Tags: Wall | Street | Romney | bet

Wall Street Is a Big Loser in Obama’s Win

Wednesday, 07 Nov 2012 11:56 AM

By Peter Moses

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Wall Street’s bet on Mitt Romney did not pay off and some analysts believe the economy might suffer as a result of President Barack Obama’s victory in Tuesday’s election.

Wall Street contributed $61 million to Romney’s campaign, while giving only $18.7 million to Obama, according to Center for Responsible Politics data cited by Forbes. The combined $80 million was the most money spent by any industry in the 2012 presidential campaigns.

Securities and investment firm employees provided Romney with $20 million, and even former Democratic-tilted Goldman Sachs gave Romney $900,000, compared with the $136,000 Goldman employees sent to the Obama campaign.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

Super PACS supporting Romney also received $94 million from Wall Street. The bulk of this money was from investment managers like Ken Griffin, Paul Singer, Robert Mercer, John Paulson and Joe Ricketts, according to Forbes.

Now that it is clear Obama will continue as commander in chief, the nation faces the fiscal cliff.

At the end of the year, tax cuts expire at the same time automatic cuts to government spending kick in, a combination known as a fiscal cliff that will throw the country into a recession if left unchecked by Congress.

Lawmakers have been unwilling to address tax and spending issues in an election year, though some have suggested Congress could convene in early 2013 and deal with the problem on a retroactive basis.

The nonpartisan Congressional Budget Office estimates that the economy would contract by 0.5 percent next year while unemployment rates would rise to around 9 percent by late 2013 if lawmakers fail to steer the country away from the fiscal cliff.

“There will be an immediate shift to government gridlock and the fiscal cliff issue, and that will be a headwind for stocks,” Michael Yoshikami, chief executive officer and founder of Destination Wealth Management in Walnut Creek, Calif., told Reuters.

Experts believe the tax hikes and spending cuts all at once would hamper consumer and business spending, sliding the U.S. economy deeper back into depression and slamming skittish markets.

“The real challenge is for (Obama) to bridge the differences with Congress and work to get in the middle,” said Jason Ader, a former Wall Street gaming analyst and a Romney supporter, Reuters reported.

“Markets will have a knee jerk reaction tonight and tomorrow and find support over the next few days,” he said.

Congressional gridlock is also still a concern, as Republicans retained control of the U.S. House of Representative, while Democrats have an advantage in the Senate. Many investors worry fiscal reform compromises will be difficult to come by, forcing more pressure on markets.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

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