It’s not just the return of ‘Government Sachs’ in the person of new White House strategist Steve Bannon. Traders are thinking Trump’s policies might actually work—at least for them.
It’s amazing how quickly Wall Street bends toward the arc of power in Washington. When Bill Ackman, the billionaire hedge-fund manager, woke up on Wednesday morning, he was “extremely bullish” on Donald Trump, adding: “Believe it or not.” Yes, that was more than just a little hard to believe, considering Ackman had never uttered a peep of support for Trump during the campaign and the new President-elect has long advocated eliminating the so-called “carried interest” benefit that allows hedge-fund managers, private-equity moguls, and other partnerships, to pay taxes at a lower rate than most other Americans.
But now Ackman was in the tank for Trump. “My thinking is as follows,” Ackman said at a New York Times conference on Thursday afternoon. “The United States is the greatest business in the world and it's been unmanaged for a very long period of time. We now have a businessman as the president and he has power because Republicans control Congress. He's going to launch a major infrastructure program. He's going to take corporate taxes down to a sensible level and get rid of loopholes. He's going to get a lot done and nothing has gotten done in a very long period of time. And if you are an activist investor, you want someone to come in, take over and get things that need to get done, done.”
It turns out that Ackman is not alone on Wall Street in suddenly being able to see Trump’s virtues. Consider the extraordinary rally of the Dow Jones Industrial Average to nearly 19,000, an all-time high, after stock futures took an initial panicky dip when the shocking election results became known early Wednesday morning. Speaking at the same Times conference, Lloyd Blankfein, the Chairman and CEO of Goldman Sachs and an outspoken supporter of Hillary Clinton—his firm paid her $675,000 for three appearances in 2013—also found some Trump religion, despite being featured in an anti-global establishment advertisement that Trump ran a few days before the election (one that some commentators suggested was anti-Semitic).
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