Boys Night Out in Miami-Leave Your Rosen Report Hat at Home-Bad Basel Art
12-10-23
Opening Comments
My last piece was about my epic fishing day in Florida with lots of pictures to prove it. The most opened links were about wealthy investors betting on private equity and the horrific story out of Israel/Hamas.
I am speaking at the SF Net Asset Based Capital Conference in Vegas in February with a former colleague from Continental Bank, Barry Bobrow. Yes, I said, “Continental Bank.” Yes, I am old given Continental Bank was bought by Bank of America in 1994! A bit more of the event is outlined here.
I went to Art Basel on Thursday & Friday and had a great time with friends at various events. I will write about it in upcoming reports, but I learned a lot about street/graffiti art at Wynwood Walls. In 28 hours, I ate at Zac the Baker, Doya, ZZs, and Faena House which will get discussed in an upcoming report. I had never been to Zac and the double chocolate babka was out of this world, but the chocolate chip cookie was underwhelming. I am a big fan of the food at Doya and ZZs and the breakfast on the veranda of Faena House was solid. Sadly, the traffic was awful in Miami resulting in a lot of walking, waiting for Ubers, and frustration. However, I had a lot of fun and was glad I went. I spoke with a few major art dealers who consistently told me it was a very good show from a sales perspective.
Basel had some good art, but plenty of awful works. There were quite a few that will make the bad list, but the one below by George Condo takes the cake in 2023. His highest price work sold for $6.8mm and this “masterpiece” can be yours for $1.4mm. I have never seen a Condo I would hang on my wall. Who wants to buy this one? Many of his works have these contorted, scary faces. I just don’t get it. They call his work Psychological Cubism. I call it scary.
The resumes keep coming and am working feverishly on a new website.
Experienced CEO, with 15+ years of diversified commercial real estate investment & management experience. Skilled in public and private debt & equity real estate investments, structured finance, corporate and venture investing. Data-driven, financially rigorous operator with a forward-thinking approach to industry trends and competitive actionable strategies.
Markets
Luxury Inventory Building
CA $68bn Deficit
Hunter Biden Indicted on 9 Tax Charges
Housing Lack of Affordability-My Childhood Home in #s
Chart of Rising Housing Defaults
Best and Worst Performing States on Housing Prices
Picture of the Day
I was surprised by Amazon’s dominance here as well as Apple’s weak position. I did not realize the disparity and thought NFLX was closer to Amazon. Bezos wins again. Here is another related headline: Amazon tests grocery subscription service for Prime members. Please don’t tell my wife, Jill. If she finds out about this, the Rosen family will get 42 bags of groceries delivered each day.
Boys Night Out in Miami
We have a group of about 8 guys in Boca that play tennis together and socialize quite a bit. Dinners, fishing, tennis, concerts, wine… It is not a group that could have existed pre-pandemic. We have hedge fund managers, bankers, CFO, Private Equity Partner, Musician and Manager from LA, Commercial R/E, Consumer Products CEO…. It is a nice group of well-educated, successful smart guys who enjoy a good time. We all live within a couple of miles of each other.
Ross had the idea of a guys dinner in Miami and it was between Contessa and Casadonna. I LOVE Contessa (been 15 times), but wanted to try something new and suggested Casadonna. We took the Brightline down at 4:36 pm. Given the dumb schedule, it was 4:36 or 7:36pm. Awful. This time, the train came on time and got us to Miami in under 1 hour. 7-minute Uber to Klaw for drinks to start the night.
I wore my world-famous Rosen Report hat in navy on the Brightline (advertising) and took it off when we got to Klaw.
We sat outside on the balcony of Klaw, the 6th-floor restaurant/bar overlooking Biscayne Bay. The view and the weather were spectacular. We had drinks and some appetizers and I would go back, as I heard it is a good dinner, albeit very pricey. However, Klaw had good Happy Hour drinks and appetizer specials.
From Klaw, we walked 200 feet to Casadonna. The place was happening. I had my RR hat in my hand and the host came over to tell me “No hats in the restaurant. You must check it.” I was not allowed to hold it?
The front bar and room are nice. We had a drink waiting for our table. Behind the front room there is a formal dining room with the big winner being the outdoor seating in back behind the dining room. I would not want to sit inside. YOU MUST BE OUTSIDE to experience the brilliance of the restaurant. Groot Hospitality (LIV, SWAN, KOMODO, GEKKO, Papi Steak..) and TAO Group (TAO, Hakkasan, LAVO, Beauty & Esses, Legasea Bar & Grill…) are partners on Casadonna. The ambiance was fantastic and a crowd of young and hip people was everywhere outside. The outside bar is where I would go to have a drink, as it was the place to be and looked out over Biscayne Bay.
We ordered appetizers and everything was good. I also liked the roasted potatoes. Is it my favorite food in Miami, no. But the combination of the ambiance, vibe, people and food make it worth the trip. We ordered a bunch of food and shared it so everyone could try different options. For appetizers, I liked the Tuna Carpaccio ($29) and Hamachi ($28). My favorite entrees were the Bolognese ($28), Chicken Diavolo ($36) and Dover Sole ($85). I thought the filet ($68) and Ravioli (were not special). For dessert, the Limoncello, Mint Ice Cream ($28), and the Chocolate Hazelnut Torte ($20) were my favorites. It is fully priced, but not offensively priced. Boys, when are we doing it again?
On the way out, I got my hat back and we all got into an Uber XL back to Boca. Given I am the eldest in the group and was old and tired, I fell asleep, and when we got back to Boca, I jumped out of the car leaving my prized hat behind. Some lucky person just found a special hat and it serves me right to bring it in the first place. I have spoken with a half dozen other readers who have experienced Casadonna and the consistent feedback was very positive on the ambiance, but one person felt the food was not up to the hype, while others loved it.
Quick Bites
The S&P 500 rose on Friday to hit a new high for the year after the November jobs report and University of Michigan consumer survey data signaled a resilient economy and cooling inflation, fueling hopes for a so-called soft landing scenario. Nonfarm payrolls rose by a seasonally adjusted 199,000 in November, slightly better than the 190,000 Dow Jones estimate and ahead of the October gain of 150,000. All the major averages finished the week with gains. The broad market index jumped 0.2% for the period, and the Dow finished marginally higher. Both indexes wrapped six winning weeks, their longest run since 2019. The Nasdaq advanced 0.7%. Treasuries sold off on Friday after the jobs report showed unemployment falling. As seen in the chart below, the 2-Year yield was 14bps higher and the 10-Year was 10bps higher. Although oil fell 4% on the week, it was +2.7% on Friday and booked 7 straight weeks of losses (1st time in 5 years).
This is a good WSJ article entitled, “Luxury Stores Are Bursting With Unsold Stuff.” Fashionistas can smell blood. Luxury brands need to find ways to unload their growing pile of unsold stock without reeking of desperation.
The luxury industry is slowing as shoppers sober up after their pandemic spending spree. In 2022, sales across the sector rose by 15% at constant exchange rates, according to Bain & Company estimates. But U.S. shoppers tightened their belts toward the end of last year, and Europeans followed this summer. The Chinese haven’t been spending as much as brands hoped either since Covid-19 restrictions were lifted in January. This year’s growth rate is expected to be around half what the industry managed in 2022. The slowdown has left brands’ own stores, independent boutiques and e-commerce retailers stuffed with unsold stock. The boss of online luxury goods seller MyTheresa said the company is experiencing “the worst market conditions since 2008,” and had 44% more inventory by the end of its latest quarter than a year earlier. Burberry is buying back unsold products from department stores. Seems to me my favorite words will be seen soon, “CLEARANCE SALE.”
I have been very consistent in crushing the bad policies in states like NY, IL, CA and others and the “doom loop” bad policies create by pushing out wealthy residents and big business. There are a myriad of articles around California’s potential $68bn budget deficit in the next fiscal year. The most populous US state’s economic slowdown has resulted in a 25% decline in estimated income-tax payments in 2022-2023, compared to the year earlier. Tax receipts in the current fiscal year fell $26 billion short of earlier estimates in an “unprecedented” downward revision. While not minimizing the shortfall, state budget analysts said California has options to address the deficit — including the use of cash reserves, one-time cuts in spending and changes to the way it funds education — that it didn’t have in previous downturns. There will be some shenanigans and likely some cuts to programs. Despite the new projections, California bond yields are unfazed. Wait, high taxes, crime, homelessness, soft on crime DA’s, traffic, bad schools, high cost of living, high gas prices, many natural disasters, onerous mandates, insurance issues, not pro-business…and wealthy people and businesses are leaving? I don’t get it.
Hunter Biden was indicted on nine tax charges in California as a special counsel investigation into the business dealings of President Joe Biden’s son intensifies against the backdrop of the 2024 election. The new charges filed Thursday — three felonies and six misdemeanors — are in addition to federal firearms charges in Delaware alleging Hunter Biden broke laws against drug users having guns in 2018. They come after the implosion of a plea deal over the summer that would have spared him jail time, putting the case on track to a possible trial as his father campaigns for reelection. Hunter Biden “spent millions of dollars on an extravagant lifestyle rather than paying his tax bills,” special counsel David Weiss said in a statement. The charges are centered on at least $1.4 million in taxes Hunter Biden owed between 2016 and 2019, a period where he has acknowledged struggling with addiction. The back taxes have since been paid. This article suggests a max of 17 years in prison. Rep. James Comer, R-Ky., the chairman of the House Oversight Committee, gave credit for the new charges Thursday to two IRS investigators who testified before Congress that the Justice Department had mishandled and “slow-walked” the investigation into the president’s son. Justice officials have denied those allegations. The two IRS employees, Gary Shapley and Joseph Ziegler, said the indictment was “a complete vindication of our thorough investigation.” The ever-repentant Hunter blasted his critics saying “Republican motherf—-ers are trying to kill me.” Nothing like taking responsibility for your bad actions, Hunter. The article suggests $1.7mm of ATM withdrawals, $683k for payments to women, and $188k on adult entertainment over a few years. I want to put something into perspective. My wife and I collectively took out less than $7,000 in cash in 2023. With ApplePay, Venmo and Zelle, the need for cash is a lot less. I can tell you that $1.7mm in cash over 4 years is a RED FLAG.
Israel
Hamas firing rockets from a ‘humanitarian’ zone set up by IDF in Gaza
U.S. issues strongest criticism of Israel yet as civilian deaths in Gaza surge
Harvard president apologizes, says she feels 'regret' following testimony before Congress
Ivy League Presidents Try to Clarify Stances on Antisemitism After Backlash to Testimony
Sorry ladies, you clearly said what you feel, and walking it back is too late. Liz Magill, Penn President, smartly resigned. You have embarrassed yourselves and your once fine institutions. Scott Bok, UPenn Board of Trustees Chair resigned following Magill. Other president’s “resignations” should follow. Happily, Jews are pulling money. Thank you to the Jewish leaders who have stepped up and demanded action and a big shout out to the leaders in Congress who grilled the school presidents to expose their hypocrisy for the world to see. It was the testimony that put the school presidents under real pressure.
UPenn donor withdraws $100M donation after president's congressional testimony on antisemitism
‘Antisemite’ professor finally suspended by liberal college — after sex for grades claim revealed
Shocking, it happened at Oberlin College. Yes, sarcasm.
Campus antisemitism was predictable — and a top-school degree may soon be worthless
I have questioned college education for some time and the last 5 years have only made matters worse. The once coveted Ivy League education is worth a hell of a lot less today than it was 30 years ago in my book.
If caught, what are the consequences of a hate crime in NYC with a soft-on-crime DA?
Are we starting to see the beginning of the end of DEI being forced at virtually all college campuses?
George Soros funneled more than $50M to Iran-sympathizer groups linked to Robert Malley
Three-quarters of Jewish people think BBC’s coverage of Gaza war is biased against Israel
Son of Israeli minister killed in Gaza battles
Of note, his nephew was killed in action within a day of his son’s death.
Other Headlines
Inflation expectations plunge in closely watched University of Michigan survey
In the latest University of Michigan consumer sentiment survey released Friday, the one-year outlook for the inflation rate slid to 3.1%, down sharply from 4.5% in November and the lowest since March 2021. The five-year outlook also moved lower, down to 2.8% from 3.2% the previous month.
Senior OpenAI employees claimed Sam Altman was ‘psychologically abusive’: report
Amazon CEO says generative AI will ‘change every customer experience’
Trump Takes 2024 Lead as Biden Approval Hits New Low, WSJ Poll Finds
Some 37% approve of Biden’s job performance, a low in Journal polling during his presidency, while 61% see his overall image in an unfavorable light, a record high. “Bidenomics,” the president’s signature economic platform, is viewed favorably by less than 30% of voters and unfavorably by more than half.
NewsNation Republican Debate Is Smallest in Series, but Biggest Audience for Outlet
Top Palm Beach broker defends Trump’s $1B Mar-a-Lago valuation in court
Moens is the most important broker in Palm Beach and does BILLIONS in transactions. I take his word on value over a judge all day and based on my knowledge of the market, I am far closer to Moens than the judge.
60% disapprove his handling of crime while only 33 percent approve —
66% disapproved of his handling of the migrant crisis and 72% gave thumbs down of his of tackling homelessness.
53% disapprove of his handling of public schools, while 31% approve.
Video shows Michigan mom punching store clerk in front of 1-year-old daughter
If I were in charge, there would be consequences for bad acts. REAL consequences.
I believe we have enough issues in the USA today and need a stronger border and better immigration policy.
What you eat every day may dictate your Alzheimer’s disease risk
This new project identifies dementia risk factors such as higher consumption of saturated fats, meat (especially red meat like hamburgers and barbeque), processed meat (hot dogs), and ultra-processed foods high in both sugar and refined grains.
Charlie Munger said there was no secret to his success: ‘I avoided the standard ways of failing’
I need to learn more about this one. Some dramatic and concerning claims are being made by plaintiffs who suggest the FBI seized their goods out of safety deposit boxes.
Christmas trees in NYC facing soaring prices — with one costing nearly $1.8K
How IMG Academy Became a $1bn Sports Powerhouse
Doomsday community wants people to live in 575 bunkers for ‘when all hell breaks loose’
If all hell breaks loose, how the hell am I going to get to South Dakota?
‘Nudify’ Apps That Use AI to ‘Undress’ Women in Photos Are Soaring in Popularity
In September alone, 24 million people visited undressing websites, according to the social network analysis company Graphika.
Texas supreme court temporarily blocks woman from abortion for non-viable pregnancy
The 31 year old mother of two is carrying a fetus with a lethal diagnosis and the doctors suggest carrying to term is a risk for the mother.
28-year-old former child prodigy refuses to work, lives on parental allowance
Sad story about a former child prodigy.
Squatter who won battle over dead woman’s home sells it for huge profit
It seems like a bad SNL skit. It is disgusting.
Tyrannosaur Discovered With Last Meal Preserved in Its Stomach
First-of-its-kind fossil gives paleontologists unprecedented insight into the diet and dominance of the top carnivore of its time
Tiger Woods and Rory McIlroy sent parting message by new LIV Golf signing Jon Rahm
After years of loyalty to the PGA Tour and hating on LIV, Rahm signed for a rumored $450m. Yes, almost everyone has a price. I have written extensively on this topic and want to reiterate how poorly the PGA Tour and the commissioner handled LIV. The PGA Tour is in serious trouble. Rahm claims to be bringing two other PGA players and Wells Fargo ended its Quail Hollow sponsorship. The commissioner is a dead man walking. Harvard, please do a business school case on how not to do business about the PGA Tour. Is this the beginning of the end of the PGA Tour?
Two-time AL MVP Shohei Ohtani agrees to historic deal with Los Angeles Dodgers
Rahm is not the only athlete with a big payday. Ohtani is getting $700mm over 10 years at 29 years old.
Covid warning: Americans urged to mask up as cases surge in winter weather
Real Estate
There is a lot of talk about housing affordability or lack thereof today given rates and home prices. In 1978, my mother and I moved from Chicago to South Florida after my father passed away. The house we bought in 1978 cost $60k and my mother paid cash from the equity due to the sale of the Chicago home. Today, the Florida townhouse is worth approximately $440k, which equates to 4.5% annual growth. Given my mother’s inflation-adjusted income level and the 28% rule of Gross Monthly Income towards housing, she could afford $1,600/month today for total housing costs. This would equate to a $185k mortgage with $50k down at a 7.03% FHA rate. These figures would result in a $1,270/month payment and then you need to add taxes and insurance. Today, my mother could not come close to buying my childhood home and would need to find a house for 53% of the going rate of the house if we were buying in 2023. Houston, we have a problem and this scenario is playing out across the country. The US housing affordability index is at levels not seen since the mid-1980s when mortgage rates were 12-13% (Chart below). My childhood townhouse looks like the one below and can tell you that I had a great childhood. I had a mother who loved me and supported me. She told me anything was possible with hard work and some luck. In May, I wrote a piece entitled, “Life Lessons from Mom,” and my favorite was “A winner never quits and a quitter never wins.” Her teachings are worth a look. Handwritten thank you notes too.
This is a CBS News story entitled, “The U.S. states where homeowners gained — and lost — equity in 2023.” For the millions of Americans who own their homes, their properties are typically their biggest source of wealth. The good news? Those assets have grown in value over the past year thanks to rising home prices. The typical American homeowner saw their home equity rise by $20,000, or 6.8%, through the end of the third quarter compared with a year earlier, according to a new analysis from real estate data firm CoreLogic. In the link there is an interactive map that shows each state’s housing appreciation or depreciation. The darker the blue, the bigger the depreciation. The darker the green the bigger the appreciation. Florida was the 2nd highest appreciation behind Maine, while New York had the 2nd largest depreciation behind Texas.
© 2023 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™ #637 ©Copyright 2023 Written By Eric Rosen