Since I began writing my column for Puck, I’ve been inundated with feedback about Wall Street’s biggest characters and concerns. I’ll be engaging with some of those questions here—in addition to a few observations of my own.
You recently updated us on Trump and Goldman alums Gary Cohn and Steve Mnuchin. What’s The Mooch up to? He seems like the rare person who, despite the nature of his exit, fully regained his dignity and reputation.
Well, don’t forget The Mooch, née Anthony Scaramucci, only spent 11 days accumulating the Trump Stink—time enough to be smelly but not to reek. I think it’s fair to say he thanks Ryan Lizza every chance he gets. Not for publishing the infamous story he wrote about him in The New Yorker, in which Lizza described their expletive-riddled conversation, because he’s still pissed about that, but for creating a pretext for Jared Kushner defenestrating him, which took him far away from Donald Trump and his awful administration.
And yes, The Mooch has recovered nicely. He’s back to running his hedge fund, Skybridge Capital—he’s a big fan of Bitcoin and Cathie Wood these days, #lasereyes and all—and has started a bit of a multimedia venture. He’s got a podcast and conducts regular Zoom interviews (I have been a guest on each) and his highly regarded SALT Conference will be returning in September, after a one-year hiatus, to the Javits Center in New York City—an appropriately staid event space for Mooch 2.0 after years of hosting at the Bellagio, in Las Vegas. He seems happier and more engaged than ever and seems to relish the role of explaining to people, on-the-record, what a nutjob Trump and his enablers were.
You were ahead of the game, years ago, in reporting that major Obama bundlers believed that Biden was a credible candidate and a threat to Trump. I know it’s early—Biden has barely been in power for six months—but do you think the Democratic money machine will encourage him to run for re-election in 2024?
The Wall Street crowd is very happy with Biden, and as long as he still has his wits about him by the time 2024 rolls around, I am sure they would be happy to have him as the nominee again. Now, that doesn’t mean they are enamored with some aspects of his “progressive” agenda. They aren’t thrilled about the prospect of higher taxes, although they seem more at ease paying higher personal taxes than with any increase in the corporate rate. Nor are they thrilled about a more aggressive antitrust division in the Justice Department, or Tim Wu in the White House, or a more confrontational F.T.C. under Lina Khan, all of which might begin to throw some sand into the gears of the investment-banking juggernaut.
But Wall Street loves Biden’s infrastructure proposals (as long as they stay focused on infrastructure) and they love the vaccine roll-out, and they love the booming economy. The bankers I talk to seem ecstatic that Trump’s departure, at least for now, has returned some semblance of normalcy. They are content to see more stability in foreign and domestic policy, even if Trump’s trade policies are largely still in place. Obviously the insurrectionist threat is not defeated, but Wall Street generally believes Biden can beat Trump, if they are the 2024 headliners. Re-nominating Trump would be a huge mistake by the Republicans, of course, although they don’t seem to have figured that out yet.
Jerome Powell recently announced that the economy hasn’t sufficiently recovered to the point where he will ease the Fed’s enormous buyback program. When does the smart money think the Q.E. narcotic will run dry?
From my conversations with top bankers, it’s fair to say the smart money on Wall Street is scared shitless about how and when the Fed’s “easy money” policies will end, and whether the financial system is prepared for another crisis. The big banks are well capitalized, of course, but the Fed doesn’t seem to know how to defang the monster it created with Quantitative Easing. (I wrote a “guest essay” about this for the Times last month.) Markets everywhere are full of froth and dysfunction: risk being mispriced, junk bonds yielding less than 4% and below the rate of inflation, the stock market at an all-time high. Retail investors are perpetually losing their minds about the stupidest things—Game Stop, AMC, NFTs, Bitcoin, Dogecoin, SPACs, the aforementioned Cathie Wood—and they are the ones who will be left holding the bag.
No one knows how it will end, or when it will end, but it will end. Hedge fund managers are trying to figure that out and position themselves for a windfall. Market dislocation and wild price swings are good news for these professionals. Private-equity moguls will use their “dry powder” to buy assets at a discount. And of course the Wall Street banks always win when volatility increases, as long as they themselves don’t become the focus of the distress.
Have a question you’d like answered in the next edition? Email us at firstname.lastname@example.org.