Auto Thefts-Including My Ride in 1989

10-18-23

Opening Comments

My last note was about my two NYC dinners last week. The most opened links were the Atlantic article, “Israel is Walking Into a Trap,” (I have the PDF if you need it) and Keith McNally doubles down on Israel.

My friends own Cellar Dog, an amazing bar in the Village that has jazz, pool tables, ping pong, shuffleboard, air hockey…. They are hosting a fundraiser for Israel as seen below. I am not sure I can make the event, but it is a good cause.

The weather is turning in South Florida. It was in the high 50s at night the other day. The humidity broke and until May, we are looking good. A friend who speaks a bunch of languages likes to say the word, “DEVINE,” in her heavy accent. I think the weather here qualifies. Come on down.

I bought gas last night for $3.17/gallon. Despite the Middle East debacle, gas is shockingly lower. Gas is almost 10% lower in the last month.

• Pictures of the Day-Latest Eye on the Market-Cembalest

• Auto Thefts in South FL Including My Ride in 1989

• Quick Bites

  • Markets

  • Cash Management Thoughts

  • Tech Job Market Shift-Crazy Example

  • Leon Panetta Interview (Israel/Hunter Laptop)

  • China Dominance Over

  • Taylor Swift Strikes Gold…Again

• Israel Headlines

• Other Headlines

• Real Estate

  • Buying vs Renting

  • Home Sales Crashing

  • Villa Miami (Major Food Group)

  • Insurance Woes in South Florida

Pictures of the Day-Latest Eye on the Market-Cembalest

• My readers know I am a big fan of Cembalest from JPM. He always puts out great thought pieces and this article is on a topic I have frequently written about with concern. It is the fiscal health of cities and there is a great heat map in the article which I have below. As you can see, the bottom of the pack is San Fran, Detroit and Chicago, while NYC is just a notch better. Cembalest gives ideas on how to improve cities including zoning changes, public/private partnerships, pro-business ideas and far more. I really like this piece. Thanks Mike. I would have liked to see more budget data given a $39.5bn projected deficit in NY over the next three years. NY politicians, listen to Mike, he is smarter than all of you…..combined. Note where Miami is on the charts below, well above NYC, Chicago, San Fran… in terms of overall rating and ease of doing business.

Auto Thefts in South FL Including My Ride in 1989

When I was 17, I bought my second car and it was a 1985 Toyota Corolla SR5- GT Hatchback. I worked my tail off to afford the car. In the back, I had a large speaker system that blasted annoying beats to those around me. I went off to college and over the summer came to visit my mom in Pembroke Pines, FL to work for the summer. I woke up and went outside only to find my prized possession was gone. In its place was a small piece of a tinted window and nothing else. The cops told me there was a crew stealing cars and sending them to Jamaica. They did not expect my car would be found and that proved to be true. My car was something like the picture below, but slightly less modified and was silver in color. In an even funnier aside, we had Allstate insurance. I went to the local office to fill out paperwork and started dating the receptionist there, despite my mullet haircut.

Today in my community in Boca, the only real crime appears to be the result of people who leave the keys in their car in front of the house only to be stolen. When keys are in the car, your side view mirrors are open, when the doors are locked, the mirrors are folded. Criminals drive around the streets and notice the open mirrors and pounce. We know multiple people who have had their cars stolen due to their sloppiness. I spoke with the police department and they told me 90% of the cars go right to a shipping container and are taken to South America.

Here is a crazy video my neighbor shared with me of his next-door neighbor’s Rolls getting stolen from the GARAGE. Apparently, someone was cleaning the car in the garage and walked into the house. The thieves were watching, drove up in a Porsche and drove off with the Rolls. They drive up in a Porsche to not attract attention in a neighborhood full of fancy cars. Brilliant. The man runs out of the house after them, but it is too late.

Just a few weeks ago, a reader and good friend sent me this video of his Ferrari being stolen in Miami Beach. He had the gates to his house closed, but that did not stop the thieves from breaking in and taking his car (keys left in). In the short video, they break in and drive off quickly. John’s wife heard the noise, but the car was gone by the time they got out there. Cops came in minutes and told them they were unlike to see the car as it was on a ship by now.

The detective told my friend the head criminals pay $5-10K for the stolen cars and the kids carrying out the crime are 15-16 years old, so when they get caught the punishment is not severe. It seems there is quite a big car stealing ring going around South Florida. Lock your car and do not leave keys in the car.

A reader sent me this story of an Aston Martin being stolen out of a home in Westport, CT. Another reader sent me this article, Minors drove stolen cars across Europe in a ‘large-scale theft’ scheme, police say. It seems as though these car burglars are everywhere. Lock up those cars!

Quick Bites

• Treasury yields rose sharply on Tuesday after retail sales data came in hotter than expected (+.7% vs +.3% expected). Yields have only gone up since with the 2-year at 5.21%, 10-year at 4.89% (hit 4.93% today), and 30-year at 4.99% (hit 5.02% today). Note how sharply Treasury yields have risen in recent months. Stocks sold off Wednesday on earnings and higher rates with JB Hunt -6%, United Air -8% and Morgan Stanley -8% on the day. Stocks dropped Wednesday as earnings season gained steam and Treasury yields climbed to multiyear highs.

  The Dow slipped 332 points, or nearly 1%. The S&P 500 traded 1.3% lower, while the Nasdaq slid 1.6% Oil is back up to $88 after being as low as $82 recently, as Middle East tensions coupled with a big US crude storage draw drove prices higher. Of note, gold is approaching $2k again and is +3% YTD and +12% for the past year. I have not been constructive on markets for many months. I feel the risk is to the downside but the markets have been far more resilient than I would have thought. TSLA reported after the closed and appears to have missed on earnings and revenues but the stock is not down a lot after hours. NFLX shares popped after hours on strong earnings (+9%).

  

  

• On the cash management front, I strongly suggest you reach out to your banking relationships. I am seeing banks become more aggressive than the rate you can get on Treasuries for time deposits. Banks lost big on deposits in many cases over the past year. If you bank with a large, reputable bank, I have no problem with time deposits vs Treasuries. For perspective, I am seeing a 10-12bps pick up in yields through 12-month maturities. I bought short-dated term deposits in the 5.66% range.

• I spoke with a tech recruiter and the market for talent has turned sharply in recent months. LinkedIn just laid off 700 (bringing a total of 1,400 YTD) and an overwhelming majority were in research & development and 20% in engineer management roles. Many other tech companies (Twitter, Amazon, Google, Spotify, Shopify, Roku, Epic Games, GrubHub, Sonos, Polestar, SoundCloud, Lyft, Dropbox, Meta….) laid off recently as well. My tech recruiter friend told me the large layoffs in tech in recent months and the lack of funding is driving the large market change that is shifting the power to the employers. There was a job posting on LinkedIn this week for a Chief Revenue Officer at a SAAS startup and there were 3,419 applicants within a couple weeks. At the beginning of the year, there would not have been 300 applicants. The second chart is the three recent tech IPOs stock performance. Instacart valuation today is $7bn and it was $39bn in March 2021 or a discount of 82% and is -16% from last month’s IPO.

  

  

• Panetta was the former Director of the CIA and the Secretary of Defense and was interviewed for 6 minutes about Israel and the Hunter Biden Laptop. The Biden Administration continues to suggest there is no evidence of Iran’s involvement in the Israel attacks despite Hamas saying otherwise, countless reputable reports of Iran’s involvement, and Iran’s history of funding terror and denouncing Israel. Panetta believes Iran played a large role and is concerned about the danger of an escalation. Panetta is concerned Hezbollah will draw Israel to the North. When Panetta was asked about the Hunter Biden laptop and the letter Panetta signed along with 50 other former intelligence officials, he still believed Russia was involved. The signed letter said the laptop was Russian disinformation. Panetta was asked “Do you have regrets about signing the letter?” Panetta said he was concerned about Russian disinformation and refused to admit the laptop was Hunter’s despite all the evidence suggesting otherwise. Panetta believes “disinformation was involved.” Let me get this right, Hunter said it was his laptop, there are literally thousands of pictures of Hunter, and thousands of emails from Hunter and the former Secretary of Defense and Director of the CIA cannot admit the laptop is real. We need leaders who can admit mistakes even if it makes their team look bad.

• I had this link in my last piece but did not have the space to dedicate the right amount of coverage. This Insider article is entitled, “It’s official: The era of China’s global dominance is over.” For the past three decades, China has been on the upswing of a super cycle that saw an almost uninterrupted expansion of the country's capacity to manufacture, appetite to consume, and ability to project power across the world economy. The Chinese Communist Party relentlessly pursued economic development over all else, even when that single-mindedness pushed the party to make debilitating policy mistakes — creating a massive bubble in the property market, saddling provinces with loads of debt, and failing to transition away from an overreliance on investment.  It's been clear for years that the Chinese real estate market has been in trouble. China has a population of 1.4 billion, but it has built housing for a population of 3 billion. Exports — which make up 40% of the country's GDP growth — hit their lowest level in three years in July, falling 14% from the same time a year before. I like this chart which shows China’s importance for global growth from 2000-2020 and it was discussed a few weeks ago in my interview with Alicia Levine and Peter Boockvar (4 minutes). Note in the 2nd chart how much China has fallen relative to Mexico and Canada on the list of US imports.

• I wrote a piece titled, “Why I Love Taylor Swift,” in June. Her concert tour and movie success only reinforce my prior view. Even better, is the deal she cut to bypass the movie studios allowing Swift, Variance Films, and a small sub-distributor to keep 57% of the gross box office. The film had a budget of less than $20mm. Box office analysts became Swifties in the lead-up to Taylor Swift’s Eras Tour concert film release, estimating blockbuster-style opening weekend numbers. And Swift delivered. While the pop singer fell short of the $100 million benchmark, domestic ticket sales still topped $95 million, according to distributor AMC Entertainment. Around 4.8 million people were estimated to have attended the film over the weekend, with an average ticket price of $20.75. Nearly 80% of the audience was female. Taylor Swift’s new film features some 40 songs and covers her past 10 albums. The whole movie takes place onstage with no behind-the-scenes or backstage footage included.

  

Iran/Israel Headlines

There are a lot of news stories about politicians, colleges, and others blaming Israel and supporting the voice of terror. I am an unabashed free-market capitalist who believes in free speech. However, I also believe as consumers and business people, we have the right to support businesses and hire people we believe share our values. I have a growing list of companies I will never support again. They have a right to hate and I have a right to boycott. Do your homework. You lost me at decapitating babies for anyone who supports Hamas. Thank you to Bill Ackman, Marc Rowan, Idan Ofer, Ronald Lauder and others for calling out hate and holding leadership at schools accountable. There is a story that confirms 199 hostages, more than was initially thought.

There is a story about a rocket that hit a Gaza hospital and killed more than 500. Initial reports suggested it was an Israeli missile and updated reports suggest it was a misfire of a rocket out of Gaza. Palestinian officials blamed ongoing Israeli airstrikes for the lethal incident. But the Israel Defense Forces has “categorically” denied any involvement in the hospital attack, blaming instead a “failed rocket launch” by the Palestinian Islamic Jihad group, a rival Islamist militant group in Gaza. Biden is in Israel and said, “the other team” appears to be behind the deadly hospital explosion. The point is, that not all the news coming out is factual. I could not imagine Israel would purposely hit a hospital. Many Middle Eastern Countries continue to blame Israel despite the facts and US intelligence confirmed that Israel was NOT responsible for the hospital blast.

• Iran Warns Of 'Pre-emptive Action' Against Israel

• Iran warns ‘time is up’ in ominous message to Israel as concerns mount of a World War III

• Biden to seek ‘unprecedented’ Israel aid package; pledges $100 million for humanitarian relief in Gaza and West Bank

• Jordan, Egypt unwilling to take Palestinian refugees

• Muslim boy killed and a woman wounded in Illinois hate crime motivated by Israel-Hamas war, police say

  • Horrific story of a man who stabbed a 6-year-old Muslim boy 26 times in Illinois.

• Hamas releases first video of a hostage taken to Gaza

• 80 years after WWII, Holocaust survivor escapes Hamas attack

• NYC doctor fired over pro-Hamas post cheering Israelis getting a ‘taste of their own medicine’

• Iconic Jewish NYC deli vandalized with swastika after pro-Israel social media posts

  • I have eaten there maybe 40 times.

• Cornell University professor calls Hamas terror attack ‘exhilarating’ and ‘exciting’

  • There is a video of the professor in the link.

• Billionaire former Victoria's Secret CEO pulls funding from Harvard, accusing the school of 'dismal failure' to take a stand for Israel

  • Les Wexner gave countless millions to Jeff Epstein without pause but stands up to Harvard. Although I appreciate his efforts, he could have done more to stop Epstein.

• Airlift Ordered By DeSantis Evacuates 300 Americans From Israel

• UF President Ben Sasse condemns Hamas attacks, ensures student safety after stampede vigil

  • Leadership.

• A student at Stanford sent me these pictures.

Other Headlines

• Microsoft-owned LinkedIn lays off nearly 700 employees — read the memo here

• Snap rises nearly 12% after CEO shares strong 2024 goals with employees

• Goldman Sachs tops estimates on stronger-than-expected bond trading

• Morgan Stanley shares fall as much as 8% as wealth management results disappoint

• Bank of America tops profit estimates on better-than-expected interest income

• Procter & Gamble tops earnings, revenue estimates even as higher prices drive some consumers away

• Nvidia stock falls after U.S. announces new restrictions on AI chip exports

  • The stock’s high was $503 (August) and it is back down to $439/share, but remains up over 200% YTD.

• United Airlines says pricier fuel, war in Middle East will weigh on profits

  • The stock fell 8%

• Roblox tells employees they have to come to office three days a week or take severance package

• Bank of America warned consumers they would be pushed to the ‘point of pain’—and CEO Brian Moynihan says we’ve now reached that point

  • Check out the CEO’s comments on the consumer. I highlighted these issues many months ago and they are become more widely discussed now.

• Iran’s oil exports to China hit 10-year high

  • Iran is exporting 1.5 million barrels per day of crude oil to China in August, the highest figure since 2013.

• SEC Head: Financial Crash Caused by AI 'Nearly Unavoidable'

• American Work-From-Home Rates Drop to Lowest Since the Pandemic

• Biden's Middle East trip riskiest of his presidency

  • The New York Times called it a "trip fraught with risks."

• Biden closed Q3 with more cash on hand than entire GOP field

• New poll suggests President Biden may have Pennsylvania problem for 2024

  • What does the polling say about our current President? A man who has been indicted on 91 counts is in the hunt? It is more of a statement about the absurdity of leadership in the US and a bad statement on Biden that Trump can be in contention.

• Jim Jordan loses first House speaker vote by a wider margin than expected

  • Twenty votes short. Hakeem Jeffries (Dem) got 212 votes to Jordan’s 200. Leave it to the idiots in DC to find a way to screw it up. 217 votes are needed to secure the Speaker slot. On the 2nd vote late Wednesday, Jordan received 2 fewer votes than the first time. 15 days with no Speaker of the House at a critical time in the world. EMBARRASSING.

• Overwhelming majority of Americans think US is trending downhill

  • 78% of Americans feel the country is going downhill. Only 3% of respondents had a great deal of confidence in Congress. The President has a 38% approval rating, we have no Speaker of the House, $33.5 trillion of debt, a nation divided, and two elderly men leading their respective political parties. I am definitely in the 78% camp. Check out this Miami Herald headline, “Large portion of Americans doubt democracy and view violence as acceptable, poll finds.”

• A banker was fired after trying to expense 2 sandwiches, 2 pastas, and 2 coffees, and saying he ate everything himself — before later admitting he shared them with his partner

• Bail increased to $4 million for biker accused of assaulting woman in front of her kids in Center City

• The Crime Spike Fades

  • Newly released FBI data suggest that the murder rate, though still far above pre-pandemic levels, is slowly falling. Last year, 6.3 per 100,000 Americans were murdered, down from 6.8 in 2021 and 6.5 in 2020. But 2022’s rate is still far above pre-pandemic numbers. America reached a low of 4.4 murders per 100,000 population in 2014 (the year of Ferguson), saw a mild-in-retrospect peak of 5.4 in 2016, and returned to rates of about 5 per 100,000 in 2018 and 2019.

• Prosecutors seek to recharge Alec Baldwin in 'Rust' shooting after 'additional facts' emerge

• Kevin Spacey Performs Shakespeare Monologue, Gets Standing Ovation at Oxford Lecture on ‘Cancel Culture’

• This is the No. 1 trait Serena Williams, Steven Spielberg and Tiger Woods all share, Arnold Schwarzenegger says

  • Arnold Schwarzenegger, “Your obsessions are a clue to your earliest vision for yourself, if only you had paid attention to them in the beginning.”

• 56% of adults feel ‘behind’ on retirement savings, survey finds. Here’s how to tell if you are

• This is the best university in the U.S, according to global rankings—it isn’t an Ivy League

  

• A 21-Year-Old Just Solved a 2000-Year-Old Mystery In 'World-Historical' Breakthrough

  • A 21-year-old computer scientist named Luke Farritor just became the first person in nearly 2,000 years to read words from a papyrus scroll that was buried under more than 60 feet of volcanic ash after the disastrous eruption of Mount Vesuvius in 79 CE. Machine learning was used.

• French nun tackles environmental protester attempting to stop construction of religious center

  • Must see TV

• One variable explains why some countries fought COVID better than others—and it’s not lockdowns or mask mandates

  • There’s little evidence that countries or communities with hard lockdowns and firm mask mandates did better than those without. There’s also little evidence that rich countries did better than poor, or authoritarian societies did better than democratic. In fact, the only variable that seems to explain COVID-fighting success is social trust. Societies with relatively high levels of trust—in each other, in their governments, in science, etc.—did better than those without.

Real Estate

• Interesting Bloomberg article on the cost of buying relative to renting. In high-cost US housing markets including Los Angeles, Honolulu, Seattle, San Jose and San Francisco, the premium for buying versus renting is surging, according to Zillow Group Inc. In California’s San Jose metro area, for instance, where the typical home costs $1.4 million, a buyer with 10% down faces a monthly mortgage payment of $8,771, more than $5,000 higher than monthly rent. Across the US, monthly rent was $81 cheaper in August than the monthly mortgage payment on a home for sale with a 30-year mortgage, assuming 10% down and a 7.18% interest rate on a house listed for about $350,000. That’s the biggest gap nationally in data going back to 2015, with soaring borrowing costs making it more expensive to purchase a home, even before taking into account taxes, insurance and maintenance costs. Homebuilder sentiment fell to a 10-month low due to higher mortgage rates.

• Good WSJ article entitled, “Home Sales on Track for Slowest Year Since Housing Bust.” The highest mortgage rates in 23 years are dragging down home sales to their lowest levels since the subprime crisis period. Sales of previously owned homes in 2023 are expected to dwindle to a rate not seen since at least 2011, when the U.S. population was smaller and the country was still recovering from one of the worst housing crises ever, according to many economist forecasts. According to the Mortgage Bankers Association, purchase mortgages dropped in late September to their lowest levels since 1995, an indication that home sales will stay depressed in the coming months. This is a CNBC article entitled, “The 30-year fixed mortgage rate just hit 8% for the first time since 2000 as Treasury yields soar. The 30 year fixed mortgage jumped 20bps this week and is up from 3% a couple years ago.

• Villa Miami is a new project by Major Food Group (Carbone, Lobster Club, ZZs, Dirty French, Contessa…), 1000 Museum Group and Terra Group. The pictures in the link look amazing and the partners are legit. I do feel too many shiny new buildings are going up in Miami as the economy is slowing and question how they will all perform. This building will be the most expensive one in the neighborhood by far and it will be interesting to see if they can get $2,000/ft + for large units. But I love MFG and what they have done in a short time. The amenities look fantastic. As a resident, you get preferred VIP treatment at ALL MFG restaurants to reserve tables with your favorite server.

• I have written extensively about the issues with South Florida. Home prices have skyrocketed, getting into private schools is impossible, golf courses are full and insurance is out of control. This WSJ article is entitled, “Home Insurance Is So High in This Florida Town, Residents Are Leaving.” I agree that pricing is so absurd that it is driving people to self-insure, rethinking living close to the water or leaving the state. There is a story of a homeowner in West Palm who saw the insurance premium jump 7 TIMES to $121k, which was more than 13 TIMES what they paid in 2019. I told the story of my neighbor who was paying $19k for insurance and was canceled. He called up four insurance companies and two said no to considering covering him. One gave him a price of $150k and the best price was $85k for higher deductibles and lower coverage than he had for $19k. Also, know that older homes are a big problem. Do your homework before making an offer with respect to schools, taxes, insurance…A project I was considering is on the water and the insurance quote was $1.95mm/year for $10mm of coverage. You cannot make it up, but you cannot get a loan without insurance.

  Rosen Report™ #623 ©Copyright 2023 Written By Eric Rosen