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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These companies are now so enormous that they can't keep track of their own positions. Also, in sharp contrast to the propaganda about what brainy people they all are, many of them lack even the most basic understanding of the potential consequences of deals they might be making.
The leadership of AIG, for instance, basically had no clue how its derivatives portfolio worked, despite the fact that they had $79 billion worth of exposure. Similarly, then-CEO Chuck Prince of Citigroup told the Financial Crisis Inquiry Commission that a $40 billion mortgage position "would not in any way have excited my attention." Both companies ended up needing massive bailouts.
Not only can they not keep track of their own books, they already blow off regulators whenever they get the chance. Take JPMorgan Chase's "London Whale" episode, in which some $6.2 billion in losses in one portfolio accumulated practically overnight. In that case, Dimon simply refused to give the federal regulators routine, required reports as to what was going on with his bank's positions, probably because he himself had no idea how big the hole was at the time.
"Mr. Dimon said it was his decision whether to send the reports to the OCC," a regulator later told the Senate.
This is the same Jamie Dimon about whom Trump said today, "There's nobody better to tell me about Dodd-Frank than Jamie Dimon, so thank you, Jamie."
The enduring lesson of the financial crisis is that in markets as complex as this one, the most extreme danger is in opacity. The big problem is that these egomaniacal Wall Street titans want markets as opaque as possible.
This is why they want to get rid of the fiduciary rule, because they don't think it's anyone's business if they choose to bet against their clients (as Cohn's Goldman famously did), or overcharge them, or otherwise screw them.
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