Election isn't necessarily a loss for Wall Street

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The notion that Wall Street lost when it bet big on Mitt Romney has been discussed incessantly since the election.

DealBook opined that, "Wall Street…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."

I am not sure that "enemy" is the most apt description of the president. There will be some friction going forward, but that friction has been institutionalized, as lobbyists and regulators have battled for years over the shape of regulation. I do not expect to see a lot of new friction, even with Elizabeth Warren ascending to the Senate. The President might propose to tax carried interest at a higher rate and other reforms, but that's hardly new. Most of the other really contentious battles have already been fought, as I've noted, and we're now in the minutiae of implementing the Volcker Rule, the OTC Derivatives rules and the like.

It should be noted that all this, as it looks now, will be implemented on terms favorable to the industry. At this point, given the massive investment in Dodd-Frank compliance, the industry might be worse off if the law were somehow repealed. 

"At the end of the day, there's a mutual goal between the administration and the markets, which is to have a robust and dynamic financial-services sector," said one lobbyist to TheHill. "Everybody's adults here."

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