Wall Street Wakes Up to a 2nd Obama Term

WALL STREET WAKES UP TO A 2ND OBAMA TERM  |  Barack Obama won a second term as president after a drama-filled election night on Tuesday. For the financial industry, it was a complicated moment. Wall Street employees had rallied behind Mitt Romney, a former private equity executive, and many were no doubt disappointed with the results.

And yet, Mr. Obama's second term “might not be a doomsday situation” for Wall Street, write Ben Protess and Jessica Silver-Greenberg in DealBook. “In many ways, the industry has already adjusted to the new regulatory environment, and the administration might rein in its fervor for change.” Democrats kept control of the Senate on Tuesday, cementing a layer of protection around the Dodd-Frank law. At least Wall Street knows roughly what to expect.

Still, there's a new wildcard in Washi ngton. Elizabeth Warren was elected senator from Massachusetts, defeating the incumbent Scott P. Brown. Ms. Warren, the Harvard professor behind the Consumer Financial Protection Bureau, is a well-known Wall Street opponent who is likely to support stricter controls on the industry (with rhetoric to make the president's “fat cat bankers” comment seem tame).

Don't shed too many tears for Mr. Romney - he can always return to a career in high finance, writes Steven M. Davidoff in the Deal Professor column. If he wants it, Mr. Romney could probably land a high-paying job as a senior adviser (or just a professional schmoozer), following similar moves by Tony Blair, Dan Quayle, Al Gore and even Bill Clinton. At the very least, Mr. Romney, who turned down a potentially lucrative offer from Julian Robertson four years ago, may find it hard to “pass up the occasional $100,000 speaking engagement,” Mr. Davidoff says.

While the president spoke of “bu ilding consensus” in his victory speech, others fear that paralyzing bickering may return. Sergey Brin, the Google co-founder, proposed a solution in a blog post on Tuesday: he asked the winners to “withdraw from your respective parties and govern as independents in name and in spirit.” Mohamed El-Erian, Pimco's chief executive, sounded a skeptical note, writing in a blog post for The Financial Times that while investors may “continue to hope for political Sputnik moments,” they are likely to be faced with the familiar set of broad economic concerns.

In the wake of the election results, stock index futures were slightly higher early Wednesday morning, suggesting a solid start to trading, according to Reuters. While a few hedge fund parties were spoiled last night, others in the industry were pleased. “I'm delighted that President Obama has won,” said George Soros, the powerful Democratic donor. “Hopefully the Republicans in office will make better partn ers in the coming years, most urgently in avoiding the so-called fiscal cliff.”

ON THE AGENDA  |  As the recovery continues from last week's storm, Jefferies plans to donate today's trading commissions to the relief effort. Kraft Foods, Macy's and Time Warner report earnings before the market opens. CBS and Qualcomm announce results this evening. Wilbur Ross is on CNBC at
7:15 a.m, and Marc Andreessen of Andreessen Horowitz is on CNBC at 3:10 p.m. A Claude Monet painting that was owned by the family of Herb Allen is scheduled for auction at Christie's this evening.

BNP PARIBAS PROFIT DOUBLES  |  The French bank BNP Paribas said its net profit rose to 1.3 billion euros, or $1.7 billion, in the third quarter, compared with 541 million euros a year earlier. The bank, which has been reducing its exposure to euro zone countries, said it had reached its capital adequacy targets ahead of schedule. A strong performance in its investment banking unit bolstered income, the bank said, cautioning that last year's lackluster results made the picture this quarter look rosier, reports David Jolly in DealBook.

Mergers & Acquisitions '

Gulf Oil of India to Buy Houghton International for $1 Billion  |  The Gulf Oil Corporation of India has agreed to buy the chemical and lubricant company Houghton International for $1 billion.
DealBook '

Morgan Stanley Said to Be Selling Its Indian Private Bank  | 
REUTE RS

TCW's Sale to Carlyle in Doubt  |  Reuters reports: “A federal judge in Los Angeles has issued a tentative ruling that could block a sale of asset manager TCW Group to private equity firm The Carlyle Group.”
REUTERS

Financial Times Up for Sale, Report Says, but Pearson Says Not So Fast  |  The British publisher Pearson is entertaining offers for The Financial Times that could lead to a much-anticipated sale, Bloomberg News reports. But Pearson has moved to try to discredit the report.
DealBook '

Netflix's Poison Pill Has a Shareholder-Friendly Flavor  |  In seeking to prevent a sale of the company on the cheap, Netfl ix tries to be noncontroversial. But its battle with the activist investor Carl Icahn is far from over, writes Steven M. Davidoff in the Deal Professor column.
DealBook '

INVESTMENT BANKING '

Morgan Stanley's Fix-It Job in Fixed Income  |  Colm Kelleher, who was named the sole head of Morgan Stanley's securities arm on Monday, faces some significant challenges in transforming the bank's fixed-income division.
DealBook '

Morgan Stanley Had Fewer Losing Days Last Quarter  |  The firm's trading business lost money on eight days in the third quarter, compared with 31 days a year earlier, Bloomberg News reports.
BLOOMBERG NEWS

ING to Cut 2,350 Jobs  |  The Dutch financial services company reported a 64 percent drop in third-quarter profit.
BLOOMBERG NEWS

French Banks Embrace Securitization  |  French banks are increasingly turning to a practice more commonly seen in the United States, and one that “led to huge losses not so long ago,” The Wall Street Journal writes.
WALL STREET JOURNAL

Goldman Partners Cash In Stock Options  |  More than 30 Goldman Sachs executives made a combined $21.8 million from the transactions, The Wall Street Journal reports.
WALL STREET JOURNAL

PRIVATE EQUITY '

McGraw-Hill Said to Be in Talks With Apollo Over Education Unit Sale  |  McGraw-Hill has begun holding talks with Apollo Global Management over a potential sale of its education unit, though any deal might yield less than expected, a person briefed on the matter said on Tuesday.
DealBook '

Bain Expects a Private Equity Rebound in Southeast Asia  | 
BLOOMBERG NEWS

China Fund Said to Approach Timber Deal With Brookfield  | 
WALL STREET JOURNAL

HEDGE FUNDS '

Peltz Said to Take Stake in Danone  |  The activist investor Nelson Peltz plans to begin a campaign against the French food maker Danone, having acquired a 1 percent stake in the company, according to a person briefed on the matter.
DealBook '

Hedge Funds Had a Lackluster October  |  Hedge funds lost 1.9 percent last month as stocks fell, according to data compiled by Bloomberg.
BLOOMBERG NEWS

I.P.O./OFFERINGS '

Evernote Avoids an I.P.O. For Now  |  “Everyone I know who is running a public company is not having a good time,” Phil Libin, the chief executive of Evernote, told The Wall Street Journal. “We just want to del ay.”
WALL STREET JOURNAL

VENTURE CAPITAL '

Fab.com Acquires Its Indian Partner  |  The online design shop Fab.com is buying True Sparrow Systems, its technology partner in India, in a deal that was said to consist of cash and stock.
TECHCRUNCH

Benchmark Pares Down Its Web Site  |  The venture capital firm is taking a minimalist approach to its online presence.
BUSINESS INSIDER

LEGAL/REGULATORY '

Big Bet Sours, Imperiling Small Firm  |  Rochdale Securities, which is known for employing the banking analyst Dick Bove, is in negotiations to sell itself or receive a cash infusion from outside investors.
DealBook '

Restructurings and the Impact of Credit-Default Swaps  |  A disclosure requirement might be one way to address the “empty creditor” problem that comes up in times of financial distress, writes Stephen J. Lubben in his column, In Debt.
DealBook '

Morgan Stanley Looks to End Arbitration Case Over Facebook I.P.O.  | 
REUTERS

Former Swiss Banker Pleads Guilty to Aiding Tax Evaders  | 
REUTERS

Greece to Vote on $23 Billion in Cuts  | 
NEW YORK TIMES

Suzuki Retreats From U.S. Automobile Market  |  “It came as little surprise to most analysts when Suzuki announced late Monday that it would stop selling automobiles in the United States and put its American unit into Chapter 11 bankruptcy,” The New York Times reports.
NEW YORK TIMES