On Wall Street, Time to Mend Fences With Obama

Del Friscos, 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.

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 executive, were big banks like Goldman Sachs

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.

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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 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.

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. Its not impossible, but its 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.

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 disinterested and disengaged, while others on Wall Street never forgave Mr. Obama for calling them fat cats.

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On Wall Street, Time to Mend Fences With Obama