A very large percentage of the American public (including myself), remain irate at the complete lack of any justice served with regard to finance criminals in the aftermath of the economic collapse of 2008/09. When it comes to greedy, unethical behavior in the wake of that tragic period, Steve Mnuchin is in a class of his own. To appoint such a toxic financial oligarch to Treasury Secretary is a serious slap in the face to all American citizens.
It's official. As previewed earlier this morning, when we reported that according to media reports, Sullivan & Cromwell lawyer Jay Clayton, a long-time favorite of Wall Street and especially Goldman Sachs, has been nominated to lead the Securities and Exchange Commission.
Donald Trump is preparing to appoint another Wall Street proxy to the top Wall Street regulation, supervision and enforcement post. According to the WSJ, Wall Street M&A and IPO lawyer, Jay Clayton, is Trump's leading candidate to become chairman of the Securities and Exchange Commission and could be announced as the nominee as soon as Wednesday.
It’s private debt, consumer debt, that will offer the winner his or her poisoned chalice. With 94 million Americans not counted as part of the workforce, and untold million others in jobs that pay hardly or no living wage, with so many millions of jobs that no longer pay sufficient or even any benefits, consumer spending has nowhere to go but down. In an economy where that spending is good for 70% of GDP, taking spending power away from people is deadly. The only way people have been able to either keep up appearances or even just make ends meet is going into debt.
"I am concerned that the appointment for Treasury Secretary offers either a great opportunity or a lost one or in one case would create a future problem. The latter, obviously, is Larry Summers who is... arrogantly unpleasant to his subordinates, dismissive to his equals and pandering to his superiors."
Deutsche Bank may be forced to shrink its U.S. activities as part of a deal to settle litigation over residential mortgage-backed securities with the Department of Justice, German newspaper Welt am Sonntag reported, in a move that will be sure to delight its US-based competitors.
At bottom, it is not central bank stimulus and intervention alone that drives equities and bond markets; it is the naive faith and willful ignorance of average market participants. There is a problem with this kind of economic model, however. Reality is never kept in check indefinitely. Fiscal truths will be exposed, one way or another.