Mnuchin speaks with US bank executives to reassure investors after Wall Street whiplash

[NeverTrump]

This is fine...

Washington (CNN)In a precautionary move, Treasury Secretary Steven Mnuchin spent Sunday on the phone speaking with the chief executives of six of the country's largest banks to avoid yet another market whiplash when Wall Street opens Monday.

The secretary, who has been visiting his children in Cabo San Lucas, Mexico, tried to get ahead of further market jitters following reports that President Donald Trump was consulting advisers about whether he had the legal authority to fire Federal Reserve Chairman Jerome Powell.
In a series of calls with CEOs, Mnuchin spoke with Jamie Dimon of J.P. Morgan Chase, Tim Sloan of Wells Fargo and David Solomon of Goldman Sachs. He also called James Gorman of Morgan Stanley, Brian Moynihan of Bank of America and Citi's Michael Corbat. Each of the executives said they have "ample liquidity" to lend to consumers, businesses and perform other market operations, the Treasury Department said in a statement Sunday evening.

Mnuchin speaks with US bank executives to reassure investors after Wall Street whiplash

 

[Amelia]

It's a wonderful life.

 

[NeverTrump]

It's a wonderful life.

 

[chuckiechan]

This is fine...



Mnuchin speaks with US bank executives to reassure investors after Wall Street whiplash

The last fed increase was not advisable, and the fed not taking the next one off the table is bad for planning. If he doesn't raise rates next quarter all may be forgiven. The Wise Men are guessing that he may go for another 1/4 percent at the end of January.

In fairness, on the one hand he is trying to create headroom to lower rates if the economy looks like it might stall, but on the other he is an inflation hawk that may be a bit quick on the trigger and has been freaked out by wage increases without corresponding increases in output of goods but rather a spartan increase in productivity. (IOW, if you increase profits and give raises, that is not the same as increasing your goods output and increasing profit through volume.)

 

[trouble13]

This is fine...



Mnuchin speaks with US bank executives to reassure investors after Wall Street whiplash

Glad you approve. Make sure you let president Trump know that its OK with you. I'm sure his plans are on hold waiting to see your reaction

Sent from my SM-G965U using Tapatalk

 

[Cardinal]

I didn’t know to think there wasn’t a problem of the banks having enough money to lend until now. Mnuchin is telling everyone not to panic about liquidity when no one really was. The trump administration’s actions in spooking the market no longer feel like incompetence to me.

“Don’t worry. I’ve checked with the Centers for Disease Control and they have plenty of Ebola vaccine in stock.”

https://twitter.com/hunterpalmerpcb/status/1077029276011106304?s=21

 

[Atomic Kid]

The last fed increase was not advisable, and the fed not taking the next one off the table is bad for planning. If he doesn't raise rates next quarter all may be forgiven. The Wise Men are guessing that he may go for another 1/4 percent at the end of January.

In fairness, on the one hand he is trying to create headroom to lower rates if the economy looks like it might stall, but on the other he is an inflation hawk that may be a bit quick on the trigger and has been freaked out by wage increases without corresponding increases in output of goods but rather a spartan increase in productivity. (IOW, if you increase profits and give raises, that is not the same as increasing your goods output and increasing profit through volume.)

Market currently down another 400 points today. Looks like Mnuchin’s my boss is really not that crazy phone calls are having the opposite of their intended effect.

 

[chuckiechan]

Market currently down another 400 points today. Looks like Mnuchin’s my boss is really not that crazy phone calls are having the opposite of their intended effect.

The fundamentals are solid, so we shall see. The fed is talking like they may do two more increases in 2019, to that is weighing heavily on business planning. We went from Yellen of virtually zero rates to Powell trying to get rates up just to cut them again when the economy stalls.

It's time to go out of bonds into gold until the economy stalls, then back into bonds and equities.

 

[Greenbeard]

Flashback to August:

Trump administration cuts staff at financial markets watchdog

WASHINGTON (Reuters) - The Trump administration moved on Wednesday to shrink a government agency tasked with identifying looming financial risks, notifying around 40 staff members they would be laid off, according to a person familiar with the changes.

The employees at the Office of Financial Research (OFR) were formally told on Wednesday they will lose their jobs as part of a broader reorganization of the agency that was created in the wake of the 2007-2009 global financial crisis, the source said.

The overhaul forms part of a broader push by the Trump administration to reduce government bureaucracy by slashing government jobs and cutting regulations.

Replaced, it seems, with the "I'll just call and ask" system that's definitely not spooking the hell out of the markets.

 

[MTAtech]

The last fed increase was not advisable, and the fed not taking the next one off the table is bad for planning. If he doesn't raise rates next quarter all may be forgiven. The Wise Men are guessing that he may go for another 1/4 percent at the end of January.

In fairness, on the one hand he is trying to create headroom to lower rates if the economy looks like it might stall, but on the other he is an inflation hawk that may be a bit quick on the trigger and has been freaked out by wage increases without corresponding increases in output of goods but rather a spartan increase in productivity. (IOW, if you increase profits and give raises, that is not the same as increasing your goods output and increasing profit through volume.)

If Individual-1 wanted a rate dove, he should have left Janet Yellen as Fed Chair. Oh, but Yellen was appointed by Obama, so she had to go.

Like trade and deficits, which conservatives used to believe in free-trade and low deficits and now have done a 180 degree turn, Trumpism requires believers to take their previous beliefs and pack them away in the attic. Conservatives were lambasting the Fed during the financial crisis for having low interest rates -- airing dire warnings about the inflationary consequences of Fed efforts to fight high unemployment, the constant harping on the evils of printing money, at a time when we should have had low interest rates. Now, with unemployment very low and inflation signs present, these same people are against raising rates.

Trump himself Tweeted in 3:24 PM - 29 Sep 2011:

Donald J. Trump‏Verified account @realDonaldTrump

The Fed's reckless policies of low interest and flooding the market with dollars needs to be stopped or we will face record inflation.

 

[chuckiechan]

If Individual-1 wanted a rate dove, he should have left Janet Yellen as Fed Chair. Oh, but Yellen was appointed by Obama, so she had to go.

Like trade and deficits, which conservatives used to believe in free-trade and low deficits and now have done a 180 degree turn, Trumpism requires believers to take their previous beliefs and pack them away in the attic. Conservatives were lambasting the Fed during the financial crisis for having low interest rates -- airing dire warnings about the inflationary consequences of Fed efforts to fight high unemployment, the constant harping on the evils of printing money, at a time when we should have had low interest rates. Now, with unemployment very low and inflation signs present, these same people are against raising rates.

Trump himself Tweeted in 3:24 PM - 29 Sep 2011:

https://twitter.com/realDonaldTrump

Rather than take an adversarial view here, the conditions were different. Yellen was trying to give low rate incentive to a soft economy, whereas Powell has the opposite problem. Following Yellen's dovish tactics into 2017 & 18 would have created inflationary pressures. My only beef is IMO, it's "too much, too soon" and that has spooked the markets.

Plus, many year end investment strageties is when a lot of people sell off losses against gains, and with evidence of a market still willing to fall some in January, you can buy similar quality stocks at a discount.

So there are a lot of balls in the air. My guess is he won't raise rates for awhile.

 

[MTAtech]

Rather than take an adversarial view here, the conditions were different. Yellen was trying to give low rate incentive to a soft economy, whereas Powell has the opposite problem. Following Yellen's dovish tactics into 2017 & 18 would have created inflationary pressures. My only beef is IMO, it's "too much, too soon" and that has spooked the markets.

Plus, many year end investment strageties is when a lot of people sell off losses against gains, and with evidence of a market still willing to fall some in January, you can buy similar quality stocks at a discount.

So there are a lot of balls in the air. My guess is he won't raise rates for awhile.

What has spooked the markets is erratic federal policy. Rates have moved up and down for decades but not created a one-month fall like this.

 

[Greenbeard]

What has spooked the markets is erratic federal policy. Rates have moved up and down for decades but not created a one-month fall like this.

The Dow is down about 15% from the point at the beginning of the month when Trump announced his made-up China trade deal and the market subsequently realized he had fabricated the whole thing.

 

[MTAtech]

The Dow is down about 15% from the point at the beginning of the month when Trump announced his made-up China trade deal and the market subsequently realized he had fabricated the whole thing.

To put that in perspective, the Dow has risen 14% in two-years. Pre-Trump 2016 alone, was 13%.

 

[Cardinal]

The DOW is down 650 points. It would appear that Mnuchin's decision to assure us that there was no need to make a run on the banks (which nobody was wondering about in the first place) did not calm investors' nerves.

 

[<alt>doxygen]

Rather than take an adversarial view here, the conditions were different. Yellen was trying to give low rate incentive to a soft economy, whereas Powell has the opposite problem. Following Yellen's dovish tactics into 2017 & 18 would have created inflationary pressures. My only beef is IMO, it's "too much, too soon" and that has spooked the markets.

Plus, many year end investment strageties is when a lot of people sell off losses against gains, and with evidence of a market still willing to fall some in January, you can buy similar quality stocks at a discount.

So there are a lot of balls in the air. My guess is he won't raise rates for awhile.

I agree with much of your analysis in this thread, but I think you may be assigning too much blame for the market turmoil to the Fed.

I've been drawing down equity positions most of the year with the idea of being down to < 50% exposure by late next year. The idea was to possibly move that into rental real estate to create cash flow or to have funds with which to "buy at the bottom" if there was a big downturn. That downturn may be earlier than expected, but I see no reason for this in the market fundamentals.