Altitude is NOT Linear
7-5-26
Opening Comments
My last note was about the growth of padel across the globe. There is a reason it is so addictive. A reader sent me this short video of a doctor explaining the health benefits of padel. Another point I did not mention in my last note was the social nature of the game. You stand closer to your opponents than tennis, and I find there is more talking and camaraderie, which makes it more fun. Interesting points at the 11:20 minute mark. The most opened links were the story about a man who asked a teenager to lower his volume and ended up getting shot and killed and the story about the ambitious TSMC project in Arizona.
In my last note, I shared my protocol for peptides and supplements as prescribed by my longevity doctor. I was run over with emails, texts, and calls from readers asking a lot of questions. The interest on the topic of peptides, supplements, and longevity is impressive. The peptides are all sourced in the US from high-quality pharmacies. It is too early for me to have noticeable results but am hoping in coming weeks I will report positive findings. To be clear, peptides are one part of the equation; diet, exercise, sleep, and stress management all play a role.
I do have a funny related story. I rented a condo in Park City, Utah and am living here solo. I received my peptides and needles and left my needle packs on my sink in the bathroom. There were well over 150 needles in packages. I received a call from my landlord that there was a leak in the neighboring unit and he and the plumbers needed to come in and check the pipes in my bathroom. I was not at home. I started laughing to myself because it would appear that I am a heroin addict or something given my needle collection due to my peptide regimen. I can only imagine what they thought when they saw my stash. Despite my unwillingness to do recreational drugs, from the state of my bathroom, it looks like I have a problem.
I hope everyone had a good 4th of July holiday despite the record breaking heat which caused many events to be cancelled. The average cost of a July 4th BBQ surged 31% in NYC. A typical cookout for 10 people with set shoppers back $295 compared with $232 last year. Consumers are getting squeezed. The picture below was taken on my hike from Friday. It was a couple running the 5.3-mile trail decked in stars and stripes while carrying a large American flag.
Markets
Profits on Hyperscalers
Alex Karp Spiting Fire
Oil Crack Spreads Explained
Best & Worst Run Cities
Resume Tips
The Rise of Socialism and the DSA
NJ Bidding Wars
NYC Luxury Remains Hot
Napa Winery Auction at Depressed Price
Video of the Day-Free Paint Job for an Old Truck
Marko is a talented artist that does amazing shoe designs for famous people. He also randomly paints people’s cars, and this is a touching story which helped a man in need. I enjoy feel good stories in an era of awful headlines every day, and this is one of those nice outcomes. The truck was a rust bucket and falling apart, but after the body work and paint job, it looked brand new. The owner was in disbelief.
Altitude is NOT Linear
I wrote about my altitude induced breathing mess in my story titled, “Huffing and Puffing.” It was about my hike that went to about 8,200 ft. What I find interesting is that I played 4.5 hours of padel at 4,350 feet on Saturday. Sure, I was winded after playing 8 sets and practicing. However, it was not crazy. Then just yesterday, I played padel at nearly 7,000 feet and after two games I was out of breath. I could not play more than four sets and quite frankly, the last set was so ugly, I should not have played.
Last Sunday, my friend, Rick and I hiked up Deer Valley. We started at 8,000 feet and went to 9,400. I was losing my mind. Within minutes of starting the hike I struggled to catch my breath. I had to take multiple breaks given my heart rate and struggles breathing. Given I live in Florida at ZERO feet, I thought I would struggle more at 4,500, but not a big issue. As I crossed over 8,500, I was getting anxious. I was breathing like a 9 pack a day asthmatic smoker with pneumonia.
You burn more calories at altitude, as the lower oxygen levels force your body to work harder to perform the same tasks. This atmospheric pressure shift alters your physiology, spiking your resting metabolism and changing how your body processes nutrients. Below, Claude explains the issue of altitude.
Altitude’s effect on your body is mostly a story about one thing — how much oxygen pressure drops as air gets thinner — but the surprising part is that the effect isn’t linear. Going from sea level to 5,000 ft does far less to you than going from 5,000 to 9,000 ft, even though the second jump is smaller in feet.
The reason is the oxygen-hemoglobin dissociation curve, an S-shaped relationship between the oxygen pressure in your lungs and how loaded-up your blood gets. At lower altitudes you’re sitting on the flat top of that curve, so even as air pressure falls, your blood stays nearly fully saturated. Somewhere around 7,000–9,000 ft you slide onto the steep part, and from there every additional thousand feet costs you a lot more.
Add to the altitude the fact that it was FREEZING. It started to snow and hail on the hike as we got to the top. Then the chairlift back down was beyond frigid. I had to order soup and sat on my hands for 20 minutes to get warm, and it was June 28th! Some reports suggested that mountain peaks received up to 4” of snow on the day of the hike. I had gone on the hike with Rick and gave him plenty of flack for taking me on a hike where I almost froze to death. This was not the only time Rick tried to kill me, but I will save that for another report. Let’s just say that he lost all restaurant recommendation privileges.
I went and did the hike again in warmer temperatures a few days later and walked an extra 45 minutes to get to the hike and back. I went with David, another reader from LA who has a beautiful Deer Valley condo. I did it faster the 2nd time, but it was taxing. The altitude is helping me get into ridiculous shape. If you train at any major altitude, you will see a difference in a hurry, and the explanation in my note is the reason for it. I am quite frankly shocked at the improvements in my body in a few short weeks between hiking, padel and lifting at altitude.
Despite Rick’s attempts on my life, he and I hiked 5.3 miles on Friday, and it was less taxing from a vertical perspective (700 ft vs 1,500), but it was very scenic. The aggressive mountain bikers tried to take me out a few times, but my catlike reflexes saved me. We saw an amazing blue bird and a chipmunk type animal eating an acorn, plus lots of stunning Aspen trees and wildflowers. The scenery in the mountains is spectacular.
Quick Bites
On Thursday, nonfarm payrolls disappointed at 57k, lower than the 115k forecast or the prior month’s revised 129k. Of concern is that the Labor Force Participation Rate is the lowest in 50 years outside of COVID. The suggestion is that workers are giving up because they can’t find jobs. The third chart shows that men’s participation in the labor force is crashing. On Thursday, stocks were mixed, with the Dow outperforming at +1.1%, while the Nasdaq underperformed at -.8% due to weakness in semiconductors. On the week, major indices were +2%, but the Russell underperformed and was slightly negative. The VanEck Semiconductor ETF was -3.2% on the week and -5.6% for the past month. The 10-year treasury was +12bps on the week to 4.49%, largely driven by Warsh’s hawkish comments on inflation and despite weaker than expected jobs data. With the recent move in rates, futures are predicting a 100% chance of one rate hike and an 18% chance of a second by year end. There is a good chart from CNBC outlining 2nd Q redemption requests from private credit funds and the numbers are concerning. The funds are capping redemptions.
Interesting commentary by Apollo’s Torsten Slok regarding profit margins and the ROI runway for hyperscalers. The first chart below shows that so far there are no signs of profit margins rising outside the tech sector. This is ultimately what we are waiting for, because the value of AI companies today rests entirely on the promise that margins in the S&P 493 will eventually climb. That promise is the link to current market prices, since implicit in the valuations of AI companies are assumptions about future earnings. That’s why the current debate about token costs, model routing and token marketplaces is important. If token costs converge toward zero for most AI use cases, then there is not enough revenue for all hyperscalers even in a situation where compute demand surges higher. The key issue is the length of the ROI runway outside the tech sector. In a handful of sectors, software and tech above all, implementation is nearly immediate, since these firms can fold AI into their own products and processes overnight. But that is the exception. Across most of the economy, and especially in capital-intensive, heavily regulated sectors, deep process re-engineering and data governance requirements could delay structural productivity gains well beyond what the market currently projects. This creates a dangerous divergence between aggressive, front-loaded valuations today and a much slower cash flow reality, since equity markets priced for instant earnings growth will face a painful repricing if the productivity hockey-stick takes five years rather than five months.
This is a great ZeroHedge article that includes the 19 minute CNBC interview of Alex Karp spitting fire. It is must watch TV. On Wednesday, Palantir CEO Alex Karp delivered a blistering critique of frontier AI labs, accusing them of having an "effing insane" business model that leaves enterprises paying escalating token costs for limited value while risking their proprietary data and intellectual property. He said that top AI labs such as Anthropic and OpenAI were misleading corporate partners - "overselling" the risks of AI while at the same time offering their most powerful models to companies and governments worldwide. Karp's comments come amid a "revolt" against U.S. AI labs - driven by a combination of high costs, questionable ROI, and increasing regulatory headwinds which have driven some major U.S. companies to cheaper Chinese alternatives, creating multiple pressure points for OpenAI, Anthropic, and others. Karp slammed the token model used by Anthropic and OpenAI - saying “I’m not throwing shade at them, but something has gone completely wrong,” he said. “The basic view among enterprises in this country is I’m going to chillax and waste my time with tokens.” In the link is the “9-point AI sovereignty manifesto” Palantir posted on X.
With the dislocations in oil due to the war in Iran, I thought I would take some time to write about oil. On a positive note, the US is at ALL-TIME high production for oil and petroleum products. In April, production rose by 254k barrels/day to 21.84mm barrels/day. Year over year, production was +1mm barrels/day. I am a firm believer that energy independence is critical to national security. I am rounding, but of the oil/petroleum products production, I presume approximately 14mm barrels/day is oil and the remainder natural gas and other products. Since 2008, total US petroleum output has quadrupled. A positive development is also China’s 450mm barrel reduction of imports which has helped alleviate demand during a period where there are disruptions in oil. However, this is a temporary phenomenon. On the negative side, the Strategic Petroleum Reserve is at the lowest level in 40 years (2nd chart). It started with Biden’s awful decision to take a major drawdown in the SPR to lower gas prices ahead of the election. Now, it is due to the Iran war and the disruption to oil production and flows. The levels are dangerous and have national security implications. The third chart outlines the divergence in oil and the petroleum products extracted during refining and is known as the “crack spread.” It represents a refiner's gross profit margin and serves as a key economic indicator for the oil and commodities markets. Oil is the input and the output includes gasoline and diesel. The result is gasoline and diesel have stayed high despite oil prices crashing. The biggest reason driving the dramatic increase in spread are damage to refineries globally. The last chart shows how far from normal the crack spread is relative to oil. The most widely used benchmark in the energy industry is the 3-2-1 spread. It approximates the typical output of a modern refinery by calculating the hypothetical margin of turning three barrels of crude oil into two barrels of gasoline and one barrel of distillate (like diesel or heating oil). The other issue the oil industry faces is the fact that production and refining capacity has been taken offline due to the wars in the Middle East and Russia. I remain of the view that oil at $69/barrel is too low for the backdrop.
I have been critical of city, state, and federal governments’ fiscal irresponsibility. It is one of my most consistent themes. This Wallet Hub study ranked 148 US cities for turning tax dollars into results. The resulting “Best- & Worst-Run Cities” ranking measures spending efficiency specifically, not overall quality of life or governance style. Researchers compared 148 of the most populated U.S. cities on measures like school quality, crime rates, health outcomes and road conditions, then weighed those results against how much each city spends per resident. Note the bottom performers: San Francisco, Detroit, NYC, Oakland, Chicago, Philadelphia, and Baltimore. The best run cities were Provo, Nampa, Manchester, Boise, Nashua, and Sioux Falls, as seen in the chart below. There is a second chart in the link that gives a full breakdown with more detailed rankings. In the end, these cities generally bring in a lot of revenue, and the worst performers find ways to waste your hard-earned tax dollars and get very little for it.
I felt this CNBC article about the #1 resume red flag and how to fix it was filled with good advice. When you talk about your work in a resume, you know exactly what your team accomplished, why the project mattered and what the results meant. But the recruiter looking at your resume has none of that context. They have about six seconds to scan your application — and hundreds of others waiting. For over a decade, I’ve worked as a recruiter at major companies like Google, TikTok, Uber and The New York Times. The biggest resume mistake I see is writing for the one person who already knows your story: you. This mistake is often completely invisible to job seekers, even the hardest-working ones. And it’s a red flag because it makes your accomplishments harder to understand and your impact easier to overlook. If you have interest in improving your resume, this link gives some good ideas on issues and how to fix them. This CNBC article outlines the importance of thank you notes during the interviewing process, and I am in COMPLETE agreement.
Middle East
Tehran’s new leadership is younger, savvier, ruthless and even more hard-line
This was not the regime change I had in mind and is yet another example of the failure of the Trump Administration’s efforts in the Middle East.
Iranians call for revenge as mourners gather for Khamenei’s funeral
Harvard’s Antisemitism Problem Has Gone Underground
Harvard says its Jew-hate problem is under control. But professors and faculty say otherwise in a new letter, arguing that an insidious form of antisemitism has taken hold. There are dozens of buildings at Harvard named after Jews. Why a Jew would ever give this school money is beyond me. Len Blavatnik donated $270mm to Harvard but suspended his donations due to rampant antisemitism. I hope others follow his lead.
Politics
This article about Peter Theil stunning the liberal Aspen crowd with his warning about socialists taking over the Democratic party is concerning. Recent polls are showing socialism increasing in popularity, especially the college educated, and in particular females who identify as liberal. There are polls from the NY Times/Sienna, YouGov, Gallup, and others that show a substantial increase in support of socialism over capitalism. The rise of Mamdani, AOC, and big Socialist wins in Democratic primaries should be concerning for Americans who believe that capitalism is the best economic system. For more proof that prominent Democrats support socialism, listen to this CNN interview of Illinois Governor Pritzker. He believes Socialism is the recipe for winning in 2026. When you consider all of the accomplishments of America on its 250th birthday and listen to the rising hatred of this great nation and capitalism, I am disgusted. There has never been a greater country that has created more wealth and opportunity for so many, yet countless haters want to take the country to hell through Socialism. Millions of Americans have shown that work ethic, ingenuity, and creativity matter. We have saved millions of lives and improved the quality of life for millions more. I am proud to be American but am very concerned for the direction of the country with the rising support of a failed system called Socialism. The miracle of compounding, USA innovation, low real interest rates, and a capitalist economic system has led to an unprecedented stock market and private asset wealth boom. There is a direct correlation between the innovation/R&D spend, stock market performance, US $ dominance, and capitalism that you cannot find in Socialist countries. These are good things for humanity and America. However, I must note that the growing wealth divide between the haves and have nots is concerning. The top 1% owns over 50% of the stock market and the bottom 50% owns just 1%. In 1980, the top 1% owned less than 32% of the total stock market. The danger of the short-term appeal of wealth redistribution, to vote yourself what others have lawfully created and earned, was a danger the Founders recognized 250 years ago. That’s why property rights are critical to our Constitution, and why Benjamin Franklin reportedly said “a Republic if you can keep it.” America needs a sane and solid Democratic party, and I hope leaders like Jamie Dimon, Michael Bloomberg, Larry Fink, and Warren Buffett express themselves forcefully to the Democratic political leadership. It will be a disaster if the party indeed is taken over by the DSA as seems to be happening in the bluest states. This link is to charts showing how America has changed over the past 250 years.
Trump hails US as ‘light and the glory’ of the world on 4th of July, condemns ‘cancer’ of communism
U.S. won’t renew USMCA, opening door for negotiations with Canada and Mexico
President Donald Trump defends business dealings, his children in exclusive interview with CNBC
During Trump’s 2nd term, the US economy has added 716,000 payroll jobs and ~90% have gone to women
5 takeaways from President Donald Trump’s interview with CNBC
Left-Wing Insurgent Ousts 15-Term Congresswoman in Colorado
Melat Kiros, a 29-year-old democratic socialist, unseated Representative Diana DeGette in a Democratic primary to represent the Denver area.
DHS says nearly 70% of ICE arrests involve illegal immigrants previously charged or convicted of a crime
FBI infiltrated Gavin Newsom’s inner circle by convincing governor’s ally to wear a wire
Nancy Pelosi’s husband Paul charged with hit-and-run in Napa County
Given Pelosi’s rampant insider trading with no repercussions, I will be surprised if the amounts to anything.
NYC budget funnels $7M to transgender programs, drag story hours
A spokesperson confirmed state law remains unchanged, and boasted about Newsom’s record in serving the trans community
Texas makes the Bible required reading in public schools. Is Florida next?
Other Headlines
Americans are paying record prices for steak. Here’s why demand isn’t cracking
Beef prices remain near record highs as the U.S. cattle herd sits at its smallest size in decades, with ground beef up 13% and steak up 16% from a year ago. Consumers are still buying beef despite higher prices, with Fourth of July beef sales up about $352 million from last year, Shoppers continue to treat steak as an affordable luxury, favoring premium cuts and quality labels even as prices remain elevated.
The first chart was better than I expected regarding foreclosures and bankruptcies for consumers. The second chart shows improvements in outstanding consumer credit as a percent of disposable income. Charts are from Yardeni Research.
Tesla stock sinks 7% despite strong deliveries report, posting worst day in nearly a year
Extreme heat wave threatens U.S. power grids and July 4 travel
Dad of teen raped by illegal trans immigrant in NYC bodega wants creep deported
Illegal Alien Abundio Hernandez Cantu RAPED a CHILD in a NYC park on June 23rd, now under arrest.
But @BronxDAClark just let this vile pedophile OUT on supervised release. What the hell is going on? Illegal aliens who rape kids and get out on supervised release? DEPORT HIM.
VAR inconsistencies questioned after controversial Folarin Balogun red card in USMNT World Cup win
What a horrible call with major implications for the US team in the upcoming match Monday against Belgium. Balogun is the leading scorer for the US and will not be able to play Monday given the absurd red card from the prior game.
Health
How to make the most of your ‘12 good years’ between 60 and 72
By doing as much as we can now to harness our mobility and independence, we’re also building resilience and strength for the years ahead
Only about 6 to 10% of adults qualify as super movers. These people walk faster than average for their age and sex, typically at a speed of someone about 30 years younger.
Golf Course Concerns: New Research Shows Link to Parkinson’s
Real Estate
I have been writing about growing housing inventory and longer days on market in many cities. This NY Post article outlines some NJ suburbs in bidding wars with housing going well above asking prices. New Jersey’s suburban gold rush has no ceiling in sight, and buyers are paying whatever it takes. Forty-two Euclid Ave in Maplewood hit the market at $1.795 million. It sold for $2.279 million, a staggering 27% above ask. Down the road in South Orange, 376 Melrose Pl listed for $998,999 and closed at $1.332 million, a 33% premium. These aren’t outliers. They’re the new normal across a stretch of Essex and Union County suburbs where inventory has all but evaporated and buyers are throwing caution, and hundreds of thousands of dollars, to the wind. Maplewood, South Orange and Montclair are leading the charge, with homes across the region averaging double digit percentages over asking price and spending under two weeks on the market before going under contract. The suggestion is northern NJ is catching up to Westchester and Long Island markets. The data in the article suggests inventory is quite low.
A month after the passage of a tax on second homes in New York City, brokers and analysts said sales of luxury real estate remain strong. There were 126 contracts signed for apartments priced at $4 million or more in June, up from 124 during the same four-week period last year. Low inventory in the luxury market is also adding pressure to buyers. I am surprised by these statistics and am anxious to see how things play out over the next 24 months. We have seen an uptick of people who are calling from NYC and CA to move to South Florida.
The former Napa Valley estate of “Two-Buck Chuck” has found a buyer at auction.
The 42-acre St. Helena property once owned by Charles Shaw, the vintner whose name became Trader Joe’s bargain-bin staple, sold at auction for nearly $10.2 million after failing to find a buyer through traditional marketing. The winning bid came in at less than a third of the property’s original 2024 asking price of $35 million. The property at 1010 Big Tree Road includes 29 acres of vineyards, a public tasting room and primary and guest homes with a combined eight bedrooms and nine bathrooms. Shaw and his then-wife Lucy, bought the property in 1977, converting what had been a horse farm into a vineyard planted with Rhone varietals. Home sales in Napa and Sonoma counties this year have slowed from pandemic-era highs, with vineyard estates proving especially difficult to move because of their niche buyer pool and declining wine consumption among Gen Z consumers. Sellers have been forced to adjust expectations, and the Charles Shaw estate appears to be the latest example of buyers seeking deep discounts for trophy vineyard properties.
© 2026 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™ #903 Copyright 2026 Written By Eric Rosen.
