The next time you "read" about a textile mill shuttering the plant and moving the

jobs offshore it may not be a textile mill. Indeed, it may not be a manufacturing or
production facility of any kind. The next American icon to close shop and move overseas
may well be the New York Stock Exchange.

Today, if news reports can be credited, the Deutsche Bourse is finalizing the
agreements to acquire the New York Stock Exchange. As word of this acquisition spread
over the past week or so, it has been amusing, and frightening, to watch and hear the
talking heads on CNBC and Bloomberg try to convince themselves that the NYSE is
somehow different from all other domestic industries our country has given away over
the past sixty to seventy years.

Somehow, the talking heads tell us, there is something special about what the
NYSE does that will grant it immunity from dissolution and removal. Of course, all these
arguments are the same arguments small town mayors made to themselves and their
fellow citizens while the nation calmly continued to whistle by the graveyard as the local,
regional, state and, finally, the national economy cratered.

If there is a difference between the movement of the textile industry offshore and
the eventual consolidation of the new, combined exchanges in Berlin, or Frankfurt or
Bremen or Cologne or wherever the Germans decide to put it, it is that the forces
demanding consolidation of the exchanges is so much more powerful and compelling
than the auguries of the rape of the textile industry ever were.

Instead of one huge, centralized exchange, advances in telecommunications and

data exchange technologies may mean the combined exchange may not require a trading
floor anywhere. It could be the entire system could reside on a great central computer
center or a number of smaller, geographically dispersed processing "exchanges" all
around the world, handling regional trades and backing one another up. One thing for
sure, as the NASDAQ exchange has proved, there is no structural requirement for a
central trading floor such as the NYSE model.
 If the structural architectures of the exchanges are due for a major modification,
why would anyone think the Germans would feel compelled, or even interested, in
centering that new architecture in New York? Money moves at the speed of light now
days, the physical point at which money legally changes hands, where commissions are
won and lost, where management fees are booked, etc. can just as easily be in Germany
as New York. It could also as easily be dispersed all around the globe in a number of
mini money centers without losing any operational efficiency. Indeed, with branches all
around the world, many of the big international exchanges already have a presence in
Asian, Middle Eastern, African, and Latin American cities as well as European and North
American cities. Spreading the "wealth" makes both operational and political sense.
There is no reason to suspect this existing trend will not be accelerated as a result of the
merger of the two big exchanges as well as the smaller exchanges in London and Toronto
previously announced.

What is a dead certainty is that New York will not be the dominant player in
international finance twenty years from now as it is today and has been for more than a
century. This diminution of importance will mean a number of things for the rest of New
York City and State and the United States, none of them very good. First, the obscene
excess wealth thrown off by the financial center operations in New York have long fueled
the theater and art markets in that city. Without that obscene wealth these markets will
find it that much harder to sustain the work of the creative types who pour into New York
everyday, ready to show the world how it is done. Without the direct and indirect funding
of these creative efforts in the performing and fine arts, New York will begin to shrink as
a world center for creativity.

So much depends directly upon these creative industries. The presence of

television and movie production would long ago have abandoned the hostile natural and
tax and labor cost environment of New York for elsewhere. The critical mass of talent,
access to capital and local markets for the product of creative arts will soon fall apart and
the city will become like any other city. It will have its own, home grown creative types
about but it will no longer be the international Mecca for those young people who possess
a creative spark in their souls and a spirit of adventure that comprise the relentless Nile
River flood of talent moving in and telling everybody to move over and replenishing the
creative soil of the City.

The combined annual business done by the two exchanges is somewhere around
seventeen trillion dollars worth of deals. Most of this, I am told, is in the derivative
markets, including credit default swaps. This combine volume will create a stock
exchange far larger than cumulative volume of the next three exchanges.

While both NYSE and Deutsche Bourse currently do business in a variety of

currencies, when trades are finalized in New York, all currencies have to be converted to
dollars. In Germany the final trades are executed in currency converted to Euros. If the
final transaction point for the two consolidated markets is in Germany, whether actual
trade processing is centralized or dispersed, the final transaction will be converted into
Euros and all, world wide prices will listed in Euros. This may mean far more than mere
pride. Such an establishment of the Euro as the world exchange standard currency could
mean the establishment of the Euro as the primary world reserve currency instead of the
dollar.

Speaking of the derivative business, this is the general market where all the credit
default swaps and hedge fund operations take place. It is the single activity given most of
the credit for the global, financial meltdown in 2007 and 2008. These markets remain
largely unregulated and there is nothing in particular to stop the financial geniuses ruling
the world from doing it all again, any time they choose to do so.

What makes this "merger," potentially, rich in irony and karma is the general
notion that the primary reason the US Federal Reserve is so opposed to an audit of the
obligations it assumed in the wake of the financial meltdown is such an audit would
discover that the Fed has agreed to guarantee a huge portion of the obligations left over
from the derivative markets pre meltdown, some seventy-five trillion dollars. Commonly
labeled legacy assets, these left over, unfunded and, largely, worthless obligations would
have sunk most of the world's financial institutions if those depending upon them or those
guaranteeing them ever had to pay up or cash in. To avoid this collapse it is widely
assumed but not discussed that the Fed simply paid every body off, removing any risk
from the private sector and saddling the public sector with it. (If this is so it amounts to
the perfect crime. No human being can even conceive of a heist so large as this making a
criminal reckoning impossible. If they stole a few hundred billion, yeah, a jury could be
impaneled that could get its collective brain around that. Seventy-five trillion, this is too
big a number to comprehend. A criminal cannot be convicted of a crime no one can
conceive.)

If an international bail out of all the banks and all the hedge funds was part of the
Bernanke scheme, then the Fed is protecting financial institutions all around the world,
not just those headquartered in the United States. By rendering these debt swaps and
other junk obligations real, the Fed has indirectly kept the German banks, as well as those
in the Middle East, China, Asia and everywhere else solvent. In doing that, the Fed has
allowed the Deutsche Bourse to remain solvent and the German and European economies
strong. In doing that, the Fed has kept all the international competitors of what is left of
out domestic production companies prosperous. Many, if not the vast majority of these
competitor companies are listed and traded on the Deutsche Bourse allowing it to stock
pile sufficient cash to buy the NYSE.

All of the above outcomes are laudable, I suppose. However, if the Fed has,
indeed, underwritten the big German banks, isolating them from the risk they assumed by
taking on one or the other side of the debt swaps, the Fed has financed the destruction of
New York as the financial capital of the world.

No one should be surprised if this scenario turns out to be accurate. It is the

logical extension of the long standing policy of our federal government to adhere to the
dogma of free trade, accepting any loss in jobs, production capacity, national wealth,
destruction of the middle class, accepting any and all of this and more in the service of
the mass stupidity of the Chicago School of economics.

If there is anybody left in Washington, D. C. still possessing the capacity of free

and rational thought and who has one or more descended testicles, they need to stop this
merger. Stopping this would be the first step in the long road back to repealing the
horrible export replacement policy we call free trade with a policy designed to create real
wealth and foster fair and open international trade. Maybe, now that it is Wall Street's
time to have its ox gored while only the Germans and the NYSE stock holders are invited
to the bar-be-que, export replacement policy can be seen for what it is, national suicide.