Hottest Ticket in Town: Mar-a-Lago
12-8-24
Opening Comments
My last note received a lot of feedback as it was about my non-stop ailments which plague me as I age despite my relatively high fitness level. The most opened links were the travel writer who visited 68 counties and picked her 4 magical places and the video of the gunman executing Brian Thompson at close range. I was quite surprised the Michael Saylor 3-minute video to Microsoft explaining his case for Bitcoin did not get more opens.
Markets
Crypto
Market Valuation
Retail Comments
Art Basel Miami
Miami Home Sales Slowing
Miami Beach $24mm Teardown
Mark Cuban on Home Owners Insurance
CMBS Office Delinquencies
Videos of the Day-Two Funny Short Kid Videos
These videos aren’t exactly new, but they keep showing up in my feed—and I still laugh every time. The first kid is going to be scary. The child can lie with a straight face. The kid claims to have gotten ramen noodles on his face and decided to wash it with chocolate. Just plain funny. The kid is a winner. The 2nd one is part of a series where the little girl pranks the father. The hesitant dad pays the price…again.
Hottest Ticket in Town: Mar-a-Lago
The reach of the Rosen Report is far and wide, and I am afforded the amazing luxury of having amazing friends who are well-connected. On Wednesday, my wife, Jill, and I were invited to a buffet dinner at Mar-a-Lago with our dear friends. I had been there before but never for the buffet. This article calls Mar-a-Lago “the hottest ticket in town,” and the energy and powerful attendees make for a special evening.
I want to be clear about Mar-a-Lago; the place is overwhelming and impressive. The 62,500 mansion sits on 17 acres and stretches from the Atlantic Ocean to the Intracoastal. The house was built in 1927 by Marjorie Merriweather Post and her husband, E.F. Hutton. It was built for $2.5mm ($45mm inflation-adjusted) to build the house, not including all the furniture and art.
After her passing in 1973, she left the house to the U.S. government as a potential Presidential retreat, but it was never used. Trump bought it in 1985 for less than $10mm. We can argue what Mar-a-Lago is worth today-but I am confident it is at least $500mm, and I can make a case that it would be worth $1bn as a single-family home. Despite the furnishings and finishes not being my taste, I appreciate the rich history and incredibly ornate detailed finishes. This link has some vintage photos. This link takes you to pictures from the Mar-a-Lago website.
Getting through security is no joke. Multiple checkpoints include bomb sniffing dogs, ID checks, and Secret Service checking under the hood of your car. There is a massive police vehicle blocking the entrance and moves for each patron entering and exiting. Once you leave your car with the valet parking attendants, you go through a metal detector before walking into the palatial estate. There are clear signs “No Photos are Allowed.”
I walked into the main living room which is incredibly rich with red and gold colors. The gold gilded ceilings are exceptionally high and could not help but think about what it could cost to build today. This link shows the finishes in the living room. Articles suggest that the membership fee is now $1mm to join Mar-a-Lago.
As soon as I walked in, I saw Robert Kennedy Jr. (nominated to lead Dept of Health and Human Services) and Mehmet Oz (nominated to lead the Centers for Medicare & Medicaid) who were there for a meeting. Men are required to wear a blazer, and women are dressed more elegantly than anywhere else in Florida, often in stylish dresses and plenty of jewelry. I rarely wear a blazer in South Florida, so it was a welcome change to get dressed up for the dinner. I saw a woman wearing one of the largest diamond rings I’ve ever seen. I honestly do not know how she held up her hand. Other well-known people included Steve Wynn, Marty Makary, Rudy Giuliani, and Amber Rose.
I walked outside where there were dozens of tables on the patio with beautiful umbrellas. The night was stunning, albeit a little chilly for South Florida. We sat down and my host said, “Eric, pace yourself. There will be a lot of food.” He can show restraint better than I can when it comes to food. I foolishly worried they would run out of food, but that was never going to happen. The food stations are both outside and inside and range from salads, sushi, steak, lobster, salmon, veggies, pasta, meatballs, Chinese orange chicken, fish & chips, ice cream sundae bar, dessert bar and much more. The volume of food is impressive.
I estimate there were about 150-175 people in attendance. We decided to start with the Wagyu, and it was very good setting expectations high for the night. As I was eating my steak, Trump walked out of his room to a standing ovation as the Village People song, “YMCA” played. The woman at the table next to me was literally in tears over being near Trump. Don’t get me wrong, it was a fun evening and I felt privileged to be included-but I was not reduced to tears. Eventually, the President made his way to the table inside a red rope next to mine and sat with his inner circle. The music played throughout the evening, gradually getting louder as the night progressed. By the end of the night, it was shockingly loud. I was amazed that at 78 years old, Trump was going strong at 10:30 pm, while I was growing tired at 55 years old. I was told Trump likes to DJ himself at some events and has an iPad in hand to select the tunes himself.
The food highlights were the Wagyu, cacio e pepe, orange chicken, ice cream sundaes, and cookie selection. The lobster, meatballs, sushi, and pastry dishes did not impress.
Overall, it was a special night, and I wanted to respect the “no photo” policy. The last thing I needed was to be tackled by the Secret Service with all my injuries. Although such an incident would have made for good Rosen Report material, I did not snap a single photo.
After seven helpings of food, I waddled out of the patio through the ornate living room out to valet to drive home. I was thankful to be included in a special event and hope Trump is successful in his presidency. I always pull for the pilot and want our elected officials to succeed as the cost of failure is too high.
Trump overcame amazing odds to win re-election. The mood on the patio was electric. He is a big presence. The only other time I’ve been near a President was when I met Bill Clinton. It is fun to be near the most powerful person in the world. I feel I am in as good of shape as almost any 55-year-old on the planet and I would struggle under the pressures and conditions of being President. How do these guys do it at 80? I was yawning and Trump was going strong.
President Trump, can you tell me the truth about Area 51 and UFOs? I NEED to know.
Quick Bites
Payrolls increased 227k relative to 214k estimate. The unemployment rate is 4.2%. Treasury yields fell slightly with the 2-year down to 4.1% (-3bps) and the 10-year down to 4.16% (-2bps). For perspective, three weeks ago, the 10-year was at 4.46%. The likelihood of a 25bps cut went from 68% to 85% on the payroll data. Remember, last month was impacted by hurricanes and a major strike. Stocks continued to perform with the S&P and Nasdaq +1% and 3.3% respectively on the week.
Bitcoin crossed $100k and was aided by Powell’s comments on the asset - “It’s not a competitor for the dollar, it’s a competitor for gold.” The fact that Trump named venture capitalist, David Sacks, the “AI and crypto czar” is yet another positive for Bitcoin and crypto in general. Many in Trump’s inner circle are big supporters of crypto: (Musk, Bessent, Sacks, and Atkins) are all crypto guys. Yes, Bitcoin has rallied sharply-but if you see any big pullback, it is probably a buy. Serious crypto investors have never been more excited. Interestingly, despite BTC hitting all-time highs, Ether and Solana remain below 2021 peak levels, but Solana is close.
This WSJ article, “Is This Wildly Overvalued Stock Market Doomed? Yes, but Maybe Not Yet,’ outlines the current lofty market valuations and where we may go from here. Here are two particularly scary forecasts for investors: Goldman Sachs thinks the S&P 500 will make just 3% a year over the next 10 years, as Big Tech dominance eventually falters. Bank of America expects 0%-1% a year for a decade, a catastrophic investment prospect. Their conclusion: Buy stocks anyway, because the next year looks great. But history also suggests no link at all between nosebleed valuations like we have today and returns over the next year. Expensive stocks can always get more expensive and often do. Michael Strobaek, chief investment officer of Swiss bank Lombard Odier, is clear. “It’s not like we have some bubblelike behavior where the valuations of everything have gone up, it’s been essentially backed by earnings,” he said. “I think it’s solidly footed in good earnings and good U.S. productivity.” This is in contrast to the .com stocks of 2000 that were unprofitable.
Some retailers who have missed the mark on 3rd q earnings as we have the tale of two consumers. The high-end consumer market remains strong, but many others are feeling the squeeze. There are other retailers performing well but below are some comments on those underperforming.
American Eagle-Weak holiday guidance. Stock -13%.
Target-Shares plunged 21% after they cut forecast.
Foot Locker-Gloomy holiday outlook sent stock -20%.
Best Buy-Cut full-year sales forecast and shares fell 5%.
Kohl’s-11th consecutive quarter of sales declines pushing stock -17%.
Jack in the Box-"We battled through a tough environment that brought top-line headwinds to the industry." Comps fell 2.1%.
Advanced Auto Parts- Macro headwinds and economic uncertainty continue to weigh on consumer spending, while our results were also impacted by other events such as hurricanes and the Crowdstrike outage.
Lowes-"When it comes to the macro environment, this remains a challenging home improvement market. While interest rates are beginning to drop, consumers continue to face affordability challenges.”
Ross-"We are disappointed with our third quarter sales results as business slowed from the solid gains we reported in the first half of 2024.”
I went to Art Basel Miami as I do each year. The traffic was HORRIFIC. I was told it took a reader 2-hours to go from Miami Beach to Wynwood, a six-mile drive. There is no real public transportation and getting from Miami Beach to downtown or vice versa is awful. Although the art is better than in recent years, I want to see more quality modern art. There had been a “woke” movement in art away from accomplished dead White male artists and towards less well-known LGBTQ, Black, and Native American artists. I felt that Art Basel became a bit disappointing on the quality side and found some art to be more of a joke than something to hang on your walls. I felt this year had more serious work and was impressed. Although there is a way to go for some of the artists who have been under pressure, I do feel the impact of the Trump win was noticeable. The stock market, crypto rally, talk of lower regulations, taxes remaining low and potentially going lower, and what will be increased M&A have the “animal spirits” in full effect and drove to a successful show. I spoke with a handful of dealer friends who said it was a very good show from a sales perspective and far better than the past few years. The crowds were thick and the international patrons were well-represented. I heard a lot of Italian, French, Spanish, German and some Chinese. This article is entitled “The Crowds Are Back-and Buying-at Art Basel Miami Beach.” Yes, I saw some art I thought was a bit of a joke, but overall there were fewer outlandish crap works and more solid pieces of art. I bumped into over a dozen Rosen Report readers and saw a couple of RR hats.
Election
Slim majority for Republicans after Democrats flip final House seat
It took way too long to count votes, which doesn’t inspire confidence in the election process. We should be able to do better. However, the Republicans have a slim lead in the House.
Biden White House Is Discussing Preemptive Pardons for Those in Trump’s Crosshairs
Why Trump’s Pick for Labor Secretary Is Cause for Concern
Trump announced Republican Rep. Lori Chavez-DeRemer of Oregon (who just lost her House seat in the 2024 election) as his Labor Secretary nominee. And she was not only one of a few Republicans to vote for the PRO Act.
After lawfare and the weaponization of the DOJ, I find this commentary to be comical. Let’s see how many more people Biden pardons.
Texas officers apprehend Afghan, Iranian men, rescue smuggled children at border
Israel/Middle East
Israel gave Hamas updated proposal for Gaza deal as Trump pushes for resolution
Strategic Syrian City Of Homs Poised To Fall To Anti-Assad Advance
Here’s hard proof that employers are discriminating against Jews
Students at Columbia University launch anti-Israel ‘Columbia Intifada’ newspaper: ‘Outrageous’
What would happen if they launched an anti LGBTQ, Black, or Hispanic paper?
Other Headlines
The About Face From Chairman Powell
Could the central banker of today be the same Jerome Powell who cheered on the Democrats as they borrowed trillions for stimulus spending and begat inflation? Powell is warning that America’s fiscal path is “unsustainable” and urging a course correction now. Remember, I have been discussing this since the dawn of time. We need politicians willing to make tough decisions on spending, taxes, and entitlements.
Bill Gross Is On the Alert as Momentum Mania Sweeps Wall Street
Everyone is bullish, and that concerns Gross.
Great comments from Dr. Alex Karp (CEO of Palantir)
Food prices are at their highest levels in over a year. And these items will get even more expensive
Inflation and the border were the two big factors that derailed the Democrat’s hopes of winning the election. I am irritated every time I go to the grocery store. The prices are out of control.
There are more data centers in the US than all other countries combined
Ulta Beauty shares pop as retailer beats earnings expectations (+9)
El Salvador’s president is triumphant after his bet on bitcoin comes true
Google Says AI Weather Model Masters 15-day Forecast
So, those awful meteorologists who are wrong half the time will be out of a job?
Appeals court upholds law ordering China-based ByteDance to sell TikTok or face U.S. ban
Trump was against TikTok and seems to have changed his tune. I would love to see it banned. Meta rallied on the news.
UnitedHealthcare CEO shooting: Photos show face of person sought by NYPD for questioning
This story is getting so much attention. I would guess I received 200 emails and 100 texts on the killing of the CEO. The article has the face of the alleged assassin. The shell casings found at the scene had “deny, “defend” and “depose” on them. They may have found the shooter’s bag.
Taylor Lorenz Says 'We Want These Executives Dead' Hours After Health Insurance CEO Murdered
WTF. She posted a photo of the CEO of Blue Cross and Blue Shield.
In a related note, the CEO’s assassin is being hailed as a hero by many Americans. This is scary.
UnitedHealthcare CEO killing spurs Centene to hold virtual meeting and insurers to pull exec photos
Insurance company halts plan to put time limits on coverage for anesthesia during surgery
Only 6% of federal workers show up in person on a full-time basis, scathing Senate report reveals
There is plenty for Elon and Vivek to go after. There is $750bn+ of government waste annually not including entitlements.
Odds of federal layoff are jumping:
5 Facts and 5 Worst Offenses From Report Showing Government Made $161B in Improper Payments in 2024
DOGE’s Musk, Ramaswamy want Congress to pass huge spending cuts. That’s a tough sell
Lilly invests $3 billion to expand Wisconsin plant as obesity drug demand soars
First-of-its-kind sensor tracks inflammation continuously, in real time
Zuckerberg backed this. An estimated 50% of deaths are attributed to inflammation-related diseases and doctors are increasingly focused on it.
Jeff Bezos: ‘I am skeptical if the meeting’s not messy’—and if it runs late, good
A $105 Trillion Inheritance Windfall Is On the Way for US Heirs
The latest inheritance projection by Cerulli is 45% higher than the 25-year forecast the firm made only three years ago. US gifts and inheritances are expected to total $2.5 trillion next year alone.
Muhammad Is The Most Popular Name For Boys In England & Wales
Real Estate
During COVID, South Florida proved to be the #1 destination for wealthy people trying to escape the ridiculous pandemic lockdowns, vaccine mandates, and onerous rules. People flocked to South Florida, with Miami being one of the major hotspots. The migration has slowed, and this data is a bit skewed as it compares the pandemic frenzy with today. Note the top three declines are all in South Florida (Miami, West Palm Beach, and Fort Lauderdale). Uber high-end remains in demand. Older condos, fixer-upper homes, lots for development, lower-end properties, and areas affected by hurricanes are facing challenges. The impact of the massive increase in prices (+3-4 times in many places), skyrocketing insurance, higher R/E taxes given higher prices, higher maintenance costs, and challenging school admissions are all contributing. However, Beckham just spent $72mm to buy a 14k foot home on N. Bay Road in Miami, and there were many buyers lined up for it. In Boca, a house sold for $105mm. There are no fire sales for high-quality properties, but the condo market could see continued weakness as new units come onto the market.
Case in point to my comments above was the recent $24mm sale of a Miami Beach teardown on 1.3 acres that has 150 ft of water frontage. The house last sold for $750k in 1991. The buyer is billionaire Teddy Sagi, according to One Sotheby’s International Realty. Forbes estimates his net worth at $6.4bn. The billionaires sure know how to relocate to South Florida. According to Forbes, there are 2770 billionaires in the world. I think they are light.
Famed investor Mark Cuban shared his thoughts on the biggest issue facing the housing market, insurance. “Home insurance in areas hit by repetitive disasters is going to be the number one housing affordability issue over the next 4 years. And possibly going into the midterms. More so than interest rates,” the billionaire entrepreneur and investor recently posted on Bluesky. “Florida in particular is going to have huge problems.” While you can legally own a home without a homeowners policy, financial institutions — such as your mortgage lender — generally require you to have coverage. You’re typically insured for damage to your dwelling, related structures, personal property and liability, in case someone is injured or their property is damaged at your house. On average, you’ll pay $2,304 per year for a policy with $300,000 in dwelling coverage, according to Bankrate, a 17% increase from January 2022. Certain individual factors tend to drive up costs. My sponsor Kevin Lang of Lang Insurance, 866-964-4434, has helped dozens of my readers improve coverage, save money, and protect their prized possessions. Reach out to Kevin and his team to help you. I did and saved a ton. He writes policies for Home, Auto, Jewelry, Fine Art, Wine, Umbrella, etc. in all 50 states with the best insurance companies.
The delinquency rate for commercial mortgage-backed securities (CMBS) tied to office properties reached 10.4 % in November 2024, approaching the 10.7% peak reached during the 2008 financial crisis. The ascent is the fastest two-year increase on record, with rates climbing 8.8 percentage points since late 2022, significantly outrunning the 6.3-point rise seen during the financial crisis.
© 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™ #741 ©Copyright 2024 Written By Eric Rosen.
