Take all the time you need
Capital in the US is moving out of traditional places that are high tax and highly regulated to places with lower tax and lower regulation. Human capital will follow.
Capital Thinking • Issue #739 • View online
What would a reasonable man or woman conclude from the data presented below?
Take your time.
This can’t all be attributable to HP, Tesla, and Oracle can it?
It is what it is
Eye Jumping Data
Jeff Carter | Points and Figures:
Was perusing some data this morning. My friend Jeff Minch took a look at data on the cost to move from major California cities to Austin, Texas.
Unsurprisingly, it costs a lot less to rent a U-Haul from any city in Texas to any city in California. The same could be said for Illinois as Illinois Policy discovered back in 2017.
Data shows the same “time to get out” sentiment in cities like New York as well.Data is just data and you might not like it. When people don’t like the data, they try and bend it to their will.
I have seen that a lot with the national conversation that is going on with regard to secession. Leftists will tell you that all the production is in the cities, and people in the states we assume would secede are uneducated rubes who are grossly obese.
When you torture the data, you can certainly conclude that but it misses a big point.
Data shows you where your trail was through the forest. It doesn’t tell you what’s in front of you. That’s called probability and statistics. You can use data to try and forecast but you better have some transparent and explicit assumptions to arrive at that forecast.
For example, in an article I read this morning, I looked at the change in top financial centers over the course of the last ten years. It was somewhat surprising to me.
In 2010, Chicago was #7.
It wasn’t listed in 2020. Remember, Chicago has the largest exchange in the world in CME and the largest options market in the world in CBOE. It is also home to Citidel, and the largest high frequency trading firms in the world along with the largest cryptocurrency traders.
Chicago is an afterthought in the way they measure top financial centers and it’s not coming back. Sydney and Geneva also dropped out of the top ten.
In 2010, China had two of the top ten. In 2020, 4 of the top ten with Shanghai finally topping Hong Kong. San Francisco also joined the top ten in 2020, but I suspect that will be changing based on the data we have seen over the last year.
Data and history would tell you Hong Kong will persist. Probability and projection would tell you Hong Kong is going to go the way of Florence, Italy. China will purposefully kill it. People I know have been talking about this ever since England handed over the reins.
In the US, Dallas; Atlanta; Nashville, Miami, Charlotte, and Raleigh are luring companies away from New York City and Chicago. Finance companies headquartered in New Jersey and California are leaving for those cities as well.
If I use data, I can make a case for Chicago. But, if I look at the same data and project forward with a couple of assumptions, I cannot.
If you use data, you can look back and say New York is the largest in the US, and second largest in the world. But, will it persist?
It depends on the assumptions going forward.
Photo credit: Brooke Cagle on Unsplash