In true Goldman Sachs fashion, Lloyd Blankfein is having trouble enjoying the Trump administration's Wall Street giveaway bonanza because it has become so unsubtle and fiscally asinine.
During an interview with CNNMoney, the Emperor of 200 West Street praised what the Trump administration has done for the US economy before essentially telling them to calm the fuck down:
"The odds of a bad outcome have gone up," the Goldman Sachs CEO told CNN's Christine Romans in an interview airing Wednesday.
Blankfein noted that the economy was already humming along before the federal government juiced it with $1.5 trillion in tax cuts and $300 billion of additional spending, pushing up the budget deficit. And now, President Trump has proposed a $200 billion infrastructure package.
That kind of spending is normally reserved for recessions -- or at least fragile recoveries -- not booms.
While it's not his "base case," Blankfein said the risk is that all that stimulus could be "too much of a good thing" for the economy and financial markets.
And while Lloyd is an adult who understands inflation is an increasing certainty thanks to a Fed that appears suddenly inelastic philosophically, he seemed almost flummoxed by the wider fiscal decision-making going on at the very top of the economic policy ladder:
Washington's spending binge will force the Treasury to borrow more by issuing more bonds. Those bonds will need to be sold at the same time that the Fed is winding down its past stimulus efforts, which were known as quantitative easing (QE), by offloading vast amounts of Treasury notes.
"They have a competitor: the central bank," Blankfein said. "They're going to sell into the same kind of market to the same investors."
Lloyd almost certainly knows enough to know that Steve Mnuchin knows nothing, so he's out here sounding an alarm to the Trump Id-ministration that they need to chill on doing more and more to boost an already verrrrrry healthy economy. And since Lloyd knows that Gary Cohn is incapable of using nuance to sway POTUS, he put it in terms that Trump can understand; biting outer-borough sarcasm:
"What could possibly go wrong? I haven't felt this good since 2006," he joked.
It's how a Brooklyn guy tells a Queens guy "I knew you was gonna fuck this up."