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On Wall Street, Time to Mend Fences With Obama - NYTimes.com

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*Subject:* On Wall Street, Time to Mend Fences With Obama - NYTimes.com


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http://dealbook.nytimes.com/2012/11/07/on-wall-street-time-to-mend-fences-with-obama/?ref=business
On Wall Street, Time to Mend Fences With Obama

[image: Daniel Loeb, a hedge fund titan, right, backed Barack Obama in
2008, but Mr. Romney in 2012.]Steve Marcus/ReutersDaniel Loeb, a hedge fund
titan, right, backed Barack Obama in 2008, but Mr. Romney in 2012.

Del Frisco’s, an expensive steakhouse with floor-to-ceiling windows
overlooking the Boston harbor, was a festive scene on Tuesday evening. The
hedge fund billionaires Steven A. Cohen, Paul Singer and Daniel Loeb were
among the titans of finance there dining among the gray velvet banquettes
before heading several blocks away to what they hoped would be a victory
party for their presidential candidate, Mitt
Romney<http://topics.nytimes.com/topics/reference/timestopics/people/r/mitt_romney/background/index.html?inline=nyt-per>
.

The next morning was a cold, sobering one for these executives.

Few industries have made such a one-sided bet as Wall Street did in
opposing President Obama and supporting his Republican rival. The top five
sources of contributions to Mr. Romney, a former top private
equity<http://dealbook.nytimes.com/category/main-topics/private-equity/?inline=nyt-classifier>executive,
were big banks like Goldman
Sachs<http://dealbook.on.nytimes.com/public/overview?symbol=GS&inline=nyt-org>and
JPMorgan
Chase<http://dealbook.on.nytimes.com/public/overview?symbol=JPM&inline=nyt-org>,
according to the Center for Responsive Politics. Wealthy financiers — led
by hedge fund investors — were the biggest group of givers to the main “super
PAC<http://topics.nytimes.com/top/reference/timestopics/subjects/c/campaign_finance/index.html?inline=nyt-classifier>”
backing Mr. Romney, providing almost $33 million, and gave generously to
outside groups in races around the country.

On Wednesday, Mr. Loeb, who had supported Mr. Obama in 2008, was sanguine.
“You win some, you lose some,” he said in an interview. “We can all
disagree. I have friends and we have spirited discussions. Sure, I am not
getting invited to the White House anytime soon, but as citizens of the
country we are all friendly.”

Wall Street, however, now has to come to terms with an administration it
has vilified. What Washington does next will be critically important for
the industry, as regulatory agencies work to put their final stamp on financial
regulations<http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/financial_regulatory_reform/index.html?inline=nyt-classifier>and
as tax increases and spending cuts are set to take effect in the new
year unless a deal to avert them is reached. To not have a friend in the
White House at this time is one thing, but to have an enemy is quite
another.

[image: Steven Cohen of SAC Capital supported Mr. Romney.]Steve
Marcus/ReutersSteven Cohen of SAC Capital supported Mr. Romney.

“Wall Street is now going to have to figure out how to make this
relationship work,” said Glenn Schorr, an analyst who follows the big banks
for the investment bank Nomura. “It’s not impossible, but it’s not the
starting point they had hoped for.”

Traditionally, the financial industry has tended to support Republican
candidates, but, being pragmatic about power, has also donated to
Democrats. That script got a rewrite in 2008, when many on Wall Street
supported Mr. Obama as an intelligent leader for a country reeling from the
financial crisis. Goldman employees were the leading source of campaign
donations for Mr. Obama, who reaped far more contributions — roughly $16
million — from Wall Street than did his opponent, John
McCain<http://topics.nytimes.com/top/reference/timestopics/people/m/john_mccain/index.html?inline=nyt-per>
.

The love affair between Wall Street and Mr. Obama soured soon after he took
office and championed an overhaul in financial regulations that became the
Dodd-Frank Act.

Some financial executives complained that in meetings with the president,
they found him uninterested and disengaged, while others on Wall Street
never forgave Mr. Obama for calling them “fat
cats<http://thecaucus.blogs.nytimes.com/2009/12/14/obama-decries-fat-cat-bankers/>
.”

The disillusionment with the president spawned reams of critical commentary
from Wall Street executives.

“So long as our leaders tell us that we must trust them to regulate and
redistribute our way back to prosperity, we will not break out of this
economic quagmire,” Mr. Loeb wrote in one letter to his investors.

The rhetoric at times became extreme, like the time Steven A. Schwarzman,
co-founder of the private equity firm Blackstone
Group<http://dealbook.on.nytimes.com/public/overview?symbol=BX&inline=nyt-org>,
compared a tax proposal to “when
Hitler<http://topics.nytimes.com/top/reference/timestopics/people/h/adolf_hitler/index.html?inline=nyt-per>invaded
Poland in 1939.” (Mr. Schwarzman later apologized for the remark.)

Mr. Loeb was not alone in switching allegiances in the recent presidential
race. Hedge fund executives like Leon Cooperman who had supported Mr. Obama
in 2008 were big backers of Mr. Romney in 2012. And Wall Street chieftains
like Jamie Dimon<http://topics.nytimes.com/top/reference/timestopics/people/d/james_dimon/index.html?inline=nyt-per>of
JPMorgan Chase and Lloyd
C. Blankfein<http://topics.nytimes.com/top/reference/timestopics/people/b/lloyd_c_blankfein/index.html?inline=nyt-per>of
Goldman Sachs, who have publicly been Democrats in the past, kept a
low
profile during this election. But their firms’ employees gave money to Mr.
Romney in waves.

Starting over with the Obama White House will not be easy. One senior Wall
Street lawyer who spoke on condition of anonymity said Wall Street “made a
bad mistake” in pushing so hard for Mr. Romney. “They are going to pay a
price,” he said. “It will soften over time, but there will be a price.”

Mr. Obama is not without supporters on Wall Street. Prominent executives
like Hamilton James of Blackstone, and Robert Wolf, a former top banker at
UBS<http://dealbook.on.nytimes.com/public/overview?symbol=UBS&inline=nyt-org>,
were in Chicago on Tuesday night, celebrating with the president.

“What we learned is the people on Wall Street have one vote just like
everyone else,” Mr. Wolf said. Still, while the support Wall Street gave
Mr. Romney is undeniable, Mr. Wolf said, “Mr. Obama wants a healthy private
sector, and that includes Wall Street.

“If you look at fiscal reform, infrastructure, immigration and education,
they are all bipartisan issues and are more aligned than some people make
it seem.”

Reshma Saujani<http://topics.nytimes.com/top/reference/timestopics/people/s/reshma_saujani/index.html?inline=nyt-per>,
a former hedge fund lawyer who was among Mr. Obama’s top bundlers this year
and is planning to run for city office next year, agreed.

“Most people in the financial services sector are social liberals who
support gay marriage and believe in a woman’s right to choose, so I think
many of them will swing back to Democrats in the future,” she said.
------------------------------

*This post has been revised to reflect the following correction:*

*Correction: November 8, 2012*

*An earlier version of this article misidentified Reshma Saujani as a male.*
A version of this article appeared in print on 11/08/2012, on page B1 of
the NewYork edition with the headline: On Wall Street, Time to Mend Fences
With Obama