KEY POINTS Bernie Sanders has a chance to become Democratic presidential nominee

Sanders could make Elizabeth Warren his VP or treasury secretary

Many on Wall Street fear a Sanders presidency

After winning the New Hampshire primary and basically tying for first in the Iowa caucus, Sen. Bernie Sanders (I-Vt.), the self-described Democratic Socialist, now has a more realistic chance to become the Democratic nominee for president against Republican incumbent Donald Trump.

While Wall Street has not taken Sanders’ candidacy all that seriously yet, some analysts have already warned how disastrous his presidency would be for the U.S. economy and financial markets.

If Sanders keeps piling up victories in primaries, expect those warnings from Wall Street to intensify.

Sanders’ platform calls for many programs that strikes absolute fear on Wall Street – including larger budget deficits, corporate tax hikes, Medicare-for-all, the abolition of private health insurance, a multi-trillion-dollar scheme to fight climate change, the forgiveness of all student loans, the elimination of tuition at public colleges, the expansion of Social Security, a federal takeover of electrical power production, a wealth tax, new payroll and investment taxes, a tax on financial transactions, the return of Glass-Steagall financial regulations and a raise in the minimum wage to $15 an hour across the country.

Prominent bond fund manager Jeffrey Gundlach has been vocally worried about Sanders’ ascendancy. He not only thinks Sanders will become the Democrat nominee, but that a Sanders presidency would precipitate a catastrophe for U.S. stock and bond markets.

Gundlach, the CEO of DoubleLine Capital, an investment firm, told Barron’s: “If [investors] get more worried about Bernie Sanders and they start to price in his spending programs, then you could really start to see trouble in both [long-term Treasury] bonds and stocks, which could really be on a rough ride.”

In early January, Gundlach warned that “Bernie is stronger than people think. I think it will be taken more seriously as the field [of candidates] winnows. The financial markets broadly will have to deal with the fact that there could be a scare that Bernie Sanders is starting to become a plausible candidate for the nomination.”

Hedge fund manager Stanley Druckenmiller warned last June that a Bernie Sanders presidency could cause stock prices to crash by 30% to 40%.

“The good news is we’d all be much more equal because everybody would be poorer but the rich would have lost a lot more wealth than the poor would have,” he quipped.

Sanders attracts more concern with every electoral triumph.

Before Sanders won Iowa, Thomas Block, policy strategist at Fundstrat Global Advisors, noted that “there was a battle between Sanders and [Elizabeth] Warren on who would be the progressive candidate. [But] people I’ve talked to continue to not take Bernie that seriously. A big win in Iowa could change that.”

Thus, at some point, investors will have to take into account a potential Sanders victory.

Dave Lafferty, chief market strategist at Natixis Investment Managers, said: “The more Joe Biden and other moderates are overtaken by the progressives [like Sanders], I think the market will very gradually begin to price in more headwinds.”

Brian Sozzi wrote on Yahoo Finance (just after Sanders won the Iowa caucus) that if Sanders were to become president he might pick fellow progressive Warren to be treasury secretary or vice president.

“That would place two Wall Street hawks in charge of, among other things, selecting the next Federal Reserve chief and possibly reshaping how the monetary policy body governs,” Sozzi wrote. “And to be sure, their choice for Fed head would very likely be the opposite of current Fed Chair Jerome Powell. Sanders and Warren haven’t hidden their dislike for the Fed. They have tended to attack the institution itself in public forums, more so than Fed chiefs. That would suggest the potential for a broader overhaul of how the Fed operates under positions of increased authority for Sanders and Warren.”

There is little doubt that Trump remains the solid favorite for Wall Street.

“I think it’s going to cause some short-term volatility, especially if [Sanders] does very well in the primaries,” Tom Essaye of Sevens Report Research said. “The market wants Trump to stay president because he is the most shareholder friendly.”

Moreover, Sanders’ climb to power is filled with potential obstacles.

JPMorgan strategist Jesse Edgerton pointed out that even if Sanders became president, he would need Democratic control of both the House and Senate to get any of his legislation passed. And even then he might face stiff opposition from members of his own party (as he has throughout the primaries).

“It thus seems unlikely for all of these stars to align at once -- a Sanders/Warren nomination, a Democratic presidential and congressional sweep, and an upswell of support around currently controversial policies. We put the probability of dramatic policy changes like this at less than 5%,” Edgerton said.

Goldman Sachs (GS) CEO David Solomon said “it's too early” for investors to worry about Sanders.

"The markets at the moment don't care about any of this, because it's too early," he said. "There's also a huge difference between campaigning platforms and rhetoric and then ultimately getting elected, becoming president and having the right mix of who is in Congress and the Senate to actually create legislation."

But Solomon's predecessor at Goldman, Lloyd Blankfein famously tweeted that a Sanders presidency would "ruin our economy.”

Other voices also fret over Sanders.

Michael R. Strain, director of economic policy studies at the American Enterprise Institute, opined in Bloomberg that “in the almost inconceivable event that a President Sanders were able to enact his full economic agenda, the result would surely be much worse than anything that’s likely to happen under Trump.”

Last October, Brian Riedl, a scholar at the Manhattan Institute, estimated that Sanders proposals could cost up to $97.5 trillion over a decade. Riedl further said that under a Sanders administration, total government spending in the U.S. would amount to 70% of annual economic output – versus 50% for Sweden and 49% for Norway.

Riedl also said Sanders’ policies would lead to average annual budget deficits exceeding 30% of gross domestic product.

“Suffice it to say that this would be a disaster for the U.S. economy,” Strain concluded.