Wall Street’s (Confused) Position on Trump’s Presidency

Traders work on the floor of the New York Stock Exchange the morning after Donald Trump’s win. Photo: Spencer Platt/Getty Images

There are few places in the world where numbers are taken more seriously than Wall Street. So it was that in the days following Donald Trump’s data-defying upset in the presidential election, even the Masters of the Universe were struggling to comprehend the course of human events. “A Trump rally?” repeated Goldman Sachs CEO Lloyd Blankfein Thursday, after Andrew Ross Sorkin, the host of the Times’ annual “DealBook” conference for market movers and shakers, asked him about what some pundits had termed the market’s unexpectedly buoyant reaction to the news. “Oh, no, in the market,” said Blankfein, a Clinton supporter whose face Trump had actually used in an anti-elites campaign ad and who had certainly never shown it at one of Trump’s notoriously boisterous campaign events. The audience laughed weakly. The mood was, as one investment banker put it, “manic depressive.” PepsiCo CEO Indra Nooyi and Starbucks CEO Howard Schultz had railed against the president-elect’s sexism and racism, respectively, but said they were hoping for the best. “It’s a great day to be an American,” said the CEO of Oppenheimer Funds, a sponsor, in his speech.​ ​“​Fully half the country thinks we are going to hell​.”

For his part, Blankfein said, he was “of course” no​t totally caught off guard by Trump’s win​ — ​​Goldman Sachs, after all,​ ​is well ​known for keeping a position on both sides of the deal​​. But he was surprised that the “jarring moment” when markets dipped on the news only lasted a short while​​. “​H​is policies are market-supportive,” he said with a shrug. “Market-friendly.”

So far as anyone understood what Trum​p’s policies were, that is. “He really hasn’t put out any sort of cogent policy on anything,” one investment banker told me.​ ​Over lunch at the conference (roast beef and salmon), the banker, who is from Israel, was attempting to make sense of ​ ​the crumbs the candidate had laid out on the campaign trail along with another banker, who had flown in from Texas.

“Lower taxes,” said Israel. “Lighter regulation.”

“The feeling was that Hillary was going to have a lot more control, and now the markets are going to be rather unfettered,” explained Texas. (In the financial industry, this is viewed as a good thing.)

Trump’s promise to repeal all or parts of Dodd-Frank and suggestions that he would also defang the Consumer Financial Protection Bureau struck them both as unrealistic. They, like others at the conference, were not convinced that Trump would, as he promised, institute “a 21st-century Glass-Steagall,” a law separating commercial and investment banks repealed by Bill Clinton in 1993. (“That omelette’s been made, that toothpaste is out of the tube, pick your metaphor,” observed Blankfein; Goldman Sachs opened retail operations this year.)

“The plans, such as he has, don’t add up,” said Israel, pointing out that the fear could be seen in the bond market, which was plummeting in reaction to Trump’s nebulous comments on trade and immigration restriction, contributing to a sense that inflation was on its way. “When he talks about restrictions on trade, bringing jobs back that were lost — those jobs were not lost because of international trade. Everything will just become more expensive. Do we really want to go back to the way the U.S. was in 1960, where the cars were terrible, where the appliances were terrible?” he asked rhetorically. It was clear he was entering the depressive phase. “When did things get better? When competition came in.”

Or repealing Obamacare. Texas couldn’t see how you can just end it, since millions of people are using it. Though he’s never been particularly fond of the program. “Congress kind of mucked it up, and you have the worst of everything,” he said. “It’s like that expression, ‘What’s a camel? It’s a horse designed by committee.’ ”

“They are actually very efficient creatures,” said Israel, who then ​​slouched off, despondent, to get a cookie from the dessert bar. ​

Elsewhere, the pendulum was swinging toward manic​. “​My own I guess/optimistic take is that he will dial it all down a bunch,” one young hedge-funder told me of Trump​. “He’ll have a bunch of more Establishment Republicans running the show, and he’ll just turn into America’s cheerleader.”

And when Bill Ackman, the activist hedge-fund manager who lost more than a billion dollars this past year on notorious pharmaceuticals giant Valeant, took the stage that afternoon, he was practically ebullient. “I woke up extremely bullish on Trump,” said Ackman. (Who, it should be noted, had also woken up to a pharmaceuticals sector that bounced on the defeat of Clinton, who had vowed to fight price-­gouging.)

“It did occur to me on Tuesday night that some people might react to this positively,” said Richard Socarides, a Clinton adviser turned business consultant, as he filled his plate at the buffet line, adding that he was going through something that felt like the five stages of grief and was today feeling “sad with touches of anger.” He did not agree with Israel’s statement that the United States was “too great” to be destroyed by one person. “I think, long term, the risks to our economy are severe,” he said. “The United States for the last 50 to 75 years has been the central organizing and stabilizing force in the global economy, the safety net for people who believe there should be human rights and democracy and freedom and open markets and capitalism. If that underpinning of the global economy starts to be shaken, anything could happen.”

As the day went on, the rumor that the incipient Trump administration was considering JPMorgan Chase CEO Jamie Dimon for Treasury secretary circulated through the crowd. “He’d be a great Treasury secretary,” said Blankfein, Dimon’s arch-rival, adding that for him, it would be “good to kill two birds with one stone.”

But the appointment of Dimon, who is not only Wall Street Establishment but an old Obama ally — would likely annoy the populace to whom Trump promised change. “He wants to be popular with everyone, but he also needs to stay popular with the people who elected him,” said Socarides, turning over the one facet of The Donald’s personality everyone is sure of: his narcissism. “And those people are not going to be happy if he doesn’t do what he said he was going to do. But if he does do what he said he was going to do, we are all in big trouble. But!” he said, his mood swinging, at least for a second, to the other side: “He could surprise us! It could be fantastic.”

*This article appears in the November 14, 2016, issue of New York Magazine.

Wall Street’s (Confused) Position on Trump’s Presidency