NYC laments another icon lost to globalization

DAVID B. CARUSO - Associated Press
February 16, 2011

For as much as it celebrates its roots as an international melting pot, New York is a patriotic city, every corner festooned in monuments to American greatness, from the Statue of Liberty in the harbor to the Empire State Building in midtown to Yankee Stadium in the Bronx.

So what to make of the news that one of those icons of American prowess, the New York Stock Exchange, is getting a new German owner?

If there is one rule that the constantly growing and changing New York has lived by over its history, it is this one:

"Big things eat smaller things," said Kenneth Jackson, a history professor at Columbia University and editor of The Encyclopedia of New York City. "This is a trend that has been going on for hundreds of years."

Now, something bigger has feasted on the New York Stock Exchange.

"Does it mean that New York City is through being the capital of the world? It is too early to tell. It is probably not a good sign," Jackson said. But, he said, that doesn't mean the city itself is moving toward obsolescence or irrelevance on the world stage.

By now, globalization is nothing new. But back in 2006, some American politicians freaked out when they learned that Dubai Ports World, a state-owned company based in the United Arab Emirates, had acquired a British firm with contracts to run stevedoring operations at several big U.S. ports.

The thought then was that the ports were just too important of a national asset to put in the hands of foreigners from the Middle East, even if they were from as West-friendly a place as Dubai.

Many New Yorkers also recall the sting of wounded pride when they learned in the late 1980s that one of the city's landmarks, Rockefeller Center, had been purchased by a Japanese company.

There was less handwringing this week over the news about the merger between the NYSE and Deutsche Boerse. Yet, there was a sense, even on the exchange floor, that something great was coming to an end.

"When you view it from the eyes of a practitioner, someone who has spent a lifetime in the building, it has a bit of sadness to it," said Theodore Weisberg, president of Seaport Securities and a presence on the exchange for 40 years. "It's a pretty special building. A pretty special place."

Even before the merger, he noted, big changes were afoot. The work force at the exchange has plummeted in recent years, from around 5,000 people to about 1,000 today. With most of the work being done by computers, the trading floor is quiet and nearly empty much of the time.

"I don't think the building is going to evaporate," he said. But the future will be different, for sure.

"Life changes. The world is changing. Maybe it's for the best," he said, sounding unconvinced.

The secret fear of some is that the merger is yet another signal that the era of American dominance of world finance is coming to an end, replaced by something new that we haven't quite grasped.

"I think it speaks to how emotionally attached many people are to the New York Stock Exchange as a symbol of American capitalism, in an era when we feel some of our competitiveness eroding away along with the rise of China and things like that," said Bernie McSherry, a vice president at the brokerage Cuttone and Co.

"People are concerned that this is one more chip at the foundation that will erode our standing."

He added, though, that international ownership of the exchange makes sense. Stock trading is global these days. Money is global.

Does it even matter if important financial institutions like the NYSE are managed by executives in another country? Practically speaking, maybe not. Even Chrysler, which has lately been promoting its American pedigree with the proud slogan "Imported from Detroit," is run by the Italian automaker Fiat. Anheuser-Busch, the maker of Budweiser, was bought by Belgian-Brazilian brewer InBev in 2008.

Mayor Michael Bloomberg, who became one of the world's richest men by selling information systems to Wall Street firms, said he welcomed the deal as a necessary change, and said it "reaffirms the central position that New York continues to play in the international financial system."

Sen. Charles Schumer, who helped lead the charge to block the DP World deal, said he was fine with the merger, too, as long as "New York" remained in the title of the new company.

"It signifies that New York remains the financial capital of the world," Schumer said.

Besides, he said, "The New York Stock Exchange is known throughout the world. No one has ever heard of Deutsche Boerse."

Being No. 1 is something New York takes seriously. It doesn't matter if you're talking about the dining and theater scene, or world financial markets, or the American League East. Being No. 2 is for losers.

While New York may not retain its dominance in every category, said Columbia's Jackson, it isn't about to fade into the past.

"We live in a great age of cities," he said. And unlike any city in Germany, or Japan, or almost anywhere, New York enjoys a diversity and multiethnic feel that makes it just right for a new era of globalization.

Where else can a South American, European, Middle Eastern, Asian or African businessperson come and feel right at home?

"Not Tokyo. Not Shanghai," he said. Not even London.

"There is no place like New York," he said. That much hasn't changed.