The New York Times reports that U.S. banks and firms saw their stocks slump on Wednesday, on the news that a second term for President Obama would cement the Dodd-Frank financial regulations. Here’s a quick snapshot of the shares performance following the opening bell at the New York Stock Exchange, per the NYT:
- Morgan Stanley: down 4 percent
- Bank of America: down 3.8 percent
- Goldman Sachs: down 3.8 percent
- JPMorgan Chase: down 3.1 percent
- Citigroup: down 2.7 percent
- Wells Fargo: down 1.7 percent
- Evercore Partners: down 5 percent
- Greenhill & Company: down 2.6 percent
- Lazard: down 1.4 percent
The Huffington Post, via Reuters, reports that Obama’s next steps will be to:
- Name key financial regulatory heads
- Engage bank lobbyists to focus on regulators as well as issues
- Pursue opportunities to reset relations with key policymakers
The next political term will provide opportunities for a personnel shakeup, reports the HuffPo:
Major power players under Obama, including Treasury Secretary Tim Geithner, are expected to step down, offering Wall Street a chance to reset relations … SEC Chairman Mary Schapiro’s term does not expire until June 2014, but speculation about her departure has been swirling for well over a year … SEC watchers speculate the job could go to SEC Commissioner Elisse Walter, a close friend of Schapiro’s and a former executive at the Financial Industry Regulatory Authority, an industry-funded watchdog.
The Economist, which endorsed Obama in 2008, expressed doubts prior to election day about his ability to handle financial and economic matters during the next four years:
As with the gargantuan Dodd-Frank reform of Wall Street, Obamacare has generated a tangle of red tape—and left business to deal with it all … It is here that our doubts about Mr Obama set in. No administration in many decades has had such a poor appreciation of commerce.
Despite these shortcomings, the editorial board backed Obama:
… This election offers American voters an unedifying choice. Many of The Economist’s readers, especially those who run businesses in America, may well conclude that nothing could be worse than another four years of Mr Obama. We beg to differ.
Over at The Atlantic, Emily Badger and Sommer Mathis make arguments for federal urban policy initiatives like a national infrastructure bank, reform of the Federal Railway Administration and funding for regional high-speed rail projects, and a hike in the gas tax, as well as greater rationalization over how resources are spent:
Imagine if the federal government created a clear and unified definition for “location efficiency” and then used it as a metric to determine which local projects merited federal grants or other support. What if you could qualify for a larger federally backed mortgage on a “location-efficient” home?
Leave your thoughts on market and economic impacts of the election outcome in the comments section.