Oil tycoon T. Boone Pickens, who made and lost fortunes targeting some of the largest U.S. crude explorers over the past 40 years, has cashed out as the worst crude market downturn in decades drags on.While T. Boone Pickens cuts ties with oil, GE cuts ties with Connecticut. This is what it might mean for CT:
Pickens has sold all his oil holdings and is waiting for the best moment to get back in, he said Thursday in an interview on “Bloomberg Go.”
Crude prices have slumped 70 percent since June 2014, leading the oil industry to eliminate more than 250,000 jobs and slash over $100 billion in spending in the last year, with more cuts expected this year.
Pickens started reversing course in the third quarter by slimming down his energy holdings and selling several stocks he’d bought just three months earlier.
General Electric’s big move to Boston this summer could mean much more than leaving an empty corporate campus behind.
Residents and small business owners in the tony town of Fairfield, Conn. – home to GE’s global headquarters for more than four decades – are bracing themselves for the collateral damage after the company announced last month it would be moving to Massachusetts and taking 800 jobs, millions in grants and opportunities for expansion with them.
But that’s not even the half of it.
The trickle-down devastation triggered by GE’s move is predicted to spare no sector. The real estate market is expected to suffer as residents pick up and leave for better job prospects. Small businesses and infrastructure projects also could start to see setbacks in the near future, as the high taxes blamed in part for GE's move remain.
“Probably half of the higher-end homes that used to house the GE executives will sit either unsold or foreclosed because no one else living in the area can afford them at their current price,” Christopher Mills, president of C. Mills & Associates, which manages real estate portfolios nationwide, told FoxNews.com.
While there is a slight possibility a large company could swoop in and save the city, the odds aren’t in Fairfield’s favor.
“[It’s] not likely to happen because the same tax and legislative hindrances that chased GE out will keep other companies away,” he said. “Those hindrances are what have to be removed to prevent a localized depression.”
GE, which has a market value of nearly $290 billion, made good on threats to leave Connecticut following two of the largest corporate tax hikes in the state’s history in 2011 and 2015.
Massachusetts – often referred to as “Taxachusetts” -- ranks 25th in a 2016 Tax Foundation survey of positive tax climates in the U.S. Connecticut, though, comes in a distant 44th. Connecticut’s corporate income tax rate stands at 7.5 percent but bigger companies have to pay more in corporate tax liability.
GE likely paid 9 percent due to surcharges on growth income. They’ll pay 8 percent in Massachusetts, Jared Walczak, a policy analyst at the Tax Foundation, told Reuters.My hunch: a) GE used the corporate tax rate as just one reason to move out; and, b) made the decision out of spite when CT raised corporate taxes even after GE threatened to move if the state raised taxes.