A Horrified Wall Street Reacts To The Mnuchin Massacre

Heading into December, a majority of traders still quietly hoped that the volatility observed in October and November would finally fade, and give way to the traditional Santa rally allowing them to escape what in just two months had mutated into a devastating year for most, unscathed: after all, in the past century, December has not only been the month with the highest average stock market return, but the month which has closed in the green on 74% of instances, the most of all other months of the year.

It was not meant to be.

Instead of being the best month of the year, this December has been the worst month for the stock market since the Great Depression – the average one-day drop in the S&P this month has been 1.6% and was appropriately capped with a Christmas Eve crash which not only saw it plunge almost 3% – the biggest pre-Christmas plunge on record – closing at a 20-month low, but in the frenzied liquidation which saw more than 1.7 billion shares changing hands in the painfully illiquid half-day session which deepened losses after the worst week since 2011, as it closed, the S&P triggered a bear market, sliding 20% from the Sept 20 all time highs, and putting an end to the longest bull market in history.

While the reasons for the relentless three month selloff are legion, starting with the “renormalization” (i.e., bursting) of the biggest asset bubble blown in history by the Fed and other central banks, and continuing through trade war tensions, rising and/or falling interest rates, political gridlock and instability in the US and elsewhere, peak profit fears, and economic slowdown concerns, the immediate catalysts for today’s plunge are two: Trump’s ongoing feud with the Federal Reserve (which today we learned, can’t putt) and its Chairman, Jerome Powell, who may or may not be fired soon, and Mnuchin bizarre, crisis-era announcement that bank liquidity is fine, even though not a single person in the market doubted that not to be the case, prompting a chill down traders’ spines that bank liquidity was not, in fact, fine.

So while we got the market’s verdict loud and clear to what will forever be known as the “Mnuchin Massacre”, here is a sample of what analysts, investors and pundits are saying:

Cowen & Co.’s Jaret Seiberg

  • “None of these controversies are positive,” the senior policy analyst wrote. “All of them put the economy at risk, which is negative for financial firms and housing. And all three incidents are unforced errors,” Seiberg wrote, referring to Trump’s discussion of Fed Chairman Jerome Powell’s ouster, the partial government shutdown and Mnuchin raising questions about financial stability.
  • “Our broad concern is that Team Trump might trigger the very downturn it wants to avoid.”

Amundi Pioneer Asset Management’s, Paresh Upadhyaya

  • Mnuchin’s statement about banks “clearly backfired,” Upadhyaya said. “It smacks of desperation and nervousness. I found it odd that he spoke to them about liquidity when it’s obvious that banks would be aware of it. I’m not sure what they planned to achieve with this plunge protection team since none of the agencies involved have legal authority to intervene in the equity markets.”
  • The portfolio manager sees little risk of Powell being ousted. He said that Trump’s undermining of the Fed could reduce the appeal of the U.S. dollar. What’s more troubling is the selloff in bank stocks, which signals distress in the credit market.

MRV Associates Inc.’s Mayra Rodriguez Valladares

  • “The timing is terrible” amid thin markets before a holiday, said Valladares, a former Fed foreign-exchange analyst who conducts training for bankers and regulators. “It’s going to make people in the markets even more nervous.”
  • “When you have a president treating Powell as a pinata, it’s really terrible and undermines the credibility of the central bank as an independent authority.”

Whalen Global Advisors’ Christopher Whalen

  • Mnuchin’s tweet about his talks with bank CEOs was “not helpful,” Whalen said.
  • “It is normal for a secretary of the Treasury to talk to banks privately, but not on Twitter,” he said, citing a “near disaster” in 2008 when markets cratered after then-Treasury Secretary Henry Paulson discussed buying bad bank assets.

Sullivan & Cromwell LLP’s Rodgin Cohen

  • Cohen was at the center of the bank bailouts during the 2008 financial crisis. He said he didn’t field calls from finance executives over the weekend, an indication that the industry isn’t facing the same concerns it was a decade ago.
  • “If you ever get contagion, that could sweep away reality and logic,” Cohen said in an email. “But today, we just don’t have anything like 2008. You’ve got banks which have two to three times the capital, and even more importantly — what really brings banks down — is a liquidity shortage. And these banks are incredibly liquid.”

Last but not least, here is Maxine Waters, soon to be the Chair of the House Committee on Financial Services:

  • “The financial markets need certainty, and a Federal Reserve that can independently set monetary policy. The recent actions of the President and the Treasury Secretary, however, have been erratic and are creating uncertainty and instability in the markets. It would be in our nation’s best interest if they stopped what they are doing.”

And the scariest news: there are 3 more trading days in 2018, and at this rate we may be looking at a 1-handle in the S&P as we usher in the new year.

 

 

A Horrified Wall Street Reacts To The Mnuchin Massacre <body> <h1> Array ( [0] => z horrified wall street reacts to the mnuchin massacre [1] => s horrified wall street reacts to the mnuchin massacre [2] => w horrified wall street reacts to the mnuchin massacre [3] => q horrified wall street reacts to the mnuchin massacre [4] => a gorrified wall street reacts to the mnuchin massacre [5] => a borrified wall street reacts to the mnuchin massacre [6] => a norrified wall street reacts to the mnuchin massacre [7] => a jorrified wall street reacts to the mnuchin massacre [8] => a uorrified wall street reacts to the mnuchin massacre [9] => a yorrified wall street reacts to the mnuchin massacre [10] => a hirrified wall street reacts to the mnuchin massacre [11] => a hkrrified wall street reacts to the mnuchin massacre [12] => a hlrrified wall street reacts to the mnuchin massacre [13] => a hprrified wall street reacts to the mnuchin massacre [14] => a h0rrified wall street reacts to the mnuchin massacre [15] => a h9rrified wall street reacts to the mnuchin massacre [16] => a hoerified wall street reacts to the mnuchin massacre [17] => a hodrified wall street reacts to the mnuchin massacre [18] => a hofrified wall street reacts to the mnuchin massacre [19] => a hotrified wall street reacts to the mnuchin massacre [20] => a ho5rified wall street reacts to the mnuchin massacre [21] => a ho4rified wall street reacts to the mnuchin massacre [22] => a horeified wall street reacts to the mnuchin massacre [23] => a hordified wall street reacts to the mnuchin massacre [24] => a horfified wall street reacts to the mnuchin massacre [25] => a hortified wall street reacts to the mnuchin massacre [26] => a hor5ified wall street reacts to the mnuchin massacre [27] => a hor4ified wall street reacts to the mnuchin massacre [28] => a horrufied wall street reacts to the mnuchin massacre [29] => a horrjfied wall street reacts to the mnuchin massacre [30] => a horrkfied wall street reacts to the mnuchin massacre [31] => a horrofied wall street reacts to the mnuchin massacre [32] => a horr9fied wall street reacts to the mnuchin massacre [33] => a horr8fied wall street reacts to the mnuchin massacre [34] => a horridied wall street reacts to the mnuchin massacre [35] => a horricied wall street reacts to the mnuchin massacre [36] => a horrivied wall street reacts to the mnuchin massacre [37] => a horrigied wall street reacts to the mnuchin massacre [38] => a horritied wall street reacts to the mnuchin massacre [39] => a horriried wall street reacts to the mnuchin massacre [40] => a horrifued wall street reacts to the mnuchin massacre [41] => a horrifjed wall street reacts to the mnuchin massacre [42] => a horrifked wall street reacts to the mnuchin massacre [43] => a horrifoed wall street reacts to the mnuchin massacre [44] => a horrif9ed wall street reacts to the mnuchin massacre [45] => a horrif8ed wall street reacts to the mnuchin massacre [46] => a horrifiwd wall street reacts to the mnuchin massacre [47] => a horrifisd wall street reacts to the mnuchin massacre [48] => a horrifidd wall street reacts to the mnuchin massacre [49] => a horrifird wall street reacts to the mnuchin massacre [50] => a horrifi4d wall street reacts to the mnuchin massacre [51] => a horrifi3d wall street reacts to the mnuchin massacre [52] => a horrifies wall street reacts to the mnuchin massacre [53] => a horrifiex wall street reacts to the mnuchin massacre [54] => a horrifiec wall street reacts to the mnuchin massacre [55] => a horrifief wall street reacts to the mnuchin massacre [56] => a horrifier wall street reacts to the mnuchin massacre [57] => a horrifiee wall street reacts to the mnuchin massacre [58] => a horrified qall street reacts to the mnuchin massacre [59] => a horrified aall street reacts to the mnuchin massacre [60] => a horrified sall street reacts to the mnuchin massacre [61] => a horrified eall street reacts to the mnuchin massacre [62] => a horrified 3all street reacts to the mnuchin massacre [63] => a horrified 2all street reacts to the mnuchin massacre [64] => a horrified wzll street reacts to the mnuchin massacre [65] => a horrified wsll street reacts to the mnuchin massacre [66] => a horrified wwll street reacts to the mnuchin massacre [67] => a horrified wqll street reacts to the mnuchin massacre [68] => a horrified wakl street reacts to the mnuchin massacre [69] => a horrified wapl street reacts to the mnuchin massacre [70] => a horrified waol street reacts to the mnuchin massacre [71] => a horrified walk street reacts to the mnuchin massacre [72] => a horrified walp street reacts to the mnuchin massacre [73] => a horrified walo street reacts to the mnuchin massacre [74] => a horrified wall atreet reacts to the mnuchin massacre [75] => a horrified wall ztreet reacts to the mnuchin massacre [76] => a horrified wall xtreet reacts to the mnuchin massacre [77] => a horrified wall dtreet reacts to the mnuchin massacre [78] => a horrified wall etreet reacts to the mnuchin massacre [79] => a horrified wall wtreet reacts to the mnuchin massacre [80] => a horrified wall srreet reacts to the mnuchin massacre [81] => a horrified wall sfreet reacts to the mnuchin massacre [82] => a horrified wall sgreet reacts to the mnuchin massacre [83] => a horrified wall syreet reacts to the mnuchin massacre [84] => a horrified wall s6reet reacts to the mnuchin massacre [85] => a horrified wall s5reet reacts to the mnuchin massacre [86] => a horrified wall steeet reacts to the mnuchin massacre [87] => a horrified wall stdeet reacts to the mnuchin massacre [88] => a horrified wall stfeet reacts to the mnuchin massacre [89] => a horrified wall stteet reacts to the mnuchin massacre [90] => a horrified wall st5eet reacts to the mnuchin massacre [91] => a horrified wall st4eet reacts to the mnuchin massacre [92] => a horrified wall strwet reacts to the mnuchin massacre [93] => a horrified wall strset reacts to the mnuchin massacre [94] => a horrified wall strdet reacts to the mnuchin massacre [95] => a horrified wall strret reacts to the mnuchin massacre [96] => a horrified wall str4et reacts to the mnuchin massacre [97] => a horrified wall str3et reacts to the mnuchin massacre [98] => a horrified wall strewt reacts to the mnuchin massacre [99] => a horrified wall strest reacts to the mnuchin massacre [100] => a horrified wall stredt reacts to the mnuchin massacre [101] => a horrified wall strert reacts to the mnuchin massacre [102] => a horrified wall stre4t reacts to the mnuchin massacre [103] => a horrified wall stre3t reacts to the mnuchin massacre [104] => a horrified wall streer reacts to the mnuchin massacre [105] => a horrified wall streef reacts to the mnuchin massacre [106] => a horrified wall streeg reacts to the mnuchin massacre [107] => a horrified wall streey reacts to the mnuchin massacre [108] => a horrified wall stree6 reacts to the mnuchin massacre [109] => a horrified wall stree5 reacts to the mnuchin massacre [110] => a horrified wall street eeacts to the mnuchin massacre [111] => a horrified wall street deacts to the mnuchin massacre [112] => a horrified wall street feacts to the mnuchin massacre [113] => a horrified wall street teacts to the mnuchin massacre [114] => a horrified wall street 5eacts to the mnuchin massacre [115] => a horrified wall street 4eacts to the mnuchin massacre [116] => a horrified wall street rwacts to the mnuchin massacre [117] => a horrified wall street rsacts to the mnuchin massacre [118] => a horrified wall street rdacts to the mnuchin massacre [119] => a horrified wall street rracts to the mnuchin massacre [120] => a horrified wall street r4acts to the mnuchin massacre [121] => a horrified wall street r3acts to the mnuchin massacre [122] => a horrified wall street rezcts to the mnuchin massacre [123] => a horrified wall street rescts to the mnuchin massacre [124] => a horrified wall street rewcts to the mnuchin massacre [125] => a horrified wall street reqcts to the mnuchin massacre [126] => a horrified wall street reaxts to the mnuchin massacre [127] => a horrified wall street reavts to the mnuchin massacre [128] => a horrified wall street reafts to the mnuchin massacre [129] => a horrified wall street readts to the mnuchin massacre [130] => a horrified wall street reacrs to the mnuchin massacre [131] => a horrified wall street reacfs to the mnuchin massacre [132] => a horrified wall street reacgs to the mnuchin massacre [133] => a horrified wall street reacys to the mnuchin massacre [134] => a horrified wall street reac6s to the mnuchin massacre [135] => a horrified wall street reac5s to the mnuchin massacre [136] => a horrified wall street reacta to the mnuchin massacre [137] => a horrified wall street reactz to the mnuchin massacre [138] => a horrified wall street reactx to the mnuchin massacre [139] => a horrified wall street reactd to the mnuchin massacre [140] => a horrified wall street reacte to the mnuchin massacre [141] => a horrified wall street reactw to the mnuchin massacre [142] => a horrified wall street reacts ro the mnuchin massacre [143] => a horrified wall street reacts fo the mnuchin massacre [144] => a horrified wall street reacts go the mnuchin massacre [145] => a horrified wall street reacts yo the mnuchin massacre [146] => a horrified wall street reacts 6o the mnuchin massacre [147] => a horrified wall street reacts 5o the mnuchin massacre [148] => a horrified wall street reacts ti the mnuchin massacre [149] => a horrified wall street reacts tk the mnuchin massacre [150] => a horrified wall street reacts tl the mnuchin massacre [151] => a horrified wall street reacts tp the mnuchin massacre [152] => a horrified wall street reacts t0 the mnuchin massacre [153] => a horrified wall street reacts t9 the mnuchin massacre [154] => a horrified wall street reacts to rhe mnuchin massacre [155] => a horrified wall street reacts to fhe mnuchin massacre [156] => a horrified wall street reacts to ghe mnuchin massacre [157] => a horrified wall street reacts to yhe mnuchin massacre [158] => a horrified wall street reacts to 6he mnuchin massacre [159] => a horrified wall street reacts to 5he mnuchin massacre [160] => a horrified wall street reacts to tge mnuchin massacre [161] => a horrified wall street reacts to tbe mnuchin massacre [162] => a horrified wall street reacts to tne mnuchin massacre [163] => a horrified wall street reacts to tje mnuchin massacre [164] => a horrified wall street reacts to tue mnuchin massacre [165] => a horrified wall street reacts to tye mnuchin massacre [166] => a horrified wall street reacts to thw mnuchin massacre [167] => a horrified wall street reacts to ths mnuchin massacre [168] => a horrified wall street reacts to thd mnuchin massacre [169] => a horrified wall street reacts to thr mnuchin massacre [170] => a horrified wall street reacts to th4 mnuchin massacre [171] => a horrified wall street reacts to th3 mnuchin massacre [172] => a horrified wall street reacts to the nnuchin massacre [173] => a horrified wall street reacts to the knuchin massacre [174] => a horrified wall street reacts to the jnuchin massacre [175] => a horrified wall street reacts to the mbuchin massacre [176] => a horrified wall street reacts to the mmuchin massacre [177] => a horrified wall street reacts to the mjuchin massacre [178] => a horrified wall street reacts to the mhuchin massacre [179] => a horrified wall street reacts to the mnychin massacre [180] => a horrified wall street reacts to the mnhchin massacre [181] => a horrified wall street reacts to the mnjchin massacre [182] => a horrified wall street reacts to the mnichin massacre [183] => a horrified wall street reacts to the mn8chin massacre [184] => a horrified wall street reacts to the mn7chin massacre [185] => a horrified wall street reacts to the mnuxhin massacre [186] => a horrified wall street reacts to the mnuvhin massacre [187] => a horrified wall street reacts to the mnufhin massacre [188] => a horrified wall street reacts to the mnudhin massacre [189] => a horrified wall street reacts to the mnucgin massacre [190] => a horrified wall street reacts to the mnucbin massacre [191] => a horrified wall street reacts to the mnucnin massacre [192] => a horrified wall street reacts to the mnucjin massacre [193] => a horrified wall street reacts to the mnucuin massacre [194] => a horrified wall street reacts to the mnucyin massacre [195] => a horrified wall street reacts to the mnuchun massacre [196] => a horrified wall street reacts to the mnuchjn massacre [197] => a horrified wall street reacts to the mnuchkn massacre [198] => a horrified wall street reacts to the mnuchon massacre [199] => a horrified wall street reacts to the mnuch9n massacre [200] => a horrified wall street reacts to the mnuch8n massacre [201] => a horrified wall street reacts to the mnuchib massacre [202] => a horrified wall street reacts to the mnuchim massacre [203] => a horrified wall street reacts to the mnuchij massacre [204] => a horrified wall street reacts to the mnuchih massacre [205] => a horrified wall street reacts to the mnuchin nassacre [206] => a horrified wall street reacts to the mnuchin kassacre [207] => a horrified wall street reacts to the mnuchin jassacre [208] => a horrified wall street reacts to the mnuchin mzssacre [209] => a horrified wall street reacts to the mnuchin msssacre [210] => a horrified wall street reacts to the mnuchin mwssacre [211] => a horrified wall street reacts to the mnuchin mqssacre [212] => a horrified wall street reacts to the mnuchin maasacre [213] => a horrified wall street reacts to the mnuchin mazsacre [214] => a horrified wall street reacts to the mnuchin maxsacre [215] => a horrified wall street reacts to the mnuchin madsacre [216] => a horrified wall street reacts to the mnuchin maesacre [217] => a horrified wall street reacts to the mnuchin mawsacre [218] => a horrified wall street reacts to the mnuchin masaacre [219] => a horrified wall street reacts to the mnuchin maszacre [220] => a horrified wall street reacts to the mnuchin masxacre [221] => a horrified wall street reacts to the mnuchin masdacre [222] => a horrified wall street reacts to the mnuchin maseacre [223] => a horrified wall street reacts to the mnuchin maswacre [224] => a horrified wall street reacts to the mnuchin masszcre [225] => a horrified wall street reacts to the mnuchin massscre [226] => a horrified wall street reacts to the mnuchin masswcre [227] => a horrified wall street reacts to the mnuchin massqcre [228] => a horrified wall street reacts to the mnuchin massaxre [229] => a horrified wall street reacts to the mnuchin massavre [230] => a horrified wall street reacts to the mnuchin massafre [231] => a horrified wall street reacts to the mnuchin massadre [232] => a horrified wall street reacts to the mnuchin massacee [233] => a horrified wall street reacts to the mnuchin massacde [234] => a horrified wall street reacts to the mnuchin massacfe [235] => a horrified wall street reacts to the mnuchin massacte [236] => a horrified wall street reacts to the mnuchin massac5e [237] => a horrified wall street reacts to the mnuchin massac4e [238] => a horrified wall street reacts to the mnuchin massacrw [239] => a horrified wall street reacts to the mnuchin massacrs [240] => a horrified wall street reacts to the mnuchin massacrd [241] => a horrified wall street reacts to the mnuchin massacrr [242] => a horrified wall street reacts to the mnuchin massacr4 [243] => a horrified wall street reacts to the mnuchin massacr3 ) </h1> </body>