The Finance 202: ‘The price of failure is just too great’: Sanders rallies his anti-corporate movement to Biden

On Monday, Sanders (I-Vt.) delivered a stark contrast with a robust and unqualified endorsement of former vice president Joe Biden.

The independent from Vermont framed the election as a contest between creeping authoritarianism and “preserving our democracy.” He linked the future of his liberal movement to the success of the Democratic field’s most establishment figure. And he presented Biden not as a jagged pill for liberals to swallow but as a candidate ready to “fight on day one” for a laundry list of worker-friendly policy goals.

“To everyone who supported other candidates in the primary and to those who may have voted for Donald Trump in the last election: The future of our democracy is at stake. The future of our economy is at stake. The future of our planet is at stake,” Sanders said, concluding his eight-minute virtual address. “We must come together, defeat Donald Trump and elect Joe Biden and Kamala Harris as our next president and vice president. My friends, the price of failure is just too great to imagine.” (Watch his full remarks here.)

From historian Michael Beschloss: 

From Michael McFaul, who served as U.S. ambassador to Russia during the Obama administration:

As the two-time runner-up in the Democratic presidential primaries argued in his speech, the party has moved in his ideological direction since the last contest. And after nearly four years of President Trump, Democrats across the spectrum have a more urgent sense of the stakes involved in this election.

Sanders nodded to the acceptance his once-fringe program has gathered since his run four years ago. “Our campaign ended several months ago, but our movement continues and is getting stronger every day,” he said. “Many of the ideas we fought for, that just a few years ago were considered ‘radical,’ are now mainstream.”

That’s in part thanks to the Biden campaign reaching out to Sanders’s team and asking for input on his policy agenda. The result, a 110-page set of recommendations from six Biden-Sanders joint task forces, revealed Biden’s willingness to move left where he was “once defined by incrementalism,” as Matt Viser wrote last month.

“Biden has suggested he believes something fundamental has changed in the country in recent weeks, and he has held regular talks with advisers inside and outside the campaign in an effort to reorient his policies to meet the moment,” Viser wrote.

Now, Biden and his allies have embraced a go-big approach both for the government’s response to the pandemic’s economic fallout and longer-term challenges like rebuilding the nation’s crumbling infrastructure. “We need a plan that’s as big as the problem we have,” Biden adviser Ron Klain told Bloomberg News. “These challenges that we faced in 2009 and 2010, they’re back again — they never went away — they’re back again with greater emphasis, and his experience doing that makes him well-positioned to put these issues front and center today.” 

Sanders is making that case in the direst terms. “This is not a complicated issue,” Sanders told CNN’s “State of the Union” on Sunday. “Donald Trump must be defeated, Biden must be elected, and after that election we’re going to do all that we can to fight for a progressive agenda.”

In a sign his commitment is more than rhetorical, Bloomberg’s Jennifer Epstein and Tyler Pager report Sanders wanted Biden to pick Harris as his No. 2, despite what some progressives criticize as her coziness with corporate interests: “He, like Biden, saw the California senator as the best boost for the ticket’s chances against Trump.”

The tech-heavy Nasdaq already set a record close: “Stock futures rose on Tuesday, with the S&P 500 on the cusp of exceeding its previous record high set in February before the coronavirus hit,” CNBC’s Yun Li reports. 

“The S&P 500 closed Monday at 3,381.99, just a few points from its record close of 3386.15 set on Feb. 19 and 0.3% below its intraday record of 3393.52. S&P 500 futures added 5.7 points, or 0.17%. Futures on the Dow Jones Industrial Average gained 0.2%. The move implied an opening gain of about 74 points. Nasdaq-100 futures added 0.3%.”

Buffett gets in on the gold rush: “Berkshire late Friday disclosed that it held a $565 million stake in Barrick Gold Corp., the world’s second-largest gold miner, at the end of the second quarter. The stake makes Berkshire the 11th-largest shareholder in Toronto-based Barrick, according to FactSet,” WSJ’s Amrith Ramkumar reports.

“The move is striking because Mr. Buffett has in the past said he doesn’t like investing in gold. Unlike dividend-paying stocks or high-quality bonds, buying and holding the metal in an investment portfolio generates no income. The Barrick stake is made up of common shares that pay a dividend.”

Manufacturing in New York is slowing. “Manufacturing in New York State expanded in August at a slower pace than projected as more factories reported declining orders, indicating the coronavirus continues to limit momentum in the recovery,” Bloomberg’s Vince Golle reports. “The Federal Reserve Bank of New York’s general business conditions index dropped to 3.7 from a reading of 17.2 a month earlier that was the strongest since November 2018, a report out Monday showed. The median projection in a Bloomberg survey of economists called for the overall gauge to ease to 15.”

Homebuilder confidence keeps rising. “U.S. home builder confidence rose for a third straight month in August to match its highest level ever as record-low interest rates spur buyer traffic, data released on Monday showed in the latest indication the housing market is a rare bright spot in the economic crisis triggered by the coronavirus pandemic,” per Reuters. 

“At the same time, however, a growing number of home owners are falling behind on their mortgages with tens of millions still out of work and growing signs that the labor market recovery is softening… The delinquency rate for residential mortgages rose to 8.2% in the second quarter, up nearly 4 percentage points from the first quarter and the largest quarterly increase on record, according to the Mortgage Bankers Association.”

• Senate Republicans will offer a smaller coronavirus package. The latest GOP coronavirus relief bill is expected to include $300 in boosted weekly federal unemployment benefits until December 27, another round of money for the Paycheck Protection Program and an additional $10 billion for the U.S. Postal Service and liability protections,” Politico’s Marianne Levine reports. “The revised bill, which includes elements of the July Senate GOP proposal, could be attached to a continuing resolution to fund the government past a September 30 deadline.” 
• Recession is about to slam cities across the map. “The crisis has arrived faster than the damage from the Great Recession ever did. And it will cut deep in the fiscal year ahead, with many communities likely to lose 10 percent or more of the revenue they would have seen without the pandemic, according to a new analysis,” the New York Times’s Emily Badger and Quoctrung Bui report. “That’s enough for residents to experience short-staffed libraries, strained parks departments and fewer road projects. The hardest-hit cities like Rochester and Buffalo could face 20 percent losses.”
• UNC abandons in-person classes after outbreak: “The University of North Carolina at Chapel Hill, one of the largest schools in the country to bring students to campus for in-person teaching, said that it will pivot to all-remote instruction for undergraduates after testing showed a pattern of rapid spread of the coronavirus,” Nick Anderson reports.
• More than 2,000 Mississippi students have been ordered to quarantine as reopenings continue: “Many Mississippi schools opting for in-person instruction just had their first day on Monday or have not yet resumed classes … Some 71 of Mississippi’s 82 counties have reported coronavirus cases in schools, and 245 teachers and 199 students have tested positive,” Antonia Farzan reports.

• Holiday shopping with look dramatically different: “After years of kicking off Black Friday sales before the turkey went into the oven, a number of the nation’s largest retailers now plan to stay shut on Thanksgiving Day … Retailers will roll out deals sooner — before Halloween,” Abha Bhattarai reports.
• Lowe’s seen gaining on Home Depot: “Lowe’s Co Inc is expected to edge past rival Home Depot with what could be its biggest growth in quarterly same-store sales in at least a decade, benefiting from its exposure to customers ready to splurge on do-it-yourself home renovations,” Reuters’s Uday Sampath Kumar reports.
• Robinhood snags third mega-investment: “The trading start-up announced a $200 million, Series G funding round … its third major investment in just five months. The new cash injection boosts Robinhood’s valuation to $11.2 billion, an increase of nearly $3 billion,” CNBC’s Kate Rooney reports.
• Authentic Brands could help more troubled retailers: “He helped save Barney’s from liquidation last year and plucked retailers Brooks Brothers and denim apparel maker Lucky Brand out of bankruptcy this month — just warmups for Jamie Salter,” CNBC’s Lauren Thomas reports of the Authentic Brands Group CEO.

This is the harshest step yet: “The Commerce Department banned the export of U.S. technology to Huawei in May 2019, calling the Chinese company a security threat. But it has had to tighten the rules several times since, as Huawei has found ways to continue buying components made with U.S. technology,” Jeanne Whalen and Ellen Nakashima report.

“Some industry executives said the latest restrictions are the toughest yet and could deal a crippling blow to Huawei by cutting it off from most of the world’s semiconductors, which are critical to the operation of electronic devices. The Chinese company has found ways around previous restrictions, however, and has continued to report sales growth, bolstered by its large domestic market.

What a TikTok ban could mean: “A 45-day clock is ticking down to a TikTok ban across the United States, a move that is certain to frustrate millions of users and sow confusion for employees and business partners,” Rachel Lerman reports.

“ … It would mark the first time the government has invoked international emergency powers to ban a huge consumer app like TikTok, and free-speech groups as well as TikTok’s Chinese parent company are already warning about the dangerous precedent it could set. The exact boundaries of the ban are still being worked out, and it is likely they won’t be fully detailed until right when the order goes into effect.” 

And it’s on track to rise again this year. “Fueled by a surging stock market, CEO compensation climbed to its highest level in seven years last year and could be poised to rise again in 2020, despite the widespread layoffs and pay cuts of the coronavirus recession,” Jena McGregor reports. “The Economic Policy Institute, a left-leaning think tank, found that chief executives of America’s 350 largest companies earned an average of $21.3 million in realized compensation in 2019, setting the ratio of CEO-to-worker pay at 320-to-1, up from 293-to-1 in 2018 and more than five times higher than the 61-to-1 ratio in 1989.”

“Between 1978 and 2019, according to EPI’s analysis, CEO compensation, adjusted for inflation, rose 1,167 percent, much higher than the top 0.1 percent of wage earners, whose pay grew 337 percent between 1978 and 2018 (the most recent year available). Meanwhile, the typical workers’ compensation, using figures that primarily rely on Bureau of Labor Statistics data for wages of a full-time worker in each industry, grew by just 13.7 percent over the past four decades.”

The legal fight over the opioid epidemic continues: “U.S. states claimed they are owed $2.2 trillion to address harm from OxyContin maker Purdue Pharma LP’s alleged role in America’s opioid epidemic, accusing the drugmaker in new filings of pushing prescription painkillers on doctors and patients while playing down the risks of abuse and overdose,” Reuters reports.

“In filings made as part of Purdue’s bankruptcy proceedings that were disclosed on Monday, the states said Purdue, backed by the wealthy Sackler family, contributed to a public health crisis that has claimed the lives of roughly 450,000 people since 1999 and caused strains on healthcare and criminal justice systems. The filings cited more than 200,000 deaths in the U.S. tied directly to prescription opioids between 1999 and 2016.”

McDonald’s former CEO fights severance clawback: “Former McDonald’s Chief Executive Steve Easterbrook said in a court filing that the company had information about his relationships with other employees when it negotiated his multimillion-dollar severance package,” WSJ’s Heather Haddon reports.

“In his first response to the suit McDonald’s filed seeking to recoup that severance, Mr. Easterbrook’s attorney said the company admitted it had his email account stored on company servers when it first investigated his conduct last October.”

Google fares slightly better in fight against video gamemaker Epic over their app stores: “Epic sued Google and Apple separately in U.S. district court on Thursday, accusing the companies of using their dominance to charge app developers an ‘exorbitant’ 30 percent fee on sales and impose other restrictions that benefit their own businesses,” Reuters’s Paresh Dave reports.

“Nearly all of the world’s smartphones outside restricted markets such as China come with either Google’s Play store or Apple’s App Store. … While Apple requires all apps be installed through the App Store, Google allows such installation through several different app stores, in one of several key policy differences that could help it beat the allegations of anticompetitive conduct.”

• The fight is about much more than the popular ‘Fortnight’ game: Apple has threatened to cut off Epic from its developer accounts and tools. “Epic Games is also the creator of Unreal Engine, which has not only become an industry standard for creating video games, but as well as film, commercial business and TV shows like ‘The Mandalorian’ on Disney+,” Gene Park reports.

In case you missed it, Epic trolled Apple last week with a spoof of its famous “1984″ ad:

It’s roughly the same sum he spent helping the party flip the chamber in 2018. “The spending will include digital and television ads to defend some of the 20 freshman Democrats he helped win in 2018, along with spending aimed at defeating additional Republican incumbents,” Michael Scherer reports. 

“The effort will include new money to several groups, including a revival of Bloomberg’s own political vehicle, Independence USA, and donations to the House Majority PAC, a group closely associated with House Speaker Nancy Pelosi (D-Calif.), said the Bloomberg adviser, who spoke on the condition of anonymity to discuss the internal planning.”

David Urban, a veteran of Trump’s 2016 campaign, is targeting the State and Defense departments for the private equity giant. “Blackstone, a massive investment firm that has more than $500 billion in assets under management, brought on David Urban earlier this year to join its ranks of outside lobbyists, according to a disclosure report. Urban is president of the American Continental Group, a Washington, D.C.-based lobbying firm,” CNBC’s Brian Schwartz reports. 

“Since Urban registered to lobby for Blackstone’s administrative services arm in February, the firm has paid at least $120,000 for the Trump ally to engage with the Department of Defense and State Department on what the disclosures call ‘issues related to military preparedness and training.’ … After repeated requests for comment, neither Blackstone nor Urban would say what they’re hoping to see from either the Pentagon or the State Department.”

The U.S. Post Office is broadly very popular, via Morning Consult’s Eli Yokley: 

• Walmart, Home Depot and Advance Auto Parts are reporting their earnings today, per Kiplinger
• The Commerce Department releases figures on housing starts for July