Eugene Grygo, Chief Content Editor, FTF News
As we have seen during the endless presidential campaign, Donald J. Trump, the presumptive nominee of the Republican Party has skillfully ducked specifics when making speeches or during debates.
Until last week, Trump, who loves to blast his own horn, has been rather quiet about the Dodd-Frank reforms. But that is over.
“Dodd-Frank has made it impossible for bankers to function,” Trump reportedly told Reuters during an interview on May 17. “It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop.”
Trump added that in about two weeks he would be releasing a plan with more details about how he would gut and replace Dodd-Frank. “I would say it’ll be close to a dismantling of Dodd-Frank,” Trump told Reuters. “Dodd-Frank is a very negative force, which has developed a very bad name.”
While it’s hard to tell if Trump avoided mention of Dodd-Frank out of ignorance or design, it’s clear that he is now following GOP orthodoxy on the issue.
But, if media reports are to be believed, Wall Street is not a big fan of Trump. One industry analyst I spoke to said that his tough stances on trade negotiations with China and others would likely cause Asian investors to pull their money out of U.S. financial markets. In addition, the analyst cautioned, European investors would also pull their money in early November if Trump wins.
The main reason they would leave U.S. markets is because of the uncertainty that a Trump presidency would create. Investors everywhere, it is argued, like stability in governments, economies and markets.
“The most important component of our China policy is leadership and strength at the negotiating table,” Trump says on his campaign website. “We have been too afraid to protect and advance American interests and to challenge China to live up to its obligations. We need smart negotiators who will serve the interests of American workers — not Wall Street insiders that want to move U.S. manufacturing and investment offshore.”
Strangely enough, his website’s section on China and international trade is long and in-depth.
Yet, given how tough his talk is and how strange these times are, it may quickly become impossible to find stability anywhere. Chinese investors and others may not find safe havens if fear, confusion and impulsive behavior spread faster than rationality. It would also be devastating if a China deeply angered by Trump called in all of its loans to the U.S.
As for Trump’s ties to Wall Street movers and shakers, they seem to be nearly non-existent.
The New York Times reported via its Dealbook section on May 23 that Trump’s “roots and connections on Wall Street are fairly shallow,” according to Roy C. Smith, an ex-Goldman Sachs partner now in a teaching post at New York University.
In the nation’s capital, The Washington Post also rooted around to find The Donald’s friends amid the canyons of Wall Street but couldn’t.
“Trump’s relationship with Wall Street is complicated by decades of name-calling, lawsuits and big debts. He has sued Deutsche Bank, blaming the megabank for the financial crisis, but continues to rely on it to finance major projects,” according to a Post piece that ran March 23. “When his companies filed for bankruptcy, he bragged, it was the big banks that endured big losses — not him. He once called the dean of New York bankers, JPMorgan Chase chief executive Jamie Dimon, ‘the worst banker in the United States.’ ”
So, in an odd twist, Trump cannot really call on too many of his business associates on Wall Street especially if they think his presidency will sink the markets.
Something tells me, though, that when he’s searching for donations to his campaign, he may change his tune and work hard to be the best friend Wall Street ever had.
I wonder if Wall Street will even give him the time of day.
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