The Curious Case of My Missing Wallet
1-21-24
Opening Comments
My last newsletter was entitled, “My Best & Luckiest Trade Ever” where I outlined how I turned $500k into $52mm in a week. The note resulted in a lot of commentary from my readers that brought back memories from the Global Financial Crisis. The most read links were how to improve your date chances on-line and the Bezos yacht story. The video of the baby trying wasabi which makes me laugh every time.
Good news, I received another email from Libia (mrsaishagaddafi746@gmail.com), and I am going to be rich.
Hello,
My name is Aisha Gaddafi, the only biological Daughter of the Former President of Libya Muammar Al-Qaddafi. I have an amount ($USD 27.500.000.00) which I inherited from my father and I want you to help me invest in your country.
Markets
Coincident Index for the 50 States
Discover Card Earnings/Charge offs
Forbes Highest Paid Athletes Compared with History
Single-Parent Homes and Impact
College vs Trade School Income Example
My Update
CA 7th Year of Resident Declines
Beverly Hills Judge Trying to Block Permits Until More Affordable Housing
Commercial Delinquencies Rising
Howard Lutnick’s Concerns on Coming Defaults
2023 US Home Sales Worst Sine 1995
Video of the Day-Jessica Beck-Alfred
The feedback on my recent podcasts with Greg Waldorf and Fabrice Grinda was very positive. I have more in the pipeline and this week, I am excited to have Jessica Beck, co-founder of Alfred. Alfred, also known as Hello Alfred, is a resident management software application that enables real estate developers and property managers to provide in-home services and experiences to their residents. Jessica is very impressive, and she and her business partner founded Alfred while at Harvard Business School. The podcast covers Jessica’s story with lots of twists and turns.
The Curious Case of My Missing Wallet
Just 10 days ago, I wrote a sentimental piece about my son, Jack’s 18th birthday. Some dared to suggest I had a “soft side,” and many readers enjoyed the tribute. Well, let’s just say any niceties about my son are in the rearview mirror after the incident that will be outlined today.
I was taking the family to Miami last Saturday night for an early dinner at Contessa in the Design District. I have now been over a dozen times and enjoy the experience, ambiance and food. My favorite dishes are the Tuna Crudo, Insalata Verde, Margherita Pizza, Pumpkin Ravioli, Spicy Lobster Capellini, Fusilli Genovese, Half Chicken Verde, Branzino and Rosemary Potatoes. I do not love the meatballs. Don’t forget about the best dessert, the Torta di Baci. I will say that Saturday’s dinner fell a little short of my prior ones.
We were trying to leave my house at 4pm on Saturday and I could not find my wallet. I tore apart my bedroom, office, kitchen, couches and nothing. The kids were sitting in the car screaming for me and I knew I had my wallet in the car earlier. I looked under the seats in the car and no joy. They wanted to walk around the Design District before dinner and my time wasted searching for my wallet was stalling the trip.
My kids were sitting in the car with my son in the front and my daughter in the back with my mother-in-law. I went back and re-traced all my steps and went through everything in the house for a 2nd and 3rd time with no success wasting over 30 minutes in the process. My blood was boiling and the swear words were flowing.
I headed down to Miami with no wallet and kept checking my phone to be sure no one was charging anything. I set my cards to alert me of charges for this reason. I felt under the seat during the drive for the 10th time and commented on how big of an idiot I was for losing my wallet. I took solace in the fact that no charges were showing up and planned to tear apart my house looking for it when we were finished with dinner. To add insult to injury, I missed getting on the express lane and the traffic was backed up. We got to the Design District in 1 hour and 7 minutes.
Contessa is in the Design District in Miami and they have valet parking every 100 yards or less it seems for $5. I pulled up to a valet station and my son, Jack, got up and I saw that my wallet was on the passenger seat of my car under his ass. I use a metal wallet from Ridge that has 15 cards (credit, IDs, insurance, metro cards…) inside. How he did not realize he was sitting on my wallet for over an hour is beyond me. He claimed the wallet was in the very back of the seat and he did not feel it. As an aside, this is my favorite wallet I have ever owned.
What did I learn here? Maybe I am not as big of an idiot as I thought. Maybe my son could have gotten off the seat knowing I was looking for my wallet and helped me. Jack, I take back all those nice things I said about you last week.
Quick Bites
Stocks were sharply higher later in the week propelling the major indices solidly into positive territory including pushing the S&P to a new record. On the week/YTD, Dow +.7%/.5%, S&P +1.2%/1.5% and Nasdaq +2.3%/2%. However. the smaller cap, Russell 2000 was -.3% on the week and is -4% YTD. Prospects for a slowing economy, geopolitical unrest and turmoil in Washington aren’t scaring market participants largely because none of those threats have turned into much in reality. I was wrong on this recent rally. I did not see it coming. Apple stock bounced back this week after a rough go. The stock was +3.4% on Thursday after Bank of America upgraded it suggesting 20% upside over the next year. On the week, the 2-Year Treasury sold off by 25bps to 4.4% and the 10-Year sold off 18bps to 4.1% on better-than-expected economic data (retail sales, jobs, consumer sentiment).
The Federal Reserve Bank of Philadelphia produces a monthly coincident index for each of the 50 U.S states. The coincident indexes combine 4 state-level indicators to summarize current economic conditions in a single statistic : (1.) non-farm payroll employment, (2.) average hours worked in manufacturing by production workers, (3.) the unemployment rate, and (4.) wage & salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s coincident index matches long-term growth in its GDP. Here is a chart showing the percentage of the 50 U.S states with a declining coincident economic index. As you can see below, we are generally in a recession at this level.
Discover announced earnings which disappointed sending the stock -10% on the news. I have been shocked by the resiliency of the consumer given inflation, severe hit to savings, rising rates, growing debt balances, rising auto delinquencies... On a positive note, housing prices and stocks are up massively to help net worth and interest rates on cash have gone up sharply. Also, Consumer sentiment surged with the University of Michigan Survey.
The amount of money in pro sports today is truly astounding. Forbes came out with their top-earning athlete list from 2023 and it included contracts and endorsements. For perspective, Tom Brady was #50 at $44mm. #40 with Anthony Davis (Lakers) at $48mm. #30mm was a tie at $45mm with Erling Haaland (soccer) and Patrick Reed (golf). #20 was Bryson DeChambeau with $69mm. Today, the average salary in the NBA-$8.3mm, MLB $4.0mm, NFL $3.3mm, & NHL $2.7mm. Just think, Jordan averaged $5.8mm per year for his career.
Now let’s compare the current list with the highest-paid athlete from days gone by according to this Men’s Health Article. In 1978, Rod Carew earned $800k to make the top of the list. I remember living in Pembroke Pines FL in the late 70s and an offensive lineman on the Dolphins lived near me. I think he was paid $25k. Now, an offensive lineman can make $25mm (Laremy Tunsil from the Texans). So in 45 years, the income difference is up to +1000 times. In 1978, an all-pro strong safety (Ken Houston/Redskins) earned $98k and today, the highest-paid safety earns $19mm (Derwin James/Chargers). Michael Jordan was the highest-paid athlete for 6 years of the decade of the 1990s and he earned $35-78mm and almost all was in endorsements.
I found this Pew Research article concerning the prevalence of single-parent homes in the US. 23% of US children live in a single-parent home compared with 3% in China, 4% in Nigeria and 5% in India. Various studies have found a reduction in academic performance, motivation, and creativity among those growing up in single-parent households. Children were likelier to drop out, have poorer grades, and get jobs outside of school.
In 2021, nearly 30% of single parents lived in poverty while just 6% of married couples fit this same statistic. Single parents are also more likely to live in poverty when compared to cohabiting couples, and single mothers are much more likely to be poor compared to single fathers.
I have been suggesting that many kids considering traditional college should not go. I am not convinced you learn a ton in most cases and the costs are harder to justify in many situations. This 2-minute video is of a college-educated woman with a Master’s Degree. She tells the viewers that her trade school-educated husband makes quadruple her salary. If he works a weekend of overtime, he makes more than she makes for two weeks of work. He has no student debt. I believe more kids should consider trade school and not waste time and money on college. However, if you want to go to corporate America, Wall Street, and become a lawyer or doctor, then obviously, you need college.
Israel
Netanyahu says he has told US he opposes Palestinian state in any postwar scenario
Pakistan conducts retaliatory military strikes against Pakistani terrorists operating in Iran
West Bank strike: Israel accused of targeting civilians in deadly attack
Herzog: ‘No Israelis in their right mind’ are thinking about peace process right now
Father of fallen soldier: Terrorist decapitated my son, tried to sell head for $10,000
BBC in Crisis Over Gary Lineker Israel Ban Tweet: ‘It Makes Them Look Moronic’
The highest-paid BBC anchor hates Israel. So do other BBC employees. Lineker is calling for a boycott of Israel for soccer with FIFA.
Amazing video by Richie Torres about antisemitism. Must watch.
Chair of Harvard’s new antisemitism task force accused of antisemitism
“veins of hatred run through Jewish civilization,” according to his 2023 book.
Other Headlines
The $8.8 Trillion Cash Pile That Has Stock-Market Bulls Salivating
Wall Street hopes trillions in money-market funds will flow into stocks and bonds. Investors have varying plan.
Fed’s Raphael Bostic expects rate cuts to happen in the third quarter
JPMorgan Chase fights off 45 billion hacking attempts each day
I would have never guessed this many hacking attempts.
Mark Zuckerberg indicates Meta is spending billions of dollars on Nvidia AI chips
Unredacted complaint alleges Meta knew of ‘huge volume’ of child sexual harassment on its platforms
TSMC beats profit and revenue expectations in the fourth quarter
Google CEO says more job cuts are needed in 2024 in order to reach ‘ambitious goals’
Watches of Switzerland shares plunge 33% after guidance cut
Birkenstock shares slump as shoe company warns on profit outlook during first earnings since IPO
Stock fell 8% post-earnings and is back to the IPO price of $46.
iRobot shares tank 30% on report EU plans to block Amazon acquisition
Macy’s to cut more than 2,300 jobs, about 3.5% of its workforce, and close five stores
Wayfair shares surge after home goods retailer announces 1,650 job cuts, 13% of workforce
Altman says ChatGPT will have to evolve in “uncomfortable” ways
Answer is employee productivity.
NFL lost 10M-12M viewers by broadcasting Saturday night's Dolphins-Chiefs game on Peacock
Jamie Dimon praises Trump, warns MAGA criticism could hurt Biden
Jamie makes some good points on the things Trump got right. “Take a step back, be honest. He was kind of right about NATO, kind of right on immigration. He grew the economy quite well. Trade tax reform worked. He was right about some of China.” This is a short video.
The more you dig into this story, the uglier it gets. Credit card statements show Trump special prosecutor appointed by DA Willis bought her plane tickets.
Haley questions Trump's mental fitness as he seems to confuse her with Nancy Pelosi
U.S. executives in Davos see a Trump victory in 2024, and no cause for concern
I have been consistent in my disappointment with the frontrunners for President.
Downtown San Francisco Target Now Locking Up Clothes as Thefts Rage On
Crime needs to have consequences. Check out the pictures in the link. Nothing could get me to live in San Fran.
The man is accused of stealing a Dolphins jersey and wore it to the court hearing
There are pictures of him with a knife. If he gets convicted, what are the consequences for his crimes in NYC?
Shocking video shows moment NYC driver intentionally plows into NYPD officer: ‘F–k these cops!’
Scary video. What are the consequences?
Homeless in America: How bad is the crisis right now?
More than 650K people experienced homelessness on a single night in 2023, a 12% jump from 2022.
His idea is to pay $14 trillion over 10-20 years. The bill cites scholars’ estimates that the U.S. benefited from over 222 trillion hours of forced labor between 1619 and the end of slavery in 1865, "which would be valued at $97,000,000,000,000 today."
Trans golfer Hailey Davidson wins women’s tournament, increasing chances to LPGA qualifier
Sorry, I do not believe biological males should be allowed to compete against women.
'Words or actions that are disrespectful, racist, discriminatory, hostile or harassing are not welcome and will not be tolerated,' the doctor says. The doctor said, “Body language and tone of voice are important parts of communication.” If a Jewish doctor sees a Swastika tattoo on a person in need, the doctor still needs to care for the racist. I do not see how the hospital’s plan will work, but don’t condone hate of any kind.
I agree and have improved on being a better listener as I matured.
Blueberries
Dementia onset and brain aging slowed with daily multivitamin, study finds
I take a daily multivitamin.
New Cancer Cases Projected to Top 2 Million, Hit Record High in 2024
The American Cancer Society’s latest statistical report, released on Wednesday, says the country’s cancer mortality rate fell by 33% from 1991 through 2021.
Read what these kids have accomplished in music, sports, and academics.
Putin’s Warped Wartime Economy, as Seen Through a Carton of Eggs
Egg inflation is latest symptom of painful trade-offs Moscow has made to fund its onslaught on Ukraine.
Real Estate
As a reminder, I received my R/E license and work for Douglas Elliman as part of a team that covers Miami to Jupiter. I am currently working with a half dozen buyers in various markets from $3-13mm and also speaking with sellers on projects for some substantial luxury homes/condos. If I can be helpful, let me know as I feel between my expertise and my team’s experience, we have you covered. If you are considering buying or selling in NY, one of my partners can help you as well.
California lost ~187,000 residents in 2023 for its 7th straight annual decline, according to Reventure. This brings the 7-year total up to 1.3 million people leaving California. In 2022 alone, nearly 415,000 people left the state of California. To put this in perspective, even in the 2008 financial crisis the biggest annual loss was just 125,000 residents. Where are all of these people going? Florida has gained 450,000 residents since the pandemic and Texas has gained 340,000. When you think of the wealth leaving CA and the condition of the state’s finances ($68bn deficit), you need to wonder what is next. I have written about proposals for wealth taxes on $50mm or more of net worth. They are raising income taxes. I believe the trend of wealthy people leaving CA will continue.
I came across an interesting headline, “Judge tells Beverly Hills homeowners no housing improvements without more affordable housing.” Last month, Los Angeles County Superior Court Judge Curtis A. Kin blocked the city from issuing all building permits except for new residential development as a penalty for Beverly Hills' failure to approve a sufficient blueprint for affordable housing.
Officials are appealing the decision and say they’re continuing to process permits as normal. But the potential ramifications on home and business owners and the construction industry have left civic leaders aghast. The permit moratorium would be among the most concrete consequences of California’s attempts in recent years to push cities to allow for new housing, including in wealthy communities that have long resisted it. Let’s see how this one plays out.
The Bill Is Coming Due on a Record Amount of Commercial Real Estate Debt. The troubled commercial real estate market is bracing for a record amount of maturing loans, boosting the prospect of a surge in defaults as property owners are forced to refinance at higher rates. In 2023, $541 billion in debt backed by office buildings, hotels, apartments and other types of commercial real estate came due, the highest amount ever for a single year, according to the data firm Trepp. Commercial debt maturities are expected to continue rising, with more than $2.2 trillion coming due between now and the end of 2027, Trepp said. Financial regulators are concerned that commercial property losses could spill over into the broader financial system. “Sales of financially distressed properties can…lead to a broader downward valuation spiral and even reduce municipalities’ property tax revenues,” according to the Financial Stability Oversight Council, a federal government organization created after the 2008-09 financial crisis to monitor risks to the financial system.
US real estate market will be 'very ugly' next year, Howard Lutnick warns
"I think $700 billion could default… The lenders are going to have to do things with them. They're going to be selling. It's going to be a generational change in real estate coming, end of 2024 and all of 2025. We will be talking about real estate being just a massive change, $700 billion to $1 trillion in defaults coming," Lutnick stressed.
December home sales slump to close out worst year since 1995
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Rosen Report™ #649 ©Copyright 2024 Written By Eric Rosen
