7 Years In Florida

8-11-24

Opening Comments

My last note was about my love of padel and Ross Berman who introduced me to the game. It turns out you can teach an old dog new tricks. I am shocked at the dozens of people who responded with their love of padel. Given my writing, I have been shown investment opportunities in pro padel leagues and new private clubs that would include the greatest sport ever. The most opened links were the $35mm paid to Tim Chalamet for a 90 second ad and the hot new fast food restaurant opening in NYC.

As my readers know, I have a mentor program where I help kids (high school through young professionals) with respect to preparing for jobs and advising them. At times, I use my extensive network to give tailored advice. Just recently, I had been working with a young man and helped him formulate a trade idea for an interview. He needed another idea for his 2nd round of interviews, and it needed to be foreign exchange related. I called my close pal, Bill, who is an expert, and he helped him as well. I also just got this email:

The Rosen Report hat can travel. I would guess I had a couple hundred RR readers at the Olympics in Paris. Gerry sent me this picture. I don’t know what is better looking, my RR hat or the Eiffel Tower. I brought 50 hats with me to NY this summer and I am down to my last two.

I am back in the Hamptons for a few days and then we will be leaving for Florida, as the kids start school soon.

• Picture of the Day-Bungalow-AMAZING Indian Food NYC

• 7 Years in Florida

• Quick Bites

  • Markets

  • Pew Research on Inflation

  • Rising Credit Card Delinquencies

  • JPM Recession Odds Increasing

  • New Tech to Speed Up Charging Times?

  • 1924 to 2024 100 Meter Olympic Race Times

• 2024 Election

• Israel/Middle East

• Other Headlines

• Real Estate

  • Deteriorating Office and Apartment Markets

  • Homes Seeing More Price Cutting

Picture of the Day-Bungalow-AMAZING Indian Food NYC

After months of trying to go to Bungalow (Lower East Side), I finally was able to get in and sit at the bar. The menu at the bar is limited, but that did not matter. The food was REMARKABLE. I have pushed Junoon as my favorite Indian food in NYC, but think Bungalow may be the new top pick. The restaurant is downstairs and is long and narrow. The vibe is very cool with fun music and a younger crowd. I started with the anarkali chicken, and it was out of this world. It packed a little heat but not too much and could not have been more tender. The dish was filled with flavor, with a hint of watermelon. One of the best chicken dishes I have ever eaten. I then had the banasari puri, a vegetable dish creatively served, as can be seen below.

The sweet potato chaat was so beautiful I almost did not want to eat it but I am glad I did. Sweet and savory. The shrimp balchao cones was the only thing I would not re-order. I felt there was too much cone. The molten chocolate cake was a 10 out of 10. I did not know what gulab jamun ice cream was but it was delicious. I need to go back for the full experience but getting a table is not easy. The presentation of the food is stunning. You must go to Bungalow….assuming you can ever get in at the hardest table in town.

Food & Presentation-A, Service-A, Ambiance A-, Cost expensive, not offensive

7 Years in Florida

The Rosen family moved from Manhattan to Boca Raton on August 10th 2017.

My wife grew up in NYC and attended Riverdale High School and Barnard College. Her family lives in NYC, so convincing her to move to Florida was not easy, but we feel it was the best decision for the family. I have not regretted it one time.

Being in Florida prior to the pandemic meant we bought right in terms of housing and the value is +250%, while my NYC Co-op is -25% during the same period. Since the Rosen family moved down, so many young families have left the Tri-State for South Florida. We have seen major hedge fund managers, real estate families, venture and private equity managers, founders, pro athletes, and countless others relocate to Florida as part of the “Great Migration.” The charts below outline the ranking by US News & World Reports. Note that Florida is #9 overall and ranks #1 in Education & Economy and #13 in Crime. Some of the most common states where people are moving to Florida from (NY, CA, IL, NJ, CT) are all ranked lower overall, as seen below.

I asked a few dozen people (who moved from the Tri-State, Chicago, California and Europe) their pros and cons about Florida; and the combined list is below.

Overall, I have enjoyed my time in Florida and am glad I made the move. As a family, we have made so many friends who were new to Florida. There are so many amazing relationships we have developed in our seven years and for that, I am thankful. Many are from NYC, CT, CA, NJ, MA and Europe. I feel the Great Migration has brought so many impressive people to South Florida that would never have considered it pre-pandemic. South Florida is no longer only retirees wearing Velcro shoes. Young, bright, well-educated, successful people have moved down, making it a much more desirable place to live. With wealth comes improved culture and restaurants (much needed). The big downside is housing costs have exploded, making it less affordable.

I also don’t think I would have these pictures if I stayed in NYC. Come down this winter and reach out. I’ll be there. If you decide to move down, I am licensed with Douglas Elliman and can help you find something. Sadly, I am heading back to heatstroke land and will need to deal with it for a couple months before the heat breaks. Once the kids leave for college, we will only be in Florida for 7.5 months/year.

Florida Does Not Look So Bad After All

Quick Bites

• What a wild ride in markets this week. Despite the remarkable volatility, major indices were all barely down when all was said and done (S&P-.04%, Nasdaq-.18%). At the Monday lows, the S&P 500 was down nearly 10% from its recent all-time high. The Nasdaq Composite’s pullback reached full-fledged correction territory of beyond 10%. The Cboe Volatility Index — used by Wall Street to measure fear — reached heights last seen during the onset of the Covid-19 pandemic and the Great Financial Crisis. One example of the carnage was Apple stock that fell from $220/share on Friday to $199/share early Monday and ended the week back at $216. Thursday data that showed weekly jobless claims fell to 233,000, less than expected, in a positive sign for labor market, causing markets to rally sharply. It is not just equity markets that have had a volatile week. The 10-year Treasury yield fell below 3.70% at one point, only to retake 4% on Thursday. It traded around 3.94% on Friday. Crypto also had a wild ride on the week with Bitcoin as low as $49k but finishing the week at $61k.

  

  

• Good Pew Research Center article entitled, “Eggs, gasoline and car insurance: Where inflation has hit Americans hardest.” As the U.S. economy began recovering from coronavirus-related shortages and shutdowns, consumer prices surged faster than they had in more than four decades. Many Americans currently see inflation as one of the nation’s top problems. The government gauges inflation mainly by looking at the prices of a “market basket” of more than 200 goods and services and evaluating how they’ve changed over time. Several inflation measures are based on this price data, but the most widely cited is the Consumer Price Index for All Urban Consumers (CPI-U). Since the start of 2020, that measure topped out at 9.1% in June 2022 – the fastest year-over-year increase since November 1981. I know oil prices are down, but I just spent $78 to fill my rental car.

• I have written extensively about my concerns for the US consumer, who has proven to be both resilient and irresponsible. This CNBC article is entitled, “Average consumer now carries $6,329 in credit card debt. ‘People are stretched.’” Crashing savings rates, rising debt balances, more use of Buy Now Pay Later (BNPL), inflation and the need for instant gratification spells trouble in my book. “Credit card balances briefly fell in 2020 and early 2021 due to pandemic-related factors,” said Ted Rossman, Bankrate’s senior industry analyst, which included government-supplied stimulus checks and fewer opportunities for spending. “But since early 2021, credit card balances have rocketed upward by 48%, fueled by a post-pandemic boom in services spending as well as high inflation and high interest rates,” he said. Credit card delinquency rates are also higher across the board, the New York Fed and TransUnion found. Over the last year, roughly 9.1% of credit card balances transitioned into delinquency, while 8% of auto loans are delinquent (highest since 2008) according to the New York Fed reported. Consumers have showed a remarkable willingness to splurge on travel and entertainment, a recent report by Bankrate also shows, to recapture the experiences they lost during the Covid years. The average credit card charges more than 20% — near an all-time high. BNPL is growing at over 40% per year and expected to be over $1 trillion in 2028. What could possibly go wrong? Buying shoes that you can’t afford on layaway? Brilliant idea. NOT.

• More economists have increased their odds of a recession recently as the consumer has slowed and employment has gone the wrong direction. More companies are citing it in earnings and this CNBC article outlines JPMorgans view. JPMorgan upped the likelihood it sees for the U.S. economy entering a recession this year, the latest sign of concern around the country’s financial health following the market turbulence this week. The bank raised its probability for a U.S. or global recession to 35% by year end, chief global economist Bruce Kasman told clients in a Wednesday note. Meanwhile, JPMorgan kept its odds for a recessionary period by the second half of 2025 at 45%. Dimon added he was “a little bit of a skeptic” that the Federal Reserve can bring inflation down to its 2% target because of future spending on the green economy and military. “There’s a lot of uncertainty out there,” Dimon said. “I’ve always pointed to geopolitics, housing, the deficits, the spending, the quantitative tightening, the elections, all these things cause some consternation in markets.”

• I think everyone gets frustrated by phone and EV battery life and charging times. We have all become so reliant on our phones that it is irritating. This SciTechDaily article is entitled, “Missing Link Discovered: New Research Paves the Way for Charging Phones in Under a Minute.” Imagine if your dead laptop or phone could be charged in a minute, or if an electric car could be fully powered in just 10 minutes. While this isn’t possible yet, new research by a team of scientists at CU Boulder could potentially make these advances a reality. Published in the Proceedings of the National Academy of Sciences, researchers in Ankur Gupta’s lab discovered how tiny charged particles, called ions, move within a complex network of minuscule pores. The breakthrough could lead to the development of more efficient energy storage devices, such as supercapacitors, said Gupta, an assistant professor of chemical and biological engineering. LET’S GO. Please make this happen.

• Great video that compares the men’s 100 meter Olympic race from 1924 to 2024 and the technology changes that led to a .81 second faster time. They go over everything from shoes, to track, training, diet, sleep…. I know .81 seconds is a lot, but I would have thought it would have been an even bigger difference.

2024 Election

I listened to Trump’s one hour press conference. I felt it was choppy. Too many odd tangents but some areas where he got back to policy differences with Kamala. I believe it should be about policies and not about IQ, failing the bar, race…He took a lot of questions, something Harris has not done. Trump continually brought up that the manner in which the Democrats booted Biden and inserted Harris with no process was unfair to the public and “perhaps” unconstitutional. He also mentioned that he has proposed three debates in September and is waiting for confirmation from Harris. It seems the September 10th date has been confirmed. I did not agree with Trump’s plan to leave Social Security unchanged in terms of age. He did bring up “No tax on tips,” something I believe is a good idea. Trump made it clear that he would start a mass deportation by going after criminals. Of course, he said more outlandish things, such as the Jan 6th rally drew more people than MLKs I Have a Dream speech and “abortion is a small issue.” I would also note that Trump looked quite different, with far less of an orange hue and a different hair color. He needs to be more balanced, but 'let’s at least give Trump props for taking questions for nearly an hour.

• Harris promises to go tough on border security

  • Since she has been anointed the “Border Czar,” she did nothing to stop millions of illegals from coming into the US. Now that she is campaigning in a border state (AZ), she is all for border security? The biggest failure of this administration has been the border.

• Harris responds to Trump Fed comments, will release economic plan

• CNN anchor admits Shapiro on Harris ticket would have been 'slap in the face' to Democrat 'activist wing'

• CNBC’s Jim Cramer faces backlash for telling viewers who care about their paycheck to ‘go with Trump’

  • Some of the responses that do not agree with Cramer are quite funny.

• Trump holds 2-point lead over Harris with a big advantage on economy, CNBC survey shows

• Kamala Harris Takes Eight-Point Lead Over Donald Trump in New Poll

  • Although I question the accuracy of polls, there is no doubt that the momentum shift from Trump to Harris is sizeable.

    

• Las Vegas Police Recordings Released From Biden's Medical Event and Code 3 Transport to Airport

  • The day before Biden dropped out of the race, it seems there was a medical episode in Las Vegas as can be heard on these police recordings. So much for transparency. He is not fit to be President today, especially given what is going on geo-politically. You can listen to the police radio tapes in the link.

    

• Pelosi: ‘I’ve never been that impressed’ with Biden’s political operation

• Trump shooting: Local police unleashed on Secret Service in new videos

  • VERY concerning how the local police were told there would be Secret Service on the roof where the shooter was during the rally.

• Riots in Britain should be warning to US

Israel/Middle East

• Hamas’ new political leader Yahya Sinwar is seen as more extreme — and less willing to compromise

• Khamenei agrees to postpone attack on Israel

• Israel faces anger over Gaza school strike rescuers say killed 93

• Cori Bush calls out AIPAC after defeat: ‘I’m coming to tear your kingdom down’

  • Cori Bush is a Jew hater that lost her primary after Jews supported her opponent. As a result, Bush is spewing hate and making threats at the Jews. Two squad members down. I hope the rest go down with Bush and Brown. “Because now, there are some strings that I have attached. And as much as I love my job, all they did was radicalize me, and now they should be afraid,” she said.

• A columnist wrote Gaza made him feel the urge to stab ‘every Jew’ he meets. His publisher says it’s ‘bored’ by the backlash

• Anti-Israel vandals release crickets, paint pro-Hamas red triangles over Columbia exec’s NYC apartment building

• 3 Columbia deans resign after antisemitic text messages scandal

• You need to watch this short video. A reporter tells people about a massacre at a music festival, and everyone is sad.

  • People are sympathetic and distressed when they hear about a massacre until the reporter tells people it was in Israel. After they find out Jews were murdered, the response turns disgusting. Please tell me what group of people have done more for the world than the Jews on a relative basis. They are .2% of the global population and account for 22% of the Nobel Prizes. They are leaders in business, banking, medicine, science, founders, politicians, judges, professional sports team owners…yet are the most hated group on the planet.

• Iraq's new 'barbaric bill' will lower marriage age for girls to 9, legalizing pedophilia

Other Headlines

• ‘Mag 7’ stocks are cheap and a buy after sell-off as long as no recession, Morgan Stanley says

• JPMorgan Says Three Quarters of Global Carry Trades Now Unwound

• Top economist Mohamed El-Erian: Fed would make ‘a huge mistake’ if it lets itself be bullied into cutting rates

• Investor Behind Record $2.7 Billion Bond Bet Says Recession Near

• Warren Buffett now owns more T-bills than the Federal Reserve

• More than half of new cars sold in China are now electric or hybrid

  • In the U.S., the penetration rate in the first quarter was 18%.

• Mercedes-Benz EQS explosion sends 23 to hospital

  • EV battery fires are serious issues, and this could lead to new regulations.

• Wall Street Bonus Watcher Says Some Payouts Will Jump Up to 35%

  

• Palantir jumps on Microsoft partnership to sell AI to U.S. defense, intel agencies

• Warner Bros. Discovery stock falls as it writes down $9.1 billion, misses estimates

• Bumble forecasts third-quarter revenue below estimates, shares drop 25%

• Shopify shares soar 17% after earnings top expectations, company gives upbeat forecast

• Paramount Global announces it will cut 15% of U.S. workforce, shares rise on second-quarter earnings

• Eli Lilly blows past estimates, hikes guidance as Zepbound, Mounjaro sales soar

• Suddenly, Wegovy sales are disappointing

• Discount retailer Big Lots plans to shutter more than 300 stores

• Disney may have a parks problem

• Boeing’s Starliner spacecraft may not be able to fly astronauts back to Earth

  • Is Boeing the worst run company on the planet?

• Trump Media reports $16 million loss for quarter as revenue falls

  • I have called this stock an overvalued joke for some time. The June quarter saw $837k of revenues (-30% from prior year) and a net loss of $16mm. Despite this, the company has a market cap of $5bn. I said it was overvalued at $70, $50, $40 and any other price it has been recently. At $29, it is still wildly overvalued.

    

• Poll: Majority says First Amendment 'goes too far'

• Hunter Biden ‘received compensation' from Romanian businessman aiming to influence US policy, prosecutors say

• NYC wasted millions in migrant spending on unnecessary services and empty hotel rooms, audit finds

• Most of US Population Growth Post-Covid Is From Hispanic People

  

  

• Female NYPD officer left bloodied after she’s punched in the face by repeat offender, leading to wild caught-on-camera arrest

  • MANDATORY jail time? I doubt it in NYC. Repeat offender, of course.

• NYC shooting victim was defending girlfriend – who hugged him as he lay bleeding on the floor

• Alleged Taylor Swift terror plot fits a worrying trend as ISIS targets teens online

• Taylor Swift ISIS suspects planned to drive bomb-laden car into crowd, were hired as stadium security

• Montauk restaurants hit by drop in sales amid soaring hotel prices in Hamptons

• Italy doubles flat tax on super-rich expat income

  • Economy minister Giancarlo Giorgetti called the move 'a regulation that has made a lot of noise,' as the government raised the flat rate it had set in 2017 to attract wealthy expats and Italian foreign tax residents.

• Popular sugar substitute linked to increased risk of heart attack, stroke

• People who eat alone in public without feeling self-conscious usually possess these 7 strengths

  • In NYC, I go to the bar and eat solo. This week, I did it at Bungalow and ABC Kitchen!

• A Scientist Says Humans Will Reach the Singularity Within 21 Years

  • A scary prediction about “Singularity,” which is when humans and AI will merge. I guess it will make doing crossword puzzles much easier for me.

• The next world’s tallest building could be a 3,000-feet-high battery

  • Very interesting battery technology. I have no interest in the high floors.

• Russian chess player Amina Abakarova seen poisoning rival with mercury

  • What is it with Russians and poison? Do they teach you how to poison someone in middle school?

• Olympic swimmers drinking Coca-Cola to fight off bacteria after competing in polluted Seine River

Real Estate

• This WSJ article is entitled, “Office Loans Are Toxic, but Apartment Loans Are in Bad Shape Too,” and gives a lot of data to support the thesis. “Survive until 25” has become a mantra for landlords who are hanging onto buildings by their fingernails and praying for rate cuts soon. While it is well understood that many offices are a lost cause, apartment loans are in surprisingly bad shape, too. More than $40 billion of office loans were in distress at the end of the second quarter based on data from MSCI, which is around three times the value of distressed apartment loans.  But the pool of apartment mortgages that could get into difficulty in the future is larger—$56.9 billion are at risk of distress, compared with $50.9 billion for offices. These loans are flashing amber because occupancy rates are falling or the income generated by the buildings is barely enough to meet interest payments, says Alexis Maltin, a vice president at MSCI Research. Offices will remain the big boogeyman for real-estate lenders, but there is pain on the way for apartments.  

  

• The share of available listings that saw a price cut in July rose to 18.9%, up 3.4% compared with levels recorded in July last year. Those cuts have helped push down home prices across the country, with the median US home price dropping from $445,000 to $439,950 last month, the real-estate-listings site said in a recent report. Price cuts have largely been driven by lower demand, alleviating some of the imbalances that pushed prices to record highs over the past year. "First, rates remain higher than expected, which means there is less buyer activity," Ralph McLaughlin, a senior economist at Realtor.com, said in a statement. "Second, the prospect of lower mortgage rates coming this fall may have induced some buyers to wait. This combo has led sellers to lower their prices in order to attract more buyers." There is no doubt the affordability issues around housing (price, rates, insurance) are impacting sales. Also, the cumulative impact of inflation over the past few years is hurting the consumer, as many earning reports have shown.

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