Courtesy of Pam Martens.
Donald Trump, Republican Presidential Candidate
Donald Trump has made a big deal about Hillary Clinton being beholden to Wall Street. That’s true. Wall Street’s mega banks and hedge funds have been major donors to Clinton’s campaign committees after showering her and Bill Clinton with millions of dollars for speeches. But Donald Trump is just as beholden to Wall Street’s mega banks because they are financing his business empire, doing so frequently behind an opaque curtain.
On August 21, the New York Times ran a front-page article by Susanne Craig that pegged Trump’s business debt at $650 million. Three days later, Fortune’s Shawn Tully took a closer look and pegged Trump’s debt at $1.11 billion.
According to Trump’s financial disclosure form updated in May of this year, hundreds of millions of dollars of Trump’s business debt will “mature” over the next seven years. But we don’t actually know what “mature” really means. Are these adjustable rate loans and the interest rate will simply reset on the maturity date? Are these interest-only loans with balloon principal payments at maturity? Are the loans subject to rollover based on a positive reappraisal of the value of the underlying collateral of the commercial real estate?
On September 19 Bloomberg News reported that banks are scaling back lending for commercial real estate “as slowing global economic growth, uncertainty over interest-rates increases and pockets of overbuilding spark concern that commercial real estate prices are due for a fall after almost doubling in six years.”
Trump has said that his adult children will run his business enterprises should be become president. But Trump will be in a position, just as a President Hillary Clinton would, to grant Wall Street mega banks their wish list for Chair of the Federal Reserve, Treasury Secretary, Securities and Exchange Commission Chair and appointees to head other Federal bank regulators. That certainly adds some leverage to the art of the deal.
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