
To: <[email-masked]>
Date: Tue, 24 May 2016 06:03:56 -0600

By Ben White | 05/24/2016 08:00 AM EDT

TRUMP AND WALL STREET: THE TRUTH - Couple of pieces out on Monday from Bloomberg and the New York Times on Donald Trump's relationship with Wall Street (both are below). But the reality can be summed up pretty quickly: Wall Street loathes the man. While you can find several examples of people who like Trump (Anthony Scaramucci, Larry Kudlow, Carl Icahn), the majority of Wall Street CEOs and rank and file bankers and traders and their lobbyists view Trump as lousy to do business with (because they say he's cheap on fees an likely to sue) and a massive risk on both foreign and domestic policy. Wall Street types generally don't like risk. 

And while Trump has said he wants to junk Dodd-Frank he has also promised some kind of alternative. The idea that the populist Trump is going to propose something that bankers would like is ... well it's not likely. Plus, Wall Street has mostly learned to live with Dodd-Frank after spending six years implementing its restrictions and higher capital requirements. Starting over with an entirely new financial reform law is not what anybody in the industry wants. Sure, bankers worry that Hillary Clinton is lurching left in the Age of Bernie but plenty of them will either sit out 2016 or actively work to defeat Trump. 

Bloomberg's Kevin Cirilli: "The banking industry is flummoxed on what to do about ... Trump, even as their fears grow that his likely opponent has moved too far to the left. ... At a private meeting last week in Washington, representatives from the largest financial institutions in the nation discussed Trump's candidacy at a gathering that focused on the latest developments on Dodd-Frank and Hensarling's proposal. 

"A few key questions emerged: Would Trump's agenda be aligned with the forthcoming proposal from Hensarling and House Speaker Paul Ryan? And should they reach out to Trump's campaign staff to inquire about his economic agenda? According to two people who attended the meeting, the group decided against reaching out after several representatives expressed fears that Trump could criticize them on social media if talks took a bad turn." http://go.politicoemail.com/?qs=08a28131a654793e1bc96cda80d950ef0f21af4adc1d1adc4436178974c4f253

NYT's Susanne Craig: "By Donald Trump's reckoning, his relationship with Wall Street could not be better. 'I am friends with all the major banks,' he said in an interview. 'They are dying to do business with me.' ... Still, an examination of financial records and interviews with nearly two dozen executives at financial firms show that Mr. Trump's relationship with the financial industry is far more nuanced than he suggests.

"While some bankers said they had a personal relationship with Mr. Trump, a majority of those interviewed about him said they had never met him, and either had not done business with him or would not do so because of past dealings that did not end well. This month Mr. Trump submitted a financial disclosure report [with] ... no indication that entities associated with Mr. Trump had lending relationships with most of the country's biggest banks, including Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley." http://go.politicoemail.com/?qs=08a28131a654793e49a33799a7e832499e78db879d324cec7bd3741d7fb6a01c

COURT THROWS OUT BANK OF AMERICA PENALTY - POLITICO's Jon Prior: "A U.S. appeals court today threw out a $1.27 billion penalty levied against Bank of America in connection with shoddy mortgages sold by the former subprime giant Countrywide. The loans in question were offered through Countrywide's 'hustle' program in 2007 and sold to now government-owned Fannie Mae and Freddie Mac even though executives knew the mortgages did not meet certain quality standards.

"The ruling reverses a lower court decision forcing the bank to pay the penalty and is a defeat for a Justice Department long criticized for not successfully prosecuting mortgage firms and banks for their role in the 2008 crisis. The White House has touted such settlements as evidence that the Obama administration has been tough on the firms that contributed to the implosion of the housing market." http://go.politicoemail.com/?qs=08a28131a654793e35388700acbd333a79b06972757cd77bd9ab750f45ac731e

INDUSTRY REACT - Per a financial industry source: "A lot of good news here: tough day for the too-big-to-jail crowd, as it seems that yet again the judicial system has decided that losing money isn't a crime; yet another decision overturned for Jed Rakoff, the populist gadfly of the SDNY; and best yet [US Atty] Preet [Bharara] once again over-indicts and under-delivers. Look for banks to question whether they should continue agreeing to billion dollar settlements and instead put the government to its proof."

REFORMERS REACT - Dennis Kelleher, President and CEO of Better Markets: "Turning law, logic and common sense on its head, the Second Circuit Court of Appeals overturned a jury decision today because Countrywide's fraud was not intended years earlier when a contract was signed. This hyper-technical decision is not only a miscarriage of justice but also provides a roadmap for Wall Street to get away with more fraud in the future" 

TRUMP LEADS ON ECONOMY - Via NBC/WSJ poll: "Forty-seven percent of Americans believe that Trump is the better candidate to deal with the economy, versus 36 percent who believe Hillary Clinton is superior on the issue ... More than half - 56 percent - chose Clinton as the better candidate to handle foreign policy, compared to just 29 percent who picked Trump. Clinton enjoyed a 10 point advantage over Trump on the question of who would make a better commander-in-chief, garnering 43 percent to Trump's 33 percent" 

GOOD TUESDAY MORNING - Little musical nugget for you this morning. Radiohead dusted off "Creep" for the first time since '09 in Paris: http://go.politicoemail.com/?qs=8e3c6e8f027329f04796bd7b41d3c80f7e27004e8a7145436f94749d00acdaba Email me on [email-masked] and follow me on Twitter @morningmoneyben. 

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES - Zachary Warmbrodt on Elizabeth Warren's new push to rein in Wall Street -- and to get Morning Money every day before 6 a.m. -- please contact Pro Services at (703) 341-4600 or [email-masked]. 

DRIVING THE DAY - President Obama is in Hanoi and Ho Chi Minh City, Vietnam ... Treasury Secretary Jack Lew this afternoon "will meet with academics and experts to discuss the state of the global economy and U.S.-China economic relations in advance of the eighth U.S.-China Strategic and Economic Dialogue (S&ED)" ... At 2:30 pm, U.S. Senator Elizabeth Warren (D-Mass.) "will be the lead off speaker at an event in Washington, DC, where labor and community based organizations representing more than 25 million Americans will launch a nationwide campaign to win concrete legislative gains on the federal, state and local levels" ... House Financial Services has a hearing at 10:00 a.m. on terrorism
 financing ... Senate Banking at 10:30 a.m. on Iran sanctions ... House Natural Resources is scheduled to start marking up the Puerto Rico bill at 5:00 p.m. ... New Home Sales at 10:00 a.m. expected to rise 521K from 511K.

NORTH KOREANS SAY NO THANKS TO TRUMP - Reuters: "Trump's proposal to meet North Korean leader Kim Jong Un is a 'kind of propaganda or advertisement' in his election race, a senior North Korean official said on Monday. Trump, in a wide-ranging interview with Reuters in New York last week, said he is willing to talk to the North Korean leader to try to stop Pyongyang's nuclear program, proposing a major shift in U.S. policy toward the isolated nation.

"'It is up to the decision of my Supreme Leader whether he decides to meet or not, but I think his (Trump's) idea or talk is nonsense,' So Se Pyong, North Korea's ambassador to the United Nations in Geneva, told Reuters on return from Pyongyang after attending the first ruling party congress in 36 years. ... 'This is useless, just a gesture for the presidential election.' 'There is no meaning, no sincerity,' So added" http://go.politicoemail.com/?qs=62c2639502134b1eb25109f7dfb52a62c91818f966f94933f060b0180231b7a0

SANDERS URGES DEMS TO REJECT PR DEAL - POLITICO's Seung Min Kim: "Bernie Sanders is pushing fellow Senate Democrats to reject the Puerto Rico debt deal reached by the Obama administration and Speaker Paul Ryan last week - a move that may help trigger fresh opposition to the agreement from the left. In a letter to Senate colleagues released Monday, Sanders rips the agreement to restructure the island's $70 billion in debt, arguing that the deal favors Wall Street creditors at the expense of residents in Puerto Rico." 

HOT CLICK - The Hamilton Project at Brookings has a new report out on the Great Recession and fighting the next downturn: http://go.politicoemail.com/?qs=62c2639502134b1e72876cbb3295c86f82fa7344d1922bed893a7c99a0db0e10

LIBOR SUITS REINSTATED - WSJ's Nicole Hong: "In a setback for some of the world's largest financial institutions, a U.S. appeals court ... reinstated the private antitrust lawsuits filed against 16 banks for allegedly rigging Libor interest rates. The ruling from the Court of Appeals for the Second Circuit reverses a lower court's decision from 2013, in which U.S. District Judge Naomi Buchwald dismissed the claims because she said the banks' alleged conduct didn't violate federal antitrust laws.

"The lawsuits accuse 16 major banks - including J.P. Morgan Chase & Co.,Bank of America Corp. andCitigroup Inc. - of collusion in manipulating the London interbank offered rate, or Libor, to the detriment of the banks' customers. The plaintiffs, who owned various financial instruments that were affected by Libor, claim the returns on their investments were depressed by the banks' alleged collusion. The lawsuits were filed by several groups of plaintiffs, including the local governments of cities such as Baltimore, San Diego and Houston" http://go.politicoemail.com/?qs=0b3ada86f0c7b78bc434045588c8d8732602f43bfe98b5d3bd9d96d12381e539

TRIBUNE REJECTS GANNETT AGAIN - NYT's Leslie Picker: "The publisher of The Chicago Tribune and The Los Angeles Times has rejected both of Gannett's takeover proposals, the latest valued at nearly double the price of Tribune's stock before news of their potential combination first surfaced in April. ... On Monday, in rejecting that latest bid, Tribune Publishing raised the pressure, saying it would issue almost five million shares to an investor who has agreed to side with the chairman, Michael W. Ferro Jr., on major issues. ... 

"Separately, a firm that is vital in wrangling shareholder votes rebutted Gannett's takeover efforts by encouraging Tribune Publishing investors to vote in favor of its board. Gannett responded on Monday by saying it needed to review whether to proceed with the offer after its shareholders meeting next week. In other words, Gannett could very well choose to walk away." http://go.politicoemail.com/?qs=0b3ada86f0c7b78bd0c7d531865c3f69952a14a6b4f347e223b7d2a10e476d5f

SWIFT RESPONDS TO CYBER THEFTS - FT's Martin Arnold: "The head of Swift will on Tuesday present a plan to fight back against a wave of recent cyber thefts at members of the global bank payment messaging network. In the wake of the discovery of three cases of theft over the network since the beginning of last year, Gottfried Leibbrandt, chief executive, will announce plans to share information, beef up fraud detection and improve security.

"'Cyber risk is big; there will be more cyber attacks,' he is due to warn a conference in Brussels, raising concerns about the financial system's continued vulnerability to hackers. The non-profit co-operative, which processes 25m messages a day for billions of dollars' worth of transfers, has faced concern about its vulnerability after cyber criminals made off with almost $100m from the Bangladeshi central bank in February" http://go.politicoemail.com/?qs=0b3ada86f0c7b78bd1547dc12fb028000b35b5976f68f07beac3c347a706d380

CLINTON SURROGATES TO HIT TRUMP BIZ RECORD - WP's Abby Phillip: "An army of Hillary Clinton's surrogates in battleground states will blast Donald Trump on Tuesday over his past statements about the housing market and his business record ... The coordinated push is the first of their efforts to frame the likely Republican nominee in the minds of swing voters even while Clinton continues to contest the Democratic primary against Bernie Sanders.

"About a dozen surrogates and local elected officials in Ohio, Virginia, Pennsylvania, Florida, New Hampshire, Iowa, Colorado, Nevada and elsewhere will host calls, events and release statements focused on Trump's response to the housing crisis that precipitated the economic recession. Sen. Tim Kaine (D-Va.) and Rep. Tim Ryan (D-Ohio), will be engaged in the efforts and Ryan will host a conference call with reporters at noon Tuesday to hammer home the message" http://go.politicoemail.com/?qs=0b3ada86f0c7b78b97e813b329effc08e5444b8c0babff5ce35a110c8e3cbd06

DAILY LONG READ - Fascinating Washington Post piece on China's "Great Firewall" of Internet censorship and why it's not going anywhere. http://go.politicoemail.com/?qs=8a72878f8ed91f6d7fa243b2f36d9cc0c55479392f4e5bae8e7ae559c8a6380f

ALSO FOR YOUR RADAR - 

JAMIE DIMON ON DETROIT - JPMorganChase CEO Jamie Dimon writes in Black Enterprise: "Detroit has established itself as a city that welcomes and encourages business investment and wants all residents to participate in its recovery. It's a good time to be an entrepreneur in Detroit. Helping small businesses grow is one of the many ways JPMorgan Chase's $100 million investment is supporting the city's comeback." http://go.politicoemail.com/?qs=8a72878f8ed91f6d652411ef25a202a6a2cdb581275331929b9b084e6f2093ed

FSR LAUNCHES 2016 PRESIDENTIAL FOCUS SERIES - Per release going out this a.m.: "In the lead up to the 2016 Republican and Democratic national conventions, the Financial Services Roundtable (FSR) today launched its 2016 Presidential Focus Series, an advocacy initiative to highlight consumer issues on which the presidential candidates should focus as they campaign for the Presidency.

"Each week leading up to the conventions, FSR will highlight a specific consumer issue to raise awareness, educate the candidates and further the conversation. ... This week, FSR will focus on protecting Americans' personal and financial data. These advocacy efforts will highlight the need for enhanced data and cyber security measures. This week, FSR joined several financial trade associations in launching an ad campaign highlighting the need for data security legislation" 

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