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Is Wall Street Still the Global Financial Superpower?

By Morgan Housel - Apr 24, 2013 at 9:46AM

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David Cowen on financial history.

Wall Street is synonymous with global financial strength.

But have you actually been therein a while? It's a ghost town, even in the middle of the day.

On the New York Stock Exchange, the media-to-trader ratio is probably about 10-to-1 (to the left is a picture I took last week). Floor traders have been replaced by computers, many of which are located hundreds of miles from Wall Street. Major banks like Goldman Sachs (GS -0.45%) and JPMorgan Chase (JPM -0.82%) are headquartered away from the Street, in different parts of New York (partly for security reasons -- banks don't want to be clustered around each other).

But there's more to it than computers and security. Wall Street may be thinning out because so much of the global financial system is now located in Asia and South America.

Is Wall Street's global power diminishing? I asked David Cowen, CEO of the Museum of American Finance, what he thought. Have a look (transcript follows):

David Cowen: "If you look back 400 years, the Dutch were the first ones to actually issue shares, and they were the financial power in the 1600s. The Brits in the 1700s and 1800s, and we come into play really around the time of World War I, Morgan, so this is very cyclical and right now, most economic historians say the transformation, it's a longer one, but it's going to the East, it's going to China.

"So if you've asked if we've diminished, I'd say, well, over the broad spectrum of time, this is a natural phenomenon, and it probably will continue to occur. I can't give you the exact date, but the capital and more power will flow toward China and to the Orient."

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