Treasury Secretary Steven Mnuchin Has Scheduled An Emergency Call With The President’s Working Group On Financial Markets On Christmas Eve

If the financial markets are going to be just fine, then why did Treasury Secretary Steven Mnuchin make emergency calls to the CEOs of the six biggest banks in America on Sunday?  And if we don’t have anything to worry about, then why has he scheduled an emergency call with the Presidents Working Group on Financial Markets on Christmas Eve?  Actions speak louder than words, and we haven’t seen these sorts of emergency moves since the last financial crisis.  Last week was the worst week for the stock market in 10 years, and it is understandable that they would want to try to do something to ease the panic in the marketplace, but for many this is just going to confirm that a new financial crisis has now arrived.  The following is from Secretary Mnuchin’s official statement…

Washington — Secretary Mnuchin conducted a series of calls today with the CEOs of the nations six largest banks: Brian Moynihan, Bank of America; Michael Corbat, Citi; David Solomon, Goldman Sachs; Jamie Dimon, JP Morgan Chase, James Gorman, Morgan Stanley; Tim Sloan, Wells Fargo. The CEOs confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations. He also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly.

Tomorrow, the Secretary will convene a call with the President’s Working Group on financial markets, which he chairs. This includes the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, and the Commodities Futures Trading Commission. He has also invited the office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation to participate as well. These key regulators will discuss coordination efforts to assure normal market operations.

Today I convened individual calls with the CEOs of the nation’s six largest banks. See attached statement. pic.twitter.com/YzuSamMyeT

— Steven Mnuchin (@stevenmnuchin1) December 23, 2018

Apparently Mnuchin believes that the fact that he is taking action is going to “reassure” the markets.  One anonymous source told CNN that Secretary Mnuchin is “being pre-emptive”…

“It’s being pre-emptive,” a person familiar with the matter told CNN. “It’s sending the proper message to the market so they can calculate the real picture into their Monday opening. They don’t have to wait until something happens to be reassured.”

But others believe that these moves could almost be akin to yelling “fire” in a crowded theater.  If investors start having flashbacks to similar meetings during the crisis of 2008, that could cause them to panic even more, and that could create even bigger problems on Wall Street.

So far this month, investors have pulled more money out of U.S.-based stock funds than ever before in history.  People are really starting to freak out, and Stephen Suttmeier of Bank of America-Merrill Lynch is warning that this market decline could extend “through the first half of 2019”…

Bank of America-Merrill Lynch sees stocks struggling through the first half of 2019.

Stephen Suttmeier, the firm’s chief equity technical strategist, is building his case with two S&P 500 charts. They suggest stocks are in the throes of a bear market and the correction is deepening.

“We are breaking through a massive support on the S&P between that 2,600 and 2,500 range,” he said Thursday on CNBC’s “Futures Now. ” “We could see the mid-2,300s on the S&P 500.”

Personally, I believe that Suttmeier is being way too optimistic.

The U.S. economy is already being strangled by higher interest rates, and the Federal Reserve has indicated that they intend to conduct even more rate hikes in 2019.  President Trump can see what is happening, and he deeply regrets nominating Jerome Powell for the top spot at the Federal Reserve.  Over the weekend, Bloomberg was reporting that Trump had been talking about firing Powell…

President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate hike and months of stock-market losses, according to four people familiar with the matter.

Advisers close to Trump aren’t convinced he would move against Powell and are hoping that the president’s latest bout of anger will dissipate over the holidays, the people said on condition of anonymity. Some of Trump’s advisers have warned him that firing Powell would be a disastrous move.

Unfortunately, that isn’t going to happen.

The White House later determined that Trump “does not have the authority” to fire Powell, and so we are all stuck with him…

Acting White House Chief of Staff Mick Mulvaney said Sunday that President Trump “now realizes” he can’t fire Federal Reserve Chairman Jerome Powell, an acknowledgment that came after reports that Trump has discussed dismissing the Fed chief in recent days amid the stock market’s meltdown.

“I think (Trump) put out a tweet last night specifically saying he now realizes he does not have the authority to fire” Powell, Mulvaney said on ABCs This Week. Mulvaney corrected himself after program host Jonathan Karl pointed out it was Treasury Secretary Steven Mnuchin who tweeted about Trump’s reversal.

Of course firing Powell would not ultimately fix much of anything.

The core of the problem is the Federal Reserve system itself.  It is a system that is literally designed to create booms and busts, to systematically debase our currency, and to create as much government debt as possible.  It has been doing a great job at achieving all three of those goals, and if we ever want to reverse course then we need to shut down the Federal Reserve for good.

The Federal Reserve created the boom and bust cycle that resulted in the financial crisis of 2008, and now another boom is turning into a bust right in front of our eyes.

The design of the Federal Reserve system is fundamentally flawed, but this issue isn’t really on anyone’s political radar right now, and that is extremely unfortunate.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters.  His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites.  If you would like to republish his articles, please feel free to do so.  The more people that see this information the better, and we need to wake more people up while there is still time.

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Michael Snyder is the publisher of The Economic Collapse Blog, The American Dream Blog and The Truth. You can follow him on Twitter right here.