Washington Extra — The nemesis of Wall Street?

September 17, 2010

We didn’t get the chance to compare the folksy style of Elizabeth Warren with the more cerebral style of Treasury Secretary Tim Geithner when her appointment was confirmed by the president on the Rose Garden lawn today.

Warren, a janitor’s daughter whose grandmother drove a wagon in the Oklahoma land rush, has been asked to set up a powerful new consumer protection agency, reporting to both Geithner and President Barack Obama. How she will juggle her relationship with the two men is just one of the many questions facing Warren tonight. We are told she gets on fine with Geithner these days, although their relationship has been a little rocky in the past. Obama, by contrast, is effusive about his “dear friend” and was describing her writings as eloquent, passionate and forceful, even before the financial crisis hit.

FINANCIAL-REGULATION/WARREN-OBAMAThe bigger questions, perhaps, surround her legitimacy in a role that had sidestepped the usual Senate confirmation process and whether she can be effective without being excessively confrontational. Warren has already promised to be the “tough cop” on the beat and bring an end to financial “tricks and traps.”

The Chamber of Commerce called her appointment “an affront to the pledge of transparency and consumer protection that’s purported to be the focus of this new agency.” Portfolio manager Matt McCormick said it was a “thumb in the eye of people trying to address real issues.”  So get ready for a fight.

One thing is for sure: Warren will be no walkover, no shrinking violet. But whether she can turn her determination to fight for consumers’ interests into votes for her “dear friend” is perhaps the biggest question of all.

Here are our top stories from today… 

Wall Street critic Warren named consumer financial czar

President Barack Obama named Wall Street critic Elizabeth Warren as his new consumer financial czar, drawing praise from liberals and an outcry from Republican opponents and the financial industry. Warren, a Harvard law professor and outspoken consumer advocate, will set up a powerful new consumer financial protection agency, a centerpiece of the sweeping regulatory overhaul Obama signed into law in July.

For Jeff Mason and Alister Bull’s full story, click here.

Analysis: Warren to wield clout in consumer job

From an exclusive perch close to the seat of power, Wall Street nemesis Elizabeth Warren will have plenty of autonomy as well as President Barack Obama’s ear. The Harvard law professor, whose grandmother drove a wagon in the Oklahoma land rush, is a folk hero for consumer groups and the bane of Wall Street. She will build from scratch a new government agency to crack down on abusive practices in financial products like mortgages and credit cards.

For more of this story by Caren Bohan and Dave Clarke, here.

For more on Warren and what Wall Street has against her, click here.

For a Factbox on Warren, click here.

November election will define Obama presidency 

The congressional election in November will define President Barack Obama’s next two years in office as Republicans look likely to pick up seats and put their stamp on issues ranging from the huge budget deficit to economic recovery and immigration. Reuters correspondents will interview an influential line-up of newsmakers at next week’s Reuters Washington Summit starting on Monday and they will take an in-depth look at the election and its implications for Obama.

For Steve Holland’s full story, click here.

Tea Party seen pressuring Congress on spending

The rise of the conservative Tea Party movement will put pressure on the Congress to cut federal spending and the budget deficit if Republicans make strong gains in the November 2 congressional elections, a senior Republican said.  “It’s going to create an environment where — if we (Republicans) are given the opportunity to lead the Congress — we are going to have the ability to make the hard choices — to restore fiscal discipline, to pursue policies that will grow our economy,” said Mike Pence, head of the Republican Conference in the House of Representatives.

For more of this story by Thomas Ferraro, read here.

Palin tests 2012 presidential waters in Iowa 

Will Sarah Palin use her Tea Party power to launch a run for president in 2012? Nobody knows, but her trip to Iowa on Friday may provide some clues. Palin speaks at the Iowa Republican Party’s Ronald Reagan Dinner in Des Moines, her influence among Tea Party activists strong after conservative candidates she backed won in Delaware and New Hampshire Senate primary races on Tuesday.

For more of this story by Steve Holland, read here.

Consumer prices rise, but underlying trend flat 

Underlying inflation pressures were muted in August, keeping deflation fears alive, even though a rise in food and energy costs drove overall consumer prices higher. The core consumer price index was flat last month, the Labor Department said, defying financial market expectations of a 0.1 percent gain. The core CPI, which excludes food and energy prices, rose 0.1 percent in July.

For more of this story by Lucia Mutikani, read here.

Agriculture Secretary, producers confident on ethanol hike

Regulators are likely to approve a higher blend of ethanol in gasoline shortly, an ethanol producers group and the top agriculture official each said, and the new fuel mix could be selling at the pump by next spring.  Ethanol companies and corn traders are anxiously awaiting a decision from the Environmental Protection Agency — expected within weeks — for a waiver to allow cars built in 2007 and after to burn regular gasoline blended with ethanol levels of 15 percent, a fuel that would be known as E15.

For more of this story by Timothy Gardner and Charles Abbott, read here.

SEC votes to crack down on debt disclosure

Securities regulators voted unanimously to propose that companies disclose more about their debt after it was revealed some banks were “window dressing” loans as sales, masking the risk levels involved. The Securities and Exchange Commission is trying to crack down on financial companies that use accounting gimmicks to bolster balance sheets.

For more of this story by Dave Clarke, read here.

Clinton seeks Iran humanitarian gesture on hikers

Iran should free two remaining U.S. citizens held on suspicion of spying as a “significant humanitarian gesture” after releasing one this week on bail, Secretary of State Hillary Clinton said.

For more of this story by Andrew Quinn, read here.

House to vote on small-business bill next week 

The House of Representatives will vote on a package of loan incentives and tax breaks for small businesses next week, House Democratic Leader Steny Hoyer said.

For more of this story by Andy Sullivan, read here.

From elsewhere…

What crisis? NY Hamptons real estate market brisk

In a market closely tied to the fortunes of Wall Street, affluent New Yorkers snapped up luxury houses in the Hamptons this summer at rates not seen since before the financial crisis of two years ago. Sales of homes in the Hamptons, a string of seaside towns on New York’s Long Island frequented by New York City’s elite, got a boost because participants have accepted the market’s “new normal,” and experts said that would yield more deals into next year.

 Photo credit: REUTERS/Kevin Lamarque (Geithner, Obama and Warren at the White House on Sept. 17)


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so the reuters author thinks that style is inherited and not taught and learned. interesting. got any pseudo-science to back that up? meanwhile, i know she’s well educated and has loads of experience in the area she will be operating in. too bad for reuters that they can’t notice.

Posted by vetxcl | Report as abusive

don’t wallstreeters just hate it when there’s even a slim chance they’ll be held accountable?

Posted by vetxcl | Report as abusive

The Wall Street people who caused America’s financial collapse and personally profited from it should have been held accountable by America’s court system.

Lucky for them that their friends in Congress decided to put the SEC in charge of the investigations instead.

The investigations took place behind closed doors, a few corporations paid modest fines, some members of Congress publicly scolded a few CEO’s and the silk-suited crooks walked away with their vast, ill-gotten, personal wealth intact.

Their friends in Congress helped out again by blaming the whole fiasco on the policies of Republicans or Democrats, and the entire SEC investigation involving banks and corporations all around the world took less time than it took to try O. J. Simpson…

and nobody went to jail.

I think the silk-suited crooks learned their lesson: If you’re clever about it and you take good care of your friends in Congress, you are above the law.

Posted by breezinthru | Report as abusive

Oh, I almost forgot. Their friends in Congress also helped out again by shifting the cost of the fiasco to American taxpayers and their descendants.

I know… the biggest banks paid back their loans, but taxpayers made it easy for them to generate enough profits to do so by absorbing all the banking system’s bad debts and potentially bad debts. The banks never have to repay that.

Posted by breezinthru | Report as abusive

Oh… and the cost of Dodd’s recent financial reform package? The cost of the reforms was originally to have been paid for by a temporary bank tax.

The banks thought that they shouldn’t have to pay to for reforms they didn’t like, so their friends in Congress shifted that cost to the taxpayers, too. Seems to me that it was about 17 Billion dollars.

I’m beginning to think Dick Cheney should take the whole bunch of the dove hunting.

Posted by breezinthru | Report as abusive

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