Wall Street

Occupy the City


Occupy the City

Photograph by Chris Ratcliffe/Bloomberg

Suppose that there are two competing shops located along the length of a street running north and south. Each shop owner wants to locate his shop such that he maximises his own market share by drawing the largest number of customers. In this example, the shop itself is the “product” considered and both products are equal in quality and price. There is no difference in product to the customers …

—”Hotelling’s Law,” Wikipedia

The “street” is the Atlantic Ocean. North is East and South is West. The “shops” are London and New York. The “shop owners” are the City and Wall Street.

Harold Hotelling established his law in 1929. There is debate, sophisticated debate, of its use and abuse in game theory 83 years on.

What is not open for debate is the “game theory” between financial New York City and financial London. As we drag ourselves out of our collective crisis, all will compete for the marginal client and his capital.

London has its many challenges. But I do not sense the Main Street/Wall Street angst of America. (King Street/the City angst?)

London and New York City share much “equal in quality and price.” With that said, after the Volcker Rule, after the Dodd–Frank Wall Street Reform and Consumer Protection Act, after various vendettas of legitimate and less-legitimate character, we must remember the other “player” in our American political game theory.

London will react and roll out the red carpet in response to Washington’s each and every salvo … north.

We need to find a common middle ground, soonest.

The City had a certain step this post-Olympic October. Yes, it is an austere and resilient United Kingdom. Walking the Square Mile, past the debris of 1940 bombardment, I kept searching for a division; symbols of a hatred of capitalism.

There was no sign of Occupy the City. Discuss.

Keene hosts Bloomberg Surveillance 7-10 a.m. ET on 1130 AM in the New York metro area and nationally on SiriusXM 113.

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