NEW YORK ( TheStreet) - Whether this week's stock sell-off is a foreboding sign for the financial industry or a major buying opportunity depends on how much weight one puts in political promises. Major market indexes were tumbling in afternoon action on Friday, but have lost roughly 3% since the sell-off began three days earlier and have given back 2010's early gains. Stocks have been weighed down in part by concerns about continued credit losses in earnings reports from the major banks over the past week. But the downward spiral in the group gained velocity on Thursday when President Obama outlined a plan to restrict the size and activity of the country's financial heavyweights. "Never again will the American taxpayer be held hostage by a bank that is 'too big to fail,'" Obama said in his comments on Thursday, later adding "if these folks want a fight, it's a fight I'm ready to have." But despite all the populist rhetoric and Robin Hood-like pledges, there are big hurdles that stand in the way of passing anything that looks like what Obama has laid out so far. As they stand, the roughly sketched proposals would hinder economic recovery, hamper America's ability to compete with foreign financial firms, and potentially put additional costs at consumers' doorstep. Taking from the rich and giving to the poor may be a noble idea, but any realistic reform would have to take into consideration America's protectionist, competitive streak as well as the populist flavor of the day. It would also have to budge to not just political opposition from free-market-minded Republicans, but also from an industry that's just as willing to dig in its heels for a fight as Obama is.