Intellectual (Dis)Honesty & A Bad Restaurant Review & Fishing Pictures
1-28-24
Opening Comments
My last note was about the Davos speech by the new President of Argentina. Please watch the link of the video in the prior report. The most opened links were about how to find a hidden camera in a hotel and the subtle hidden trait of high intelligence.
It was recommended that we go to a new West Palm Beach restaurant called Pink Steak. Sadly, Pink Steak is disappointing to say the least. I started with a $24 sushi roll that was about a 3 out of 10 and overpriced. I also tried the rock shrimp, another 3 out of 10. I had an awful free-range chicken entree that I ate about 1/2 of and it was a 2 out of 10. I wish they had let the chicken continue to roam free rather than serve me the undercooked dish that lacked flavor. Those who had steak (filet) were complaining that it was raw. The texture was oddly soft. My wife ordered the shrimp cocktail, and the back-lit bowl may have been the highlight of the dinner. If you want to sit at the bar and have a drink and an overpriced appetizer, so be it. The service was fine, and the buildout of the space was good enough. If you want to go to dinner, save time, money, and disappointment by going elsewhere. To be positive about something, there is ample parking as well as free valet parking. I am not sure what it would take for me to go back, but if it includes me paying or eating food, I am washing my hair that night and can’t make it.
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Markets
Resilient Consumer
Surging College Costs
Birth Trends
TV Ad Spend Efficiency vs YouTube
Texas Fight on Barbed Wire
Hamptons Home Prices Going Up
SL Green Debt Fund
Palm Springs AirBnB Limitations Market Impact
Pictures of the Day-Great Fishing Day in Boca
I will do an entire piece soon on why we caught so many fish the other day. In the meantime, my friend, Dustin, and I went fishing on Friday at 6 am. Back at the dock at 10:30am. We caught 4 Blackfin Tuna and 3 Wahoo. It was the right wind, full moon, falling barometric pressure, and right tide. Here is a taste. Yes, I made Poke Bowls for dinner Friday night.
Intellectual (Dis)Honesty
I think at times earlier in my career, I was not always intellectually honest with myself, my shortcomings, or my development points. I have had a friend for nearly 20 years who is a senior person on Wall Street who has taught me the importance of intellectual honesty. He is incredibly sharp and if I ever tried to suggest something that did not ring true about a situation, he crushed me, and it was for good reason. It is his friendship and candor that helped me improve as a person, manager, and employee. I have used his thought process to help many others.
I feel to grow and develop, we need to look at ourselves in the mirror to get to the right answer. My earliest career failure was in 1993 when I worked in the dreaded “Large Corporates” group at Continental Bank. For those lovers of Michael Lewis and Liar’s Poker, it was akin to Equities in Dallas. I was asked to present a complex restructuring in Latin America. Truth is, I did not understand the complexities of the transaction. It was over my head, and I was too proud to ask for help. “I got this,” I said. I wanted to impress my boss and agreed to do the presentation in front of 25 people. On a scale of 1-10 my performance was a zero. If there was a possibility for a negative score, I would have given it. I almost had a stroke, I was so nervous. People thought I was an idiot as I stuttered through the presentation not making any clear points or conclusions. Truth is, it was my first major presentation as a professional and it was awful. I FAILED on every account. I was intellectually dishonest with myself and failed due to my insecurities.
I vowed it would never happen again, and I learned how to develop to be what I believe is an excellent presenter and public speaker. For this example, I was intellectually honest (after the fact) with my shortcomings and decided to attack them head-on. Sadly, this was not always the case with me, and at times I deluded myself into believing my own BS. I am now doing numerous speaking engagements across the country. The feedback has been incredibly positive, and more opportunities are being presented. In 1993, I could not have fathomed this would ever happen. It was only made possible because I held myself accountable for my weakness and spent countless hours practicing turning a deficiency into a strength.
A reader called me recently about losing their job. I said, “I am sorry that happened. How can I help?” As we spoke, I asked about the next possible roles, and I asked a question, “What could you have done differently in your role in hindsight? Are there things you did not handle as you wished knowing what you know now? If so, what are they?” I did not want to know what mistakes were made; I wanted the reader to think about what could be done to prevent the situation in the future. What can be learned from our good and bad experiences?
It is easy to look at yourself through rose-colored glasses and only talk about your strengths. What makes us grow, develop, and improve is when we address our weaknesses. I have done that historically by hiring amazing people who worked with me and made me better and smarter. Also, I have done that, by focusing on things that are not my strong suits and working to make them less of a weakness.
I famously hired Jeremy Barnum at JPM (now the CFO of the entire firm). He is a derivatives expert, and I felt his knowledge of operational issues would help me manage risk, and asked him to help build out the infrastructure. Thankfully we did, because without him, my business and the firm would have suffered mightily during the Global Financial Crisis/Lehman. I learned a great deal given his unique expertise.
I like to be intellectually stimulated and around smart and interesting people who push me to improve and grow. I want to thank my loyal readers who challenge me every day to be better. Asking me complex questions and pushing me to tackle new subjects has made me grow and develop and for that I am thankful. As I have become more intellectually honest with myself and feel I have grown and been more willing to listen to others. I don’t say this to preach but to learn from my mistakes.
Quick Bites
GDP increased at a 3.3% annualized rate, far better than the expected rate of 2%. A strong pace of consumer spending helped drive the expansion, as did government spending. Despite Friday’s mixed session, the major averages recorded a winning week. The S&P 500 advanced around 1.1%, while the technology-heavy Nasdaq Composite climbed about 0.9%. The blue-chip Dow gained approximately 0.7%. Oil rallied 6.3% this week to $78/barrel on strong US growth and China stimulus.
The consumer remains SHOCKINGLY resilient. I don’t see how this is possible. The expansion is expected to continue in 2024, albeit at a significantly slower pace. The highly anticipated pivot from the Federal Reserve toward interest-rate cuts should support the economy this year, economists say. Moderating inflation and a still-tight labor market have boosted consumer confidence levels, according to some surveys. Still, there are signs that spending—and the whole economy—won’t be able to continue at such a rapid clip. Economists, expecting consumer outlays to cool, forecast growth to ease to 1% this year. The annual change in GDP compares the fourth-quarter level to the prior fourth quarter. Economists surveyed by The Wall Street Journal and the Fed use that metric for forecasts. The savings rate is now down to 3.7% relative to the 20 year average of 5.9% and peak pandemic levels of 33%+. This CBC news anchor could not find a single person outside a grocery store who feels good about the economy due to inflation. I remain in shock at prices when I go shopping.
I have written extensively about college relative to vocational school and this Bloomberg article is interesting, “Surging College Costs Push Students to Vocational Programs.” The growing debate over college costs in the US is pushing more students to community colleges, with schools that offer vocational programs seeing a big bump in enrollment. After steep declines in the pandemic, enrollment at community colleges rose 2.6% in 2023 compared with a year earlier, fueled by a 16% surge at two-year schools with a “high vocational program focus,” according to the data from the National Student Clearinghouse. As college costs rise and millions struggle to pay their student loans, more people are questioning whether four-year degrees are worth it. A high school in Palm Beach prepares students for HVAC careers after graduation. I support this type of program.
I have written frequently about spending issues, entitlement reform, the aging population and the impact on national debt levels. Jamie Dimon is at it again concerned about growing Federal Debt Levels. This article is entitled, “Childless Future? Birth Rate Plunging as Millennials Decide Against Being Parents.” The ramifications are dire and only embolden my arguments around entitlement reform. Less than a fifth of millennials, specifically those between 26 and 35, are certain that they want to become parents one day. This inclination further diminishes among individuals with pronounced environmental concerns. The findings revealed a correlation with the nation’s declining birth rates, highlighting a drop in the number of young adults planning to have children. Only 19 percent of younger millennials expressed a definitive desire to have children, while 30 percent leaned towards probably wanting children. Among older millennials, between 36 and 41, 36 percent were certain they will not have children, and 20 percent were leaning towards not having them. Link to a related story.
I found this LinkedIn Post by Avi Gandi quite interesting about TV ads and the math relative to YouTube advertising. Although I have not confirmed the data, I believe it to be directionally correct. I added some data from other sources as well. This Forbes article also gives more weight to social media advertising.
8.5 TRILLION TV ad views in 2023 - and yet, TV is dying.
Total TV ads run in 2023 grew 2.2%, to 44.5 million.
BUT total impressions only went up 1.8% - to 8.5 trillion.
So impressions grew less than total ads run. What does that mean?
Viewership didn’t increase. TV networks just ran more ads!
On top of that, total ad spend FELL by 4.7%, to $43.71 billion.
But by this math, the average views on a single TV ad are just 191,011.
And the average CPM (cost per 1000 impressions) is $5.14.
There are tens of thousands of YouTubers who average more than 191,011 views per video.
The average YouTube CPM in the United States is…$0.38?
Americans’ ratings of nearly all 23 professions measured in Gallup’s 2023 Honesty and Ethics poll are lower than they have been in recent years. Only one profession -- labor union leaders -- has not declined since 2019, yet a relatively low 25% rate their honesty and ethics as “very high” or “high.” Nurses remain the most trusted profession, with 78% of U.S. adults currently believing nurses have high honesty and ethical standards. However, that is down seven percentage points from 2019 and 11 points from its peak in 2020. Note Senators and members of Congress are at 8% and 6% respectively. I wonder why?
I am really at a loss over the noise of Texas putting up a fence to protect from illegal immigrants given the Federal Government has failed on border security. We have seen nearly 8mm illegal border crossings under this administration. It is negatively impacting countless cities and costing tens of billions of dollars. There has been no shortage of crimes committed by the border crossers. This week, a mother sued DHS for $100mm over her 17-year-old daughter’s rape and murder at the hands of a suspected gang member who illegally entered the US. Even Jamie Dimon admitted Trump was right on the border. Immigration is now the top voter concerns ahead of inflation. US Supreme Court voted to let federal Border Patrol agents remove the barrier installed there as part of Texas’ Republican governor’s security initiative while the state’s legal challenge to the wire-cutting plays out. Again, I am ALL FOR LEGAL immigration and a process. What we have today is pandemonium and I do not support the administration’s border policy. This should not be a Republican/Democrat issue. Now, a trucker convoy of “patriots” is heading to the border to ‘Take Our Border Back.” What could possibly go wrong?
Israel
Biden administration discussing slowing some weaponry deliveries to Israel to pressure Netanyahu
Israeli hostages impregnated by Hamas rapists will decide whether to keep babies upon release
Remember, many people and news organizations refuse to call Hamas terrorists.
Given our porous borders, hard to feel super comfortable.
UNRWA to probe claims saying employees took part in Hamas' October 7 attack
NYU Professor Tells Students of Hamas Atrocities: ‘We Know It’s Not True’
I do not agree with what is being taught in schools. No wonder why such a huge percentage of young people support Hamas.
Is Cornell Next? School’s Wealthy Donors Call for President’s Ouster
“Cornell is no longer concerned with discovering and disseminating knowledge, but rather with adhering to DEI groupthink policies and racialization,” wrote Lindseth, 89 years old, a retired mechanical engineer and entrepreneur, in a five-page letter to the board’s chair.
TED Fellows Resign after Bill Ackman, Bari Weiss Invited to Speak at Conference
“TED Fellows refuse to be associated with genocide apologists,” the letter accused TED of choosing “not only to align itself with enablers and supporters of genocide but to amplify their racist propaganda.”
Defiant Fetterman Waves Israeli Flag From Rooftop As Protesters Chant He’s ‘Supporting Genocide’
Other Headlines
Stock valuations are stretched, a major recession is a real threat, and the US is caught in a debt spiral, Bill Gross has warned. The benchmark stock index's price-to-earnings ratio of about 19 is "much too high" when the real or inflation-adjusted interest rate today is a restrictive 1.8%, he said.
3 reasons the US economy's strength right now is a head-fake, according to Mohamed El-Erian
Index Funds Have Too Much Voting Power: A Proposal for Reform
I had never thought of this issue but believe it is something to consider.
China's $6 Trillion Stock Wipeout Exposes Deeper Problems for Xi
I have written extensively about the China slowdown and my lack of confidence in anything out of that country.
Bankruptcies Surge Among Gen X and Millennials
In contrast to recently issued positive economic data showing a 29% surge in consumer confidence since November, LegalShield's December Consumer Stress Legal Index (CSLI) documents a relentless rise in financial duress, reaching a three-year peak as consumers seek legal help for bankruptcy and other legal assistance.
Tech layoffs balloon in January as Wall Street rally lifts Alphabet, Meta, Microsoft to records
Tesla CEO Musk: Chinese EV firms will 'demolish' rivals without trade barriers
TSLA stock is on a rough ride. CHART and #s.
NYC Tesla owners rage at Musk as huge lines leave it 'impossible' to charge cars
For two years, I have written that the ambitious plans for EVs will not be met. Between cost, charging limitations, range, issues with repairs…I am hearing more complaints. I have had a TSLA for 6 years.
IBM shares rise after earnings top estimates in ‘uncertain, volatile’ economy
Since 1984, IBM has returned an average of less than 7% vs the S&P of 11.1%.
LVMH shares jump over 12% as earnings point to luxury sector resilience
Comcast shares rise on earnings beat, better than expected broadband performance
Intel stock sinks more than 10% as early 2024 outlook comes up short
American Airlines stock climbs 10% as carrier posts narrow fourth-quarter profit
Humana stock plunges on dismal 2024 forecast, as insurers face soaring medical costs
Stock was -12% post earnings. The US spends far more on healthcare per capita than our peers. Healthcare inflation is growing too rapidly. This is a MAJOR issue for entitlements. Health insurance is through the roof and coverage is awful. The US pays far more for care and medicine and sadly, does not see the best outcomes despite the higher spending.
Immigration Is Now Top Voter Concern, Beating Inflation, New Poll Shows
35% said immigration was top concern. 32% had inflation and 25% “economy & jobs.” I am surprised by jobs given the low unemployment rate.
Jury rules Trump must pay E. Jean Carroll $83.3 million in damages for defamation
FBI Seizures From Safe Deposit Boxes Violated US Constitution
Read this article. Seems like government over-reach to me.
Farmers protests in Europe bring France, Germany and Poland to standstill
The EU is facing fresh chaos as farmers from member countries come together to block highways in a huge protest over excessive regulations.
$4.6 million Beverly Hills mansion overrun by hard-partying squatters — outraging neighbors
Crazy story.
Here is a thought. Maybe he needs to be institutionalized?
Professional dancer, 25, dead after eating mislabeled cookies from Stew Leonard’s grocery store
Incorrectly labeled cookie from Stew Leonard’s that contained peanuts.
Report on sex abuse in Germany’s Protestant Church documents at least 2,225 victims
Florida House passes bill that would ban children under 16 from social media
I am supportive of this move. I feel social media is damaging children.
How $1,300-a-night hotel rooms became the new normal
I remember when $500/night was a lot. Not anymore.
Carbone Owners Partner With Marea, a Rival Italian Dining Powerhouse
I LOVE Marea and look forward to the expansion. I think they are opening in Palm Beach. The best pasta dish in NYC is bone marrow fusilli with octopus and breadcrumbs from Marea.
I was shamed for refusing to pay $150 for a group dinner when I only spent $25 — am I in the wrong?
This brings up a good question as to the protocol in such situations. If you don’t eat much, what is the right answer?
Real Estate
Home prices soared to a record in New York’s Hamptons and sales rose year-over-year for the first time in 10 quarters. Properties in the Long Island beach towns changed hands at a median of $1.85 million in the three months through December, up 45% from the fourth quarter of 2022 and more than double pre pandemic levels, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate reported Thursday. Purchases climbed 8.8% to 273. In the luxury tier — the most expensive 10% of transactions, which in the quarter meant $7.3 million and above — the median sale price jumped 87% from a year earlier to $12.6 million, the firms said. Luxury listing inventory rose 51% to 554. Interestingly, “La Dune,” the massive Southampton Oceanfront estate just sold for $79mm at auction after an asking price of $150mm.
SL Green Realty Corp. plans to start raising funds for a New York City opportunity debt vehicle this month. The Manhattan-based real estate investment trust is targeting $1 billion, according to its quarterly earnings statement Wednesday. Scores of investors are hunting for commercial real estate opportunities across the US, as loans mature and owners have to find new sources of capital. High borrowing costs and plunging values have made it harder for existing owners to refinance. At the same time, major banks are shying away from providing more loans, which has left a major gap for other lenders to fill.
Very interesting article from the LA Times about the devastating impact of capping Airbnb rentals is having on the Palm Springs R/E Market. Two years ago, YouTube star Luan Palomera paid $1.5 million for a chic vacation home in Palm Springs. Today, he’d be lucky to get $1 million for it. As L.A. continues its crackdown on Airbnb, city officials can turn toward the desert for an example — perhaps a cautionary tale — of the potential side effects of curbing the short-term rental market. In Palm Springs, a cap on short-term rentals in specific high-demand neighborhoods has all but frozen the market in those communities. Sales are down. In 2022, the City Council adopted an ordinance that capped the number of rental certificates in any given neighborhood to 20% of the homes there. If you live in one of 10 Palm Springs neighborhoods that already are over the limit, you’re trapped in permit purgatory, stuck on a waiting list for a rental license that may take years. Those with licenses before the cap were grandfathered in. Those count toward the cap, so most of the capped neighborhoods were over the limit as soon as the ordinance passed. Some, like Movie Colony East at 21.8%, are just above the limit. Others, like Racquet Club Estates at 41.6%, have blown through it. But beyond the grandfathered homes, the rules are extremely strict. If you have a license and sell your home, the license isn’t passed down to the buyer. The article suggests homes that went for $1.2mm are struggling to get $800k due to the rule changes.
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Rosen Report™ #651 ©Copyright 2024 Written By Eric Rosen
