Opening Comments
My last note was about how policies and behavior tend to swing wildly and went over examples. The most opened links were the trait required to living a long and happy life and the one reason why 75% of single people are getting ghosted.
I started a new tariff section to share relevant stories and charts on the topic.
I will do a full piece on my surf trip, and it was epic. I am incredibly sore from all the surfing and caught amazing waves with friends. This is a small taste. Best pictures and videos coming soon. The pics below were ones with the RR cap I wore backwards while surfing, so it would not fall off while I was going 22 mph.
My son, Jack, and I are heading to the Masters in Augusta Georgia on Monday night for a practice round Tuesday. Our good friend, Max Greyserman, is playing in his first Masters and we want to support him. I hope to get out a note on Wednesday, but will be abbreviated given I will be out of pocket all day Tuesday and most of Monday.
Markets
Powell/Fed
High Yield Spreads
Manhattan High-End Market Boom
Steve Ross New South Florida School
67 Billionaires in Palm Beach
Multi-Family Distress
Boomers Dominating House Buying
Pictures of the Day- Sunset Tower Hotel Dinner
I need to be crystal clear. If there were a restaurant in Boca Raton, Florida that could smell the Sunset Tower Hotel Restaurant in West Hollywood, CA, there would be a line out the door. The place exudes cool in this hip, Art Deco restaurant with old Hollywood vibes. Before or after dinner, grab a drink at the bar and enjoy the people-watching. The crowd is younger and attractive. The food is magnificent, and the ambiance is amazing, but is a touch loud. The service was top notch, and we ordered what the waiter recommended. Nothing disappointed. The pigs in a blanket were the best I ever had. The fried zucchini and calamari were good, but not the best. The blackened branzino was the best branzino I have ever tried. It was cooked perfectly and seasoned magnificently. I feared the blackened seasoning would overpower the fish, but I was wrong. The lamb chops were as good as it gets and cooked medium rare. The wine list by the glass is solid. Excuse the pictures as the restaurant is very dark, making photos challenging. There is a 100% chance I return to the Sunset Tower Hotel and next time, I am getting dessert.
Food-8.6
Service-9.1
Ambiance-9.4
Cost-Full, but fair
Travel Woes-#$%@
I’ve never thought air travel was a great experience, unless you’re flying private. But after 9/11, it got even worse. The attacks led to major changes in the industry: the creation of the TSA, stricter security protocols, and more intense screening of passengers and baggage. Flying became more about endurance than convenience.
Add to the security issues the fact that air travel has never been busier (nearly 3mm travelers each day in USA) and the fact that flights are being consolidated, and you have a disaster. Now, I need to buy $7 water on the other side of security and cannot bring my much-needed hair gel other in small amounts. Let’s just say my readers have seen the chaos when I forget the Magic Move.
I flew to LA last week for my annual surf trip and business meetings. I had planned to leave on the first JetBlue flight Wednesday at 7:37 am. I never sleep well the night before an early flight due to fears of oversleeping. I was up at 4:30 am and got in a Lyft ($34 to go 24 miles) at 5:45 am. Within minutes of getting in the car, I received an alert the flight was delayed 30 minutes. Do I go back home? I kept going to the airport.
By the time I arrived at Ft Lauderdale Airport, the delay was one hour and climbing. Despite being Mosaic and having privileges on JetBlue, there were no alternative flights to get me there earlier. The cursing was starting off in legendary fashion.
I went online and found a Delta flight that was leaving at 7:35 am. I ran to the Delta Terminal while trying to call the 800 Delta phone number. Getting an agent on the phone is akin to winning the Powerball. Despite my grotesque profanities where I called the automated system no fewer than 300 curse words including some new ones, I could not speak with a human. Only texting was available.
I arrived at Delta and waited in line after asking the attendant which line was right to buy a ticket. I waited 20 minutes and got to the front only to find out I was standing in the wrong line. More cursing.
I waited in the new line and bought a ticket on Delta (no status). All the good seats were taken, which means I am on the back of the bus. More cursing.
As soon as I bought the ticket, a delay was announced of 20 minutes. More cursing.
I have Clear and walked over to what looked like a short line. The line did not move, and every other line was moving as though Usain Bolt was running the show. More cursing.
I asked the irritating staff what was going on and they looked at me in their polyester uniform as though I was dropped on my head. More cursing.
I got to the gate in time given the delays were now up to an hour. More cursing.
I am on the back of the plane and the kid in my row across from me has the whooping cough. He sounds like a barking seal, and his parents have not yet taught him that it would be polite to cover your mouth. You guess it… more cursing.
I tried to type the report and work on a presentation, but the Wi-Fi was akin to dial up from AOL in 1999. You click on something, and it takes 5-minutes to open. More cursing.
We land at LAX and the pilot announces that no gates are available, and it will be 25 minutes before one opens. How much more can I curse in one morning?
I get a rental car from National, and I get to pick a car from the lot. I got a small Equinox SUV and pulled out of the lot. Apparently, the auto brakes in this car kick in if you are withing one mile of another car. It looks as though I am a drunk driver as the brakes slam constantly. I am getting screamed at by the irate California drivers that you guessed it, results in more cursing.
Despite the disaster at Fort Lauderdale Airport and all the delays, I made it for my annual lunch with George from Oaktree. I always look forward to my lunch with George, and the cursing was done… for the day only.
I flew back on a JetBlue flight out of LAX and thought everything was great until… a two-year-old started screaming, and it lasted for two hours. There was a commotion after the flight attendant asked the parents to have the child sit down, and the kid refused. I thought the child was injured or was bitten by a dog on the flight, based on the non-stop screaming. The parents called the police on the flight attendant when we landed. Everyone on the plane was livid, as this kid had a set of lungs and the flight attendant did not appear to do anything wrong. You guessed it. More cursing.
Quick Bites
Sharp selloff in equities on the heels of the aggressive tariff announcement Wednesday, followed by retaliatory tariffs from China Thursday. Over $5.4 trillion was wiped out from the US stock market in two days. This brings the losses since Inauguration Day to $11 trillion. The Mag 7 has lost $1.8 trillion of market cap in two trading days.. Also of note, Thursday and Friday had weak closes with late sell offs, with no support. Although gold and treasuries rallied, oil and the US dollar fell as fears of an economic slowdown continue to grow. JPM increased the recession odds in 2025 from 40 to 60% due to the tariff policy. With such a sharp decline in risky assets, we have seen Treasury yields plummet to 3.88% from 4.80% in January but settled at 4.00%. This will help people refinance loans and lower the federal interest burden to the extent refinancing takes place. Oil plunged 7% on Friday alone to $62/barrel due to recession fears and OPEC production hikes. The VIX surged from 21 to 45 in two days due to the market turmoil. Historically, when VIX hits 45, it is a signal to buy stocks and sell volatility. Warren Buffett was forced to defend his $300bn+ cash position a month ago. I guess the old man has still got it. Great call by the Oracle of Omaha. I am starting to dip by toe in the water. Bank earnings next week should be interesting with commentary on forward guidance. Interestingly, Bitcoin rallied 2.5% Friday despite the deep sell off in equities, closing at $84k.
The hope of a Fed put has been put on hold as Powell’s concerns about the impacts of tariffs on inflation. “We are well-positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy,” he said. Powell added the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday, keeping the Fed on hold for interest rate moves. Powell’s fears of stagflation are likely to prevent him from acquiescing to Trump’s lower rates demands. Powell will take Volcker measures to prevent inflation/stagflation if he is worried about prices.
On the heels of “liberation day,” the High Yield market took took a sharp leg lower driving up yields as can be seen in the chart below. Concerns over the economy, the potential for sharply higher unemployment and global uncertainty will leave more companies struggling to repay debts. “Credit is obviously a canary in the coal mine,” said Brian Levitt, global market strategist at Invesco. “Credit tends to go first . . . if the economy’s going to roll over, the odds of a recession pick up and then you’re going to see spreads blow out.” The weakest performers in the High Yield market were the lowest rated credits.
Tariffs
The tariff announcement was far more sweeping than imagined, pushing stocks, treasury yields, and the US dollar lower with gold higher (new record). This article outlines the “bizarre” math used to calculate tariffs. For example, Israel took tariffs to zero yet was hit with a 17% “reciprocal” duty on goods from Israel to the US. That is not exactly “reciprocal.” Trump and Lutnick believe these tariffs will bring counties to the negotiating table and he will have the ability to announce “wins” over coming weeks. On Thursday, Trump said he will negotiate if the counterparts bring a phenomenal deal to him and mentioned Vietnam wants to slash its tariffs to zero after a productive call. China will impose a 34% retaliatory tariff on all goods imported from the US and that sent stocks sharply lower on Friday. If these tariffs were to be in place for months, stocks will be far lower. I remain of the view that the important tariffs will be lower or gone in 60 days or we will be in a major recession by year end. The other potential end to some of the tariffs could be played out in courts due to lawsuits alleging that Trump overstepped his authority on the tariffs.
Do I think the US has been treated unfairly on trade and something needed to be done? 100%. However, the execution by President Trump has been awful. I have been complaining about his implementation for weeks, and Wednesday’s announcement taking on the world was poorly conceived. He has too many “Yes Men” in his inner circle that are scared to challenge him.
Our big trading partners are the EU, Mexico, Canada, and China. On the other hand, if Trump is delusional enough to believe major manufacturers such as Nike and Apple will be making products in the US and he holds tariffs in place, we are going far lower in stocks. The US lacks the facilities, and labor costs are too high to compete with these other countries.
The only way for the US to compete is through automation, robots, and AI, not human talent when it comes to manufacturing. Just cannot happen. Depending on the source, in the US, you are looking at fully loaded labor costs in the $30-40 range per hour at the UAW, while China is $6/hr and other countries are lower (Vietnam $3/hr). How can you possibly compete by paying so much more for labor? Sorry, the US will not be competitive in manufacturing absent automation. It will take a decade to build factories to onshore meaningful production in an automated fashion.
A big issue from my standpoint is the destruction of trust and relationships with key partners. Trump’s tactics may prove to be so detrimental to our trading partners that it will take years to repair. Add to this the lost confidence from consumers and business leaders, and Trump has created an epic mess that is getting harder to fix the longer it goes unresolved. I already spoke with business owners who have seen deals and contracts evaporate recent days due to uncertainty. Check out this story of Macron calling on EU companies to freeze investments in the US, as a case in point. Trump, you have a short window to put the toothpaste back in the tube.
If Trump brings key trade partners to the table and negotiates far better trade deals in short order, it is a fantastic outcome. If instead, he creates a deep recession and many more trillions of losses, it is an epic catastrophe that will result in the Democrats taking back the House and Senate in the midterms.
Trump’s tariffs are ‘biggest policy mistake in 95 years,’ Wharton’s Siegel says
I 100% agree that it is a major mistake. I am not convinced it is the worst policy mistake in 95 years, but time will tell. If we are talking about this is July, it very well may be the worst.
Apple loses $311B in market value as Trump tariffs threaten China-heavy supply chain
A 54% tariff rate on goods imported from China, where Apple makes the vast majority of its hardware, as well as a 26% rate for India and 46% rate for Vietnam – two of its other key production hubs hurt Apple. Rosenblatt Securities estimated the iPhone maker could face $39.5 billion of tariff costs, adding that "if these costs were just eaten by Apple, we estimate a near 32% hit to operating profit and EPS, annualized.”
Shoppers will pay more for bananas, coffee and toilet paper because of tariffs, trade group says
Cars Were Already Unaffordable Before Tariffs
Common advice to not spend more than 10% of pay on a car loan payment is getting harder to follow. Even American cars use foreign parts that will impact US made autos.
El-Erian says U.S. recession risks are now ‘uncomfortably high’-50%
Recession Odds Soar on Betting Markets as White House Defends Tariffs
CEOs think Trump’s tariff plan is a ‘huge mistake,’ says Altimeter’s Brad Gerstner
Politics
Border Patrol sets new record with low border crossings (7,181 attempts)
Talk about weaponizing the FBI. Could you imagine the outrage if the FBI did this to protect a Trump child?
NYC Mayor Eric Adams dropping out of Democratic primary, will seek re-election as independent
Layoff announcements surge to the most since the pandemic as Musk’s DOGE slices federal labor force
Furloughs in the federal government totaled 216,215 for March, part of a total 275,240 reductions overall in the labor force.
As stock market continues plummeting over tariffs, Trump spends the day at his golf course
I do not feel this showed good judgment. In light of the carnage, playing golf was a bad idea.
Big protests in NYC and even Boca. 1,200 locations in all 50 states.
Middle East
Hamas says it will release all Israeli hostages at once to end the war
Trump has drawn a 'red line' for Iran
Will he enforce it? That’s the question. Trump, bomb the hell out of Iran.
Beirut: Israeli Airstrike Eliminates Top Hezbollah Terrorist Who Directed Hamas Terror Attacks
Trump touts airstrike on Houthis, showing video: Will 'never sink our ships again'
Sanders Leads Charge To Block Arms To Israel, Senate Votes Down Overwhelmingly
Hamas admits it lied about how many children and civilians died in Gaza
I wrote about this in detail at the time and backed it up with stats showing just how unreliable the Hamas data was.
Trump admin freezing $510 million in federal funding to Brown University
Trump does a lot of things that I disagree with, but his support of Israel and his willingness to punish those that support antisemites is amazing.
1.3mm Jews live in NYC, almost 10% of the global Jewish population.
Other Headlines
Hedge funds hit with steepest margin calls since 2020 Covid crisis
U.S. payrolls rose by 228,000 in March, but unemployment rate increases to 4.2%
Musk claims '10 billion humanoid robots' will outnumber people and invade Earth
Interesting map outlining just how much GDP is generated by such a little geographical area.
Over a seat at a track meet. The murdered boy had a 4.0 GPA and was a star football player. The lawyer for the defendant claims self-defense.
The sharp drop in homicides in El Salvador is impressive but has received some pushback from human rights groups, given the treatment of the gang members jailed, as well as some innocent people who were wrongly arrested.
Health
I’m a cardiologist — the 4 worst drinks for heart health including a ‘dangerous’ Starbucks order
New antibiotic drug is a ‘massive game changer’ for chronic lower back pain
UK’s most commonly prescribed drug cuts risk of dementia, study suggests
Coldwater Creek’s former neighbors struggle as the feds weigh compensation bill
Horror story of radioactive landfill leaks from a factory in St. Louis that had enriched uranium for the first atomic bombs. The compensation for the disaster seems light to me. Another example of the government mistakes crushing the lives of innocent people.
Real Estate
Manhattan apartment sales rose 29% in the first quarter. The total value of apartment sales in the city reached $5.7 billion, up 56% over the same quarter last year. The strength has largely been driven by the high end of the market and luxury properties, as the wealthy sought a safe investment. Sales of apartments priced at over $5 million soared by 49% compared with a year ago. The ultra-high-end, or properties priced at $20 million or more, had its best first quarter since 2019. However, the co-op market in NYC remains challenged at the high-end. Look no further than the recent purchase by Scarlett Johansson and Colin Jost. The pair bought the six-bedroom Carnegie Hill home for $13 million this month, the Wall Street Journal reported. The 6,000-square-foot residence sold for the same amount its previous owners, Craig and Deborah Cogut, paid for it in 2006. The pair had been trying to sell the home on and off since 2018, when it initially listed for $27.5 million. I wrote that I would never live in a co-op again, and you can read about it here.
South Florida is in desperate need for more schools. The population growth is off the charts, and the limited schools are preventing families from relocating. Citadel has had many people unable to move down due to schooling. However, the brilliant developer Steve Ross is at it yet again. Billionaire developer Steve Ross advanced his plan to develop a kindergarten-through-12th-grade private school on 55 acres of city-owned land in West Palm Beach near Florida’s Turnpike.
At least 67 billionaires have strong residential ties to Palm Beach, according to a Palm Beach Daily News analysis of the 2025 Forbes list of the world’s wealthiest people. The combined wealth is $615bn and has helped to drive the ultra-high-end Palm Beach real estate into the stratosphere.
A concerning story entitled, “Multifamily Distress Volumes Hits 12-Year High,” has some good charts. CRED iQ’s data shows that over $6.1 billion of community bank loans secured by apartment buildings are delinquent. The $6.1 billion of delinquent loans yields a 0.97% delinquency rate based on total multifamily loan amount of $629.7 billion. CRED iQ also examined losses attributed to apartment loans with community banks. As of September 30, 2024, total losses amounted to $504 million, the highest level since 2013.
Despite many millennials entering the prime home-buying years of their life, the 2025 Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR) found that baby boomers accounted for 42% of all home buyers in the past year, surpassing millennials at 29% — with the latter generation’s share down from 38% for the previous year.
© 2025 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™ #775 ©Copyright 2025 Written By Eric Rosen.
