The Washington PostDemocracy Dies in Darkness

The Finance 202: Wall Street is sounding alarms over Warren. Her campaign thinks that's good news.

with Brent D. Griffiths


Finance titans keep piling on Sen. Elizabeth Warren (D-Mass.) for her soak-the-rich tax plan. The 2020 Democratic presidential hopeful is relishing it. 

Warren's campaign sent out a fundraising appeal yesterday featuring headlines about Wall Streeters’ laments, telling prospective donors the stories have “something in common: The wealthy and well-connected are scared. Scared that under a Warren Administration, they would finally have to pay their fair share.” And the email said the ultrarich are “right to be scared.”

The solicitation was the clearest signal yet that the Warren camp views her Wall Street critics as a useful foil for a bid framed around confronting runaway inequality and an entrenched political class. And they serve as bogeymen as the candidate takes heat from within her own party about the sweep and price tag of her $20.5 trillion plan to overhaul the U.S. health care system — a proposal that's drawn criticism from House Speaker Nancy Pelosi (D-Calif.) in addition to her more moderate rivals in the field. (Former vice president Joe Biden is accusing Warren of being an "elitist" who is "condescending to the millions of Democrats who have a different view.")

Warren’s wealth tax “is extremely popular, so I don’t think they needed this, but it’s a huge bonus,” one source close to the campaign tells me. “I don’t actually think they anticipated people would be going on CNBC and crying. But they love it. These are the bad guys, and people out in the rest of the country think they’re the bad guys. They’re the only ones who think they’re the good guys. They tell themselves that, and CNBC tells them that, but nobody else thinks so.”

The cohort of financiers going public with their sky-falling claims about Warren's economic program continues to grow. Just this week: 

  • David Rubenstein — the billionaire co-founder of the Carlyle Group, the private equity giant, said Warren’s proposed wealth tax wouldn’t alleviate income inequality “if one could ever actually be implemented.” 
  • Billionaire hedge fund manager Leon Cooperman teared up on CNBC while discussing the issue, saying he doesn’t “need Elizabeth Warren telling me that I’m a deadbeat and that billionaires are deadbeats. The vilification of billionaires makes no sense to me.” (Cooperman earlier accused Warren of "s—ing" on the American dream.)
  • JPMorgan Chase CEO Jamie Dimon, also in an interview with CNBC, criticized Warren for using “some pretty harsh words” and vilifying successful people. 
  • And former Obama treasury official Steven Rattner, who now manages Michael Bloomberg’s wealth, wrote in a New York Times op-ed that a Warren presidency is a "terrifying prospect" because “left to her own devices, she would extend the reach and weight of the federal government far further into the economy than anything even President Franklin Roosevelt imagined, effectively abandoning the limited-government model that has mostly served us well.”

Others are predicting the stock market will tank if she wins. (Comedy Central's "The Daily Show" just dedicated a segment to Warren's fight with the Wall Street.) Warren has highlighted the criticisms on Twitter. It’s a tactic she's used for months, with supporters jokingly referring to the attacks as in-kind contributions to her campaign. But the drumbeat of criticism has grown louder as her star has risen in the Democratic primary and the industry more seriously grapples with the potential consequences of a Warren win. Some, however, think the increasingly aggressive language aimed at Warren by two of her primary rivals -- Biden and Pete Buttigieg -- has a gendered quality to it.

And the candidate recently raised the stakes. The wealth tax proposal she rolled out in January would impose a 2 percent levy on households worth more than $50 million and a 3 percent tax on those worth more than $1 billion. To pay for her Medicare-for-all plan, she just doubled to 6 percent the tax she would impose on net worths greater than nine figures. 

Microsoft founder Bill Gates is the latest to criticize the proposal. The second-richest person in the world — behind Amazon CEO Jeff Bezos, who also owns the Washington Post — tells the New York Times’s Andrew Ross Sorkin he’s paid “over $10 billion in taxes. I’ve paid more than anyone in taxes. If I had to have paid $20 billion, it’s fine. But when you say I should pay $100 billion, then I’m starting to do a little math about what I have left over.”

The outspoken Trump critic wouldn't say whom he'd vote for in a matchup between Warren and the president. And asked if he would meet with Warren to discuss the his concerns, Gates questioned her open-mindedness, adding he’s not sure “she’d even be willing to sit down with somebody who has large amounts of money.” That also drew a response from Warren on Twitter:



— BREAKING OVERNIGHT. China says both sides agree to roll back tariffs in deal. Bloomberg: "China and the U.S. have agreed to roll back tariffs on each other’s goods in phases as they work toward a deal between the two sides, a Ministry of Commerce spokesman said. 'In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement,' spokesman Gao Feng said Thursday.

"'If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement, which is an important condition for reaching the agreement,' Gao said. If confirmed by the U.S., such an understanding could help provide a road-map to a deal de-escalating the trade war that’s cast a shadow over the world economy. China’s key demand since the start of negotiations has been the removal of punitive tariffs imposed by [Trump], which by now apply to the majority of its exports to the U.S."

Trump-Xi meeting could be delayed, again: “A meeting between [Trump] and Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December as discussions continue over terms and venue, a senior official of the Trump administration told Reuters,” Reuters’s David Brunnstrom and Matt Spetalnick report.

“The official, who spoke on condition of anonymity, said it was still possible the ‘phase one’ agreement aimed at ending a damaging trade war would not be reached, but a deal was more likely than not.”

  • London calling?: Dozens of venues have been suggested for the meeting, Reuters reports, including London — “other sites are possible in Europe and Asia, but the former is more likely, with Sweden and Switzerland among the possibilities. . Iowa, which Trump has suggested, appeared to have been ruled out, the official said.
  • Markets falling: “ … It was not surprising when stocks sold off Wednesday morning on a Reuters headline that quoted Trump administration sources as saying the phase one trade deal could be delayed until December and that Europe is a likely venue,” CNBC’s Patti Domm reports of Wall Street’s reaction. “Stocks have run up on optimism about trade progress but have been languishing in the past two sessions as the market digests recent gains to new highs and no news on the trade front.”

Schwarzman is still optimistic about a deal: “Private equity firm Blackstone Group Inc. Chief Executive Stephen Schwarzman said he was optimistic that the United States and China would resolve their 16-month-long trade war, helping to ease tensions between two of the world’s biggest economies,” Reuters’s Chibuike Oguh reports.

U.S. Lawmakers Seek to Ban Federal Pension Fund From Investing in China (Reuters)

IMPEACHMENT MINUTE: Your daily speed read on the latest from the congressional impeachment inquiry.

House to hold first open hearings in impeachment inquiry of Trump.” By The Post's John Hudson.

Trump makes falsehoods central to impeachment defense as incriminating evidence mounts.” By The Post's Toluse Olorunnipa and Philip Rucker.

Senate Republicans consider including Bidens in Trump impeachment trial.” By The Post's Rachael Bade and Robert Costa. 

Fighting impeachment, Trump leans into an enduring legacy.” By Politico's Gabby Orr.


Productivity stumbles. WSJ's Justin Lahart: "More than ever, the U.S. economy needs productivity to get going. Unfortunately, that isn’t happening. The Labor Department on Wednesday reported that real output per hour—the standard measure of worker productivity—fell an annualized 0.3% in the third quarter from the second, marking its first quarterly decline in nearly four years. The productivity data can be volatile on a quarterly basis, but the longer-term trend doesn’t look good either. From a year earlier, productivity was up just 1.4%. That is in keeping with the tepid pace in the 15 years since 2004. In the 15 years prior to that, productivity growth averaged 2.5%."

Stocks flat. CNBC's Yun Li: "The Dow Jones Industrial Average was essentially unchanged, down 0.07 points to 27,492.56. The S&P 500 rose 0.07% to 3,076.78 and the Nasdaq Composite fell 0.29% to 8,410.63 as big tech companies, including Amazon, Apple and Facebook, retreated. Investors largely took a wait-and-see approach as they digested the latest development on the U.S.-China trade front."

Fed’s Williams Says No Rate Changes Penciled In, Economy Will Drive Policy (WSJ)


Former Twitter employees charged with spying for Saudis: “The Justice Department has charged two former Twitter employees with spying for Saudi Arabia by accessing the company’s information on dissidents who use the platform, marking the first time federal prosecutors have publicly accused the kingdom of running agents in the United States,” my colleagues Ellen Nakashima and Greg Bensinger report.

“One of those implicated in the scheme, according to court papers, is an associate of Saudi Crown Prince Mohammed bin Salman, who the CIA has concluded likely ordered the assassination of journalist Jamal Khashoggi in Istanbul last year.”

  • Why this case is so important: It “highlights the issue of foreign powers exploiting American social media platforms to identify critics and suppress their voices. And it raises concerns about the ability of Silicon Valley to protect the private information of dissidents and other users from repressive governments.”

IMF warns Europe about coming slump: “Germany stuck to its stance that Europe’s economic engine will pull through its current trough without a spending jolt, countering increasingly dire warnings from the International Monetary Fund,” Bloomberg News’s Nikos Chrysoloras and Birgit Jennen report.

“Europe needs to come up with emergency plans, since monetary policy has all but exhausted its arsenal and risks spread, the fund warned. The stark warning comes after the latest data showed that the euro-area economy is proving more resilient than anticipated, driven by robust expansion in countries such as France. Still, Germany probably went into a technical recession during the last quarter, and the labor market in the continent’s biggest economy started to deteriorate.”

Sackler legacy at stake as future of Purdue is decided: “A battle over billions of dollars in the bankruptcy case of Purdue Pharma has eclipsed what observers see as a key element of a proposed settlement of thousands of opioid lawsuits: a bid to repair the Sackler family legacy,” my colleague Christopher Rowland reports.

“The Sackler family’s Purdue Pharma — widely blamed for fueling the opioid epidemic with its marketing of the addictive pain killer OxyContin — would be reinvented in the proposed bankruptcy settlement as a public interest trust dedicated to fighting addiction and overdose deaths. If successful, it would be a startling turnaround. The Sackler family business would be transformed from a maker of a well-known prescription narcotic into an entity focused on manufacturing and distributing overdose antidote drugs free or at a low cost to communities hit hard by addiction.”

  • Meanwhile, a judge extended temporary legal protection of the Sacklers: “A federal bankruptcy judge temporarily extended protection that halts scores of lawsuits against Purdue Pharma and members of the Sackler family, who founded the opioid maker, until April 8,” my colleague Renae Merle reports. “The order by Judge Robert Drain continues a temporary injunction that was put in place last month and expired Wednesday. It came over the objections of some litigants who have argued that the Sackler family does not deserve such legal protection.” 

Company insiders are taking advantage of buybacks: “ … Insiders — including chief executives and directors who authorize buybacks — often sell during the short-term price pops that typically follow disclosure of new authorizations, or when the companies are actively buying in the market,” Gary Putka reports for The Post.

“A review by The Washington Post found that insider stock sales during buybacks are surprisingly common. At least 500 insiders sold during buyback programs at their companies in just one 15-month period in 2017 and 2018, according to The Post analysis of data compiled by the SEC as well as regulatory filings. More than 50 of the insider sellers were chief executives … SEC rules do allow insider selling during a buyback.” 

Alphabet investigating execs over inappropriate relationships: “Alphabet’s board of directors has opened an investigation into how executives handled claims of sexual harassment and other misconduct, including behavior of Chief Legal Officer David Drummond, who has been accused of having relationships with employees,” CNBC’s Jennifer Elias reports.

“The board has formed an independent subcommittee to look into the issues and has hired a law firm to assist with the investigation, according to materials viewed by CNBC.”

SoftBank CEO refuses to call WeWork debacle a “rescue”: “SoftBank CEO Masayoshi Son won’t call WeWork a rescue, saying instead that the latest financing allowed his company to dramatically reduce the average share price it paid for the co-working company. Nevertheless, he described it as an ‘exception’ that won’t happen again,” CNBC’s William Feuer reports.

“Son acknowledged making some mistakes in his investment strategy and accepted that WeWork’s dramatic fall in recent months has led some to question his judgment and the viability of SoftBank’s massive Vision Fund. SoftBank recorded a 374.7 billion yen ($3.4 billion) writedown on its WeWork investment about two weeks after taking 80% control of the company with a new $5 billion financing package.”

Chesapeake Energy hits two-decade low: “Chesapeake Energy Corp. collapsed to a 20-year low Wednesday, one day after the shale gas driller warned it may not be able to outlast low fuel prices and issued a ‘going concern’ notice,” Bloomberg News’s Michael Bellusci reports.

“Shares fell as much as 24% intraday to their lowest since 1999. The stock also briefly dipped below the $1/share mark, and Wall Street isn’t optimistic on Chesapeake’s future.”

Exclusive: #MeToo Pushes CEO Firings to a 15-Year High (Fortune)


Lawmakers call for probe of opportunity zones. NYT's Eric Lipton and Jesse Drucker: "Lawmakers are voicing mounting concerns about a federal tax incentive, known as an 'opportunity zone,' that is supposed to encourage investors to pump money into the nation’s poorest neighborhoods. Leading Democrats in the House and Senate have sent a flurry of letters demanding answers and action by federal agencies after recent New York Times articles detailed how wealthy investors and real estate developers, including those with ties to the Trump administration, are poised to profit on the initiative... 

"Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee, said he was introducing legislation this week that would eliminate hundreds of opportunity zones in relatively wealthy neighborhoods."




  • AMC Entertainment, NewsCorp, Wynn Resorts, Yelp Inc., Activision Blizzard, Monster Beverage, Party City,  Ralph Lauren, Planet Fitness, Meredith and Nielsen are among the notable companies reporting their earnings, per Kiplinger
  • The Senate Banking Committee hosts a hearing on bipartisan bills to promote affordable housing


  • Honda Motor, Duke Energy and Revlon are among the notable companies reporting their earnings, per Kiplinger
  • China releases its latest trade figures, per WSJ



The Washington Post's Robert Costa dissects what the Kentucky gubernatorial race means for Republicans in 2020. (Video: The Washington Post)
Rep. Ayanna Pressley (D-Mass.) broke from the other progressive members of the Squad by endorsing Sen. Elizabeth Warren (D-Mass.) for president on Nov. 6. (Video: The Washington Post)