Over breakfast yesterday, John Thain, the chief executive of the New York Stock Exchange (NYSE), waxed theoretical about the benefits of a merger with the London Stock Exchange (LSE).

Mr Thain was clear that he had no plans to pursue a tie-up with London “for now”. The NYSE is eager to bed down its proposed deal with Euronext, the European exchanges operator, and that, he expects, will take a year. Twelve months from now, though, the logic of Mr Thain’s argument for merging the number one listing business in the world (New York) and the number two (London) will surely still hold. It would be, as he put it, a combination of great brands.

And listening to him, the idea of an NYSE deal with the LSE seemed a lot less distressing than the prospect of the LSE being snapped up by Nasdaq. Why? It is clearly not the argument for maintaining independence to ensure competitiveness between financial capitals. It is not the case for defending London’s light-touch, principles-based regulatory framework. It’s not even patriotic nostalgia.

It is snobbery: if consolidation of exchanges is going to happen — and it is — then there is something that appeals to London pride about a combination with the world’s most prestigious bourse, not its stepbrother.

This, of course, is not rational. It is not financially sound — price, more than prestige, should govern the outcome. And it is not, strategically speaking, cut and dried: there are arguments that the NYSE could cannibalise business from the LSE, while Nasdaq might be a much more keenly competitive partner for the LSE than the Big Board.

But Mr Thain appreciates that an exchange is not a bloodless business. “Exchanges are still political animals. There are still nationalistic views of exchanges. Exchanges are not the same as a widget manufacturer.”

In fact, the same rules of value creation — rather than the values of the snob and the patriot — should apply to exchanges. Ultimately, they will. Clara Furse, the LSE’s chief executive, seems to have done an admirable job using all the weapons in the exchange’s armoury — financial, political and emotional — to fend off Nasdaq’s misguided hostile approach. Mr Thain yesterday offered a helping hand: the deal on the table may make great sense for Nasdaq, which has no substantial international business, he said, but offered little to London.

Mr Thain may not be the white knight riding into Paternoster Square with a £14plus a share bid in the next few weeks. But nor, it seems, is the London Stock Exchange short of a worthy suitor.

The Prime Minister is adamant that he took the right decision when he ordered the Serious Fraud Office to abandon its corruption investigation into the arms deal between BAE Systems and Saudi Arabia earlier this month. The reprieve was shocking, mainly because a UK prosecuting authority was being told to dump a criminal investigation, not for lack of evidence but simply because of pressure from a foreign power.

There was another consideration. If the House of Saud could exert influence on British politicians to end potential embarrassment and derail the due process of the law, why shouldn’t other foreign powers? It has taken South Africa, itself under investigation over a separate BAE deal, less than two weeks to come to that very view. President Mbeki was careful yesterday to emphasise that South Africa would continue to cooperate with the SFO but he left little doubt that he regarded the differing treatments of Saudi Arabia and his own country as unfair and insulting. That is the public statement. Who knows what pressure in private South Africa may be putting on the UK to drop its inquiry?

Mr Blair’s reasons for ending the Saudi inquiry have never been fully explained, and probably never will be. But jeopardising the relationship with Saudi Arabia was evidently unthinkable.

There was, too, the little matter of safeguarding a £10 billion contract and thousands of skilled British jobs making jet fighters. South Africa, by contrast, is a lesser power, certainly in geopolitical terms. Mr Blair has set a difficult precedent by yielding to Saudi demands. He can expect more complaints like Mr Mbeki’s. And he has left the SFO with a much more difficult task in winning the support of law enforcement agencies in other territories.

The co-founder of Google, Sergey Brin, said yesterday that the group’s decision to censor its search findings as a condition for going into China had been a “net negative” for the world's most successful internet company. While there were arguments for delivering more choice and information into a one-party state, the reputational damage around the world had outweighed the good intentions in China.

The other co-founder, Larry Page, interrupted. He said that he would rather Google based its decisions on fine judgments of what it thought was the right thing to do than on its reputation.

It was an insight into the internal dilemma of the “Don’t Do Evil” company’s compromise in China. (Also, the business is not going very well.) More interesting, though, was the glimpse it afforded of the soft-spoken, thoughtful men. They may disagree, but they do get on.

The Maria Bartiromo saga may look like a salacious scandal, which has brought down a powerful banker. Todd Thomson has been stripped of his job at Citigroup for elbowing colleagues off the company jet to fly back from China with Ms Bartiromo, the CNBC celebrity business correspondent. Then there was Mr Thomson’s commitment of $5 million of Citigroup money to sponsor a TV show to be hosted by Ms Bartiromo. The way in which Mr Thomson is compromised is clear. But the ramifications for business journalism should not be forgotten. When Enron and Worldcom collapsed, the accusations came thick and fast that the financial Fourth Estate had failed to spot the failures of both companies because business journalists were too close to their subjects. Come the next crack in the market, Ms Bartiromo will be Exhibit A of the case against the financial Fourth Estate. The challenge of business journalism is getting close enough to get the story, not so up-close as to be unable to see the story. Let alone, of course, to become the story.

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