Some Assembly Required+Restaurant Review
4-7-24
My last note was about living life to the fullest based on my friend, Mark Martinez’ philosophy on life. I hope you took the time to read it as it was an emotional piece for me. The feedback has been amazing given the way he lived his life was such a powerful message. The most opened links were the Citadel annual letter from Ken Griffin and the reason why luxury travel is so expensive.
Restaurant Review-MaryGold’s by Brad Kilgore
The Wynwood restaurant, MaryGold’s, inside the Arlo Hotel, focuses on Florida-inspired dishes and has a creative flair. Although it is not at the top of my Miami list when I factor in vibe, crowd, food, and price, there were a couple of special dishes that stood out. I thought the Deviled Egg appetizer was pretty solid. The Caviar Waffle was a very creative dish packed with flavor with Sweet Potato and Parmesan Creme Fraiche. My favorite dish on the menu (BY A MILE) was the Agnolotti with Sweet Corn and Brown Butter which had a nice mix of sweet and savory flavors. I thought it was delicious and wanted to lick the plate. Agnolotti is similar to ravioli except it is made of one piece of pasta folded over while ravioli is made from two pieces. My son had a filet and thought it was decent. For $65 with no sides, it was no bargain and did not present in any special fashion. For dinner, I had the Tagliatelle with Sweet Crab and Caramelized Cream and enjoyed it. The texture of the pasta and the crab coupled with the sauce made for a memorable dish. The fries were good as well. The Caesar was uninspiring with too much dressing and was left half-eaten. We went at 7 pm on a Saturday and the restaurant was one-third full which was a bit disappointing in Miami over Spring Break. The food was fine, not remarkable apart from the Agnolotti. I won’t be rushing back, but would pop in for more of that pasta. It is in Wynwood which is a cool area to walk around before or after dinner. One other frustration was the glass of Chardonnay I ordered was delivered at around 60 degrees (10 degrees too warm). I hate warm wine!
Markets
US Debt Load
Top Colleges for Pay
Apple Delving Into Robotics
TikTok
Meredith Whitney on US Housing
US Office Vacancy Approaching 20%
NJ Distressed Mall Sale & Distressed San Fran Office Sale
Lost R/E Fortunes in China
Video of the Day-Mel Blanc on Johnny Carson
I was addicted to Johnny Carson as a kid. I would stay up late to watch him from a young age and feel he was brilliant. I emulated him doing some of his skits and thought he was hysterical. In this short video from 1983, Mel Blanc, the voice of many cartoons is interviewed. Blanc was a genius and showed his skills and creativity.
Some Assembly Required
It is important to be intellectually honest about your strengths and weaknesses. I always think about it for myself and members of my team. I surround myself in businesses with people who excel at things that are not my strong suit. I feel that is a core competency of mine.
When I consider my weaknesses, the list is long, but two of my big issues are my lack of patience and my inability to put things together. I do not like false advertising and when you see something that says “Some Assembly Required,” it suggests that SOME of the item is already assembled which is never the case. The correct comment should be, “ALL Assembly Required,” in my opinion. The bag of screws and bolts is offensive and when I put it together there is always something unused.
My famous story encapsulating my frustration was the desk I bought for my daughter Julia when she was 5 and we lived on Park Avenue in NYC. She was doing a lot of coloring, so I went to Ikea to buy a desk for $99. Inexpensive is my single favorite word in the English language. I asked the salesman about assembly and he suggested it would take 20 minutes and is very simple. Either the salesman is a trained carpenter or a liar. I have an advanced degree from the University of Chicago. How hard can it be to put together a child’s $99 desk?
Let’s just say that after 4 hours, the desk looked like it was more likely to come crashing down and kill my daughter than to be used for her color books. Frustrated, I called the building super, Joe, and he came up and almost pissed in his pants. He just looked at me and did not have to say anything. You knew he thought I was a complete idiot. He took apart 80% of the desk in 5 minutes and reassembled it in 15 minutes in perfect order. I gave him $100 for his 20 minutes and said, “Please never tell anyone this took place.” I spent 4 hours of my time and $100 to get the $99 desk assembled. How inefficient. I believe Ikea offered to put the desk together for $29. I could have handled the situation in a better manner.
The definition of insanity is doing the same thing over again and expecting different results. I know I am awful at fixing things or assembly, yet I continue to try with limited success. I own a fishing boat (34’ Jupiter center console) and inevitably something goes wrong. I always attempt to fix it myself and generally cause more damage requiring me to hire a mechanic to fix the original issue AND whatever I broke. However, recently, in a total surprise event, I fixed a hatch despite having to go to Boat Owners Warehouse 3 times for parts. When I finished, I started screaming with joy. The marina staff came over to see if I was ok. They know about my legendary poor fixing skills. I screamed, “I just fixed something by myself.” They were in shock almost as much as I was and I was given high-fives for my accomplishment. When I factor in the time, my anxiety, and trips to the store, it would have been far more efficient for someone else to do it.
We have a kitchen spice drawer and some spices tipped over and went everywhere. I tried getting the drawer out to clean behind it and could not. This should not be hard to do and despite a couple hours of trying, I could not get the latches off. Finally, a wise man came over and I showed it to him. The latch was broken, so I feel slightly better about myself, as it took Rich 15 minutes to get it off and he is a pro.
No, I will never buy anything from Ikea again. No, do not call me to fix anything because chances are I will make it worse. Yes, it always makes sense to pay someone to put items together as the amount of time I spend attempting adds a lot to the cost. If you know anyone in Congress, I would like to see if we can get the advertising laws changed from “Some” Assembly Required to “ALL” Assembly Required.
Quick Bites
Markets sold off sharply Thursday as Fed officials cast doubt on rate cuts and oil hit $87 on Middle East concerns pushing all major indices down more than 2% from intraday highs. On Friday, payrolls data topped expectations and increased 303k vs 200k estimate bringing unemployment to 3.8%. This article outlines how the job growth is in part-time rather than full time jobs. The second chart shows the foreign-born employment growth (blue line) relative to the native-born growth (red). Treasuries sold off on the news with the 2-year at 4.75% (+11bps) and 10-year at 4.4% (+9bps). The 2-year is now + 50bps and the 10-year is +56bps on the year. This is despite the belief that just months ago there would be 6 rates cuts in 2024 and now some Fed Presidents are suggesting zero. Fed Governor Bowman suggested we could see a “hike” in rates if inflation stays high. What is the impact on all the R/E deals waiting for lower rates if they do not materialize in 2024? Equities rallied sharply on Friday despite the inflationary concerns. However, it was the worst week of 2024 with the S&P-1%, Nasdaq-.8% and the Russell-3%. Watch oil with the Middle East escalating as it is hovering around $87/barrel and now +21% YTD. The Biden Administration has the Strategic Petroleum Reserve to fill. If things continue to heat up in the Middle East, it could prove to be inflationary and make rate cuts less likely. This CNBC article suggests the oil technical chart is positive given a “Golden Cross” when the 50-day moving average outpaces the 200-day moving average.
Yet another concerning article about the growing U.S. debt load and the inability of politicians to show fiscal responsibility. This is a momentous issue that not enough people in D.C. are taking seriously. The CBO warned in its latest projections that US federal government debt is on a path from 97% of GDP last year to 116% by 2034 — higher even than in World War II. The actual outlook is likely worse. From tax revenue to defense spending and interest rates, the CBO forecasts released earlier this year are underpinned by rosy assumptions. Plug in the market’s current view on interest rates, and the debt-to-GDP ratio rises to 123% in 2034. Then assume — as most in Washington do — that ex-President Donald Trump’s tax cuts mainly stay in place, and the burden gets even higher. I do not believe we have a revenue problem, we have a spending problem. All-In Podcast goes over the budget issue in detail this week at the 47:45 mark Biden’s new budget shows $7.3 trillion (+19%) of spending. For perspective, it was $2 trillion in 2000, $3.5 trillion in 2010, $4 trillion in 2017 and $6.1 trillion in 2023. Biden’s budget is an offensive plan of waste and will result in yet another nearly $2 trillion in deficits despite taxing the rich. As David Friedberg of the All In Podcast said, “We took two major crises and we had crisis-level spending and allowed it to carry forward.”
Good WSJ article entitled, “The Top Colleges for High-Paying Careers in Finance, Tech and Consulting.” I do not agree with all of the conclusions based on my experience from decades on Wall Street, but most are pretty on point. I include 3 different sections on Finance, Tech, and Consulting with the top 10 private and public schools for each. The article outlines the top 20. Note, that there is some consistency on schools at the top of the list. I have found kids from MIT, Harvard, Princeton, Wharton, Duke, Chicago, Yale, Cornell, and Columbia to be more consistent than many others. That is not to suggest there are not amazing candidates from many schools. In terms of costs, college is out of control. Costs at some colleges nearing $100,000 per year, but many families pay a lot less. I have spoken with multiple parents who tell me that college, fraternity/sorority, travel home to see family, Ubers and food is well over $100k in many cases. My entire 4 years of college 100 years ago was $25k. In a related matter, Vanderbilt University is planning a $300mm expansion to Palm Beach led by Steve Ross (Related) fundraising effort. South Florida is WINNING!
This is a good Bloomberg article entitled, “Apple Explores Home Robotics as Potential ‘Next Big Thing’ After Car Fizzles.” Apple Inc. has teams investigating a push into personal robotics, a field with the potential to become one of the company’s ever-shifting “next big things,” according to people familiar with the situation. Engineers at Apple have been exploring a mobile robot that can follow users around their homes, said the people, who asked not to be identified because the skunk-works project is private. The iPhone maker also has developed an advanced table-top home device that uses robotics to move a display around, they said. Check out the chart below and the sales of specific products.
I am not a fan of TikTok and have ZERO trust in Chinese ownership. I am convinced they are spying on us as the Chinese government has proven to be liars, cheaters, and murderers. I am all for banning TikTok and find it damaging to kids. This Pew Research Center article is entitled “6 Facts About Americans and TikTok” and has some amazing charts.
A third of U.S. adults – including a majority of adults under 30 – use TikTok
A majority of U.S. teens use TikTok.
In fall 2023, support for a U.S. TikTok ban had declined.
A relatively small share of users produce most of TikTok’s content.
About four-in-ten U.S. TikTok users (43%) say they regularly get news there.
A majority of Americans (59%) see TikTok as a major or minor threat to U.S. national security, including 29% who see the app as a major threat.
Israel
IDF ends active ground invasion, completely withdraws from southern Gaza
The IDF on Sunday announced that it had concluded the active invasion stage of the war for now while leaving open the possibility of a future new invasion of Rafah in deep southern Gaza.
Biden tells Israel's Netanyahu strikes on humanitarian workers in Gaza 'unacceptable'
UN Human Rights Council Adopts Resolution to Hold Israel Accountable for 'Possible War Crimes'
Most Jewish families applying for college have eliminated a school based on rising antisemitism
I am one of those families that refuses to send my children to an $80-100k school that hates Jews and does not provide a safe environment.
Jewish Parents Decry Double Standards at UVA
Pretty concerning accusations.
McDonald's buying back its franchises in Israel as boycott hurt sales
Other Headlines
Currency Angst Goes Global as Strong Dollar Vexes Officials
The top 1% of American earners now own more wealth than the entire middle class
More than one-quarter of all household wealth, 26.5%, belongs to Americans who earn enough money to rank in the top percentile by income, according to Federal Reserve statistics through mid-2023. The top 1% holds $38.7 trillion in wealth. That’s more than the combined wealth of America’s middle class, a group many economists define as the middle 60% of households by income. I do not believe this is good for America. The growing disparity between the haves and have nots will not end well.
California bill would let employees ignore boss's after-hours calls, messages
Under the bill, employers could face civil penalties if they violate the rule. When I think of the countless reasons to not live in CA, I am shocked that I find more. What kind of crappy company wants to be in CA? If you work for me, you will be available when I call you. I work 24/7. There is NEVER a time I am not available for my clients, colleagues, partners…. EVER. I would get calls at all hours from Europe, Asia, and across the globe. I never complained about it. Why? It was my job. I ran global businesses. Now you cannot call your employees after hours in this idiotic CA proposal? The new motto of CA, is “How to finish last in life.” California is the state of participation trophies. I want to win and I will bust my ass to do it. Nothing could ever get me to live in what would be my favorite state if it had better rules.
Why gas prices in California ‘have gone ballistic'
CA gas averages $5.27/gallon vs a nationwide average of $3.54/gallon.
Increased Crime Cutting Into Small-Business Earnings, Survey of Owners Finds
One-third of small businesses suggest increased crime is hurting earnings.
Samsung expects first-quarter profit to soar 931% as memory chip prices rebound
Retailers like Peloton and Saks keep paying vendors late, signaling possible ‘financial distress’
Poor resale values of EVs threaten adoption, warn some experts
Ford to delay all-electric SUV, truck to focus on offering hybrid vehicles across its lineup by 2030
I have been consistently clear for over a year that EV sales would not materialize at the rate suggested. They are too costly, charging stations are not sufficient and manufacturers cannot make them effectively without massive subsidies. We will be reliant on fossil fuels for decades and any other suggestion is impossible in my mind. Remember, I have owned a TSLA for 7 years. They are fine for short trips, but nothing else. A reader had a nightmare story this week given charging issues on a road trip.
Posts About Broken Cybertrucks Fill Tesla Owners' Forums
I considered buying one of these. Not a chance now.
Trump Media is the most expensive U.S. stock to short — by far
Investors who wanted to borrow Trump Media shares to sell them short on Wednesday would have had to pay annual financing costs of between 750% and 900% of the price of the stock, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners. Stock is down 44% from highs from last week. Market cap is down to $5.5bn after peaking at a ridiculous $10bn. Yes, I crushed this stock last week showing all the ways it was massively overvalued and still is at 1,350 times sales.
Biden Raises $90 Million, Widens Fundraising Lead Over Trump
President’s $192 million record stash twice as big as Trump’s
Boozed-up Lauren Boebert was cut off by bartender, begged Trump for selfies at GOP gala
Nearly half of Levi’s sales are happening online and in its shops, a shift as department stores fade
No Labels will not field third-party ticket
I thought if No Labels had a reasonable candidate, it could complicate the 2024 election and mean one party may not get 270 electoral votes. I believe Kennedy’s VP pick is quite progressive and will pull more votes from the Left than the Right. I don’t believe Kennedy will pick up any electoral votes.
Wait. Governor Newsom tells you to do one thing and does another? He said, Wear a mask. No parties. Stay at home. He then goes to a $700 dinner maskless with his rich friends in Napa. He said, Don’t use too much AC as the power grid is under pressure while wearing a thick fleece in his office as his AC was blasting. Now he tells you to pay $20 for your employees and only pays $16/hr for his. The cartoon is from Michael Ramirez.
Until there are consequences for crimes, NYC is not a place for me to live. For the second year in a row under Adams, overall crime was on the rise — driven by a historic surge in assaults, which neared 28,000 for the first time in the city’s publicly recorded history, according to the police department’s rolling report.
Up close and too personal with America’s fentanyl epidemic — where New York is ground zero
How many reasons does NYC want to give people to leave? Crime, homelessness, high-income taxes, high cost of living, unsafe subways, illegal immigration, woke policies, covid mandates, squatters rights, unfriendly business rules, commuter taxes, estate taxes…I just can’t figure out why people are leaving and coming to Florida.
In 2024, El Salvador’s Homicide Rate Is 0.28 per Day or 1.6 Homicides per Every 100,000 Inhabitants
In El Salvador, they started to have consequences for crime and put gangs in jail by the thousands. Note how murder rates plummeted since they took a different stance.
Illegal immigrant in Illinois accused of nearly decapitating his wife in front of their two children
Haitian migrant fatally stabs his 2 roommates inside NY apartment before deportation hearing
Burglars steal as much as $30 million in one of L.A.'s largest cash heists ever, LAPD seeks clues
Watch this interaction with a homeowner and squatters. Welcome to the USA
People who work from home are less likely to get pay raises and promotions - especially men
Pfizer's Own Study Confirms Paxlovid Sucks
This is the worst drug I have ever taken. I had serious COVID. I took Paxlovid and it was an unmitigated disaster. The side effects were worse than my symptoms from the virus. Now, studies show it has no significant benefits, yet we were pushed this awful drug. All captured Hamas terrorists should be force-fed this drug, recorded, and put on Insta for our enjoyment.
As a shocker, I have only been to 20% of these restaurants. Generally, I am at 70%. I have a list of 30 I need to try in the coming months. My son, Jack, has some internships this summer in NYC and I will be eating out for lunch and dinner for about 30 days to be sure I cover all the restaurants on my list.
Magnitude 4.8 earthquake hits New York City region, USGS says
NYC’s hottest chain, Sushi by Bou, turns old utility rooms into elaborate 200-square-foot sushi bars
It opened in Boca. I think it is good for Boca, but hardly remarkable.
This list is too painful for me to consider.
How Far $100 Goes at the Grocery Store After Five Years of Food Inflation
I notice the prices in grocery stores and it is out of control.
Real Estate
I felt this was a concerning Fortune article about housing prices due to the “Growing Crisis of the Young American Male.” Meredith Whitney, deemed the “Oracle of Wall Street” for successfully calling the financial crisis, says home prices are likely to fall substantially, and the reasons have to do with habits picked up by young guys. “You have men staying single longer…and then you have what I call a growing crisis of the young American male…they’re twice as likely to live at home than women. So one out of five young men live at home with their parents, and these aren’t young men going to college and coming home for holiday breaks, these are young, grown men choosing to live at home,” Whitney told CNBC. “I think you’re going to start to see housing prices begin a multi-year/decade decline, just due to supply/demand dynamics,” Whitney said. “So you’ve had a demand, supply imbalance: more demand, less supply. And I think that’s going to invert.” So what that means is supply will then outweigh demand, which is why she sees home prices falling for years. Although I agree with Whitney’s concern partially, I feel the US is under-housed and not as bearish as she is today.
The office market in the US has hit a new record in vacancy rates, reaching 19.8% in the first quarter of 2024, as reported by Moody’s Analytics. This marks a slight increase from the 19.6% vacancy rate observed in the last quarter of 2023. The rise in vacancies highlights the persistent challenges faced by the office real estate market following the pandemic, particularly in the wake of changing work models and the economic pressures from the Federal Reserve’s interest rate hikes. Despite the gloomy outlook for the office sector, Moody’s report points to positive signals in other areas of the commercial real estate market. The multifamily sector, for example, is beginning to see relief from an excess supply issue, indicating a potential stabilization.
Bondholders have lost $155M on the sale of NJ’s 3rd biggest mall, Woodbridge Center. The 1.7M sq ft mall sold for $70M, or ~$42 a sq ft. The mall was appraised at $366M when the Seller - Brookfield - acquired the mall Brookfield owned the mall since 2014 but stopped making payments on the loan in 2022. A 117K sq ft building in San Francisco is up for sale and sources say it's being 'marketed' at a massive 80% discount
Interesting Bloomberg article entitled, “China’s Real Estate Tycoons Lost $100 Billion in the Housing Collapse.” The piece details 10 wealthy real estate individuals and how much each lost recently due to the R/E situation in China. Many lost 70% or more and a couple saw their net worth decline by over 90%.
© 2024 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #671 ©Copyright 2024 Written By Eric Rosen.
