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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452Comments
Nov 8, 2012 4:18PM
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It seems to me that since Obama has been president the stock market has gone up a rather large amount, why does anyone think that is going to change. Some people have told the same lies for so long that they now actually believe their own lies. Relax, everything is going to be just fine 
Nov 8, 2012 4:18PM
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Pull your money out now.  Warren and Obama will end the wealth in this country.  We will all be looking for the government to help us.

 

America as we know it, is gone!!!!!

Nov 8, 2012 4:17PM
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When will you people wake up and realize you should have been in Whole Life Insurance all along. It has never lost money, always gain and you can access your cash anytime without penalty or credit checks. The reason it is trashed is the greedy Wall Streeters and morons like Dave Ramsey...he should be hung by his balls. Americans are too greedy....I have maintained a straight consistent 5-7% every year for over 20 years....with no taxes. Can any person in America make that claim outside of using Life Insurance? NO!   But you won't do it because your broker tells you it's bad...Your broker makes 2% off your money minimally every year whether you make money or lose it. THEY DON'T CARE. They hate you, they love your money. Broker's should all be in prison for faulty information and grand theft.  Dave Ramsey should join them!!!
Nov 8, 2012 4:17PM
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Who are you kidding? Wall Street has exactly who it wants as president. The man with the most money always wins. Can't wait to see who takes tax cheat  and meltdown overseer Tim Geithner's place. Anyone who thinks this election was a win for the citizenry is ignorant at best
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It's nice to see Wall Street bankers feeling pain for a change.
Nov 8, 2012 4:16PM
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Please.........chill out. I believe after the next for years in office, he will go down as one of the great presidents. The man has done more for my personal life in a positive way than any other president in my 60 plus years. I've seen many presdients come and go and flap their lips about healthcare but NOTHING has been even attempted until Obama. He saved my home from foreclosure in 2009 from the Make Home Affordable program. He made it so my 20 something kids can be carried on my insurance until they get on their feet in life. Employers dont' just hand out benefits like they used to. Look how many peoples' jobs he saved by bailing out Detroit and the cars are even nice. Wow. Have some respect for our president. He's a great man in my book.
Nov 8, 2012 4:15PM
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Oh, so now they want to act like they are good people?  What a sham, I want Warren on both Banking and Finance.  We need someone to stand up for all of us that lost most of our wealth because of the Wall Street and Bankers stupidity and betrayal.  Make their lives as miserable as ours.  Let them know how it is to have to do actual honest work instead of using other peoples savings and retirement funds to pay for their "gambling business tactics"  that only paid off for them.  If Obama caves in to them I will never forgive him.  He played to them in the first term, then they turned on him.  He has to be completely stupid to fall for their continued lies and deceit.  Obama needs to remember who elected him, and it was not Banks, Corporations and Wall Street.
Nov 8, 2012 4:13PM
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Do you really think that the greed on Wall Street happened all by itself?  Good lord can you really be that  blind?

 

The guys on Wall Street would be in jail if what they did was illegal.  The fact that they are still walking around and collecting their bonuses speaks volumes.  And who makes the laws?  Congress of course.  And who gave them money to help them shore up their losses?  That would be Ben Bernanke of course. . .

 

I think this country is doomed if the electorate can't figure out that the corruption in this country is in both parties.  And no one wants to fix the problem because they are living so well with the status quo.

 

 

Nov 8, 2012 4:12PM
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Ummm, yes goldman sachs was Romney's top contributor, but what do you know they gave 20,000 more to barack osama than they did Romney.  Jp Morgan also gave more to Oblama than they did Romney.    This is an awful story that I guess was just written to stir up the people who are too stupid to know that you can't trust the drive by media.
Nov 8, 2012 4:11PM
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If arrogant Wall street criminals don't want Warren on the banking committee, then that exactly where she should be.  I don't want  one more cent of my tax dollars to banks that destroyed the economy and caused millions of American to lose their homes.  I hope Wall street gets steam rolled, it's about time the tables are turned.
Nov 8, 2012 4:08PM
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I have a question for anyone familiar with Wall Street: How familiar are you with Human Nature? It is upon this that Greed slowly seeps into Ambition. What if i told you that you could make millions of dollars with no risk to yourself? Would you do it? The odds are: Yes. You would. Why do i say this? When individuals are at work the LAST thing on the mind of a worker is "Gee, is this what my political leanings would approve of?" No one thinks this way. What people think of is the "here and now". Simply put, we are not considering the future implications of our actions since the focus is on what were are doing in the moment.
Nov 8, 2012 4:08PM
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What liars !!! Obama was backed by wall street and the Banks in 2008 and 2012 !! Main stream media is full of crap !!! Do the libs really think Obama is against the fat cats on Wall street ?? He made them RICH RICH RICH !!!  Free money printed and lent at 0% interest rate being currenty gambled in the derivative market by Goldman, Merryl,B of A, JP Morgan just to name a few which will cause the collapse of the world economy but not before they rape and pillage it
Nov 8, 2012 4:05PM
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Beat Goldman Sucks to death with that olive branch.

Nov 8, 2012 4:05PM
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Yes a nightmare for them but for the country a dream.  They've had free reign under Bush to rob and steal and they don't like the regulations that will be coming to keep them in line.  
Nov 8, 2012 4:02PM
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Shakespeare said, "..first thing we do is kill all the lawyers".  I think that should be changed to include lobbyists and bankers.
Nov 8, 2012 3:59PM
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You greedy ****s have it coming!  You've raped, pillaged and sold off some of the best US assets over the last 20 years.  Hopefully Gen X will have the US spirit to rebuild your squander.
Nov 8, 2012 3:58PM
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Last over 250K earner to leave the country,  please turn out the lights.
Nov 8, 2012 3:57PM
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Obama's top contributors:
University of California, Microsoft, Google, US Government and Harvard. Who thinks is is appropriate for colleges to donate huge amounts to campaigns and raise our kids tuition. Number 4 is pretty troubling too.

Nov 8, 2012 3:56PM
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After viewing "O-Boy's" amassed Executive Orders, I shiver and am deeply concerned that as philosopher, "POGO", iterated: " WE HAVE MET THE ENEMY AND HE IS US",    .... A  NATION IMPLODED BY DECEPTION AND IGNORANCE.   Acquiring a weapon is wise.   But, also, bear in mind other necessities, i.e. food, clothing and a continual supply of water  --  silver and gold coins.

To replace freedom with this dictatorialistic / socialistic  agenda will draw blood in the streets.

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