NEW YORK ( TheStreet) --It is no longer an arguable point that the selloff in U.S. stocks--and bank stocks in particular--is attributable to Obamaphobia in the financial services industry. Since the close of trading on Election Day, Nov. 6, the S&P 500 is down 4.86%. Shares of Wells Fargo ( WFC), Citigroup ( C), Bank of America ( BAC), JPMorgan Chase ( JPM), Goldman Sachs ( GS) and Morgan Stanley ( MS) are down between 8.41% (Wells) and 11.53% (Morgan Stanley). There is a large contingent of banking industry people: executives, analysts, and investors among them--who believe they are the victims of a witch hunt, and that know-nothings in government will spare no effort to extinguish every chance they might have at making a decent profit. These people see Obama's victory as something close to a death knell for financial services industry profitability. No doubt they are especially alarmed by the fact that of the dozen or so executives who met with the President on Wednesday, only one-- American Express ( AXP) chief Ken Chenault--comes from the financial services industry. But let's not go overboard. After all, Obama chose Tim Geithner as his Treasury Secretary--a man who has defended banks' interests at every turn. Though Geithner is on his way out and Obama is under pressure to pick someone who won't kowtow to Wall Street interests, he is a long way from the radical that some would make him out to be. Geithner was Obama's pick. Whoever replaces him may have a more populist bent, if Obama decides he must defer to the populist public mood, but Obama is not, at heart, a populist, and the decisions he makes will reflect that fact. Tom Russo, partner at money management firm Gardner, Russo & Gardner, has been puzzled by the selloff. He concedes banks may be under tighter constraints from President Obama than they would have faced if Romney had won the election. Still, he says of Obama's reelection, "I don't think its a large enough item on the margin for them to cause a sharp selloff in commercial banks." Russo adds that banks "have a prospect for better loan growth as the result of low interest rates that come about because of a continuation of a Fed with a fairly loose policy at the moment."
Separate from Obamaphobia are fears are regarding the fiscal cliff. A separate group of financial services executives--many of whom also suffer from Obamaphobia--believes politicians are idiots who have no idea how markets work and turn everything they touch into lead. Thus they look ahead at the looming "fiscal cliff," and think that Congress may very well be idiotic enough to send us plunging off it. But where were these people before the election, Russo wants to know. "The fear about gridlock in Washington and all of the things that now seem to be pressing investors' attention were all in the market before. I personally think its a bit remarkable that the market has seemingly focused on the post-election time as something different than they would have expected." Russo has been adding to shares of Wells Fargo, shares of which comprise about 5% of the funds he manages, as the stock has cheapened in recent days. He may have to stand another few days of losses, but it seems difficult to believe he won't be rewarded in fairly short order for standing firm amid the wave of post-election negativity among investors in bank stocks. -- Written by Dan Freed in New York. Follow @dan_freed