Good Morning and Happy Friday! Ares Chairman says sports could be a $3 trillion asset class. Trump announced that if re-elected, Elon Musk will lead a government efficiency commission. JPMorgan’s top economist says the Fed should cut rates by a half-point. Apollo will build out a trading desk for private credit, and Thoma Bravo founder vows to ‘never touch’ crypto again. Verizon will buy Frontier Communications for $20 billion. Plus an important jobs report drops today and three ways to buy happiness.

Read by Warren Buffet and other high-flying execs, Dry Powder shines a spotlight on Wall Street’s most consequential stories. Start your 2-week trial here.

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Miami’s Venture Capital Party Is Over

During the pandemic, Miami started to give New York a run for its money. It became the financial hub’s cooler sibling - where wearing designer clothes to the office was the norm and you could even play tennis and padel in February. Even less than a year ago, Ken Griffin thought Miami could replace NYC as the financial capital of America.

Fast forward to September 2024, and Miami’s financial dreams are taking hits, with Andreessen Horowitz’s quiet exit being the latest. The venture capital giant, managing $43 billion in assets, left its Miami Beach office back in May, a move that was only revealed recently by Bloomberg.

This office, which Andreessen Horowitz had opened in 2022 during Miami’s crypto boom, was a symbol of the city’s ambitions to become a tech and VC powerhouse.

The departure highlights Miami’s struggle to sustain the post-Covid momentum. Initially, the city attracted a wave of finance and tech firms, particularly during the height of the crypto craze, but the subsequent collapse of FTX and the broader crypto market hit Miami hard.

Even though Andreessen Horowitz stayed after the initial downturn, showing off its Miami space as late as May 2023, the firm ultimately closed its doors due to underutilization.

In 2022, Miami-based companies raised $5.5 billion in venture capital, but by Q2 2024, that number had plummeted to just $400 million, while the Bay Area saw a massive $18.7 billion influx, driven by the AI boom. Miami, once a legitimate competitor, is now struggling to stay relevant as tech investors focus elsewhere.

Takeaway: Miami remains a trendy, Instagrammable city—perfect for escaping winter and enjoying yachts. But if Miami wants to solidify itself as a real financial center, it needs to carve out a sustainable niche—just like San Francisco did with tech or Chicago with industrials. And given the recent crypto collapse, it might be time to rethink what that niche should be… unless "tropical crypto influencer” becomes a thing.

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The Newsletter Wall Street Can’t Stop Forwarding

Everybody on Wall Street reads Bill’s private newsletter, Dry Powder, religiously.

As a former investment banker, Bill has unparalleled access. Recent correspondences include Warren Buffett, David Solomon, and Leon Black. If you’re even loosely connected to the capital markets, Bill is essential reading.

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_HEADLINES

Top Reads

• Ares Chairman says sports is a $3 trillion asset class (BB)

• Trump says Musk would head a government efficiency commission if he's re-elected (Axios)

• The stock market’s next big test is the August jobs report (CNBC)

• JPMorgan top economist says the Fed should cut rates by a half point (CNBC)

• Verizon to buy Frontier Communications for $20B (Axios)

• The US economy may be on 'thinner' ice than investors think (YF)

• That Chase money glitch hack was just fraud (Vox)

• Thoma Bravo founder vows to ‘never touch’ crypto again after FTX bet (CNBC)

• Apollo plans to build out a trading desk for private credit (YF)

• Private equity spoils of war bound to spread again (Reuters)

• We're about to see how fast the sports TV landscape is changing (YF)

• How Blackstone and AirTrunk plan to build a $100B business (AFR)

_{CAPITAL PULSE}

Markets Rundown

S&P 500, Dow end lower ahead of key jobs data, Nasdaq up.

Movers & Shakers

• (+) G-III Apparel Group ($GIII) +22% after the maker of Calvin Klein and Tommy Hilfiger beat earnings.

• (+) JetBlue ($JBLU) +7% after the airline raised its guidance.

• (–) ChargePoint ($CHPT) -18% after the EV charging company missed expectations.

Private Dealmaking

• Verizon agrees to acquire Frontier Communications for $20 billion

• Salesforce to acquire startup Own for $1.9 billion 

• Safe Superintelligence, an AI startup, raised $1 billion

• ConnectOne Bancorp bought First of Long Island for $284 million

• Cortex, a productivity platform, raised $60 million

• Oyster, an HR platform, raised $59 million

  For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

Scary Smart

Artificial intelligence is smarter than humans. It can process information at lightning speed and remain focused on specific tasks without distraction. AI can see into the future, predicting outcomes and even use sensors to see around physical and virtual corners. So why does AI frequently get it so wrong?

The answer is us. Humans design the algorithms that define the way that AI works, and the processed information reflects an imperfect world. Does that mean we are doomed? In Scary Smart, Mo Gawdat, the internationally bestselling author of Solve for Happy, draws on his considerable expertise to answer this question and to show what we can all do now to teach ourselves and our machines how to live better.

With more than thirty years' experience working at the cutting-edge of technology and his former role as chief business officer of Google [X], no one is better placed than Mo Gawdat to explain how the Artificial Intelligence of the future works.

By 2049 AI will be a billion times more intelligent than humans. Scary Smart explains how to fix the current trajectory now, to make sure that the AI of the future can preserve our species. This book offers a blueprint, pointing the way to what we can do to safeguard ourselves, those we love and the planet itself.

“Technology is putting our humanity at risk to an unprecedented degree. This book is not for engineers who write the code or the policy makers who claim they can regulate it. This is a book for you. Because, believe it or not, you are the only one that can fix it.”

_{DAILY VISUAL}

Canada: Immigration Doubled Starting in 2022

_{PRESENTED BY BILL}

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_{DAILY ACUMEN}

Money in Relationships

Financial stress is a leading cause of tension in romantic relationships, often triggering broader stressors such as job insecurity or caregiving burdens.

Open, honest communication about finances is crucial but often avoided due to the expectation of conflict.

However, research suggests that approaching financial discussions with a mindset that views conflicts as solvable rather than perpetual can pave the way for more productive outcomes.

To reduce negative expectations and foster constructive dialogue, couples should frame conversations positively, use approachable language, and maintain open body language.

By focusing on collaboration and compromise, partners can work towards solutions that enhance both individual financial well-being and overall relationship satisfaction.

Proactive communication about money can transform financial stress into an opportunity for growth, highlighting the importance of optimism and a cooperative approach in maintaining a healthy and loving relationship.

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Short Squeez Picks

• 15 organic foods that are unhealthy for you

• How to find joy as a manager, even on bad days

• Hope vs. fear as a leadership strategy

• 3 ways to buy happiness 

• 4 ways to mitigate workplace catfishing

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Memes of the Day