New York’s financial community watched in stunned dismay on Wednesday as Republican Donald Trump clinched the White House, from plush penthouse apartments on the Upper East Side to bars in midtown Manhattan, reports Reuters.
As donors and supporters of Hillary Clinton realized that the Democratic candidate, Wall Street’s preferred choice because she represented the status quo, had lost, an early party mood quickly soured.
Many were stuck for words.
“Not really much to say,” said Marc Lasry, a billionaire credit investor.
The real estate mogul was made unpopular with many financiers, who fear that he could disrupt global trade and damage geopolitical relationships due to his unpredictable pronouncements and opposition to free-trade agreements.
As investors fled risky assets, the U.S. dollar sank and stocks plummeted. S&P 500 index futures crashed.
While watching the returns during an election night party he hosted for about 20 friends and family members in his hometown of New Orleans, Joseph Peiffer, a lawyer who has represented investors and others in class-action lawsuits, cracked open a third bottle of wine, his “only in the case of an emergency” bottle.
“This seems like enough of an emergency to break it open,” he said.
The Wall Street has been perplexed by Trump’s pronouncements on the financial sector.
While on one hand he has called for a “21st century” version of the 1933 Glass-Steagall law that required the separation of commercial and investment banking and on the other, he has pledged to dismantle much of the regulation put in place after the financial crisis, known as the Dodd-Frank Wall Street reform law.
Other than saying that he would prioritize “helping African-American businesses get the credit they need,” Trump has not said what that version would entail.
“Sometimes you hear him on the stump criticizing the banks. Then his policy paper says he wants to deregulate the bank. The two things don’t jive. But who knows what he really thinks. And we won’t know that until he does it,” Peiffer said.
His victory is a vindication, for Trump supporters who work on Wall Street.
“I’m very happy,” said Matthew Tyrmand, a private investor and contributor to the Breitbart News website, who was attending a Young Republicans party at a bar off Madison Avenue.
Since Trump understands the benefit of letting businesses fail, he would be good news for markets, Tyrmand said. Equity markets would go through a prolonged correction before recovering, he predicted.
“We will be healthier long term,” he said.
Clinking glasses and calling out “M-A-G-A!” – the acronym for Trump’s campaign slogan, “Make America Great Again”, other Trump supporters hugged one another, sang “God Bless America” around Tyrmand.
He had been warning friends and colleagues about an electoral upset for months, said Matthew Farley, a lawyer with Drinker Biddle & Reath LLP in New York.
“I told them that … a significant portion of the country wanted someone to do a cannonball into the pool and mess up the status quo,” said Farley, who advises Wall Street brokerages on regulation and arbitration issues.
“The cannonball party is not united. They’re progressives and conservatives, but they’re fed up with the status quo and all they know is that anything is better than what we got.”
“The world doesn’t end. Assuming capitalism survives, you manage through the volatility and then find the opportunity.”
(Adapted from Reuters)
Categories: Economy & Finance