Wall Street Banks Celebrate Trump Win
Take That Establishment!
He’s a born-rich billionaire real estate mogul, who has openly bragged about exchanging campaign contributions for political favors. His first act as president is going to be to give himself (and other billionaires and corporations) a lavish tax cut.
His chief of staff is the former chair of the Republican National Committee and his chief strategist is former Goldman Sachs exec and media baron.
You think Wall Street and its lobbyists are shaking in their boots because Donald Trump is president?
Their stock has soared in the past week…
- Goldman Sachs is up 17%.
- Morgan Stanley is up 18%.
- Bank of America is up 19%.
- And JPMorgan is up 15%.
Heck, even Wells Fargo is up. That stock was obliterated in the wake of its phony account scandal. It tumbled from $52 at the start of the year, all the way down to a 52-week low of $43.55 – a 17% drop.
It was still trading at just $45 on election night. Since then, it’s bounced all the way back up to where it started the year. That’s right. Donald Trump’s election restored all the value Wells Fargo lost during its debilitating scandal, pretty much overnight.
Perhaps that’s because the Consumer Financial Protection Bureau, which fined Wells Fargo $100 million in September will likely be dismantled or de-fanged by the Trump administration.
During his campaign Trump pledged to “dismantle” Dodd-Frank, the legislation enacted in the wake of the financial crisis to rein in Wall St. excess. Furthermore, a federal appeals court last month handed down a ruling, saying that the president should be able to fire the CFPB’s director at any time, rather than for only for cause, as spelled out in Dodd-Frank.
That puts CFPB Director Richard Cordray’s job at risk.
“He’s one of the biggest problems in terms of individuals in the government that have strangled industry,” Scott Pearson, a lawyer who represents large financial firms facing CFPB scrutiny, told the LA Times. “Firing Cordray is something I think he’d do the first week.”
In June, Trump met with Texas Representative Jeb Hensarling, the chairman of the House Financial Services Committee, to talk about his plan for disbanding Dodd Frank and reorganizing the CFPB. Hensarling’s plan, the Financial CHOICE Act, calls for restructuring the CFPB so that it would be led by a five-member commission instead of a single director.
Over the years, Hensarling has received millions of dollars from the very banks the CFPB regulates. Bank of America is Hensarling's top corporate donor, and Wells Fargo and JPMorgan also land on his top 20 donor list.
This year, alone Wall Street sources donated $585,490 to his campaign.
Now, Hensarling is one of the candidates Trump is reportedly considering for Treasury Secretary.
Other candidates include Steven Mnuchin and JPMorgan CEO Jamie Dimon.
Under Dimon, JPMorgan was fined more than $35 billion in just a four year period following the financial crisis. A large portion of the penalties were tied to the company’s promotion and use of mortgage-backed securities. Some $2.6 billion came from its dealings with Bernie Madoff.
Mnuchin, meanwhile, was in Yale’s Skull and Bones secret society, a Goldman Sachs partner like his father before him, and a hedge fund manager. He worked with George Soros, funded Hollywood blockbusters, and bought a failed bank, IndyMac, with billionaires including John Paulson.
Drain the swamp indeed.
Said Pearson: “There’s no question from the industry’s standpoint that a Trump victory is a huge win.”
Jason Simpkins is a seven-year veteran of the financial publishing industry, where he's served as a reporter, analyst, investment strategist and prognosticator. He's written more than 1,000 articles pertaining to personal finance and macroeconomics. Simpkins also served as the chief investment analyst for a trading service that focused exclusively on high-flying energy stocks. For more on Jason, check out his editor's page.