Poor Downtown: Will Smith's Leaving, But Bush is Coming

Great, so we go from being blinded by the lights from the movie while driving south on the FDR to totally snarled in traffic!

The line about Bloomberg being a Republican really amused me!

#1 and #3(#1), if you don't have anything nice to say...

The picture says so much
and what it says is true
the gesture Bush is making
is to show us his I.Q.

Boy, oh boy, don't drink the cool-aid and buy the lie that "NYC's status as the world's top financial center is slipping"! --It's all bullcr*p propaganda cooked up by "Reverse-Robb'in Hood" Bloomberg & "Give to the Richest" Schumer to end public oversight and regulation on Wall St.

Wall St. has never been better! It's another Repub-li-cat lie. No wonder Bloomie's hangin' out with Bush today. Read this...and don't buy what they're selling!

The New Yorker
THE FINANCIAL PAGE
OVER THERE
Issue of 2007-02-05
Posted 2007-01-29

These look like fat years on Wall Street. In 2006, the city’s biggest financial firms made more than thirty billion dollars in profits. Trading volume on the major exchanges is climbing, while the merger market is booming. And bankers and traders have reaped the benefits, earning close to twenty-five billion dollars in bonuses last year. Yet over the past few months, amid this bounty, a chorus of Cassandras has emerged. “The United States is losing its leading competitive position,” a private-sector commission on capital markets said in a November report, and last week Mayor Michael Bloomberg and Senator Charles Schumer released a study arguing that New York City’s financial dominance was being eroded, thus putting tens of billions of dollars and tens of thousands of jobs at risk. These reports argue that overzealous regulation—as epitomized by the Sarbanes-Oxley Act, the anti-fraud law passed after the Enron and WorldCom scandals—is making the U.S. an increasingly unalluring place to do business. Unless such regulatory excesses are curbed, they say, New York will soon lose its position as the world’s financial capital.

What the New York report calls “the most dramatic illustration” of this slide toward disaster is a statistic that may seem rather esoteric: in recent years, the number of foreign companies choosing to go public in New York has plummeted, with Europe and Asia snapping up much of the business. America’s share of so-called “global I.P.O.s” is now only a third of what it was in 2001, and in 2005 twenty-four of the world’s twenty-five biggest I.P.O.s were held abroad. In other words, foreign companies, wary of our arduous regulations, are supposedly shunning America. And this signals a grim future, in which foreign firms stay away and, eventually, American companies may abandon the New York Stock Exchange and Nasdaq to list their shares elsewhere.

To businessmen weary of compliance officers and internal controls, this seems like a compelling narrative. But it’s a radically oversimplified explanation of what’s been happening. To begin with, many of the world’s biggest I.P.O.s in recent years have been privatizations of state-owned companies in Europe and China, which for political reasons were never likely to happen in the U.S. Also, corporate executives prefer to take their companies public in bull markets, which improves their chances of getting a high price for their shares, and foreign markets have lately done better than the U.S. market. London and Hong Kong are also cheaper than New York: the commissions that investment banks charge to take companies public there can be about half what they are in the U.S. More broadly, globalization—a force that Wall Streeters applaud when it comes to textile plants and call centers—has increased competition. Many foreign exchanges, like Hong Kong’s, are now far more liquid and open, and they also have much tougher regulations (often modelled, ironically enough, on those of the U.S.) than they once did. All this has made investors more willing to invest in them. Their market share has naturally increased as a result, particularly since, even in a global economy, companies prefer to list their shares closer to home.

Once you control for these factors, it becomes hard to find anything other than anecdotal evidence that regulations are doing serious damage to New York’s ability to attract foreign I.P.O.s. More important, it’s far from clear that a decline in foreign I.P.O.s would be a sign of future disaster anyway. After all, what matters to the fundamental health of an economy is its ability to attract capital and investors, not foreign listings. And there is no evidence that America’s attractiveness to investors has diminished. Its share of global stock-market activity in 2005 was actually three points higher than it had been a decade earlier. In the same period, the market capitalizations of the New York exchanges rose almost twice as fast as the market cap of the London Stock Exchange. And, according to the New York report, if you look at the annual growth in equities—which is what Sarbanes-Oxley would presumably be a drag on—you find something unexpected: from 2001 to 2005, the U.S. market grew significantly faster than that of Europe or the U.K. Does that really look like an industry crippled by regulation?

There’s no doubt that Sarbanes-Oxley is an imperfect piece of legislation, but it is not a harbinger of doom for America’s capital markets, and we should be skeptical of any analysis that says it is. Wall Street, after all, has greeted practically every important market regulation introduced in this century with howls of dismay and predictions of disaster. In 1934, the head of the New York Stock Exchange told Congress that if the Securities Exchange Act, which became the foundation of market regulation in the U.S., was made law there was a chance that stock trading in the U.S. would be “entirely destroyed.” Needless to say, it wasn’t. In 1975, when the S.E.C. abolished fixed commissions, the Street claimed that its business would be demolished. Instead, after transaction costs fell, trading volume shot up. And in 2000, when the S.E.C. required companies to disclose material information to all investors, rather than just to insiders, we were told that this would strangle the flow of information to the market and make stock prices swing wildly. But, as numerous academic studies have found, it has actually done the opposite. Maybe this time the doomsayers are right. But we need a lot more proof than we’ve been shown so far to believe that the wolf is really at the door.

— James Surowiecki

RE: #7 "That kind of brilliant thinking helped blow the elections for the Dems in 2002 and 2004."

Where were you at the last congressional and gubernatorial elections, you dipshit? (Hint: November 2006)