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Wall Street Feels Betrayed By Elite Obama

From an outraged New York Times:

Why Wall St. Is Deserting Obama

August 30, 2010

Daniel S. Loeb, the hedge fund manager, was one of Barack Obama’s biggest backers in the 2008 presidential campaign…

So it came as quite a surprise on Friday, when Mr. Loeb sent a letter to his investors that sounded as if he were preparing to join Glenn Beck in Washington over the weekend.

Boy, has Mr. Beck gotten under their collective skin.

“As every student of American history knows, this country’s core founding principles included nonpunitive taxation, constitutionally guaranteed protections against persecution of the minority and an inexorable right of self-determination,” he wrote. “Washington has taken actions over the past months, like the Goldman suit that seem designed to fracture the populace by pulling capital and power from the hands of some and putting it in the hands of others.”

Over the weekend, the letter, with quotations from Thomas Jefferson, Ronald Reagan and President Obama, was forwarded around the circles of the moneyed elite, from the Hamptons to Silicon Valley. Mr. Loeb’s jeremiad illustrates how some of the president’s former friends on Wall Street and in business now feel about Washington.

Mr. Loeb isn’t the first Wall Streeter to turn on the president. Steven A. Cohen, founder of the hedge fund SAC Capital Advisors and a supporter of the Obama campaign, recently held a meeting with Republican candidates in his home in Greenwich, Conn., to strategize about the midterm elections, according to Absolute Return magazine.

Other onetime supporters, like Jamie Dimon, chief executive of JPMorgan Chase, also feel burned by the Obama administration, people close to him say…

Less than two years ago, Democrats received 70 percent of the donations from Wall Street; since June, when the financial regulation bill was nearing passage, Republicans were receiving 68 percent of the donations, according to an analysis by the Center for Responsive Politics, a nonpartisan research group

The prevailing view is that bankers, hedge fund mangers and traders supported the Obama candidacy because he appealed to their egos.

Mr. Obama was viewed as a member of the elite, an Ivy League graduate (Columbia, class of ’83, the same as Mr. Loeb), president of The Harvard Law Review — he was supposed to be just like them. President Obama was the “intelligent” choice, the same way they felt about themselves. They say that they knew he would seek higher taxes and tighter regulation; that was O.K. What they say they did not realize was that they were going to be painted as villains.

Somehow these brainiacs didn’t know that Columbia and Harvard graduate a lot of Communists.

That Wall Street view of itself as a victim has prompted much of the private murmurings and the unfortunate — or worse — outburst from Stephen A. Schwarzman, who likened the administration’s plan for taxes on private equity to “when Hitler invaded Poland in 1939.” Mr. Schwarzman later apologized for the “inappropriate analogy.” …

Mr. Loeb’s views, irrespective of their validity, point to a bigger problem for the economy: If business leaders have a such a distrust of government, they won’t invest in the country. And perception is becoming reality

Gosh, where did they ever get that crazy “perception”?

Mr. Loeb, whose poison pen is legendary, usually targets obstinate corporate managers or rivals..

In his letter to investors, he took issue with a number of Washington initiatives, including the Credit Card Act of 2009 and a proposed “enterprise tax” that would be levied on hedge fund managers who sell their firms.

“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

What a wild-eyed radical.

No wonder The Times compared him to Glenn Beck.

This article was posted by Steve on Tuesday, August 31st, 2010. Comments are currently closed.

9 Responses to “Wall Street Feels Betrayed By Elite Obama”

  1. P. Aaron says:

    ‘Smart’ people can do more damage faster than dumb people.

  2. proreason says:

    No wonder they are pissed off.

    They tanked the Stock Market in September 2008 to get their homeboy elected, assuming that he would shower them with riches. Even some of the glitterati like Mr Loeb probably took it in the shorts, expecting a big payoff later.

    And what happens. Goldman Sachs makes multiple fortunes. Soros makes a fortune fit for Stalin. What what about Trooper Loeb? Where’s his candy?

    Sounds like there wasn’t enough left over to “spread around” to a pissant like him.

    And the Moron isn’t even apologetic about shafting the bit players.

    Oh sure, Beck is concerned about the country, but jeez louise, this is MONEY we’re talkin about here.

  3. BigOil says:

    “They say that they knew he would seek higher taxes and tighter regulation; that was O.K. What they say they did not realize was that they were going to be painted as villains.”

    Now that is funny. The smartest guys in the room thought they could make a deal with the devil by buying influence, hoping he’d come for them last.

    Apparently the ivy league business schools don’t teach common sense.

    If they had read Barry’s book, they would know he described his stint on “Wall Street” as working behind enemy lines.

  4. MinnesotaRush says:

    Odd that o-blah-blah would throw a s’posed “friend” under the bus, ay.


  5. Liberals Make Great Speedbumps says:

    “Washington has taken actions over the past months, like the Goldman suit that seem designed to fracture the populace by pulling capital and power from the hands of some and putting it in the hands of others.”

    This guy is a financial wizard???? Hell, I must be the freaking Albert Einstein of Economics if this clown only figured this out in the “past months”!

    I agree with the proposition that he’s PO’d that he didn’t get the ROI that he expected for his role in the crash.

  6. Chinnubie says:

    Don’t you love how people like him put themselves first and “screw” what any leader is liable to do to the country, just make sure I get paid. I’m not disagreeing with wanting to make some money but, for cryin’-out-loud if you can’t see who a guy like Obama claims to be, you need to get your head checked. Or to think you’ll be safe by playing ball with these people, they want to redistribute the wealth, where do you think they are going to get the money to redistribute??

    • untrainable says:

      Obviously from the wealth of the poor, and OTHER rich people, but WE VOTED FOR HIM? WHAT GIVES?
      They knew he was a crook, they just didn’t realize that the buy-in for Cime Inc. was going to be so high. Just the word “betrayal” suggests a deal that has been broken.

  7. Reality Bytes says:

    Inglorious Bastards Aren’t They? Excerpts From Marketwatch

    Ask yourselves first what if the Tea Party grass roots drive raises more than these NeoCons (OK used the code word – but hey I love my Hebrew bro’s – heck I’m a bigger Zionist than they are any day!). Read down & you’ll get the idea what I mean.


    SAN FRANCISCO (MarketWatch) — The head of hedge-fund firm SAC Capital Advisors, Steve Cohen, held a strategy session earlier this week at his home to discuss how the Republican Party can win the midterm elections, industry publication AR magazine reported Friday.

    Attendees at the Tuesday evening meeting in Greenwich, Conn., included Paul Singer of Elliott Management; Daniel Senor of Rosemont Capital; and Bruce Kovner of Caxton Associates, the magazine said, citing an unidentified person familiar with the event.

    Hedge-fund managers donated more money to Democrats during the last presidential election, but the $1.8 trillion industry may be switching its allegiance to the Republican Party now, AR reported.

    SAC gave 93% of its 2010 election-cycle donations to Republicans through Aug. 1, the magazine said, citing data from the Center for Responsive Politics. During the 2008 election cycle, SAC gave 71% to Democrats.

    At the meeting on Tuesday evening at Cohen’s home, several GOP operatives discussed with large donors how best to deploy campaign contributions and other support so that Republican candidates can win in this year’s midterm elections, according to AR.

    In contrast to Cohen, Singer and Senor are longtime supporters of conservative causes, the magazine noted.

    Singer — head of Elliot Management, a $16 billion firm — is one of the largest contributors to the Republican Party from the hedge-fund industry. He was a major supporter of Rudy Giuliani’s 2008 presidential campaign. Singer also gave $1.5 million to the Progress for America Voter Fund, which advocated for policies of the George W. Bush administration.

    Still, Singer happens to be hosting a fund-raiser in support of gay marriage at his New York City home on Sept. 22, according to AR. Singer and Clarium Capital manager Peter Thiel will co-chair the $5,000-per-person event with Ken Mehlman, former head of the Bush-Cheney re-election campaign who recently announced he’s gay, the magazine said.

    Mary Cheney, daughter of former Vice President Dick Cheney, and Margaret Hoover, great-granddaughter of Herbert Hoover, will co-host the event, AR added.

    Elliott started out as a convertible-arbitrage fund, but after the 1987 market crash Singer’s focus shifted to distressed debt. This strategy involves buying bonds and other securities of troubled companies, then selling at a profit later when they either recover or reorganize in bankruptcy. See earlier story on Elliott.

    In an October 2009 letter to investors, Singer also knocked former Federal Reserve Chairman Alan Greenspan and the current chairman, Ben Bernanke, calling the U.S. central bank “an utter failure.”

    “‘Helicopter Ben’ Bernanke is now our albatross for another interminable period of time, during which we will be forced to listen to a man whose contribution to the amusement of the cackling class of the early 21st century is his fantastic insight that, if necessary, money can be simply printed and dropped from helicopters to prevent another depressionary deflation,” he wrote. Read more about the Fed and Bernanke at the Jackson Hole, Wyo., policy retreat.

    Senor, who co-founded Rosemont and used to work at private-equity firm Carlyle Group, served in Iraq as a senior adviser and chief spokesman for the U.S.-led Coalition Provisional Authority in 2003 and 2004.

    He also served as an aid to Central Command in Qatar and as a foreign-policy and communications adviser in the U.S. Senate, according to Rosemont’s Web site.

    Caxton’s Kovner, who drove a cab in New York City before getting hooked on commodities trading, was named to Alpha magazine’s hedge-fund hall of fame in 2008. (Alpha merged with Absolute Return magazine in the wake of the financial crisis, creating AR.)

    Alistair Barr is a reporter for MarketWatch in San Francisco.

  8. confucius says:

    Finally. A reason to like Obama.

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