The nation’s largest financial institutions are maintaining a stony silence while they scramble to uncover what Obama’s latest bank regulation proposal means for them.

Privately, top Wall Streeters say they are being scape-goated by an administration desperate following Tuesday’s stunning loss in Massachusetts.

The first reaction was confusion. “What is this?” one exacerbated Wall Streeter asked a close associate when the news broke of the “Volcker Rule” and the ban on further banking consolidation.

Was this a return of Glass-Steagall? The word on the Street was that it was not. It was something else. But what exactly? No one seems to know.

Big banks began contacting the White House and the Treasury Department yesterday seeking clarification about the coming proposal. They were not given any information. A couple of the banks wound up having to listen in to a briefing for reporters.

"At one point they just stopped returning our calls," a person at one too big to fail bank said.

One of the smarter guys on Wall Street told us Obama’s rhetoric may have been stronger than the final regulations will be. He thinks that the administration will likely wind up requiring just separate capitalization of trading operations and banking, rather than full separation.

Beyond the confusion, there is a lot of distress over how quickly the administration turned on the banks.

“This look like a rush job,” one senior Wall Streeter said. “They are scrambling to find an issue after Massachusetts. It’s troubling. We haven’t heard populist positions like this for a generation.”

One person at a top ranking financial institution pointed to Geithner’s seemingly unhappy stance during the press conference.

“He was looking at his feet the whole time. He knows this is a joke,” the person said.