In today's episode of "Who Will Cable News Defend," Anderson Cooper took up arms for Steven Mnuchin, facing off with formidable Senator Elizabeth Warren.
Anderson Cooper, in the role of Wall Street defender, asked Senator Warren whether it was fair to exclude anyone who worked in finance from roles in government. She set him straight, and quickly.
After explaining that voters were angry about Wall Street turning their lives upside down and turning them out of their homes, not paying any price for that, and then infuriating everyone, Warren laid down the problem.
"Donald Trump tapped into that anger and he promised when he was running for president that he would break the connection between Wall Street and this Congress," she remonstrated. "He wasn't going to do that sort of thing, and then what does he do? He turns around and picks a guy who had actually been one of the people who helped do all of those lousy mortgages."
Yes, Steven Mnuchin was that guy. And that was just the beginning of what he did, as Warren explained. "Then after the crash, a guy who turned around and bought a bank that then became infamous for how hard it squeezed families that had already been cheated, and was the foreclosure machine following that."
Mnuchin profited handsomely from Wall Street's malfeasance and other people's pain.
For Democrats and consumer advocates, hearing Mnuchin talk about a rollback of Dodd-Frank is troubling given his recent history in the banking business. Mnuchin in 2009 led a group of wealthy investors — including Soros and Michael Dell — who bought failed Pasadena mortgage lender IndyMac and turned it into OneWest Bank.
Mnuchin’s group netted billions thanks in large part to a much-criticized deal that allowed the investors to buy the bank at a big discount while passing off as much as 75% of its loan losses on the Federal Deposit Insurance Corp. Mnuchin and his group paid about $1.6 billion for the bank and sold it last year to New Jersey lender CIT Group for $3.4 billion.
Between the sale price and hefty dividends paid out from 2011 to 2015, Mnuchin and his group made a profit of more than $4 billion. It’s not clear how much of a profit Mnuchin personally made, because his stake in OneWest was undisclosed.
Despite its secure financial footing, OneWest had a history of problems with regulators over its foreclosure practices and lending and has been accused of being unwilling to work with borrowers seeking mortgage loan modifications despite promises to do so. Community groups have accused the bank of being particularly aggressive about foreclosing on properties in minority neighborhoods.
Warren ripped Trump for this and the threat to repeal Dodd-Frank, which would allow all of the Wall Street excesses which put us in the hole before to be reincarnated and become much, much worse.
She barely got started on it. She never even got to the prospect of Goldman Sachs president Gary Cohn being considered for the Office of Budget Management. That one is as mind-boggling as Mnuchin.
It is time to go back and review what led to the Great Depression. Know your history, because it looks like it's about to repeat itself.
I think the Senate confirmation hearings for Mnuchin will be epic. I also think he'll ultimately be confirmed. Adjust your investments accordingly.