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Why Is Steve Mnuchin Calling Wall Street CEOs On Sunday To Ensure ‘Ample Liquidity’?
In what is either something that happens all the time and I just wasn't aware of it, or else an example of a man doing the exact opposite of what he should do when it comes to reassuring nervous investors, Steve Mnuchin decided to tweet out a press release on Sunday evening.
In it, Mnuchin details a series of "individual calls" he conducted with Moynihan, Solomon, Gorman, Corbat, Sloan and Dimon.
Mnuchin apparently made these calls on Sunday and the topic of discussion was liquidity. "The
So why is a guy that has treasury auctions soaking up +1 trillion per year of dollars not looking into the mirror?
Is it because Trump is planning to fire Powell?
You beat me to it John.
For the most part, the American economy handles ups and downs just fine, without the need for comments from government officials. On those few occasions when the market needs some reassurance, it would be nice if the Treasury Secretary was someone that was credible and widely respected. In the event of a crisis, the team of Trump, Mnuchin and Kudlow will just be a reminder that the Keystone Cops are in charge.
This can only be a game, but I can’t think of a better way to threaten short term global liquidity with Twitter. Is Trump taking a try a financial terrorism to get his wall funding? And just giving him 5 billion really is a big come down from “The Great Wall of China” that we were hearing about.
I don’t agree that “nobody that I’m aware of was worried about a Lehman-esque systemic seizure”. Anyone who went through that must be assigning a non-zero probability to it, and we see that in the price of credit. And this same behavior from a SecTreas we respected, instead of Mnuchin, who is part of an administration entirely incapable of arresting a crisis, would be seen as pro-active, cautionary, and not ridiculed. While markets CAN impact economies (isn’t that what QE IS?) I don’t yet see a transmission mechanism where market behavior results in a systemic crisis, or a radical deterioration in the real economy. Yes, rates are higher, but not punishing. Markets are substantially compromised due to “year-end” behavior. And remember, $50b/month, $600b/year in balance sheet unwinds is a headwind, not a wall (there’s that word again), the same way QE was a tailwind. And its direct impact will be on financial and trophy asset valuations, not the real economy, as was the case during QE.
Meant to say….. $50b/month, $600b/year in balance sheet unwinds is a headwind, not a wall (there’s that word again), in the context of combined US equity and debt market caps of $60tln, the same way QE was a tailwind.
Amateur hour is my best guess. But could be a European bank or banks. But that is just a guess.
Mnuchin’s a smart guy IMO. A federal district court judge declaring the ACA unaffordable has basically trashed any further QE or TARP options to respond to another market crisis. That is probably what has made risky debt much harder to move recently, and with that Mnuchin”s nightmares.
Pardon me but the court’s ruling had NOTHING to with affordability. Where do you guys come from, anyway?
It’s Christmas Eve, so of course I pardon you. But I don’t pardon your ignorance. Read Paxton’s argument:
https://www.apnews.com/0d746d577b0741269cab18e8ef4cc571
Here is betting that Trump instructed the A team to do something so the huddle included Kudlow, Mnuchin, maybe Ross and perhaps, uber financiers, Ivanka and Kushner -and viola they decided this would be a great idea – from their holiday residences – without leaving the house.