Richard X. Bové, the bank analyst with a superhero’s middle initial, thinks Wall Street has a location problem.
Specifically, Bové — whose claims to fame include fairy-tale metaphors, sorta predicting the housing collapse, and not caring whether banks cater to their customers’ needs — thinks Wall Street would be a lot better off if it moved away from New York, to a part of the USA where bankers could be celebrated as the fine, upstanding citizens they are, and not sued by angry prosecutors who get all huffy when they do little things like (allegedly) commit massive mortgage fraud.
According to his latest research note, Bové thinks the “constant hostility” banks face in New York, like continued legal pressure over their financial crisis misdeeds, should make it attractive for them to move. “If the industry was located in Charlotte, North Carolina it would not be facing constant hostility, it would be supported by a government that wants its business,” he wrote.
I am constantly struck by the fact that Michigan does not sue the auto industry; Texas is not suing the oil industry; California is not suing the entertainment industry; and Florida is not suing the tourism industry,” Bove wrote. “They do not sue farmers in Iowa. New York never stops suing the financial industry. Why? What do these other states understand that New York does not?
Never mind the fact that all of these states do actually sue their primary industries, or that Bank of America, which actually is headquartered in Charlotte, has been sued more than any other bank for its crisis-era misdeeds.
Does Bové really not know how much better Wall Street has it in New York than anywhere else?
As a quick reminder, the rest of America hates Wall Street. When I went on my cross-country listening tour this summer, exactly zero of the people I talked to regarded the financial sector with anything less than pure, boiling disdain. Outside New York, there is no other city in America that is anywhere near as inhabitable by banker types, or as forgiving of their sins. Can you imagine how dee-lighted prosecutors in Mississippi would be to try to put bank executives behind bars at the first sign of foul play?
And here’s what the bar scene in Anytown, USA, would look like after a Wall Street migration:
Banker: So, how about that Einhorn short? Chipotle? You think their expense headwinds will really be that bad?
Unemployed auto worker: [Spits tobacco into cup, growls.]
That said, Bové’s suggestion does make sense on some level. Banks are getting sued a lot in New York, by all manner of entities for all manner of alleged offenses. And moving out of New York would at least take some of the short-term heat off their legal teams.
Alternatively, to save on moving expenses, banks could stop, you know, breaking the law.