New Wall Street nightmare begins

Its presidential pick loses big, and one of its harshest critics heads to the US Senate. Where do bankers go from here?

By Kim Peterson Nov 8, 2012 2:47PM
Images: Bank Vault (Radius Images/Jupiterimages)Wall Street is in a bit of a political pickle these days. It made a large, risky bet on Mitt Romney's presidential campaign, and now must try to fix its fractured relationship with President Obama.

Even worse, one of its biggest fears has come true -- Elizabeth Warren as Senator -- which may lead to an even bigger nightmare: Elizabeth Warren on the Senate's banking committee.

What's an embattled banker to do? Make nice, and fast. One Wall Street lawyer told The New York Times that the industry "made a bad mistake" in backing Romney so completely. "They are going to pay a price," he said. "It will soften over time, but there will be a price."

Romney's top five contributors were Goldman Sachs (GS), Bank of America (BAC), Morgan Stanley (MS), JPMorgan Chase (JPM) and Credit Suisse (CS).

But as Romney fades into history, Warren is coming on strong. It's kind of amazing to see one woman so completely rattle the industry, but that's what's happening after Warren's decisive victory over incumbent Sen. Scott Brown in Massachusetts. She helped create the new Consumer Financial Protection Bureau, but backed away from it when Congressional Republicans revolted at the idea of her as its first director.

She moved quickly into the political arena. "Wall Street CEOs -- the same ones who wrecked our economy and destroyed millions of jobs -- still strut around Congress, no shame, demanding favors, and acting like we should thank them," she said at the Democratic National Convention. "Anyone here have a problem with that? Well I do."

Now there are two questions surrounding Warren's entry into the U.S. Senate. Will she soften her tone in order to legislate effectively? And will she get a seat on the Senate Banking, Housing and Urban Affairs Committee, which oversees the financial services sector? A senior aide on that committee told Bloomberg that it's not a sure thing, and that a decision won't happen until January.

Senate Democrats, who watched Republicans block Warren from the consumer bureau she worked hard to create, may end up giving her the seat she wants.

But one Hill watcher -- perhaps a lobbyist hoping to sway the situation -- told Politico this week that the Senate Finance Committee would be a better fit. "The banks all have tax issues that are at least as important as regulations, and that's a better committee in terms of fundraising," said the anonymous insider, noting that Warren will be in high demand as a Democratic fundraiser. Plus, placing Warren on the finance committee instead of banking could be viewed as an olive branch of sorts to Wall Street.

That leaves Wall Street's powerful lobbyists with a clear mission: Get Warren as far away from the banking committee as possible.

As for the industry itself? It needs to mend fences with Obama, and then try not to get steamrolled over the next four years. As Warren and other new senators -- including Tammy Baldwin and Angus King -- flesh out their political and legislative ambitions, Wall Street will continue to be a prime target.

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449Comments
Nov 8, 2012 6:42PM
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Don't worrie obama is our god now welcome to Hell
Nov 8, 2012 6:40PM
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Don't worrie obama is our god now welcome to hell
Nov 8, 2012 6:36PM
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There's 68 acres of land in Kentucky with a spring, a pond and 2 caves that my wife and I are going to look a this weekend and possibly purchase.  They want $149,000 for it.  It maybe a better investment than stocks.  Plus, I'll have a safety net of good water and food (hunting, fishing and future garden).  Time to prepare for the collapse.
Nov 8, 2012 6:32PM
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we need someone to start kicking lobbyist butt. those people have way too much power.
Nov 8, 2012 6:29PM
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Poor Wallstreet Bankers...For decades now, they have operated on the philosophy that they "can do no wrong" and somehow bear no responsibility for the collapse of 2008.

 

Now they whine and cry when they can no longer rob the average American without repercussions.

Nov 8, 2012 6:29PM
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Wouldn't the Bureau of Indian Affairs be better for Warren?
Nov 8, 2012 6:27PM
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It is so laughable when people said about socialism. United State is not socialistic country at all or we not going to that direction at all. Acutally we are more and more going into non socialistic counrtry when any big corporation can do what ever they want and all these rich people are backing for Republicans. Did you see the faces of Republicans when Romney made speech after he lost the election and you see the President Obama's supporters, Obama's supporter are the faces of this country all race and religion. It is for all people, not just the white people who are not get along with different back ground or belief. WAKE UP REPUBLICANS. IT IS NOT YOU COUNTRY. IT IS COUNTRY FOR ALL PEOPLE WHO IS LIVING IN THIS COUNTRY. PERIOD!!!!!

Nov 8, 2012 6:25PM
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Everyone needs to READ the obamacare act. Take a look at how it will directly effect YOU, not your rich uncle, your racist dad or your **** sibling. REALLY READ WHAT IT SAYS AND APPLY IT TO YOUR LIFE and you won't be so upset about it....guaranteed. If you rich, you are the only one that has any gripe....except you can afford it so shut up. If your racist, then I hope it hurts you really bad and you leave this great melting pot of ours. If your a ****...your screwed anyway. The rest of us are middle class folk and the prices or penalties are non existent or very minimal....seriously. The poor people will always get healthcare and not have to pay for it, how do you tell someone to just be smarter and go make more money. If your lazy, get off your **** and get a job, stop expecting someone to take care of you, you are the real problem here.
Nov 8, 2012 6:25PM
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The re-election of Obama has caused Wall street to tank.

Nov 8, 2012 6:25PM
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Whatever Kim.  Wall Street made the same bet on Obama.  He has pandered at every turn to Wall Street and helped buoy the banks for years.  Anyone that thinks otherwise is simply a fool.
Nov 8, 2012 6:23PM
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If Romney would have been elected, the Stock Market would have had a Rally like no other !

The 1% reacted by showing their displeasure of the Numbnuts and Moochers who sponge off of the

workers and real earners of Society. I predicted that the Market would dop like a "Lead ballon" if the Coward in Chief would be re-elected and I was right on the Money ! The Folks in the Middle Class need to really be shaking in their Boots, because the Tax Man is Comming for your Wallet !

Don't let this Socilaist fool you, he means to make you Poor and Dependent ! 

Nov 8, 2012 6:23PM
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What are you smoking? Obama began his presidency as a compromiser in chief. And it pissed off a lot of his constituency. He even tried to compromise with those who made it their first political priority to “make him a one-term president” (good luck with that). His accomplishments are many, even with the obstructionist repubs pounding their chests.

And what’s this ‘quite spending’ horse dookie. Yes, let’s do that. Let’s quit spending on roads and bridges, you know, like the ones that you drive on. Oh, and airports, like air traffic control systems. And fire and police and schools. I know, your kids go to private schools so screw those who can’t afford to do that. That is the best way after all to keep those miscreant low lifers down (you know, so they can remain low lifers, so they can’t move up the economic ladder, so they remain society’s ‘takers’, so you can continue to complain about them.

 

In truth it’s people like you who benefit from ‘entitlements’. You feel you’re entitled to take advantage of all the economic privileges without paying your fair share in taxes. You are entitled to all of the services performed by others while you piss and moan about how minimum wages are too high.

 

And it’s people like you who are the true advocates of wealth redistribution. But only if it’s redistributed from the pockets of the middle class into your pocket. It’s only bad if it is redistributed downward instead of upward. This country has, over the past thirty years, seen the largest redistribution of wealth in the history of the world – except it’s going upstream, not downstream. And when anyone dares to bring this inconveniently to your attention, they are labeled un-American socialists, or worse (save your breath. I can hear you now accusing me of same).

 

So yes, let’s stop spending – like on your precious military and their friends at Halliburton.

 

Trickle Down is a failed economic model. How many more times do we have to participate in this grand experiment, only to have it proven time and time again. It doesn’t work as advertised. It actually does work just fine for the privileged uber-class (which is their dirty little not-so-secret secret).

 

And if you are not of the uber-class I speak of, then that just makes you their willing sycophantic boot-licking tool who consistently votes against your own best interest so you can avail yourself of the privilege of eating the breadcrumbs from their table.

Nov 8, 2012 6:23PM
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The fact that those five companies are Romney's biggest contributors is why he lost th eelection, and what is worng with American politidcs in general (and not just the Repugnicans).

 

These companies are expecting a return on their investment when they contribute to political campaigns, and it infuriates me to no end that politicians won't clean themselves up, do the right thing, and ban these companies and "super-pacs" from being able to give them money.

Nov 8, 2012 6:22PM
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I got one word for Wall Street's nightmare. OBAMA
Nov 8, 2012 6:21PM
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There is a right wing politics and a left.  The swing between the two is what is important.  The swing must go back and forth to keep a balance in our society.  Margaret Thatcher did a fantastic job of pulling the country back from the far left.  She in turn proceeded to push it to the far right.  And so it goes on.  Between left and right swings it hovers over the centre, at that time we see a fair and just society because the whole thing is in perfect balance.  This is the time of social justice and opportunity for all before it is dragged one side or the other.  Bush screwed over aAmerica with his far right, now Obama is pulling it back to centre.  At the end of his next term, we should see a return the real American values which count and a reining in of greed, excess profit and hopefully Donald Trump!
Nov 8, 2012 6:21PM
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Here's a list of Obama's top supporters. Notice that there are a lot of banks on the list. Seems to me MSN is resorting to fiction in their reporting.
University of California $1,648,685
$1,013,091
Harvard University $878,164
$852,167
Google Inc $814,540
$808,799
$736,771
$624,618
Sidley Austin LLP $600,298
Stanford University $595,716
National Amusements Inc $563,798
WilmerHale LLP $550,668
Columbia University $547,852
$543,539
$532,674
IBM Corp $532,372
$529,855
US Government $513,308
$512,232
Latham & Watkins $503,295

Nov 8, 2012 6:19PM
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So much hate and ignoranace on here. I guess the conservatives have invaded MSN.
Nov 8, 2012 6:13PM
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Oops, the sh-t is really about to hit the fan. Now its time to sell big time, this women don't seem the type to be bought and may have a personal agenda or should I say pay back in mind, like they say Nothing like a women scorned or pissed off. They can be a real BIT_H
Nov 8, 2012 6:12PM
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I noticed that one post promoted the elimination of lawyers, bankers and lobbyists. In truth,  the greatest benefit the great american "brain-washed" could receive would be extermination of that segment of American society that masquerades' under the label "journalists" , when they are nothing more than purveyors of self-serving fabrications that propagate their personal ideologies. 

Nov 8, 2012 6:10PM
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Elizabeth Warren got elected in spite of outright lies on her heritage and her academic background. I think more then the bankers need to worry with this happening. Heck Jesse Jackson Jr got re-elected and we haven't seen him for 6 months including on the campaign trail. How did that happen?

Goes to show you, we, are the enemy as, we, the electorete keep doing these STUPID things of electing individuals like this. Where I live we are stocking up on ammunition and locking and loading. No telling when these stupid people and the Socialist President will be coming for what we have including our guns we use to hunt with.

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