- the source for market opinions


February 23, 2024 | Strategic Relocation, Part 3: Whales Fleeing Weaponized Courts

John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What to Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website in 2004, sold it in 2022, and now publishes John Rubino’s Substack newsletter.

In January, a Delaware judge forbade Tesla from paying its CEO, Elon Musk, an amount to which the board and shareholders had previously agreed. Musk responded by moving the corporate registration of SpaceX from Delaware to Texas and threatening to do the same with Tesla.

“Never incorporate your company in the state of Delaware,” Musk posted on X following the ruling, later adding, “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”

Meanwhile, in New York …

While the Tesla drama was unfolding, New York state convicted Donald Trump of real estate fraud and — without a jury trial, a victim, or any monetary damage — fined him $350 million.

The fact that Musk and Trump had previously been butting heads with the Aristocracy is not lost on other potential victims of politicized justice. Many, apparently, are now wondering if they should preemptively move to places where contracts are respected and the courts don’t pursue political vendettas. Check out entrepreneur Kevin O’Leary going off on “loser states”:

And here’s PJ Media founder Roger L. Simon on the Trump ruling’s impact:

Judge Arthur Engoron Shot New York

It remains to be seen to what extent New York Supreme Court Justice Arthur Engoron put a stake in the heart of the once great, now beleaguered, city of New York, but he certainly didn’t help when he issued his draconian judgment against Donald J. Trump, ruling the former president and his family pay a staggering $350 million plus in penalties and forbidding them from doing business in the state for several years.

I imagine businessmen across the city and state had anticipated this and have been making plans to exit New York for some time.

That state already has the biggest population outflow, outnumbering even California’s.

Meanwhile, what businessperson—high or low—wants to incorporate in a state where a wanton judge can suddenly decree his or her estimates of their real estate valuations to obtain a loan to be inflated, impose ridiculous fines, and then shut them down?

The financial and political impact of the resulting mass migration is becoming clear to even the legacy media. As ABC News reports:

Five states are currently enjoying better-than-average performance on four key metrics analyzed by ABC News: job growth, personal income growth, gross domestic product growth and gas prices, according to data from the U.S. Bureau of Economic Analysis, the U.S. Bureau of Labor Statistics and AAA.

Four of those five states delivered their electoral votes for Trump in the 2020 election, including Idaho, Texas, South Carolina and Utah. The fifth, Wisconsin, went to Biden.

Meanwhile, 13 states boast better-than-average performance on three of the four metrics. Nine of those states backed Trump, among them Florida and Nebraska.

As the New York Times recently noted, Red States And Blue States Are Becoming Different Countries.

The two previous articles in this series are:

Strategic Relocation — Why, Where, And How

Strategic Relocation, Part 2: The “Big Sort”

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

February 23rd, 2024

Posted In: John Rubino Substack

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.