The Rarity of Customer Service

9-20-23

Opening Comments

My last note was on Redfishing in Louisiana and the most opened links were the Nvidia video and the link to the pictures of Kate Moss on how smoking impacts your looks over time. I want to stress the importance of understanding AI and the impact on various aspects of life and business. In my last note, there were two links that I strongly suggest people take the time to watch to better educate yourselves on this topic. Check out this CNBC headline, “Morgan Stanley kicks off generative AI era on Wall Street with assistant for financial advisors.”

I went to NYC Sunday night and took the subway to the Flatiron district to eat dinner and walk around. I will write up more about them, but I ate two meals that night. The first was at Maki Kosaka (sushi) and the next was at a Michelin Star Korean restaurant, called Oiji Mi. Kosaka was a fairly priced sushi restaurant which was solid. Oiji Mi was another level of greatness and beauty. I took the subway back uptown and walked up Madison Ave and saw this burnt-out van in front of Barneys. No idea why or what was going on here. It is UN Week and the traffic was awful. I never felt unsafe on the subway but had to move cars multiple times due to the stench from the homeless people.

The Rosen Report keeps growing, and have two fun examples. I reached out to a new school to send my son, Jack. I emailed the school and the response came back, “Are you Eric Rosen from the Rosen Report?” The owner of the school and his wife are fans. Then, I was flying to NYC at sat next to a lovely woman who was talking about her kids and their spouses. One of the names was familiar. She texted him and he was a reader who looked at a deal with me. He also owns car washes in Florida called El Car Wash.

• Picture of the Day-Election Spending

• The Rarity of Customer Service

• Quick Bites

  • Markets

  • GS on the Market

  • $33 Trillion of Debt and Counting

  • Ray Dalio Thoughts

• Other Headlines

• Real Estate

  • Luxury Apartment Market

    • Shell Bay Update

  • Housing Affordability

  • Fontainebleau Vegas

  • China Housing Crisis

Pictures of the Day-Election Spending

• I believe we need election reforms in various ways and one of them is spending. Check out these concerning charts about how much is spent to win a Congress and Senate seat. The last Presidential election year saw over $14bn spent on Federal elections with about $6bn on the Presidential race. One would think that with all this money spent, we would have better candidates than the never-ending clown-show of DC. The second chart is pretty telling about company donations to Biden relative to Trump as well.

The Rarity of Customer Service

I have found customer service to generally be underwhelming at best and absolutely awful most of the time. You call the 800 number and it goes to India, Philippines, Pakistan or some other place where they barely speak English. I had a brand new Dell laptop which broke shortly after purchase. I called customer service 5 times and could not understand anything the people were saying. They did not speak English as I know it. Last summer, I had a horrible problem with Budget/Avis Rental Car and it was solved by Tricia Moussette, the manager of the Budget in Southampton. I sent an email to the regional managers to let them know that one of their employees was special.

Rachel and Mark, I want to write a note about Tricia Moussette at your Southampton, NY location.  I have been Hertz Gold for 25 years and stopped using them over customer service issues. In the past year or so, I have done 90% of my rentals with Avis/Budget and many are extended (30-90 days).  I was on the road and my wife and son needed a car to be picked up at Westchester Airport. Given Avis rules, I made it under her name (Jill Rosen) and she picked up the car June 25th for a one-month rental.  It turns out the NY State inspection was expired which led to all kinds of problems. A police officer tried to give me a ticket due to the inspection but told them it was a rental and they let me go. 

After 7 hours on the phone and on hold with Avis, I just went and had it inspected and paid for it myself waiting 2 hours to get it done.   I wanted to extend the rental and despite 5 calls with customer service, I was unable to do so. They suggested my wife go back to the location I rented it (nowhere near us) and deal with it, as they could not help.  Flustered, I decided to go to the Southampton, NY location this morning as every time I have EVER had an issue, Trishia seems to find the solution.  This time was no different despite it being her day off. 

It was Sunday and Trishia was not working, but Margaret was there who is a newer employee. Margaret wanted to be helpful but lacked the experience to know how to handle my issue and called Trishia on her cell.  As usual, Trishia jumped into action and realized that the registration on my rental had expired as well.  Trishia ended up getting me a new car and solving my problem in short order. This is something that the customer service center representatives were unable to do despite hours of time trying.  

I can tell you right now that you do not find employees like Trishia often.  She has a "can do" attitude which is refreshing.  Your customer service representatives found ways to waste my time and come up with horrible solutions that did not work for me during the inspection and registration issues.  Trishia makes herself available on days off and puts the customer first.  She is the kind of employee who needs to teach classes, manage big teams, and be promoted within your company. You do not want to lose a leader like her.  Her knowledge, attitude, work ethic, and desire to get to the right answer make her special.  If I start another company, I will call Trishia to work with me. She is that good.  

Of note, I had Trishia's cell number because she gave it to me some time ago to be helpful. She has solved numerous issues with my Avis rentals, even when it is from another location. 

Sincerely,

Eric

I copied Tricia on the email I sent to her bosses and she was thankful.

Tricia sent me this note on 8/29/23:

How come I didn’t see you this summer? 
Tricia Moussette

Yes, there are still some people who believe in customer service and go above and beyond. Tricia is one of those special people. If anyone ever needs a can-do manager, hire this woman. She is amazing. It is rare to find employees who truly care about the customer. When you do encounter amazing service, be sure to thank them, tell their managers and show loyalty to the business.

Quick Bites

• The big news Wednesday was the Fed’s decision to leave rates unchanged. However, they expect one more hike prior to year end and fewer cuts than previously expected for 2024. The front end did not move a great deal, but the 10 and 30 year were 4bps lower in yield. “The US economy is too strong and this rate hiking cycle will last a lot longer than Wall Street wants,” said Edward Moya, senior market analyst at Oanda. On Wednesday, the S&P 500 dropped 0.9%. The Nasdaq Composite slid 1.5%, weighed on by a 2% drop in Microsoft and Nvidia and 3% slide in Google parent Alphabet. The Dow lost 76 points, or 0.2%. Technology stocks dragged on the S&P 500 in the session, with information technology and communication services the two worst performing sectors. Real estate stocks performed the best. Although oil was -1% to $90/barrel, Goldman increased its target to $100.

  

• Goldman Sachs expects the stock market is about to get even bumpier from here — and recommends ways for investors to capitalize on the turbulence.

  “We expect volatility to increase over next few weeks,” John Marshall, head of derivatives research at the firm, wrote Monday. October has been a choppy stretch for markets historically, according to Marshall. Since 1928, realized volatility in the S&P 500 was 25% higher in October compared to other months as companies come under pressure to deliver on year-end expectations during the crucial earnings season. That choppiness has become more pronounced in recent decades, especially in the years 1997, 2002, 2008 and 2022. Last October, the 1-month implied volatility in the S&P 500 rose to 30 from 25, the firm said. “While some consider it a coincidence that major market corrections have occurred in October, we believe performance pressures for company managements (to meet full year expectations) and investors (final earnings catalysts for their performance year) exacerbate shifts in investor sentiment at this time of year,” Marshall wrote. However, Bank of America raised its S&P price target for year end to 4,600.

• America’s national debt soared past the $33 trillion mark for the first time ever, according to the Treasury Department. In the prior 3 months, the debt increased by $1 trillion. For perspective, in 1981, the total debt was $1 trillion, meaning it took over 200 years to accumulate $1 trillion of debt and we just did it in 3 months. Ladies and gentleman, we have a spending problem and with higher rates and growing deficits, the numbers will continue to deteriorate. I have been harping on this topic for good reason. We need elected officials to be more prudent stewards of capital. Interest expense is now $1 trillion/year and growing rapidly. Entitlements are out of control. Yes, we need to stop running massive deficits. I believe the forecast is for $1.5 trillion + deficit this year with full employment, record housing prices, record stock markets and no war. Sorry, we need to run a surplus in the good times.

  

• This CNBC article outlines Ray Dalio’s views and there are many interesting ones. A lot more than I highlighted is in the link. U.S. billionaire Ray Dalio says new investors should have a diversified portfolio as economic and geopolitical headwinds persist. “I would like to have diversification, because what I don’t know is going to be much greater than what I do know,” said Dalio, founder of one of the world’s largest hedge funds, Bridgewater Associates. “Diversification can reduce your risk without reducing them sharply, if you know how to do it well,” he said at the Milken Institute Asia Summit in Singapore last week. “Pay attention to the implications of the great disruptions that are going to take place because the world will be radically different in five years,” he explained. The artificial intelligence evolution has caught the hedge fund manager’s attention too — but Dalio said he recommends investors put money in companies that adopt this new technology, rather than those creating them. “It’s like going through a time warp. We’re going to be in a different world. And the disruptors will be disrupted,” Dalio said. “I don’t need to pick those who are creating the new technologies. I need to really pick those who are using the new technologies in the best possible way.” 

Other Headlines

• Why a Soft Landing Could Prove Elusive. Odds of the Fed reducing inflation without a recession have improved, but hazards loom

  • Article makes some good points. If the Fed could pull off a no-recession outcome, it would be virtually unprecedented based on history. Since World War II, economists say, the U.S. has achieved only one durable soft landing, in 1995.

    

• American workers are now striking at some of the highest levels on record.

• Striking unions impacting the economy at a level not seen in decades

  

• Biggest price drops in cars since January

  • What happens to all those car loans done at higher prices and now consumers are struggling to pay? The value of the cars is down sharply.

    

    

• Instacart closes up 12% in Nasdaq debut, after first-day rally sputters

  • The grocery-delivery company has taken a massive valuation haircut from a peak of $39 billion in 2021. It was $11bn after the 1st day of trading.

  • Klaviyo jumps 23% in NYSE debut after software vendor priced IPO at $30

• Olive oil prices surge over 100% to record highs, sparking cooking oil thefts

  • +130% from last year.

• Orange juice futures are hitting record highs. Here’s why, and what it means for consumers

  • The article cites bad weather and citrus disease. The chart says it all.

  

• Biden takes a political hit but brings Americans home

  • CNN article. I sympathize with the hostages, but negotiating with terrorists is just a bad idea and the $6bn only makes matters worse. Excuse me for not trusting the Iranian government.

• Anxiety ripples through the Democratic Party over Biden

  • The liberal media is turning on Biden. More negative articles are being written and this WaPo is no different. A growing number of polls are showing voters concerned about President Biden’s age and energy. Democratic lawmakers have hesitated to offer full-throated endorsements of his running mate. Prominent commentators have ruminated on whether he should drop out of the presidential race.

• The Biden administration tried to censor this Stanford doctor, but he won in court

  • A federal court of appeals ruled earlier this month that the White House, surgeon general, CDC, and FBI “likely violated the First Amendment” by exerting a pressure campaign on social media companies to censor Covid-19 skeptics — including Stanford epidemiologist Dr. Jay Bhattacharya. As Americans, we should be concerned about such behavior. I would feel the same if the Left was being blocked by the Right.

• Mar-a-Lago 'Direct Witness' Strengthens Case Against Donald Trump

• ‘Exactly Who She Is’: Local TV Anchor Drops Epic Takedown On Lauren Boebert

  • Both parties need to hold elected officials to a higher standard. The American public needs to think about who they are electing.

• 'He's 100% in': Matt Gaetz widely expected to run for Florida governor

  • I think we can do better.

• NY quality of life suffering from sky high living costs, crime and migrant crisis: poll

  • 57% of 804 registered voters who participated in the Siena College Poll released Tuesday said the quality of life in the Empire State is getting worse, while 27% said it was the same and just 14% said it was better.

• 6-year-old fighting for life after Texas man bashed his head with baseball bat

  • Neighbor breaks into a house and hits a boy in the head with a bat and then tries to attack the parents.

• ‘They’ll walk straight into jail cells’: California says it will spend $267M to crack down on smash-and-grab robberies in retail stores — but will it stave off the national 'growing threat'?

• Distressing video shows teen pummel cashier as gang of kids swipe candy, vapes

• Forget young blood — Bryan Johnson says his body transformed when he stopped eating late-night brownies and stressing about work

  • The guy is nuts, but spending millions on staying fit and healthy. He made hundreds of millions selling his company to Venmo and now spends it to stay young.

• The No. 1 personality trait linked to a long life: ‘The effects of just being positive are overstated,’ psychology expert says

• A good marriage is the 'number one predictor of happiness' for men and women, sociologist says

  • Marriage tops income, education and sex in reports of happiness, University of Virginia professor Brad Wilcox says

• Air Force releases most detailed images yet of secretive Raider nuclear stealth bomber

  • B-21 Raider expected to cost about $700 million per aircraft. The pictures in the link are crazy. For $700mm, they better be out of this world.

• Mexican doctors conclude tests on alleged ‘non-human’ alien corpses — here’s what they determined

  • Mexican doctors have found “no evidence of any assembly or manipulation of the skulls” of the so-called “non-human being” remains that were presented to Mexico’s congress last week — seemingly proving the remains were not human-made.

• Florida Man Gets Trapped in Porta-Potty, Busted for Drugs

Real Estate

• In my last note, I wrote about luxury rentals starting to cool down. Minutes after sending a reader who owns many thousands of apartments reached out to confirm my commentary. He too is seeing the luxury side cool and agreed with the article that you cannot afford to build anything but luxury. The cost of construction and financing is so high, lower end units no longer make economic sense.

  • On the luxury condo front, Shell Bay is selling well. Over $35m worth of condos have sold at Shell Bay in the last 2 months and Devin Kay has sold 95% of them. I believe one sold for over $10.5M, a truly remarkable # for Hallandale, FL. They are trading in the $2,000+/ft range. The course is now $1.35mm for initiation fee. It must be the most expensive course in Florida. The course rating is 76.1/148 Slope and measures 7,300 yards from the back tees with daily green speeds of 12+. The head superintendent was formerly at Sebonack , Bethpage Black & Augusta National. It opens on October 2nd and Jack (my son) and I will be checking it out in coming weeks. The pictures looking amazing. There are at least a dozen Rosen Report reader members. Miami is limited in private golf. However, north of Palm Beach, we are seeing 8-10 new courses and I feel those may not do as well.

    

• Record-low US housing affordability is squeezing homebuyers and renters while threatening to spill into presidential politics. Milwaukee, the largest city in key swing state Wisconsin, saw affordability deteriorate in its rental market more than almost any US metro area in the year ended July. The region also recorded one of the greatest increases in mortgage burden among the biggest 50 metros in the past year, data from Zillow show. US mortgage rates in August hit the highest level since 2000, which has translated into the fewest home-buying applications in decades. Adding to the pressure is the scarcity of inventory, which has helped push selling prices, as well as rents, to near record-high levels. I am hearing more people complain about affordability for housing on both owning and renting. Limited inventories and higher rates are making it challenging in many markets.

• 23 years in the making, Fontainebleau Las Vegas will feature 3,644 rooms, 36 restaurants, and 150,000 square feet of gaming space. In an announcement made earlier this week, Fontainebleau Las Vegas said they will officially open their doors to the public on December 13th, regulatory permits permitting, marking the end of a nearly 23-year long battle to get the Miami, Florida inspired mega resort up and running. “This building represents a remarkable new chapter in our storied legacy and will be a beacon for those seeking to indulge in the unforgettable,” Fontainebleau Development Chairman and Chief Executive Officer Jeffrey Soffer said in a statement Monday.

  

• Good WSJ article on China’s growing housing market crisis. China’s giant housing industry is lurching into a new crisis that threatens to be the country’s worst yet. Two years ago, the debt-laden developer China Evergrande Group spiraled into insolvency, bursting the country’s real-estate bubble and setting off a chain of developer defaults and business losses. Now China’s largest privately run property developer, Country Garden, is struggling to survive. Unlike Evergrande, which was brought down by its profligate habits, Country Garden’s troubles come from the retreat of investors and home buyers from the industry. Its financial distress could create far bigger problems for the economy and policy makers than Evergrande’s debt default in 2021. “The whole industry is in trouble,” said Kenneth Rogoff, an economics professor at Harvard University, adding that the problems are particularly severe in smaller and medium-size cities. Years of overbuilding have resulted in a huge oversupply of homes, and there will need to be an adjustment in the property market, he added. I believe nothing out of the Chinese government. No economic data is real. COIVD numbers are all lies. Child labor, treatment of Uyghurs, stealing of IP, partnerships with bad foreign governments…Nothing out of the country is real. I believe the country is is trouble.

  

  

  Rosen Report™ #615 ©Copyright 2023 Written By Eric Rosen