The Ultra-Rich Are Building a Separate World Here on Earth

Joe Weisenthal (0:03)

Bloomberg Audio Studios.

Atossa Araxia Abrahamian (0:05)

Podcasts, radio, news.

Joe Weisenthal (0:20)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:25)

And I'm Tracy Alloway.

Joe Weisenthal (0:26)

Tracy, did you see that story a few weeks ago about Andreessen Horowitz, the big VC firm, closing its Miami office?

Tracy Alloway (0:34)

Oh, I did, partially because you tweeted about it.

Joe Weisenthal (0:39)

See, my tweeting serves a purpose. It allows us to coordinate and be on the same page on topics.

Tracy Alloway (0:45)

It gives us shared content, sure.

Joe Weisenthal (0:47)

That's right. But I found that story to be really fascinating because in 2020, or I think around 2020, and obviously with COVID and people frustrated about things going on in San Francisco, it felt like there was this big effort to sort of manufacture an environment in a new city. So it's like, okay, Miami is nice and the standard of living. If you have a lot of money, it seems pretty good. Let's just see if by sheer force of will and money and tweets, etc., consider whether we can relocate everything there. And there has been a lot. And we've talked a little bit about Miami, and Citadel has obviously brought a ton of money to the city. But this sort of impulse to sort of manufacture cities and manufacture new physical networks is a very interesting phenomenon to me.

Tracy Alloway (1:35)

Right. And I always find it's sort of the strongest whenever you see a city talk about becoming a crypto hub or something like that. And there have been so many, right? So Miami was one of them at certain points. Eric Adams in New York has talked about it. Malta wants to be a crypto hub. Dubai wants to be a crypto hub. Its neighbor Abu Dhabi wants to be a crypto hub. And it kind of raises the question, can everyone basically repeat the same economic or financial model and become these sort of offshore wealth centers that foster new business and innovation? It seems like there are multiple cities or countries or locations that are trying to do the same thing.

Joe Weisenthal (2:17)

By the way, well, you lived in Abu Dhabi.

Tracy Alloway (2:19)

I did.

Joe Weisenthal (2:20)

What's the business there? What does everyone do? No, I'm serious. I don't know what Dubai, I mean, I know there's a ton of money there, but I don't actually know what the big industries are in these places. So you must know.

Tracy Alloway (2:34)

I'm trying to word this very diplomatically. I would say light touch regulatory environment. I mean, that's basically it.

To start companies and pay low taxes and be able to do it in a fairly quick way. But the interesting thing about Abu Dhabi, and again, going back to the point of all these cities basically trying to do the same thing, is Abu Dhabi very, very, almost explicitly, was trying to follow the model of Singapore. In fact, they even hired Richard Tang, who used to run the Singapore Monetary Authority, to come behead of ADGM. It was that explicit. It's very obvious what a lot of these places are trying to do.

Joe Weisenthal (3:15)

It seems to be working well. I mean, I know people always think like, oh, there's a bubble, it's all real estate and speculation or whatever is gonna crash. But for the most part, I mean, there was something that happened in late 2009 One of them went bankrupt or something. But for the most part, it seems like it's been working.

Tracy Alloway (3:30)

For certain countries, certainly. I mean, Singapore, again, is the big example of this. But I guess the more people and places try to imitate these particular business models, not everywhere in the world can be an offshore financial center, for obvious reasons. And I think one man's loophole might be another country's comparative advantage, but there's a limit to how far you can push that.

Joe Weisenthal (3:55)

You think so. I wonder how far we are from the limit. Anyway, we're in an age, clearly, where there's just a lot of interest in cities. And people want to talk about, on Twitter, they're like, what city should I move to? And where people have a ton of money and options. Some people have a ton of money and they go to somewhere for some reason, maybe because regulation is low or taxes are low, etc. And essentially kind of be, I don't know, rootless. I remember during the pandemic when ostensibly, I thought all of the borders were closed and you couldn't travel, seeing friends on Instagram and stuff all over the world and places where there didn't seem to be any restrictions at all and on beaches.