For the first two weeks of President Trump’s administration, it seemed as though White House senior strategist Steven K. Bannon was calling the shots. With his protectionist stance on trade and immigration, Trump appeared to be hewing exactly to the protectionist, nationalist economic policies that Bannon has espoused.
That changed on Friday. Trump ordered a reconsideration of some of the rules imposed on Wall Street in 2010 after the mortgage crisis, signaling an approach at odds with Bannon’s views. The former Goldman Sachs banker has argued for stricter regulations, and he has had scathing words for financiers.
.. Bannon faulted greed for the financial crisis, “much of it driven by the greed of the investment banks.” He went on to say that bankers should have forfeited their bonuses and equity and faced criminal charges.
“The people who ran the banks and ran the hedge funds have never really been held accountable for what they did,” Bannon said. “That’s what I think is fueling this populist revolt.”
.. Bannon railed against the federal rescue of major financial institutions in 2008, calling it contrary to “the underpinnings of the Judeo-Christian West.” He complained that banks were borrowing too much, and suggested that they should focus on lending to businesses, rather than trading on financial markets.
.. During the campaign, the president was not that sympathetic to big banks,” Cramer said to Gary Cohn, director of Trump’s National Economic Council. “What happened between campaign Trump and President Trump?”
Cohn responded that the president was allowing his advisers leeway to pursue a deregulatory agenda, in response to arguments from the business lobby.
“He’s heard from over 50 CEOs that regulatory issues are what’s slowing them down,” Cohn said. “He is giving us the latitude to fix what we think is wrong.”
How Will the House Freedom Caucus Respond to Trump?
“This is a brand new world for most of our members,” added Cole, noting that scores of House Republicans were elected post-2008 specifically “to fight President Obama. Not now. Now they have to find a totally new purpose. It can’t be, ‘I’m just against what Obama opposes.’”
.. Likewise, slapping one’s own leadership for seeking consensus with Obama is a vastly different proposition than slapping them for accommodating a President Trump. As Meadows put it, “The fallout can potentially be, ‘Well, Mark, you can’t get along with establishment types and now you can’t get along with those fighting the establishment.’ And if that’s the case, it can have far-reaching implications back home.”
.. Meadows’s office compiled a Christmas wish list for the incoming president, consisting of 228 rules and regulations the Freedom Caucus would like revoked ASAP. The list covers everything from trucking regulations to alternative-energy mandates to school lunch requirements. Two top targets Meadows points to: the Overtime Rule, which ups the number of Americans eligible for overtime pay, and the Fiduciary Rule, which expands the categories of financial professionals who are classified as “fiduciaries” and thus bound by stricter standards when advising clients.
.. the overarching goal of the rollback is to shift regulatory authority away from federal agencies and back toward Congress, says Meadows. This, in turn, is part of an even broader push by conservatives to curb what they consider an out-of-control executive branch... Trump came to power touting his Alpha Maleness and a fondness for authoritarian leaders. So while he may prove an enthusiastic de-regulator, it’s tough to know how he’ll respond to any broad-based effort to siphon power away from the branch of government he controls... “Every week we’ll come up with a piece of legislation—and it doesn’t have to be Freedom Caucus driven,” he insisted. “My internal goal is to be promoting between 10 and 12 Freedom Caucus initiatives and 8 to 10 pieces of legislation led either by conservative Democrats or by the more moderate members within the GOP conference.”.. On the trail, Trump vowed not to cut benefits or raise the eligibility age for either Medicare or Social Security. Even so, some key members of his Social-Security transition team, along with his newly named budget chief (Freedom Caucus co-founder Mick Mulvaney) are outspoken fans of reduced benefits and/or privatization, indicating that President Trump may be more open than candidate Trump to messing with the system... His vision for the group is “a shift,” he allowed—and one that is not without risk. For starters, being reasonable and policy oriented and open to compromise is a great way to get ignored in politics... “People are tired of excuses,” he told me. “It is incumbent upon us to find ways to get things done.”
Donald Trump’s New Appointments Shake Up Trade, Regulation
“What Trump is trying to achieve is to show business in a lot of this country they aren’t going to be ruined by absurd regulation by bureaucrats.”
.. Mr. Icahn was an early backer of Mr. Trump and urged him to support efforts to let U.S. corporations bring home offshore cash and to end the carried-interest tax break that benefits many on Wall Street.
.. Mr. Icahn, who has spent the past four decades battling big companies as an activist investor, already has been wielding influence in the president-elect’s transition team. He is playing a central role in selecting the next chairman of the Securities and Exchange Commission, said people familiar with the matter
.. “Trump seems to want to run a flat organization with no real hierarchy, which leaves open the possibility of a lot of poles of power and tug-and-pull within the administration,” said Jeb Mason, a Treasury Department official in the George W. Bush administration. “This may leave everyone guessing about who holds ultimate sway.”
.. Several liberal economists said although they oppose many of Mr. Navarro’s policy ideas, he deserves credit for challenging both Democrats and Republicans to think differently about the costs of globalization.
.. He has written several books with provocative titles, including “The Coming China Wars” in 2008 and “Death by China: Confronting the Dragon—A Global Call to Action” in 2011, and struck up a correspondence with Mr. Trump several years ago after he saw an interview in which the New York businessman spoke approvingly of Mr. Navarro’s China analysis...Mainstream economists have taken a dim view of recent articles by Messrs. Navarro and Ross that characterize U.S. trade deficits as a drag on growth, which economists say present a flawed and confused view of elementary economic principles.“Peter Navarro, a friend, is just wrong,” Lawrence Kudlow, the CNBC commentator who advised Mr. Trump earlier this year on taxes, posted on Twitter before the election.
Steve Eisman of ‘The Big Short’ fame says the stock market is entering a ‘golden age’ for banks
But Eisman, who works at money manager Neuberger Berman, says the era of Trump will be a “golden age” for the banking sector. “I think over the next couple of years there will be more leverage, and this will be a golden age of investing in financial stocks,” he told CNBC during an interview early Monday in New York.
He said he was “as long as he could be” in the banking sector.
.. She said she only rates two sectors overweight (that’s code for buy among Wall Street researchers), and those are financials and technology.
.. Other market participants also have warned that rapidly rising interest rates may result in loan losses in other areas of banks’ balance sheets, including in auto lending.