A Perfect Day of Fishing

1-31-24

Opening Comments

My last note was one of my personal favorites. It was entitled, “Intellectual (Dis) Honesty,” and outlined the importance of owning up to your shortcomings. I received an incredible number of emails, calls and texts with appreciation for the note. The most opened links were my Rosenreportjobs.com site and the story of the woman shamed for refusing to pay for an expensive dinner when she barely ate. I am now asking readers to help by posting summer internships on the site. I want to connect kids with jobs at no cost and am spending time and money to help make sure it happens. My report on Sunday will have more details. I know it is late for this summer, but please try to come up with roles for college kids in need. If you are willing to mentor kids, let me know as well. Also, many readers commented on my crushing review of Pink Steak in West Palm Beach. People referenced my line, “I wish they had let the chicken continue to roam free rather than serve me the undercooked dish that lacked flavor.”

• Video of the Day-Wrestler with Cerebral Palsy

• A Perfect Day of Fishing

• Quick Bites

  • Markets

  • Ken Griffin on Markets & Taiwan

  • Dimon/Rosen On Debt Levels

  • Musk $56bn Pay Package Voided

  • Americans Feel They Pay Too Much In Taxes

• Israel

• Other Headlines

• Real Estate

  • Return to Office/Sternlicht on Office Losses

  • Record $72mm Greenwich Village Townhouse

  • Home Prices

  • China’s Evergrande Liquidation

  • London Home Price Affordability

Video of the Day-Cerebral Palsy Wrestler

• If you do not shed a tear watching this video, I have serious concerns. A young man with Cerebral Palsy wrestles in a match, and the boy who he is matched against allows him to win in the most caring way. I have publicly stated my addiction problem with Instagram Reels and most of the time it is drivel. This one had me in tears. There is good in the world, but it is rare.

A Perfect Day of Fishing

Sometimes, the sun, moon, and stars align when fishing and you crush it. On January 25th, my friend and expert fisherman, Dustin, called and said, “Looks good tomorrow, do you want to go?” I love this kid and don’t fish a ton with him anymore given he is the captain of a 74’ sportfish in Jupiter. What made the conditions so good?

1. The wind in the winter tends to blow from the Northeast and it shifted Southeast

2. The barometric pressure was falling (fish bite more when this happens)

3. Full moon-Wahoo bite is better on or near full moon

4. The tide was perfect as the Wahoo bite better just after high tide

5. We found a good “edge.” An edge is where green “dirty” water and blue “clean” water meet. The fish prefer the blue water and often stack up just on the blue side of the edge. Anytime I see an edge I tend to catch fish on it.

   

We left the dock at 6 am and started fishing around 6:35 in the morning (had to wait for the bridge). The sun was rising and it was stunning. I see so many beautiful things fishing; nature is amazing. At times I have seen porpoises frolicking, massive leatherback turtles, whales, orcas (Pacific) and many other memorable things while fishing. I was never more than 3 miles from my HOUSE on this day of fishing.

We started trolling our favorite blue and white and pink and white lures and the Blackfin Tuna bite was on. We caught 4 Tuna in short order with the biggest being 8 lbs. Not huge, but fun. As high tide change occurred, the Wahoo went bonkers and we caught three in rapid succession. I reeled in most of the fish and Dustin handlined in the last bit leaving me to gaff the fish. I was a 10 out of 10 on the gaff not wasting meat hitting the head rather than the body. This is not always the case. Last month, we caught a 45 lb Wahoo and I was so excited that I hit the belly with the gaff wasting precious meat. Note how close we are to shore. This time of year, I tend to fish in 150-300 ft of water.

After fishing, Dustin filleted the fish as he is a 10 out of 10 at that job and I am at best a 7 out of 10. I washed the boat and equipment while he sliced and diced with my sharpest knife which was a birthday gift from my wife. The scale does not lie. Only fish fillets were in the light cooler tipping the scale at over 43lbs of meat.

Then comes the hard part. I had to vacuum seal 30 bags of Tuna and Wahoo. First, you need to make the bag and then insert fish and seal it. The job is messy and time-consuming but allows me to keep the fish fresh for months in the freezer. There are not many days like the one on Jan 26th, so the fish needs to last a while! I will make Poke Bowls, tacos, sushi rolls, sear it for appetizers and make homemade tuna or wahoo salad/dip as well. Look at the color on the fresh Tuna.

Friday night, I made Tuna & Wahoo Poke bowls with jasmine rice, pickled ginger, scallions, edamame,

Quick Bites

• The ADP data showed private payrolls slowed to 107k in January, below the downwardly revised estimates of 158k. Treasuries rallied with the 2-Year yield falling 12bps to 4.24% and the 10-year -11bps to 3.94% on the heels of the payroll data and Fed announcement. The S&P and Nasdaq fell 1.6% and 2.2% respectively after tech earnings and the Fed. Powell signaled Fed may not cut in March. The market was as high as an 80% chance of a March rate cut and it is now down to 36%. The VIX was +9.6% to 14.6 on today’s volatility. Alphabet shares fell 7% after disappointing ad revenue overshadowed better than forecast earnings and sales. Walmart announced the opening of 150 new large-format stores across the US over the next 5 years. However, Community Bankcorp stock was -46% at one point on Wednesday post earnings. They cut the dividend drastically and increased the provision for loan losses by $552mm or more than 10 times over the expected amount. Exposure to multi-family and office in and around NYC is weighing on the Bank and the sector with the KBW Regional Bank Index -3.3% on the day. On a positive note, US consumer confidence increased in January.

  

  

• Ken Griffin is constructive on the world according to the CNBC article outlined below. The market has managed to put behind the “economic anxiety” it faced as recently as the fourth quarter of 2023, according to Citadel CEO Ken Griffin. 

  The hedge fund manager said Tuesday that a soft landing could happen this year, with recent data indicating a solid labor market, healthy GDP growth and inflation moderating at a better pace than expected. Inflation could even fall into the low 2% range by the end of 2024, Griffin noted. “The [Federal Reserve] can start to cut rates come this summer, and we will see unemployment touch up a little bit. But the overall economy looks pretty damn good right now,” Griffin told CNBC’s Leslie Picker on Tuesday at the MFA Network event in Miami. “This is a real change in mindset from where we were September, October last year.” However, Ken Griffin is concerned about Taiwan and his GDP impact estimates are dire. “If there were a rupture around Taiwan, it would be catastrophic to both the Chinese and the American economy — and by catastrophic, I think you’re looking at Great Depression circumstances,” said Griffin.  U.S. GDP could take a hit of 8% to 10% if it lost access to Taiwanese semiconductors.” I loved this headline, “Harvard grad Ken Griffin blasts elite students as ‘whiny snowflakes,’ says he won’t donate any more after giving $500mm to Harvard.

• I had put this story in my last note in Other Headlines but did not have the space to write more about it. As my readers know, I have been vigilant about the nation’s growing debt levels, reckless spending, and unfunded entitlement obligations (Medicare/Social Security/pension & retiree health care liabilities). Jamie Dimon said, “Washington faces a global market ‘rebellion’ over record U.S. debt: It is a cliff… we’re going 60 mph towards it.” Speaking on a panel alongside former Speaker of the House, Paul Ryan, Dimon said the American government is facing a "hockey stick" effect when it comes to government debt. Despite full employment record-setting stocks, and relatively low interest rates… we continue to run massive deficits, and politicians in DC are doing Americans a disservice with their unchecked spending. Look at the chart below from the Federal Reserve showing debt levels exploding since the Global Financial Crisis. When you factor in the underfunding on entitlements, the estimates are another $100 trillion or more with Jeff Gundlach estimating it is $210 trillion. We need politicians to make tough decisions around means testing, raising the retirement age, forcing endowments to pay taxes…. The math does not add up.

  • Additionally, the Federal Government spent $6.2 trillion in fiscal 2023. Given entitlement spending is now over 50% of Federal outlays and interest has grown to over $1 trillion run rate, we have crowded out our discretionary spending. In 1973, discretionary spending was 53% of the budget and in 2023 it was 28% and falling fast as entitlements and interest expense are ballooning. Check out the link from the Congressional Budget Office (CBO) about spending over the next 10 years. Hard not to be concerned and I am not convinced the CBO is aggressive enough in the forecast.

    

    

  

• A Delaware judge on Tuesday voided the $56 billion pay package of Tesla CEO Elon Musk, ruling that the company’s board of directors “failed that the compensation plan was fair.” Tesla’s share price slid about 3% in after-hours trading Tuesday following news. The 2018 CEO pay package that Tesla granted Musk was unparalleled in corporate compensation plan in history and made the Tesla and SpaceX boss a centi-billionaire and the richest person on the planet. Chancery Court Judge Kathaleen McCormick in her ruling found that Tornetta had proved that Musk “controlled Tesla,” and that the process leading to the board’s approval of his compensation was “deeply flawed.” I want to put something in perspective. In 2008, TSLA was valued at $200mm and that is the year Musk took over as CEO. Today, it is valued at $600bn ($1.2 trillion in 2021). I attribute a good deal of the success of the company to Musk. I don’t know what he should be paid, but it is a hell of a lot of money.

  

• A majority of taxpayers feel they pay too much in taxes, with many saying that they receive a poor value in return, according to a new poll from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research. Two-thirds of U.S. taxpayers say they spend “too much” on federal income taxes, as tax season begins. About 7 in 10 say the same about local property taxes, while roughly 6 in 10 feel that way about state sales tax. This link shows state income taxes with the map included below but does not include local taxes which are high in various cities.

  

Israel

• 3 US troops killed by Iranian-backed drone strike in Jordan, Biden says

  • We have troops being injured and killed, billions of defense equipment in the Middle East and are engaging with various terrorist organizations. If it looks like a duck and quacks like a duck, it is a duck. We are at war. Of note, a couple dozen troops were injured as well.

• Blinken: We've Not Seen A Situation This Dangerous Since At Least 1973

  • Yet another reason to have a secure border. 8mm encounters since Biden took office.

• State Department reviewing options for possible recognition of Palestinian state

• Israel PM Netanyahu’s urgent warning to Americans: Iran is targeting the US — and the rest of the West

• GOP hawks press Biden to target Iran directly over soldiers' deaths

• China's tightly controlled internet flooded with antisemitism following Hamas massacre

  

Other Headlines

• IMF upgrades global growth forecast, citing U.S. resilience and policy support in China

• Big pharma is at a crossroads, as J&J, Merck and others prepare to lose heaps of revenue from blockbuster drugs

• US private equity portfolio company bankruptcies spiked to record high in 2023

  

• The Big Year for EVs Gets Off to a Bumpy Start

  • This year was supposed to be an important one for EVs, but there are signs the industry’s push has gotten ahead of buyers. I have been on this one for a while and made the right call. No chance CA can accomplish its lofty EV ambitions. Remember, I am a long time TSLA owner.

    

• Elon Musk's Neuralink implants brain chip in first human

  • Too much to discuss about this one. I would not be raising my hand to be the first human to get a chip implanted into my brain.

• Novo Nordisk hits $500 billion in market value as it flags soaring demand for Wegovy, Ozempic

  

• Microsoft beats estimates as Azure grows faster than expected

• Pfizer beats earnings estimates as declining Covid business loses less revenue than expected

• UPS announces 12,000 job cuts, says package volume slipped last quarter

• PayPal will cut about 2,500 jobs, or 9% of global workforce

• Ex-IRS contractor who leaked Trump's tax returns sentenced to 5 years in prison

• Squad member Ilhan Omar slammed for 'disgraceful' speech saying she is 'Somalia first' and pushing an unrecognized deal with Ethiopia

  • Not sure where to begin here other than to suggest she should not be a Representative in the US. I believe she should be removed from Congress.

• Sotomayor overwhelmed by demanding SCOTUS workload: ‘I live in frustration’

  • Term limits for SCOTUS please. 20 years is enough.

• Chevron Says California Plays a Risky Game With Climate and Gasoline

• NYC brothers had ‘human sacrifice’ hit list for cops, judges with stockpile of bombs, guns

• NYC Council rejects Mayor Eric Adams’ veto on controversial NYPD bill that will force cops to document nearly every public interaction

  • Another bad policy out of NYC will mean less cops on the street. Under the How Many Stops Act, officers will have to record details on the apparent race, gender and ages of people they stop — even in low-level encounters where cops are asking for information from someone who could just be a potential witness to a crime. The bill passed 42-9 while another bill will eliminate solitary confinement in NYC jails.

• Protesters hurl soup at the Mona Lisa painting in Paris

  • The Mona Lisa is arguably the most valuable painting in the world. Thankfully, it is behind glass, so these idiots did not damage the work.

• Navy again lowers requirements as it struggles to meet recruitment goals

  • Now, they have lowered the test scores to 50 out of 99. Vaccine mandates, DEI, lost confidence in the military after Afghanistan, tighter labor market and veterans urging family members not to join.

• Iconic San Francisco toy store that inspired ‘Toy Story’ films closing after 86 years over ‘perils and violence’ in city’s downtown

• Border Patrol catches two child sex offenders, a murderer, and felon illegally entering US

  • How many got through our porous border?

• NYC migrant pickpocketing teams are the newest headache for NYPD as trio busted for string of West Village bar thefts

• Cops allegedly beaten by rowdy migrant mob near Times Square — with suspects later freed without bail: horrifying video

  • Sorry Bragg. They need to be immediately deported.

• House Republicans release impeachment articles against Mayorkas amid push to remove him over the border

• Flyers are changing their tickets to avoid Boeing 737 Max 9 planes

  • Boeing stock is -46% over the past 5 years and the S&P is +81%.

• This city has the worst traffic in the U.S.—and it’s not Los Angeles

  • I would have thought LA would have been higher on the list. Miami is now awful. This week, it took me 35 minutes to drive 1.2 miles in Miami Beach. Should be a 5 minute drive.

    

• Brightline, Florida’s High-Speed Railroad, Slashes 2024 Ridership Forecast

  • I have written extensively on the Brightline. When it works and is on time, it is great. It is rare that the train is crowded (Heat game or Art Basel).

    

• Colon cancer could be stopped by turning on a protein ‘like a light switch’

• I’ve spent 20 years studying how to raise successful kids—here’s the most ‘overlooked’ skill I tell parents to teach

  • Good thoughts. Just hard to do in the moment.

• Why extracurricular activities are key to top-tier college admissions

• Symptoms from excessive screen time cost the U.S. $73 billion a year, study finds

  • I am at my computer or on my phone screen at least 13 hours a day on average.

• PGA Tour secures up to $3 billion from U.S. investors as LIV Golf merger hangs in the balance

• Royal Caribbean's 'Icon,' world's largest cruise ship, sets sail

  • Nothing could get me on this cruise. What will happen? Covid outbreak, norovirus, food poisoning, gastrointestinal illness, storms, large waves…. Ill pass.

Real Estate

• A good NY Post article entitled, “NYC’s return-to-office trend gains steam, hits nearly 70% of pre-pandemic level.” The return-to-office trend gained steam in December when average visitation rates at 350 Manhattan buildings rose to 67% of 2019 rates, according to the Real Estate Board of New York. That was up from the 65% recorded in November — and would have been 74% if the sleepy last week of December between Christmas and New Year’s weren’t included. However, one of my investing heroes, Barry Sternlicht, sees $1 trillion or more of losses for the office market. Once a $3 trillion asset class, offices now are “probably worth $1.8 trillion,” said Sternlicht, chief executive officer of Starwood Capital Group. “There’s $1.2 trillion of losses spread somewhere, and nobody knows exactly where it all is.” Today’s Community Bankcorp stock sell off is partially due to office exposure.

• A Greenwich Village townhouse sold for$72.5mm and set a record for the most expensive ever downtown. The 12,000-square-foot home shares its street with a few star-studded homeowners. In 2017, Marcelo Claure, former CEO and executive chairman of Sprint, paid $27 million for an eight-bedroom townhouse next to one purchased by Sarah Jessica Parker and Matthew Broderick for $35 million

• Home prices started to fall in November, after nine straight months of gains, according to the S&P CoreLogic Case-Shiller national home price index. Seattle and San Francisco reported the largest monthly declines, falling 1.4% and 1.3%, respectively. Prices nationally were still higher compared with the year before, and those annual gains increased again. For the second straight month Detroit reported the highest year-over-year gain among the 20 cities, with prices rising 8.2% in November, followed again by San Diego with an 8% increase.

• Chinese property developer Evergrande faces imminent liquidation after its overseas creditors failed to reach an 11th-hour deal this weekend to restructure the sprawling real-estate company, according to people familiar with the matter. Evergrande has $300 Bn in debt. It owns more than 1,300 R/E projects in China and at one time was responsible for 3.8mm jobs. For perspective, Walmart has 2.3mm employees on a worldwide basis.

• London homes are now the most affordable they’ve been since 2014, though they’re still by far the most expensive relative to earnings in Britain despite their underperformance. Data from the online sales portal Zoopla showed that London houses now cost 13 times the average earnings of a UK worker, down from over 15 times at their peak in 2016. Britain’s departure from the European Union along with tax changes and shifts in house prices and wages were responsible for the move.

  

  

© 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™ #652 ©Copyright 2024 Written By Eric Rosen