Is anyone apart from me surprised at the lack of hullabaloo surrounding the Deutsche Borse acquisition of the New York Stock Exchange? NYSE, surely, is one of America's most storied institutions - having been founded in 1792, when the fledgling Republic was not yet two decades old. Some of you will remember the massive kerfuffle which occurred thirty years ago when the Japanese bought the Rockefeller Center in New York. Or what about the Dubai Ports scandal back in 2006? That was an issue of national security!But turning over the largest stock exchange in the world by market capitalization to the Germans doesn't seem to pose any problem at all. Even Chuck Schumer, a severe critic of the Dubai deal (which ultimately failed), has given Deutsche Borse his blessing, insisting only that the merged company have the words New York somewhere in its name. Has America's financial capital come to this?
Time was that the stock exchange was seen as a viable measure of the strength of our economy. Periods of strong stock market performance often coincided with low unemployment - the Eighties spring to mind. But as Felix Salmon argues convincingly in Wall Street's Dead End, the stock market is becoming increasingly irrelevant. Two of the most innovative American companies to launch in the last decade, Facebook and Twitter, have chosen to bypass it entirely. They are valued at $50 billion and somewhere near $10 billion respectively, but have chosen to raise money privately, leaving them free to develop without the pesky interference of shareholders.
Don't get me wrong. It's not that I have anything particularly against the Germans. Neither am I reflexively against foreign ownership of U.S. companies. We buy stuff overseas. It's only natural that strong companies abroad would be interested in owning a piece of the world's number one economy, and being able to tap into its freespending customer base. But I guess I was under the mistaken impression that our primary stock exchange was sacrosanct. It makes you wonder what's next. Will the Mint start printing money in China because it's more cost effective? Will the White House be sold to the Abu Dhabi Investment Council and leased back to the President for use? (You may mock, but that group controls 75% of the Chrysler Building).
I can't help feeling that America in 2011 is a bit like Britain in 1945. This is the beginning of the end of an empire.
