Opening Comments
Pictures of the Day-9/11
My 1st Podcast-I was a guest on Lee Bressler’s Show
Topics Included: My background, Writing, Future of Dining, South Florida vs NYC..
Bicycles - If You Can Even Find One - are Now Gender Neutral and Expensive
Quick Bites
Markets, Strategists Nervous/Market Breadth, Apple Legal Decision
Nat Gas, Buy Now Pay Later Woes, Microsoft WFH
Food Prices, Taxes on Wealthy, US Drone Strike
Macklowe $600mm Art Sale, Water on Mars
Gold Chains Implanted in Head
Virus/Vaccine
Data
Biden Vaccine Mandates
Unvaccinated 11x more likely than Vaccinated to Die
LA Students 12+ Years Old
Real Estate
My General Comment/Follow up from 7/25/21 Rosen Report
Manhattan Rents-Good Charts
Palm Beach Estate Flip
Opening Comments
We have about 50 more days of heat, humidity and rain and then magically, it disappears and is amazing from November-May. Hard to put into perspective how challenging it is to do physical activity outside right now. Lots of new people are here in South Florida. They came down for the start of the school year and have made comments about the heat/humidity and don’t want to go outside. Most schools are full and housing remains in short supply. One interesting side note. People who move here from the Tri-State, Chicago, CA… are taken aback by a South Florida behavior; it’s excessive drinking. I was a bit stunned when I came down too. People drink in the middle of the day.
What an exiting time in tennis with two teenagers in the Women’s Final of the US Open. Also, D-Joker going for the calendar Grand Slam Sunday at 4pm. Great ESPN story about Djokovic’s run to the calendar Grand Slam and some impressive stats. Let’s not forget T-Brady still strong at 44. He is 7 years younger than me and playing in the NFL at the highest level. I am finally watching some sports again after a bid of a pandemic related hiatus.
Picture of the Day-9/11 Pictures
In light of the 20th anniversary of 9/11, I wanted to share a story and some pictures I found primarily in a WSJ article. I was in Midtown at 270 Park Avenue (JPM/Chase) during 9/11. I went to the cafeteria to get breakfast and when I came back to the trading desk, it looked like a movie was being filmed on the TV. I said, “Is that a new action film on TV? Why are we not on CNBC?”
One of the traders said, “Eric, a plane flew into the World Trade Center.” I was very scared and there were bomb threats and rumors of explosions in our area. My office was evacuated. It was a surreal walk from midtown to my then apartment on the Upper West Side. People from downtown near the tragedy were walking uptown to get away from the chaos. The park was crowded and some of the people were covered in soot. No one wanted to get into a subway. I was so nervous about what was coming next, but that was nothing relative to the people who were at the epicenter of the attack and the first responders who helped so many.
Thankfully, we had brave police, fire and paramedics helping those in need. I know there is a lot of hate of the police, but these men and women did super human things during 9/11 and should be applauded for their bravery. Here are some pictures which bring back horrible memories. I have many young readers who are too young to remember the tragedy and inserted more pictures than normal to make sure we never forget.
Thank you to all those heroes who risked their lives to help. I believe 2,977 people were killed and more than 6,000 injured in the multiple attacks on 9/11. Included in the deaths were 344 firefighters and 71 law environment officers. Additionally, 3,439 first responders died of cancer and other related ailments due to all the carcinogens in the air after the attack. Many remain sick with an array of illnesses. You are all heroes and should be treated as such in my opinion. If the US government can send hundreds of millions to Sudan and fund gender programs in Pakistan, surely they can take care of those who stepped up for our own country.
My 1st Podcast-I was a guest on Lee Bressler’s Show
On a much lighter note, I had a fun experience doing a podcast recently as a guest on Lee Bressler’s Show. Tell me what you think. Should I do this more and maybe do a section of the Rosen Report on audio or video? Topics for the podcast attached included a quick background on me, why I started writing, dining in NYC/Florida and the future of dining. There was a tangent on Austin, Texas and hotel experiences. It is about an hour. Near the beginning is a funny story about me at Cipriani pre-GFC with a dress code violation. Towards the end is an entertaining story about hotels and my honeymoon.
Bicycles - If You Can Even Find One - are Now Gender Neutral and Expensive
Shortly after we we moved down to to Florida in August 2017, we bought 4 bicycles. We drove to a local bike shop and everyone picked out the bike they wanted. There were a ton of options to choose from of varying styles and colors at the time. We all bought similar bikes in the “hybrid” style and they ranged from $300 for the kids to $500 for mine. We are not riding in the Tour de France and did not feel the need to get a composite bike which costs a fortune. The bike shop offered us a healthy discount and threw in a couple high end locks as well. The total spent with helmets, locks and taxes was approximately $1,800.
Obviously, my wife and I did not outgrow our selections. However, my kids have not been able to fit on their bikes for a while and we gave them away. Fast forward to last week and Jack asked for a new bicycle. I understood that biking took off with the pandemic, but did not expect the experience we had buying a bike.
We went to a local bike shop and I was taken with how little inventory was in the store. I asked about the lack of bikes and the guy said, “Pre-pandemic, we had a warehouse with over 600 bicycles in it as well as a store overflowing with inventory. Today, this is what we have and getting re-orders is impossible.”
I asked which bike was good for my son and he had two different ones to pick with one color option each. This was far different from the last experience where there were far more options. Shockingly, my son fit on an XL frame. I think I need a DNA test. What Rosen gets an XL bicycle? The bike cost a smooth $850 and no discounts. No free locks.
The owner told me he cannot get inventory and they are months delayed. The manufacturers do not let him pick styles, sizes or colors any more. The shop receives what is available based on pre-pandemic ordering habits.
Well, when you buy a new bike for one kid, the other says, “Seriously, what about me, dad?” So off I went with my daughter, Julia, to pick out her bike. I decided to try another store given the scarcity of product in my first attempt with Jack. This store had a more traditional showroom which was largely full of bikes, but to be fair, it was 60% of the size of the other place. At least there were a few options for Julia.
The options ranged from $600-850. My daughter is 5’7” tall and was looking at traditional women’s bikes. The owner said to Julia, “You are tall and I think you would be more comfortable in this one.” It was a traditional men’s bicycle and I said, “You think Julia needs a men’s bike?”
He responded, “We no longer use the terms men’s or women’s, but call them step-over (formerly men’s) or step-through (formerly women’s). He was laughing when he said it, but clearly he has been hit over the head because he offended someone by using the wrong language in 2021. I thought he was kidding. He was not joking about the new names.
Step-Through (FKA Women’s Bike)
Step-Over (FKA Men’s Bike)
He told me they cannot get inventory and Shimano (manufactures bike component parts), is closed for three months due to the pandemic. The result is a huge backlog as you can no longer get the component parts to complete the bikes.
Getting a bike today is painful with limited inventory, high prices and new woke terms. Remember, “step-over” or “step-through.” Don’t you dare make the mistake I did and date yourself by asking for a men’s or women’s bike any more. SERENITY NOW! How in the hell did we get here? Also, I spent as much on two bikes as I did on four bikes just four years ago.
Quick Bites
The Dow declined for a fifth straight day Friday as economic uncertainty loomed. The blue-chip index shed 272 points, or 0.8%, to close at 34,607. The S&P 500 dipped nearly 0.8% to 4,458, and the Nasdaq retreated about 0.9% to 15,115. The S&P 500 and the Dow haven’t recovered since the poor jobs report last Friday, falling each day since, including all four trading days of this holiday-shortened week. For the week, the Dow is down roughly 2.2% in its second negative week in a row. The S&P 500 is off about 1.7% for the week, while the Nasdaq Composite is 1.6% lower. Investors are worried about persistent Covid cases slowing the economy just as hot inflation causes the Federal Reserve to take away easy policies. “It’s been a week that’s really taken its cue from the delta variant,” said Jack Ablin, Cresset Capital Management’s founding partner and CIO. “Investors are wringing their hands over growth but are seeing higher inflation at the same time.” I feel sell-offs are healthy and after the historic rally, hope to see a continued pullback. Markets just don’t go up everyday. The VIX is 21, down 30% on the year, but up 39% from the early July lows of approximately 15.
Strategists from almost all the top Wall Street banks have come out this week with a nervous message about the U.S. stock market. The latest views hail from Deutsche Bank AG and Goldman Sachs Group Inc., and echo earlier pronouncements from Morgan Stanley, Citigroup Inc. and Bank of America Corp. While investment banks tend to be measured in their outlooks, there are common threads that underpin their predictions that the market is vulnerable. Valuations are at historical extremes, stocks have rallied non-stop for seven months, the economy looks soft and the Federal Reserve is preparing to taper stimulus. From a Bloomberg article, big rallies are a thing of the past. The S&P 500 has gone 34 days without rising 1% in any of them, the longest in 20 months. And the pool of companies feeling significant price pressure keeps expanding. More than half the index’s members have suffered peak-to-trough declines of at least 10% since May, data compiled by Morgan Stanley show. It’s worse in small-caps, where 90% of Russell 2000 stocks have already suffered their own 10% correction. I found this article interesting from the Associated Press with respected to the UN Chief, Antiono Guterres, who issued a dire warning that the world is moving in the wrong direction. He is concerned about a breakdown of global order and a future of perpetual crisis.
Apple’s lucrative App Store business received a major blow Friday thanks to a federal judge’s decision in the company’s legal battle with Epic Games. Judge Yvonne Gonzalez Rogers handed down the decision in the closely watched trial, and issued an injunction that said Apple will no longer be allowed to prohibit developers from providing links or other communications that direct users away from Apple in-app purchasing. Apple typically takes a 15% to 30% cut of gross sales. The injunction addresses a longstanding developer complaint and raises the possibility that developers could direct their users to their website to subscribe to or purchase digital content, hurting Apple’s App Store sales, which grossed an estimated $64 billion in 2020. Apple stock dropped more than 3% ($85bn market cap) in trading Friday. Finally, a slight help for the company who is not the market behemoth. I personally feel Apple, Amazon, Netflix, Microsoft, Facebook… have far too much power, influence, control.
Natural gas prices have doubled this year and are expected to continue to rise, resulting in larger winter heating bills for some consumers and higher costs for electric utilities. Natural gas is plentiful in the United States and has been cheap for years, so the jump in prices this year is eye popping. In the futures market, the natural gas contract for October rose above $5 per one million British thermal units, or mmBtus, for the first time since February, 2014. Besides electricity and heating demand, natural gas is an important feed stock and is used in the processing of chemicals, fertilizers, paper and glass, among other products. These prices will result in far higher bills for consumers, especially over the winter heating months. Historically, natural gas peaks in the winter and is lower in the summer, but has been quite elevated recently.
A third of U.S. consumers who used "buy now, pay later" services have fallen behind on one or more payments, and 72% of those said their credit score declined, a new study published by personal finance company Credit Karma showed. The study, conducted by software firm Qualtrics, surveyed 1,044 adult consumers in the United States last month to measure their interest in buy now pay later (BNPL) and found 44% had used these services before. The usage figure was slightly up from a similar survey conducted by Credit Karma for Reuters in December, while missed payments was down from 38%. I am shocked about the instant gratification society. I grew up with limited means and never fathomed to borrow money to buy anything. Today, you can borrow to buy a pair of shoes. I appreciate these business models which offer consumers credit, but feel many consumers don’t understand the interest component or the consequences. I have always been conservative when it comes to leverage.
Microsoft told employees Thursday that it has indefinitely delayed their return to U.S. offices until it’s safer to do so. "Given the uncertainty of COVID-19, we’ve decided against attempting to forecast a new date for a full reopening of our U.S. work sites," Jared Spataro, a corporate vice president, wrote in a blog post. Microsoft had already postponed its planned return to the workplace from September to no earlier than Oct. 4, but now says the re-opening won’t be next month. Here is a link to 30 companies doing long-term remote work. I have mentioned numerous times the WFH/Hybrid model will be one of the biggest long term impacts of the pandemic. The longer people work from home, the harder it will be to go back in full-time. Although I do feel you lose collaboration by not being in an office, I feel there is so much wasted time, boring meetings and commuting, that you are more efficient from home in many cases. Also, work-life balance is something on the top of people’s minds right now. In another related story, 15 CEOs weigh in on the weigh the pandemic changed work and what is next.
The Biden administration said Wednesday it plans to take “bold action” to enforce antitrust laws aimed at meatpacking companies it says are causing beef, pork, and poultry prices to rise at the grocery store. Even though beef prices have been rising, farmers and ranchers have been making less money, the White House said. Climate change, labor issues, transportation concerns and other supply chain disruptions have been contributing to the rising costs over the past several years. The pandemic disruptions then sped up the rate of growth in prices. I keep speaking about inflation. It is almost everywhere. Yes, some is transitory. How much, I just don’t know. Other than electronics (TV’s computers, phones…) which are increasing in power and functionality and going down in price, virtually everything else is increasing (homes, cars, clothes, consumer products, commodities, food, travel, hotels, rental cars, restaurants, wages and now paint…Prices that producers get for final demand goods and services surged in August at their highest annual rate since at least 2010, the Labor Department reported Friday. On a year-over-year basis, the gauge rose 8.3%, which is the biggest annual increase since records have been kept going back to November 2010. That came following a 7.8% move higher in July, which also set a record.
Democrats may scuttle tactics used by the rich to pass wealth to heirs with little to no tax, part of a broader plan to raise money for an expansion of the U.S. safety net. Specifically, the party is considering disallowing some complex trust-planning techniques used by wealthy Americans to avoid estate tax, according to a discussion list of potential tax reforms obtained by CNBC. Congressional Democrats may also ask the Treasury Department to update regulations to “prevent the abuse of non-economic valuation discounts,” according to the list. This concept applies, for example, to entrepreneurs who give a minority interest in their business to their kids at a discounted rate. I do not know where this shakes out in terms of income tax, capital gains, corporate taxes and estate taxes, but clearly, there is a push to raise them significantly on the wealthy. I feel taxes are going up, but hope they are measured. I am a firm believer you cannot tax a nation into prosperity and the high end of the tax discussion seems too onerous, especially in estate taxes. Remember, you already paid income and capital gains one time and then you are taxed again. This AP article was a bit more balanced and suggests the high end tax rates are a less likely outcome given Senators Manchin and Sinema are likely to push back and the Biden Administration is willing to compromise.
I was clearly critical of the way the exit from Afghanistan took place. I do not want to continue to bring up this point, but did want to highlight a story which has been circulating for a week about the US drone strike. It appears from multiple news sources (NY Times and CNN included) that the drone caused secondary explosions resulting in the death of an an aid worker and children, in addition to the ISIS-K target. The stories suggest one family of 10 was killed. On a positive note, it appears the Taliban will let Americans leave and one story I read suggested a plane left Thursday with some Americans on board.
The billionaire real estate developer, Harry Macklowe, and his wife, Linda, were married 59 years and built a truly remarkable art collection. The collection, which includes works by Mark Rothko, Andy Warhol and Alberto Giacometti, will be auctioned by Sotheby’s. Valued at about $600 million, it could be the most valuable single collector sale in history, Sotheby’s said. The Macklowes fought bitterly in court over the collection, and auction houses and top dealers fought over the chance to sell it. Sotheby’s declined to talk about the process of winning the sale, but people familiar with it say Sotheby’s offered a guarantee of $650 million to $700 million. I am very picky about art and feel this is one hell of a special collection with works by artists I hold in the highest regard. Unfortunately, it is a wee bit outside of my price range. Now, if a reader wants to pay me $12,000/foot for my house, I could participate in the auction. As for why wealthy people are Florida residents, assuming the sale nets $600mm, it would cost a NYC resident an incremental $77mm in taxes which would never be spent on anything useful by the inept politicians. Given the Macklowes have collected for decades, I assume their basis is incredibly low. I know people who bought art in the 1960s/70s for $10k which is worth $80mm+ today, for perspective. I would be a bit surprised if the Macklowe sale does not go for over $700mm based on the quality of the collection and hot market environment. The highest sale ever was in 2018 when the Rockefeller (David & Peggy) received $835mm and some believe the Macklowe’s will go for more.
Every time I put something UFO related into the Rosen Report, it seems to get a lot of attention. For all my new readers, I am not some crazed person who claims to be abducted by aliens, but I think it is a bit insane not to believe in the vast universe that other life forms could exist. The Mar’s rover’s first rock samples reveal a lengthy water exposure. "We determined salt granules in the rock indicate it was exposed to water," Julia Goreva, a NASA scientist for the rover program, said in a news conference from the Jet Propulsion Laboratory in Pasadena, Calif. We have even more evidence and I am convinced we are not alone. Aliens, if you are friendly and want to abduct me, I am available. Bring me back safe and give me some gold bars and good food an I am yours.
Attention-hungry rapper-Dan Sur has adopted an extreme look that is sure to fill even the most die-hard hip-hop fans with dread. This 23-year-old Mexican goldilocks claims he’s the “first rapper … in human history” to rock an assortment of gold chains as “hair” — hanging from hooks he had surgically implanted into his scalp. Stupidity in this world never ceases to amaze me. Having said that, the Rosen Report needs some spicing up in order to keep my readers engaged. I needed a haircut and stopped at the jewelry store on the way. Hopefully, my courage and daring new look will bring a few new subscribers to the table? In order to complete my due diligence, I listened to some of this clown’s music and the four minutes I spent doing it are gone forever and I am traumatized. If this guy can sell 3 albums, my horrific voice and hack guitar should sell out Madison Square Garden every night for a month, especially with my new hair.
Pre-Hair Cut
Post New Rosen Report Look to mimic Dan Sur
Virus/Vaccine
Cases were -6% for the prior two-week period relative to peak growth of 172%. As of Saturday, cases are averaging 147k/day for the prior two-week period. Hospitalizations were unchanged at 101k and at one point, they were growing 85% over the prior two-week period. Deaths are growing but have slowed to +30%, down from +116% at peak. Daily deaths are averaging 1,666/day. The Delta variant continues to dominate in the US, while Mu only accounts fr less than .5% of the cases as of a couple days ago.
In his most forceful pandemic actions and words, President Joe Biden on Thursday announced sweeping new federal vaccine requirements affecting as many as 100 million Americans in an all-out effort to increase COVID-19 vaccinations and curb the surging delta variant. Speaking at the White House, Biden sharply criticized the roughly 80 million Americans who are not yet vaccinated, despite months of availability and incentives. “We’ve been patient. But our patience is wearing thin, and your refusal has cost all of us,” he said, all but biting off his words. The unvaccinated minority “can cause a lot of damage, and they are.” The expansive rules mandate that all employers with more than 100 workers require them to be vaccinated or test for the virus weekly, affecting about 80 million Americans. And the roughly 17 million workers at health facilities that receive federal Medicare or Medicaid also will have to be fully vaccinated. Biden is also signing an executive order to require vaccination for employees of the executive branch and contractors who do business with the federal government — with no option to test out. That covers several million more workers. While speaking in Wilmington, Del., on Dec. 4, 2020, Biden was asked whether COVID vaccinations should be mandatory. He said, "No, I don't think it should be mandatory. I wouldn't demand it to be mandatory." He added, "Just like I don't think masks have to be made mandatory nationwide." "I'll do everything in my power as president of the United States to encourage people to do the right thing and when they do it, demonstrate that it matters," said Biden.
President Biden announced a sweeping plan that could force millions of unvaccinated Americans to get the COVID-19 shot but left out mandating the vaccine for illegal immigrants crossing the border. Biden announced Thursday that all employers with more than 100 employees will be forced to either require their employees get vaccinated against COVID-19 or mandate weekly testing for the virus. Meanwhile, more than 18% of migrant families who recently crossed the border tested positive for COVID before being released by Border Patrol. Another 20% of unaccompanied minors tested positive for the virus.
An upstate New York hospital said it will pause the delivery of babies in two weeks because of a spate of resignations by maternity unit workers who are objecting to COVID-19 vaccination mandates. Lewis County General Hospital, in Lowville, will temporarily stop delivering babies after Sept. 24, WWNY reported. During a news conference Friday afternoon, Lewis County Health System CEO Gerald Cayer said seven of the 30 hospital workers who resigned were from the hospital’s maternity ward.
Unvaccinated people are 11 times more likely than vaccinated people to die from Covid-19, a large study by the Centers for Disease Control and Prevention found. The study looked at Covid-19 cases, hospitalizations and deaths in 13 states “and found further evidence of the power of vaccination,” CDC Director Dr. Rochelle Walensky said in a briefing Friday. More than 600,000 Covid cases from April through mid-July were analyzed and linked to vaccination status.
The Los Angeles board of education voted Thursday to require students 12 and older to be vaccinated against the coronavirus to attend in-person classes in the nation’s second-largest school district. The move makes Los Angeles by far the largest of a very small number of districts with a vaccine requirement. Nearby Culver City imposed a similar policy last month for its 7,000 students. The Los Angeles Unified School District, which has more than 600,000 mostly Latino students, already tests all students and employees every week, requires masking indoors and outdoors and has ordered employees to be vaccinated. Under the vaccination plan, students 12 and up who participate in sports and other extracurricular activities need to get their two-shot sequence completed by the end of October. Others have until Dec. 19.
Denmark lifted all COVID-19 restrictions, making it one of the first EU countries to do so, the AP reported. The country boasts an 80% vaccination rate, which is the driving force behind this choice. Meanwhile, cases in the US are 16 times too high to end the pandemic, Dr. Anthony Fauci said this week.
Real Estate
My Comments-On 7/25/21, the Rosen Report was entitled, “There Ain’t No Such Thing as a Free Lunch.” In it, I discussed a 1,500 square foot, 3 bedroom/2 bathroom home in Hollywood, Florida asking $375k. The house was built in 1960 and is on .24 acres of land about a mile west of I-95 on a fairly busy road. I wrote about the fact that over 200 people showed up to the open house and they had 22 offers with no contingencies at the showing. The house ended up selling for $460k or 23% over ask. Yes, the insanity continues. Remember, there were termite wings all over the house and no contingencies from buyers. The Fed needs to stop buying $40bn of mortgages every month. I spoke with a big broker in South Florida on Saturday who has sold over $400mm YTD in homes. He said, “Eric some brokers used aspirational pricing and now more have turned to delusional pricing.” We are starting to see some homes sit on the market now. They are just asking ludicrous prices. I was offered to participate in a deal to buy a lot and an older home on the adjacent lot. I passed given the pricing which I felt was too rich. The buyer presumes he can get full price for a 20 year old tired house. I don’t even think the house is salvageable and view it as a knockdown. People will start getting hurt given all the “stretching” going on to buy down here. I went to look at a house on the water in Boca. It has been on the market for over 1 year, a red flag in a hot market. The house was very nice, but the property was long and narrow with 50ft on the water and 300 ft in length. The sellers are delusional on pricing. If the lot was 100x150, it would be a different story. Markets are efficient.
Rents are climbing again in Manhattan -- but only in buildings with doormen. The median price of those apartments, in fancier towers with more amenities, jumped 8.1% in August from a year earlier, to $4,160, according to a report today by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest annual increase for doorman rents since 2012. At the other end of the spectrum -- in buildings without doormen, and few, if any, other frills -- rents continued their pandemic-era plunge. The median price for those units fell 12% to $2,595.
In the sizzling-hot, pandemic-fueled Palm Beach real-estate market, Todd Michael Glaser may have hit the jackpot: He is relisting a private island for $120 million—or $35 million more than he and his partners paid in July. The developer said the plan is to list Tarpon Island, which includes an older home, next month. Buyers have two options: They can pay $120 million for the property as is, or $200 million with an extensive renovation and addition completed. It is possible, however, that the latter price tag could increase by the time the project is finished in about 10 months, he cautioned. In South Florida, quick flips on high end R/E are happening constantly. I have seen countless multi-million dollar properties bought and sold over a few months with 30-60% gains, but this one would be on a much higher base.