Steve Mnuchin’s call to major banks to check on liquidity concerns over the weekend was certainly strange. There is zero indications of liquidity concerns of the top major banks. Nothing. Zilch, Nada. There are many data points on this. I will show one.
Now compare this to what happened in 2008.
It became clear in the beginning of 2008 that something very serious was happening in the banking system.
Steve Mnuchin is either clueless, trying to pander to Mr. Trump or a combination of both.
The idea that the treasury or the president can stop a falling stock market or stop a financial crisis is misplaced. After every financial crisis, a whole new set of laws are rolled out. Lawyers in Washington D.C. declare that now there are backstops and a stock market panic will never happen again. They are always proven wrong. Presidential administrations have very little to do with stock market movements. The driver is the Federal Reserve. It has always been the Federal Reserve.