Skiing is for Billionaires
4-2-23
Opening Comments
Unlike other news outlets, when I make a mistake, I do my best to correct my errors. It was pointed out that in my last note in regard to the horrific Tennessee school shooting, I wrote, "Used assault rifles and a handgun." I had written it because it was in articles I read. Turns out I was misinformed. The shooter bought 7 firearms from 5 stores despite the fact that the parents felt Audrey Hale (shooter) should not own any weapons. Video shows that the shooter did not have a fully automatic rifle; fully automatic rifles are only lawfully purchased and used by the military and some police jurisdictions. The term “assault rifle” is a media term that really means how it looks…not what it can do. Rifles can be fully automatic, semi-automatic (lawful in USA) and single shot. This is semantics but wanted to clarify my error.
I want to praise the brave police officers who risked their lives going into harm’s way to save the people inside the school. In a crazy bout of suppressing information, CBS executives bar the word “transgender” from reports about the Nashville shooter who the police have identified as transgender.
Markets
GS on Equity Flows & JPM on Markets
Twitter-Digital Banking?
Trump Indicted
Shell Bay PH Sale
Dallas/Houston/National Office Data-Not Good
Flows Leaving Big Cities Slowing
Spring Housing Market
Picture of the Day-The Rich Get Richer
In light of the theme of today’s note, I thought these two charts were telling about wealth creation. Total assets held by the top .1% have gained $5 trillion since the pandemic and are at over $17 trillion. However, the wealth of the 50th-90th percentile went from 37% of the total to 29% since 1990. The rich get richer which is why you need to be a billionaire to go skiing.
Skiing is for Billionaires
I snowboarded for the 1st time at 27-years-old and have never been on skis. Given my years of surfing and skateboarding, it came pretty naturally for me. I am hardly an expert but can hold my own. I have gone snowboarding in Vail, Aspen, Beaver Creek, Telluride, Park City, Canyons, Snowbird, Jackson Hole, Tahoe (Northstar and Squaw Valley), Whistler, Yellowstone Club (Montana), Stowe, Killington and Mont-Tremblant. I won’t talk much about East Coast skiing, but it is a cheaper alternative to the better mountains and experience out West. My few experiences with East Coast skiing were awful (freezing, icy conditions) and I will NEVER do it again.
I can tell you that skiing has always been expensive, but now, it has gone bonkers. I took my daughter, Julia, to the Canyons in Park City, Utah for her spring break. Lift tickets were $250/day (no half days allowed). We spent just over $2,000 for the two of us for 4 days. I think we should have bought a season pass, but when I called Epic, I was told to do it this way. The Hyatt Centric Hotel was approximately $1,000/night due to fees, taxes… It was not what I would call an exclusive or high-end experience, but was ski-in-ski-out with a rental store in the building. The room was underwhelming and the hot water was hit-and-miss. The rooms in Deer Valley (I can’t go due to snowboarding), were $2,500-3,500+ night during the time I was there. I am not talking about huge suites, but rooms. Flights were shockingly expensive, and the return was a redeye on JetBlue. Private ski lessons were $1,400/day +tip. Dinners in town had most entrees between $55-90. We did not talk about renting equipment which cost $750 for 3.5 days. Also, Julia had to buy a ski coat given her exponential growth since her last outing. Food on the mountain or in town was very expensive. Julia wanted a candy apple now that she has her braces off, and in town there was a store. With tip and tax, the candy apple was $11.
My friend called for a room at the St. Regis in Aspen for NEXT President’s Day weekend and the CHEAPEST room was $3,734/night after fees and taxes for a 400 sq foot room.
I checked the Montage at Deer Valley for next Christmas/New Year’s and a one-bedroom suite started at $4,355/night and a 2 bedroom was $9,345/night pre-tax and fees. A king room was $3,915/night. I don’t even understand the taxes and fees. For a room that is $43,550 for the 9 nights, with taxes and fees it is $53,292 or almost $1,100 per night OVER the stated rate. See the picture below I selected the “Resort View,” which is the cheapest one.
Cloud Nine Apline Bistro in Aspen on Highlands Mountain is one of the largest purchasers of Veuve Clicquot and a majority of the champagne is bought to be sprayed in the air. Here is a short video of the insanity. What could possibly go wrong with getting drunk at 10,000 feet and then skiing down the mountain? People spend $150/bottle for champagne to spray on the crowd.
Of all the places I have skied, one stands out for the best overall experience and it is by far Yellowstone Club in Montana. We went to consider buying a 2nd home there 4 years ago and whiffed. I could have bought for $2,000/ft and it is now closer to $5,000/ft. The positives are uncrowded (2,000 people for 3,400 skiable acres). For perspective, Aspen Mountain (Snowmass, Aspen Mountain, Highlands, and Buttermilk) has 5,495 skiable acres and can have 20,000 on a busy day. My Ski Tracks app does not lie. Check out my speed, miles skied and vertical feet in a few hours at Yellowstone vs Canyons. At Yellowstone, I went 66.5MPH going 39.6 miles and skiing 16k vertical feet. Taking an extra 1.5 hours at the Canyons, my max speed was 31mph, traveling 17 miles and skiing almost 14k vertical feet. I skied less than half the miles despite taking 40% more time to ski compared with Yellowstone.
To be fair, some of this can be explained that I was skiing with my daughter who is not as advanced as I am, but you get the picture. The lack of compaction, no lift lines, and no one on the runs makes it more fun, and far safer at Yellowstone. I cannot count the number of runs at Yellowstone where I did not see ANYONE else and never waited in a lift line. I have never been to another resort where I can say that. The service at Yellowstone is as good as it gets (and the members all make me look homeless (Gates, Zuckerberg, Brin, Tom Brady, Eric Schmidt, Justin Timberlake, countless GS partners, and major hedge fund and Tech founders). Mike Meldman (found of Discovery Land) has a recipe for success which is hard to beat. The negatives are it is hard to get to Yellowstone (fly private to Bozeman or connecting flights) and from the airport to Yellowstone can be brutal in snow. However, more direct flights are starting (23 cities now). The other issue is the price is not for the faint of heart, but the experience is as good as it gets even though it is not my favorite terrain. If you get invited to sky Yellowstone Club, do yourself a favor and go.
Ways to save: Book early and get a season pass now for next year. Consider a condo vs a hotel. Book airlines in advance. Shockingly, it is far cheaper to ski in Europe than in the US, but the flights are quite pricey. If anyone wants to help me rob a bank to go skiing again, let me know. Oh, many banks really don’t have deposits anymore, so maybe we need to rob a high-end ski hotel.
Quick Bites
Stocks rose Friday as Wall Street wrapped up a volatile, but winning quarter that saw more Federal Reserve rate tightening and a mini-financial panic spurred on by the collapse of Silicon Valley Bank. The market got a boost Friday after the Fed’s preferred inflation gauge showed a cooler-than-expected increase in prices. The core Personal Consumption Expenditures index, which excludes energy and food costs, rose 0.3% in February, less than the 0.4% expected by economists. The S&P 500 and Nasdaq were up 7.03% and 16.77%, respectively, for the first quarter. It was the best quarter since 2020 for the tech-heavy Nasdaq. The Dow ended the period with a 0.38% increase. The 1st Q was a big reversal from 2022 where tech underperformed. Given the backdrop of the banking crisis, rates and the consumer, I feel stocks performed far better than I would have expected. I threw together a chart sorted by YTD performance for indices, S&P 500 sectors and some select stock winners and losers. Despite some big YTD rallies, I was surprised at how much the stocks are down over the past year. Sunday, some oil headlines hit the tape, “OPEC+ Makes Surprise 1 Million-Barrel Oil Production Cut” and “Saudi Arabia and OPEC+ producers announce voluntary oil output cuts.” The third chart below outlines the cuts by country.
RDI 4.5-Stocks performing well. Latest inflation data down. Still have consumer concerns and CRE remains bleak. RDI explained.
GS came out with tactical flows which they claim are quite bullish for equities:
Equity market flow of funds technicals are extremely favorable starting Friday at 4pm EST.
There is simply too much going on in the “macro” to have a confident trading call, but I am bullish equities for April.
Current positioning is too short, too low var, low net, at the same time the upside has been capped (for now).
If the macro were to improve, we think that the pain trade goes back to the upside. This is a change in tone.
However, JPM Asset Management’s Bob Michele sees the potential of a near term rally followed by a sell-off. He believes a recession is inevitable and the Fed may cut in September. He sees defaults going to 6% and HY spreads going to a minimum of 800bps (512bps today).
Behind Elon Musk’s gamble to turn Twitter Inc. into a company worth more than $250 billion is a beloved idea he has hung on to for more than two decades: digital banking. The billionaire entrepreneur has talked in dribs and drabs about what Twitter 2.0 might ultimately look like under his control. But late last week, he gave employees a taste of how grandiose his plans are, telling them he envisions Twitter being worth more than 10 times its current value of around $20 billion.
Key to his effort, he has said, is putting the social-media company at the center of users’ financial lives. It is a remake that harks back to the early days of his professional career and his first major corporate setback at a startup called X.com, now known as PayPal. After paying $44bn for Twitter (overpaying by over $25bn), he now is setting his sights on digital banking through Twitter. He is truly a gifted visionary and engineer, but my concern remains about being stretched too thin across Tesla, SpaceX, Neuralink, Boring, Twitter and whatever else comes his way. I do think the idea is brilliant if he can pull it off.
Trump was indicted on Thursday by a Manhattan grand jury, and his attorney revealed the former president will face 34 counts when he is arraigned next week. The case is the first time in American history that a current or former president has faced criminal charges. The case is about payments to the porn star, Stormy Daniels, paid by Trump’s lawyer, Cohen, in 2016. Trump reimbursed Cohen, but internal documents suggest the payments were falsely recorded as a legal expense. To me, this seems like an overreach. Would John Doe be charged with a felony over such an act? I am not a lawyer but have spoken with many and the consistent theme despite a lot of hate for Trump is they feel the case is a stretch. After all, DA Bragg allows violent criminals to walk the streets and feel there are other, more serious accusations against Trump which have more merit (see chart). Lindsey Graham says Trump should 'smash some windows' and 'punch a cop' on his way to being booked to avoid being arrested given the DA in NYC seems to look past any of those crimes. This Rolling Stone article outlines concerns around the case. Why is the indictment under seal? After his arrest, Trump will be taken into custody, and processed just like any other defendant, including a booking number, former prosecutors and law enforcement officials told USA TODAY. “There will still be a mug shot, fingerprints and lots of paperwork filled out as part of the booking process,” like other defendants, said former federal prosecutor Glenn Kirschner. I do not feel Trump should ever be President again. I fear this indictment will invigorate his base and I question if the charges will hold up in court. Pelosi made a gaffe about the indictment saying, “No one is above the law, and everyone has the right to a trial to prove innocence.” As a Representative of Congress for over 35 years and Speaker of the House, I would think she knew that there is a presumption of innocence in the USA and prosecutors must prove guilt. Here are some crazy AI generated images of a fake Trump arrest. They look so real. Let’s not forget about E. Jean Carroll's civil rape and defamation lawsuit against Trump and the judge ruled he will use an anonymous jury in the case.
Other Headlines
Ed Yardeni says the S&P 500 can rally by double digits to end the year at 4,600
$13 Billion In Silicon Valley Bank Bailout Money Went To Just 10 Accounts
Small Banks Are Losing to Big Banks. Their Customers Are About to Feel It.
UBS May Cut Workforce by 20-30% After CS Takeover
Banks’ combination will result in significant duplication
Global deals sink to lowest level in over a decade
M&A in the first quarter came to $575.1 billion, down 48% during the same period a year ago
A record number of Americans are grappling with $1,000 car payments and many drivers can't keep up
With a record 16% of American consumers paying at least $1,000 a month for their cars, it's no surprise that drivers are starting to fall behind on their bills.
The percentage of borrowers at least 60 days late on their car payments is higher today than it was during the peak of the Great Recession in 2009.
In New York City, a $100,000 Salary Feels Like $36,000
After taxes and adjusting for the sky-high cost of living, a six-figure paycheck doesn’t take you as far as you might expect.
Wall Street bonuses dropped 26% in 2022 after record 2021
Wall Street bonuses fell 26% to an average $176,700 in 2022 from a record in 2021, according to a report from New York State Comptroller Thomas DiNapoli published on Thursday.
JetBlue is preparing to trim New York flights in response to FAA staffing shortage, CEO says
Just great. Less flights will drive up costs.
Tesla has installed 3,000 Solar Roof systems in the U.S., study finds
Shocking to me. I would have thought this would have exploded by now and have far more uptake. If I build another house, 100% chance this is my roof.
CDC Research Team Members Fell Ill Studying Toxic Ohio Derailment, Agency Confirms
Very interesting battle here and Disney just played strong and can be followed with this article.
Whopping 82% Of Berlin's Voters Refused To Support Net Zero 2030 As Referendum Fails
I guess early reliance on alternatives and the Russia debacle scared people off of Net Zero.
Girl straddled by drag queen sparks outrage at North Carolina school
Check out these pictures and tell me why this is necessary. What happened to reading, writing, arithmetic?
College issues list of offensive terms: Gift, bunny, America, Christmas tree
I’m very happy that all these overpaid DEI officers are working so hard to make the campus a better place.
Cornell’s classroom trigger warnings are a disaster for free speech
The recently introduced resolution (passed unanimously by student govt) “implores all instructors to provide content warnings on the syllabus that may be discussed,” meaning professors would be on the hook for anticipating what readings or other materials might “traumatize” their students. Are we preparing kids for the real world with “trigger warnings?” Top Ivy League schools are more worried about hurting someone’s feeling than teaching.
Angry Dad Blasts School Board Over Sexual Fantasy Assignment
Why should we discuss sexual fantasies in a high school classroom? The children must have been mortified. There is an amazing 2-min video in the link of the father destroying the teacher and school board. Must watch TV.
Male powerlifter enters women’s event, breaks record
Manhattan garage worker charged with attempted murder after shooting thief
The garage attendant was shot twice while confronting the thief. He then wrestled the gun away and shot the suspect. The attendant was charged with attempted murder. Are you kidding me right now? He is a hero. DAs in NYC better not follow through on this one.
Parents Are Paying Consultants $750,000 to Get Kids Into Ivy League Schools
Acceptance rates at the nation’s top universities are plunging, and parents are doing whatever it takes to get their kids in. Think about the parents who send their kids to fancy private or boarding schools for $60-80k/year. They hire tutors for standardized testing and consultants to get your kid into an Ivy League-type school for six figures. Oh yeah, you now have to pay $75-90k for school, room, and board…Sorry, it is not worth the money in my opinion for 80% of the kids, especially based on what they are learning in school today.
In a loss for Fox News, judge allows Dominion's defamation case to go to trial
If you use these 13 phrases every day, you have high emotional intelligence
Caitlin Clark powers Iowa over undefeated South Carolina in Final Four
This woman is special on the basketball court. She is ruthless out there and fun to watch. 41 points in EACH of her last two games against great teams.
WHO Now Says COVID Vaccines Not Recommended For Healthy Kids & Teens
The misinformation from the media, WHO, CDC, NIH, Fauci, Birx…is legendary. Lockdowns, trillions of dollars of damage, handouts, missed education, mandates, and vilification of anyone who questioned the narrative will go down as one of the biggest overreaches in the history of the United States.
Russia arrests Wall Street Journal reporter on spying charge
Real Estate
A penthouse sold at Shell Bay in Hallandale, Florida. The asking price was $10mm for the 4,000 ft with a 5,000 ft terrace, swimming pool, outdoor kitchen and 270 degree views. Yes, high end remains hot in South Florida. Devin Kay sold the unit. There was over 300 people at the Shell Bay launch party last Wednesday night despite the rain.
A reader sent me a report on the Dallas-Ft. Worth office market by Avison Young. There is a summary picture below and the vacancy rate is its highest level since the 1980s. Of note, the vacancy rate in this market seems to run higher than I would have thought, even in “better” times. The next shoe to drop is likely due to commercial real estate given the massive value destruction in the space. High vacancy/availability rates, lower rents, big related loan maturities and banks not wanting to aggressively lend are all contributing. The 2nd chart outlines the fact that 2022 ended with a 25% overall vacancy rate in Houston, the Central Business District had 31.2% vacancy, and the suburbs, 23.7%. This CommercialEdge report on the national office market is interesting. It suggests the national vacancy rate is 16.5%, but does not disclose the availability rate (including space for sublet.” There is another 123.5mm square feet under construction and 271mm square feet in the planning stages. Fantastic charts in the link. This Bisnow article suggests there are 270bn of CRE loans maturing this year and $80bn are secured by office buildings. For Manhattan, the vacancy rate is 16.1%. Remember, SFO has a vacancy rate of 27.6% and an availability rate of 32.6%. Lots of leases coming due in the next two years and expect vacancy rates to continue to climb. Many owners will be giving back the keys to lenders.
Big cities lost fewer residents last year as more immigrants moved in, fewer people died and more babies were born there, according to new census data that shows the urban exodus that gained steam early in the pandemic is cooling. The suburbs of big cities and small and medium-size metropolitan areas continued to claim most of the country’s growth, according to a Wall Street Journal analysis of population estimates released Thursday for the year that ended June 30. Rural areas and small towns collectively remained nearly flat.
CNBC article entitled, “More home sellers are sitting out of the spring housing market.” New listings continued to fall in March, according to Realtor.com, down 20% from the same month last year. That decline in new listings outpaced the 16% drop posted in February. New listings in March were nearly 30% below pre-pandemic levels. The active inventory of homes for sale is, however, 60% higher than the start of last spring, but that is only because homes are taking longer to sell. Mortgage rates, having dropped slightly in early March due to the stress on the banking system, are now, moving higher again.