"Class Envy Run Amok" - Fund Manager Asks Trump To Pardon Michael Milken

Twenty-three years after former Drexel Burnham Lambert executive Michael Milken finished a 22-month minimum-security prison sentence, one fund manager is lobbying President Donald Trump to pardon his past convictions, arguing that Milken’s prosecution was an example of anti-banker hysteria run amok.

Wealth-management executive David Bahnsen told Bloomberg that he sent a plea to Trump asking that he pardon Milken, an innovator who is widely lauded in the financial world for helping to popularize junk bonds among a broader set of investors during the 1980s. Bizarrely, Bahnsen says he’s never met the man. Milken pleaded guilty to securities fraud charges in 1992, and was initially sentenced to 10 years in prison, though he only served 22 months.

Bahnsen said a pardon would send an important message to prosecutors trying to burnish their reputations by going after white-collar criminals.

“Bahnsen, a managing director at Morgan Stanley before he started his own wealth-management group in 2015, told Trump in a letter that Milken’s prosecution was a result of “a period of class envy run amok.” Bahnsen, a Republican donor, said in an email he’s never met Milken.

…

Bahnsen, whose Bahnsen Group oversees more than $1 billion, told Trump the pardon would signal a stop to “headline-seeking, human-damaging corporate prosecutions, devoid of due process.” The banker said he sent an earlier version of the request and revised it after Trump pardoned former Maricopa County Sheriff Joe Arpaio last week.”

Milken, 71, is now a philanthropist and namesake of the Milken conference. While he was investigated by the SEC in 2013 for allegedly violating his lifetime ban from the securities industry, the matter was eventually dropped. Milken has not asked that he be pardoned.

Seeing that Milken himself hasn’t asked for a pardon – and the public is still widely resentful of Wall Street executives for evading prosecution after the financial crisis – it’s unlikely that the request will be seriously considered.

Trump proved his mastery of the f**k you pardon by granting clemency to sheriff Joe Arpaio, a man who – apart from being a longtime friend and campaign-trail ally – is popular with a certain segment of Trump’s base. But we doubt he would do it again to appease a much, much smaller crowd of supports, with whom he has a shaky alliance, at best.

Dr. Doom's Back: Marc Faber Warns Markets Will Fall "Like An Avalanche... Trump Can't Stop It"

"One man alone cannot make "America great again". That you have to realize," warns Marc Faber, the editor of "The Gloom, Boom, & Doom Report," reminding the world that the US stock market is vulnerable to a seismic sell-off that won"t be caused by any single catalyst. His argument: Stocks are very overbought and sentiment is way too bullish for the so-called Trump rally to continue.

"Very simply, the market starts to go down. As it goes down, it will start triggering selling, and then it will be like an avalanche," said Faber recently on CNBC"s Futures Now. "I would underweight U.S. stocks."

Faber, a supporter of President Donald Trump, isn"t blaming the new administration for his bearish forecast:

"Trump, unlike Mr. Reagan, is facing huge, huge headwinds — including a debt to GDP that is gigantic, as it is in other countries."

Faber lists rising interest rates and record earnings and margins as additional risks to the historic rally.

The Dow Jones Industrial Average closed at a record level for a twelfth consecutive session today with the S&P 500 to see the fewest declines in February than in any month since May 1990.

The investor said that markets in Mexico, Brazil, and Asia also have been picking up significant gains so far this year. However, Faber doesn’t expect the worst-case scenario for all countries that have been benefiting from a strong run.

“China looks quite attractive. For the next three months, money can flow into China. The economy, surprisingly, has begun to do quite well. We see that in retail in Hong Kong. We see that in the hotel industry, and we see that in demand for commodities,” he said.

Faber says that resource commodities such as copper and gold would probably bring the traders solid profits this year.

“When you look at Trump and his administration, and the way the budget is, I think further money printing down the line is inevitable,” he said, stressing that such a policy could push commodities even higher.

Moelis Wins Saudi Aramco Advisory Mandate: World's Biggest IPO

In what will be the biggest victory in the brief history of Ken Moelis" relatively new New York-based independent investment bank, Moelis & Co., moments ago the FT has reported that Moelis has won the advisory mandate for the planned IPO of Saudi Aramco. 

As the FT notes, "winning the hotly contested mandate represents a coup for the boutique investment bank, which was founded by Ken Moelis in the midst of the financial crisis in 2007." As for the potential for advisory fees, they are - in a word - huge: the Saudis hope to turn the state-owned oil group into the world’s biggest, most valuable publicly traded company, with a valuation of about $2tn. As the FT also adds, citing people close to the IPO planning process, the sale of a 5% stake should happen next year, although the number of shares sold could increase, although depending on the price of oil, the timing could slip.

A quick recap on the strategy behind the Saudi plan to take the company public:

Saudi Aramco’s IPO is part of a transformation plan, envisaged by Saudi Arabia’s power broker deputy crown prince, Mohammed bin Salman, which seeks broad-based privatisation to boost employment and diversify the kingdom away from oil. Prince Mohammed believes the privatisation could value Saudi Aramco at $2tn.

A successful flotation aims to use the IPO proceeds for investments in non-oil industries in order to wean the country off its most precious resource.

Banks, advisory firms and consultancies have scrambled to secure work on the IPO since Saudi officials announced their intention a year ago. JPMorgan, which has been Saudi Aramco’s commercial banker for years, and Michael Klein, a former star Citigroup banker, are working with the Saudi authorities on a broad range of matters including the IPO.

It was not immediately clear was the fee structure granted to Moelis will be, but even a sizable haircut on traditional advisory fee assignments will be a huge windfall for the investment bank.