Thursday, November 10, 2016

Today's links

1---GOP Election Sweep Heralds Postcrisis Turning Point for Financial Regulation -- Prospect of change might be mixed blessing for big banks, which could still end up facing fresh burdens

The Republican electoral sweep on Tuesday heralds the peaking and likely reversal of the rising tide of financial regulation by Democrats after the 2008 financial crisis.
Many financial lobbyists have welcomed the elections results and are moving quickly to take advantage of the emerging new Washington landscape.
But prospects for change may be a mixed blessing for big banks, which remain politically unpopular, and could still end up facing fresh burdens.

President-elect Donald Trump said repeatedly during his campaign that he wants to eliminate or significantly change the 2010 Dodd-Frank law that outgoing President Barack Obama has considered a centerpiece of his legacy, along with the Affordable Care Act and other moves to expand government’s role in the economy.
And while Mr. Trump hasn’t said specifically what he intends to do, there are early signs his administration could make rolling back regulation a priority. His transition team focused on financial regulatory agencies is headed by Paul Atkins, a former member of Securities and Exchange Commission who has been an outspoken critic of postcrisis regulations, including changes to money-market mutual funds.

And now, given a Republican Congress and White House, they are likely to move swiftly to revive measures they have crafted in the past, such as checks on the new Consumer Financial Protection Bureau, fewer large financial firms subject to heightened federal oversight and a pullback in the Obama administration’s regulatory initiatives from the Volcker-rule bank trading restrictions to retirement advice rules.

Mr. Trump, in a speech on Wednesday morning, highlighted plans such as infrastructure spending and veterans’ health care. He didn’t mention regulation, leaving open the question of how hard he and other Republicans will push. “I don’t want to overpromise on Dodd-Frank,” Sen. David Perdue (R. Ga.), a Trump ally, said in an interview CNBC on Wednesday. “ Dodd Frank is a much more complicated issue” compared to other priorities that Republicans are ready to move quickly on, such as healthcare, he said.
In many ways, the GOP’s sweep into power can be a double-edged sword for the financial industry, especially the biggest financial institutions. During the campaign, Mr. Trump said he wants to “get rid of Dodd Frank,” and require that for every new federal regulation, two existing rules be eliminated. But he also has said “Wall Street has caused tremendous problems for us...

But Mr. Trump endorsed reinstating the Depression-era Glass-Steagall law separating commercial and investment banking, and House Republicans have proposed twinning regulatory streamlining with higher bank capital requirements in a way that could have the same effect.
Many Wall Street firms have already invested and restructured to comply with Dodd-Frank, so changes could create new uncertainty for them.
On Wednesday, bank stocks rose sharply on the prospect of stronger economic growth and less regulation.

2--Trump: I’m Reopening 9/11 Investigation

3--Dow Jones best week in five years--Tax cuts, looser regulations, infrastructure spending and Diamond at treasury send markets higher

The sharp jump in U .S. interest rates since Donald Trump's White House victory is sending a shudder through emerging markets, whipsawing currencies and separating the winners from losers in the U.S. stock market.
The 10-year U.S. Treasury yield went to as high as 2.14 percent Thursday from about 1.80 pre-election, on the idea the Trump era would mean lower taxes and usher in a large infrastructure program that could generate growth but also create inflation and more debt.

The U.S. stock market rallied Thursday, with rising industrials, transports, and banks stocks driving a surge in the Dow, which rose 218 points to 18,807, a new high. But tech names took big hits and sent the Nasdaq down 0.8 percent to 5208. The small cap Russell 2000 was up more than 1.5 percent Thursday and was on track for its best week in five years.

The S&P 500 rose 4 to 2167, after vacillating between positive and negative, but it continues to benefit from the idea that Trump and the newly elected Republican Congress will spend on infrastructure, remove some regulations and replace the Affordable Care Act. Tech stocks, however, have not joined the party as investors rotate away from some of their previous winners.

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