This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Elizabeth Warren's Win Changes Little: Street Whispers

NEW YORK (TheStreet) -- Consensus is that after Elizabeth Warren was elected as the next Senator for Massachusetts, the former Harvard Law School professor and figurehead of the Consumer Financial Protection Bureau will use her bully pulpit to dismantle Wall Street mega banks like Citigroup (C) and Bank of America (BAC).

Were Warren to emerge in the Democratically controlled Senate as the chair of its Banking Subcommittee, many are already envisioning a crackdown that may pressure the likes of Citigroup, Bank of America and even JPMorgan Chase (JPM) to split investment banking businesses from consumer lending operations.

Warren, after all, made it a point of her Senate pitch to Massachusetts voters that she'd consider reinstating the Glass Steagall Act, a post-Depression banking sector reform that split off investment banking from ordinary Main Street lending.

Meanwhile, former administration officials who played key roles in President Obama's first-term banking sector fixes and reforms say that a strong Election Day showing by Senate Democrats augur poorly for banks, while strengthening the mandate for reforms like the 2010 Dodd Frank Act

"Wins by Warren, Sherrod Brown & Grayson means bad day for the banks and a very good day for supporters of real regulatory reform," wrote Neil Barofsky, the former inspector general for the Treasury's Troubled Asset Relief Program, on Twitter.

But industry insiders may be overreacting to Warren's election, in favor of Republican Scott Brown, who was portrayed in a lengthy Businessweek profile as "Wall Street's hope to stop Elizabeth Warren."

Why an Obama Financial Selloff Would be an Investor Gift.

Were Warren to become chair of the Senate's Banking Subcommittee, her impact might be felt most by pushing a completion of Dodd Frank, which could help clarify how banks will earn their way out of a long post-crisis profit slog.

Instead of spending efforts trying to repeal Dodd Frank - as Republican presidential candidate Mitt Romney indicated he'd do -- banks may now take Warren's election and her expected top legislative position on the industry as reason to problem-solve lingering uncertainties and issues surrounding the law.

Already, Jamie Dimon, the head of the nation's largest bank JPMorgan, and Lloyd Blankfein, CEO of Goldman Sachs (GS) have publicly said many parts of Dodd Frank are beneficial to the financial sector, even if the industry generally oppose reform.

Meanwhile, the nation's top performing banks like JPMorgan and Wells Fargo (WFC), and those on the mend like Bank of America and Citigroup are in their strongest post-crisis position when it comes to capital and normalized earnings. Housing markets are on the rebound, and recent quarterly reports show strong growth in mortgage lending.

Why Goldman Sachs and JPMorgan can fall off the 'fiscal cliff.'

In fact, financial sector bellwethers like Warren Buffett-run Berkshire Hathaway (BRK.A) are also making big acquisitions to boost exposure to a recovering housing market, after previous calls of a housing bottom fell flat.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,080.88 -32.66 -0.19%
S&P 500 1,983.10 -0.43 -0.02%
NASDAQ 4,459.0250 +3.0090 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs