It's a cliché that New Yorkers move to sunny Florida when they retire. This trope is being updated. For a while, top Wall Street investment banks and hedge funds planned to leave New York City and open up offices in the Sunshine State.
Virtu Financial, a highly successful electronic trading firm that made about “$9.6 million a day” during the third quarter of 2020, set up shop in Palm Beach Gardens, Florida. Virtu’s CEO Doug Cifu said in Wall Street parlance about the migration, “We are dramatically oversubscribed for people who want to relocate from the Tri-State area.” Cifu added, “We surveyed our employees, and the No. 1 concern that people had was quality of life—but also taking mass transit to New York City any time in the foreseeable future.” There's another benefit for the well-paid workers too. They will “see a lateral pay move, which amounts to around an 11% increase in salary because Florida has zero income tax.”
“I was always a non-work-from-home, people-gotta-be-in-the-office, trading-room kind of guy,” said Cifu. “But I don’t think it’s practical given the modern world and where people want to live their lives and where people are happiest.” After schlepping back and forth from his home in New Jersey to Manhattan, Cifu said about the move to Florida, “This is a forever thing. We ain’t coming back.”
A combination of high taxes, poor governance on the part of New York City Mayor Bill de Blasio, ever-increasing crime, capricious business and school shutdowns and a resurgence in Covid-19 cases may have contributed to Goldman Sachs considering to move a large money management division to Florida.
The absence of a state income tax, plus warm weather and a business-friendly mindset, has already prompted hedge fund billionaires and native New Yorkers Paul Singer and Carl Icahn to relocate their respective businesses to Florida. Blackstone Group, the large private equity firm, signed a long-term lease in October for office space in downtown Miami. Deutsche Bank previously established a sizable beachhead office complex in Jacksonville, Florida.
Now, things are starting to change. You probably feel it in the air. The Covid-19 cases are coming down, there are less horror stories of people going to the hospital, states—like New York, California, Connecticut and Texas—are opening up and some are doing away with the mask-wearing mandates. The stock market is on fire, real estate is hot and it looks like companies are starting to hire again.
As things are looking brighter, the exodus out of Manhattan has subsided—and it's now reversing. Wall Street big shots who moved to Miami and Palm Beach during the restrictive lockdowns are seeking to come back home. The Wall Street executives are missing their old pre-pandemic Manhattan lifestyle. They claim that the city boasts the “best schools, theaters and restaurants.” Bloomberg says several billionaires are seriously considering moving back to the Big Apple.
Jason Mudrick, who oversees $3 billion at Mudrick Capital Management in NYC, quipped, “The main problem with moving to Florida is that you have to live in Florida.” Mudrick explained, “New York has the smartest, most driven people, the best culture, the best restaurants and the best theaters.” He added, “Anyone moving to Florida to save a little money loses out on all of that.”
Warren Buffett Is Part Of The $100 Billion Club
The grandfatherly Warren Buffett, who is viewed as one of the smartest investors in the world, is reported to be worth $100 billion, according to the Bloomberg Billionaire's Index. That places him in a rarefied group of five guys, including Jeff Bezos, Elon Musk and Mark Zuckerberg.
This year, the 90-years-young Buffett made about $13 billion. His company, Berkshire Hathaway, is up nearly 15% in 2021, giving the company a market capitalization of more than $600 billion.
Buffett and Berkshire Hathaway are known for their value investing style. This means, Buffett will look for quality companies that are trading at discounts due to certain temporary factors. He’ll buy the company’s stock at a discount, and hold on until their fortunes change and the investments flourish. As investors pivoted from WallStreetBets and growth stocks, like Apple and Amazon, they have moved to beaten-down stocks that Buffett loves—and their prices soared higher.
Not Everyone Is Rich
It's wild. We talk about billionaires getting more billionairey; meanwhile, Kroger—the large grocery chain—announced it will close three Los Angeles grocery stores because it doesn’t want to give hazard pay to its supermarket workers. A new “hazard pay mandate” is some cities require large grocery and pharmacy stores to pay their employees an additional $5 per hour.
This is about the third time this year that Kroger said it's shutting down stores that fall under the mandate. A Kroger spokesperson said, "It's never our desire to close a store, but when you factor in the increased costs of operating during Covid-19, consistent financial losses at these three locations and an extra pay mandate that will cost nearly $20 million over the next 120 days, it becomes impossible to operate these three stores."
The corporate spokesperson didn’t say, “How do you expect the supermarket’s executives get really, really rich if they have to actually pay their workers?!”
More Jobs, More Good News
If the Kroger workers are fed up, they may have other options, as the job market shows signs of improving. On a positive note, we saw new jobless claims fall more than expected last week. The spring weather will allow more outside dining and tempt people to leave their homes and go out shopping. The $1.9 trillion stimulus package and people getting vaccinated both bode well for a pickup in the economy and the need for more people to work at the reopened businesses.
As new Covid-19 claims are continuing to plummet, we’re likely to have a great spring and summer. A number of states have said, “F*ck it, we’re reopening and you don’t have to wear masks!” So far, so good. We’re not hearing any horror stories about deaths attributed to the loosening of restrictions. Here’s a huge sign of the change—California Governor Gavin Newsom, who's been super strict regarding shutdowns, announced that Disneyland can open its doors again to the public. This will bring back thousands of furloughed workers. Surrounding restaurants and hotels will see an increase in customers. Travelers will rent cars and go on airplanes to visit the “happiest place on Earth.”
Over $1 Trillion
The stock market boomed again on Thursday. Investors are thrilled that the federal government is going to flood the economy with lots and lots and lots and lots of money.
President Joe Biden’s $1.9 trillion Covid-relief financial stimulus plan was passed by the U.S. House of Representatives. The bill includes $1,400 stimulus checks to most Americans, $300 per week in enhanced unemployment benefits through early September and $350 billion in state aid.
Don’t ask how we will ever repay all of this debt. The $1.9 trillion doesn’t include the other trillions the Federal Reserve Bank pumped into the economy since the start of the pandemic. We’ll just have to hope our grandkids will figure out what to do about it.
There is some concern that all of this money could cause inflation. Next time you go to a Krogers, you’ll notice the price of food is going up pretty quickly. I guess we’ll worry about this later too.
Facebook Is Trying To Pretend That It’s Nice And Caring
Facebook’s hiring practices have been accused of widespread racial bias, according to Reuters. A “systemic” investigation of the social media giant has been launched by the Equal Employment Opportunity Commission.
“In July, Facebook operations program manager Oscar Veneszee Jr., who is Black, filed a complaint with the EEOC along with two applicants he recruited that Facebook later rejected. A third rejected applicant joined the case in December. The complaint, which they told NPR, was filed on behalf of “all Black Facebook employees and applicants to Facebook,'' alleges that the company fails to provide equal career opportunities for its Black workers, employs subjective evaluations that promote racial stereotypes and discriminates against Black candidates. In short, Facebook has “a Black people problem,” Veneszee said at the time.
Facebook’s Dream Of A More Diverse And Inclusive Workforce
I’m sure this has nothing to do with the investigation. Coincidently, Facebook has embarked upon building a “more diverse” workforce. The company says, “We’re invested in increasing diversity and inclusion because we care about doing better at serving diverse communities all around the world.”
Here’s what the company is doing:
“We’ve already committed to have 50% of our workforce be from underrepresented communities by the end of 2023, and we’re working to double our number of Black and Latinx employees in the same timeframe.”
“And over the next five years, we’re committing to have 30% more people of color, including 30% more Black people, in leadership positions. We will also continue our ongoing efforts to increase the representation of women in leadership.”
“We’re taking a closer look at how we make decisions. We’ve already made some shifts and investments and we’re continuing the work to get more voices and diverse perspectives included in the development of our products, policies and programs.”
“Achieving racial justice and equity is a goal all of us share – and a goal that will take real work to achieve. This is just the start of how we plan to help in this fight. We’ll continue to listen and take action to support the long-term success of the Black community.”
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