The Rosen Report Tipping Guide

7-23-24

Opening Comments

My last note was about me joining the exclusive 700 Club and received a lot of positive feedback. It was a fun note and in this time of turmoil and uncertainty, it sounds as though readers got a kick out of it. The most opened links were the 65-year-old who quit his job and is now worth $11bn and Bill Maher predicts the exact dates Biden will drop out.

I recently wrote about how much I like Cowfish in Hampton Bays. The combination of a casual setting, beautiful waterfront views, consistently good food AND a reasonable price has me going back for more. A couple of readers disagreed and did not love it. This is NOT a Michelin Star experience. It is the culinary wasteland of the Hamptons. I think it is a solid alternative that does not break the bank. If you don’t like it, have your taste buds checked. Maybe there is a surgical procedure for you.

In the last note, I wrote about my passionate readers wearing Rosen Report hats around town. I was walking Saturday in Southampton and I saw someone I did not recognize wearing the old version of my hat. I was wearing mine and walked up to him and his wife. Here is Adam with yours truly on Main Street.

I am in NYC Sunday evening and likely there for a few days. I will have some openings. Trying to take advantage of Restaurant Week! Rosenreport@gmail.com

New Game

A reader, Tucker, sent me this game called Uncovered Shorts. Takes one minute to play each day and is fun for all you Wall Street types. I just started playing it. Let me know what you think.

• Picture of the Day-Lulu Kitchen & Bar Sag Harbor

• Rosen Report Tipping Guide

• Quick Bites

  • Markets

  • IT Outage

  • Smart Phone Impact on Kids

  • NYC Restaurant Week Ideas

• 2024 Election

• Israel/Middle East

• Other Headlines

• Real Estate

  • Multi Family Distress

    • San Fran Apartment Default

  • Wealthy Moving to Fort Lauderdale, FL

  • SL Green/Manhattan Office

Pictures of the Day

Sag Harbor has new restaurants and we tried Lulu Kitchen & Bar the other day. Overall, it was fine, not amazing and fully priced. One thing we ordered, seafood & lobster cobb salad, was worth it despite the $97 price tag. It is enough for 3-4 people as an appetizer and was nice and fresh with chunks of lobster meat, tomatoes, hard-boiled egg and bacon. I recommend it.

The seafood & lobster bucatini was not special and lacked a punch of some heat or texture that made it forgettable. I would have added some homemade breadcrumbs to the dish. The branzino was nicely prepared, but again fully priced at almost $60. The steak underwhelmed and I would not order it. I felt the quality of the meat was subpar for the price, but the chimichurri was a nice touch. The presentation of the food was not great.

I went back for a 3i Members lunch on Friday and again the food was fine. The desserts were pretty solid with a warm chocolate lava cake, macaroons and sorbet. The lunch was fun with about a dozen members. I always enjoy these gatherings.

Lulu Food-B, Service-B+ Ambiance B, Price-Fully Priced for what it is

Rosen Report Tipping Guide

I worked in dozens of restaurants from age 11 to 19-washing dishes, busboy, waiter, barback, pizza delivery, host-and my college was paid for by valet parking cars at Calder Racetrack. The point is, I understand the importance of tipping, having been a recipient for many years. One of my favorite people of all time was my father-in-law, Stephen Swid. He said, “You can’t go broke, tipping.” He grew up in the Bronx and understood the value of a dollar. His point was to err on the side of being generous.

That said, the insanity of tipping expectations at outlandish places have made me increasingly frustrated. This was not the case 10 years ago, but today there is a new and unhealthy expectation about tipping almost everywhere-the fish market, wine store, self-checkout, ordering online, and countless others. It seems that tipping expectations changed with the pandemic when service workers were displaced. Tipping expectations have grown over the past few years. According to a 2023 Pew Research survey of nearly 12,000 adults in the U.S., about 72% say they are being asked to tip service workers more frequently than in the past. The NPR article goes into detail on tipping policies and why it is more important to tip in some states than others (minimum wage).

I took my daughter skiing last year and, on the mountain, grabbed a Gatorade for $7. When the cashier rang me up and flipped the screen to me asking for a tip between 20-30%. I grabbed my own overpriced drink and scanned it myself. The pendulum has swung too far in my opinion. When you don’t give a tip, they look at you as though you are a Cruella De Vil, the dalmatian killer. We went to self-serve ice cream in the Hamptons and when I paid, they wanted a tip. Why? They sat there and did nothing to help me. This is a 3-minute video on the growing frustrations around tipping. How dare they set the tip range at 20%, 25% and 30% while doing almost nothing to help me from behind a counter?

I was playing tennis with friends the other day, and someone asked me about my tipping policy at the bar. Given drink prices are outlandish, giving 20% for someone who pours you a tequila or a glass of wine seems steep. My friend was genuinely asking for the right protocol. I told him that I am more of a 10% on drinks and 18-22% on wait service for food.

I went to Sag Harbor recently with a friend and we had drinks. At one place, the drinks were $70 for two Casamigos on the rocks. I think I gave an $8 tip. When I looked at my credit card bill, the charge was $108. I was apoplectic. Despite wanting to be generous, there is no way I would have given a $38 tip on drinks. The restaurant was hard to get a hold of and ended up emailing them. I followed up with multiple phone calls and they claimed they would give me a credit for the “mix up.” I believe the bartender doctored the tip to give more than I had left for the service. Check your credit card bills. I have heard from numerous readers that they have caught extra charges.

Readers-how do you tip on drinks at the bar? What is the right protocol in your mind?

Here is the Rosen Report Guide on Tipping that will be modified based on reader feedback. I will give zero when there is no value added. In short, you need to provide a valued added service to get a tip. A server, bartender, food deliver, bellman… checks that box. The cashier or internet website does not.

Given I give you valuable information each week, I feel a tip is warranted. Here are your very reasonable tip choices:

“In the end, if you enjoyed your service experience, no matter where you are, express your gratitude with the right tip.” 

Quick Bites

• Stocks retreated Friday, as Wall Street wrapped up the week defined by a rotation out of this year’s megacap winners in favor of smaller names. The S&P 500 and Nasdaq slipped 1.97% and 3.65%, respectively, marking their biggest weekly losses since April. The tech-heavy Nasdaq also snapped a six-week win streak. On the other hand, the Dow advanced 0.72%, while the small cap-focused Russell 2000 climbed 1.68%. A shift away from megacap artificial intelligence beneficiaries can explain the Nasdaq’s underperformance this week. Similarly, the information technology sector led the broad S&P 500 lower with a 5.1% drop. The 2-Year Treasury was +6bps on week and is now at 4.52% while the 10-year was +6bps to 4.24%. Bitcoin was +15% on the week and Mark Cuban said, “Bitcoin prices can go higher than you think.” The VIX was + 33% this week to 16.5 and crossed 17 at one point.

• What a crazy tech event with CrowdStrike that caused the “Largest IT outage in history.” The Crowdstrike update did not jive with Microsoft and resulted in all kinds of mayhem. Businesses worldwide grappled with an ongoing major IT outage Friday, as financial services and doctors’ offices were disrupted, while some TV broadcasters went offline. Air travel has been hit particularly hard, with planes grounded, services delayed and airports issuing advice to passengers. “This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed, ”CrowdStrike CEO, George Kurtz, said. Some reports suggest it is going to take weeks to fix the glitch. A fix for the CrowdStrike outage has been finalized by security engineers, but Kurtz has cautioned that it "could take some time" before IT systems are back to normal. Crowdstrike stock closed down 11%. I do think it is ironic that the company that is hired to prevent malware had an update that brought down the house.

  

  

  

• I have been crystal clear about my views that social media have been extremely detrimental to children. Smart phones are amazing inventions but have a big downside for kids. This CNBC article is entitled, “A growing number of parents are refusing to give their children smartphones — and the movement is going global.” The evidence linking smartphone use with mental health harms in children is growing and one grassroots organization in the U.K. is supporting parents who are refraining from giving their kids the devices. Smartphone Free Childhood, founded by Daisy Greenwell and Clare Fernyhough in February, set up various group chats for parents locally across the U.K. and grew to over 60,000 members in a few weeks, according to its website. Interest in the movement is driven by concerns about the normalization of children with smartphones. By the age of 12, 97% of children in the U.K. have a mobile phone, according to Ofcom, a government-approved regulator for the use of communication services in the U.K. Meanwhile, in the U.S., 42% of children had a smartphone by the age of 10, climbing to 91% by the age of 14. Young people reported worse mental health outcomes the earlier they acquired a smartphone, a Sapien Labs study published last year found. The study used data from 27,969 18–24-year-olds which was obtained between January and April 2023 across 41 countries including North America, Europe, Latin America, Oceana, South Asia, and Africa. Some 74% of female respondents who got their first smartphone at age six reported feeling distressed or struggling, per the study. However, this decreased to 61% for those who acquired their first smartphone at age 10, and 52% for those who were aged 15. A ton of good info in this article. Read it if you have kids.

• It is Restaurant Week in NYC, and my readers know how I love food and deals, so this is a great time for me. Here is a list of the numerous restaurants that have specials. I know I have a lot of readers who love good food, so check it out. The link shows the deals for each participating eatery. It should be called Restaurant Month, not Week, as it is from July 22-August 18th. NYC Restaurant Week is a popular celebration of the New York City culinary scene that initially debuted in 1992 as a one-time culinary event to welcome the Democratic National Convention. Since then, the event has changed to a yearly weeks-long event that features a prix-fixe menus for $30, $45 and $60 at over 600 participating restaurants across all five boroughs. In my chart, I outline my favorite participating restaurants. There are others that look good, I just have not tried them. Enjoy the value! I went through all 624 participating restaurants to form the list below.

  

  

2024 Election

I have been critical of the Secret Service for good reason. They are either incompetent or worse. I spoke with multiple East Hampton police and state troopers who were on detail for Biden when he was in the Hamptons recently. They told me they had the area locked down many hours before the event and found the assassination attempt concerning due to how obvious the situation in PA was at the Trump rally. The more info that comes out, the worse it looks. Check out these headlines:

• Secret Service was warned about, ID’d Thomas Crooks as a ‘threat’ 10 minutes before Trump took stage — but let ex-president go on anyway.

• Sniper took picture of Trump rally shooter, saw him use rangefinder before assassination attempt, source says.

• Trump Gunman Flew Drone Over Rally Site Hours Before Attempted Assassination

• Secret Service honchos denied Trump additional security for 2 years before assassination attempt

  Check out the All-In Podcast that discusses the assassination attempt in depth. David Sacks goes into detail about how the media that has vilified Trump for years likely played a role. They also talk about the failure of the Secret Service. How in the hell was Trump allowed on stage knowing a suspicious person was there?

  

Overall, Biden and Trump are going in opposite directions. Trump crushed Biden in the debate, got shot, walked away, grew support from key parties, had a successful convention, raised a ton of money and is leading sharply in the polls.

Meantime, Biden bombed the debate and NATO, lost the faith of key politicians and supporters (over 30 Democrats are calling for Biden to exit, Manchin called on Joe to “step aside,” money is drying up, calls for him to drop out are even coming from the Left-leaning media), the polls are crushing him, there is a viral video of him struggling to get into a car, he called his Secretary of Defense “the Black man,” Obama lowered the boom, AND he has COVID. To add more, Rep. Seth Moulton (D-MA) claimed that despite Biden being a mentor and friend, he did not recognize the Congressman at a recent event.

Given all of this, Biden should be exiting the race any day, but instead we are learning that Hunter Biden, who has not been known to have the best judgment (he is a recovering drug addict who has had an affair with his dead brother’s sister; is being tried for tax evasion; has been convicted on gun charges and kicked out of military; has been involved with prostitutes; was found to have lots of questionable material on his laptop; took money from Russia, Ukraine and China; and fathered a child who he would not acknowledge with a stripper) is now giving the most powerful man in the world advice. In my opinion, the fact that Hunter Biden has turned out to be a key advisor should scare the world. Although he is clearly begging his father to stay in the race, my concern is with a diminished President of the United States. I fear our enemies are more likely to be aggressive with the turmoil and Biden’s weakness.

• I liked this post by Victor Davis Hanson. Never in modern presidential history has a political party staged a veritable inside coup to remove their current president from his ongoing candidacy for his party’s nomination and reelection. Stranger still, the very elites and grandees, who now are using every imaginable means of deposing Biden as their nominee, are the very public voices that just weeks ago insisted that candidate Biden was “sharp as a tack” and “fit as a fiddle.” And they damned any who thought otherwise! Click link for the full report.

• These are the Drudge Report Headlines as of Friday morning. The damage to the down ballot candidates will be substantial.

  

Vice President Kamala Harris hosted a call with big donors on Friday and it did not go well from the tone of this NYT article. I also heard from others that it was a bit of a disaster.

• Texas Dem doubles down on support for stripping Trump's Secret Service protection

  • Can you imagine? There was just an assassination attempt.

The RNC was a spectacle. I did not watch a ton of it but saw about a dozen speakers. Trump’s speech was 90 minutes. It showed mental acuity despite the fact that it rambled, repeated and literally put me to sleep after 45 minutes. I felt it started off solid and went off the rails before I started snoring. His speech peaked at 28.4mm viewers. He went through the shooting in detail and kept talking about blood. He mentioned he was going over the chart about immigration (below) when the shots were fired. I do think this chart is telling and a big reason for Trump support. Zuckerberg Calls Trump’s Response to Shooting ‘Badass’.

I LOVE the All-In Podcast and always learn from watching it on YouTube. In last week’s episode, they put up this chart showing the divergence by party on their view of the economy. If a Republican is President, the Republicans view the economy in better shape than the Democrats and vice versa. The chart is pretty telling. You need to really go back to Clinton to get it where both parties agreed that things were good for any period of time.

I found this post and chart interesting comparing women and men on the liberal/conservative scale in terms of trends.

Israel/Middle East

• Suspected Hezbollah Drone Crashes And Explodes In Tel Aviv

• Israeli military says it has struck Houthi targets in Yemen in response to attacks

• Israeli settlements violate international law, U.N.'s top court says in a landmark opinion

• Iran ‘one or two weeks’ away from producing fissile material for nuclear weapons

• 'We're inside the 10-yard line': Secretary of state on an Israel-Hamas ceasefire deal

• 'Nashville has a Nazi problem': Jews face two weeks of neo-Nazi invasion

• Adidas 'Revising' Bella Hadid Retro Shoe Campaign After Protests From Israel

  • Adidas acknowledged 'unintended connections' to the 1972 Munich Olympics terrorist attack, following Israel's objection to Bella Hadid being 'the face of their campaign'

Other Headlines

• Foreign US Treasury holdings rise, Japan's stockpile shrinks

• The ultra-wealthy just gained $49 trillion in wealth thanks to stocks

• Netflix beats estimates as ad-supported memberships rise 34%

• U.S. EV Registrations In May 2024

  

• All cars to be fitted with speed-limiting AI tech thanks to new EU rules – but there is an easy loophole

• NYC Subway Crime Down 11% Since 2019 With More Cops on System

  • I was surprised by this headline but happy about it. There were 1,120 reported crimes this year through July 14, down from 1,256 during the same period in 2019, the year before the coronavirus pandemic began. Average weekday subway ridership is about 70% of pre-pandemic levels, according to MTA data. The transit provider needs more customers to help boost farebox revenue collections because its fiscal plan relies on total ridership increasing to 80% of pre-Covid usage by 2026. Yes, crime is down, but given ridership is down more, net crime is still up given 30% fewer passengers.

• ‘F–k your baby!’ Horrific video shows moment woman shoots infant in Philly

  • What are the consequences for such horrific crime? What will DA Krasner do about it?

• Suspected drug-smuggling tunnel found in Tijuana is so long authorities don't have enough oxygen to reach other end

• Gifted children display these 4 characteristics according to an Educational Psychologist

  • Great thoughts in this piece. 1-Passionate and have a zest for life. 2-Hyperfocused. 3-Resillient. 4-Giving everything they have.

• Promised Cures, Tainted Cells: How Cord Blood Banks Mislead Parents

• Half of cancer deaths could have been prevented through lifestyle changes, says American Cancer Society report

  • Some of those factors were cigarette smoking, alcohol consumption, physical inactivity, excess body weight, dietary choices, ultraviolet (UV) radiation and certain viral infections.

• These Membership Clubs for the Rich Say They Can Actually Slow Aging

• University of Florida President Ben Sasse Announces Resignation

  • President Sasse has shown amazing leadership during the antisemitic turmoil since October 7th. He made kids feel safe and did not stand for Jew hate. THANK YOU. Read this amazing resignation letter. He has been a remarkable leader and other school presidents, and CEOs can learn from Ben Sasse. I am not impressed with many people, but Mr. Sasse is special. When he is ready to go back to work, ANY school would be lucky to have Sasse.

• Olympic track and field gold medalists are about to receive prize money for the first time ever

  • What about other sports that get a lot of attention? Gymnastics, swimming, basketball, soccer, tennis…

• Reality TV Filming Plummets in Los Angeles in Major Production Slowdown

• Bob Newhart, legendary comedian, dead at 94

  • I am a big Newhart fan.

• Citadel’s Ken Griffin buys a stegosaurus for $45 million in a record auction sale

• WSJ reporter Evan Gershkovich sentenced to 16 years for espionage by Russian court in case denounced by US as a sham

Real Estate

• Concerning article from the Real Deal entitled, “Multifamily distress nearly triples in 6 months.” The sketch of multifamily distress drawn over the past year is now being shaded in by data. The picture shows problems have spread beyond value-add players squeezed by floating-rate loans. Apartment deals marked delinquent or in special servicing and financed with commercial mortgage-backed securities loans jumped 185% in late June from January, according to a report by CRED iQ.  “We’ve noticed a spike in multifamily since the beginning of the year,” said report author Mike Haas.  The data signals the deterioration of multifamily loans isn’t only ramping up, it’s mushrooming. At the end of May, 46% of all CRE CLO loans were in some type of distress – either watch listed, specially serviced or delinquent, according to an earlier CRED iQ report.  But CMBS is another beast. Loans are typically longer-term at five, seven or 10 years and fixed-rate. That signals the troubles affecting speculative multifamily buyers is spreading to investors with a longer-term hold strategy. 35% of all multifamily loans are set to mature in the next 18 months, representing the biggest piece of the CRE debt pie, according to CRED iQ. Over 7% of CMBS multifamily loans were distressed by those measures last month, compared to 8.6 percent of all CMBS debt. The overall distress rate for CRE broke a record in June for the fourth straight month. 

  • The owner of San Francisco's largest apartment community has defaulted on ~$1.8B in loans tied to the complex. The 152 acre, 3,200-unit apartment community known as Parkmerced was just appraised at $1.4B, plummeting $700M from 2019 and $400M less than the total loan balance.

• This Daily Mail article is entitled, “Millionaires priced out of Miami and Palm Beach by billionaires are now flocking to this balmy Florida city.” I have written extensively about how prices have gone parabolic in South Florida and has made affordability a major issue. The article suggests wealthy people are being driven to Fort Lauderdale. You definitely get more for your money in Fort Lauderdale relative to Miami or Palm Beach Island.

• This was in CRE Daily the other day and a quite positive note about SL Green and the Manhattan office market. Manhattan's largest office landlord, SL Green, reported massive second-quarter results, exceeding analyst expectations, with funds from operations reaching $2.05 per share against a forecast of $1.65. Tenants are favoring Class A buildings to encourage a return to the office, leading to increased leasing activity in top-notch properties. Class A buildings are capturing more than their fair share of leasing activity. However, with almost two-thirds of Manhattan's total office stock being Class A, there is ample supply. To attract tenants, landlords are offering incentives such as one to 1.5 months of free rent per year and generous tenant improvement allowances. SL Green has a bullish outlook for the year's second half. The firm raised its 2024 earnings guidance to $7.45-$7.75 per share due to strong portfolio performance and additional fee generation while keeping net income guidance steady at $2.73-$3.03 per share.

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