11/8/2012 8:30 PM ET|
Warren win has Wall Street worried
After campaigning on a vow to 'hold the big guys accountable,' Elizabeth Warren heads to Washington as Massachusetts' first female senator.
One of Wall Street's worst nightmares has come true. No, not the re-election of President Barack Obama. What has the financial community exasperated is Elizabeth Warren's victory in Massachusetts. In toppling incumbent Republican Scott Brown, Warren recaptured for the Democrats the seat that until 2010 had been held for more than four decades by Ted Kennedy.
Warren is a former Harvard Law School professor and former special adviser to the secretary of the Treasury, where she helped create the Consumer Financial Protection Bureau.
In doing so, Warren had plenty of adversaries, particularly within the Republican Party, which tends to view the CFPB as a burdensome regulator of Wall Street.
Executives at Wall Street's biggest banks likely haven't forgotten a suggestion Warren made in September 2011, when the newly created CFPB produced a seven-page report for the 50 state attorneys general investigating improper foreclosure procedures by Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C) and Ally Financial. In the report, the CFPB said banks dodged more than $20 billion in expenses between 2007 and 2010 by taking shortcuts in servicing troubled home loans.
The report was presented as the banks and the states were engaged in settlement talks, and there was speculation that the financial firms would cough up somewhere between $5 billion and $30 billion to put the issue behind them.
But Warren balked at the $5 billion figure, saying it "would seem too low" considering that "rough estimates suggest the largest servicers may have saved more than $20 billion through under-investment in proper servicing during the crisis."
In the end, banks ended up settling for a whopping $25 billion.
Oh, and don't forget Warren's calls for a breakup of big banks by reinstating a modern version of the Glass-Steagall Act, a Depression-era law that separated investment and commercial banks. That's not winning her any love from the big banks, either.
Now, just a year later, Warren claims victory over a moderate Republican in a hard-fought Senate race. She's likely to get a seat on the Banking Committee.
As the Los Angeles Times points out, with Rep. Barney Frank, D-Mass., retiring, Warren becomes Capitol Hill's chief defender of the Wall Street reforms passed during Obama's first term.
"At exactly the time that big banks don't want more oversight -- or another potentially activist regulator -- that's what they're getting," says hedge fund manager Shah Gilani. "Not only will Momma be protective and nurturing with her offspring, she will champion a much harder stare-down and, most frighteningly to the banks, a possible breakup frontal assault on them while their underbelly is being further exposed."
How's that going to sit with banks?
JPMorgan Chase CEO Jamie Dimon may be particularly interested in watching Warren's moves. Warren called for Dimon's resignation as a director at the Federal Reserve Bank of New York after his bank's embarrassing $6 billion trading loss earlier this year.
Dimon, of course, didn't take her up on the suggestion, but that hasn't stopped the senator-elect from continuing her crusade against Dimon and Wall Street. After Dimon appeared before the Senate Banking Committee over the trading loss, Warren issued a statement saying, "If there is one thing we learned at the hearing, it's that Wall Street still doesn't get it. Jamie Dimon and his defenders have spent millions lobbying for delays, loopholes and exceptions to block any real accountability on Wall Street -- and they're still at it."
Notes Gilani, "The ascent of Elizabeth Warren spells further declines for big banks. From her new, lofty perch she will be able to feather the nest of her offspring, the CFPB."
Wall Street's problems don't end with Warren, though. Dennis M. Kelleher, the president and CEO of Better Markets, a nonprofit that focuses on financial markets, says the industry has been dealt a crushing defeat.
"Wall Street put hundreds of millions of dollars into defeating Warren, Obama and financial reform. They went all in. Today they have a much bigger problem," Kelleher says.
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I see a lot of people are confusing the government with Wall Street.
Wall Street has purchased our government - mostly the Republicans because they love the system and are in agreement with Wall Streets values - but they own both parties - yes even the tea party Republicans - the system has been set up so that candidates can't get elected without Wall Street.
Wall Street is never satisfied, they want your Medicare dollars, Social Security dollars, your 401K until there is
nothing left - it is all consuming.
They are counting on the stupidity of Americans to keep choosing R's of D's to bicker against each other and name call while they steal the rug out from underneath you but until we wake up - if we ever do - we will be responsible for our own demise.
This country was built on Capitalism where anyone who worked hard could prosper. Now, all the criminal element on wall street take hard working Americans' money and invest it like they were in Las Vegas, yet, they make sure their money is insured so they get paid before all our money is lost to their idiotic investments. Crucify Wall Street and let them burn, along with all involved in the melt down of our country's financial condition. What is really sickening, is that many retired elderly citizens
will now have to go back to work becuase their life savings has been trashed by millionaires and
billionaires. Take all the bail out money and provide help to the people whose money was lost. Bail out the American people who work for a living, not the predators who make money off the people who work for a liiving. E. Warren is the Elliott Ness of Wall Street, you go get em girl!!!
Why should they be worried it they are not infinitely greedy, revelations 2-9 Satan spawn criminals guilty of conspiracy and treason against the USA, all people and nature of the planet? They are the same families that financed the rise of Hitler and have the tooth fillings and wedding bands of Holocaust victims in their bank accounts to this day to prove it. Yet they call the rest of us Anti-Semitic if we speak out or challenge their reign over us and enslaving us in any way. If we brought guillotines to Wall Street and began to line them all up, they still should not be afraid because that is truly what they deserve. Cheers for Elisabeth Warren and the American People!
The people have spoken. I wonder if the rich 2% still think the rest of us won't matter on election day?....
God Bless America, my home sweet home..SSG K ,to answer your question. Yeah I'm ready... ready to move onward and upward with our great country.
Grey Ghost, Please quit calling people names. I doubt you even know Natural Blond yet you call her names.
Go ahead and cry a river....
Of course, its those big bad evil banks that lent all that money to all those poor souls that bought houses they couldnt afford and then cried because they couldnt make the payments once the 1% rate expired in 5 years.
How could they have known it would actually do exactly what the loan said it would?
They were preyed upon!
Oh the humanity!
Alll those victims!
And now Mama Warren will make it right!
Power to the People!!
Free Houses for all!!
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