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CEO Daily: Trump and Wall Street make up

Saturday Morning Post: The Weekly View from Washington

If the blue-collar workers who helped deliver Donald Trump to power expect he’ll redeem his tough talk about Wall Street from the campaign trail for a pound of industry flesh once in office, now may be time to temper those hopes. That, at least, is the assessment of one of the most powerful figures in finance, J.P. Morgan CEO Jamie Dimon. In a press call Friday to discuss the bank’s fourth quarter earnings, Dimon told reporters he’s setting aside Trump’s “one-liners and election rhetoric.” Instead, he said, he’s “comforted by the fact that he’s putting real players on the playing field.” And Dimon is in a position to press his case, considering his direct line to the president-elect as both the new chairman of the Business Roundtable and one of 16 CEOs in Trump’s economic advisory group, the Strategic and Policy Forum. Dimon downplayed his own influence — “I don’t whisper,” he said — but pointed to Treasury Secretary nominee Steve Mnuchin, a former Goldman Sachs executive, and Commerce Secretary nominee Wilbur Ross, the billionaire investor, as inspiring confidence that the new administration won’t push hardline protectionism or antagonize important trading partners like China.

Dimon’s comments, a day after the Trump team announced the fourth and fifth appointments of Goldman Sachs alums to top administration posts, track the market’s judgment. J.P. Morgan, whose earnings beat expectations by rising 30% in the fourth quarter, has seen its share price surge 23% since the election. Shares of other big banks are up sharply, too, in part on expectations of a Dodd-Frank rollback. Dimon on Friday said he thinks Trump will boost economic growth broadly by easing up on regulations and passing tax relief. The industry, and the public, will get a clearer sense of what the administration has in mind this Thursday when Mnuchin heads to the Senate for his confirmation hearing.

A programming note: This will be one of my last contributions to this note, since this week I launched a daily newsletter — Trumponomics Daily — devoted to covering the business impact of the dawning Trump era in Washington. So if you’ve found the Saturday edition of the CEO Daily valuable, I’d encourage you to join me during the week, which you can do by signing up here:

Tory Newmyer

Top News

• Trump’s campaign promises are colliding with the hard facts of governing reality

As a candidate, Trump pledged swift results on his most sweeping policy pronouncements, from wholesale replacement of the Affordable Care Act, to the construction of a Mexican border wall and a burst of infrastructure spending. Already, the grind of a legislative process that moves at its own pace is frustrating Trump’s vision for a pileup of early victories. Even with unified Republican control of Congress, Trump can’t simply will his agenda into law — a potentially difficult adjustment for a man about to assume his first-ever public office.  Washington Post

• House moves to repeal Obamacare

The House voted nearly along partisan lines Friday to fast-track repeal of President Obama’s signature healthcare overhaul. The Senate passed the same procedural measure on Thursday, clearing a path for Congressional Republicans to undo the Affordable Care Act with simple majority votes in each chamber in the weeks ahead. But there’s growing concern in GOP ranks about the party’s ability to forge consensus on an alternative to replace the law — and anxiety about the speed with which Republicans are moving to rip up the existing one in its absence. New York Times

Government ethics watchdog reminds employees of no-endorsment policy after Trump’s L.L. Bean tweet

A day after Trump tweeted an encouragement that people buy L.L. Bean goods — a thank-you to Linda Bean for her support, and a would-be violation of a ban on commercial endorsements by executive branch employees — the federal ethics watchdog reminded workers of the policy in its own tweet. The U.S. Office of Government Ethics made no mention of Trump’s missive in its reminder, but its motivation was clear enough from the context. The office came under fire this week from House Oversight Chairman Jason Chaffetz after its chief suggested Trump’s plan to hand his business over to his sons while maintaining his stake in it falls woefully short what’s needed to ensure the incoming president faces no conflicts of interest.  Fortune

Around the Water Cooler

• Trump Bump is minting a new set of billionaires

The post-election stock rally now short-handed as the Trump Bump is making billionaires out of a handful of already-wealthy executives. Among the new members of the Three Comma Club: Square CEO Jack Dorsey, Robert Wilmers, CEO of the Buffalo-based M&T Bank, and Stuart Miller, CEO of the homebuilding company Lennar and the only Fortune 500 chief executive in the bunch. The market rally has also padded the billions of those already in the club. Warren Buffet, for example — a vocal Trump critic and Hillary Clinton booster — has seen his Berkshire Hathaway shares gain $6.4 billion in value since the election.  Fortune

• Younger Kushner feels unwelcome political heat

The rapid rise of Trump son-in-law Jared Kushner to the pinnacle of political power has put his younger brother, Josh, in an uncomfortable position. The 31-year-old investor has guarded a lower profile than his older brother, who’s set to join the Trump White House as a senior advisor. The longtime Democratic donor maintains one of his biggest investments in Oscar Health, a startup that sells insurance to individuals under the Affordable Care Act. Since the election, he’s reassured investors in Thrive Capital, his technology investment firm, that he remains committed to keeping his head down and focusing on the business.  New York Times

• Trump’s new trust plan for his business interests doesn’t inspire much of it

The plan that Trump’s lawyer described for how the incoming president will handle his business interests once in office reveals a troubling detail. Unlike a blind trust, which empowers an independent trustee to make decisions about assets and fire executives guilty of ethical misconduct, Trump’s holdings will be managed by his sons and a loyal lieutenant. They’ll be managing the Trump Organization as an ongoing concern, and Trump himself plans to return to it once he leaves office, ensuring some of its gains in the meantime will eventually end up in his pocket. One Republican ethics lawyer sees a path forward under the described structure, if the Trump team names a respected ethics adviser with broad authority to police deals.  Fortune