Author of Bailout Nation Gets Bailout

Mish

Barry Ritholtz, Author of Bailout Nation, just got a bailout.

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

Comments (42)
No. 1-17
caradoc-again
caradoc-again

What happens when the props are taken away without the support of a more normalised economy? The roof falls in.

Sechel
Sechel

I think its low-ball to attack people who qualify from taking a PPP loan. I don't agree with the mortgage interest rate deduction, but when I had a mortgage I sure took advantage of it. This is on par with criticizing an environmentalist for taking an airline flight to a green conference. It's puerile.

U.S. is close to paying farmers to euthanize livestock. I don't agree with this, but lets attack the industry and those who hire lobbyists not companies who simply fill out a form.

Attack the program, not the people who qualify and take one out.

anoop
anoop

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

Sechel
Sechel

So now you are proposing an ethical rule for who qualifies for PPP. But that's not how the program was set up. The mistake was always giving loans to companies for retaining employees which just encourages companies to take the money , benefit from the financing and fire the employees once the sunset provision expires. We should have been simply providing expanded unemployment benefits Companies could have rehired if business warranted. If there's no business they sit around watching TV and playing computer games anyway. Airlines are already talking about layoffs once the sunset provisions on their loans end.

numike
numike

“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

Tony Bennett
Tony Bennett

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.

tokidoki
tokidoki

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"

Tengen
Tengen

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.

Montana33
Montana33

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.

Mish
Mish

Editor

I could have applied for a bailout and probably would have gotten one.

Casual_Observer
Casual_Observer

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.

Knight
Knight

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

Tony Bennett
Tony Bennett

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."

Worker
Worker

Every company tries to maximize profits. Why should this be any different?

channelstuffing
channelstuffing

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!

Dubronik
Dubronik

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.

BigSKYoung
BigSKYoung

Wonder if Barry took in more $ with Bailout Nation or the actual bailout..