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Shelton Fed vote falls short in Senate; consumers continue to shun credit cards

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If at first you don’t succeed …

“Senate Republicans failed to secure enough votes Tuesday to advance the confirmation of Judy Shelton to a seat on the Federal Reserve’s board of governors as two GOP senators were absent because of coronavirus-related health precautions,” the Wall Street Journal reported. “Although Republicans have a 53-47 majority in the Senate, they could marshal no more than 48 votes in her favor on Tuesday. After it became clear that a vote on a final procedural hurdle would be defeated by a 48-49 margin, Senate Majority Leader Mitch McConnell then switched his own vote to ‘no,’ giving him the option under Senate rules to bring the matter back up again before senators leave town for Thanksgiving at the end of this week.”

Her failure to win confirmation is “a significant setback but one that does not kill her chances at ultimately winning confirmation,” the New York Times said. “Still, her failure to clear a closely watched procedural vote signaled the tough road ahead for President Trump’s nominee, whose bid has been contentious from the start.”

The outcome was uncertain until the very end,” the Financial Times said. “Ms. Shelton’s defeat was ultimately sealed after the Republican majority championing her bid suffered several defections and absences within its ranks, on top of unanimous opposition from Democratic senators, including Kamala Harris, the U.S. vice-president-elect, who was in Washington to cast her vote.”

“On the Republican side, Chuck Grassley of Iowa and Rick Scott of Florida could not attend because they were quarantining after being exposed to the coronavirus. Lamar Alexander, the senator from Tennessee, opposed the nomination but did not vote.”

“Senate Majority Whip John Thune, the party’s chief vote counter, said Republicans still expect to have enough support to confirm Shelton eventually, although he acknowledged that the election of Democrat Mark Kelly in Arizona is a ‘complicating factor,'" the Washington Post reported. “Kelly is filling an existing Senate term and can be sworn in as senator as soon as his election is certified, which could be as early as Nov. 30, and shrink the existing GOP majority by one vote.”

Happy trails

Roger Ferguson, who “has emerged as a top contender for a cabinet role in the Biden administration,” said he was retiring as the long-serving CEO of TIAA, effective at the end of March, the Journal reported. A former vice chairman of the Federal Reserve and “one of Wall Street’s most-prominent Black executives, Ferguson ran TIAA for a dozen years, leading the firm through the 2008-09 financial crisis and broadening its reach through multibillion-dollar acquisitions.”

“Under Mr. Ferguson’s direction, TIAA expanded aggressively beyond its core business managing retirement accounts for employees in U.S. colleges, health-care systems and other nonprofit institutions. TIAA now oversees more than $1 trillion in assets under management, more than double where it stood when Mr. Ferguson arrived.”

“TIAA — once known as the Teachers Insurance and Annuity Association of America, with a century-long history dating back to its founding by the philanthropist Andrew Carnegie — has expanded under Mr. Ferguson’s leadership from a focus on teacher retirement plans to become a diversified investment house, more than doubling assets under management in the process,” the FT said. “During his tenure, TIAA acquired the asset manager Nuveen Investments in 2014 and expanded in banking with the 2017 purchase of EverBank. “

Wall Street Journal

Cars yes, cards no

American consumers “continue to shy away from adding onto their credit cards even as they borrow more to buy houses and cars,” the New York Fed reported. While total household debt rose by $87 billion, or 0.6%, to $14.35 trillion in the third quarter, “credit card balances declined by $10 billion to $810 billion. That followed a $76 billion decline in the second quarter, the steepest drop in data going back to 1999.”

At the same time, however, mortgage outstandings rose by $85 billion to $9.86 trillion and auto loan balances rose by $17 billion to $1.36 trillion. Student loans increased by $9 billion to $1.55 trillion.

Bargain hunting

“South Korean investors are emerging as some of the most-aggressive buyers of U.S. commercial real estate during the Covid-19 period,” a trend that could help a sector threatened with potential loan defaults. “The East Asian country’s pension funds, life insurers and other investors have been targeting warehouses and office buildings with long-term tenants. They are also drawn by ultralow U.S. interest rates, which make currency hedging cheaper.”

“While Chinese investors have been pulling back from the U.S. in recent years due to local capital controls, and other foreign firms are shying away amid fears over the pandemic, South Korean interest has been rising. In the first nine months of the year, Korean investors accounted for 8.6% of all overseas investment in U.S. commercial real estate, up from 3.7% a year earlier, according to Real Capital Analytics.”

Washington Post

Wait a minute...

"The Small Business Administration has asked a federal judge to delay release of records involving millions of small businesses that received Paycheck Protection Program loans, arguing that publicizing those records would do 'irreparable harm' to millions of businesses by exposing allegedly confidential information."

Quotable

We remain confident that Judy Shelton will be confirmed upon reconsideration.” — White House spokesman Judd Deere after President Trump’s nominee failed to garner enough votes to win confirmation for a seat on the Federal Reserve.

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