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While You Were Working – March 9

White House spooks banks with Glass-Steagall talk, Debt limit deja vu, AIG CEO departs and wind power gathers force

3 min read

Modern Money

White House Press Secretary Sean Spicer

White House Press Secretary Sean Spicer - Photo credit: Win Mcnamee/Getty Images

Sean Spicer mentioned Glass-Steagall and bank stocks turned a bit pale

White House Press Secretary Sean Spicer reaffirmed President Donald Trump’s commitment to keeping a campaign promise about restoring the Glass-Steagall Act, the 1933 law that used to prohibit commercial banks from engaging in investment banking activities. Treasury Secretary Steven Mnuchin has previously expressed interest in devising a modernized version of Glass-Steagall. The news out of the White House today caused bank stocks to take a break from the ascent they have enjoyed since Trump was elected. It seems like the Glass Steagall talk is just lip service aimed at maintaining the populist support that propelled Trump to the White House. The odds that Trump or Mnuchin actually push for such a measure are slim to none.

Debt ceiling déjà vu

Treasury Secretary Steven Mnuchin called on Congress to raise the debt limit. Will anyone on Capitol Hill have the courage to re-engage in the debt limit brinksmanship that was such a staple of the Obama years?

The most thankless job on Wall Street became open again

AIG President and CEO Peter Hancock announced he is leaving the company. The board and investors were not all that happy with Hancock’s performance. That is fair enough, but the headline to this New York Times piece is hilarious: “AIG needs a new, risk-focused CEO right away”  

I’m gonna go out on a limb here and say that is exactly what AIG needed … ohhhh … about 10 years ago.

Speaking of CEOs on the hot seat

Deutsche Bank CEO John Cryan let it be known he is open to extending his contract at the bank beyond its current expiry date in 2020. Considering the woes Deutsche Bank has faced with Cryan at the helm, shouldn’t the banks directors be the ones pondering if they want to extend his contract.

The cost of generating wind power continued to decline

It might seem hard to believe, but the cost of generating wind energy has fallen so much that even oil companies are getting in the game. Royal Dutch Shell and Statoil have secured contracts during the last year to build offshore wind projects. According to Bloomberg, the economics are becoming rapidly more attractive:

“Across Europe, the price of building an offshore wind farm has fallen 46 percent in the last five years — 22 percent last year alone.”

Wind has even made great strides in the US over the course of the last five years, but it remains to be seen if the Trump administration will leave in place the current US government goal of building enough turbines in the sea to produce 86 gigawatts of power by 2050.