'TaaS 2.0' event TONIGHT; Roughly 4 in 5 Manhattan Office Workers Will Not Return Full-Time; Wall Street Sees Path to Return to the Office; Apollo and Goldman Sachs sweatshops; Wall Street A-Listers Fled to Florida. Many Now Eye a Return; Crazy times in South Florida; Billionaire Fund Manager Pays $105 Million in NY Tax Case

1) A final reminder that my colleague Enrique Abeyta and I will be hosting our "TaaS 2.0" event tonight at 8 p.m. Eastern time.

"TaaS" or Transportation as a Service is an entirely new industry that is emerging thanks to the rapid development of electric and autonomous vehicles. According to Bank of America (BAC), TaaS could attract $2.5 trillion (with a "T") in investments over the next decade.

Enrique and I believe that TaaS will transform life as we know it – from the way we eat to the way we shop, work, and travel. And this future is coming sooner than almost anyone expects – and is already minting many new millionaires in the process.

The five TaaS stocks we recommended to our subscribers on February 5, 2020, have soared an average of 54% versus only 16% for the S&P 500 Index.

But Enrique and I think this sector is just getting started...

To hear our latest thinking, tune in for our TaaS 2.0 event tonight, where we'll reveal a new opportunity you can act on.

This event is totally free to join – all you need to do is register right here.

As a thank-you for watching, attendees will receive something very special... See you at 8 p.m. tonight!

2) I'm not quite sure what to make of this survey of Manhattan's largest employers: Roughly 4 in 5 Manhattan Office Workers Will Not Return Full-Time, Survey Says. Excerpt:

Just 22% of the island's large employers will require all workers to return to the office full-time when they do eventually go back, according to a Partnership for New York City survey.

Some 66% said they would adopt a hybrid model of days in the office and days at home, another 9% said they would not require workers to return to the office at all, and 4% said it would ultimately be role-dependent.

Whatever model they choose, employers don't seem to be in much of a rush either. Survey respondents said they expect just 45% of Manhattan's roughly 1 million office workers to be back to the office by this September.

Another way to read it is that only 9% of large employers don't plan to have their workers return at all...

3) The big banks are leading the way in having employees return to the office: At Long Last, Wall Street Sees Path to Return to the Office. Excerpt:

New York City is reopening, vaccinations are accelerating and spring brings with it an air of optimism. For Wall Street's banks, that means a return to offices may finally be in sight.

At JPMorgan Chase (JPM), hundreds of interns are set to work in the lender's New York and London offices in the coming months. Citigroup (C) will begin inviting more workers back to its offices in July, and expects 30% of its North America employees to return throughout the summer. Goldman Sachs (GS) has also said it hopes to have more staffers back by summer.

One year after Wall Street sent employees home in droves to stop the spread of the coronavirus, the prospects of a broad return are starting to get clearer – and not a moment too soon for some companies in the industry. From Zoom (ZM) fatigue to the exhaustion of jobs colliding with home life, many bankers say the strains of long-term remote work are growing for bosses and underlings alike.

There are exceptions, and signs of growing flexibility as companies such as Apollo Global Management (APO) consider hybrid models. But as other industries look at dramatically reshaping work in a post-Covid world, the stance of New York's financial giants is clear: Employees should be at offices. It's just a matter of how quickly – and safely – their leaders can get them there.

4) The big financial firms are so busy that they're working their associates to the bone. Here's a story about Apollo: Apollo's hard-driving culture is extreme even by Wall Street standards, and it's burning through young workers. Here's why $450,000-plus pay and rules to ban weekend emails aren't enough to keep them happy. Excerpt:

Associates are often handed assignments by executives late in the day, with the expectation that they are to forgo a night's sleep to prepare materials for early the next morning. Associates assigned to support a deal could expect to live without a full night of rest for weeks on end. One source who recently left Apollo said they often felt drunk because of sleep deprivation.

One executive made it known that he hadn't taken a personal trip until he was promoted to principal – a point that associates took to mean that they shouldn't either, according to one Apollo associate who heard the remarks firsthand.

This person and an employee who left the firm recently said that associates have coped with the work stresses by relying on a dark sense of humor to get them through the day, joking about everything from the perceived incompetence of superiors to more extreme statements, like saying they would rather kill themselves than keep working.

And here's one about Goldman Sachs: Goldman's junior bankers complain of crushing workload amid SPAC-fueled boom in Wall Street deals. Excerpt:

• Junior investment bankers at Goldman Sachs are suffering burnout from 100-hour work weeks and demanding bosses during a SPAC-fueled boom in deals, according to an internal survey done by a group of first-year analysts.
• The surge in activity has taken a serious toll on analysts' mental and physical health since at least the start of the year, according to slides released to social media and authenticated by people with knowledge of the matter.
• "My body physically hurts all the time and mentally I'm in a really dark place," one analyst said.

5) There's a lot of talk about my fellow New Yorkers moving permanently to Miami, but I'm not buying it.

I know a lot of people... and not a single one is making this move. This Bloomberg article, which quotes my old friend Jason Mudrick, explains some of the reasons why: Wall Street A-Listers Fled to Florida. Many Now Eye a Return. Excerpt:

"The main problem with moving to Florida is that you have to live in Florida," said Jason Mudrick, who oversees $3 billion at Mudrick Capital Management and has resided in Manhattan for more than two decades.

"New York has the smartest, most driven people, the best culture, the best restaurants and the best theaters," he said. "Anyone moving to Florida to save a little money loses out on all of that"...

Much of the narrative around these relocations centered on taxes and business-friendly climate. Florida has no state income tax, while New York City's is among the nation's highest.

Yet U.S. Postal Service data paints a different picture: Last year, 2,246 people filed a permanent address change from Manhattan to Miami-Dade County and 1,741 went to Palm Beach County. Together they account for 9% of the out-of-state moves from the borough, up from 6% in 2019.

Still, even a small number of departures by the ultra-wealthy can have an outsize impact. The top 1% of New Yorkers earned a combined $133.3 billion in 2018 and accounted for 42.5% of local income taxes collected, according to the city's Independent Budget Office.

More Manhattanites relocated to Jersey City, Los Angeles, Philadelphia, Chicago and Hoboken, New Jersey, than they did to either Miami or Palm Beach. Except for Philadelphia, the other destinations are in some of the highest-taxed states...

Cristobal Young, a sociology professor at Cornell University and author of "The Myth of Millionaire Tax Flight: How Place Still Matters for the Rich," predicts that relocation will remain minimal because wealthy people generally stay put.

"They live where they became successful, where they have industry connections, employees and customers, and where they sit on nonprofit boards," he said. Young, who has studied the effects of tax increases in California and New Jersey, said they barely caused an uptick in interstate migration, which stands at about 2.4% a year among U.S.-based millionaires.

Then there is the lure of New York as everything starts to reopen.

"It will be like the Roaring Twenties – you'll see a resurgence here like never before," said Mudrick, who predicts some of his friends who moved to Miami will soon be back. "You want to be buying New York and selling Florida -- that's the contrarian in me."

6) Eric Rosen of The Rosen Report, who used to live in New York City, responds:

I never thought I would say this, but fine, go back to NYC, so I can buy a new house. I can't find anything down here, so if it is so horrible in South Florida, stay in NYC with a soon-to-be 15.75% tax rate, crime, DeBlasio, Cuomo, homeless... On culture, when you go back to NYC a few times a year, you get all the culture you need, trust me on that.

He added:

I spoke with someone who wants to move to Florida and is unable to find a house. He feels the Palm Beach area (including West Palm) has become so expensive with such limited inventory, it is having a major impact on the cost savings coming from a high tax state (CA). He feels a nice house is much more money in the Palm Beach area than Beverly Hills and based on his math and tax rates, you need to make a fair amount of income to offset the increased home price. I still take the other side and suggest the move to Florida, but I did not realize the magnitude of the move relative to CA and NY in terms of affordability at the high end.

I spoke with two new real estate brokers this week and they were crazed. They have buyers galore and virtually no high-end home inventory. To me, we need to see higher prices given this imbalance. I was shocked when a broker told me, "It is going to be extremely difficult to find you a house. I just don't have anything in the price range/specs and when I do, I have seven other people ahead of you."

I picked three homes to see on Monday afternoon and was planning to go Thursday morning. OOOOPPS. All three were under contract by noon on Wednesday, less than 48 hours after I spoke with a broker. These homes were in the $7mm to $10mm range and are going as though they are $250k. Inventory for homes is down massively at all price points in South Florida. West Boca is the new hot spot with homes going for as much as $4mm. I am talking 10 miles west of the beach.

With respect to golf courses down here, things have gotten insane. What once was a very straightforward process is now very challenging. Courses which struggled now have years long waiting lists and are dramatically raising prices. A club near me, Boca Rio, was dying. Older members, limited play and $45k range dues/year (VERY high for South Florida). I received countless cards from the club asking if we wanted a free round to check out the course. I was just told they are full and after a zero initiation for some years, it is now up to well over $100k.

LaGorce in Miami is an "A" location, but was not full a year ago. I believe there are over 60 people on the waiting list and the initiation is up to $350k from $200k and likely to be raised again. La Gorce is averaging 3,800 to 4,000 rounds per month throughout all of 2020, a typical month during winter season is 1,600 to 1,800 rounds. Emerald Dunes has an even longer waiting list.

Michael Jordan's new course, Grove XXII, started between $175k to 200k. I am told it is up to $350k and not taking new members. You need to be personal friends with MJ. The place is in the middle of nowhere, but the experience is amazing with arguably the best practice facility on the planet. I am not aware of one good golf course which is available for entry immediately. Everything I have heard now has some form of wait and many are years long.

7) Speaking of folks moving to Florida (or not), cheers to this whistle-blower and jeers to billionaire former hedge fund manager Thomas Sandell, who faked a move to Florida to avoid paying state and city taxes in 2017 on deferred-fee revenue of nearly half a billion dollars.

He was forced to pay $105 million (of which $22 million went to the whistle-blower – nice work if you can find it!). Billionaire Fund Manager Pays $105 Million in NY Tax Case. Excerpt:

Sandell, who founded Sandell Asset Management in 1998, took several steps to dodge the 2017 tax, including relocating to London from 2016 to 2019 and using an international accounting firm to make it look as though his operations were no longer in New York, according to the attorney general. He opened a shell office with three employees in Boca Raton, Florida, and held it out as the company's only U.S. operation, funneling his payroll and property expenses through a third party he owned to keep up the false appearance, James said.

Best regards,

Whitney