All Articles Finance While You Were Working - July 24

While You Were Working – July 24

MoochWatch ends and begins all at the same time, the Imposssible Trinity faces the Financial Trilemma, Deutsche Bank has a Brexit plan, and investment banking heads to the boon docks

4 min read


Anthony Scaramucci

MoochWatch ends ... or has it only just begun? (Drew Angerer/Getty Images)

Geeezzz… I take one week off and all the fun news breaks! Bob Mueller is tapping Deutsche Bank for dirt on President Trump related to Russia. Speaking of Trump, he continued his push to endear himself to coal miners by … moving to let Wall Street CEOs be paid more? And finally, most importantly …

MoochWatch ended!

I have written a few times in this space – here and here – about the fascinating twists and turns Anthony Scaramucci was having to endure in order to secure a job in the White House. Alas, I guess good things come to those who wait. By bobbing and weaving for the last 6 months, Mooch has ended up in a more powerful position that the one first mooted for him during the transition. Mooch’s ascension is also yet another example of people, in this case Steve H.B. Bannon and Reince Priebus, not adhering to the the Warren Rule of Political Scuttling. Tsk, tsk fellas.

I don’t think President Trump ever forgave Sean Spicer for wearing an ill-fitting suit at his very first White House press conference. Such things shouldn’t matter, but they do to this president and that is his prerogative. And now he doesn’t have to worry about that now that the always slick Mooch is at the helm.

As a communications expert, Mooch running comms for the White House makes me oh-so happy. He is gonna be a site to behold. Someone on Twitter the other day said Mooch “could sell sand in the desert.”  Well, Spicer couldn’t sell ice in the desert, so the smooth and affable Scaramucci is gonna be fun to watch.

On the Impossible Trinity and Financial Trilemma

This is a great analysis of the choices national and international policymakers face when it comes to governing the global economy and an ever-more-integrated financial system.  

For those unfamiliar with the “financial trilemma,” the authors explain:

“Financial stability, cross-border financial integration, and national financial policies are incompatible … The logic behind this … is that increases in financial integration reduce the incentives for national policymakers to act in ways that preserve financial stability globally. Put differently, as the benefits from financial stability policies spread beyond borders, the willingness to bear the costs of stabilizing the system at the national level decline.”

 Some of the extreme monetary policy measures adopted in response to the financial crisis (including those still in place) are hindered by the simple fact that money moves around the global financial system faster than monetary policies can chase it – or in some cases, lure it.

As evidenced by the recent bailouts in Italy, domestic policymakers still prefer to rescue one of their own institutions rather than let it fail. And unless regulation of the global banking system becomes more integrated, rather than less, then that preference will always be the case.

Deutsche Bank is moving 1/5 of its balance sheet to … well … Deutschland

Make no mistake: $350 billion is a serious chunk of change. The fact that Deutsche Bank is planning to move that amount of assets from London to Frankfurt is not only news, but also a nod to prudence.

Fulton County and Cuyahoga County became investment banking hotbeds

Regional banks in places like Atlanta and Cleveland are starting to snag some of the investment banking business usually resigned to bigger Wall Street firms. This is a good thing because sometimes a little local knowledge goes a long way. Plus, it must be nice to be making investment banker wages in cities where those dollars go a lot farther than New York or London.  

WYWW Appetizers

No bueno. Surely this spells the end of Chipotle, right?

People are still trying to kill the fiduciary rule.

When Greg Davis talks, people listen. Or at least they should.