I Need a Lobotomy

If you have read the Rosen Report for a while, I am sure you can come up with a few dozen reasons that I am a prime candidate for a lobotomy. If you spoke with my wife, she could come up with 100 reasons. When I told a friend this story, he offered to give me the lobotomy himself despite not being a doctor. Thank you, Chris. However, I am giving you a legitimate reason why I am considering invasive brain surgery as was the case in the classic film, “One Flew Over the Cuckoo’s Nest.”

One Flew Over The Cuckoo´s Nest (1975) – Vinyl Writers

When it comes to music, I have a wide range of things I enjoy. I am a huge fan of classic rock and enjoy the Rolling Stones, Eagles, Beatles, The Who, Queen, Aerosmith, Fleetwood Mac, Genesis, The Cars, Chicago, Dylan, Neil Young, The Allman Brothers, The Police, Steely Dan, Elton John, Billy Joel and many others. I am a big fan of John Mayer and like some rap and hip-hop.

I was driving the car a couple of weeks ago and listening to Sirius when a song from 1989 came on. It was from Cher, “If I Could Turn Back Time.” I want to begin by saying that I have a lot of respect for Cher and what she has achieved in her storied career. As a kid, I fondly recall watching Sonny and Cher in the 1970s. She is an accomplished actor (Silkwood, Moonstruck, Mask), Oscar winner and other awards (full list), singer, songwriter, producer, cultural icon, fashion trailblazer, and philanthropist. I appreciate her career accomplishments and her broad status as an entertainer. She has been in the business for 60 years and that longevity is due to a lot of talent, courage and hard work.

However, I am not a big fan of her music, at least consciously. Sadly, after hearing the song, “If I Could Turn Back Time,” I cannot get it out of my head. I just keep playing in my mind, over and over and over. All day long. Before I go to bed. Even when I am asleep, I dream about this song, and it is becoming painful. Because I am a glutton for punishment, I watched the music video. It is Cher scantily clad singing on a Naval Ship to a bunch of sailors in white uniforms.

I went to the gym and hit my jump rope hard. I was listening to Eminem-Lose Yourself, yet unknowingly singing this God-forsaken song by Cher, “If I Could Turn Back Time.” A guy came up to me and said, “Are you seriously singing Cher while you are jump roping like a pro?” My face turned into a tomato. I don’t even realize I am singing the song anymore. How can someone listen to Eminem and sing Cher? Singing Cher is nonstop in my head and aloud without me realizing it. I need a hypnotist, acupuncturist, intervention or exorcism as the jump rope incident put me over the edge.

Oh yeah. I hope others feel my pain and this song is lodged into your brains so I am not alone. If I could turn back time, I would have never listened to the station that played this song! If you don’t hear from me for a while, it is because I am recovering from my lobotomy. No, Chris, you cannot use a rusty knife to perform my lobotomy.

Quick Bites

All non-bolded text below is excerpted from the cited articles. Bold are my thoughts.

Despite Nvidia’s stellar earnings and rally (+9%), broader markets sold off on Thursday. The majority of the stocks in the broad market index turned negative Thursday, indicating a lack of market breadth. More than 400 names in the S&P 500 were lower, and information technology was the only positive sector for the day. Stronger than expected economic data (PMI) also evaporated the rally on Thursday as investors cut their odds of a rate cut in September. Services and manufacturing data for May both topped economists’ expectations, according to purchase manager surveys from S&P Global released Thursday. Treasury yields were higher post the PMI and closed the week with the 2-year at 4.94% (+12bps on the week) and the 10-year at 4.48% (+6bps on the week). However, we did see a solid rebound Friday in markets and Nvidia continued to climb. For the week, the Dow was -2.3%, S&P flat and Nasdaq +1.4%. The VIX is sub12 after being 19.5 six weeks ago. The SEC approved the rule change to allow Ether ETFs. Ether has rallied sharply in recent weeks in anticipation of the approval and was only up 2% on the formal announcement. Although oil bounced back from a three-month low, it was still -3% on the week. Watch for next week’s OPEC meeting regarding holding a continued 2.2mm barrels a day off the market.
I briefly wrote of the Nvidia earnings as they came out minutes before I hit send on Wednesday. Let’s go into more detail. Nvidia’s historic rally is being driven by its data center business, which grew at a whopping 427% in the latest quarter as companies keep snapping up its artificial intelligence processors. Nvidia CEO Jensen Huang told analysts on the earnings call that OpenAI, Google, Anthropic and as many as 20,000 generative AI startups are lining up for every GPU the cloud providers can put online. “All of the work that’s being done at all the [cloud service providers] are consuming every GPU that’s out there,” Huang said. “Customers are putting a lot of pressure on us to deliver the systems and stand it up as quickly as possible.” Nvidia announced a 10-for-1 forward stock split in its fiscal first-quarter earnings report on Wednesday. The shares will begin trading on a split-adjusted basis at market open on June 10, according to a release. Nvidia investors have enjoyed a historic rally over the past five years, with the stock price soaring by 25-fold. I should have put 100% of my net worth in this stock 5 years ago! The stock was +9% post earnings and trading solidly over $1,065/share and 5 years ago it was $36/share. In 2000, Palm was worth more than Apple, Nvidia and Amazon combined. Maintaining dominance is hard. Apple, Nvidia and Amazon today are worth a combined almost $7.5 trillion. Palm is a subsidiary of HP that bought it for $1.2bn in 2009.
A lot of chatter about the implications of China invading Taiwan. We know that Citadel’s Ken Griffin believes it would be catastrophic and could lead to a new Great Depression. I hope Griffin is wrong. China launched “punishment” war games around Taiwan in response to “separatist acts.” The drills, named "Joint Sword - 2024A," included areas around Taiwan-controlled islands of Kinmen, Matsu, Wuqiu, and Dongyin, with dozens of fighter jets carrying live missiles and warships participating in mock strikes. The U.S. State and Defense departments urged China to act with restraint, emphasizing that China's actions risk escalation and erode regional peace and stability, while Taiwan expressed confidence in its military's ability to protect its territory. Also concerning is China’s showing of robot “dogs of war” with machine guns mounted on their backs as part of these exercises.
I thought this CNBC article, “Palm Beach housekeepers are making $150,000 a year due to massive demand from the wealthy” was a joke but it is real. The wealth migration to South Florida over the past five years has been incredible. The result is high demand for private schools, country clubs, high-end homes, housekeepers, and nannies. A shortage of housekeepers for wealthy homes and elite hotels has led to a surge in hourly wages. “I have been placing staff for 30 years, and I’ve never seen anything like this,” said April Berube, founder of The Wellington Agency. Typical pay for housekeepers has rocketed from about $25 an hour in 2020 to $45 or $50 an hour today, according to some agencies. In Palm Beach, housekeepers with experience in wealthy homes are typically making between $120,000 and $150,000 a year, along with 401(k) plans, health care and benefits, including overtime. Melissa Psitos, founder of Lily Pond Services, said she recently had a Florida client hoping to hire a housekeeper for $75,000 a year. They ended up paying $110,000, which was reasonable for the market. I have received dozens of calls from new Floridians looking for nannies and housekeepers. I had not realized just how out of control the pricing had become on Palm Beach Island. Check out the map below from Forbes showing the average salary in Florida was $56k. Most housekeepers are not college grads and getting well over $100k is remarkable. This Forbes link has an interactive map showing the average salary by state. I just spoke with someone in the Hamptons and the demand for housekeepers is off the charts requiring $45-50/hr.
NCAA and the Power 5 agree to pay college athletes directly for the 1st time in history. The NCAA will pay more than $2.7 billion in damages over 10 years to past and current athletes, sources told ESPN. Sources said the parties also have agreed to a revenue-sharing plan allowing each school to share up to roughly $20 million per year with its athletes. All Division I athletes dating back to 2016 are eligible to receive a share as part of the settlement class. A lot of intricacies are outlined in the article. I agree with this result, but we need to be honest about the small number of star players who should receive any meaningful money. Fans pay to see greatness and I have no problem with the best athletes getting paid by the school. After all, the best schools make tens of millions/year on these athletes.
I have frequently written about the fact that the pendulum has swung too far in some respects. This article suggests that half of the trainee doctors at UCLA’s medical school are failing basic tests because the dean is pushing DEI. I believe merit matters, especially when I think about medical school. Among the disturbing anecdotes shared are of a student lashing out in an operating room and accusing a surgeon of picking on her after being asked to locate a major artery - a basic medical request. The number of students failing tests on basic medical knowledge has increased 10-fold in some subjects since 2020. A majority of students are now flunking standardized tests on emergency medicine, family medicine, internal medicine, and pediatrics among some cohorts. The collapse in standards has turned the institution into a 'failed medical school' according to one former member of the admissions staff. Admitting students on racial criteria has been banned in California since 1996 and outlawed federally since a Supreme Court ruling last year. But faculty at the school said that Lucerno (medical school dean) has ignored bans on affirmative action and allegedly told colleagues she wanted a highly qualified white male candidate pushed down the residency rank list because 'we have too many of his kind.' Luciano is accused of stuffing the 25-strong admissions committee with her hand-picked members and terrorizing dissenters into silence by implying they are racist and threatening them with diversity training sessions. Two members recalled Lucero becoming incensed at an admissions meeting in November 2021 when members voiced doubts about a black candidate with grades way below the usual standard. 'Did you not know African-American women are dying at a higher rate than everybody else?' she raged. 'We need people like this in the medical school.' Sorry folks, this is wrong, and the ramifications are serious. Do you want to have surgery with a doctor who failed classes and cannot answer basic medical questions? I sure don’t. The article has so many disturbing examples I did not have space to discuss. Most concerning is the fact that many faculty members are going public over concerns about the direction of UCLA Medical School’s woke decisions.

Israel/Middle East

Germany says it will arrest Netanyahu as Israeli envoy appeals to Berlin to defy ICC
- The irony here is not lost on me. Does anyone recall what they did in the 1930s and 40s? Germany wants to arrest Netanyahu for war crimes? How many German companies helped Nazis kill Jews?
Father-son Hamas terrorists casually describe taking turns raping Israeli woman, then executing her, in bone-chilling video
- More disgusting admissions from the terrorists but the media wants you to believe that Israel was the aggressor. Why should these terrorists be allowed to live?
Egypt blew up possible Israel-Hamas cease-fire deal after secretly changing framework to the benefit of terror group
Palestinian state is recognized by several European countries: How the news unfolded
Footage shows hundreds of Palestinians looting aid convoy in Gaza, blocking delivery from US pier
Viral influencer Zach Sage Fox put spotlight on clueless anti-Israel protesters: ‘No one knew anything’
- He asked protesters questions with a $100 prize for the right answer and he did not give out any money as no one could answer the most BASIC questions.
Bakery proudly posts Hamas-themed cake for four-year-old’s birthday party, prompting mass outcry

Other Headlines

JPMorgan CEO Jamie Dimon says can’t rule out ‘hard landing’ for the U.S., stagflation will be ‘worst outcome’
Goldman’s Solomon Says He Sees ‘Zero’ Rate Cuts This Year
- CEO says he doesn’t see compelling data to support rate cuts. Just think, 5 months ago, the market was predicting 6 cuts.
Sudden container crunch sends ocean freight rates soaring, setting off global trade alarm bells
- Still well below the pandemic highs, but up sharply from last year.
Average U.S. vehicle age hits record 12.6 years as high prices force people to keep them longer
Record broken for most passengers screened at U.S. airports, as holiday weekend starts, TSA says
- For years, I put in this data as travel was limited due to the pandemic. On 5/24/24, almost 3mm cleared through TSA precheck relative to 2.7mm in 2023, 2.3mm in 2022, 1.9mm in 2021 373k in 2020 and 2.8mm in 2019 (pre-pandemic). I used the equivalent Friday for each year.
The Ugly Truth Behind Ticketmaster’s Lawsuit
- Ticket fees are the least of why Ticketmaster and Live Nation are finally getting sued by the U.S.
The collapse of a fintech firm with 10 million users has left many Americans without access to their money
- Synapse was an Andreessen Horowitz backed start-up that filed for bankruptcy.
GameStop surges after fetching $933 million from stock sale
- The market cap is about $6.76bn on $26mm EBITDA or 250x multiple. I am a hard pass despite the fact the stock is -70% from two weeks ago.
Tech giants pledge AI safety commitments — including a ‘kill switch’ if they can’t mitigate risks
Citi, HSBC, Barclays Ramp Up Demands for Five Days in Office
Grocers are finally lowering prices as consumers pull back
Most Americans falsely think the U.S. is in recession, poll shows
- According to a new Guardian/Harris poll, 56% of respondents said they believe the U.S. is in a recession and 58% say that President Joe Biden is responsible for what they see as an economic downturn.
U.S. Senate panels launch probe into Trump 'quid pro quo' with energy execs
Blackstone's Steve Schwarzman backs Trump
- This could be a major positive as Schwarzman potentially brings with him many big donors. He cited antisemitism and economic concerns.
Truth Social struggles to grow its U.S. user base
CIA Blocked Probe Into Hunter's Hollywood Tax 'Sugar Brother': Whistleblower
13th conservative Oregon county approves measure to secede and join ‘Idaho’
143 Democrats Voted Against Bill Barring Non-Americans Voting In DC
- I cannot believe anyone would vote to allow non-citizens the right to participate in a U.S. election.
Senate again fails to advance border security bill in election-year showdown vote
- Our border situation is a major national security issue.
Foreign Purchase of U.S. Ammo Maker Sparks National-Security Battle
Taxpayer Costs Skyrocket As Two-Thirds Of Jobless Benefit Recipients In Germany Are Migrants
- 63.1% of those in receipt of the so-called citizen’s income, or “Bürgergeld,” are of migrant origin, and “most do not have a German passport.”
Creep with rap sheet sought for repeatedly raping girl, 12, in NYC
NYC straphanger set on fire blocked fiancée from maniac’s flaming liquid in subway attack, has burns on 30 percent of his body
- Idiotic crime policies are to blame for rampant crime that hurts law-abiding citizens who pay taxes and support the community.
The Algebra Problem: How Middle School Math Became a National Flashpoint
- Sad story about the state of education in America. The dumbing down of America in the name of equality. Why would anyone hold back greatness? Lift people up. Don’t push people down.
Teen girls’ stunning smartphone usage revealed in new study: ‘Serious’
Anger Does a Lot More Damage to Your Body Than You Realize
- Anger is worse than anxiety or sadness with respect to impacting blood flow.
Louisville police officer who arrested Scottie Scheffler had been previously suspended
Auto insurance rates are jumping the most since the 1970s, but there could be relief soon
New preseason hurricane forecast is highest ever issued. Brace yourself, Florida
- Extremely high water temperatures in the Atlantic have forecasters scared.
Endless cruise set to tour the world – and it’ll always be summer
- There has never been a vacation I would want to take less.

Real Estate

A lot of articles have come out in recent weeks about various housing markets cooling with inventory building in Florida and the Sun Belt states. This article shows inventory growing sharply in Florida. Nine of the ten metros experiencing the largest declines in asking rents are located in the Sun Belt, according to a recent analysis by Redfin. By the numbers: Seattle topped the list with a -7.3% drop in median asking rent year-over-year in April. Following Seattle, the Sun Belt cities of Austin, TX (-6.6%), Nashville, TN (-5.9%), and Jacksonville, FL (-5.6%) saw the largest declines. Miami, San Diego, Phoenix, Charlotte, Tampa, and Orlando also reported notable decreases ranging from -5% to -3.2%. I can tell you that at the high end, the first 4.5 months in South Florida were as hot as ever. Houses sold at an amazing clip for over $20mm from Miami to Jupiter. Major house sales over $50mm were happening constantly as the migration of the wealthy continued. In my community in Boca, records were set after a slow 4th Q of 2023 (last chart). I do feel things need to slow down at the high end as this trend seems unsustainable, and I am not convinced there are enough people that can afford the new high-end levels in Florida.

For the first time since the financial crisis, investors in top-rated bonds backed by commercial real estate debt are getting hit with losses. Buyers of the AAA portion of a $308 million note backed by the mortgage on the 1740 Broadway building in midtown Manhattan got less than three-quarters of their original investment back earlier this month after the loan was sold at a steep discount. It’s the first such loss of the post-crisis era, according to Barclays Plc. All five groups of lower ranking creditors were wiped out. “Now that we’ve seen the first commercial mortgage backed securities get hit, other AAA bonds are bound to see losses,” said Lea Overby, a CMBS strategist at Barclays. “These losses may be a sign that the commercial real estate market is starting to hit rock bottom.” Losses on AAA rated securities do not happen with regularity. These securities are at the top of the capital structure and paid off before lower-rated bonds or equity. Interesting development and won’t be the only time it happens in this cycle. More details from the Kobeissi Letter.
Interesting article about Hudson Valley potentially becoming the Silicon Valley of NY. The sleepy, bucolic area north of New York City, known for its farmhouses, rural ambiance, and spectacular views of the Hudson River, is poised to become the next big tech area if Nvidia co-founder Curtis Priem has his way. “We’ve renamed Hudson Valley as Quantum Valley,” the multimillionaire told the Wall Street Journal. “It’s up to New York whether they want to become Silicon State—not just a valley.” While the co-founder of one of the world’s largest microchip companies cashed out long before the market cap topped $2 trillion, he’s not hurting for money. He is reportedly donating $75 million to his alma mater, Rensselaer Polytechnic Institute in Troy, slightly north of Albany, so the school can buy an IBM-made quantum computing system. It would be the first of its kind on any campus in the world. Priem told the Journal he hopes this gift will make the Hudson Valley the epicenter of quantum computing research, attracting the kind of talent that started billion-dollar disruptors such as Google, Microsoft, and Apple.
I wonder how successful the 64 office buildings looking to convert to residential units will be. The layout (windows, ceiling height, wasted space, elevators) of these buildings make it challenging for conversions. There is an initiative to alleviate the burdensome permitting process in NYC to allow for the transition from commercial to residential. Four buildings are underway for 2,100 units. In Boston, despite an ambitious plan, not many office conversions will take place, I am told from a major Boston office broker. The economics make these conversions challenging. I hope NYC can figure it out as it will take offices off the market and add much-needed residential.

© 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™ #685 ©Copyright 2024 Written By Eric Rosen.

I Need a Lobotomy

5/26/24

Picture of the Day-V&S Best Subs in Boca

I Need a Lobotomy

Quick Bites

Israel/Middle East

Other Headlines

Real Estate

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