Financial Markets

Democrats Will Help GOP Roll Back Financial Regulations

“The Senate is preparing to scale back the sweeping banking regulations passed after the 2008 financial crisis, with more than a dozen Democrats ready to give Republicans the votes they need to weaken one of President Obama’s largest legislative achievements,” the Washington Post reports.

“Eight years after nearly every Senate Democrat backed a sweeping set of new rules for financial firms large and small, the party is now split, with moderates, several of them facing tough midterm election contests, working with the opposing party.”

SEC Dropped Inquiry After Firm Aided Kushner Company

“The Securities and Exchange Commission late last year dropped its inquiry into a financial company that a month earlier had given White House adviser Jared Kushner’s family real estate firm a $180 million loan,” the AP reports.

“While there’s no evidence that Kushner or any other Trump administration official had a role in the agency’s decision to drop the inquiry into Apollo Global Management, the timing has once again raised potential conflict-of-interest questions about Kushner’s family business and his role as an adviser to his father-in-law, President Trump.”

Stock Market Plunges Again

The Dow Jones Industrial Average plunged more than 1,000 points during trading Thursday, the latest major swing in a volatile week for the market.

New York Times: “One likely catalyst for Thursday’s fall were comments from the Bank of England that it might raise interest rates sooner and higher than expected as it looks to fend off possible inflation. That was the latest signal that an epic run of easy money, which buoyed markets worldwide, is coming to an end.”

Trump’s Fed Nomination In Trouble

Sen. Rand Paul (R-KY) “said he will vote against Marvin Goodfriend’s bid to become a member of the Federal Reserve board, a move that could sink the nomination on the Senate floor,” Politico reports.

“Goodfriend, nominated by President Trump, was approved by the Senate Banking Committee in a 13-12 party-line vote, indicating that he is unlikely to receive any Democratic support. With Sen. John McCain (R-AZ) out for health reasons, any Republican ‘no’ vote could defeat his nomination.”

Trump’s Stock Market Miscalculation

“President Trump is learning a basic and painful lesson of Wall Street: Stocks also go down,” Politico reports.

“A global market sell-off accelerated Monday with the Dow Jones Industrial Average plunging nearly 1,600 points at one point in roller-coaster afternoon trading. After a volatile session, the Dow ended down 1,175 points, or 4.6%, at 24,346. It was the largest ever single-day point drop for the Dow and it rattled both Wall Street and Washington, abruptly ending a remarkable period of placid markets where it often seemed the only direction was up.”

Financial Times: “A rout swept through European and Asian stock markets in the wake of the biggest sell-off on Wall Street in six years as a sudden burst of turmoil shattered the long period of calm.”

Trump Strips Consumer Watchdog of Enforcement Powers

“The Trump administration has stripped enforcement powers away from Consumer Financial Protection Bureau office that specializes in pursuing cases against financial firms for breaking discrimination laws,” the Washington Post reports.

“The move comes about two months after President Trump installed his budget chief Mick Mulvaney at the head of an agency that has long been in the cross-hairs of Republicans. The Office of Fair Lending and Equal Opportunity had imposed penalties on lenders that it said had systematically imposed higher interest rates on minorities than whites.”

Flashback Quote of the Day

“Believe me: We’re in a bubble right now. And the only thing that looks good is the stock market — but if you raise interest rates even a little bit, that’s going to come crashing down. We are in a big, fat, ugly bubble. And we better be awfully careful.”

— President Trump, quoted by the Washington Post, during the first presidential debate in September 2016.

Most Americans Don’t Own Stocks

Bloomberg: “Only about 45 percent of private-sector workers participate in any employer-sponsored retirement plan, and the lower-income workers in Trump’s political base are the least likely to hold money in such an account.”

“Trump mentions the stock market almost daily in tweets or public remarks, taking direct credit for record highs by the Dow Jones Industrial Average and other indices. But only about 14 percent of U.S. families directly own stocks, an asset class dominated by the country’s top earners, according to the Federal Reserve. Meanwhile, the president has also rolled back efforts to expand retirement savings options to more middle-class and low-income workers.”

Mulvaney Tells CFPB Staff to ‘Disregard’ Leandra English

Mick Mulvaney, President Trump’s pick to lead the Consumer Financial Protection Bureau, on Monday instructed agency staff to disregard directions from Leandra English, who was named acting director by the former head of the agency, Reuters reports.

Axios reports Mulvaney showed up to work with donuts for the staff.

Trump Preps for Showdown Over Consumer Agency

“The White House is preparing for a showdown over who will be the next leader of the Consumer Financial Protection Bureau, a high-stakes battle that could end up in court and slow President Trump’s effort to roll back banking industry regulations,” the Washington Post reports.

“Leadership of the agency, which Trump called a ‘total disaster’ on Twitter Saturday, was thrown into doubt on an otherwise slow holiday weekend after the White House and the CFPB’s outgoing head both named acting directors to head the regulatory watchdog. On Friday, Trump named Mick Mulvaney, a longtime critic of the agency and the Office of Management and Budget director, while Richard Cordray promoted his chief of staff, Leandra English, to deputy director and said she would become acting director.“

Cordray Blocks Trump from Nominating His Successor

Consumer Financial Protection Bureau Director Richard Cordray “appointed the agency’s chief of staff, Leandra English, as the CFPB’s deputy director, establishing her as his successor when he steps down at the end of the day,” Politico reports.

“The move appears designed to thwart any move by President Donald Trump to name another temporary official to head the controversial agency… Trump will likely now have to nominate someone who must be confirmed by the Senate before he can oust English.”