To say Wall Street is not a fan of Zoran Mamdani, it’s an understatement.
In fact, Big Apple’s well-known investors and business leaders are armed with the astonishing victory by democratic socialists in the primary to win the next Democratic nomination to serve as mayor of New York City. The potential victory for three-term council members in the November general election could bring about what the streets hate most. This is a regulation that threatens the profits of businesses and investments and stricter regulations.
Philip Lafont, founder of Hedge Fund Court Management, told CNBC that Mamdani’s victory could lead to another departure of wealthy investors. Since the pandemic, a wave of wealthy residents and institutional businesses has fled the country’s biggest cities for low-tax states such as Florida and Texas.
“There are certainly people who go,” Lahonto told CNBC’s “Scoobox” on Wednesday after former New York Gov. Andrew Cuomo admitted the Democratic nomination. “It’s not finished yet. There’s still an election. Maybe Cuomo will re-enter as independent.”
Mamdani’s emphasis on socialism and redistribution of wealth is contrary to Wall Street’s preference for unlimited capitalism and policies that support growth, such as deregulation and low taxes. The 33-year-old supports ultra-rich financial transactions and taxation of passive incomes like dividends. He also approved state-level wealth taxes and increased the marginal income tax rate for high-income earners.
Hedge fund massive Bill Ackman said he was “a bit depressed” by Mamdani’s victory on Wednesday. The chief of Pershing Square said he is looking at logistics to run logistics for other candidates, not himself.
Lawrence Summers, former Secretary of Treasury and Chairman of Harvard University, has also announced his nomination for the disgusting Mamdani.
“I’m deeply wary of that future. [Democratic National Committee] And the country advocated Trotsky economic policies due to the NYC hierarchy yesterday of candidates who did not dismiss the slogan of “Intifada globalization”,” Summers said in a post in X.
“Suicide by the mayor”
Some stock markets are already feeling the pain from the outlook for NYC led by Mam Danis. Shares of New York Regional Bank Flagster, exposed to the New York real estate market, sank nearly 4% on Wednesday. Office-centric real estate stocks also suffered, with SL Green Realty down more than 6% and Vornado Realty Trust down nearly 7%.
Mamdani defends universal rent management, and the mayor of New York has the authority to appoint representatives to the regulatory board that oversees rent control and rent-stabilized apartments. A suspension of rent increases will undermine the profits of multi-family rental properties.
Around one million New York City apartments are stabilizing rents, but only 20,000 people still manage rent.
“It appears New York is choosing to commit suicide by the mayor,” Jim Bianco, president and macro strategist at Bianco Research, said in a post on X on Tuesday evening.
“Fear is emotions.”
Mamdani’s solution to most issues relies on ideological commitments to taxpayer-funded spending, leaving the business community involved, says Kathryn Wylde, president of New York City Partnership, a CEO’s nonprofit founded by David Rockefeller in 1979.
“Fear is a sense,” Wylde said Tuesday morning, as voters headed to the polls on CNBC, saying, “There are a lot of positives in New York, but if you lose confidence in the mayor, it can change quickly.”
Wylde said the state government, led by Gov. Kathy Hochul, should keep cities out of the “disaster” scenario. She acknowledged concerns about high living and doing business, but said tax cuts were not the solution.
Some of the strongest support from former Governor Cuomo came from Manhattan’s Upper East Side, home to many of New York City’s best earners and business Titans. The former secretary of the Clinton administration’s Housing and Urban Development Bureau received more than seven of seven of the 10 first-choice votes in several of the neighbouring precincts, according to Associated Press data on Wednesday.
In 2013, Bill de Blasio’s victory also sparked unrest among financial elites, but he was able to ease his fears by meeting in person with business leaders before implementing the sweeping reforms.
“We had Mayor de Blasio for eight years. New York is really strong. I hope the same thing happens,” Lahonto said.
