Category Archives: Financial Crisis

Quantitative Easing Is a Costly Habit We Should Have Kicked Long Ago

Larry Elliott writes for The Guardian:

Related imageThings have moved on in the civil service since the days of Yes Minister. Back then senior civil servants remained the soul of discretion even after retirement. When Sir Arnold Robinson has advice to give to his successor, Sir Humphrey Appleby, he does it over lunch at a Pall Mall club.

Lord Macpherson, until recently the Treasury’s top mandarin, has some advice for the current government: it’s time to move on from quantitative easing, the scheme that has been pumping electronic money into the economy since early 2009.

Not for Macpherson a quiet word over an agreeable bottle of claret. Instead, he took to Twitter to compare QE to heroin: ever bigger doses are needed to get a high.

Did Macpherson say this when he was working for Alastair Darling, who originally gave the Bank of England permission to start QE, or George Osborne, who said the economy needed more of it? We won’t know that until the records of the Great Recession and its aftermath are released in a couple of decades, but if he did the warning was not heeded.

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Naomi Klein: The Worst Is Yet to Come with Trump, So We Must Be Ready for Shock Politics

Amy Goodman speaks with Naomi Klein, best-selling author and Intercept senior correspondent, about her latest book, No Is Not Enough: Resisting Trump’s Shock Politics and Winning the World We Need. You can watch the full interview over at Democracy Now’s website(Democracy Now!)

Goldman Sachs Bails Out Maduro

Matt Taibbi writes for Rolling Stone:

Who says two amoral and corrupt institutions with diametrically opposing ideologies can’t collaborate to sink even lower together?

Goldman Sachs, infamous investment bank and symbol of international predatory capitalism, has made a devil’s bargain with Nicolás Maduro, the infamous left-wing dictator of Venezuela who claims to despise companies just like Goldman. As Forbes writes:

“What happened is that the Venezuelan Treasury owned some bonds issued by PDVSA, the national oil company. They sold those bonds to Goldman Sachs at a serious discount to face value.”

Maduro’s authoritarian government has been rocked by protests this spring thanks to widespread economic and political devastation. (Maduro blames his country’s problems on an “economic war” waged by Washington.) The most shocking statistic is that 75 percent of Venezuelans are said to have lost at least 19 pounds from food shortages.

The Goldman deal was a win-win for the bank and the dictator. Goldman bought $2.8 billion worth of oil bonds for 32 cents on the dollar, according to the Times of London. Maduro’s regime, in return, immediately gets to stock its coffers with about $865 million.

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Why Trumponomics Won’t Make America Great Again

The Economist reports:

Donald Trump rules over Washington as if he were a king and the White House his court. His displays of dominance, his need to be the centre of attention and his impetuousness have a whiff of Henry VIII about them. Fortified by his belief that his extraordinary route to power is proof of the collective mediocrity of Congress, the bureaucracy and the media, he attacks any person and any idea standing in his way.

Just how much trouble that can cause was on sensational display this week, with his sacking of James Comey—only the second director of the FBI to have been kicked out. Mr Comey has made mistakes and Mr Trump was within his rights. But the president has succeeded only in drawing attention to questions about his links to Russia and his contempt for the norms designed to hold would-be kings in check.

Just as dangerous, and no less important to ordinary Americans, however, is Mr Trump’s plan for the economy. It treats orthodoxy, accuracy and consistency as if they were simply to be negotiated away in a series of earth-shattering deals. Although Trumponomics could stoke a mini-boom, it, too, poses dangers to America and the world.

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Obama’s $400,000 Speaking Fees Reveal What Few Want to Admit

Steven W. Thrasher writes for The Guardian:

Image result for Barack Obama wall streetThe reason many of us have been critical of Barack Obama’s outrageous $400,000 speaking fee is that it robs us of a fantasy: that sooner or later, the first black president was going to use his considerable powers, in or out of office, to help the economic ravages of the poor, who are disproportionately black.

That Obama’s project was or ever would be racial and economic justice was always a dream – and the sooner we let go of this and recognize Obama for who he is and what he does, the better we’ll all be.

Some people who disagree with me believe I am racist for not lauding Obama’s right to cash in on the presidency the same way the Clinton and Bush dynasties have. I will never deny the representational and psychological value of having had Obama in the Oval Office and his beautiful black family living in the White House. I always liked the guy immensely, even as I’ve criticized the politician.

But when it comes to the economics of systemic racism, I don’t think anyone should earn $400,000 an hour, and I certainly don’t worry about criticizing black people also earning that obscene sum. I’m much more concerned with factors of economic racism such as why white people have 12 times the wealth of black people; why black families would need to work 228 years to build the wealth of white families; why the median wealth of single black women is $5 and how the economic crash of 2008 was an apocalyptic theft of wealth from black homeowners to Wall Street which was never prosecuted.

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Man Trump Named to Fix Mortgage Markets Figured in Infamous Financial Crisis Episode

Matt Taibbi writes for Rolling Stone:

In early 2007, a group of Morgan Stanley bankers bundled a group of subprime mortgage instruments into a package they hoped to sell to investors. The only problem was, they couldn’t come up with a name for the package of mortgage-backed derivatives, which they all knew were doomed.

The bankers decided to play around with potential names. In a series of emails back and forth, they suggested possibilities. “Jon is voting for ‘Hitman,'” wrote one. “How about ‘Nuclear Holocaust 2007-1?'” wrote another, adding a few more possible names: Shitbag, Mike Tyson’s Punchout and Fludderfish.

Eventually they stopped with the comedy jokes, gave the pile of “nuclear” assets a more respectable name – “Stack” – and sold the $500 million Collateralized Debt Obligation with a straight face to the China Development Industrial Bank. Within three years, the bank was suing a series of parties, including Morgan Stanley, to recover losses from the toxic fund.

The name on the original registration document for Stack? Craig S. Phillips, then president of Morgan Stanley’s ABS (Asset-Backed Securities) division. Phillips may not have written the emails in question, but he was the boss of this sordid episode, and it was his name on the comedy-free document that was presented to Chinese investors.

This is just another detail in the emerging absurd narrative that is Donald Trump naming Phillips, of all people, to head up the effort to reform the Government-Sponsored Entities, Fannie Mae and Freddie Mac.

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Profits Can be Made from Catastrophes With Disaster Capitalism

Gregory Wilpert speaks with Antony Loewenstein, author of Disaster Capitalism: Making a Killing Out of Catastrophe, who says companies that make profits from disasters around the world also have a vested interest in maintaining these disasters. (The Real News)

Markets Worry More About Political Turmoil Than Encroaching Autocracy

The Economist reports:

Image result for Markets worry more about political turmoil than autocracy[…] In Turkey investors may have feared turmoil if Mr Erdogan’s proposal had been defeated. It is an old, but fairly reliable, rule that investors dislike uncertainty. And the early years of Mr Erdogan’s tenure, when he was seen as a liberalising democrat, saw rapid economic growth; his transformation into an emerging autocrat has not put investors off. Since he took office, the Istanbul market has gained 760% (see chart).

An authoritarian government can provide certainty, at least in the short term. In 1922, when Mussolini took power in Italy, its equity market returned 29% and its government bonds 18%, according to Mike Staunton of the London Business School. Hitler’s accession in 1933 saw German shares return 14% and bonds 15%. True, Wall Street did even better that year under Franklin Roosevelt but still—even then, Hitler was clearly a dangerous extremist.

The world’s most developed economies tend to be democracies, and to be more open to trade and foreign investment. But as China has demonstrated, it is certainly possible to generate rapid economic growth without a democratic system. China’s stockmarket (along with Hong Kong’s) has been among the best-performing bourses this millennium.

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How France’s Hotly Contested Election Could Shake Markets

Sara Sjolin reports for Market Watch:

[…] Usually a French general election doesn’t present a make-it or break-it moment for the entire eurozone, but this time its different. After a race full of surprises, a surge in the polls by far-left, euroskeptic Jean-Luc Melenchon has again reminded investors of the sweeping antiestablishment sentiment grabbing Europe and the U.S. at the moment.

Far-right, anti-EU candidate Marine Le Pen is also doing well in the polls and currently looks like she’ll get one of the two spots in the runoff. The big question is who she’ll face in the second round.

Will it be centrist Emmanuel Macron, who pollsters and analysts see as the favorite to emerge as president in May? Will it be scandal-ridden, dark horse candidate François Fillon who’s enjoyed an 11th hour rebound in support? Or will it be Melenchon, who has promised to rework the treaties that set the framework for the EU and then hold a referendum on whether to remain in the bloc.

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Nomi Prins on the Past, Present and Future of Goldman Sachs

James Corbett speaks to Nomi Prins, a former managing director at Goldman Sachs and the author of All The Presidents’ Bankers, about her old firm’s past, present and future. One of her most recent articles is titled: ‘On The Goldmanization Of President Trump‘. (Corbett Report)

The Deep State Hiding in Plain Sight

In 2014 Bill Moyers was joined by Mike Lofgren, a congressional staff member for 28 years, to talk about what he calls Washington’s ‘Deep State’, in which elected and unelected figures collude to protect and serve powerful vested interests. “It is how we had deregulation, financialization of the economy, the Wall Street bust, the erosion or our civil liberties and perpetual war,” Lofgren tells Moyers. Lofgren also authored an essay titled: Anatomy of the Deep State(Moyers & Company)

How Blair and Clinton created the conditions for Brexit and Trump

Thomas G. Clark writes for Another Angry Voice:

[…] In my view the ruptures in British and American politics happened in the 1990s with the accession of Bill Clinton in 1993 and Tony Blair in 1997. These were men who inherited the Democratic Party of Franklin D. Roosevelt and the Labour Party of Clement Attlee, but instead of pursuing the kind of prosperity yielding democratic socialism of their predecessors they adopted a “third way” strategy.

Clinton and Blair held onto power by slightly slowing down the radical and destructive right-wing neoliberalisation agenda rather than actively working to reverse the worst of the damage. Of course they seemed like an improvement after the chaotic crisis-ridden 1980s, but both men slowly continued the progress of the right-wing zealotry introduced by Margaret Thatcher and Ronald Reagan.

One of Clinton’s most overt moves towards hard-right economic dogma was a piece of legislation called the Commodity Futures Modernization Act of 2000 which exempted all manner of derivatives trading from financial regulation. a move that unleashed the frenzy of speculative derivative trading that resulted in the 2007-08 global financial sector insolvency crisis.

Aside from the extraordinarily dodgy PFI privatisation scams and the commodification of the higher education system through the introduction of student fees (aspiration taxes), one of Tory Blair’s most blatant rightward lurches saw the de facto privatisation of the Bank of England and the establishment of what turned out to be an astoundingly weak tripartite system of financial sector regulation.

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Cash, Cruises and Sex Parties: Inside Ex-HBOS Manager’s £245m Scam

Simon Goodley reports for The Guardian:

Image result for HBOS Manager's £245m Scam[…] Now it can be reported for the first time that Scourfield, 54, is corrupt,and pleaded guilty last year to six counts relating to his role in a scheme that cost the bank £245m.

On Monday his business associate David Mills, 60, who ran a small business turnaround consultancy Quayside Corporate Services (QCS), Mills’s wife. Alison, 51, plus their associates Michael Bancroft, 73, and Tony Cartwright, 72, were all convicted for their roles in helping to run Scourfield’s scam.

A sixth man, Mark Dobson, 56, who worked for Scourfield at HBOS, was also convicted, while one other defendant, Jonathan Cohen, 57, was acquitted.

Despite his absence from the courtroom having changed his plea last year, Scourfield’s presence loomed over proceedings each day of the four-month trial.s

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From ‘Drain the Swamp’ to Government Sachs

John Cassidy reports for The New Yorker:

Gary Cohn (far right) has suggested that the Trump Administration will attempt to significantly roll back post-2008 regulatory reform on Wall Street.Until now, Gary Cohn, the former president of Goldman Sachs, has been the invisible member of the Trump Administration. Now we know why: he has been busy preparing favors for his old pals on Wall Street. In an interview with the Wall Street Journal on Thursday, Cohn said that Trump was preparing to sign an executive order designed to pave the way for a broad rollback of the regulatory regime that the Obama Administration and Congress introduced after the disastrous financial crisis of 2008 and 2009.

Although Cohn gave few specifics, his comments suggested that the Trump Administration wants to hobble the Consumer Financial Protection Bureau, which Congress created to protect the interests of ordinary Americans and investors; reduce the amount of capital that big banks such as JPMorgan Chase and Bank of America have to hold in reserve; spare some non-bank financial firms—such as major insurers—from the enhanced scrutiny they have been subjected to in recent years; and scythe away other key elements of the 2010 Dodd-Frank Act. “This is a table setter for a bunch of stuff that is coming,” Cohn said in reference to the executive order, which Trump signed on Friday.

During last year’s campaign, Trump portrayed both Ted Cruz and Hillary Clinton as pawns of Goldman Sachs. And after the self-described “Leninist” Steve Bannon took over as his campaign C.E.O., Trump broadened his critique, at one point depicting Lloyd Blankfein, Goldman’s C.E.O. and Cohn’s old boss, as a member of a cabal of global financiers who had “robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities.” Even when it was happening, though, it was clear that all this rabble-rousing was mainly for show.

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‘Spectacular Betrayal’ as Trump Rolls Back Wall Street Regulations

Deirdre Fulton reports for Common Dreams:

President Donald Trump is set to hand the U.S. economy “back over to Wall Street” on Friday, with a regulatory rollback that critics say could put consumers and the financial system at risk.

According to the Wall Street Journal, Trump plans to sign executive orders Friday “establish[ing] a framework for scaling back the 2010 Dodd-Frank financial-overhaul law” and rolling back an Obama-era regulation requiring advisers on retirement accounts to work in the best interests of their clients. That rule was set to go into effect in April.

Trump plans to sign the orders surrounded by bank CEOs.

“The Wall Street bankers against whom Trump ran are making policy now,” said Robert Weissman, president of watchdog group Public Citizen.

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Extreme Vetting, But Not for Banks

Matt Taibbi writes for Rolling Stone:

Donald Trump, the man who positioned himself as the common man’s shield against Wall Street, signed a series of orders today calling for reviews or rollbacks of financial regulations. He did so after meeting with some friendly helpers.

Here’s how CNBC described the crowd of Wall Street CEOs Trump received, before he ordered a review of both the Dodd-Frank Act and the fiduciary rule requiring investment advisors to act in their clients’ interests:

“Trump also will meet at the White House with leading CEOs, including JPMorgan’s Jamie Dimon, Blackstone’s Steve Schwarzman, and BlackRock’s Larry Fink.”

Leading the way for this assortment of populist heroes will be former Goldman honcho Gary Cohn, now Trump’s chief economic advisor.

Dimon, Schwarzman, Fink and Cohn collectively represent a rogues gallery of the creeps most responsible for the 2008 crash. It would be hard to put together a group of people less sympathetic to the non-wealthy.

Trump’s approach to Wall Street is in sharp contrast to his tough-talking stances on terrorism. He talks a big game when slamming the door on penniless refugees, but curls up like a beach weakling around guys who have more money than he does.

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Government Sachs: Protesters Decry Financial Giant Swamping Trump Administration

In New York City, over 100 people set up a protest encampment outside the headquarters of financial giant Goldman Sachs, which they are calling “Government Sachs.” At least six of Trump’s top advisers and Cabinet picks are tied to Goldman Sachs: treasury secretary nominee Steven Mnuchin, National Economic Council Director Gary Cohn, Trump chief strategist Stephen Bannon, Securities and Exchange Commission chairman nominee Jay Clayton, senior White House adviser Anthony Scaramucci and senior counselor for economic initiatives Dina Habib Powell. (Democracy Now!)

Joe Biden to Davos: The Top 1% Must Pay Its Fair Share or Else…

Jay Yarow reports for CNBC:

Image result for Joe Biden to DavosIn his final speech as vice president, Joe Biden warned that the top 1 percent needed to pay their fair share, or else.

Biden delivered his speech at the World Economic Forum in Davos Switzerland, which is attended by world leaders, top executives, investors and members of the press.

The outgoing vice president started his speech by noting that there is a “palpable sense of uncertainty about the state of the world,” and we need to ask ourselves, “What kind of world are we going to leave for our children?”

The main theme of his speech was that the “liberal international world order” is at risk of collapse, as bad actors like Russia meddle in elections and try to undermine the progressive values of the United States and Europe.

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Davos Elite Seeks Fixes to Defend the System From Populists

Jeff Black and John Follain report for Bloomberg:

Image result for Davos Elite Seeks Fixes to Defend the System From PopulistsThe great and the good of Davos agree they have a problem with populism. Finding a solution is the hard part.

On the second day of the World Economic Forum’s annual meeting in the Swiss Alps, delegates disagreed on how best to address the upending of the western political order, a debate made doubly urgent by the string of elections in Europe this year where anti-establishment parties could gain more ground.

While International Monetary Fund chief Christine Lagarde urged a list of policies from programs to retrain workers to more social spending, others fretted that the turbulence is only starting. Hedge Fund billionaire Ray Dalio warned on a panel chaired by Bloomberg Television’s Francine Lacqua that “we may be at a point where globalization is ending, and provincialization and nationalization is taking hold.”

That leaves technocrats trying to patch together potentially expensive remedies to make the current system of global trade, banking and business links that the Davos club represents acceptable to the public at a time when newcomers like U.S. president elect Donald Trump threaten to dismantle it by scrapping trade deals and introducing tariffs.

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Trump Treasury Pick Steven Mnuchin’s Former Bank Accused of Widespread Misconduct

Juan Gonzalez and Amy Goodman speak to The Intercept reporter David Dayen, author of Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud, about Trump’s pick for Treasury Secretary, Steven Mnuchin, who faces scrutiny for his role at OneWest, a bank which has been called a “foreclosure machine” that profited from the collapse of the housing market. Dayen recently wrote about Mnuchin for The Intercept in an article titled: Treasury Nominee Steve Mnuchin’s Bank Accused of “Widespread Misconduct” in Leaked Memo(Democracy Now!)

Nomi Prins: My Political-Financial Road Map for 2017

Nomi Prins, former managing director at Goldman Sachs and author of All The Presidents’ Bankers, writes:

Happy New Year! May yours be peaceful, safe and impactful!

As tumultuous as last year was from a global political perspective on the back of a rocky start market-wise, 2017 will be much more so. The central bank subsidization of the financial system (especially in the US and Europe) that began with the Fed invoking zero interest rate policy in 2008, gave way to international distrust of the enabling status quo that unfolded in different ways across the planet. My prognosis is for more destabilization, financially and politically.  In other words, the world’s a mess.

Over 2016, I circled the earth to gain insight and share my thoughts on this path from financial crisis to central bank market manipulation to geo-political fall out, while researching my new book, Artisans of Money. (I’m pressing to hand in my manuscript by February 28th – the book should emerge in the Fall.)

I traveled through countries Mexico, Brazil, China, Japan, England and Germany, nations epitomizing various elements of the artisanal money effect. I spoke with farmers, teachers and truck-drivers as well as politicians, private and central bankers. I explored that chasm between news and reality to investigate the ways in which elite power endlessly permeates the existence of regular people.

In last year’s roadmap, I wrote we were in a “transitional phase of geo-political-monetary power struggles, capital flow decisions, and fundamental economic choices. This remains a period of artisanal (central bank fabricated) money, high volatility, low growth, excessive wealth inequality, extreme speculation, and policies that preserve the appearance of big bank liquidity and concentration at the expense of long-term stability.”

That happened. Going forward, as always, there’s endless amount of information to process. The state of economies, citizens and governments remains more precarious than ever. Major areas on the upcoming docket include – central bank desperation, corporate defaults and related job losses, economic impact of political isolationism, conservatism and deregulation, South America’s woes, Europe’s EU voter rejections, and the ongoing power shift from the West to the East.

For now, I’d like to share with you some specific items – which are by no means exhaustive, that I’ll be analyzing in 2017.

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Capitalism Is Collapsing, and There Is Nothing Rising to Replace It

Crawford Kilianwrites for The Tyee/AlterNet:

Some anonymous wise person once observed that it is easier to imagine the end of the world than the end of capitalism. But Wolfgang Streeck, a 70-year-old German sociologist and director emeritus of the Max Planck Institute for the Study of Societies, thinks capitalism’s end is inevitable and fast approaching. He has no idea what, if anything, will replace it.

This is the premise of his latest book, How Will Capitalism End?, which goes well beyond Thomas Piketty’s Capital in the 21st Century. Piketty thinks capitalism is getting back into the saddle after being ruined in two world wars. Streeck thinks capitalism is its own worst enemy and has effectively cut itself off from all hope of rescue by destroying all its potential rescuers.

“The end of capitalism,” he writes in the introduction, “can then be imagined as a death from a thousand cuts… No effective opposition being left, and no practicable successor model waiting in the wings of history, capitalism’s accumulation of defects, alongside its accumulation of capital, may be seen… as an entirely endogenous dynamic of self-destruction.”

According to Streeck, salvation doesn’t lie in going back to Marx, or social democracy, or any other system, because there is no salvation at all. “What comes after capitalism in its final crisis, now under way, is, I suggest, not socialism or some other defined social order, but a lasting interregnum — no new world system equilibrium… but a prolonged period of social entropy or disorder.”

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The Vampire Squid Occupies Trump’s White House

Matt Taibbi writes for Rolling Stone:

[…] One surprise election result and a mountain of jubilant #draintheswamp hashtags later, Donald Trump has filled his White House with, you guessed it, Goldman veterans.

His chief strategist, the unabashed white-supremacist loon Steve Bannon, is a former Goldman banker, as is adviser Anthony Scaramucci. Steve Mnuchin marks the fourth Goldman-pedigreed treasury secretary in the last four presidencies, after Bob Rubin, Lawrence Summers and Hank Paulson.

But the real shocker is the recent appointment of Goldman Chief Operating Officer Gary Cohn to the post of director of the National Economic Council. Bannon and Mnuchin were former, past Goldmanites. Cohn, meanwhile, is undoubtedly at least the number-two figure at the world’s most despised bank, if not the outright co-head with Blankfein. He has been at the center of many of its most infamous episodes, including the Greek affair.

So much for draining the swamp.

The new party line, emanating both from Washington and from Alt-Right yahoos on the Internet, is that people like Gary Cohn are no longer the swindling scum-lords Trump said they were a few months ago, but simply smart businessmen.

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Trump’s Great Gatsby Government Will Be a Gift to the Rich

Nomi Prins writes for The Guardian:

Image result for Trump's Great Gatsby government[…] Despite all his populist slogans, Trump was born with a golden spoon in his mouth. He understands having money because he never had to understand not having money. He understands bending the rules because he’s made money doing that. He became president doing that. He boasted about it during the election.

He gravitates to people similar to him, billionaires and up and coming millionaires. His cabinet choices are pedigreed and skilled at using the government to their profit advantage. We are supposed to believe that because they know how that game is played, that as public officials they will divert those talents on our behalf. The only fly in that ointment is that they have no reason to do so.

We have Steven Mnuchin, the Treasury secretary nominee, whose hedge fund took over a California bank in 2009 on the cheap, got the government to back the risk of the deal and proceeded to foreclose on 36,000 homes between 2009-2015, reaping a profit for him and his group of around $1.5bn. He’s not going to regulate the industry that handed him that windfall. Then, there’s Commerce secretary nominee Wilbur Ross who made billions taking over flailing steel and other industrial companies, pushing costs like pension payments onto the government and firing people in the process. He’s not about to advocate for unions or higher minimum wages or equal pay for women in the workplace.

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Stephen Hawking: This Is The Most Dangerous Time For Our Planet

Stephen Hawking writes for The Guardian:

Image result for planet earthAs a theoretical physicist based in Cambridge, I have lived my life in an extraordinarily privileged bubble. Cambridge is an unusual town, centred around one of the world’s great universities. Within that town, the scientific community that I became part of in my 20s is even more rarefied.

And within that scientific community, the small group of international theoretical physicists with whom I have spent my working life might sometimes be tempted to regard themselves as the pinnacle. In addition to this, with the celebrity that has come with my books, and the isolation imposed by my illness, I feel as though my ivory tower is getting taller.

So the recent apparent rejection of the elites in both America and Britain is surely aimed at me, as much as anyone. Whatever we might think about the decision by the British electorate to reject membership of the European Union and by the American public to embrace Donald Trump as their next president, there is no doubt in the minds of commentators that this was a cry of anger by people who felt they had been abandoned by their leaders.

It was, everyone seems to agree, the moment when the forgotten spoke, finding their voices to reject the advice and guidance of experts and the elite everywhere.

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Bankers Behind ‘Great Foreclosure Machine’ Join Trump’s Cabinet as Treasury and Commerce Secretaries

Amy Goodman speaks to David Dayen, journalist and author of Chain of Title, about two of Donald Trump’s Cabinet picks: Steven Mnuchin for treasury secretary and Wilbur Ross for commerce secretary. Dayen’s most recent for The Nation is ‘Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington‘. (Democracy Now!)

Trump Reportedly Considering JPMorgan CEO Jamie Dimon For Treasury Secretary

Linette Lopez reports for Business Insider:

jamie dimonPresident-elect Donald Trump is considering offering the post of Treasury secretary to JPMorgan CEO Jamie Dimon, CNBC’s Kate Kelly is reporting.

A lifelong Democrat, Dimon supported Barack Obama in 2008 and during the aftermath of the financial crisis.

As post-financial-crisis Dodd-Frank regulation started to make an impact on the American financial system, however, he became much more critical.

On Wednesday, after Trump won Tuesday’s presidential election, Dimon sent a memo to JPMorgan employees calling them to come together for the nation. He also made a subtle dig at Trump’s stances on immigration and race.

[…] JPMorgan declined comment to Business Insider about Trump’s possible interest in Dimon as Treasury secretary. Steven Mnuchin, a former Goldman Sachs official, is also reportedly in the running for the position.

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Donald Trump and the Bonfire of the Certainties

John Authers writes for the Financial Times:

Behold the bonfire of the certainties. In combination with June’s Brexit vote, the political reaction that many assumed would hit in 2009 has finally come to pass. The US wants to reverse globalisation, as does the UK, while France, Germany and Italy all have a chance to upend the status quo at the ballot box in the coming months.

The certainties that had reassured investors and financiers since the era of Thatcher and Reagan, and that are now in question, include a global commitment to free trade, independent central banks, a financialised version of capitalism, and relatively limited social safety nets. Although many of those voting for British exit from the EU, and for a Donald Trump presidency, have a deep distrust of governments, the likely result is more interventionist governments.

Mr Trump’s character adds a layer of uncertainty. As President Barack Obama argued, to no avail, it is worrying when someone who will now have control of the nuclear codes cannot be trusted with their own Twitter account. This uncertainty will itself damage securities prices and shake confidence.

Putting Mr Trump’s personal character to one side, in the broader picture the result should not have been a surprise. Back in 2008, as the financial crisis broke, many thought a political crisis would ensue within months. Capitalism appeared broken, and some form of populist reaction an inevitability. The surprise is that the denouement has been so long delayed.

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Globalisation Is Dead, and White Supremacy Has Triumphed

Paul Mason writes for The Guardian:

Image result for Globalisation Is Dead[…] This is not some two-dimensional revolt against poverty and wage stagnation. It is a three-dimensional revolt against the impacts of neoliberalism – both positive and negative.

Freemarket economics unleashed two forces that have now collided: the rapid rise in inequality, and a route to the top percentile for the talented female, black or gay person. As long as it delivered not just growth but a growth story, a foreseeable better future, those disempowered by neoliberalism could stand it.

But neoliberalism no longer works. It is broken. If it survived it would have delivered at best zombie growth fuelled by central bank money and at worst stagnation. But it will not survive. Last summer I predicted that if we do not break with the economics of high inequality, high debt and low productivity, populations will vote to dismantle the global order. With Brexit and Trump that process is inexorable – and the next wave of the tsunami will hit Italy and Austria in their plebiscites on 4 December.

In the next weeks, our denial reflexes will be in full swing. Like Auden’s generation we will “cling to our average day”. But one set of people now faces a moment where only honesty will suffice. It is the economists, journalists, civil servants, bankers and policy wonks who have rubbished the idea of the existential threat.

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How Did Neoliberalism Help Create Trumpism? Interview with Nomi Prins

Author of ‘All The Presidents Bankers’ Nomi Prins joins Paul Jay and panelists to discuss the economics behind Donald Trump. (The Real News)