While You Were Working - Day 1 at Milken Institute Global Conference

This week WYWW is bringing you onsite coverage from the Milken Institute Global Conference. Lotsa of heavy hitters making lotsa news...

Mnuchin at home in Hollywood

This was not Steven Mnuchin’s first Milken Institute Global Conference. But it was his first as Secretary of the Treasury. And that shined a whole new kind of spotlight on a man who made no bones about missing the Los Angeles lifestyle he coughed up a wee bit more than 100 days ago.

Mnuchin was the main event this morning and took part in a wide-ranging interview.

The quote that will make the rounds came when Mnuchin explained to Maria Bartiromo of Fox Business News that President Trump’s anti-regulation rhetoric helped propel the Trump Bump in the stock market.

“You should all thank me for your bank stocks doing better," Mnuchin deadpanned to the finance-heavy crowd.

But my favorite quote came when Mnuchin explained that the fate of the border adjustment tax was not a critical as people think to the administration’s economic plans. Mnuchin said there are “lots of other ways” the government can raise the mooted $1 trillion that has been attached to the BAT.

A trillion here, a trillion there … pretty soon we’ll be talking about a lot of money.

Jamie Dimon is fired up

If you think America isn’t great and you want to know why, ask Jamie Dimon. The Chairman and CEO of JPMorgan Chase will not be shy about giving you a one word answer. Stupidity.

Dimon made a passionate appearance during the lunch session at Milken and lamented the stupid pubic policies that have held the US back from reaching its potential.

Trump admitted that he didn’t support President Trump during the campaign and was surprised to see him win. After the election, Dimon said he received quite a bit of negative feedback – including from one of his daughters – about agreeing to work with Trump. But Dimon insists it is the patriotic thing to do.  

“You gotta root for the pilot of the airplane,” Dimon said.

Dimon added that he thinks three of Trump’s key solutions for fixing America are spot on: Tax reform, fixing trade policies and rolling back regulations.

On the regulatory front, Dimon encouraged the Milken audience to be active in pushing for lighter regulation, but to not be parochial about it. In urging the crowd to push for overall changes, or changes in other industries, Dimon explained that when he became chairman of the Business Roundtable, one of the first things he told the group is that they wouldn’t hear him lobby for the specific interests of financial services.

Breaking banks

News that President Trump is looking into the idea of breaking up some of America’s biggest banks received a warm welcome from Citadel CEO Ken Griffin.

"My fantasy is to break up the big banks," Griffin told the Milken crowd. "I wish we would end too big to fail in our banking system."

Paging Mr. Cohn.

The Fed is gonna do what the Fed is gonna do

No one truly know how much longer Janet Yellen will be steering the ship at the Federal Reserve, but that didn’t stop some of the leading minds at Milken from betting she will be really busy. Speaking on the Global Capital Markets panel, Mohamed El-Erian of Allianz said he thinks the Fed will end 2017 with a total of 3 rate increases.

Meanwhile, Scott Minerd of Guggenhiem Partners suggested Yellen might even feel some kind of personal responsibility to start unwinding the Fed’s $4.5 trillion balance sheet before she exits the building.

Wells Fargo CEO Tim Sloan continued his “apology tour”

Murmurs have it that Wells Fargo CEO Tim Sloan might be growing tired of what one bank staffer attending Milken called the “apology tour.” “He understands why he has to do it, but he is just getting tired of it,” the staffer said.

Wilbur Ross is still new to the whole political correctness thing

In regaling the Milken crowd about the inside story of the US missile strike on Syria, Commerce Secretary Wilbur Ross shared how the strikes took place as President Trump was hosting Chinese President Xi Jinping at Mar-a-Lago.

“Just as dessert was being served, the president explained to Mr. Xi he had something he wanted to tell him, which was the launching of 59 missiles into Syria,” Ross said. “It was in lieu of after-dinner entertainment.”

Lobbing cruise missiles to kill people is the new “entertainment”… Wow.

Future not so bright for brick-and-mortar retails

TPG founding partner David Bonderman says there are choppy seas ahead for the brick-and-mortar retail stores.

“There are more store fronts than the country needs. … The guys that are having the most trouble are selling other peoples' brands.”

Bonderman probably should have shared his insight with the crew at Westfield because the shopping center giant just completed a brand new expansion of their Century City mall a few doors down from the Beverly Hilton (home of the Global Conference).

The future of finance still includes people

With all the talk of artificial intelligence and things like blockchain threatening to wipe out a generation of bank employees, you’d be forgiven if you thoughts the future of finance was gonna be all robots. The experts on the Future of Finance panel said that isn’t true – at least not entirely.

My favorite revelation came from Briann Chin of Credit Suisse, who revealed the bank is alrady piloting an Alexa like AI device to help its employees solve compliance challenges. Employees can ask the machine questions and it will spit out the answer. Chin explained that the device is still being tested and that it performs best on more simple questions. Employees still have to call the compliance department for more complex questions, but Chin estimated calls to the bank’s compliance department could be cut in half if the machine handles the low-hanging fruit. The best part is the machine’s name: Reggie.

SoFi co-founder Mike Cagney and NYSE President Tom Farley squashed the notion that the future will be all machines all the time. Cagney explained that most SoFi customers don’t want to have to interact with humans; right up until the point when they do. Cagney told many stories of ways SoFi has optimized its call center to make sure that human interaction is enjoyable and – in some cases – adds value to the customer relationship.

Farley shared similar examples of how humans still want humans there for certain tasks. Be it market openings, closing or major IPOs, Farley said humans will never be extinct on the NYSE floor.

WYWW Appetizers

  • There is at least one person who thinks Jes Staley is doing a fine job running Barclays.
  • Guggenheim’s Minerd warns on US corporate credit.
  • In case you didn’t know, impact investing – the essence of Milken – actually works.