Can't Make This Shit Up - Mnuchin Wants Former Bear Stearns Chief Economist As Undersecretary

[hatrack]

Yes, that Bear Stearns. The one that went bankrupt. The first to collapse. The one that leveraged itself to the hilt on CDO, subprime and synthetic CDO. Their chief economist.

EDIT

Economist David Malpass, a veteran of the Ronald Reagan and George H.W. Bush administrations, is expected to be nominated by President Trump to serve as undersecretary for international affairs.

A White House spokesperson and a spokesperson for Mnuchin did not immediately return requests for comment on Sunday night. None of the selections are final.

The trio would round out the top level at Treasury, which has been operating for weeks with limited staff including Adam Szubin, an Obama and George W. Bush administration holdover, as acting secretary.

All three are well known both on Wall Street and in Washington. Malpass, who was an economic adviser to Trump during the 2016 campaign, also served as chief economist at Bear Stearns.

EDIT

http://www.politico.com/story/2017/02/steven-mnuchin-wall-street-234952

Malpass is a former economic adviser to Ronald Reagan whom the Trump campaign touts as having "extensive private sector experience." That experience includes serving for 15 years as the chief economist for Bear Stearns—the Wall Street firm that was deeply enmeshed in the subprime mortgage market—in the lead-up to the investment bank's spectacular March 2008 collapse.

The fall of Bear Sterns lit the fuse on the economic crisis. And perhaps more so than its competitors, the 85-year-old investment bank came to exemplify the excesses and short-sighted economics that led to the financial meltdown. If Trump is counting on Malpass for economic advice, he had better hope it's an improvement on the wisdom the economist dispensed as the financial system hurtled toward a cliff. Nine months before his company fell apart, Malpass wrote a column for the Wall Street Journal titled "Don't Panic About Credit Markets." He derided the "hyperventilation over the coming U.S. economic slowdown" and wrote:

The slowdown talk weighing on equities also reflects the Wall Street view that debt, mortgage and takeover businesses have replaced General Motors as the economy's bellwether. According to the bears: As goes the credit market, so goes the economy. Fortunately, Main Street is not that fickle. Housing and debt markets are not that big a part of the U.S. economy, or of job creation. It's more likely the economy is sturdy and will grow solidly in coming months, and perhaps years.

So, that was wrong.

Malpass did fine, though. He currently sits on the board of New Mountain Capital, a multi-billion-dollar private investment firm, and runs his own market research firm.

EDIT

http://www.motherjones.com/politics/2016/08/trump-economic-adviser-said-economy-fine-before-crash

[dalton99a]

1. We're ruled by vultures and thieves.