Please note the $1.3 billion Ritholtz Wealth Firm Takes Out a PPP Loan.
Count Ritholtz Wealth Management among the $1bn-plus RIAs which have taken out government-backed coronavirus relief loans.
Reformed Broker Under Pressure
The RIA’s chief executive, Josh Brown had this to say in a Reformed Broker blog post.
We qualified for the SBA-backed payroll protection loan after submitting our information and attestations. Two and a half months worth of employee payroll. I’m never comfortable taking on debt, but I’m even less comfortable about the idea of having to let people go. I would never be able to look myself in the mirror again if I had made that promise and didn’t back it up with action.
Thank you, Chase Bank! Thank you, SBA! It’s the news I needed and it came at the right time. Many of our peers of a similar size and employee headcount throughout the industry were able to make use of the program too. Being able to assure the firm that we’re keeping everyone and honoring all of our financial commitments meant everything in the moment.
Thank You Chase Bank!
Heaven forbid that an RIA would have to lose money over anything at all or layoff any employees.
It would be un-American for such travesties of justice to occur.
Fortunately, Ritzholz Wealth can use that money and under small business loan rules does not even have to pay it back.
Tears to My Eyes
I nearly cried when I read this part.
This post is dedicated to the 13,000 registered investment advisory firms in America and their 835,000 employees. Our industry serves 43 million clients nationwide and we are proud to be a part of it. Thanks to all of our colleagues who’ve shared their stories with us as we’ve shared ours.
God’s Work
No one can possibly be more deserving of a taxpayer bailout than RIA.
They do God’s Work.
Bailout Nation – The Book
I happen to have a copy of the book Bailout Nation at hand.
From the jacket of Bailout Nation.
Ritzholz leaves no stone unturned as he breaks down how the Federal Reserve’s interest-rate targeting policies as well as a condition known as moral hazard – the belief that you won’t bear the full consequences of your actions.
The United States has abandoned its capitalist roots and become a Bailout Nation.
Once again, thank you Chase Bank for allowing RIAs to continue with their God’s work.
Mish
Wonder if Barry took in more $ with Bailout Nation or the actual bailout..
Mish,
You cannot blame him…A Pirate is always a Pirate. He might have reformed himself for a while, but the pillage and plunder temptation got the best of him this time around.
Stocks need DAILY bailouts!Central Banks are now forced to daily bailouts of the stock “market”!Since 08 Fed pumped in a few trillion here and there through there bag men at the PPT to drive stocks to record high after record high,but know the Fed is forced to pump billions (trillions)into stocks everyday or it crashes …literally!
Well yes. That is 50% of the country. Do you want the government in charge of the banking system on a day to day basis ?
Every company tries to maximize profits. Why should this be any different?
Pitfall for taking PPP loan?
There was such a rush to get a loan … without considering consequences. Read one “expert” expecting only about half of PPP will qualify for forgiveness.
And this:
“Many small business owners who have been approved for Paycheck Protection Program loans (“PPP”) are realizing that the loan isn’t as forgivable as they’d hoped.
…
Unfortunately, there is an additional restriction on loan forgiveness requests which penalizes a small business if they do not bring back the same number of workers they had before the pandemic. For example, if you were a small business who had 10 employees prior to the pandemic, and now, after receiving your PPP loan funds you only have 6 employees, then your loan forgiveness request will be reduced to 60% of the total amount of eligible expenses.”
The reality hasn’t hit yet. Everyone is extending and pretending that things return to pre-Covid levels. That could take until 2021 or 2022 in terms of employment.
Add Real estate agencies to this of god’s workers. My uncle and his wife run their own RE affiliate of REmax in East coast FL. 2 person operation and they each net around 300k annually. They were called by Wells and qualified for 26k of PPP for 8 weeks
First time I’m seeing the cover of his book.
Is that a selfportrait of Barry?
Many associated with Wall Street have no shame. As long as we have the middlemen portion of the economy growing and the actual producers dwindling, most everyone is screwed. Glad to say I am part of a company that has its own manufacturing, R&D, and outsources nothing. And no reliance on China. Oddly my employer is taking no loans and actually paying down debt faster.
I could have applied for a bailout and probably would have gotten one.
Too bad you didn’t … You could have refunded us …
Mish, you are one of the few who adhere to your principle, even though you may be fighting windmills…. I respect and support your position. I would not take the money on principle either, as I am pro- capitalism and pro-market. Handouts have to come from somewhere, and we all know that robbing Peter to pay Paul just does not work. I support you calling things what they are and calling people on their bluff. Thank you for doing fine journalistic work and for putting your time into market analysis.
I can’t imagine why an RIA firm needs this? These firms earn a percentage fee on assets so their revenue stream is steady. You said early on Mish that businesses did not have to show negative covid impacts.
“I can’t imagine why an RIA firm needs this? “
These “firms” only exist in the first place, because of bailouts. Either formal bailouts, by the government, where productive people are forced to fork over to hand loot to the useless leeches, such as now. Or debasement driven bailouts, where The Fed forces productive people, by way of debasement, to, again, hand loot over to them.
It’s not as if “being good” at doing completely useless makework, playing office, picking random numbers and running around like little well indoctrinated children pretending “Wall Street” serve any economic function at all, is where their earnings come from.
Absent debasement and other bailouts of the idiots, it’s not as if free people would volunteer to hand over billions to mediocre clowns, simply to have them preen around being mediocre clowns.
the millenials are using app based investment guidance. AI will make better decisions based on age and objectives, and will impartially screen the choices.
No possible “guidance at picking random numbers,” will ever be any better, nor worse, than any other.
“Investors,” aside from those with access to asymmetric, “inside” information, “makes money” in exactly one way ever. And it’s exactly the same way the dealer at a make money at Casino blackjack: The House (in this case The Fed and Government) provides them the privilege of an a priori enforced edge. Paid for by the rest.
As an “investor,” unless you have inside information, it makes exactly zero difference whether you try your best to make as much money as possible, or lose as much money as possible. If you have a million people attempt one of the two, and another million the other, both groups will always end up in the same spot. That’s been done in pretty much every finance class since forever (not with millions, but wit class sized numbers of gullibles indoctrinated to beforehand believe things are somehow different.). And it has never failed. Heck, you’d get a Nobel, if you could find a way invest in public markets, absent inside information, while doing systematically better by trying to lose money, than by trying to make money. Or vice versa.
You’re literally more likely to systematically beat the odds in some state lottery, or at roulette. As at least in those cases there exists a non zero chance that the random generating machine is broken and remains so, undetected, for long enough that someone could take advantage for awhile. Which there never is in public “markets”, where the randomness is derived from an “infinite” number of other players immediately taking advantage of, hence rendering moot, any possible edge, arising from any new information, as soon as it becomes available.
The whole thing is stupid, silly, childish and economically illiterate from the getgo. “Local” lenders, as in community banks, can, and did, play with an edge, specifically because by being well connected and local, they did have “inside” information about their customers and communities So they did know Bill was an unusually hard working and industrious guy, who likely could make something out of some hardscrabble mountain plot where most others could not. So they’d take a risk on him, and it would pay off more often than not.
Money center banks, and “investors” in public “markets” have non of those advantages. Hence cannot, ever, “make money” in any economic sense. The only reason they, quite obviously, do obtain lots of money in financialized dystopias such as ours is, instead, that The Fed and Government first steals the money from others who have to work for it, and than hands the loot to the banksters and “market” participants / “asset” owners.
That’s it. There are no exceptions. No “hedge fund manager” is any “smarter” than any other. Just as no “investor” is. All that is just an illusion, kept alive in order to make the people who are robbed, fall for the scam that the redistribution The Fed and government is involved in, has any at all economic inevitability about it. With the hope that the dumb dupes will then keep supporting “the system.” Which exists to keep idle idiot banksters, and those with government privilege, wealthy and powerful. At the expense of all those who have to be robbed in order to maintain that illusion.
…And those clowns are not funny one bit..
Lot of irony going around these days, sort of like Buffett telling everyone to bet on America while Berkshire sits on record amounts of cash.
Ritholtz probably believes that he may as well join in on the looting like so many others did in 2008, but this time appears to be different. We may not be able to kick the can much longer and now is not the time to expose oneself as a blatant hypocrite.
“Ritholtz probably believes that he may as well join in on the looting like so many others did in 2008, “
There was no more nor less looting going on in 2008, than in any year since. The looting has gone up every year since at least the Sherman act.
How do you think Ritholtz “made” money, aside from book royalties, in all those other years? By being somhow better than random at picking random numbers? Like the rest of the mediocre halfwits in hos neighborhood?
Another American showing his true colors. Is it truly surprising at this point?
Use one hand for virtue signalling, then extend the other hand for a bailout.
And don’t forget the classic line : “blame the game, not the playa”
There would be no game without the players …
And the Fed does not create a “moral hazard” … the moral hazard already exists in every one of the players.
NOT The Onion:
WASHINGTON (Reuters) – White House economic adviser Larry Kudlow said on Tuesday that President Donald Trump’s administration is looking carefully at a potential “back to work bonus” to encourage Americans who had been laid off as the coronavirus pandemic spread to return to work.
Kudlow, speaking on Fox News Channel, also said he does not think Congress will approve another $600 per week in extra jobless benefits to laid-off workers in a future coronavirus relief legislation.
Seems they will have to pay the unemployed even more than the $600 week extra they are getting now to encourage them to give up that benefit! It’s indeed a slippery slope.
Actual testimonial!
For Many, $600 Jobless Benefit Makes It Hard To Return To Work
ay 26, 2020 10:14 AM ET
“Currently we’re suffering from the fear instilled into Americans that another 9/11 is just around the corner. We’ve also been brainwashed into believing the Federal Reserve just saved us from a total financial collapse in the past seven years even though the Fed was one of the most important causes of the crisis. To deal with the threats of another attack and another financial crisis we are expected to complacently accept endless spending, endless debt, endless bailouts, endless inflation by the Federal Reserve, endless spending by the Congress, and even endless war.”
― Ron Paul, Swords into Plowshares: A Life in Wartime and a Future of Peace and Prosperity
Don’t you get it? the Federal Reserve is Great Wizard of Oz….
After writing the book, Ritholtz realized he’s better of joining them rather than trying to fight them. This time he’s on the right side. Now if we can only get Bill Black (author of The Best Way to Rob a Bank is to Own One) to start a bank. haha
bill is much too honest to start/run a bank
What happens when the props are taken away without the support of a more normalised economy? The roof falls in.
and they won’t even have to pay it back. We will not be ‘normalized’ for some time, and those employees will be let go in the future anyway.