Happiness = Reality – Expectations

6-4-25

Opening Comments

My last note was about the impact of Caitlin Clark on the WNBA. The note elicited a big response of a lot of Angel Reece haters feeling she is overrated. The most opened links were the padel points videos from the pros, 2nd padel video and the article on Jamie Dimon and his gloomy outlook.

My son Jack and I are in NYC and leave for Marion, MA on Friday for some golf. In Southampton June 9-11, and back in Florida for meetings June 12-13. Then back in the Northeast.

I will give a full update when I know more, but I was in the emergency room for nearly 12 hours on Tuesday. It turns out I have kidney stones. The pain is unbearable. Of course, it happened to me. Being in the ER in NYC until 2 am, is not fun. Due to this development all the plans I have are up in the air.

I almost fell for a phishing scam. I received a text that someone was trying to access my Coinbase account. I called up the # on the text, and they answered “Coinbase.” The agent told me that “Mohammed from Brussels was trying to access my account.” I logged into Coinbase on my computer, and no suspicious activity was there. The FAKE Coinbase agent said that he would send me a new password login, and I said, “I want to do it myself from the Coinbase website.” He asked me for my security questions, and I refused to answer. He hung up on me. BE CAREFUL. Coinbase never sends text like the one below.

• Video of the Day-Eric Schmidt on AI’s Impact-SCARY

• Happiness = Reality - Expectations

• Quick Bites

  • Markets

  • Eagan-Jones Private Credit Ratings

  • Consumers Facing Pressure in Charts

  • Top CEO Pay

• Tariffs

• Politics

• Middle East

• Other Headlines

• Health

• Real Estate

  • Housing Affordability by State (Chart)

  • Two NYC PH Sales of $34.5 and 40.3mm

  • San Francisco Building Sale at 75% off.

Video of the Day-Eric Schmidt on AI Impact-SCARY

• Do you want to be scared about the future? Listen to this short video of the former Google CEO outline AI’s impact on the world over the next 10 years. He believes in approximately 5 years, systems will begin to write their own code. In 6-8 years or so, it will be possible to have a single system that will be 80-90% of the knowledge of the expert in EVERY field. You will have a nonhuman that is smarter than any human. Schmidt brings up a lot of questions about the near future, and they scare me. He suggests this could be amazing or very bad. The efficiency potential is remarkable. However, what is to stop the systems from using this knowledge to generate bad outcomes? Schmidt closes that humans are not prepared for what is coming soon. On a related note, "Learn to Code" Backfires Spectacularly as Comp-Sci Majors Suddenly Have Sky-High Unemployment.

Happiness = Reality – Expectations

I feel managing expectations is a key to happiness. I hate when someone tells me about an “amazing” restaurant, as nine times out of ten, it does not live up to the hype. How many times has a friend told you that it was “the best movie ever,” only to be disappointed.

My loyal readers know that when I am in NYC, my schedule revolves around food, and I try to have plans for amazing dining experiences given I live in the culinary wasteland of Boca Raton, Florida. I arrived on Monday afternoon and met a friend for drinks and appetizers at the rooftop at Eataly on 23rd. Nothing remarkable, but a nice setting and it was good to catch up with an old friend who left traditional asset management to run a crypto fund. I had heard from my dinner date that he had to cancel, and I checked OpenTable. There was a 7pm reservation at Noz17, the Michelin Star omakase in Chelsea. It is affiliated with the two-star Noz, on the Upper East Side. I booked Noz 17 and was very excited about my dinner at a sushi bar that holds eight guests at a cost of $195.

I walked over from Eataly, people watching and listening to the sounds of the city that never sleeps. I arrived at the restaurant right at 7 pm and I was giddy.

The host asked for my name, and I said, “Eric Rosen.” He looked at his computer and said, “Andrew?” My heart sank. After a long discussion, there must have been a glitch, as I never received confirmation from Open Table despite getting a pending charge from Amex. Either way, I left dejected as they did not have another opening, and my expectations for a fancy night of Michelin star omakase at an exclusive NYC restaurant was not in the cards.

I was at 17th and 10th and started walking around upset at what transpired. I called Amex, but getting a human on the phone was near impossible. I was screaming on 10th Avenue at the robot who could not connect me to a person. Finally, I got assistance from a human and it turns out the charge was pending and did not go through. I don’t know how many four-letter words I belted, but the Guiness Book of World Records reached out to me. I was that close.

I decided to walk into Chelsea Market as they have a bunch of restaurants, and it was getting late. I went to Lobster Place for a lobster roll and sushi. To say it was disappointing is a massive understatement. I was expecting a Michelin Star experience at Noz 17 and instead got a lousy lobster roll and marginal sushi. Happiness = Reality – Expectations

Quick Bites

• Markets remain resilient despite negative headlines on trade around the lack of progress with China, steel sanctions, weak ADP payroll data, and the lack of progress on Ukraine. The weaker payroll data helped to push down Treasury yields with the 10-year falling 10 bps to 4.37% and the 30-year down 10bps to 4.89%. The VIX is down to 17.5 after hitting nearly 66 in April.

  

• This Bloomberg article outlines the Eagan-Jones Ratings Company’s limited staff to rate thousands of issuers. The article suggests the company rates almost 5,000 issuers, which means that each analyst follows more than 240 credits. NOT humanly possible. BlackRock Inc., Carlyle Group Inc., and other investing powerhouses in recent years have explicitly excluded the firm from the list of acceptable credit graders for some of their capital raises, regulatory filings show. Apollo Global Management Inc. does not use Egan-Jones to rate any of the private credit assets held in its insurance business, people with knowledge of the matter said. A report issued — and then abruptly rescinded — last year by the National Association of Insurance Commissioners showed that small outfits like Egan-Jones rated private investments three notches higher on average than the association’s in-house valuation office. Almost a year after its retraction, the report’s conclusions are still reverberating across the industry. If you are allocating to the private credit space, be careful who you pick to manage your money. If anyone relies on Eagan-Jones for ratings, I would run. To be clear, I think all the rating agencies are a bit of a farce and do not put much weight on them. My teams always did their own work and made decisions based on the analysis we did ourselves. The rating only factored in as a technical issue, as Collateralized Loan Obligations (CLOs) would find highly rated loans attractive. In 2022, the SEC accused Egan-Jones of conflict-of-interest violations. It also accused Sean Egan of personally violating rules and banned him from taking part in how his firm determines ratings. Egan-Jones agreed to pay a $1.7 million penalty; Sean Egan paid a $300,000 fine. Neither party admitted or denied wrongdoing.

• I have written extensively about the pressure on consumers from inflation, rates, insurance, and the squeeze they face. This CNN article outlines the situation in charts. We are seeing increased delinquencies across the board (chart 1). The rise in Buy Now Pay Later (BNPL) is concerning. People are using it to buy new Ugg boots and concert tickets at alarming rates (2nd chart). Americans are pessimistic about the US economy given the poor tariff implementation (3rd chart). Local, state, and federal governments need to be more fiscally responsible, but so too do US consumers. Save your money. Don’t use high-cost credit cards. Live within your means. Remember, you will likely live far longer than your grandparents and will need money to live later in life.

• I am a capitalist, and I believe in pay for performance. If you add a great deal of shareholder value and your stock outperforms, I want to see senior management get paid well. This WSJ article outlines the highest paid CEOs. Shareholders, I am available to be CEO for this kind of money if you are asking! Rick Smith, who co-founded and runs the maker of Taser stun guns, tops this year’s list of the highest-paid chief executives, with pay of $165 million. The Axon Enterprise CEO’s pay outstripped that of the leaders of much larger companies, including General Electric’s Larry Culp, Blackstone’s Steve Schwarzman and Apple’s Tim Cook. Smith was the only S&P 500 CEO to receive a pay package above $100 million in 2024. Overall, CEO pay set another record. Half the chief executives in The Wall Street Journal’s annual analysis made $17.1 million or more last year, up from $15.8 million for the same executives a year earlier, the analysis of pay data from MyLogIQ found. JPMorgan boss Jamie Dimon came in at No. 23 with $37.7 million, while No. 63 Mark Zuckerberg got $27 million from Meta last year, mostly for security services. The link outlines hundreds of CEO’ pay.

Tariffs

• Trump says ‘extremely hard’ to make a deal with China’s Xi as trade stalemate fuels calls for leaders to talk

• Trump’s 50% steel tariffs hit the world but UK spared full blow

• EU ‘prepared to impose countermeasures’ after Trump doubles steel tariffs to 50%

• China counters Trump’s accusations of Geneva trade deal violations, says U.S. undermining consensus

• Here are the retailers raising prices as Trump tariffs take hold

• Small businesses struggle under Trump’s tariff whiplash: ‘I’m so angry that my own government has done this to me’

  • I feel the US has been taken advantage of on trade deals. However, the implementation of these tariff policies has been sloppy. The on-again off- again nature is confusing. Companies do not change factories on a dime, and it is very challenging to manage companies on the ever-changing tariff policy.

• Trump’s 50% steel tariff could see prices tank in Europe — and soar in the U.S.

Politics

• Fla. Sen. Rick Scott calls for more budget cuts to restore ‘fiscal sanity’ into Trump’s ‘big, beautiful’ bill

• Musk torches Trump budget bill: ‘Disgusting abomination’

• Trump calls for scrapping debt limit

  • We need fiscal responsibility, debt reduction, entitlement reform, lower spending, and smaller deficits. I do not like scrapping the debt limit. If anything, I want lower limits to hold politicians accountable.

• GOP strategist makes stunning prediction for Trump Republicans

  • Rove is suggesting a tough mid-term for Republicans due to the tariff policy.

• Trump says ‘Too Late’ Powell must lower interest rates after weak ADP jobs report

• Trump says he spoke to Putin, predicts no ‘immediate’ peace for Russia and Ukraine

• Trump administration pauses Social Security benefit cuts over defaulted student loans

• The price of eggs has dropped 61% since Trump took office

  • US egg prices plunge from all-time highs amid bird flu losses and increased imports

• Senate rankings: The 5 seats most likely to flip

• Elon Musk says he doesn’t ‘want to take responsibility for everything the administration’s doing’

• How Zohran Mamdani’s promises would destroy working-class New York

  • Mamdani’s policy ideas are idiotic, and he is not a big fan of Jews or Israel.

• LA Mayor Karen Bass used this lone house to claim she’s cutting red tape for wildfire victims — but owner says he’s had to fight at every turn

  • Your vote matters. When you elect clowns into office and get bad results, who is to blame?

• The BRICS Go Their Own Way

  • Outlines upcoming BRICS+ summit and the players.

• Former Biden press secretary says she's no longer a Democrat

  • She is now an Independent and I felt she was a very week press secretary.

Middle East

• There are conflicting reports out of Gaza regarding gunmen shooting at civilians at an aid station. There have been multiple retractions and accusations against Israel. Many have reported that Israelis open fired into the crowd. Israel denies it and has video of what they suggest are Hamas firing into the crowd. Many well know American news agencies are citing data from the Ministry of Health (Gaza) which is an awful source of news of any kind related to Israel. I have proven them wrong numerous times. My point is it is hard to get facts out of Gaza and as a base case, if it is the Ministry of Health data, question it. Why would Israel provide aid and shoot civilians? If I am proven wrong, I will obviously correct it.

  • Israel claims warning shots were fired near distribution center

  • 31 Palestinians are killed heading to a Gaza aid site, witnesses say. Israel denies responsibility

  • Israeli fire kills at least 27 aid seekers in Gaza-Ministry of Health claim

• U.S. envoy rejects Hamas ceasefire proposal as 'unacceptable'

  • Hamas reaffirmed its position that negotiations should aim for a permanent ceasefire, an Israeli withdrawal from Gaza and a sustained flow of humanitarian aid.

• Attack in Boulder, Colorado, burns 12 people at march for Israeli hostages

  • The madman used Molotov cocktails. He was charged with a hate crime. He also had USAID papers in his car and attempted to buy a gun but was denied due to his illegal status. One of those burned was a Holocaust survivor. Just imagine what is going through their mind today 80 years after WWII.

• Columbia protester and self-proclaimed ‘Jew-hater’ had direct link to Hamas’ terror cell, disturbing phone records reveal

• Trump says US will not allow Iran to enrich 'any' uranium under nuclear deal

  • Early reports suggested otherwise, and I was in panic mode.

• How the Nazis' top interrogator was hired to work on Disney theme parks

Other Headlines

• Investors are piling into big, short Treasury bets alongside Warren Buffett

  • ETF flows in 2025 show that it’s the ultrashort opportunity that is attracting the most investors. The iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 T-Bill ETF (BIL) are both among the top 10 ETFs in investor flows this year, taking in over $25 billion in assets.

• U.S. growth forecast cut sharply by OECD as Trump tariffs sour global outlook

• The consensus is forecasting a sharp slowdown in nonfarm payrolls over the coming quarters, see chart below. (from Torsten Slok-Apollo)

• Nvidia tops Microsoft, regains most valuable company title for first time since January

• JPMorgan to accept Bitcoin ETFs as loan collateral, consider digital holdings in evaluations

• $210K target for Bitcoin due to its 'digital gold' status: Presto's Chung

• China’s 1,000-Mile EVs Render Range Anxiety Obsolete

  • I would buy one of these. I could drive a month on a charge.

• NYC sees fewest reported murders, shootings in modern history to start year

  • I love this. Note NYPD Commissioner Tish’s comments at the end.

• ‘Violent Venezuelan alien’ with possible Tren de Aragua ties caught with knife during ICE takedown in San Diego: video

• Squatters took over this Georgia home after the owner died, family says — now they’re throwing parties inside

  • On what planet is this ok? People steal a home with no consequences? In Florida, you serve SERIOUS time.

• Quiet Hickory, North Carolina rocked by mass shooting at high school party that leaves 1 dead, 11 wounded

• Disturbing video shows taxpayer-funded babysitter brutally beating NYC tots with a belt — and horrified family demands answers

• Chinese national couple charged with smuggling crop-killing fungus into US: ‘Potential agroterrorism weapon’

• Trans high school athlete wins two events at California finals in shadow of protests, Trump funding threats

  • How anyone can support biological men competing against women makes zero sense to me. Let’s see how this person does against the boys.

• Olympic boxer Imane Khelif’s leaked lab results offer new evidence about her biological sex

• Man Pleads Guilty to Killing Eagles and Hawks

  • What is wrong with people?

• Harvard Has Trained So Many Chinese Communist Officials, They Call It Their ‘Party School’

• Thousands march in Rome against security clampdown law

  • A new security law passed by Prime Minister Giorgia Meloni increases sentences for certain acts including protests and strengthens protections for police officers accused of violence.

• Etsy’s CEO shares two key steps he took early in his career that set him up for later success

• AI Startup ‘BuilderAI’ has collapsed after it was found to be powered by 700 engineers in India, not AI

• The 20 Richest Songwriters Ever

  • I always take these stories with a grain of salt, but there are some obvious ones listed and others I never considered.

• Office dress codes are more confusing than ever—etiquette experts and stylish dressers offer their best advice

  • When I had to wear a suit and tie, it was far easier to dress for work.

• The ingenious way Ukraine pulled off its stunning ‘Pearl Harbor’ attack against Russia

  • Amazingly creative way the Ukrainians developed a sneak attack by hiding drones in wooden sheds and remotely removing the roofs to unleash drones. Some 34% of Russia’s Tu-95 bomber fleet, equipped to carry nuclear payloads, was reportedly wiped out in the raids on five air bases across the country, the SBU said on Sunday. Two days later, Ukraine hit the only bridge connecting Russia and Crimea. I never thought the war would last this long. Putin looks like a clown at this point and is being humiliated.

• Smartphone smuggled out of North Korea reveals the insane things Kim Jong Un does to control his ‘suffocated’ people

  • Crazy examples of Big Brother watching.

Health

• This daily beauty routine could be ruining your hair, experts warn

  • Experts offer tips on safely detangling wet hair to reduce damage and hair loss

• I’m a neurologist—to keep my ‘brain healthy and memory sharp,’ I avoid these 4 things that people do all the time

• I’ve worked with over 1,000 kids—if you want your child to trust and talk to you, do 6 things

• The No. 1 skill to teach your kid ‘as early as possible,’ says psychology expert—they’ll be successful at ‘pretty much everything’

• The 20 best sunscreen sticks, according to dermatologists

  • As a kid, I never wore sunscreen while surfing or playing outside. Now, I am like a sunscreen madman.

• Interesting video of a sport that requires strenuous exercise in competition.

Real Estate

• Housing prices have gone up dramatically over the past five years given a period of zero rates, government handouts, and wealth creation in stocks and crypto. The Visual Capitalist puts out amazing graphs and charts and shows affordability across income levels for median home prices by state. I would love to have seen this chart from 2019. I can tell you that Florida is no longer as affordable as it was when I moved down. For example, I would not have considered buying my current home at today’s prices.

• A couple of penthouse sales in NYC of note. The first is in a related building in West Chelsea for $40.3mm. The unit was 5,700 square feet and has four bedrooms and two terraces at 555 West 22nd. Way too far west for my liking and I just don’t care for that neighborhood. However, the Robert Stern building and amenities are very nice. Eric Schmidt’s apartment just sold for $34.5mm at 25 Bond Street. It was a 6,400 ft duplex, and he paid $24.5mm for it in 2021. This building is older (2007), and I cannot imagine it has amenities close to 555 West 22nd. The location is much more centrally located than West Chelsea.

• A pair of San Francisco towers sold Friday in the highest-priced deal for the city’s battered office market in three years. The skyscrapers, known as Market Center, were acquired by restaurant franchise magnate Greg Flynn and investment firm DRA Advisors, who took over a distressed $417 million mortgage at a discount. They paid about $177 million. After being hit hard by vacancies following the pandemic, the city has started to see renewed interest from investors looking to score bargains and capitalize on the tech hub’s artificial intelligence boom. Still, the sale represents a massive drop in value for Market Center, which Paramount Group Inc. and a partner purchased from Blackstone Inc. for $722 million in 2019. Four years later, Paramount wrote its value down to zero, citing the “tough leasing environment and upcoming debt maturities” in a 2024 earnings call. The building, which sold six years ago for $722mm, just sold for $177mm and we don’t know how much was invested in the building during that time. Yes, work from home played a part, but awful COVID mandates, homeless crisis and crime has driven companies and people out of San Francisco. Blame bad policies.

  © 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™ #790 ©Copyright 2025 Written By Eric Rosen.