Connect with us

Business

What Buffett’s Exit Means

Published

on

What Buffett’s Exit Means

It was closing in on 1 p.m. when Warren Buffett, seated onstage before a rapt audience of about 40,000 at the CHI Health Center in Omaha, said that he was getting a “5-minute warning.”

To most of those there for the annual meeting of Berkshire Hathaway, his company, it was simply a signal that the gathering — known as Woodstock for capitalists — was drawing to a close. No one knew that something historic was about to happen.

After 60 years of running the company he has called his painting, the 94-year-old Buffett said that he planned to step down as chief executive at year end. (Proving how much freedom he has always exercised at Berkshire, he surprised his own board and Greg Abel, his handpicked successor: “I want to spring that on the directors,” he said with a smile.)

People in the crowd, many of whom were in tears, rose from their seats in a standing ovation for a singular figure in the business world.

Buffett is often described as a symbol of American capitalism. The truth is that he has always been an outlier. He is more the conscience of capitalism, willing to speak uncomfortable truths about the system’s ills while others remained silent. (His public comments on issues like tariffs over the weekend are a prime example.)

Advertisement

The billionaire always comes across as a gentleman, and in an age of distrust he became someone people could trust. Fellow business moguls and government officials admired him because of his success, yes — Berkshire reported $89 billion in net profit last year, and it is one of the biggest buyers of U.S. Treasury bonds — but also because he didn’t appear to have changed despite his wealth. He lives in a modest house in Omaha, and for years drove his own car, including to the drive-through at McDonald’s.

Buffett isn’t perfect, something he often acknowledges, and he has urged his followers to stay humble as he discussed his own investing mistakes and misses. But that also got to one of his biggest accomplishments, using his annual Berkshire letters and marathon Q. and A. sessions with shareholders to educate generations about business, investing and life itself.

After the announcement, I was struck by a social media post from someone I wouldn’t have normally considered to be a Berkshire watcher, who perfectly encapsulated the importance of Buffett and his longtime business partner, the late Charlie Munger. “They were the good investors, dealers in reality, patient,” wrote Nick Denton, the founder of Gawker. “When the history of the rise and fall of America is written, one of the chapters will begin in Omaha, with their departure.”

As Buffett prepares to depart, the big question is: What will happen to his masterpiece once it passes to Abel?

It has been apparent for several years now that on a day-to-day basis, Abel is already running large swaths of Berkshire’s operations, so the shift likely won’t be dramatic. But the scrutiny of “Abel’s Berkshire” will undoubtedly increase: The company wasn’t built just as a collection of disparate businesses, but as the vision of one man.

Advertisement

Abel has said he will seek to maintain the culture that his boss meticulously built. But things will inevitably become different. Berkshire’s board gave Buffett an unparalleled degree of autonomy to operate as he saw fit, often learning about significant deals he had struck only after the fact.

Abel will have to work hard to earn even some of that latitude, and under him Berkshire is likely to operate with more guardrails. But there is speculation that Buffett will remain chairman for some period, which could afford Abel more freedom as he grows into the top job.

Nevertheless, Buffett’s success, and the company he built, were exceptional. What investors gathered in Omaha this weekend, and the world over, want to know is what comes next.

Markets brace for central banks and a busy earnings week. On Wednesday, the Fed is widely expected to again hold interest rates steady, potentially further irritating President Trump (though he seems to be backing off calls to fire Jay Powell, the Fed chair). Big companies are also set to report results, with investors focusing on further fallout from the trade war: Ford announces on Monday; Disney, Uber and Novo Nordisk on Wednesday; and Toyota, AB InBev and Shopify on Thursday.

Stocks look set to snap a nine-day winning streak. S&P 500 futures are down, with energy stocks in particular looking weak. Oil prices have fallen roughly 2 percent on Monday — West Texas Intermediate, the U.S. benchmark, is trading around $56.60, well below most domestic drillers’ break-even price — after the OPEC Plus cartel shifted course on Saturday and said it would increase production.

Advertisement

Shell’s shares jump on a report that it’s weighing a bid for BP. The oil giant’s advisers are evaluating a takeover of the struggling BP, Bloomberg reports, and could pounce if oil prices (and its rival’s stock) fall further. The fate of BP has become a much-discussed issue, with Wall Street analysts seeing it as a prime acquisition target as it pursues a turnaround plan under pressure from the activist investor Elliott Investment Management.

Betting on papal elections may be older than the Sistine Chapel. This week’s conclave involves a new twist: It’s the first time that major online prediction markets have turned their focus on the Vatican’s ancient selection process.

And the wagers are flowing in. The Italian cardinal Pietro Parolin has emerged as the odds-on favorite to succeed Pope Francis, according to the prediction markets Polymarket and Kalshi. Even a report last week that the 70-year-old had medical issues, which the Vatican denied, did little to dent that lead.

But while prediction markets claimed vindication in correctly predicting President Trump’s victory in November, picking the next heir to Saint Peter’s throne is likely to be a tougher challenge, experts both inside the Vatican — known as the “vaticanisti” — and outside tell Bernhard Warner and Michael de la Merced.

The wisdom of crowds can likely go only so far. High-tech betting sites “will never be able to break through the complexity, the unpredictability of the decisions made inside,” Franca Giansoldati, a Vatican specialist who writes for Il Messaggero, one of Italy’s biggest daily newspapers, said.

Advertisement

Rajiv Sethi, an economist at Barnard College who has studied prediction markets, noted that when it came to the presidential election, bettors were able to process a wide variety of information sources, including public polls and televised debates. The papal conclave — famously conducted behind closed doors and composed of an expected 133 cardinal electors sworn to secrecy — offers far fewer clues for gamblers.

Consider that a spike in the Polymarket contract betting that a new pope would be picked in 2025 took place after Francis’ death was announced, according to Sethi. Were there inside trading, someone could have made a lot of money. “We can rule out information leakage from cardinals,” Sethi said.

Conclave politics have been highly unpredictable. In 2013, the odds-on favorite was Cardinal Angelo Scola; then-Cardinal Jose Maria Bergoglio, who became Francis, was on few short lists. There are also unexpected developments, most recently when Cardinal Angelo Becciu, who was forced to resign his positions after a financial scandal, briefly sought to crash the upcoming conclave.

Again this time, the cardinals are divided, and many are meeting for the first time — factors that could complicate how long it takes before white smoke emerges from the Sistine Chapel.

Then there are other potential wild cards, including President Trump’s policies (which Francis frequently criticized), Giansoldati noted. Could cardinals even be influenced by a Trump social media post depicting himself in papal vestments? Analysts have seen a kind of Trump effect energizing national elections around the world already this year.

Advertisement

All that is unlikely to deter online bettors. Kalshi’s main contract on who the next pope will be currently has about $5 million in wager volume. “So far, the papal election market is tracking to be as big as the Super Bowl,” which saw $27 million in volume, Jack Such, a spokesman for the prediction market, told DealBook.


Marc Elias, a prominent lawyer for the Democratic Party whom President Trump has targeted by name in his campaign against big law firms, on “60 Minutes.” Trump drew further concern when, during an interview on “Meet the Press” that aired on Sunday, he repeatedly said “I don’t know” when asked if he needed to uphold the Constitution and guarantee the right of due process.


Shares in Netflix were down more than 4 percent in premarket trading this morning as investors weigh President Trump’s latest tariff target: films made overseas.

Never mind that Hollywood has a huge trade surplus with the rest of the world, and that it’s difficult to define how much of a major film is actually produced outside the United States. The proposal, which involves a 100 percent levy on such films, could scramble the economics for major studios and streaming services.

Elsewhere in tariff news:

Advertisement
  • Trump said on Air Force Once that he has no plans to speak with Xi Jinping, China’s top leader, this week as the trade talks between the two stall. But he reiterated that he is willing to lower the levies that have hit commerce between the two countries.

  • Many of the corporate promises to invest big in America, which the White House has said amount to “trillions of dollars in new investment,” are wildly overblown, according to an analysis by The Washington Post.


DEALBOOK WANTS TO HEAR FROM YOU

We’d like to know how the tariffs are affecting your business. Have you changed suppliers? Negotiated lower prices? Paused investments or hiring? Made plans to move manufacturing to the U.S.? Or have the tariffs helped your business? Please let us know what you’re doing.

Deals

Politics, policy and regulation

Best of the rest

Advertisement

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Business

In a first for the country, voters in Monterey Park ban data centers

Published

on

In a first for the country, voters in Monterey Park ban data centers

Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.

As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.

Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.

Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.

Advertisement

That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.

“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”

The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.

The Data Center Coalition, an industry trade group, expressed disappointment in the vote.

“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.

Advertisement

“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”

SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.

The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.

City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.

There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.

Advertisement

“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.

Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.

California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.

That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.

In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.

Advertisement

Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”

Continue Reading

Business

Rent-hike ban to protect fire victims ends despite gouging concerns

Published

on

Rent-hike ban to protect fire victims ends despite gouging concerns

A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.

The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.

The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.

“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”

Advertisement

Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.

It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.

Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.

“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.

Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.

Advertisement

“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”

Mitchell did not immediately respond to a request for comment.

There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.

In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.

In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.

Advertisement

A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”

“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.

Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.

L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.

Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.

Advertisement

Newsom defended the price-gouging protections shortly after they went into effect.

“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”

The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.

“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.

Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.

Advertisement

Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.

The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.

Continue Reading

Business

Read Nick Bilton’s Letter to Scott Pelley

Published

on

Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

Continue Reading
Advertisement

Trending