Stocks drop again as Steven Mnuchin calls bank CEOs about cash needs
"The banks all confirmed ample liquidity is available for lending to consumer and business markets," the Treasury Department said in a statement.
Mnuchin’s statement assured the public that they had not been having liquidity problems or “clearance or margin” issues—the sorts of things you would worry about if the country were on the brink of a financial crisis.
None of the possible explanations are very reassuring, though it seems that Mnuchin was trying to be.
But the surprise holiday readout, which came with a heads-up that Mnuchin would be holding a call with some of the country’s top financial regulators as well, unnerved and puzzled investors, bank executives, politicians, and economists.
Secretary of the Treasury Steven Mnuchin is facing harsh criticism for an open letter sent by his department about Wall Street that either addressed a brewing economic crisis no one else knows about — or, by asking alarming questions out of the blue, risks creating a crisis out of nothing.
The second option, according to Lowrey, is that "the Treasury secretary believes that the market correction is due in part to animal spirits—animal spirits he could quiet by reminding everyone that the financial system is in fine shape."
Mnuchin is dealing with several issues facing investors and the financial system:
The economy has been rocked by Mnuchin's letter, the Dow Jones Industrial Average had its worst recorded Christmas Eve day of trading Monday, dropping more than 640 points, while the SP 500 dropped more than 50 points and entered a bear market, according to Business Insider.
Steven Mnuchins phone calls and press release were a bad idea, but even worse: they were a weird idea. Process at the White House has broken down. Thats terrifying.
"We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business," Mnuchin said in the statement.
U.S. stock futures climb and the dollar falls in thin Christmas Eve trading after Steven Mnuchin calls top bank executives to discuss liquidity
Treasury Secretary Steven Mnuchin held calls on Sunday with the heads of the six largest U.S. banks to shore up confidence in the U.S. financial system amid the recent market turmoil.
“Today I convened individual calls with the CEOs of the nation’s six largest banks.” Treasury Secretary Steven Mnuchin. Right, because historically the biggest banks always fix problems in financial markets.
"But that’s what I did, as more of your retirement money and mine was flushed down the toilet, courtesy of current Treasury Secretary Steven Mnuchin’s utterly inexplicable decision this weekend to weigh in publicly on big U.S. banks’ ability to withstand a run that literally no one had said was happening, as part of a panicking administration’s unwillingness to tell President Donald Trump 'no' about anything."
"Mnuchin is under enormous pressure from President Trump, who is upset about the market sell-off and mad at the current Federal Reserve chairman, Jay Powell.
This is roughly what happened on Sunday evening, when Treasury Secretary Steven Mnuchin put out a press release on calls he held with executives from the country’s largest banks.
Markets rattled as US Treasury Secretary calls big banks to ask if they have enough cash
After a series of calls to CEOs of the countrys biggest banks, Treasury Secretary Steven Mnuchins odd statement failed to calm markets in the worst December since the Great Depression. CNNs @ChristineRomans reports
Who thought we were tipping into a financial panic?