11 Very Depressing Economic Realities that Trump Will Inherit from Obama
#1 Nearly 7 out of every 10 Americans have less than $1,000 savings. About 2/3rds are living paycheck to paycheck.
#2 Reuters is reporting that U.S. mall investors are poised to lose “billions” of dollars as the “retail apocalypse” deepens.
#3 Credit card delinquencies have hit the highest level that we have seen since 2012.
#4 Approximately 35 percent of all Americans have a debt that is at least 180 days past due.
#5 The rate of home ownership has fallen for eight years in a row and is now hovering near a 50 year low.
#6 The total number of gov’t employees now outnumbers manufacturing employees in this country by almost 10 million.
#7 The number of homeless people in New York City has hit a brand new record high.
#8 About 20 percent of all young adults are currently living with their parents.
#9 Total household debt in the United States has now reached a grand total of $12.3 trillion.
#10 The total amount of corporate debt in the U.S. has nearly doubled since the end of 2007.
#11 When Obama entered the White House, the U.S. was $10.6 trillion in debt. Today, it is $19.8 trillion.
Trump’s Rise May Save Banks Billions by Disrupting Global Rules
Silla Brush sabrush Bloomberg.com
November 13, 2016 — 7:01 PM EST
The Basel Committee on Banking Supervision is racing to complete a revamp of international capital standards by year-end. The U.S. has pushed for strict rules to protect against future market meltdowns, whereas Europe and Japan want to rein in proposals that could hit banks with billions in costs. Basel Committee members including the U.S. Federal Reserve and the European Central Bank are under enormous industry pressure to soften the rules.
Trump’s ascendancy and his vow to dismantle financial regulations could throw another wrench in the works. If he stalls U.S. implementation of the revised Basel Committee standards on how banks measure asset risk, or ignores them altogether, Europe could follow suit. And if the U.S. and Europe go their own ways, the last piece of the global response to the financial crisis could be undermined. “I think that before Trump, Basel was going to be softened down significantly,” Sam Theodore, managing director for financial institutions at Scope Ratings AG, said in an interview. “And now with Trump, I think the whole thing is going to become more of a symbolic exercise.”
The memory of the crisis is fading, and “you have all the ingredients for the anti-regulation backlash to continue,” he said.
Trump’s election comes at a critical juncture in the debate at the Basel Committee, which has heated up this year amid a huge industry lobbying campaign to ease the new standards on how banks assess credit, operational and market risk to determine their capital requirements, a package the bankers call Basel IV.
The Basel Committee is “working intensively” to wrap up the reforms on time, Chairman Stefan Ingves said last week.
If the global regulator meets its year-end deadline, Trump won’t have time to affect the U.S. negotiating position by shaking up the country’s four organizations on the Basel Committee, which also include the Federal Deposit Insurance Corp.
“The key thing that worries European banks at the moment is the progress of Basel IV,” Howard Davies, chairman at Royal Bank of Scotland Group Plc, said last week. “An agreement is supposed to be reached by the end of the year. I doubt if the new Trump administration will be able to influence that.”
European Union opposition to key elements of the Basel Committee’s proposals has already turned the talks into a hard slog. EU politicians and policy makers insist not only that the new rules don’t significantly increase overall capital requirements, but also that the bloc’s banks aren’t unduly punished.
The U.S., by contrast, has consistently advocated tough rules. As recently as last week, FDIC Vice Chairman Thomas Hoenig, a political independent, warned against backsliding.The process to put Basel Committee standards into national rules can easily take years to accomplish, however, and this is where Trump and Republicans in the U.S. Congress will have the most sway. Trump will eventually get a chance to install new faces in the Fed, FDIC and the Office of the Comptroller of the Currency, the other U.S. Basel member.
Trump will “influence the process not only through what Treasury says, but also who comes to be head of the OCC and FDIC and vice chair of supervision at the Fed,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics in Washington.
If the Basel Committee fails to deliver the package of new rules on time, U.S. influence on the negotiations could wane, Barclays Plc analysts wrote in a note to clients last week.
“Trump’s election campaign presented a vision for the U.S. that was both less weighed-down by regulation, but also less engaged in shaping global consensus,” they wrote. Should Basel miss its deadline, “U.S. input into Basel IV may reduce once Mr. Trump comes to power.”