clarida pimco

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</div><div><a href="https://www.alternet.org/theres-uncovered-beltway-story-hiding-plain-sight-trillions-dollars-play" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">https://www.alternet.org/theres-uncovered-beltway-story-hiding-plain-sight-trillions-dollars-play</a></div><div>
</div><div>Nomi Prins is one of the most regular of TomDispatchregulars, so I have no doubt that you’ve come to know her work well. As it happens, her striking new book, <a href="https://www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20//www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20" target="blank" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none;">Collusion: How Central Bankers Rigged the World</a>, a piercing look at the 2007-2008 global economic meltdown and the responses to it in the years since, has just been published. As Jeremy Scahill writes, “Prins has emerged as one of the fiercest critics of crony capitalism and its sustained attacks against poor and working people. This is the book that the financial elites don’t want you to read.” Ralph Nader adds, “Taxpayers, workers, and consumers who will suffer from another bailout, all better read this clear, concise compelling book.” And Greg Palast comments, “Scarier than Stephen King horror fiction.” For just a few days -- the offer ends this Sunday night -- you can get a signed, personalized copy of Collusion for a $100 donation to this site ($125 if you live outside the U.S.A.). Check out the details at <a href="https://donatenow.networkforgood.org/1443285?uniqueID=634795889283895124" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">our donation page</a> and, while you’re at it, offer a helping hand to this website, which works hard to make Prins and so many other writers with unique perspectives on this topsy-turvy planet of ours available to you regularly. Tom]In her new book, <a href="https://www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20//www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Collusion: How Central Bankers Rigged the World</a>, Nomi Prins remembers how the 9/11 attacks affected her. She was, at the time, working for Goldman Sachs (which has been <a href="https://www.tomdispatch.com/post/176236/tomgram%3A_nomi_prins,goldmanizing_donald_trump/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">sending</a> key former employees directly into top government posts ever since, most recently, of course, <a href="https://www.tomdispatch.com/blog/176348/tomgram%3A_nomi_prins%2C_you%2C_sir%2C_are_no_alexander_hamilton/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Steven Mnuchin</a> as Donald Trump’s Treasury secretary). Before that, she had been working for the investment bank Lehman Brothers, which crashed and burned so dramatically, helping trigger the great financial crisis of 2007-2008. Here’s what she writes:<div id="TeadsNative"><blockquote>“We each have our stories from those days, where we were, what went through our minds, how it changed us as people, as a nation. For me, those tense moments walking up Broadway away from Wall Street, with the acrid, debris-filled smoke of the Twin Towers in the air, was a last straw. I left Goldman Sachs. Partly because life was too short. Partly out of disgust at how citizens everywhere had become collateral damage, and later hostages, to the banking system. Since then, I’ve dedicated my work to exposing the intersections of money and power and deciphering the impact of the relationships between governments and central and private bankers on the citizens of the world.”</blockquote>Because 9/11 did something <a href="https://www.tomdispatch.com/post/176310/tomgram%3A_engelhardt%2C_bombing_the_rubble/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">similar to me</a>, and this website, TomDispatch, resulted from my own urge to decipher a puzzling post-9/11 world, I couldn’t be more sympathetic. Now, almost 17 years later, as the U.S. military pursues its <a href="https://www.tomdispatch.com/blog/176409/tomgram%3A_andrew_bacevich%2C_creating_a_perpetual_war_machine" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">unending wars</a> across the planet, the central bankers of the same planet pursue... well, let Nomi Prins explain it to you. Tom</div><div>...</div><div><blockquote>Trump and the Next Crash
Making the Fed an Instrument for Disaster
By <a href="https://www.tomdispatch.com/authors/nomiprins" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Nomi Prins</a>Warning: What you are about to read is not about Russia, the 2016 election, or the latest person to depart from the White House in a storm of tweets. It’s the Beltway story hiding in plain sight with trillions of dollars in play and an economy to commandeer.While we’ve been bombarded with a litany of scandals from the Oval Office and the <a href="https://www.tomdispatch.com/blog/176399/tomgram%3A_nomi_prins%2C_jared_kushner%2C_you%27re_fired%21" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Trump family</a>, there’s a crucial institution in Washington that few in the media seem to be paying attention to, even as President Trump quietly makes it his own. More obscure than the chambers of the Supreme Court, it’s a place where he has already made substantial changes. I’m talking about the Federal Reserve. As the central bank of the United States, the “Fed” sets the financial tone for the global economy by manipulating interest rate levels. This impacts everyone, yet very few grasp the scope of its influence.</blockquote><a name="more" id="more" style="font-weight: bold; color: rgb(0, 51, 153); outline: none;" /><blockquote><a name="more" id="more" style="font-weight: bold; color: rgb(0, 51, 153); outline: none;">During times of relative economic calm, the Fed is regularly forgotten. But what history shows us is that having leaders who are primed to neglect Wall Street’s misdoings often sets the scene for economic dangers to come. That’s why nominees to the Fed are so crucial.</a><a name="more" id="more" style="font-weight: bold; color: rgb(0, 51, 153); outline: none;">We have entered a landmark moment: no president </a><a href="https://www.forbes.com/sites/johnmauldin/2017/08/17/whoever-gets-appointed-to-the-fed-expect-negative-rates-and-qe-in-the-next-crisis/#49fea7ee79d9" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">since</a> Woodrow Wilson (during whose administration the Federal Reserve was established) will have appointed as many board members to the Fed as Donald Trump. His fingerprints will, in other words, not just be on Supreme Court decisions, but no less significantly Fed policy-making for years to come -- even though, like that court, it occupies a mandated position of <a href="https://www.federalreserve.gov/faqs/about_12799.htm" target="blank" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none;">political independence</a>.The president’s <a href="https://www.reuters.com/article/us-usa-fed-trump/trump-to-nominate-clarida-bowman-to-feds-board-of-governors-idUSKBN1HN2M3" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">latest two nominees</a> to that institution’s Board of Governors exemplify this. He has nominated Richard Clarida, a former Treasury Department official from the days of President George W. Bush who later became a strategic adviser to <a href="https://www.pimco.com/en-us/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">investment goliath Pimco</a>, to the Fed’s second most important slot, while giving the nod to Michelle Bowman, a <a href="https://www.osbckansas.org/about/staff.html" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Kansas bank commissioner</a>, to represent community banks on that same board.Like many other entities in Washington, the Fed’s Board of Governors has been operating with less than a full staff. If Clarida is approved, he will join Trump-appointed Fed Chairman Jerome Powell and <a href="https://www.newyorkfed.org/newsevents/news/aboutthefed/2018/oa180403" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">incoming</a> New York Federal Reserve Bank head John C. Williams -- the New York Fed generally exists in a mind meld with Wall Street -- as part of the most powerful trio at that institution.Not surprisingly, Wall Street has embraced Trump’s new Fed line-up because its members are so favorably disposed to loosening restrictions on financial institutions of every sort.  Initially, the financial markets reflected concern that Chairman Powell might turn out to be a hawk on interest rates, meaning he’d raise them too quickly, but he’s proved to be anything but.Williams served as president of the San Francisco Fed. Under his watch, the third largest U.S. bank, Wells Fargo, created about <a href="https://www.bloomberg.com/news/articles/2017-08-31/wells-fargo-increases-fake-account-estimate-67-to-3-5-millio" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">3.5 million</a> fake accounts, gave its CEO a whopping raise, and copped to a <a href="https://www.marketwatch.com/story/wells-fargo-fined-1-billion-for-unfair-insurance-practices-how-to-avoid-being-oversold-2018-04-25" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">$1 billion</a> fine for bilking its customers on auto and mortgage insurance contracts.As Trump stacks the deck in his favor, count on an economic impact that will be felt for years to come and could leave the world devastated. But rest assured, if the Fed can help Trump keep the stock market buoyant for a while by letting money stay cheap for Wall Street speculation and the dollar competitive for a trade war, it will.  History Warns UsAt a time when inequality, <a href="https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">economic hardship</a>, and household and <a href="https://www.cnbc.com/2018/02/13/total-us-household-debt-soars-to-record-above-13-trillion.html" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">personal debt</a> levels are escalating and <a href="https://www.bloomberg.com/news/articles/2018-03-01/america-s-wage-growth-remains-slow-and-uneven" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">wages are not</a>, why should any of this matter to the rest of us? The answer is simple enough: because the Fed sets the level of interest rates and so the cost of money. This, in turn, indirectly impacts the value of the dollar, which means everything you buy.Since the financial crisis, the Fed has kept the cost of borrowing money for banks at near zero percent interest. That allowed those banks to borrow money to buy their own stock (as did many corporations) to inflate their value but not, of course, the value of their service to Main Street.When money is cheap because interest rates are low or near zero, the beneficiaries are those with the most direct access to it. That means, of course, that the biggest banks, members of the Fed since its inception, get the largest chunks of fabricated money and pay the least amount of interest for it.Although during the election campaign of 2016 Trump <a href="https://www.wsj.com/articles/donald-trump-attacks-federal-reserve-yellen-during-debate-1474946709" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">chastised</a> the Fed for its cheap-money policies, he’s since evidently changed his mind (which is, of course, very Trumpian of him). That’s because he knows that the lower the cost of money is, the easier it is for major companies to borrow it. Easy money means easy speculation for Wall Street and its main corporate clients, which sooner or later will be a threat to the rest of us. The era of trade wars, soaring stock markets, and Trump gaffes may feel like it’s gone on forever. Don’t forget, though, that there was a moment not so long ago when the same banking policies still reigning caused turmoil, ripping through the country and devouring the finances of so many. It’s worth recalling for a moment what happened during the Great Meltdown of 2008, when unrestrained mega-banks ravaged the economy before being bailed out. In the midst of the current market ecstasy, it’s an easy past to ignore. That’s why Trump’s takeover of the Fed and its impact on the financial system matters so much.Let's recall that, on September 15, 2008, Lehman Brothers <a href="https://www.thenation.com/article/september-15-2008-lehman-brothers-files-for-bankruptcy-and-american-finance-collapses/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">crashed</a>. That bank, like Goldman Sachs a former employer of mine, had been around for more than 150 years. Its collapse was a key catalyst in a spiral of disaster that nearly decimated the world financial system. It wasn’t the bankruptcy that did it, however, but the massive amount of money the surviving banks had already lent Lehman to buy the toxic assets they created.<a href="https://www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Around the same time, Merrill Lynch, a competitor of Lehman's, was sold to Bank of America for </a><a href="https://www.reuters.com/article/businesspro-us-bankofamerica-merrill/bank-of-america-completes-merrill-lynch-purchase-idUSTRE5001EA20090101" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">$50 billion</a> and American International Group (AIG) received <a href="https://www.thedailybeast.com/remember-the-dollar182-billion-aig-bailout-it-just-wasnt-generous-enough" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">$182 billion</a> in government assistance. JPMorgan Chase had already bought Bear Stearns, which had crashed six months earlier, utilizing a <a href="https://www.reuters.com/article/us-bearstearns-fed/ny-fed-to-provide-29-billion-in-bear-stearns-financing-idUSWAT00917720080324" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">$29 billion</a> government and Federal Reserve security blanket in the process.In the wake of Lehman’s bankruptcy, <a href="https://www.sanders.senate.gov/newsroom/press-releases/the-fed-audit" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">$16 trillion</a> in bailouts and other subsidies from the Federal Reserve and Congress were offered mostly to Wall Street’s biggest banks. That flow of money allowed them to return from the edge of financial disaster. At the same time, it fueled the stock and bond markets, as untethered from economic realities as the hot air balloon in The Wizard of Oz.After nearly tripling since the post-financial crisis spring of 2009, last year the Dow Jones Industrial Average rose magically again by <a href="https://www.nomiprins.com/thoughts/2017/12/31/the-next-financial-crisis-will-be-worse-than-the-last.html" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">nearly 24%</a>. Why? Because despite all of his swamp-draining campaign talk, Trump embraced the exact same bank-coddling behavior as President Obama. He advocated the Fed’s cheap-money policy and hired Steve Mnuchin, an ex-Goldman Sachs partner and Wall Street’s special friend, as his Treasury secretary. He doubled down on rewarding ongoing malfeasance and fraud by promoting the deregulation of the banks, as if Wall Street’s greed and high appetite for risk had vanished. Impending Signs of CrisisA quarter of the way into 2018, shadows of 2008 are already emerging. Only two months ago, the Dow logged its worst single-day point decline in history before bouncing back with vigor. In the meantime, the country whose banks caused the last crisis faces record consumer and corporate debt levels and a vulnerable geopolitical global landscape.True, the unemployment rate is significantly lower than it was at the height of the financial crisis, but for Main Street, growth hasn’t been quite so apparent. About one in five U.S. jobs still pays a median income <a href="https://graphics.wsj.com/how-the-world-has-changed-since-2008-financial-crisis/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">below</a> the federal poverty line. Median household income is only <a href="https://graphics.wsj.com/how-the-world-has-changed-since-2008-financial-crisis/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">up 5.3%</a> since 2008 and remains well below where it was in 1998, if you adjust for inflation. Workforce participation remains nearly as low as it's <a href="https://fred.stlouisfed.org/series/LNU01300001" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">ever been</a>. Meanwhile, the top 1% of American earners saw their incomes go up by leaps and bounds since the Fed started manufacturing money -- to more than <a href="https://inequality.org/facts/income-inequality/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">40 times</a> that of the bottom 90%.Just as before the 2007-2008 financial crisis, there’s a <a href="https://www.businessinsider.com/feds-powell-sets-new-tone-less-focused-on-social-issues-in-testimony-2018-2" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">scary level of confidence</a> among politicians and regulators that neither the economy nor the banking sector could possibly go bust. Even the new Federal Reserve chair views the possible need for bailouts as a relic of a bygone time. As he <a href="https://www.reuters.com/article/us-usa-fed-powell-banks/fed-chair-nominee-powell-sees-no-too-big-to-fail-banks-idUSKBN1DS260" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">said</a> at his confirmation hearing, “Generally speaking I think the financial system is quite strong.” When asked if there are any U.S. banks that are still too big to fail, he responded, “I would say no to that.”  That’s a pretty decisive statement, and not strikingly different from <a href="https://www.foxbusiness.com/markets/yellen-too-big-to-fail-is-not-black-and-white-issue" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">one</a>outgoing Fed Chair Janet Yellen made last year. By extension, it means that Trump’s new chairman supports laxer structures for the big banks and more cheap money, if needed, to help them. So watch out. When a crisis hits, liquidity dies, and banks close their doors to the public. Ultimately, the same formula for crisis will surely send Wall Street executives crawling back to the government for aid and then Donald Trump will find out what financial negligence truly is.A Time of Crisis and Financial CollusionAs signs of crisis emerge, few in Washington have delved into how we can ensure that a systemic crash does not happen again. That’s why I’ll never forget the strange message I got one day. It was in the middle of May 2015, about a year after my book, <a href="https://www.amazon.com/dp/1568584792/ref=nosim/?tag=tomdispatch-20" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">All the Presidents' Bankers</a>, had been published, when I received an email from the Federal Reserve. Every year, the Fed, the International Monetary Fund, and the World Bank hold an annual conference where the most elite central bankers from around the globe assemble. To my shock, since I hadn't exactly written in a kindly fashion about the Fed, I was being invited to speak at the opening session about why Wall Street wasn’t helping Main Street.Two months later, I found myself sitting in front of a room filled with central bankers from around the world, listening to Fed Chair Janet Yellen proclaim that the worst of the crisis and its causes were behind us. In response, the first thing I asked that distinguished crowd was this: “Do you want to know why big Wall Street banks aren’t helping Main Street as much as they could?” The room was silent. I paused before answering, “Because you never required them to.” I added, “The biggest six U.S. banks have been rewarded with an endless supply of cheap money in bailouts and loans for their dangerous behavior. They have been given open access to these funds with no major consequences, and no rules on how they should utilize the Fed’s largess to them to help the real economy. Why should you expect their benevolence?”After I returned home, I became obsessed with uncovering just how the bailouts and loans of that moment were only the tip of an iceberg, the sort of berg that had once taken down the Titanic -- how that cheap money fabricated for Wall Street had been no isolated American incident.What my research for my new book, <a href="https://www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20//www.amazon.com/dp/1568585624/ref=nosim/?tag=tomdispatch-20" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Collusion: How Central Bankers Rigged the World</a>, revealed was how central bankers and massive financial institutions have worked together to manipulate global markets for the past decade. Major central banks gave themselves a blank check with which to resurrect problematic banks; purchase government, mortgage, and corporate bonds; and in some cases -- as in Japan and Switzerland -- stocks, too. They have not had to explain to the public where those funds were going or why. Instead, their policies have inflated asset bubbles, while coddling private banks and corporations under the guise of helping the real economy. The zero-interest-rate and bond-buying central bank policies prevailing in the U.S., Europe, and Japan have been part of a coordinated effort that has plastered over potential financial instability in the largest countries and in private banks. It has, in turn, created asset bubbles that could explode into an even greater crisis the next time around.So, today, we stand near -- how near we don’t yet know -- the edge of a dangerous financial precipice. The risks posed by the largest of the private banks still exist, only now they’re even bigger than they were in 2007-2008 and operating in an arena of even more debt. In Donald Trump’s America, what this means is that the same dangerous policies are still being promoted today. The difference now is that the president is appointing members to the Fed who will only increase the danger of those risks for years to come.A crash could prove to be President Trump’s worst legacy. Not only is he -- and the Fed he’s helping to create -- not paying attention to the alarm bells (ignored by the last iteration of the Fed as well), but he’s ensured that none of his appointees will either. After campaigning hard against the ills of global finance in the 2016 election campaign and <a href="https://www.scribd.com/document/318660213/RNC-Platform#from_embed" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">promising</a> a modern era Glass-Steagall Act to separate bank deposits from the more speculative activities on Wall Street, Trump's policy reversals and appointees leave our economy more exposed than ever. When politicians and regulators are asleep at the wheel, it’s the rest of us who will suffer sooner or later. Because of the collusion that’s gone on and continues to go on among the world’s main central banks, that problem is now an international one.</blockquote></div><div>=</div><div><a href="http://www.tomdispatch.com/blog/176348/tomgram%3A_nomi_prins%2C_you%2C_sir%2C_are_no_alexander_hamilton" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">http://www.tomdispatch.com/blog/176348/tomgram%3A_nomi_prins%2C_you%2C_sir%2C_are_no_alexander_hamilton</a></div><div>
</div><div>=</div><div><a href="https://www.alternet.org/economy/next-financial-crisis-will-be-worse-last-one" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">https://www.alternet.org/economy/next-financial-crisis-will-be-worse-last-one</a></div><div>
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</div><div>We’ve made it through 2017. The first-season installment of presidential Tweetville is ending where it began, on the Palm Beach, Fla., golf course of Mar-a-Lago. Though we are no longer privy to all the footage behind the <a href="https://deadline.com/2017/12/cnn-donald-trump-truck-camera-shot-block-golf-course-obama-1202233430/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">big white truck</a>, we do know that, given the <a href="https://www.cnbc.com/2017/01/25/mar-a-lago-membership-fee-doubles-to-200000.html" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">doubling of its membership fees</a>, others on the course will have <a href="https://www.businessinsider.com/notable-members-of-trumps-mar-a-lago-club-2017-3" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">higher stakes</a> in the 2018 influence game.The billionaire who ran on an anti-establishment platform went on a swamp-filling, deregulatory and inequality-producing tear, in the process creating the <a href="https://www.forbes.com/sites/chasewithorn/2017/07/05/the-4-3-billion-cabinet-see-what-each-top-trump-advisor-is-worth/#7a5be0065dfc" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">wealthiest Cabinet</a> in modern United States history and expanding his own empire along the way. His offspring, Russia-related investigations aside, didn’t do too shabbily either. White House policy adviser Ivanka Trump’s brand <a href="https://www.bloomberg.com/news/articles/2017-12-13/ivanka-trump-store-is-said-to-open-thursday-in-new-era-for-brand" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">opened a splashy new store</a>in the lobby of Trump Tower in Manhattan, just in time for Christmas.If you look at the stock and asset markets, as Donald Trump tends to do (and as Barack Obama did, too), you’d think all is fine with the world. The Dow Jones Industrial Average rose about 24 percent this year. The <a href="https://us.spindices.com/indices/equity/dow-jones-us-real-estate-index" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Dow Jones U.S. Real Estate Index</a> rose 6.20 percent. The price of one <a href="https://www.coinbase.com/charts?locale=en-US" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Bitcoin rose</a> about 1,646 percent.On the flip side of that euphoria however, is the fact that the <a href="https://www.reuters.com/article/us-usa-economy/u-s-job-growth-picks-up-flat-wages-raise-consumer-spending-worries-idUSKBN1D308L" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">median wage</a> rose just 2.4 percent and has remained effectively stagnant relative to inflation. And although the unemployment rate fell to a 17-year low of 4.1 percent, the labor force participation rate dropped to 62.7 percent, its lowest level in nearly four decades—particularly difficult for new entrants to the workforce, such as students graduating under a $1.3 trillion pile of unrepayable or very challenging <a href="https://www.businessinsider.com/student-loan-bubble-investment-is-private-abs-goldman-2017-12" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">student loan debt</a>. (Not to worry though:Goldman Sachs is on that, promoting a way to profit from this debt by stuffing it into other assets and selling those off to investors, a la shades of the subprime mortgage crisis.)Those of us living in the actual world without billionaire family pedigrees possess a healthy dose of skepticism over the “Make America Great Again” sect that believes Trump has transformed America “hugely,” for record-setting markets don’t imply economic stability, nor do 40 percent corporate tax cuts translate into 40 percent wage growth. We can march forward into 2018 carrying that knowledge with us.But first, a recap. For the U.S. financial system, 2017 was marked by five main themes: The GOP’s “You All Just Got a Lot Richer” Corporate Tax Reduction Plan; Big Banks Still Bad; The Fed’s Minor Policy Shift; Debt; and Deregulators Appointed to Positions of Regulatory Authority.Banks Are Still Big and BadThe Big Six banks have paid billions of dollars in settlements for a variety of frauds committed before and since the 2007-2008 financial crisis, but that didn’t keep them from tallying up new fines in 2017. The nation’s largest bank, JPMorgan Chase, agreed to <a href="https://www.corp-research.org/jpmorganchase" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">pay $53 million in fines</a> for scamming African-American and Latino mortgage borrowers with disproportionately higher rates than for white borrowers. The Consumer Financial Protection Bureau <a href="https://www.corp-research.org/citigroup" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">fined Citigroup $28.8 million</a> for not disclosing foreclosure-avoiding actions. Bank of America <a href="https://www.foxbusiness.com/features/2017/03/28/judge-fines-bank-america-45-million-for-heartless-treatment-mortgage-borrowers.html" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">got fined $45 million</a> for its foul treatment of a California couple trying to save their home.But the Big Six bank that received the most attention in 2017, as it did in 2016, was <a href="https://financialadvisoriq.com/search/search/advanced?referrer_module=companyTag&q=%22Wells+Fargo%22" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">Wells Fargo</a>. The number of people affected by its fake-account creation scandal grew from 2 million reported in 2016 to about 3.5 million. That increase resulted in Wells Fargo expanding its associated <a href="https://financialadvisoriq.com/c/1824523/211663" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">class-action settlement</a> to $142 million.Wells Fargo was mired in smaller scandals, too. For instance, it charged 800,000 customers for auto insurance they didn’t need, raised mortgage rates for certain customers without properly disclosing it was going to, and made a bunch of unauthorized adjustments to people’s mortgages.No Glass-Steagall Reinstatement, More DeregulationThe idea of reinstating the Glass-Steagall Act of 1933 featured in both the Democratic and the Republican National Committees’ platforms during the campaign season. But Trump’s treasury secretary, Steven Mnuchin, made it clear multiple times there would be no such push from the administration, arguing against doing so before senators including Elizabeth Warren and Bernie Sanders.To emphasize his disdain for regulation and oversight, Mnuchin also pushed the Financial Stability Oversight Council, over which he presides, to vote 6 to 3 to rescindAmerican International Group’s designation as posing a potential threat to the U.S. financial system. Thus, AIG will no longer be <a href="https://www.chicagotribune.com/business/sns-bc-us--aig-systemic-risk-20170929-story.html" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">paying penance for its role</a> at the epicenter of the last financial crisis by filing regular risk reports anymore. Federal Reserve Chair Janet Yellen also supported the move.In a major blow to citizen security, Richard Cordray, the Obama-appointed regulator, <a href="https://www.washingtonpost.com/news/business/wp/2017/11/15/richard-cordray-is-stepping-down-as-head-of-consumer-financial-protection-bureau/?utm_term=.e0a7758f5b64" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">resigned as director</a> of the Consumer Financial Protection Bureau in November.Consumer Financial Protection Bureau BashingDuring his six years at the helm of the CFPB, which the Dodd-Frank Act formed in 2011, the 1,600-person regulatory entity <a href="https://www.consumerfinance.gov/" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">accomplished a lot</a>. It has provided $11.9 billion in relief to consumers for enforcement actions affecting more than 29.1 million people, handled 1.2 million consumer complaints and garnered timely responses on concerns for 97 percent of consumers.Still, Trump appointed White House budget director Mick Mulvaney to the post that Cordray vacated. Remember: Mulvaney as a congressman <a href="https://www.businessinsider.com/trump-names-mulvaney-to-cfpb-wants-to-tear-agency-apart-2017-11" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">wasn’t a fan of protecting consumers</a>. “I don’t like the fact that [the] CFPB exists,” he said. “I will be perfectly honest with you.”Over at the Office of the Comptroller of the Currency (OCC), Joseph Otting, Mnuchin’s former partner in the takeover of IndyMac and subsequent flurry of foreclosures, was confirmed to the top position. In that spot, Otting will be able to help the Trump administration dial back more post-crisis bank regulations.The Fed and Debt BubblesThe Federal Reserve <a href="https://www.forbes.com/sites/laurengensler/2017/12/13/federal-reserve-raises-interest-rates-for-third-time-in-2017/#67f40b327a53" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">raised rates three times</a> this year. With trepidation that more or larger hikes would cause a market meltdown (because cheap money has lifted banks and markets over the past decade), each time <a href="https://fred.stlouisfed.org/graph/?g=HfT" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">the Fed acted</a>, it did so by the smallest sliver it could—25 basis points. All told, this brings the total rate hikes of 2017 to 75 basis points. The short-term interest rate now sits in a 1.25 percent to 1.5 percent range.<img alt="" src="https://www.alternet.org/sites/default/files/styles/large/public/fedandbubble_0.png?itok=k5hgnf4s" typeof="foaf:Image" style="border: none;" />As part of its rate-hike-into-strength message, the Fed forecast that the job market and economy will further improve in 2018. Trump’s appointed Fed leader, Janet Yellen’s No. 2 man, Jerome Powell, will take stewardship of the Fed in February 2018. Policywise, he will do exactly what Yellen and Ben Bernanke did before him, given that’s how all his votes went—albeit while advocating less oversight of the big banks. That’s because cheap money turbo-boosts the stock market, and quick rate hikes can harm the bond markets.The reality is that the Fed and the administration are scared that selling too many bonds back into the capital markets will result in broader sell-offs, which could lead to another credit squeeze and possible recession, not to mention losses for the big banks exposed to those corporations.Zombie CompaniesFueled by <a href="https://fred.stlouisfed.org/series/NCBDBIQ027S" target="blank" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">cheap Fed money</a> and low rates, the amount of outstanding corporate debt has nearly doubled from pre-crisis levels of $3.4 trillion to record levels of $6.4 trillio
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