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Stories of Interest
- Canada's CIBC Completes $5Bn PrivateBancorp Buy
- Word ‘Women’ Literally Never Appears in U.S. Senate’s 142-Page Health-Care Bill
- Stephen Pierce, Goldman Sachs Global Head of Equity Markets, To Retire
- Al Gore 'Not Very Smart,’ But Became Filthy Rich Using Simple Investing Formula - Charlie Munger
- U.S. Regulators, Lawmakers Support Volcker Rule Revamp at Hearing
- Morgan Stanley Opts for Frankfurt as New EU Hub
- A New Risk for Goldman, Morgan Stanley in Stress Tests (subsc reqd)
- A Trump Bump for Law Firm of President’s Lawyer - Kasowitz Benson Torres
- JPMorgan, BofA, Goldman, Citi, Wells Fargo Pass Fed's Stress Test
- Blackstone Stock Still Trading at $31 - Its IPO Price From 10 Years Ago
- NJ Resident and NY-Based Global FX Club Charged with Solicitation Fraud, Misappropriation - CFTC
- Senate Republicans Release Plan to Replace Obamacare - The Details
- Berkshire Hathaway Throws $1.5Bn Lifeline to Canada's Home Capital
- Inside Nomura: Day in the Life of a Junior Banker
- Inside Travis Kalanick’s Resignation as Uber’s C.E.O.
- Creative Planning, KS Investment Firm, Spurring Change on Wall Street
- SEC Obtains Judgment Against Attorney Who Defrauded Escrow Clients
- SEC Files Fraud Charges Against Stock Promoters in Market Manipulation Scheme
- Power Lunches and Dinners in New York, London, Washington
- Banks to Cut $1.2Bn in Research Spending, Analyst Jobs - McKinsey
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NEWSLETTERS & ALERTS
Donald Trump & Co.
Getting Wall Street to Pay for ‘The Wall’
With debate heating up over tax reform, NAFTA and the federal budget, now may not be a good time to bring up the issue of building the Mexico border wall. But here we go anyway.
No one seems to want the wall except, perhaps, the president. After all, one of Trump’s signature campaign promises was that he was going to build the biggest, most beautiful wall along our southern border to keep out Mexico’s “bad hombres.” So he’s now chomping at the bit for some opening to get ball rolling. If only there was a way to fund the estimated $21 billion cost.
Well, dear friends, there may is. And it’s quite surprising that this obvious solution has not been suggested, until now that is. Have Walls Street firms pay for the $21 billion wall. Here’s why the idea makes sense.
First, Wall Street banks are currently rolling in money – thanks largely to the Trump Bump. As of last night, Thursday, 4/27, the 9 largest Wall Street banks - JPMorgan Chase, Wells Fargo, Bank of America, Citigroup, Goldman Sachs, U.S. Bancorp, Morgan Stanley, Blackrock, and PNC Financial Services - had an aggregate value in excess of $1.36 trillion. That’s a 20% increase in value since Trump’s election.
Next, ‘sticking it to Wall Street’ would help Trump ‘kill two birds with one stone’. First. He’d satisfy the public’s thirst for Wall Street blood. Second, it would enable Trump to fulfill another of his campaign promises – to be tough on Wall Street. To date, Trump has been playing up to Wall Street by engaging in a full-throttled assault on Dodd-Frank and by staffing his administration with current or former Wall Street bankers and lawyers.
Now, don’t expect Wall Street firms to willingly ante up the proceeds. No, the government will have to take it from them in fines. And the government has had good practice doing just that. Since 2008, global banks have paid $321 billion in fines. [See Financialish, 3/2/17] An additional $21 billion would amount to just 6.5% of the $321 billion.
RAISING THE FUNDS. In keeping with Trump’s M.O., we’ll leave the details (who and how much to fine) up to Congress and the federal regulators. Though, a good starting point might be … Wells Fargo. Should there be need to resort to a Plan B, the Trump administration may wish to consider taxing Carried Interest as ordinary income. The head honchos of the Private Equity and Hedge Fund firms can surely manage with a few less ‘pesos’.