Trump gives Wall Street some gifts before Valentine's day
(February 3) This week the U.S. Dow Jones Index of stock prices had begun to show signs of investor unease with Trump's actions as it dropped back below its record 20,000 but now Trump is delivering on deregulation and the index has again moved over 20,000 today.
|While Trump is supposed to be anti-establishment he has many prominent former Wall Street figures in his administration. Since he was president-elect U.S. stock markets have been enjoying what has been called the Trump rally. However, the rally faltered earlier this week. Today it continued its journey upward as Trump began to undo regulations that had been put in place to ensure another financial crisis took place. The restrictions also led to less avenues for banks to make profits. According to Bloomberg: "Among the targets are rules that guard against predatory lenders, force brokers to lower fees for retirees and ban proprietary trading — protections that consumer advocates vowed to defend." Instead of protecting those who voted for him and saw him taking on the power of the big banks to protect their interests, Trump is doing the exact opposite. No doubt he will sing a song about a smaller more efficient government and less red tape creating more jobs and a fatter paycheck as the much bigger pie trickles down more crumbs. There will be no warning about future bubbles and financial crashes.|
A federal regulation that prohibits banks from conducting certain investment activities with their own accounts, and limits their ownership of and relationship with hedge funds and private equity funds, also called covered funds. The Volcker Rule’s purpose is to prevent banks from making certain types of speculative investments that contributed to the 2008 financial crisis.This rule restricts banks from operating in areas where they formerly made large profits. Just to make sure that no one gets the idea that Trump is interested in protecting consumers, he is expected to sign an executive memorandum that will direct the Department of Labor to review and stall the fiduciary rule. This rule set to come into effect in April was supposed to protect millions of retirees from being led into inappropriate investments that would generate larger profits for brokers but are quite risky, according to the Obama administration.