Dodd-Frank Act Should Be and Will Be Scrapped

Dodd-Frank Act Should Be and Will Be Scrapped

Dodd-Frank Act Should Be and Will Be Scrapped

$DIA, $SPY, $QQQ, $VXX

President Elect Donald Trump is now translating his populist campaign vows into policy, including that the Dodd-Frank Act should be scrapped because it has made Wall Street banks an even bigger threat to the nation’s economy and working families.

After the government’s answer to the  Y 2008 financial crisis, the “big banks got bigger while community financial institutions have disappeared at a rate of one per day, and taxpayers remain on the hook for bailing out financial firms deemed ‘too big to fail,’” says a statement posted on Donald Trump’s official transition website.

“The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”

US bank stocks have climbed in here as investors bet a Trump Presidency will lead to less regulation and sideline industry critics in Congress led by US Senator Elizabeth Warren (D-MA).

The call to scrap Dodd-Frank will not go over well with Ms. Warren as she will now be relegated to the back benches of the Senate.

In remarks prepared for an AFL-CIO labor federation event in Washington, Ms. Warren cited issues she and President Elect Donald Trump agree on, including the need to curtail Wall Street influence in politics, reinstate Glass-Steagall Act limits on banking activities and reform trade deals.

In addition to repealing Dodd-Frank, Donald Trump’s transition website outlines several policies that will be familiar to those who followed his campaign, including calls for a moratorium on new rules so existing measures can be reviewed. It also broadly addressed a tax-code overhaul, saying Trump’s plan “can be summarized as lower, simpler, fairer, and pro-growth.”

The Trump Administration’s plans for financial regulation could pull from a proposal released earlier this year by Representative Jeb Hensarling (R-TX) who leads the House Financial Services Committee.

His bill calls for sacking core parts of Dodd-Frank, including a provision that empowers the government to dismantle failed banks. It will also do away with Volcker Rule restrictions on banks’ trading and investments, and to weaken the reach of the Consumer Financial Protection Bureau (CFPB).

Ms. Warren’s pledge offers a 1st look of a strategy she may try to use next year when Republicans control the White House and both chambers in Congress.

Friday, the US major stock market indexes finished at: DJIA +39.78 at 18847.66, NAS Comp +28.32 at 5237.11, S&P 500 -3.03 at 2164.45

Volume: trade was heavy with over 1.1-B/shares exchanged on the NYSE

  • Russell 2000 +12.8% YTD
  • DJIA +8.2% YTD
  • S&P 500 +5.9% YTD
  • NAS Comp +4.6% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.35) Bullish (0.25) Bullish (0.43) Bullish (0.36)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (0.17) Neutral (0.21) Bullish (0.31) Neutral (-0.01)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bearish (-0.25) Bearish (-0.25) Neutral (-0.21) Bearish (-0.29)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.34) Bearish (-0.31) Bearish (-0.33) Bearish (-0.38)

Have a terrific weekend.

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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