[Week 15 of 2026] Straits, Streets, and Stewards

Welcome back to Price and Prejudice with a few musings from Week 15 of 2026. Now that the Capital Markets & Investments class at Columbia is in progress, the blog will also reference to some contents from class as well.

Operation Citrini

This article is hard to describe without making it sound like satire. Citrini Research, who was responsible for an earlier sell-off driven by its dark characterization of the future, dispatched "Analyst #3" to the Strait of Hormuz during an active US-Iran war. He basically bluffed his way past Omani border agents, got detained by the CID, bribed his way onto a forty-year-old dinghy with no GPS captained by an Iranian smuggler he'd met the night before, and counted 15 tankers crossing the strait in a single day while drones flew overhead. Two days later, an American F-15 and A-10 were shot down roughly where he had been swimming in the strait with a cigar in his mouth.

The piece is actually valuable as research: the counted vessel traffic suggests AIS feeds (which most investors are relying on) are missing roughly half of what transits on a given day. This is also a reminder of what Grossman and Stiglitz told us a long time ago: if information were free, there would be no reason for prices to reflect any of it, and the people doing the gathering have to be compensated for the cost. In a world where most "research" is repackaging publicly available data, the premium goes to whatever is genuinely expensive to acquire. Sometimes that means proprietary data, sometimes it means sitting on a company for years, and sometimes it means getting on a speedboat.

Manhattan Membership

Every now and then, there are some talks of major financial companies leaving New York. This article is a more recent coverage of that trend, talking about Apollo's search for a second HQ in American South. The article cites several evidence to conclude that while Wall Street keeps threatening to leave New York, the exodus never actually materializes. On paper, the Florida math looks very attractive, i.e. no state income tax, bigger houses, better weather. But you still have high property taxes, private school fees, and insurance premiums. So the rational case for leaving is thinner than the headlines suggest, which partly explains why the great exodus never arrives.

The more interesting question is why the talent pool is so hard to relocate, and the answer is that finance is a textbook case of agglomeration economies. A thick labor market lets a bank replace a departing analyst in a week instead of a quarter, and deal flow accrues to the place where lawyers, bankers, and hedge fund PMs all eat lunch within the same ten blocks. None of this shows up in the spreadsheet calculation comparing New York rent to the rent in Palm Beach, but it's probably one of the biggest reasons why finance firms stay.

One could perhaps argue that AI threatens this since AI can do most of what a junior banker does at least functionally. But the case against is that AI mostly commoditizes the input that was already cheap, and what stays scarce is deal origination, client trust, and senior judgment, which are still built over dinners and not Zoom calls. If anything, AI likely widens the gap between firms with strong networks and everyone else, and that gap correlates directly with being in New York. On net, New York probably still wins for another decade, but the path by which agglomerations unwind is at least becoming visible, which is more than we could have said a few years ago.

Outsourced Ownership

This piece documents how the US asset managers are quietly taking over the European asset management industry. The share of US firms among the top 20 managers in Europe has risen from 40 percent in 2021 to roughly 47 percent in 2026, and the brief estimates they are about to overtake their European counterparts. Globally, BlackRock, Vanguard, and State Street alone oversee $26 trillion in assets. The brief is dense with interesting material on the economics of passive investing, the principal-agent problem in stewardship, and the hub-and-spoke structure these firms use to operate across the EU from Dublin and Luxembourg.

The part I want to focus on is strategic autonomy, as asset managers are not passive intermediaries. They vote at annual general meetings, they decide which directors to back, and they steer how European corporate boards think about climate, governance, and long-term strategy. And there is now a measurable gap in how US and European managers exercise that power. In 2024, US managers voted in favour of social and environmental shareholder resolutions 17 percent of the time, down from 49 percent in 2021. European managers voted in favour 86 percent of the time. BlackRock alone voted for 4 percent of such resolutions. When Nuveen (US) acquired Schroders (UK), the combined entity's support rate collapsed from 78 percent to 42 percent in a single year.

Europe is, in effect, importing its corporate governance from firms that systematically do not share its stated sustainability priorities. This seems structurally similar to the kind of dependence Europeans have been worrying about in energy and semiconductors, but now just dressed up in the uniform of finance.