“The Last Jedi Has Fallen”: Wall Street Reacts To Cohn’s Departure

Former Goldman President Gary Cohn (who was a Democrat, when he was Goldman’s president and COO) is now the“The Last Jedi”.

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“It’s easier to fool people than to convince them that they have been fooled.”
– Mark Twain

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“The Last Jedi Has Fallen”: Wall Street Reacts To Cohn’s Departure:

As we highlighted first thing this morning, there has been no shortage of opinions about what Gary Cohn’s departure from the White House (after just one very lucrative year, which allowed Gary to cash out tax free on over $280 million in Goldman deferred comp) will mean for both markets and Trump policy going forward. And while many differ on the margins, the collective agreement is that “political moderate” Gary Cohn’s resignation confirms the ascendancy of the “protectionists”, “populists” and “anti-globalists” in Trump’s circle of influence (first noted here 2 weeks ago), such as Peter Navarro and Wilbur Ross.

Courtesy of Bloomberg, here is a rundown of some of the most vocal views this morning from Wall Street analysts, investors and traders.

‘The last Jedi’, from Citi’s Fraser King

“While heavily-trailed in the press, the market is still mourning the sudden departure of Gary Cohn, the White House’s ‘lonely democrat’ – seen by some as the final bastion of tariff-free international trade. Alas, now the last Jedi has fallen, Trade Wars and a galaxy far, far away now all seems an awful lot closer than before.”

‘Voice of Reason’, from Paul Donovan, chief economist at UBS Wealth Management:

“The departure signals the defeat of anti-protectionism, or reduces the influence of anti-protectionism.”

“Any tax on trade, in any country, means consumers are going to be purchasing goods they would not chose to buy, at prices that are higher than they should have to pay, to subsidize less efficient companies.”

‘Most Meaningful’, from Michael O’Rourke, chief market strategist at JonesTrading Institutional Services:

“Of all the Trump administration resignations, this will be the one most meaningful for markets.”

“Cohn was the administration official financial markets had the most confidence in. This opens the environment up to whole new wave of uncertainty. The likelihood of a trade war just jumped dramatically.”

‘Treasury Tremors’, from Rabobank strategists led by Richard McGuire:

“We would challenge the oft-cited view that protectionism is bearish for USTs as it promises higher import costs (and, thus, inflation) while also portending a possible divesture of U.S. debt by China in retaliation.”

“We would instead argue that higher import costs, in representing a negative supply shock will ultimately weigh on demand. Tit-for-tat trade measures, meanwhile, point to lower world trade volumes which, in turn, promises lower global growth.”

Retaliation Risk. from Ben Emons, chief economist at Intellectus Partners LLC:

“Not only countries may retaliate, reciprocal trade is not a 1 for 1 trade, especially when tariffs are placed on high quality/low cost foreign goods that are a benefit to the domestic consumer.”

“The favorable global synchronization theme from 2017 is morphing into a de-synchronizing theme that can impact markets negatively.”

Faith in Earnings, from James Soutter, a fund manager at K2 Asset Management Ltd. in Melbourne:

“Markets will see this as another negative in the Trump presidency and will move lower on the news in the short term, but this doesn’t have an impact on the broader earnings growth story that equities are experiencing.”

‘More Chaos’, from Alan Patricof, a venture capitalist and managing director of Greycroft LLC who had backed Hillary Clinton against Trump:

“We need a grown up in the White House, that’s the problem, and it gets worse every day,” with the latest news indicating “more chaos.”

“The market doesn’t like uncertainty, the market doesn’t like surprises. All we’ve gotten for the last 15 months is surprises, and yet the market went up. At some point the market has got to be spooked by the fact that they just don’t know what’s going to happen tomorrow.”

“I feel it so many times — I Tweet it myself — this is it we’ve hit the inflection point. But “the market defies me, then we get another crazy move.” But this time, “Gary Cohn has been a grown up in the White House, and now he’s gone.”

‘Bark vs Bite‘, from Terry Haines, a managing director at Evercore ISI:

The narrative will be that protectionists “will be in the ascendant” and Treasury Secretary Steven Mnuchin, “the lone remaining ‘free trader,’ will be in eclipse.” Even so, “there is more bark than bite in the Trump protectionist story line of the last few days.”

“Investors should understand the Cohn departure as the end of his influence in a difficult White House, but not to overreact to it.”

‘Rates Impact?’, from Michael McCarthy, Sydney-based chief strategist at CMC Markets Asia Pacific.

“It’s clear at the moment the markets are likely to price the worst-case scenario on tariffs. “Markets are very concerned about the impact on global growth,” given the “potential for tit-for-tat” protectionist moves in the wake of Europe’s retaliation threat following the move on U.S. steel and aluminum tariffs.

“Higher interest rates could be off the table if this does escalate.”

‘Brutal’ Worries, from Johan Jooste, chief investment officer at Bank of Singapore Ltd.:

The really important next thing is how do other countries react to this. If the response is fairly brutal, if it’s really strong, without Cohn there you’d imagine the White House reacts in kind. Then we get into the kind of thing the market is probably now starting to discount as a greater probability, which is not a good outcome for stocks.”

‘Grandstanding Behavior’, from Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd.:

“I view this as grandstanding behavior by Mr. Trump, with the aim to have more negotiating cards in his deck.”

“In markets, we are closer to a durable low than we were after the first leg down in markets in early February.”

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Cohn Resigns After Confrontation With Trump, His Replacement Will Be Chosen “Wisely”

Cohn Resigns After Confrontation With Trump, His Replacement Will Be Chosen “Wisely”:

Update: President Trump has announced he will make a decision soon on Gary Cohn’s replacement:

The two frontrunners, now confirmed by administration officials, are White House Trade Council Advisor Peter ‘Death By China’ Navarro (seemingly the out of nowhere architect of Trump’s trade war plan) and Conservative commentator Larry ‘mothers milk of stocks’ Kudlow (who was on CNBC today defending Cohn and talking down Trump’s trade war plan).

Separately, Bloomberg reports that Trump confronted Cohn hours before the resignation, demanding his cooperation on tariffs in a meeting in the Oval Office Tuesday, and asking Cohn directly if he would support his decision to move forward with the plan. Cohn would not offer his support and just hours later, the White House announced Cohn’s resignation.

According to one source with knowledge of the exchange, Trump specifically asked Cohn: We’re all on the same team, right? He then asked if Cohn was going to support the president on the issue. Cohn didn’t answer.

For now the market is not happy… Dow -450

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David Stockman: “Trump’s 1500-Word Airball” Tax Plan

“Stated differently, after nine months of work these geniuses have come up with $6 trillion of easy to propose tax rate cuts and virtually no plan whatsoever to pay for them.”

“In all, this plan is so embarrassingly weak that Mnuchin and Cohn should be fired on the spot.

Actually all of these Rothschild puppets did exactly what they were told to do!

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Trump’s 1,500-word Airball:

The Donald’s strong point isn’t his grasp of policy detail.

The nine page bare-bones outline released this week is nothing more than an aspirational air ball that lacks virtually every policy detail needed to assess its impact and to price out its cost.

It promises to shrink the code to three rates (12%, 25%, 35%), for example. But it doesn’t say boo about where the brackets begin and end compared to current law.

Needless to say, a taxpayer with $50,000 of taxable income who is on the 15% marginal bracket today might wish to know whether he is in the new 12% or the new 25% bracket proposed by the White House. After all, it could change his tax bill by several thousand dollars.

Similarly, to help pay for upwards of $6 trillion of tax cuts over the next decade, it proposes to eliminate “most” itemized deductions. These “payfors” would in theory increase revenues by about $3 trillion.

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45 Trillion Reasons Why Gary Cohn Has Recused Himself From All Goldman Matters

45 Trillion Reasons Why Gary Cohn Has Recused Himself From All Goldman Matters

consistent with the stringent ethics rules established by the Trump Administration, Mr Cohn will recuse himself from participating in any matter directly involving his former employer, Goldman Sachs. He will also recuse himself from any matter or potential rulemaking before the CFTC in which Goldman Sachs has participated.”

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Gary Cohn’s Parting Gift From Goldman: An Accelerated $124 Million

Gary Cohn’s Parting Gift From Goldman: An Accelerated $124 Million:

Leaving Goldman Sachs to work for the government has always been a lucrative career move: eight years ago, it allowed former Treasury Secretary Hank Paulson to sell $500 million in Goldman stock tax free, and now its the turn of Gary Cohn, Goldman’s former COO and president, who is leaving to join Trump’s cabinet, who is departing with an “accelerated” gift.

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Goldman President Gary Cohn Accepts National Economic Council Director Role Offered To Him By Donald Trump

Goldman President Gary Cohn Accepts NEC Director Role:

As reported last week, Trump had offered Goldman Sachs president and COO the job of his top economic advisor, as Director of the National Economic Council Director. Moments ago CNBC reported that, as expected, Cohn has accepted the role.

From CNBC:

Goldman Sachs executive Gary Cohn is expected to accept the directorship of the National Economic Council “at any moment,” a source told CNBC on Monday.

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Rothschild Puppet Trump Picks Goldman President Gary Cohn To Be Chief Economic Advisor

Trump-Satanic-Hand-Signscrewed

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Trump Picks Goldman President Gary Cohn To Be Chief Economic Advisor:

It appears that vampire squids are quite adaptable to living inside the swamp that Trump promised to be draining.

Following the appointment of former Goldman partner Mnuchin as Treasury Secretary, NBC News reports that Goldman Sachs President and COO Gary Cohn has been selected as National Economic Council Director.

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Donald Trump has offered Goldman Sachs executive Gary Cohn a key economic post, which would add to the administration another veteran of the powerful firm he bashed during his campaign, sources close to Cohn told NBC News.

As NBC adds, Cohn, Goldman’s president and chief operating officer, has been offered the directorship of the National Economic Council and assistant to the president for economic policy, the sources said. It is unclear if Cohn will accept the post, but he reportedly had discussions late last month about leaving Goldman.

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Goldman’s President Gary Cohn Said To Be Considering Departing Firm

Goldman’s President Gary Cohn Said To Be Considering Departing Firm:

Just a day after Goldman COO Gary Cohn unexpectedly met with Donald Trump, he is now said to be “weighing a future outside the firm” the WSJ reports. According to Dow Jones, the bank’s “Number 2”, who met with Trump on Tursday, has had conversations in recent months about leaving the bank.

As reported yesterday, Cohn, who has been CEO Blankfein’s top deputy for a decade, met with Donald Trump Tuesday. It isn’t clear whether the president-elect is considering Mr. Cohn for a position; Politico reported Wednesday that Mr. Cohn could be a contender to head the Office of Management and Budget. A possible position in the Trump administration comes at a time when Mr. Cohn’s role at Goldman has already been in question. The 56-year-old president and chief operating officer has had conversations in recent months about leaving the bank, according to people familiar with the matter.

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