One of the few constants in my investment career has been that New York City was the hub of the financial world. That may be in the process of changing. Luigi Zingales, a professor at the University of Chicago’s Booth School of Business, recently wrote a commentary that suggests a major change is underway. Like the Italian city-states, Amsterdam, or London of the past, New York may be in the process of forfeiting the world’s financial crown. Dr. Zingales points out a wide variety of factors that may contribute to this change. They include tax policy, brain drain, and poor regulation.
I have witnessed NYC being wheeled into the morgue in the past, but it has always managed to walk out. Will it be different this time? I don’t know, but I will be watching the relative strength of foreign markets for a clue.
