Dem platform goes left on Wall Street

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DEM PLATFORM GOES LEFT ON WALL STREET — We don’t put huge importance on the Democratic Platform. But the policy document does offer a sense of the party’s direction. And a President Hillary Clinton could come under criticism if she eventually deviates from it in major ways.

The draft document approved over the weekend in Orlando clearly has a Bernie Sanders/Elizabeth Warren stamp on it, though Sanders lost on repudiating the Trans Pacific Partnership. The draft document only states that trade deals meet a high standard for US workers. Sanders forces lost their effort to include a line saying that TPP should not even come up for a vote in Congress, something that would have been a huge embarrassment to President Barack Obama, who is pushing to get TPP done before he leaves office.

Still, Sanders won on calling for a $15 federal minimum wage and the document includes sharp language on Wall Street reform. …

A couple of highlights of interest to the financial services industry: “We will fight against any attempt by Republicans in Congress or on Wall Street to roll back the Conflict of Interest Rule …

“We will also vigorously implement, enforce, and build on the landmark Dodd-Frank financial reform law, and we will stop dead in its tracks every Republican effort to weaken it. … We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading …

“Democrats will not hesitate to use and expand existing authorities as well as empower regulators to downsize or break apart financial institutions …

“Democrats support a variety of ways to stop this from happening, including an updated and modernized version of Glass-Steagall and breaking up too-big-to-fail financial institutions that pose a systemic risk to the stability of our economy.

“We will ban golden parachutes for those taking government jobs. We will limit conflicts of interest by requiring bank and corporate regulators to recuse themselves from official work on particular matters that would directly benefit their former employers. And we will bar financial service regulators from lobbying their former colleagues for at least two years.”

“We will reform the Federal Reserve so that it is more representative of America as a whole, and we will fight to make sure that executives at financial institutions are not allowed to serve on the boards of regional Federal Reserve banks or select its members.

Full Dem draft platform: https://goo.gl/AFbxFP

Full Dem Platform wrap from POLITICO’s Daniel Strauss and Kristin East: http://goo.gl/RgIAdm

GOP DRAFT GOES TRUMPIAN ON TRADE — Via CNN: “A first draft of the document that will become the GOP platform at this year’s Republican convention, sticks to Donald Trump’s tough talk on trade … The most substantial changes to the 2012 platform came on trade … The new language sounds remarkably like Trump, though it stays away from some of his more inflammatory positions including renegotiating [NAFTA] …

“Overall, the relevant section of the draft says international trade is beneficial to the American economy, but decries ‘massive deficits.’ It speaks of a ‘worldwide multilateral agreement’ that promotes open market ideals. ‘We need better negotiated trade agreements that put America first,’ the draft reads, borrowing a line directly from Trump. It continues with language along the lines of Trump’s campaign speeches regarding negotiations and deal-making” http://goo.gl/KChoJD

CONGRESS RACES TO THE FINISH — POLITICO’s Seung Min Kim, Rachael Bade, and Heather Caygle: “With just one week left before they leave for a nearly two-month summer break, lawmakers will renew their fights over gun control and Zika money — as Congress sprints to get out of town ahead of the political conventions and the height of campaign season. … In the House, Speaker Paul Ryan is still juggling calls from frustrated House Democrats determined to secure gun control votes, particularly after last week’s spate of gun violence in Baton Rouge, La., Falcon Heights, Minn., and Dallas.

“Yet the Wisconsin Republican’s hands have been tied by conservatives … whose opposition to an anti-terrorism package with modest gun provisions derailed the bill last week. The looming recess is adding more pressure on GOP leaders to bridge the divide within their own party. … [T]he slow pace of spending measures on Capitol Hill all but assures Congress will have to take up a short-term bill before government funding expires Sept. 30” http://goo.gl/F8kfaV

GOOD JOBS REPORT (BUT NOT THAT GOOD) — Pantheon’s Ian Shepherdson: “Whatever you might think about the state of the U.S. economy, it is not as volatile as implied by the past few months’ payroll numbers. Assuming steady productivity growth in line with the recent trend, the payroll data suggest the economy swung from bust to boom in one month …

“This did not happen. Instead, a combination of sampling error, seasonal adjustment problems, and the Verizon strike, likely explains the swing from a 144K payroll increase in April to just 11K in May and finally, the spectacular 287K leap in June. … [W]e are not willing to call the June report definitive evidence of a renewed upturn in employment growth”

THE NOT SO BRIGHT SIDE — Manulife’s Megan Greene: “The headline jobs figure for June was impressive, but is not the most important data point in any jobs report. More important than the quantity of jobs added is the quality of those jobs. Of the 287K new jobs, 126K were in low wage sectors and only a net 9K were added in (high wage) goods producing sectors. Accordingly, average hourly earnings rose by a whopping 2 cents (0.1 percent) compared with the previous month. This sluggish wage growth is in line with what we’ve seen over the past year and a half.”

JOBS DAY CHEAT SHEET via Hamilton Place Strategies: http://goo.gl/oy3Hfg

BANK EARNINGS DOWNGRADED — FT’s Ben McLannahan and Alistair Gray: “Wall Street analysts have taken an axe to profit forecasts for the biggest US banks, fearing that the [Fed] — spooked by sluggish job growth and the UK vote to leave the EU — will hold off on pushing up interest rates. After the Fed’s first post-crisis bump in rates last December, many analysts had been counting on more increases to help boost bank earnings throughout this year and next. …

“But with JPMorgan Chase due to start the second-quarter reporting season this week, analysts now believe those assumptions look too bullish because of the market turmoil unleashed first by slumping oil prices and then the UK’s referendum on EU membership. Analysts at Credit Suisse have stripped out any expectation of higher rates from its estimates for US banks’ profits in 2016 and 2017” http://goo.gl/wbH7dd

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END OF AN ERA — The great Mike Allen, who created Playbook and helped launch Morning Money (kindly poking and prodding me until I found a rhythm), signed off his 3,304th and final Playbook on Sunday: “I haven’t used an alarm clock since college: I just bolt out of bed every morning, humbled and thrilled to have the chance to serve you one more time. I say: ‘Thank you, God, for this day,’ then go make the donuts at my keyboard.” http://goo.gl/NRrMHf

GOOD MONDAY MORNING — Hope everyone managed to catch a refreshing break this weekend. Email me on [email protected] and follow me on Twitter @morningmoneyben.

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES – Patrick Temple-West on a push for the SEC to cut transaction fees to high-frequency traders -- and to get Morning Money every day before 6 a.m. -- please contact Pro Services at (703) 341-4600 or [email protected].

DRIVING THE WEEK — President Obama returns from Europe and will travel to Dallas on Tuesday following the killing of five police officers there last week … Treasury Secretary Jack Lew will travel to Paris, London, Brussels and Berlin Monday through Thursday for discussions with counterparts on Brexit impact and other issues … House Financial Services has a hearing Tuesday at 10:00 a.m. on “Making a Financial Choice: More Capital or More Government Control?” … House Financial Services subcommittee has a hearing Tuesday at 2:00 p.m. on fin tech … House OGR has a hearing at 10:00 a.m. on Wednesday on the FDIC application process … Senate Banking has a hearing Thursday at 10:00 a.m. on “Evaluating the Financial Risks of China.” … U.S. and EU leaders will continue work on TTIP in Brussels … Bank of England will announce its latest rates decision on Thursday and could stage a post-Brexit cut … JPMorganChase reports earnings Thursday. Wells Fargo and Citigroup report Friday.

MASS ARRESTS IN BATON ROUGE — Reuters: “Police arrested dozens more protesters in Baton Rouge, Louisiana, on Sunday after authorities warned they would not tolerate violence during street demonstrations over the fatal police shootings of two black men. Photos and video posted on social media by witnesses and journalists showed protesters being arrested in different parts of the city by police officers who told the crowds they were no longer holding peaceful demonstrations or that they were blocking major thoroughfares …

“Louisiana media, citing Baton Rouge police, reported that at least 48 people were taken into custody after demonstrators clashed with police on Sunday evening following an earlier peaceful march to the state capitol.The protests follow the shootings by police of Alton Sterling, 37, in Baton Rouge and Philando Castile, 32, in a suburb of St. Paul, Minnesota. Calls for demonstrations to remain peaceful in Louisiana and Minnesota came as authorities grappled with a wave of protests against police use of force that has swept the country in the past week” http://goo.gl/rTXZ3c

NINTENDO SOARS ON POKEMON GO — Bloomberg: “Nintendo Co. surged by its daily limit, jumping as much as 25 percent, as its new Pokemon Go game tops smartphone app rankings. The stock jumped the most since it began trading in Tokyo in 1983, and was 24 percent higher as of 10:04 a.m. Shares of the Kyoto-based company have climbed 34 percent in the past two trading days after the release of the augmented reality game for the fantastical monster-like characters.

“Pokemon Go debuted last week on iPhones and Android devices in the U.S., Australia, and New Zealand, letting players track down virtual characters in real locations using their smartphones. Nintendo is an investor in Niantic Inc., the game’s developer. After years spent resisting the consumer shift to smartphones for game play, Nintendo is trying to catch up though Niantic and also a venture with DeNA Co. for more mobile titles.” http://goo.gl/ZSkCgM

MM NOTE — OK, MM has two young boys who went through a Pokemon collecting phase. But we have no idea who is driving this new craze. We are betting on it being millennials. So can someone please millennial-splain this to us? [email protected]

WP: TRUMP A “DANGER TO THE REPUBLIC” — WP edit page in a blistering take: “Ms. Clinton is well within established bounds of competence, knowledge, commitment and integrity. She is not a dumpster candidate. Mr. Trump, by contrast, has waged a campaign based on bigotry, ignorance and resentment. He has no experience as a public servant, and his private record of bankruptcies and exploitation should be disqualifying. He regularly circulates falsehoods. He has no discernible interest in or knowledge of policy.

“Just in recent days, Mr. Trump tweeted out an anti-Semitic image circulating on neo-Nazi websites and attacked the media for reporting as much. He called one sitting senator a loser and threatened another while proving that he lacks even a passing familiarity with the Constitution. He praised one of the most vile dictators of the 20th century. Ms. Clinton is a politician, long in the arena, whom you may or may not support. Mr. Trump is a danger to the republic.” https://goo.gl/JJqK6M

THE BIG IDEA: MAYBE DON’T GO SO GLOBAL — Larry Summers on what elite free traders should keep in mind: “It is clear after the Brexit vote and Donald Trump’s victory in the Republican presidential primaries that voters are revolting against the relatively open economic policies that have been the norm in the US and Britain since the second world war. … While there is a strong case that the US is better off than it would have been if [NAFTA] had been rejected, the most extravagant predicted benefits have not materialised. And it is fair to say that claims that China’s accession to the [WTO] would propel political liberalisation have not been borne out.

“The willingness of people to be intimidated by experts into supporting cosmopolitan outcomes appears for the moment to have been exhausted. … A new approach has to start from the idea that the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good. People also want to feel that they are shaping the societies in which they live” http://goo.gl/0ROv3i

NEVER TRUMP’S LAST STAND — POLITICO’s Kyle Cheney: “Anti-Trump Republicans will make their final stand this week, a long-shot bid to hijack the rules of the Republican Party and deny Donald Trump the presidential nomination. But as GOP delegates converge on Cleveland to begin the business portion of their national convention, that marquee struggle is just one subplot in a drama that will determine the future of the party.

“Delegates will also weigh whether to embrace Trump’s brand of populism and protectionism, to ban outsiders from voting in GOP primaries or to reconfigure the power of the [RNC] … Those fights will play out in two powerful committees of delegates. The Platform Committee, which meets Monday and Tuesday, will revisit the core tenets of the Republican Party’s policy vision. The Rules Committee, which meets Wednesday and Thursday, will determine the procedures that govern the convention a week later — but also establish the 2020 primary rules” http://goo.gl/QMeSMn

2016 BLOWS UP TRADITIONAL PARTISAN LINES — WSJ’s Patrick O’Connor: “Candidates aren’t the only ones doing the unexpected this election year. Voters are adding to the uncertainty by threatening to buck the parties they typically support. Republicans ill-disposed toward Mr. Trump are threatening to stay home or vote for Mrs. Clinton, while some Democrats who don’t like Mrs. Clinton or feel abandoned by their party are gravitating toward the presumptive GOP nominee.

“The election is four months away, but early evidence suggests a larger-than-usual share of the electorate might switch sides this fall, with Republican women, in particular, more open to backing Mrs. Clinton, and white men who identify as Democrats rallying around Mr. Trump. … One big factor is that Mrs. Clinton and Mr. Trump are the two least-popular presumptive presidential nominees in modern polling history, alienating rank-and-file voters on both sides of the aisle” http://goo.gl/I2Zmux

HOUSE GOP TAX PLAN DISSES TRUMP’S (TO A POINT) — NYT’s Patricia Cohen: “In some important ways, the House Republicans’ new plan to overhaul the tax code has more in common with proposals from the candidates who lost their party’s presidential nomination than those from .. Trump … Like Senator Ted Cruz of Texas, the Republicans boast that most Americans will be able to file their taxes on a postcard. Like the former Florida governor Jeb Bush, they would eliminate deductions for interest payments for businesses and allow them to immediately write off all capital investments. Like Senator Marco Rubio of Florida, they would no longer tax a company’s foreign profits.

“But most significant, the blueprint, shepherded by Paul D. Ryan … embraces a transformational shift promoted by both Mr. Cruz and Mr. Rubio, but not Mr. Trump: a move away from taxing income to a system that basically taxes consumption. .. Despite their conceptual differences, however, there is a crucial feature that Mr. Trump’s plan and the House Republicans’ plan share: The biggest tax cuts are reserved for the wealthiest” http://goo.gl/kdwZTm

CHINA WARNS U.N. ON SOUTH CHINA SEA — FT’s James Kynge in London and Geoff Dyer in Washington: “China has warned that any ruling against the country this week in a UN tribunal over disputed waters in the South China Sea ‘will increase tension and undermine peace in the region’. The warning came as Chinese warships on Sunday conducted live-fire military drills in the sea’s disputed waters, stiffening its territorial claims ahead of the UN ruling.

“Beijing has long rejected the authority of the UN Permanent Court of Arbitration in The Hague, which is widely expected to rule against the country on Tuesday in a case brought by the Philippines that challenges the legality of China’s claims and activities in the sea. China has refused to participate in the case. .. A negative ruling for China could also increase tensions with the US, which regularly sends US navy ships to the region to reinforce freedom of navigation around some of Beijing’s man-made islands in the sea.” http://goo.gl/ZiYn5Q