Did Wall Street Just Give Up on Romney?
Many on Wall Street are increasingly convinced that Barack Obama will win the election.
On the eve of the election, many financial professionals on Wall Street believe that Mitt Romney has lost the election. In phone conversations, email and instant messaging exchanges, and text messages with over 20 people in different jobs on Wall Street today the message I picked up was almost universal: The president will be re-elected tomorrow.
Many of those with whom I spoke—all of whom spoke on the condition of anonymity—had a sense of resignation about this forecast. They were Romney guys. They ate at expensive rubber-chicken fundraisers in midtown hotels, they coaxed friends and coworkers into donating to Romney and Republican campaign funds, and just a few weeks ago they were enthusiastically predicting a victory for Romney.
Not any longer. The word that comes to mind is: capitulation. The sudden and simultaneous collapse of hope that we sometimes see in markets just as they reach their lowest points.
(Please note: this is far from a scientific survey of opinion on Wall Street. It's very possible that my list of contacts is heavily skewed toward pessimists or biased in some other way.)
There has been something of a paralysis on Wall Street during this political cycle. Knowing that Romney could not afford to be branded the "Wall Street" candidate, a lot of folks on Wall Street shied away from too much visible support. But at off-the-record dinners and cocktails parties in New York City, Connecticut, New Jersey and Long Island they took out their check books and quietly supported the candidate from Bain Capital.
Some said Super Storm Sandy was to blame.
"His candidacy was the ultimate hurricane victim. Once the storm loomed, he vanished from public thought," one investment banker said.
"It's a shame really. He had the momentum. Then Sandy overtook him. Now we have Chris Christie hugging Obama. Game over," said another.
"Where was he in the last few weeks," asked a young hedge fund Republican.
Others say that the Romney campaign just never really capitalized on its gains after winning the first debate.
"All eyes were on them and we got…nothing," a Wall Street executive long involved in Republican politics said.
"It kind of just feels like he didn't want it enough and his PR campaign just didn't do the right thing," a hedge funder said.
Another Wall Streeter pointed to the lack of a Ryan bounce s a reason for Romney not doing better.
"It was a wager that didn't pay off. Ryan did nothing for the campaign," he said.
Some of these people supported Obama in the last election but were disappointed with his performance over the last few years. Others are stalwart Republicans who reluctantly supported John McCain four years ago but once had genuine hope and enthusiasm for Romney.
Now they seem deflated.
One of the more optimistic investment bankers in the bunch said that some of the "big money guys" on Wall Street were already planning for the next presidential election.
"There's always 2016. Chris Christie looks great coming out of Sandy," one source said.
Not everyone is depressed about forecasting an Obama victory, of course. Obama still enjoys a substantial amount of support on Wall Street, although not nearly as much as he did four years ago. These people expressed guarded optimism—they think they've won but don't want to jinx the outcome.
There's even a certain amount of schadenfreude among a few of the Obama supporters. They're enjoying watching the capitulation of their Romney supporting friends and coworkers.
The rarest of birds on Wall Street today—at least according to my completely unscientific survey—was the Romney optimist. I only encountered one guy who really believes Romney will win.
How was he still clinging on to confidence?
"I'm a contrarian about Wall Street consensus. Everyone is saying Obama's going to win. And when everyone on the Street says something will happen, I figure the opposite will," he said.