Doma-Anything But Tame
8-28-24
Opening Comments
My last newsletter was about my daughter’s summer job selling women’s clothes at Love Shack Fancy in Southampton, NY. The most opened links were Danny Meyer’s favorite interview questions and the biggest mistake that will leave you disappointed on travel. The video of the day of Milton Friedman on capitalism and greed got a lot of views as well.
I received positive feedback about Julia’s summer job process and even got some calls from people who want to hire her. Also had a lot of action on the KIA Telluride; so far, it has not disappointed. I would guess 10 more people are considering the Telluride post my note. Remember, If you buy one, let me know. I can steer you on features and pricing. Rosenreport@gmail.com.
As the Rosen Report grows and more readers are wearing my hats, more people are connecting. Two readers met at LAX when my friend, Ross, of padel fame, was wearing a hat and David introduced himself. Below we have Teddy, a freshman at UVA, wearing his RR swag on his first day on campus. Teddy is an impressive young man who will be rowing at UVA and wants to work on Wall Street. Given his love of the RR, I expect him to get straight As and change the world.
Markets
Rate Cuts and Market Reactions
Morgan Stanley “Tech Downturn”
Debt/Deficit Charts
Housing Affordability Chart
Palm Beach Is Attracting Real Companies
US Office Values -$557bn
Chicago R/E Tax Disaster
RealPage Price Fixing Allegations
Video of the Day-JJ Watt Believe in Yourself
JJ Watt is one of the best defensive ends of all time. He played at 6’5” and 288lbs. He talked about transferring from Central Michigan as it was not a good enough program from his perspective. He transferred to Wisconsin and gave up a full scholarship. His parents told him they could afford one year of tuition and he would need a scholarship. The rest is history. Believe in yourself. JJ gambled on himself and no one could stop him from accomplishing his goal.
Doma-Anything But Tame
I had wanted to try Doma in the Wynwood section of Miami for some time. The word, Doma, means tame in Italian. The Mediterranean-inspired, Southern Italian cuisine is beautifully presented, remarkably prepared, and served in a pretty setting that offers indoor and outdoor dining with an open kitchen. Shockingly, the prices were not offensive but to be fair, the portions are not very large.
It was Saturday night, August 24th, and Miami was a bit quiet allowing last-minute reservations at some of the best restaurants. The Rosen family drove the 50 minutes to Wynwood, which is an up-and-coming neighborhood. I liken it a bit to the Lower East Side of NYC. It is where the Wynwood graffiti walls can be found.
The restaurant is small, yet packs a punch. The service was snappy and we elected to sit inside due to the heat and humidity and what it does to my luscious locks. They started by bringing us risotto balls that I felt were amazing and presented well. They were soft with good texture. They offered fresh bread, something many restaurants are charging for today.
For appetizers, we started with the ponzu marinated hamachi crudo, which was nicely presented and unlike any other crudo dish I have tried. As you can see below, it was a work of art. It was delicious. We also had bao buns, Neapolitan ragu was another beautiful dish packed with flavor and unlike any other appetizer I have tried. It only came with two buns for $24, which was the only thing we ordered that seemed out of line from a price perspective. The last appetizer was the meatball Doma. They were good, not elite as they were too small to have the tenderness I am looking for in a top meatball.
I tried all the entrees and I ordered the lobster pasta special which was hearty but cost $70. Even so, I would have it again. Julia ordered the homemade ravioli alla caprese that was stunning and packed a punch. Thankfully, she gave me two tastes. Jack had the gnocchi pumpkin and prawns which was another eyeful. Jill ordered the sweet and spicy glazed salmon. The fish was great but had a red pepper sauce and I am allergic to bell peppers.
Doma offers an ample wine list with reasonable and offensively priced wines, primarily from Italy and France, with other selections as well.
The number of new restaurants from Miami to Jupiter that have opened since I moved down in 2017 is truly remarkable. With the wealth migration comes better food, and South Florida has come a long way. There are now 14 Michelin Star restaurants in Miami and there are 18 Bib Gourmand restaurants as well.
Trust me, you want to go to Doma and you won’t want to go homa!
Food A-, Service A, Ambience A-, Wine List A-, Price-Reasonable. Smaller portions
Fireman Derek’s Bakery
When I pulled up to Doma, we drove by Fireman Derek’s Bakery and it looked amazing. As a result, we passed on dessert at Doma and went to the decadent, sugar coma bakery 200 feet from Doma. Fireman Derek’s was started by a former fireman and D-1 football player named Derek Kaplan who now makes fun sugar bomb creations in the bakery. It is overwhelming if you like pies, cakes and cookies. Our pictures did not come out well, but we had the cookie monster pie, which was out of this world, with a chocolate chip cookie crust, crushed Oreo cookies, pralines, whipped cream, chopped chocolate chip cookies, caramel and a Ghirardelli chocolate sauce. Yes, it is delicious. No, it is not low-fat. We also had the vanilla birthday cake which has cream cheese frosting and is doused in rainbow sprinkles. I prefer chocolate to vanilla, but the frosting was top notch. The choices of pies, cakes, cheesecakes and cookies are overwhelming. There is a 100% chance I go back. Get the Cookie Monster Pie if you go! They have multiple locations (Wynwood, Coconut Grove, Ft Lauderdale).
Pies-key lime, salted caramel, chocolate peanut butter, and many more
Cakes-red velvet, chocolate, carrot, chocolate birthday.
Cheesecakes-cookies & creme, NY style, red velvet.
Cookies and Baked Goods-chocolate chip, sugar cookie with rainbow sprinkles, fudge brownie….
Quick Bites
Major indices fell on Wednesday in the 1% or less range in front of much-anticipated earnings from Nvidia post the market close. VIX spiked 11.5% on the day and is back to 17. Nvidia earnings were released and the stock was -7% but recovered to -4% (volatile) after hours despite a beat on revenue and earnings. As of Wednesday, options markets had priced in an 11% move in Nvidia stock on earnings. Although rates were slightly higher Wednesday, the trend over the past week is mixed with the 2-year Treasury -13bps to 3.87% and the 10-year +3bps to 3.84% over the past week. Oil prices fell and are down below $75/barrel despite supply disruptions from Libya driven by slower demand from China and a broader economic slowdown.
I spoke about rate cuts not always leading to market rallies (2002 and 2008) on Bloomberg in June. This chart outlines some detailed examples. I am not suggesting we are crashing. I am only pointing out that markets are euphoric and people need to be aware of recent history.
Morgan Stanley believes a tech downturn is coming and outlines it in this CNBC article. “Our base case is that a cyclical downturn is a near certainty in 2025,” it said in an Aug. 20 report, adding that it will be caused by a “likely reversal” in the rate of change of revenue growth and tight supply-demand conditions. “Certain segments of tech – such as semiconductor materials and the AI supply chain – could be hit the hardest in view of higher volatility in pricing and operating leverage,” said the bank. Morgan Stanley says the semiconductor industry is in the late cycle, moving “from optimism to euphoria,” with the risk-reward not being as attractive anymore. “And should the AI cycle be coming to an end we would favor NVDA over its suppliers and competitors,” it said, explaining that an inventory correction could be more severe for secondary components. The article goes over US IT hardware and networking and covers a bunch of stocks.
I have been critical of the careless spending and deficits we run in the United States and much of the damage they have done in the past 15 years. We have an unhinged Fed and politicians who want to appease constituents by giving out free money. Let’s not forget about the careless waste with literally trillions being wasted each decade with little or nothing to show for it. Check out these charts. If the 2024 election is about the border and inflation, the 2028 election will be about deficits, debt, and entitlements. I do not mind slight increases on income and capital gain taxes. However, it must lead to lower deficits and an end to careless spending and omnibus bills filled with pork. We cannot afford to give handouts to all and must stop the ridiculous border policy. We continue to run deficits of 5% of GDP during periods of low unemployment, high stock and real estate prices and no wars. The lunacy must end and entitlement reform must take effect now. I want to raise the age at which people receive benefits to be more commensurate with longer life spans. I also want to means test, which will result in wealthy people no longer getting benefits. Lastly, we need to raise caps on contributions.
I am a firm believer that being intellectually stimulated and pushing yourself keeps life interesting. I have gone through periods of my life where I was in a rut or questioned if I was on the right path. This article “Think your life is boring? You’re in the same boat as 1 in 4 Americans,” made me want to write about it. The survey revealed that over a quarter of Americans (27%) feel they’ve fallen into a rut, with one in four respondents admitting their life is a bit boring. In fact, the average respondent fantasizes about going on an adventure four times every day, but only 10% felt they could be adventurous in their current life on any given day. I feel we should all try new things and push ourselves to meet new people. I love making connections and finding people with similar passions (surfing, fishing, padel, food, wine, music/guitar, real estate, interesting conversation…). You do not need to travel the globe to find adventure. Do little things. Try a new sport (I highly recommend padel). Go for long walks to new places and listen to your favorite podcast or better yet, read the Rosen Report. If you are in a rut, push yourself to be adventurous and try something new. Try to make a new dish in the kitchen. Do your research and expand your horizons. I find that I grow when I Leave My Comfort Zone, as outlined in a recent newsletter. Writing the Rosen Report has been amazing for me from a connectivity and growth perspective, as it has led to countless new relationships, business opportunities, intellectual stimulation and a ton of fun.
2024 Election
Kamala Harris’s Tax Increases and Cuts Take Shape
I do not believe she is on the right path with her tax policies as outlined in this WSJ article. The plan would send the highest marginal tax rate to levels not seen since 1986. A 44.6% top marginal tax rate for both income AND capital gains is ridiculous. For perspective, it is nearly doubling the capital gains tax rate. The most idiotic part of the proposal is unrealized cap gains on people with a net worth over $100mm. The good news is we know where Kamala stands. The bad news is the ideas are awful.
What happens if there’s a tie in 2024? Be ready for a ‘contingent election’
I hope this is not the case. A tie is the last thing we need.
38 days: VP Harris refuses to reveal policy positions, give news conferences or interviews
This is as of Monday. I want to know where she stands. I want to see her take questions and face the media. I have been critical of her avoidance, as have others including Democrat, Bill Maher and the Hill.
Harris and Walz to sit with CNN for exclusive first joint interview since campaign began
What kind of questions will be asked? Will CNN give them questions in advance? I am just happy that Harris is willing to take a question after 40 days.
Donald Trump faces new indictment in Jan. 6 Capitol riot case after Supreme Court immunity ruling
Media Gives Harris 84% Positive Coverage and Trump 89% Negative Coverage
Between July 21, when Biden dropped out, and August 17, the Big Three gave Harris 66% more coverage than Trump. Trump is hardly lovable, but I am not convinced this disparity is fair. After all, Kamala had the lowest VP approval rating in modern history and had 3% of the vote in the 2020 Democratic Primary before dropping out in 2019.
Trump threatens to pull out of Harris debate, hot mics an issue
More drama as Trump is arguing against hot mics. Harris seems to refuse a debate on Fox. ABC is clearly biased in favor of Harris. I feel there should be at least two debates (ABC & FOX) at the very least.
Interesting stats from Gallop on young men and the Democratic Party
Trump says Musk wouldn’t have time to be in his White House cabinet, but could ‘consult’
Tim Walz Lied about Winning Teaching Awards
Walz never won either Minnesota Teacher of the Year awards.
Trump rally counter-sniper backs bombshell ‘evidence tampering’ claims by House GOPers
I believe there is more to this story than we know.
RNC Sues Detroit, Alleging City Did Not Hire Enough Republican Poll Watchers
Detroit appointed seven times more Democrat poll watchers than Republicans for its primary election, the Republican complaint states.
Israel/Middle East
Israel launches large-scale military operation in occupied West Bank, killing 9 Palestinians
Israel’s Conflicts With Hamas and Hezbollah Show No Sign of Easing
IDF strikes launcher near Gaza school, Iran vows 'reaction' to Israel
The Israel-Hezbollah escalation has arrived. What next for the Middle East?
US Warns Tanker Hit By Houthis Could Cause Largest Ship Oil Spill In History
Anti-Israel vandals deface Cornell University on first day of classes
What are the consequences for these acts?
Great chart of protests at private universities
Other Headlines
Goldman issues warning on how quickly market confidence has recovered from an August stocks slump
US household income expectations over the next year dropped to the lowest level in 4 years
Consumers now anticipate a mere 0.8% year-over-year income increase, a sharp decline from the 2.5% rise expected in Q1.
New York To Pay $155 Per Megawatt Hour For Wind-Power, Current Rate Is $36 Per MWH
Crazy story about the costs NY is paying for solar power that are more than 4x the cost for traditional power.
Gas prices are down. We could be headed for lows not seen since 2021
Great news. Biden, fill up the Strategic Petroleum Reserves!
Lego revenue jumps 13% boosted by Lego Fortnite and diverse brick sets
Abercrombie & Fitch posts 21% sales gain, hikes outlook despite ‘increasingly uncertain environment’ (stock -17% after earnings)
Super Micro shares fall 19% on filing delay, Hindenburg Research repor
OpenAI in talks to raise funding that would value it at more than $100 billion
The FT article suggests the population of NY has shrunk by 500k in recent years, making it the fastest shrinking city in the country with Chicago at 400k in the #2 spot. Jobs and housing drove people out of NY.
Florida is the ‘most fun’ state in America thanks to restaurants, amusement, fitness
Although I am a big fan of Florida, the study gives too much credit to the Florida restaurant scene, which has improved, but still has a way to go.
California close to approving $150K loans for illegal immigrants to help purchase homes
How is this being considered? There are over 181k homeless people in CA. The state is running a massive deficit, but is considering giving illegal immigrants $150k loans to buy a house?
The migrant from Nicaragua who allegedly raped a woman at knifepoint in Coney Island had a federal immigration detainer placed on him after a prior sexual assault — but he was still free to roam around New York months after his release from jail. HOW IS THIS POSSIBLE?
Fare Evasion Surges on N.Y.C. Buses, Where 48% of Riders Fail to Pay
The issue in NYC is the worst of any major city in the world.
Zuckerberg says he regrets not being more outspoken about ‘government pressure’
I have called out blatant media/social media bias for years around COVID, Steele Dossier, Hunter Laptop and many other topics. Zuck admitted there was major pressure from the Biden Administration to suppress info and now regrets it.
Restaurants fight back against the FTC crackdown on ‘junk fees’ as diners balk at new charges
Famed New York Bagel Company to Open First Florida Location
One of New York City's most legendary bagels H&H Bagels is opening in Boca Raton for the first time in its 52-year history. I love H&H.
Navy to sideline 17 vessels due to manpower shortage, operating crews will be redistributed
What could possibly go wrong? This article explains the recruiting issues.
Kelce Brothers Sign Amazon ‘New Heights’ Podcast Deal Worth $100 Million+
Real Estate
I thought this Bloomberg chart was interesting about housing affordability. As you can see, prior to the Global Financial Crisis, homes were very expensive. Then post crisis, rates went to zero and housing prices crashed making housing incredibly affordable. Now, we are back to pre-crisis affordability levels. Again, I blame the Fed for leaving rates too low for too long, Quantitative Easing and the Biden Administration giving out free money.
This NY Post article is entitled, “How West Palm Beach won COVID’s real estate wars.” Two-plus decades ago, the mega-developer and founder of Related Cos. struggled just to lease, and re-lease, retail space in the city’s downtown amid high turnover. “You couldn’t keep tenants because there wasn’t enough year-round business,” said Kenneth Himmel, president of Related Ross, the Florida-centric firm spun off from New York City’s Related. While Miami may grab headlines with blingy condo towers and island enclaves, the bigger urban transformation post-COVID is happening 70 miles north in West Palm Beach — a city of 124,000 that’s becoming a co-mecca for the nation’s wealth. The number of millionaires in Palm Beach and West Palm Beach combined grew 93% in the decade through 2023, according to advisory firm Henley & Partners. You now have major hedge funds, asset managers and banks in West Palm Beach with real office space. More jobs are coming to South Florida and the high-end real estate is booming. It looks as though Vanderbilt will be building a campus here in the $500mm range and the flow of businesses, wealthy individuals and opportunities will continue.
This WSJ article outlines the drop in office values. Commercial real estate turmoil is centered mostly on aging central business districts — with outer neighborhoods holding up better or even thriving. About $557 billion of value was erased from US offices from 2019 through 2023 because of falling demand, with older, lower-quality properties disproportionately affected, according to a recently updated estimate by economists at Columbia and New York universities. At the same time, only 2% of the country's office buildings are considered to be top-tier — and they charge rents that average 84% more than the rest of the market, CBRE Group Inc. data show.
I have crushed Chicago and did it again in my last note. This story is UNBELIEVABLE. A Chicago family said their latest property tax bill increased 440% and now their modest apartment complex could go bankrupt. A one-bedroom apartment will now cost Michael Markellos $17,494 in property taxes for one year. "This has put us in a tremendous financial bind, the building has gone negative in the bills," he said. He and his mother own the 10-unit Lincoln Park apartment complex. Last year's tax bill for all 10 units combined was $23,674, but now the same 10 units are $128,282 dollars this year; up 440%. In NYC, my friend owns a big office building that has seen the valuation cut by over 50% in 4 years. Despite this, the taxes are +37% during that time. Major cities are scrambling for revenue.
While price-fixing at the turn of the 20th century involved robber-barons colluding in smoke-filled rooms, "today, it looks like landlords using algorithms to raise rents," Attorney General Merrick Garland said during a press conference on Friday.
© 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™ #712 ©Copyright 2024 Written By Eric Rosen.
