THE TICKER

Mike Bloomberg intends to make a big statement about President Trump in a one-minute ad running nationally during this year’s Super Bowl. The $10 million he’s spending to do so makes a statement of its own about the billionaire’s unconventional campaign strategy.

To get a perspective on the eye-popping scale of the expense, consider: The Wall Street titan is plowing more into that 60 seconds of airtime than the campaigns of the three leading Democratic candidates — former vice president Joe Biden, Sen. Elizabeth Warren (D-Mass.), and Sen. Bernie Sanders (I-Vt.) — have spent on all of their television advertising combined as of the first of this year, according to data from FiveThirtyEight’s campaign ad spending tracker.

For Bloomberg, though, the spot is a relative drop in the bucket. Since jumping into the race on Nov. 24, he has spent an estimated $100 million on television advertising. Here’s a visualization of the tsunami of ad dollars Bloomberg has unleashed since his late entry, courtesy of FiveThirtyEight:

Bloomberg’s unmatched outlays are core to his plan for capturing the Democratic nomination. The former New York mayor is skipping the first four primary states — and forgoing the debates, which require candidates to demonstrate support from hundreds of thousands of donors. Bloomberg is self-financing instead and staking his bid on the delegate-rich contests in bigger states deeper into the calendar. He continues drawing from from that playbook today, when he rolls out an economic plan, aimed at creating jobs and boosting wages, with stops in Illinois, Minnesota and Ohio. 

The approach has drawn sharp criticism from Sanders and Warren, who are blasting Bloomberg as an out-of-touch billionaire aiming to subvert democracy by buying the election. Appearing on the Rachel Maddow Show on MSNBC, Warren urged voters to “get in this fight, because the alternative is Michael Bloomberg’s version of democracy. And that is billionaires who decide among themselves who’s going to reach in a pocket and throw a few hundred million on the table and buy what? A nomination? Buy an election? If that’s the case, then our democracy becomes something that only works for a tiny number of people, and it’s going to shut everybody else out.”

But Bloomberg’s approach is showing some initial signs of success. In a matter of weeks, he has vaulted into fifth place in national polling, according to RealClearPolitics. And his spending isn’t limited to the television airwaves. It has also allowed him to rapidly assemble an intimidatingly large ground game across the map. Per NBC’s Alex Seitz-Wald, “He already has 800 people on staff, including 500 in more than 30 states. In comparison, Hillary Clinton had about 800 people on her staff in the final stretch before the 2016 election. He's also spent about $150 million spent on television and radio so far, according to Advertising Analytics, plus $20 million on Facebook and Google, per the Democratic firm ACRONYM.” 

The scale of the effort has the attention of Bloomberg's competitors. "Rival campaigns worry about the creeping possibility that he finds a way to catch fire if the early states deliver no clear front-runner, or that he wins enough delegates to deny anyone a majority, granting him a brokering role in choosing the nominee before the convention," my colleagues Isaac Stanley-Becker and Michael Scherer wrote recently. "His ability to dominate airwaves could also raise advertising rates for everyone else."

While Bloomberg’s spending — coupled with his opposition to liberal Democratic proposals such as a wealth tax — has opened him up to criticism from the left, his campaign is framing his seemingly bottomless war chest as a strength. As the nominee, his camp argues, the billionaire would be able to outmatch Trump on his own turf. “Mike is taking the fight to Trump,” Bloomberg spokesman Michael Frazier tells my colleague Michelle Ye Hee Lee about the Super Bowl ad buy. The Trump campaign — which along with the Republican National Committee has $200 million on hand — also says it is spending $10 million to advertise during the Super Bowl.

Trump himself used his wealth to buttress his anti-corruption message in the 2016 campaign, arguing he was too rich to be bought by special interests. “The American people, because they’re so skeptical about the current campaign finance system, actually find that an attractive message, so it’s worked in many cases,” Meredith McGehee, executive director of the group Issue One and a longtime advocate of tighter controls on campaign spending. “But we also know just because you are rich doesn’t guarantee you success.”

Bloomberg, elected three times to lead the nation's largest city, has a proven record as a candidate. By virtue of those wins, he also comes to the 2020 presidential race with a stable of experienced political hands, an asset that self-financing rookie candidates usually lack. But Bloomberg by his own description is "basically nonpartisan," while the party is arguably lurching left, a tension encapsulated by the debate over how he is deploying his fortune. "How Bloomberg is going to navigate being accused on the Democratic side of trying to buy the election at a time when the party is taking a stand that it's for small donors is going to be very interesting," McGehee says. 

MARKET MOVERS

Investors see U.S., Iran poised for deescalation after rocket attacks. Financial Times: "Oil prices and global stock markets stabilised after an initial jolt of volatility as investors bet an Iranian missile strike against American forces in Iraq would not escalate towards a broader conflict in the Middle East. Brent crude was 0.6 per cent higher at $68.70 a barrel in London trading, having calmed from an earlier spike to as high as $71.75 in the Asian session as investors gauged the consequences of the Iranian action and the likelihood of a US response. 

"US stock futures turned positive having earlier fallen as much as 1.6 per cent. [Trump] is due to make a statement in the coming hours, but tweeted 'all is well!' in the aftermath of the strikes, while Iran’s supreme leader said the attack was a 'slap' in the face for the US but fell short of making further threats of escalation."

Consumer sentiment takes a hit but remains high. Per Morning Consult economist John Leer: "Political tensions rattled consumers during the latter half of the week, although aggregate U.S. consumer confidence remains elevated by historical standards. Consumer confidence experienced the largest four-day swing since August 2019 after the U.S. government used a drone strike to kill Iranian general Qasem Soleimani. Due to structural issues, U.S. consumers are less exposed to oil price shocks than they once were, which should limit the direct financial harm of tensions with Iran on U.S. consumers." More on that here

U.S. is much less vulnerable to oil shocks than it once was. This chart from Deutsche Bank Securities chief economist Torsten Sløk tells the story: 

Meanwhile, a Ukrainian passenger jet made by Boeing crashed in Iran. All 170 people aboard were killed. From The Post: "In the aftermath of the crash, Ukraine has banned all flights from Iranian airspace, a move also taken by several other countries in light of the rising tensions between Iran and U.S. forces in the region. The Boeing 737-800 likely crashed due to technical difficulties, Iranian state media quoted Ali Kahshani, a senior public relations official at the airport, as saying. Ukraine’s embassy in Iran at first concurred, issuing a statement ruling out terrorism, but then took it down without explanation."

The global economy is heading towards a “liquidity trap” that would undermine central banks’ efforts to avoid a future recession, according to Mark Carney, governor of the Bank of England.
FT

TRUMP TRACKER

TRADE FLY-AROUND: 

— Grassley says USMCA could be delayed: Senate Finance Chairman Chuck Grassley said “that an impeachment trial in the Senate could delay a vote on [Trump’s] new NAFTA deal by a month,” Politico’s Adam Behsudi reports.

“Still, he said he was hopeful that a delay by House Speaker Nancy Pelosi to send over the articles of impeachment could give the upper chamber time to vote on the agreement.”

— Trade deficit lowest in three years: “The U.S. trade deficit fell more than expected in November ahead of negotiations with China that cooled the simmering tariff battle between the two sides,” CNBC’s Jeff Cox reports.

“The shortfall in goods and services declined to $43.09 billion for the month, below the $43.6 estimate from economists surveyed by Dow Jones. That represented the lowest deficit since October 2016. That was down sharply from $46.9 billion in October, which was revised lower from an initially reported $47.2 billion … In addition to representing the low point of the Trump administration, the numbers also provide further indication that fears of a weak fourth quarter for GDP were probably overblown.”

— Tech giants want to use tariffs against France: “A trade dispute between the Trump administration and France intensified on both sides of the Atlantic ... with U.S. tech giants backing tariffs to retaliate against a new French digital services tax and a top EU official warning the bloc would stand behind its member country,” Politico’s Doug Palmer reports.

“The dustup could complicate efforts to strike an international agreement on taxation of the tech sector and other multinational businesses. And it could suck in other countries that have imposed similar taxes or are contemplating doing so.”

— Facebook looks to grow its China presence: “Facebook Inc is setting up a new engineering team in Singapore to focus on its lucrative China advertising business, according to three people familiar with the effort, even as chief executive Mark Zuckerberg ramps up criticism of a country that blocks the social network,” Reuters’s Paresh Dave and Katie Paul report.

“The team at Facebook’s Asia-Pacific headquarters is tasked with developing better ad-buying tools for Chinese customers who have to work around internet restrictions in China known as the ‘great firewall,’ the sources said. One of the people described it as Facebook’s first significant attempt at developing regionally localized ads tools outside of its Silicon Valley headquarters, where China-related engineering work previously took place.”

General Motors warned of a tough 2020, underscoring the challenges that U.S. car makers are facing as a protracted decline grips the world’s largest auto market.
WSJ

IMPEACHMENT MINUTE: A speed read on the latest from the congressional impeachment process.

"McConnell says he’s ready to begin Trump impeachment trial with no deal on witnesses." By The Post's Seung Min Kim, Mike DeBonis and Rachael Bade 

"Pelosi says impeachment articles won’t go to Senate until she learns more about how trial would be conducted." By The Post's Felicia Sonmez, Colby Itkowitz, John Wagner and Seung Min Kim 

"McConnell's win on impeachment trial procedure was months in the making." By Politico's John Bresnahan and Burgess Everett 

POCKET CHANGE

— Tesla continues its rampant growth: “As Tesla CEO Elon Musk showed off his dance moves … to celebrate the launch of the Model Y in China, no such festivities were likely occurring in Detroit,” CNBC’s Michael Wayland reports.

“Shares of Tesla have roughly doubled in the last six months, giving the Silicon Valley automaker a market capitalization of roughly $84.5 billion — about $2 billion shy of General Motors and Ford Motor, combined. That’s despite record profits and significant efforts by the Detroit automakers in recent years to restructure operations and cut costs, while Musk has unprofitably danced his way into Wall Street’s good graces.”

— Mortgage rates continue to fall: “The average rate on the 30-year fixed mortgage fell to the lowest level since October this week, at 3.69 percent, according to Mortgage News Daily. That has an already competitive housing market heating up even more,” CNBC’s Diana Olick reports.

“Open houses, which are usually pretty rare the first week in January, were plentiful in markets across the nation this year, as buyers hope to get in before the competition gets even worse.”

— Muilenburg’s downfall: “Chief Executive Officer Dennis Muilenburg had been assuring directors for months that regulators would soon clear the grounded jet to fly again, but his predictions hadn’t panned out. The board decided that day to suspend production, and one week later, it ousted Muilenburg,” the Wall Street Journal’s Andrew Tangel writes of Boeing’s decision to let go of its CEO.

“It wasn’t just because Muilenburg’s forecasts had proven unreliable. Board members concluded that he had become part of the problem by mismanaging Boeing’s relationship with the Federal Aviation Administration, the one agency the company had to win over to emerge from its nearly yearlong crisis, people familiar with the matter said.”

  • Key quote: “His greatest strength was his optimism, and his greatest weakness was his optimism,” said a friend who has spoken to him recently.
  • Meanwhile: “U.S. and European aviation safety regulators will meet with Boeing this week in an effort to complete a 737 MAX software documentation audit — a key step toward the grounded plane’s eventual return to service,” Reuters’s David Shepardson reports.

— Goldman peels back the curtain a little: “Goldman Sachs Group Inc. will release new details about how and where it makes money, a shot of transparency it hopes will win over skeptical investors and boost a stock price stuck in neutral,” the WSJ’s Liz Hoffman reports.

“An overhaul of the bank’s financial disclosures will peel back the curtain on Goldman’s lending and proprietary bets and reshape its quarterly reports to investors to look more like those of peers JPMorgan Chase & Co. and Bank of America Corp., whose shares are more richly valued by investors. The changes are the latest effort by Goldman to shed some of its signature secrecy. For many investors, the changes are long overdue, though it remains to be seen whether they will generate enthusiasm for a stock that hasn’t grown meaningfully since 2007.”

Bryan Cohen pleaded guilty to one count of conspiracy to commit securities fraud, a charge that carries a maximum five-year prison term.
WSJ

MONEY ON THE HILL

Warren aims at Biden with new bankruptcy plan. NYT's Shane Goldmacher and Astead Herndon: "Warren on Tuesday announced a plan to roll back provisions in a 2005 bankruptcy law, reviving a debate she had 15 years ago with [Biden], a United States senator at the time, over consumer protections and the credit card industry. Bankruptcy is a critical part of the political origin story of Ms. Warren, whose new plan would make it easier for families to file for bankruptcy and increase accountability for creditors... In the plan she outlined on Tuesday, Ms. Warren would ease bankruptcy rules, allow students to declare student debt as part of any bankruptcy filing, and let more families keep their homes and cars while declaring bankruptcy."

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