Songs Bring Back Memories
11-15-23
Opening Comments
My last piece, Follow the Money… To South Florida received a lot of positive feedback and I noticed a lot of new Wall Street subscribers following the note. I received an amazing email and call from someone I respect a great deal. He told me that my piece was the most inciteful and compelling one he read on the topic of the migration to South Florida. As a follow-up to my prior note, Ingrid, a new reader, sent me an article entitled, “Miami Luxury Prices Soar as Billionaires Move In.” The most opened links were the Ackman Tweet asking Biden to not run in 2024 and the Warren Buffett conflict of interest video from CNBC.
I am off to dinner in Miami and looking at a property on the water so I had to send it prior to the market closing. Awful weather and I expect close to 2 hour drive.
A reader told me that the Hampton Jitney (Ambassador) from East Hampton to NYC was $69 each way and his flight from LGA to PBI was $69 each way last week on Delta.
We all know I love good food and my friend and reader, Rich, sent me the link to what is heralded as “The World’s Best Burger.” I am skeptical as it is from a pizza joint in NYC. Someone go and tell me how it is and I will go in December when I am back in NYC. It is in the West Village and Brooklyn called, “Pizza Loves Emily.”
Low CPI Drove Markets Higher
IPO Market Update
Oberlin College in Hot Water…AGAIN
FDIC Salacious Scandal
Quick South Florida Thoughts
LA Mansion Slump Due to Tax
Foreclosures on Commercial Mezzanine Debt
Video of the Day-Post Malone Covering Pearl Jam
As some of you may know, I learned guitar in 2009 despite not playing any instruments as a kid. It was my 5th wedding anniversary and wood was the traditional gift for the 5th year. My wife bought me a $200 Yamaha acoustic guitar and 10 lessons. I have ZERO musical genes or talent worked hard and am able to play guitar. YouTube helped a great deal. I am not going to be confused with Hendrix, Van Halen, Clapton, Mayer or any other major guitarist. Further, I once said, “My voice is a 3 out of 10.” My abusive sister, Debbie, said, “It is not that good.” She is no longer in my will for cash but will receive a large bag of cat hair (she is highly allergic) upon my passing for years of mental abuse. I appreciate great music and found this Post Malone cover of “Better Man” by Pearl Jam from Howard Stern last year. Let’s just say that my rendition does not sound quite like this one. My favorite Pearl Jam song is “Elderly Woman Behind a Counter in a Small Town.” If I got a face tattoo and a grill and could sound like this, I would do it.
Not That 70s Show-Mike Cembalest-Eye on the Market
Cembalest does it again explaining the conflict in the Middle East and the economic impact. He suggests now that the US oil production is far higher than it was decades prior, the impact will be far less. I love the fact that Mike called out Biden for his disastrous decision on the Strategic Petroleum Reserve which is at 40-year lows. He also discusses the age of the two leading candidates for President and how that stacks up historically adjusted for shorter lifespans historically (2nd chart). Cembalest outlines various scenarios of Biden becoming incapacitated at various points in the coming year. On page 9, Cembalest addresses entitlements, something I am always harping on and he agrees they will need to be addressed.
Songs Bring Back Memories
Given I have two older sisters, I listened to music ahead of my time. Now that I will be 54 years old in 10 days, when I hear songs from decades prior, I am brought back to a different age. I remember what I was wearing and where I was when I heard the song. It is a strange and nostalgic feeling. I am going to list some songs and my memories of them:
Steely Dan-Dirty Work, Pretzel Logic & Do It Again-My sister Shelley is 11 years my senior, and when she was in high school, her friend, Bob, was a great guitarist. He always played Steely Dan. For years, I thought he was indeed Steely Dan. What the hell did I know, I was 5 years old. Anytime “Hey Nineteen” or any other Steely Dan song comes on, I think back to my early childhood in Chicago and Bob playing the guitar. My favorite Steely Dan songs are Hey Nineteen, Reelin’ In the Years, & Rikki Don’t Lose That Number.
Christopher Cross-Sailing-Came out in June of 1980. I remember being at the Sears Mall in Hollywood Florida with my mother in her car as she was parking. Casey Kasem Top 40 was on the radio and I refused to exit the car as the #1 hit was coming on after the commercial and it was “Sailing” in August of 1980. I was wearing an OP (Ocean Pacific) worn out yellow T-Shirt that day 43 years ago. I went to a Christopher Cross concert about 5 years ago in Boca. Let’s say, his best days are in the rearview mirror. My favorite Cross song is Arhtur’s Theme from the 1981 movie, Arthur with Dudley Moore and Liza Minelli.
Chicago-25 or 6 To 4-The first concert I ever attended was Chicago with my sister Debbie. She was in love with Peter Cetera and it was my childhood music. The concert was May 29th, 1982 at Sunrise Musical Theater. I was thrown by the fact that live, it does not sound the same as on the radio. I was singing their songs and my timing was off. My favorite Chicago songs are Saturday In the Park, Colour My World, and Baby What A Big Surprise. I was invited last month backstage to the Chicago concert and it was my wife’s birthday. It proved a dilemma for me, but I chose wisely as if I had gone to the concert, I would have never heard the end of it.
Fleetwood Mac-Dreams-I was playing in a soccer game in 1977 (8 years old) and I heard the song “Dreams” on the radio just as I got out of the car. At the time, I was a star soccer player and scored 4 goals in the game by halftime. During the break, I got stung by a bee and my hand swelled up and I was crying. The coach called me names and made me go into the game. I played while holding a small bag of ice. I scored two more goals and then I was able to leave and go home as we had a big lead. My favorite Fleetwood Mac songs are Landslide, Go Your Own Way, You Make Loving Fun.
Kiss-Beth-It was 1985 and I was in high school. My mother was an usher at Sunrise Musical Theater and did it for free to get show tickets. She said, Eric, I am an usher tonight at a band called, Kiss. I said, “Mom, bad idea. This is not the music for you.” She did not listen and was home quite early looking incredibly disheveled. She was so pissed. She was not ready for Kiss. Some people don’t listen. I reminded her of this story the rest of her life. My favorite Kiss songs are Rock & Roll All Night, I Was Made for Loving You, and Detroit City Rock.
Queen-Bohemian Rhapsody-I was 6 years old when I first heard this song and was mesmerized by it. I don’t even recall why I was so taken with the song, but I could not get enough of it. I was always a big Queen fan and loved the movie. My favorite Queen songs are Rhapsody, We Will Rock You, Crazy Little Thing Called Love, and Another One Bites the Dust.
I am a huge Elton John fan and have seen him in concert a few times. He has so many great songs, but “Someone Saved My Life Tonight” is amazing and you can read the story about it here. Bernie Taupin is one of the best songwriters of all time and Elton refused to shorten the nearly 7-minute song which came out in 1975. My other favorite Elton John songs are Benny and the Jets, Tiny Dancer, Levon, Rocket Man and Goodbye Yellow Brick Road.
The year was 1986 and Ski Row came out with the song, “I Remember You,” where Sebastian Bach belted out his high notes. I got dumped and recall listening to this song over and over again. I also like the Skid Row song called 18 And Life.
I became a big Smiths fan in the mid-1980s and love Morrissey. His melancholy lyrics resonated with me for some unknown reason. My favorite Smiths songs were Panic, William, It was Really Nothing, Bigmouth Strikes Again, Is it Really So Strange and Shelia Take a Bow. The video of Panic, is quite frankly hysterical and concerning at the same time.
I can go on for days on songs from days gone by and may pick it up again soon if the feedback is positive.
Quick Bites
Markets rallied sharply (+1.5-2.5%+) on Tuesday after a flat CPI for October relative to a .1% month-over-month expectation. The Russell 2000 was up 5.5% on Tuesday alone bringing it to positive territory for the year. Regional banks rallied hard Tuesday with the KRE ETF +7.4% on the day, but remains -23% YTD. Facebook is now up almost 300% since last November ($90 to $336). The 10-year Treasury fell to 4.45%, but yields increased on Wednesday with the 2 and 10-year +10bps and 30-year +7bps. For such a small beat on CPI, I was surprised by the size of the move in markets on Tuesday. Shows positioning was light/short (including me). Stocks were up again Wednesday, but only .2.5%. The VIX is back down to 14! The market is pricing in 100bps of Fed cuts by the end of 2024 as of Wednesday morning. Oil is hovering around $77/barrel given US oil output at peak production.
For a moment this fall, it looked like the window for initial public offerings would be pushed open. Four big companies, three of them in the technology sector, moved forward with their plans to sell stock in blockbuster IPOs. Chip designer Arm Holdings, grocery-delivery company Instacart, and e-commerce marketing company, Klaviyo. All priced their IPOs at the high end of or above expectations and initially traded higher. A few weeks later, German shoemaker Birkenstock listed on the New York Stock Exchange, and the shares dropped. Now, all but Arm trade below their IPO prices. No one expected a flood of IPOs to follow, but bankers, investors and other deal advisers said the disappointing performance by the quartet has likely shut the door for the remainder of 2023. Good interactive charts in the WSJ article entitled, The Charts That Could Predict the IPO Market’s Comeback.”
Oberlin College is an embarrassment. This is the school that was forced to pay $36.6mm after a years-long libel and slander lawsuit against Gibson's Bakery (established in 1885). If you recall, a local bakery/market employee saw a shoplifter steal wine in November of 2016. The employee (son of owner) tackled the shoplifter (Black student) and when two friends (Black students at Oberlin) of the alleged thief stepped in it became physical with the employee. The three students were arrested and pled guilty to misdemeanor charges. The students Black Student Union, Student Senate, College Democrats and faculty at the school began protesting the bakery/market as a “RACIST” establishment. The Dean of students handed out flyers calling out the bakery/market and its history of racism. Gibson’s was decimated financially and as a result, Oberlin had to pay $36.6mm in damages. Now there is a new story about antisemitism and a new lawsuit that tracks Jew hate back to 2014. For many years, Jewish students at Oberlin have been targeted, ostracized, and harassed for their Zionism. They have faced hostility from student groups like Students for a Free Palestine and have heard Israel delegitimized and mischaracterized as an apartheid state by professors such as Mohammad Jafar Mahallati and the former Dean of Students, Meredith Raimondo. Professor Mahallati called for global jihad against Israel in the 1980s at the United Nations. At Oberlin, the professor required students enrolled in his Religion 270 class to post anti-Israel blog entries that reflect Jafar’s lectures and assigned readings. I do not condone racism or hate of any kind to anyone. The Department of Education is now investigating the antisemitic charges filed at Oberlin. Due to a Trump-era executive order (13899 entitled, “Combating Antisemitism,” Oberlin could lose millions in Federal funding. NYU is being sued for antisemitism as well. Some accusations in from the Oberlin article below:
A crazy and salacious story from the WSJ entitled, “Strip Clubs, Lewd Photos and a Boozy Hotel: The Toxic Atmosphere at Bank Regulator FDIC.” A male Federal Deposit Insurance Corp. supervisor in San Francisco invited employees to a strip club. A supervisor in Denver had sex with his employee, told other employees about it, and pressed her to drink whiskey during work. Senior bank examiners texted female employees inappropriate photos. A former female employee recalled her male colleagues saying women needed to use sex to get ahead at the FDIC, as they stared at her. The FDIC’s 11-story hotel outside Washington, where out-of-town employees stay when attending training, was a party hub, where people have vomited in the elevator and urinated off the roof after nights of heavy drinking. The author interviewed more than 100 current and former employees for this article. I would say it is unbelievable, but it seems to have actually happened. I have had a lot of meetings with bank regulators over the years and never saw this one coming.
Israel Headlines
U.S. mounts 'defensive' airstrikes against Iranian training, weapons sites in Syria
Hamas planned to push October 7 massacre to the West Bank border
Concerning story showing Hamas truly wants to end the Jews.
Hamas commits war crimes in hospitals and mosques, but world says nothing
Watch this short video which shows Hamas weapons in the basement of the hospital. Suicide bomb vests, RPGs, grenades, AK-47s were found. There are signs that Hamas also held hostages in the basement of the hospital. Why are numerous TV stations unwilling to call Hamas terrorists? This link is to the 6-minute version explaining Hamas using hospitals for hostages and weapons.
This video link is NOT for the faint of heart and goes over details of the Hamas terrorist attack
80% of the bodies found were tortured (including children)
Hamas Needed a New Way to Get Money From Iran. It Turned to Crypto.
I feared violence and it appears to have been fine given added security. Thankfully, I was wrong. Articles suggest almost 300k in attendance. Some did not make it as bus drivers staged a malicious “walk-off” stranding Jews.
Ilhan Omar faces Democratic primary challenge from candidate hitting her 'missteps'
EINHORN | How Cornellians Can Rise to the Challenge of Our Time
I appreciate Rowan, Ackman, Einhorn, Sternlicht and others speaking up.
UPenn student who praised ‘glorious’ Hamas terror attack later arrested for stealing Israeli flag
Anne Frank kindergarten will be renamed ‘to be more diverse’
German nursery said it wanted a name ‘without a political background’ but it comes amid growing concern at rise in antisemitism
Billionaire plots $50M media blitz against Hamas with help of big-name moguls
Barry Sternlicht is amazing.
Charts show a stark difference in the human cost of Israeli-Palestinian conflicts over the years
Other Headlines
Morgan Stanley’s Mike Wilson is out with his new 2024 outlook, and he sees the stock market stuck
He sees the S&P 500 rising only to 4,500 over the next 12 months.
UBS Strategists See Far Deeper Fed Rate Cuts Than What Markets Are Pricing
UBS believes the Fed will cut by 4 times more than the market believes due to a continued decline in inflation. Below is the market assuming 75bps of cuts. I cannot fathom 275 bps of cuts next year. I would think things would need to be dire for that to take place.
World economy to perform better than expected in 2024, says Goldman Sachs
On Main Street, it’s time to prepare for the new state minimum wage hikes in 2024
Annualized interest expense on US debt is now at $1.027 trillion and is quickly rising.
Since 2020, total US debt is up ~$10 trillion and set to hit $35 trillion in 2024.
Home Depot earnings beat, but retailer offers a tepid outlook as sales slide
Fisker shares sink 18% after EV maker discloses ‘material weaknesses’ in financial reporting
About 15 years ago, a friend asked me who would win, Fisker or Tesla? I said, “I have no idea. Both seem compelling. Split the investment in half and put money in each one, as it is too hard to pick a winner. He decided to go with Fisker which was a zero. Had he split the investment in half, his TSLA investment would have been worth well over $1.7bn.
House passes a stopgap bill to avert a government shutdown
We need fiscal responsibility, entitlement reform, and move towards a balanced budget, something which has proven elusive.
Nvidia unveils H200, its newest high-end chip for training AI models
NVIDIA sales are expected to grow 170% this quarter. The new chip is almost twice as fast as the H100 version.
Sen. Joe Manchin says he 'absolutely' would consider a presidential run
He calls himself a “centrist, moderate, conservative Democrat." He is 76 years old. He is a step in the right direction.
Trump’s Truth Social has lost $73 million since its launch, faces potential shutdown
Comical and sad at the same time.
Migrant crisis has US taxpayers on the hook for up to $451B, House GOP report says
Just 14% of Americans think Biden has made them better off as president
If Biden can't run a normal campaign, he should step aside
By the pollster, Nate Silver. Good charts in the piece. More Democrats are calling out Biden. How anyone can suggest Biden is capable is beyond me.
Ellis told Georgia prosecutors Trump planned ‘to stay in power’
Crazy 7-minute video confirming many lies around the White House cocaine investigation. I had assumed it was Hunter given his penchant for cocaine and the results of Freedom of Information Act materials bring up too many questions.
Behind Public Assurances, Xi Jinping Spreads Grim Views on U.S.
Wait, you mean China leadership lies? I don’t believe it. They were so truthful about COVID. They never steal IP. They treat all citizens with respect. They never lie about their economy or anything else. I find it unlikely Xi Jinping has ever lied in his life. Those new readers need to understand that the author writes with sarcasm.
Pentagon aide part of ‘covert campaign’ to undermine Iran opposition
Biden Mulls Approval of Fresh $10 Billion for Iran
Money is currently frozen. Under Biden, Iran has received an incremental $71bn relative to Trump. Iran funds Hamas and Hezbollah and hates Jews, Israel and America.
Billionaire Philanthropists Have Discovered a New Way to Give Away Their Fortunes
The article outlines billionaires who despite giving away money, are seeing their net worth increase. MacKenzie Scott gave away over $14bn, but her net worth increased from $36bn to almost $44bn.
Brutes pummel NYPD cop who asked them to stop smoking at NYC subway station
How much jail time in NYC for beating a police officer? Bail? If you will beat a police officer, what will you do to a citizen? Does Bragg care?
California sheriff rips Target for interfering with shoplifting crackdown: ‘Unbelievable’
Target has asked authorities for help and when the police try to help, the store said, “You cannot contact suspects inside the store.” “We could not handcuff suspects in the store; and if we arrested someone, they wanted us to process them outside… behind the store… in the rain,” Sherriff Cooper fumed.
Armed homeowner who defended home in shootout unloads on liberal politicians: 'not gonna care'
AI could predict heart attack risk up to 10 years in the future, finds Oxford study
Amazing news. What are the financial ramifications of advancements in medicine to increase longevity? Our entitlement programs are broke ($70-100 trillion underfunded). When people start living materially longer than the late 70s, then what? We need entitlement reform today along with more fiscally responsible idiots, I mean politicians in DC.
Obesity drug Wegovy cut risk of serious heart problems by 20%, study finds
I spoke with a friend who lost 68lbs in 7 months on the drug and asked about his concerns about side-effects. He said, “I was going to die of a heart attack or stroke. How bad could the side effects be?
Patients are lining up for $2,500 full-body MRI scans that can detect cancer early
Florida Again Earns Top Spot on Heritage Foundation’s Education Freedom Report Card
Top Liberal-Arts Colleges in the Northeast
The world’s best and brightest are flocking to these countries
The 164-year-old Swedish secret to raising happy and resilient kids, says parenting expert and mom
The Most Important Ferrari GTO Ever Just Sold For A Record $51.7 Million
It originally sold for $6k and was bought for $500k in 1985. The return is 10 times the S&P since 1985. Great pics on this Sotheby’s link.
Invasive tick species is expanding its reach in U.S., researchers say
Real Estate
I am seeing the continued trend of demand for new builds with move-in condition, especially nicely furnished and modern. Empty lots, older homes, projects… are struggling in many areas. Although I feel the migration has slowed, we will see a pick-up in activity in the next couple of months over Thanksgiving and winter breaks as more people will be coming for the holidays. I continue to see sellers asking for unrealistic levels and homes sitting on the market longer. When the house is priced right and of good quality, it sells. I did see residents at the Alina in Boca. I was pleasantly surprised by the project and there are still 50 units available with completion between the summer and fall of 2024 (2 new buildings). The project will be completed ahead of schedule, a rarity for large developments. Lots of amenities and walking distance to restaurants and shopping. Many units overlook the Boca Resort. A 4-bedroom unit was rented for $50k/month last week and I believe it was for the season (furnished). I have a reader and long-time friend coming to stay with me on Sunday to show him some homes. We are going to check out Shell Bay on Monday and Jupiter on Tuesday to see if we can find him something to move down for a chunk of the year. Although the migration has slowed, make no mistake, it is not done. A new development on the water just finished and closed called Boca Beach House. The first unit post-closing came to market for $10.5mm at 4,205 ft ($2,500/ft) with a 50’ dock. These units originally sold for $900-1,000+/ft. Ken Griffin from Citadel was just quoted suggesting his new home, Miami could replace NYC as the world’s finance capital. This house on Sunset Island in Miami just sold for $32mm or $6k/ft. It was listed for sale for $17.9mm in 2017 when it was built.
Interesting article on high-end LA residential entitled, “Los Angeles Mansion Owners Test $150,000 Rents as Sales Slump.” The market for the priciest properties in the city faces challenges such as a new tax on luxury sales and turmoil in the entertainment industry. Now, some homeowners are turning to another path to generate cash: Renting them out. Los Angeles hasn’t been left out of the slowdown that’s gripping the US housing market as soaring borrowing costs sideline potential buyers. Luxury home listings — with a median price of $13.25 million — languished on the market for 73 days, or twice as long as the average single-family house. I had dinner with a couple of higher-end R/E brokers from Los Angeles and they told me the market has slowed dramatically due to the new tax rules.
This WSJ article is entitled, “The Clearest Sign Yet That Commercial Real Estate Is in Trouble.” The article suggests foreclosures are surging on high-risk property loans. They highlight mezzanine loan foreclosure announcements. The number of commercial mortgage foreclosures tracked by data companies is still low. It can take many months or even years between default and a traditional mortgage foreclosure, as cases inch through courts. Banks are also often reluctant to take over buildings. In contrast, foreclosing on mezzanine loans is often quick and easy because they aren’t technically mortgages. Because the loans don’t appear in property records, the Journal was unable to determine the dollar value of the announced foreclosures.
Rosen Report™ #631 ©Copyright 2023 Written By Eric Rosen
Your memory is amazing!