Opening Comments
Latest Eye on the Market-Michael Cembalest
Quick Bites
Markets, HY Update, Inflation, Lumber, Value of the Dollar
Mortgage Applications, $3.5 Trillion Bill, GS/JPM Earnings
AMC/Reddit Stocks, Apollo/Figure/Blockchain, Chicago Murders
NYC Random Attack, Cornel West Resigned, Social Dawrinism
Virus/Vaccine
Data-Continues to deteriorate with large increases in cases
Delta Variant
Vaccination Rates
J&J Warning
France-Health Pass
Real Estate
NYC R/E story from CNBC
Chris Whittle House Auction
US News Best Places to Live
Opening Comments
Jack and I leave for the Hamptons on Saturday for him to play in the Met Boys Match Play event at Gardner’s Bay on Shelter Island. We’ll out there approximately July 18-25th and will be staying in Southampton. Today, we are lucky to have the latest Cembalest piece which is particularly strong this week. Please take the time to click the link below and spend 10 minutes on it.
Latest Eye on the Market-Mike Cembalest
For those new readers, you may not know about my admiration for Cembalest, the Chairman of Market and Investment Strategy J.P. Morgan Asset and Wealth Management. Mike is a good friend and an incredibly smart person with a hell of a sense of humor. His IQ is approximately 27 times mine, but I lost count along the way. I enjoy his writing and views and feel the piece entitled, “Thy Brother’s Keeper” is exceptional on many levels. Because I have found my summaries never seem to do Cembalest justice, I no longer attempt it, but encourage the readers to spend some time reading it. I will drop in a few of my favorite charts and highlight one point he makes in the piece; it is something I have been hammering home in the Rosen Report. Mike writes about China and there are 8 bullet points about China’s rise and the impact of some of the “brilliant” decisions by the US which led to major issues. Mike also seems to share some of my concerns about wage inflation which won’t go away so easily. The good news is if you are vaccinated, he does not believe the Delta variant is a huge cause of concern, but unvaccinated over 50, watch out.
Eric’s view-Given where we are in the economy with stocks at all time highs, housing at all time highs, cars at all time highs, wages rising, people not going back to work and shortages on virtually everything, I am struggling to see why we need so much support. The charts below are telling. To me, too much fuel is being added to the fire and the investors are DYING for yield and buying poorly structured crap to find it. I know these people on paper have more degrees than I do, but struggle to understand the depth and breadth of the intervention, rates, QE at this point in the cycle. Powell commented today that the Fed “is not close to altering its easy monetary policies.” Remember, Ben Bernanke said, “Subprime is contained” in 2007. How did that work out? In January 2008, he said, “We are not forecasting a recession.” This link shows some incredibly stupid things Bernanke said over the years and my point is, just because a senior Fed official says something, it does not mean it is right.
Eric’s view-Having been in the credit markets for 30 years, I can tell you that the cost of poorly structured credit facilities (from the lender’s perspective) will come home to haunt the markets with lower recoveries. We saw this before the GFC. Investors have short memories. According to Moody’s (2nd chart below) every category of loan covenants is weaker than 2007. There is a section today on the High Yield market as well.
Getting Old Sucks
Jack and I are out in PA staying at Springhill Suites, our new home away from home. We are members of Saucon Valley Country Club which is an amazing facility with 3 great golf courses, tennis, restaurants, pools, gyms, squash, pickle, paddle across 900 acres. Between tournaments, we come here for Jack to play and practice and it allows me to play tennis or swim if he wants to play 36 or hit the range all day. The Old Course will be the site for next year’s Senior US Open.
On Monday, Jack and I were heading to the gym and I was on a call in the car. Jack got out of the car to head inside while I was wrapping up the conversation on the phone. Jack came running out in a panic and screaming, “Dad, a man fell down in the shower and needs your help.” I sprinted inside to find an a very old man laying on the shower floor. He had slipped and fell and could not get up. He looked at me with despair, and a sadness came over me that I haven’t experienced in a very long time. His look was one of embarrassment that he was unable to get up and needed someone to help him. In a nano second, I played out in my mind that this could be me one day. I realized these thoughts never cross my mind when I was younger, yet at that moment I could see myself as a very old man, helplessly laying naked and cold on the shower floor. I have been thinking about it non-stop ever since.
I turned off the shower and wanted to see if he had a broken leg or hip and whether or not I needed to call 911. Given he was contorted, the severity of his injury was hard to determine and there was some blood dripping from his arm. Before I picked him up, I wanted to be sure that was the right thing to do. I asked him questions, but he did not have his hearing aids on and needed to scream for him to hear me. I asked him his name and he responded, “Fred.” I felt confident that he was not severely injured and lifted him up. I am a relatively strong person, but struggled to lift the slippery dead weight of this man while being gentle and not wanting to hurt him. Miraculously, I managed to get Fred off the floor without incident. I was checking to see if he was concussed using the protocols I learned from Dr. Barry Kosofsky from Weill Cornell. He did not appear to have hit his head and was not in pain. I had someone get me a chair with arms and got him to sit down and covered him with towels. I kept thinking about how scary it must have been for this man and what might have gone through his head as he fell. I am happy Jack was there and heard him. No one else was in the small locker room.
All the while, but I kept thinking, son of a bitch, this could be me in the not so distant future. I pride myself on being in shape and then this was the first time it occurred to me there will come a day when I just won’t be able to do it anymore. I helped Fred up off the chair and got him to his locker for him to get dressed. I asked for a first aid kid and cleaned up the cut (no stitches needed) and wrapped it.
Given his lack of balance and inability to walk a straight line, I felt uncomfortable for him to drive home. Yes, this 93 year old man still drives! Will I be able to drive at 93? Will I want to drive at that age? I asked him if I could drive him home and he refused. When he stood up from the bench in the locker room and wobbled, I did not give him a choice. I took his keys and asked another member who was in the locker room if he could follow me to take me back to the club after I took Fred home.
I drove my new friend home and learned he was alone. At 93, his wife died a couple years ago. His kids do not live nearby. Again, I was saddened about the thoughts of growing old and being alone. How scary it must be to not have the strength to do the things you once did and not have anyone to assist you in a time of need. As we drove, Fred turned to me and said, “Getting Old is For the Birds.” I agreed wholeheartedly. This is a saying I often heard from my feisty paternal grandmother, who lived to be almost 93. Back then I thought that only a really old person would think like that. And yet here I am, for the first time in my life, envisioning what aging truly means. At age 51, now I’m thinking like an old person.
On the short drive, I got to know Fred a bit better and we pulled up to an adorable single story home with a perfectly manicured lawn. I was looking forward to seeing inside the house and wanted to be sure he was safely inside before I left him. We walked up a shockingly steep short stair case from the garage to the house and I opened the door. It was not easy to get up the few stairs to the house so Fred installed a handle on the wall to pull him up. Holy guacamole, the living room was like a museum of a house from 1972. Shag carpet, Lazy Boy recliners, and wallpaper from the 1970s reminiscent of Archie Bunker’s living room from All in the Family. It was clean and neat, but had clearly not seen any upgrades in almost 50 years. The padding on the carpet was so thick, it was like walking on clouds. There was a musket hung on the wall which appeared to be from the Civil War era. I did not want to leave my new friend alone, but also could not leave Jack all day. I took his phone # and gave him mine. I let him know that I was in town for 5 days and my hotel was only 2 miles from him should he need me. I offered to take him to the store or doctor this week.
I checked in on him via phone twice on Monday and once on Tuesday and Wednesday to be sure he was ok. He refused my offer to drive him anywhere. The stubborn old man was too proud to let me help him or maybe he felt just fine. On Tuesday afternoon, Jack and I were in the hotel room and we received a call on the room phone. Fred was in the lobby and I ran down to see him. He brought me a bottle of wine with a lovely note and thanked me profusely. He looked more sturdy and was smiling. The cut looked fine and he drove to see me by himself. I was happy to see him, but concerned he came out of his house for me. As he walked out of the lobby with a noticeable limp (walked this way before the fall), I could not help but feel uneasy about his well-being as a 93 year old living alone.
In the end, this incident helped put things into perspective for me. In a recent note, “Time Flies,” I wrote about how quickly our kids grow up. I felt the same about this experience in that it seemed like yesterday I moved to NYC, yet that was over 25 years ago. I was young and healthy and fit as a fiddle. I was single with no kids. Now I am aching and limping and sore with far too much grey hair and have kids as big as I am. I know time will continue to breeze by, but sure hope I have someone to lift me up when I fall. I was in the pro shop and the head pro, Charlie, came over to thank me about the incident and I let him know that it was only a matter of time before I needed help. My son told us that he would be there to pick me up, but fear he will be on a golf tour in some podunk town when I fall. Unless his skinny self gains some pounds, he wont be able to pick me up anyway. It’s time to start shopping for one of those, “I have fallen and I can’t get up” call buttons to wear around my neck.
Quick Bites
The S&P 500 closed slightly higher after Federal Reserve Chairman Jerome Powell said the central bank will maintain its easy monetary policies. The broad index added 0.12% to reach 4,374 after hitting a new high earlier in the session. The Dow Jones Industrial Average added 44 points, or 0.13%, to close at 34,933. The Nasdaq fell 0.22% to 14,644. Powell said in his semiannual testimony before the House Committee on Financial Services Wednesday that the central bank can wait before it starts to ease its bond purchases despite surging inflation readings. The Fed chair said he still expects inflation to moderate. “At our June meeting, the Committee discussed the economy’s progress toward our goals since we adopted our asset purchase guidance last December. While reaching the standard of ‘substantial further progress’ is still a ways off, participants expect that progress will continue,” Powell said. I really do not understand the need to be so accomodative given where we are with stocks, bonds, HY market, housing, cars, wages, commodities/oil, consumer products, chips, shipping, rental cars, and everything else.
Junk bonds aren’t so junky anymore, with a strong fundamental backdrop helping to underpin what traditionally has been one of the riskiest sections of the financial markets. Yields in the $10.6 trillion space for the lowest-grade bonds in terms of quality are around historic lows after a tumultuous year that saw corporate America face down the Covid-19 pandemic and come out on the other side with balance sheets looking extraordinarily strong. Bond yields decline as prices rise; the two have an inverse relationship to each other. Most recently, the junk bond sector collectively was yielding 3.97%, according to the ICE Bank of America High-Yield index. That’s up from a record low of 3.89% on Monday. In March 2020, during the worst of the pandemic volatility, the yield was at 9.2%. This is the first time in history that the collective yield for junk has been below the rate of inflation as measured by the consumer price index, which rose 5.4% in June year over year. Yet another reason the Fed does not need to add fuel to the fire.
Inflation surged in June at its fastest pace in nearly 13 years amid a burst in used vehicle costs and price increases in food and energy, the Labor Department reported Tuesday. The consumer price index increased 5.4% from a year earlier, the largest jump since August 2008, just before the worst of the financial crisis. Economists surveyed by Dow Jones had been expecting a 5% gain. Stripping out volatile food and energy prices, the core CPI rose 4.5%, the sharpest move for that measure since September 1991 and well above the estimate of 3.8%. On a monthly basis, headline and core prices rose 0.9% against 0.5% estimates. Stock market futures fell following the report, while government bond yields, which have been down precipitously, were mixed. “What this really shows is inflation pressures remain more acute than appreciated and are going to be with us for a longer period,” said Sarah House, senior economist for Wells Fargo’s corporate and investment bank. “We are seeing areas where there’s going to be ongoing inflation pressure even after we get past some of those acute price hikes in a handful of sectors.” I have been writing about my inflation concerns for four months. GS sent out some good charts Tuesday. Here are two of them which I feel helps to summarize the data through graphs. Yes, I do believe some is transitory, but not all and believe wages will be sticky and do not see oil coming down near term. Some of the supply disruptions will go away, but do I think many of the commodities which are up massively will go back to pre-pandemic levels, no. The 10 year Treasury remains at 1.36% despite the fears of inflation.
I thought this was a good CNBC chart showing the price increases from a year ago. The fact that vending machines/outdoor trucks make a list is shocking to me.
I have written about lumber prices. Yes, the recent sell off has erased the crazy 2021 gains, but it remains over double and closer to triple the pre-pandemic price as seen in this chart. Spot is now trading at $712 after being as high as $1,600. However, you can see it remains well above historic levels whichwere in the $250-300 range most of the time.
Interesting Opinion piece from the WSJ entitled, “The Dwindling Value of a Dollar.” I get a lot of questions from readers on the topic, so sharing the story.
Homeowners saw an opportunity last week and seized it. A sudden and unexpected drop in mortgage rates sent borrowers to their lenders in droves, hoping to save on their monthly payments. Applications to refinance a home loan jumped 20% last week from the previous week, according to the Mortgage Bankers Association’s weekly index, which was seasonally adjusted, including for the Fourth of July holiday. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.09% from 3.15%, with points decreasing to 0.37 from 0.38 (including the origination fee) for loans with a 20% down payment. Just what we need, a hotter housing market.
Senate Democrats say they have reached a budget agreement envisioning spending an enormous $3.5 trillion over the coming decade, paving the way for their drive to pour federal resources into climate change, health care and family service programs sought by President Joe Biden. But Democrats behind the agreement face possible objections from their rival moderate and progressive factions and will have to work hard to convert their plans into legislation they can push through the closely divided Congress over what could be unanimous Republican opposition. I have not gone through all the details and am sure there are some useful things in the $3.5 trillion plan, but would believe much of it is wasteful. Separately, there is a $1 trillion infrastructure plan. I am definitely supportive of infrastructure spending given the quality of roads, bridges, tunnels in the USA. I am less supportive of the $3.5 trillion spending bill.
Goldman Sachs and JPMorgan reported significant increases in second-quarter profits on Tuesday, fueled by fees from advising companies on mergers and underwriting IPOs and other stock sales. This spring’s rapid U.S. economic recovery, helped by the rollout of Covid-19 vaccines and extensive business reopening and hiring, energized corporate America and the two firms’ investment bankers alike. Corporate chieftains, buyout firms and blank-check companies put hundreds of billions of dollars to work in big-ticket acquisitions. Investors gobbled up billions of dollars of stock sold by startups in marquee initial public offerings and private fundraising rounds. The busy investment bankers helped offset a slowdown in trading revenue for the banks. They had posted record periods a year earlier, when uncertainty surrounding the pandemic made markets more erratic. Goldman reported quarterly profit of $5.49 billion, on revenue of $15.39 billion. Both measures were up significantly from a year ago and better than the expectations of analysts polled by FactSet. JPMorgan posted profit of $11.95 billion, on revenue of $30.48 billion, also beating expectations. While its profit more than doubled, its revenue fell 8%, a result of depressed lending margins and the lower trading activity.
The price of AMC Entertainment stock has been cut in half from its peak amid a big rout in meme stocks this month as the reality of bubble-like rallies and failing businesses started to become apparent for Reddit-obsessed investors. The movie theater chain’s stock tumbled 15% to $33.43 apiece on Wednesday, less than half of its all-time high of $72.62 in early June. The decline brought its month-to-date losses to 41%. GameStop, the original meme stock king, has fallen more than 21% this month, while newcomers Clover Health and Clean Energy Fuels have plunged 34.8% and 22.6% in July, respectively. I know many feel Reddit is the new way to invest. It will work for a while and then it will end in tears. Quite frankly, it has lasted longer than I would have thought. In the end, fundamentals matter at some point. A bunch of 20 somethings pontificating you should own stocks with weak fundamentals is not sound investing. Proceed with caution. I have warned about the risks in these stocks since day one. Yes, they rallied hard, but they will fall hard too without more fundamentals behind them.
Apollo will work with Figure to apply its affiliated blockchain, Provenance, to projects like an on-chain fund listing, asset securitization and digital marketplaces, the firms said on Wednesday. San Francisco-based Figure, which applied for a bank charter in November, has already used blockchain for loan origination, equity management, private fund services and payments. Figure was founded in 2018 by Mike Cagney, the former chief executive officer of Social Finance Inc., and was valued at $3.2 billion in May. In the next year, the firm is focused on building out Provenance, standardizing a blockchain securitization platform, increasing use of stablecoin payments and creating a competing marketplace for private and public securities, Cagney said. “Our expectations are that we’ll work with Apollo across all four of these initiatives,” Cagney said in an email. Blockchain technology is here to stay and Figure is on an impressive run with a big valuation in a short period of time. Partnering with powerhouses like Apollo is a good sign for future opportunities for Figure. I do not know the founder, but have heard good things.
Chicago’s weekend gun violence left at least 40 people shot, including 11 fatally – and among those killed was rapper KTS Dre, who was riddled with dozens of bullets shortly after he was let out of jail. A police report says the 31-year-old local rapper, whose real name was Londre Sylvester, had just been released on electronic monitoring when he was fatally shot across the street from the Cook County Jail around 8:50 p.m. Saturday in what authorities believe to be a targeted attack, Fox 32 reported. Sylvester was left suffering from as many as 64 bullet wounds to his head and other areas of the body, the Chicago Tribune reported. He was transported to Mount Sinai Hospital, where he was pronounced dead at 9:25 p.m., according to the Cook County medical examiner's office.
Amid nationwide calls to defund police departments and a rise in crime in major cities, the number of Chicago cops that have retired this year has already surpassed all of the retirements in 2018 and are on track to be the highest number in the department’s history. The figures come from the police pension board, as reported by the Chicago Sun-Times. It shows that between January and June, some 363 officers called it quits, and another 56 were expected to retire this month. Geraldo Rivera, citing Superintendent David Brown and Mayor Lori Lightfoot’, wrote that the city’s roughly 117,000 gang members outnumber the city’s 13,000 police officers by roughly 10 to 1. So a guy gets out of jail and shot 64 times while leaving the station. Cops are retiring so fast, gang members are out numbering them 10 to 1. I can’t believe I am suggesting someone may be worse than DeBlasio, but I believe the title of worst mayor in the US may well be Lori Lightfoot. I lived in the city and was born in Chicago. There is nothing and I repeat nothing to ever get me to live there. I was fortunate to be in Chicago during the MJ era and enjoyed the cubs in the bleachers without being shot. I have not been back in a couple years and really have no intention of going back any time soon.
Another awful attack in the city happened at the corner of West 47th Street and Sixth Avenue. Police say it was unprovoked. Video shows the shirtless suspect creep up behind a man wearing all black and throw some sort of liquid on him. The victim, 57, turns around, stumbles and falls to the ground, hitting his head. The suspect doesn’t even look back. “It’s horrible. It’s a horrible incident. You never want to see something like that go on,” said Zack Williams, who works in Midtown. Watch the short video. A man is walking down the street and attacked. I don’t care who you are, you would be susceptible to this attack. I have not been writing about NYC crime as much lately, but this scared me as a random attack that could happen to anyone. Hey, moron mayor, do something. Last I checked, it was your job. I continue to get asked if I would move back to NYC and I guess everything has a price, but mine kind of prices me out of the market.
In an unrelated story, there are a couple good pieces about NYC crime and the problem with repeat youth offenders. NYC Police Commissioner Shea said,“You have a 16-year-old kid arrested three times in 90 days with guns,” he said. “Why would this kid be put back onto the street over and over and over without meaningful help? So is it COVID? Is it incompetence? What is the plan here? Where is the mentorship?” In a NY Post article about violent crime by the city’s youth, the suggestion in soft on crime rules have helped make things worse in NYC through questionable reforms. Perhaps most relevant right now, and among the most corrosive, is the 2017 “Raise the Age” law, a statute strongly backed by Gov. Cuomo that reset the age of criminal responsibility in New York from 16 to 18. The result was entirely predictable — more 16- and 17-year-olds on the streets with guns. And, fast forwarding to this week in The Bronx, three teenagers dead allegedly at the hands of other teenagers — casualties in what one cop described to this newspaper as a “major gang war.” If people vote to keep Cuomo in office after the nursing home deaths/lies, multiple sexual harassment allegations, budget issues and crime, then NY deserves what is coming.
Cornel West, considered one of the most prominent Black philosophers and progressive activists in the country, announced Monday that he has resigned from his position at Harvard University’s Divinity School, saying the institution is in a state of “decline and decay” and “spiritual rot.” “How sad it is to see our beloved Harvard Divinity School in such decline and decay,” he wrote. “The disarray of a scattered curriculum, the disenchantment of talented yet deferential faculty, and the disorientation of precious students loom large.” West, who added that Harvard has become “market-driven,” tweeted, “Let us bear witness against this spiritual rot!” “The School has no comment on Dr. West’s letter,” Jonathan Beasley, a spokesman for the Divinity
I am a big believer in Social Darwinsim. Here is a perfect example. I am not sure the shark did humanity any favors by not finishing him off. The link includes a video of the incident. All I can say is I know people have varying levels of judgement and intellect, but this guy is just a complete idiot. A star from the hit MTV series “Jackass” was bitten by a shark while wakeboarding over infested waters as part of a dangerous stunt that was filmed for “Shark Week.” Sean McInerney was on location filming for the Discovery series when he was launched from a ramp and bitten on the hand when he failed to land the stunt, The Sun reported. “He would be f–king dead if they didn’t dive on him as fast as they did,” Jackass co-star Steve-O said. “Jesus, he got wrecked by a shark … for a ‘Shark Week’ episode.” Here is an idea, don’t do incredibly stupid stuff and you have a lower chance of getting “wrecked by a shark.”
Virus/Vaccine
The data has deteriorated largely due to the spread of the Delta variant. Cases are now up 109% over two weeks and total 25.7k after being as low as 11.1k June 20th. This increase is despite a 14% decline in testing. Hospitalizations rose 19% to 19.7k. Deaths jumped 17% to 330.
I thought this was an interesting chart about low vaccination areas and new cases.
People who are fully vaccinated against Covid-19 are still getting infected with the delta variant, but global health officials said the shots have protected most people from getting severely sick or dying. “There are reports coming in that vaccinated populations have cases of infection, particularly with the delta variant,” Dr. Soumya Swaminathan, the World Health Organization’s chief scientist, said at a press briefing Monday. “The majority of these are mild or asymptomatic infections.” However, hospitalizations are rising in some parts of the world, mostly where vaccination rates are low and the highly contagious delta variant is spreading, she said.
When you compare states with high vaccination rates to states that are lagging, the difference in the number of people getting Covid-19 is staggering. Over the past week, states that have fully vaccinated more than half of their residents have reported an average Covid-19 case rate that is about a third of that in states which have fully vaccinated less than half of their residents, according to a CNN analysis of data from Johns Hopkins University and the Centers for Disease Control and Prevention. Alabama, Mississippi and Arkansas are the only states to have fully vaccinated fewer than 35% of their residents. Average daily case rates in each state were among the 10 worst in the country last week.
The Johnson & Johnson vaccine will soon have a new warning from the FDA after the shot was linked to a rare but serious side effect in a handful of patients, it was revealed Monday. The side effect, Guillain-Barré syndrome — a condition that occurs when the immune system attacks the body’s nerves — has been detected in about 100 people after 12.8 million jabs of the single-dose shot were administered, the Centers for Disease Control and Prevention told the Washington Post. The outlet, citing four individuals familiar with the situation, reported the FDA is preparing to announce the warning after the adverse reactions came to light.
French president Emmanuel Macron has announced new health rules to contain the spread of the Delta variant of COVID-19. The country is currently hosting the Cannes Film Festival with several thousands of guests from all around the world. The key measure announced by Macron will make the EU Digital Covid Certificate — commonly called “health pass” — mandatory in all cultural venues, including cinemas, theaters and concert halls starting on July 21. Starting in August, the health pass will be mandatory in cafes, shops, restaurants, as well as trains and planes, among other places. The pass launched on July 1 and is meant to facilitate travel within Europe and ease the pressure for multiple tests by allowing people to receive a QR code once they get tested or vaccinated and use it as official proof.
Real Estate
The revived New York City real estate market is seeing strong demand and attractive prices relative to recent history, a top broker told CNBC on Tuesday. “The story that I’m seeing across the board: All segments are transacting. New York is back, and people want to be here,” Christopher Kromer, a broker with Brown Harris Stevens, said on “Power Lunch.” “We’re coming off a record number of signed contracts in the second quarter, and what’s driving that is buyers are seeing value. They’re sensing opportunity, and there’s a real sense of hope for an economic boom in September when it opens up.” Kromer said potential buyers can still find reasonable opportunities, after real estate prices in the city were depressed during the height of the Covid pandemic. “For the most part, if you’re buying today, it’s probably less expensive than it would have been three or four years ago,” he said. However, a recent report from Douglas Elliman and Miller Samuel found the median resale price for Manhattan apartments reached an all-time high in the second quarter. Average sale prices rose 12% in the quarter and topped $1.9 million, and there was also a 150% gain in sales during the same time period compared with last year.
Crazy story about a big Hampton’s home auctioned off due to unpaid debts. The house was owned by Chris Whittle. He founded the Avenues School where Jack and Julia were part of the 1st classes when it opened approximately 10 years ago. I have known Chris for 25 years, but was never close with him. He is a visionary who is aggressive with borrowing. Well, it did not work out again this time. Chris Whittle, once a highflying education entrepreneur, has lost his grand Hamptons estate to Avenues Global Holdings, the parent company of the private Avenues school network he helped to found, according to a spokeswoman for Avenues. In an auction that took place Tuesday morning, Avenues was awarded right and title to the property, subject to other liens, for a credit bid of just $700,000, the spokeswoman said. The auction was a forced sale to satisfy more than $6 million in debts owed to Avenues by Mr. Whittle. Avenues expects to officially take title to the property next week and will make plans for the property soon after, the spokeswoman said. “We hope that this facilitates the recovery of the more than $6 million that remains owed and unpaid to Avenues,” the spokeswoman said.The property had been on the market most recently for $95 million, down from the $140 million Mr. Whittle first listed it for in 2014, The Wall Street Journal reported.
Reached by phone, Mr. Whittle said he has “had better days.” He said he had taken out a very large mortgage on the property in order to fund his latest venture, Whittle School & Studios, another for-profit school network, but the Covid-19 crisis derailed his plans. “When Covid hit, it interrupted schools all over the world,” he said. “Over the last 18 months, I really had a terrible Sophie’s Choice: to support the school or support the home. I chose the school. Today’s really the result of that.” Known as Briar Patch, the roughly 11-acre property sits on Georgica Pond—one of the Hampton’s most prized locations—and has close to a quarter mile of frontage on the water. It includes a roughly 10,000-square-foot, six-bedroom, Georgian-Revival shingle-style house built around 1930. Mr. Whittle bought the property with his wife, Priscilla Rattazzi, in 1989, he told The Wall Street Journal in 2014.
Boulder ranks as the No. 1 metro area in U.S. News' Best Places to Live in the U.S. in 2021-22 – the second year in a row that Boulder has taken the top spot. To determine the Best Places to Live rankings, U.S. News examined housing affordability, net migration, desirability, the job market and quality of life – which includes access to quality health care, college readiness among high school students, crime, average commute and overall well-being among residents – in the 150 most populous metro areas in the U.S. With particularly high scores in desirability, job market and quality of life, Boulder outranked the 149 other spots on the list. I was a little surprised by the list which included Raleigh Durham, NC, Huntsville, AL, Austin, TX, CO Springs, CO, Naples and Sarasota, FL and Portland, Maine.