Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!
If you spent any time on the Internet today, you likely came across footage of Donald Trump and Angela Merkel sitting in the Oval Office for a photo-op, a scene that may have surpassed the awkwardness of Trump’s photo-op with Japanese Prime Minister Shinzō Abe. (You know, the one where the two shook hands for what seemed like an eternity before Abe finally broke free of Trump’s clutches with a look on his face that said “I can’t even put into words what I just went through.”) The meeting between the president and the German chancellor was arguably worse. Not only did the two not shake hands, but Trump wouldn’t even look in Merkel’s direction, despite several deeply uncomfortable attempts on her part to engage her 70-year-old counterpart in eye-contact (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
But the cringeworthy scene in the Oval Office was merely a prelude for what was to come. During the subsequent joint press conference, Merkel opened by commenting that whereas the 45th president of the United States prefers to talk sh*t about his peers on Twitter, “It’s much better to talk to one another than about one other” (the Don commented that he “very seldom” regrets anything he’s ever said on the social-media platform). In light of Merkel’s support for refugees, Trump said that “immigration is a privilege, not a right,” and on the issue of NATO expressed his “strong support” but noted that “it is very unfair to the United States; these nations must pay what they owe.” And then there was this:
“Germany has done very well in its trade deals with the U.S., and I give them credit for it,” Trump told a White House press conference. “Virtually any country we do business with it’s not exactly good for our workers.”
“The U.S. has been treated unfairly and that’s going to stop,” he told reporters.
In fact, the U.S. has no direct, bilateral trade deals with Germany. As Merkel quickly pointed out, Germany’s trade with the U.S. is governed by rules negotiated by the European Union on behalf of member states.
Oh, well. It’s not as though Trump ran his entire campaign on the basis of his mastery of this issue. He’s more of a big-picture guy, anyway. If you would like to receive the Levin Report in your inbox daily, click here to subscribe. At least one member of the Trump administration wants to avoid a conflict of interest with China (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
Naturally, it’s not anyone related to the president but rather former Goldman Sachs president turned National Economic Council director Gary Cohn, who plans to divest himself of holdings that might conflict with his role in the government. Per Bloomberg:
Cohn . . . owns almost 23.4 million shares of Beijing-based Industrial & Commercial Bank of China Ltd., according to a two-page disclosure report obtained by Bloomberg using public-records laws. The stake is valued at more than $15 million and was likely acquired as part of an investment Goldman Sachs Group Inc. and its private-equity funds made in January 2006.
The filings also show that Cohn will divest more than $216 million in Goldman Sachs stock, 18 other publicly traded shares, and investments in eight company-managed funds. Cohn’s wife, Lisa Pevaroff, will divest three such funds.
Earlier this week, we learned that the family of First Son-in-Law Jared Kushner had moved forward on a deal with Chinese firm Anbang Insurance Group, the terms of which are very favorable to the Kushner family. Anbang, whose “murky links to the Chinese power structure,” Bloomberg reports, “have raised national security concerns over its U.S. investments,” will become a business partner of Kushner Companies in its tower at 666 Fifth Avenue, for which a young Jared Kushner paid $1.8 billion just months before the financial crisis hit. Through a $4 billion transaction, Anbang will purchase most of the building, while the Kushners will be able to “buy back into the building’s more lucrative retail spaces” that they sold when their investment went south (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
They’ll also keep a 20 percent stake and receive a $400 million payout from the Chinese firm, as well as roughly $100 million from other investors. Since Jared is a senior adviser to the president, a.k.a. his father-in-law, some people see this deal as a massive, steaming conflict of interest, even despite the fact that he sold his holdings in Kushner Companies. The Kushners and the Trump, you might have guessed, see zero issue, because Kushners and Trumps apparently always do the right thing and are never, ever influenced by people paying them and their families money (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
Billionaire Trump backer: “there are no white racists in America today”
Several weeks back, the most uncomfortable phone call between an employee and an employer in modern history was recounted in the pages of The Wall Street Journal. The conversation was between an employee of hedge fund Renaissance Technologies and its co-C.E.O. Robert Mercer, who is widely credited with using his deep pockets to help get Donald Trump elected.
“I hear you’re going around saying I’m a white supremacist,” Mercer told trader David Magerman, whose politics are the polar opposite of his boss’s. “That‘s ridiculous.”
Perhaps that’s up for debate. The New Yorker’s Jane Mayer reports:
Mercer strongly supported the nomination of Jeff Sessions to be Trump’s attorney general. Many civil-rights groups opposed the nomination, pointing out that Sessions has in the past expressed racist views. Mercer, for his part, has argued that the Civil Rights Act, in 1964, was a major mistake.
According to the onetime Renaissance employee, Mercer has asserted repeatedly that African-Americans were better off economically before the civil-rights movement. (Few scholars agree.) He has also said that the problem of racism in America is exaggerated. The source said that, not long ago, he heard Mercer proclaim that there are no white racists in America today, only black racists. (Mercer, meanwhile, has supported a super PAC, Black Americans for a Better Future, whose goal is to “get more blacks involved in the Republican Party.”)
A Wall Street veteran explains “Why Wall Street Matters”!
Bill Cohan spent 17 years working on Wall Street before leaving the industry to write about it for the last 13 years, including for the Hive. In his new book, Why Wall Street Matters, he has harsh words for Dodd-Frank and those who want to keep punishing the industry. Though he disagrees with Donald Trump on just about everything, Cohan is encouraged by the president’s executive order to scale back Dodd-Frank. As for preventing another economic calamity? Cohan believes he has the answer, which he told us about during a chat earlier this month.
VF: You say that Dodd-Frank has led to “economic hopelessness” and extreme voting patterns and that, basically, Dodd-Frank is to blame for Donald Trump and Brexit. Do you think that Hillary Clinton would have won if Dodd-Frank, in its current form, hadn’t been passed?
Bill Cohan: Well, look, none of us really know all the causes of what led to Trump. That’ll probably be something that’ll be studied for generations. We do know that Larry Summers has talked about this secular stagnation and sort of being condemned to 2 percent G.D.P. growth. The G.D.P. growth at the end of last year came in at 1.9 percent, so that‘s pretty much consistent with what Larry was saying. We do know that the big, private equity firms in the world, the big corporations, they have no trouble getting capital, they’ve got plenty of capital. JPMorgan Chase is only too happy to throw capital at them. So they’ve got all the capital they need. But small businesses, new businesses, businesses in the heartland, people in the heartland who are trying to get a mortgage, all of those people have had a much more difficult time, because credit standards have ratcheted up, there’s all sorts of penalties and charges that the Fed has imposed on lending. And I think there is a correlation between lending and G.D.P. growth (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
Glass-Steagall was like 35 pages long; the parts that pertain to separating commercial banking from investment banking were three pages long. Dodd-Frank is 848 pages long and the regulations related to them are 20,000-plus pages long and are still being written, or they were until the temporary head of the Securities and Exchange Commission said no more. So now you’ve got one person at each bank watching what the other four are doing all day long. We went from a period when there were no rules, no speed limits, no speed belts, and we saw what happened, to a time when they’re basically throwing sand into the beautiful machine that is Wall Street. And my view is that is too far the other way and we’ve got to reform that (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
You talked about Clinton’s speech at Goldman Sachs (the text of which was leaked by WikiLeaks), where it was revealed that, shockingly, she understands Wall Street and its importance. Do you think she would have reformed Dodd-Frank? What do you think she would have done about regulation if she had won?
I think that, unfortunately, Hillary would not have done what Donald Trump is proposing. And believe me, I don’t think I agree with Donald Trump on anything but in this one particular area, I do think he’s onto something. Hillary Clinton would have been so beholden to the Bernie Sanders and Elizabeth Warren wing of the Democratic Party, had she won. With Elizabeth Warren, if you even have Wall Street on your résumé then you can’t work in Washington, as we saw with Antonio Weiss. So, no, there’s no way that Hillary would have done what Donald Trump is doing (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
My concern now is that Donald is going to go too far the other way. And that’s why I think there should be this sort of grand bargain between Donald Trump and Wall Street it’ll never happen but where in exchange for Donald cutting back on these regulations, these so-called onerous regulations that hinder loan growth and our productivity, that there should be a reformation of the incentives system on Wall Street, which has been completely mismatching incentives with rewards for basically the last 50 years (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
You argue in your book that “the remaining big Wall Street firms need to designate the top 500 or so top executives at their respective firms and . . . create a way for the bank’s creditors and shareholders to be able to go after their full net worth everything in the case of a meltdown.” Do you think any would ever work on Wall Street again if that were the case?
Is that too much pie in the sky? Is that too much wishful thinking? Of course it’s too much wishful thinking. I wish it wasn’t true. But my view is, it’s such an obvious fix, it’s in the D.N.A. of these firms because it’s the way they operated for the first 150 years of their existence. So this to me is something they’re familiar with. They seemed to make a lot of money when they were private partnerships and they took prudent risks. It‘s not something that’s unfamiliar to them, that they can claim, “Oh my god, you’re springing something outrageous on us.” But guess what? It does require leadership. It does require Lloyd Blankfein standing up and saying, “Look, no one is asking us to do this, no one is demanding that we do this, no one is telling us to do this. We’re going to do this because it’s the right thing and we want to do the right thing.”
Do you think Lloyd Blankfein is going to do that?
Of course Lloyd Blanfein is not going to do that. But that’s what a real leader would do. That’s what Jamie Dimon should do. That’s what Lloyd Blanfein should do. If Lloyd Blankfein did this the rest of Wall Street would follow. Speaking of Lloyd Blankfein…
The Goldman Sachs C.E.O. had his compensation slashed 27 percent in 2016, to $22 million. Blankfein was awarded $16 million in shares linked to performance, a $4 million cash bonus, and a $2 million salary. We pray he’ll be able to turn things around this year. Goldman Sachs may suffer reputational risk of being associated with Donald Trump (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
As we have frequently discussed, following his claims that Ted Cruz and Hillary Clinton couldn’t be president because of their ties to Goldman Sachs, Donald Trump turned around and hired everyone he could get his hands on at . . . Goldman Sachs. Former Goldman No. 2 Gary Cohn is one of his top economics advisers; former partner Steven Mnuchin is his treasury secretary; former partner Dina Powell has just been named to a national security post, former partner James Donovan has been nominated to serve as deputy treasury secretary; and, of course, there’s former M&A banker turned senior adviser to the president Stephen Bannon, who may be the most powerful person in the White House ahead of Donald Trump. And while Goldman Sachs has long seen its employees take jobs in government former co chairman Robert Rubin went on to serve as treasury secretary, as did former C.E.O. Hank Paulson some people are now wondering if the potential benefit of having half a dozen lines to the White House is outweighed by being associated with potential national embarrassment (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).
“My guess is that whatever benefit Goldman would have from its senior executives leaving to go to the Trump administration, the reputational effects may well be more severe,” Wharton professor Peter Conti-Brown told The New York Times.
“If the best and brightest look at Goldman Sachs as an appendage of the Trump administration and react with horror, they’ll be looking more closely at jobs with Morgan Stanley.”
Hedge funds had a no good, very bad 2016!
You can add hedge funds to the World Wildlife Fund’s list of endangered species for 2017: According to Bloomberg, more hedge funds closed last year “than in any year since the financial crisis as investors moved money to larger firms and withdrew assets,” with liquidations coming in at 1,057. Some of that might have to do with the fact that the average fund has failed to beat the S&P 500 since 2008. The underperformance, coupled with the high fees hedge funds charge, has led many investors to wonder, “What the hell are we paying you for?” (Angela Merkel Just Fact-Shamed Donald Trump About The One Thing He’s Supposed To Know!).