Hurricane Craziness

10-16-24

Opening Comments

My last note was about the insanity of the cost of vacations, including a discussion of the significant increase in global wealth. I heard from dozens of readers about ridiculous stories of the cost of travel and hotels as a result of my note. One is going to London for Thanksgiving from California and is spending $60k for 4 people. It is lunacy. The most opened links were the Nadal video on the importance of body language and the 40-year-old CEO’s productivity strategy. The story on the best reward credit cards was a close third.

I have mentioned the fun game Uncovered Shorts (Wordle for Wall Street) which takes one minute to play each day. It is a trivia game for Wall Street. It is the first thing I do when I wake up. Today, the picture below was the last of 4 questions. It would be fantastic if the Rosen Report were considered a publication with the gravitas of the others listed.

A reader of mine, John Gore, does a Washington Overview I find interesting. He has decades of experience working for many of the largest companies in the world and has provided counsel on politics and strategy for them. For those interested, check out his writings.

• Photos of the Day-Deluca’s Chop House Boca

• Hurricane Craziness

• Quick Bites

  • Markets

  • The Global Innovation Index

  • Plumbers and HVAC-The New Millionaires

  • The Value of Kickers in the NFL

  • Fertility Rates Crashing

  • Federally Owned Land By State

• 2024 Election

• Israel/Middle East

• Other Headlines

• Real Estate

  • Miami High End

  • NYC Rents Falling

  • CPI Shelter Falling

  • Best Places

Photo of the Day-DeLuca’s Chop House Boca

The restaurant on US1 in Boca Raton must have been a half dozen places since I moved to Florida 7 years ago. DeLuca’s opened recently and has had mixed reviews. I went Friday night and sat at the bar. It took me 20 minutes to get a seat to eat dinner, as the place was packed before 7pm. The number of short-sleeved button-down shirts on men was alarming. The room is nicely appointed, albeit a little cheesy. There was a woman singing, or shall I say trying to sing, in a pink rhinestone dress with bad white boots. It was like a skit from Saturday Night Live. The friendly bartender suggested I order a meatball, chicken parmesan and beans. From a food quality or taste perspective, nothing impressed, but the service was shockingly snappy for a crowded Friday night. The meatball texture was fine but they did not blend the ingredients well enough, leaving an uneven taste. The gravy was a highlight. The chicken parm was bland with no real flavor, although the cook was solid. The escarole and beans were the best thing I ordered. Others rave about this place. I do not see how that is possible. DeLuca’s does have a Happy Hour worth a look, as they have specials from 3-7 pm during the week and 3-6 pm on weekends. You can get a decent wine for $18-$20/glass on the regular menu.

Hurricane Craziness

All these hurricanes got me thinking about all the storms I have been through. I moved to South Florida from Chicago in 1978 and vividly recall “Hurricane Days,” when school was closed for up to a week during the late 70s and early 80s. We lived near a public golf course and it would be covered in water. I enjoyed skimboarding on the course with friends when there was no school and remember getting chased off by the golf course staff dozens of times. The storm I most vividly recall was the Cat 4 storm, Hurricane David, from 1979. It peaked at 175mph winds and hit just north of where I lived.

I also remember being incredibly stupid as a teenager. We would surf just before hurricanes. When a storm is hundreds of miles away, the weather can be beautiful and the waves can be perfect. One day, we went to Singer Island in Palm Beach in the mid-1980s and the waves were perfect. I believe it was Hurricane Gloria in September of 1985. As the tide dropped and the storm swells picked up, it went from 3-5 ft to 8-10 ft in hours. We could not get back to shore given the reef was exposed and the waves were massive; I was scared for my life. I somehow got to the beach first and my friend’s surfboards were on the beach with no sight of them. I thought they drowned. When they started coming out of the water I was in tears with joy. We were all scratched up from the reef and lucky to be alive. Youth=Stupid.

In August 2004, I surfed before work in Long Beach, NY. It was a 1-hr drive from NYC and I left at 4:30 am to surf under moonlight in front of Tropical Storm Hermine. I paddled out alone in darkness in small but fun waves. One other guy showed up and we started talking. It turns out he too worked at JPM and we became friends. Twenty years later, Alex is one of my closest friends. He stays with me in Florida and we have surfed Puerto Rico, NY, NJ and Tobago… together. The world is small and you never know where a new connection will be made. Alex and I have had an amazing time together over the years. Alex is a little nuts. He surfs in the winter in NY when the air is below zero and the water is 42 degrees.

I surfed Hurricane Bill in Montauk in 2009 with massive waves, making the conditions challenging. I took these pictures from on top of the cliff, overlooking the surf. These are big and perfect waves.

The Rosen family moved to Florida in August of 2017 from NYC. I was still working at my hedge fund, Reef Road Capital, and going back and forth to NYC. Within weeks of moving, Hurricane Irma came barreling down on South Florida and I happened to be in NYC. I could not get my family out of harm’s way via commercial flights and ended up chartering a plane with another family to get them to NYC before impact. The storm ended up changing course and hitting the west coast of Florida. We had rain and wind but it was not awful. A lot of panic and money spent for nothing, in hindsight.

It seems to me that storms are getting stronger and more prevalent in South Florida. This is having an outsized impact on insurance premiums and starting to impact housing costs in some markets. Tampa has been hit twice in a matter of two weeks by major storms. Florida is not for the faint of heart when it comes to storms. I do feel more people considering Florida are asking about the impact of hurricanes and insurance as well.

Quick Bites

• Bank earnings were strong from JPM, GS, Bank America, Citi, MS and Wells. Over the past 5 days, stocks are up slightly, with the Russell 2000 outperforming. In Other Headlines, I outline some weakness with LVMH, Ulta Beauty and a disappointing chip outlook. Treasury yields have come down over the past week with the 2-year -7 bps to 3.93% and the 10-year -6bps to 4.01%. However, yields remain elevated from the September 18th rate cut. Oil has been under pressure for a few days as a looming supply surplus has overshadowed Middle East tensions. After hitting $77/barrel 10 days ago, oil is back down to $70. Crypto has rallied recently and Bitcoin is back up to $68k+ after hitting $53k in early September. The all-time high for Bitcoin was nearly $74k in March of 2024.

• Innovation is critical, and this link outlines innovation by country. I love Visual Capitalist and the amazing charts and graphs they create. I was surprised by the ranking.

  

• I have frequently written about my belief that I think college is a waste for many kids today. The costs are too high and too many end up without jobs and saddled with too much debt. Look at the number of degrees where I have no idea what you would do for a living. And these are at top colleges. I suggested trade jobs as an alternative for many students and this WSJ article, “America’s New Millionaire Class: Plumbers and HVAC Entrepreneurs,” proves my point. Few businesses are as vital to their customers as local plumbing, heating or air-conditioning companies—especially in places like Tucson, Ariz., where Rice works and residents sweltered in 100-degree heat most days this summer. Private equity, however, is no foreign player in the skilled trades these days. PE firms across the country have been scooping up home services like HVAC—that is, heating, ventilation and air conditioning—as well as plumbing and electrical companies. They hope to profit by running larger, more profitable operations.  I have met dozens of people who have made millions in plumbing, HVAC, electrical work, marinas, and auto and boat mechanics, not everyone was meant to go to Wharton and work for Goldman Sachs. Be intellectually honest with your skill set and what you enjoy doing.

• Great WSJ article entitled, “They’re Better, Longer and More Valuable Than Ever. The NFL’s Newest Superstars Are Kickers.” I have long believed that kickers are the most underrated and underpaid players in the NFL. They are generally the leading scorer on every team and many games come down to a field goal to decide the winner. The article outlines how kickers are becoming more important, and kicking field goals from longer distances. This season, teams are making more field goals per game than ever— even as they’re also hitting them from more far-flung distances. Some 29% of this year’s attempts have been from 50-plus yards, far and away the most in NFL history. At the same time, 76% of those long-distance kicks have gone in, which is easily the highest percentage ever. 

• This is not the first time I have written about crashing fertility rates. This WSJ article, “Worldwide Efforts to Reverse the Baby Shortage Are Falling Flat,” outlines the issue with great charts. Imagine if having children came with more than $150,000 in cheap loans, a subsidized minivan and a lifetime exemption from income taxes. Would people have more kids? The answer, it seems, is no. These are among the benefits—along with cheap child care, extra vacation and free fertility treatments—that have been doled out to parents in different parts of Europe, a region at the forefront of the worldwide baby shortage. Europe’s overall population shrank during the pandemic and is on track to contract by about 40 million by 2050, according to United Nations statistics. Birthrates have been falling across the developed world since the 1960s. But the decline hit Europe harder and faster than demographers expected—a foreshadowing of the sudden drop in the U.S. fertility rate in recent years.  Two European countries devote more resources to families than almost any other nation: Hungary and Norway. Despite their programs, they have fertility rates of 1.5 and 1.4 children for every woman, respectively—far below the replacement rate of 2.1, the level needed to keep the population steady. The U.S. fertility rate is 1.6. 

  

• I thought this was an interesting chart showing how much of the land in each state is Federally owned.

  

2024 Election

• Armed man arrested outside Trump’s Coachella rally — and sheriff says it was possible third assassination attempt

• As Harris makes case for presidency, her record as prosecutor draws fresh scrutiny

  • This is a CNN article critical of Harris and her soft-on-crime policies.

• Kamala Harris accused of plagiarizing entire sections of her Smart on Crime book in an exclusive report by @realchrisrufo

  

• VP Kamala Harris to sit down with chief political anchor Bret Baier for first formal Fox News interview

  • My view is the election momentum has turned towards Trump and Harris has been reluctant to take tough questions. The Fox interview is an attempt by Harris to turn the momentum. It airs at 6 pm on Wednesday. I feel these charts are why she agreed to be interviewed on Fox. There is a rumor Harris is considering Rogan as well. Even NBC News is reporting the shift to Trump.

    

• Kamala Harris pledged to prosecute oil companies over emissions. Now, she’s praising their record US production

• Harris PAC’s $1 million contribution from Ripple’s Chris Larsen shows crypto industry warming to VP

• Trump's bizarre music session reignites questions about his mental acuity

• CNBC’s Joe Kernen Calls Out Trump for Canceling Interview, Invites Kamala Harris to Show Him Up

• Ted Cruz and Colin Allred wage another big US Senate fight in Texas

  • Surprising that Cruz is struggling here again after his last race with Beto O’Rourke.

• Glenn Youngkin Hit With Lawsuit by Biden-Harris DOJ Over Removing Noncitizens From Voter Rolls

  • The claim is voters were removed too close to the election.

• Young men's economic prospects are shifting, along with their politics

  • Young men, seen as a solidly Democratic group less than two decades ago, have been shifting further to the right politically as their economic outlook has been on a downward trajectory.

• Outgoing Sen. Kyrsten Sinema taps into her millions in campaign cash for lavish international travel and meals – including near $1,300 Nobu Tokyo dinner

Israel/Middle East

• US suggests military aid to Israel is at risk in letter demanding more aid for Gaza

• Fears Israel will have to LET terror missiles through air defenses amid shortage of interceptors including $2m Arrow 3s

• This is the number of missiles launched at Israel from the Iranian regime and its proxies.

  

• Israel says 4 soldiers killed by Hezbollah drone attack while Israeli strike in Gaza leaves 20 dead

  • The attack on Israel injured 61.

• Israel Says It Struck Hezbollah Weapons Depot in Beirut

• Did The New York Times Publish a Hoax?

  • I have been critical of the press and the constant gaslighting. A reporter is suggesting the NYT piece suggesting Israeli soldiers were targeting children in Gaza was fake. Ballistics experts claim the X-ray photos of bullets lodged in the brains of children cannot be real given the caliber of bullet that would have exit wounds. I am no expert here, but something does not seem right.

• Columbus was a Sephardic Jew from Western Europe, study finds

  • There is a Catholic school in Miami called Christopher Columbus High. Will there be a name change?

• Lufthansa fined record $4 million for discriminating against Jewish passengers

• Amazon invited pro-Palestinian rapper Macklemore to address staff — but allegedly banned pro-Israel talk to Jewish workers

• Pro-Sharia-Law Protests Are Becoming A Regular Thing In Germany

Other Headlines

• What 66 Economists Say About Where the Economy Is Headed, in Charts

  

• BlackRock Hits $11.5 Trillion With Push into Private Markets

  • Total net flows hit record $221 billion last quarter

• Germany has had no growth for 6 years

  

• Chinese Stocks on Brink of Correction as Investor Patience Wanes

  

• Used EVs Sell for Bargain Prices Now, Putting Owners and Dealers in a Bind

  • More consumers are pushing back and causing EV prices to fall sharply for both new and used. One reader bought a Mercedes EV for $40k off sticker. I continue to be of the opinion that EVs will not grow at the rate outlined by the media. I have owned a Tesla for 7 years. There are a lot of limitations around rage, cost, charging, tires and more.

    

• Global chip stocks fall on ASML’s disappointing outlook, possible U.S. export cap

  • AMSL stock fell 16% on Tuesday, losing $53bn of market cap.

• LVMH Sales Miss Is "Clear Negative" For Luxury, Sparking "Global Growth Concerns" 

  • Spirit sales fell 11% in the first 9 months of the year, and China was cited. Fashion and leather good sales fell 5% in the 3rd quarter.

    

• Walgreens says it will close 1,200 stores by 2027, as earnings top estimates

  • There are currently 8,700 locations.

• Ulta Beauty shares fall as company sees ‘headwinds’ in beauty industry

• The Optimus robots at Tesla’s Cybercab event were humans in disguise

  • Shocking. The videos were incredible…if they were really robots.

• Amazon goes nuclear, to invest more than $500 million to develop small reactors

• Billionaires Back a New ‘Anti-Woke’ University

  • Billionaires frustrated with elite colleges are banding behind a fledgling school in Texas that boasts 92 students.  Trader Jeff Yass, real-estate developer Harlan Crow and investor Len Blavatnik are among the high-profile people donating to the University of Austin, or UATX. The new school has raised roughly $200 million so far—including $35 million from Yass—a huge sum for a tiny school without any alumni to tap.

• Americans' Trust in Media Remains at Trend Low

  

  

• SpaceX’s Starship rocket completes fifth test flight, lands booster in dramatic catch

  • This is amazing. Musk is worth every penny of his $244bn net worth.

• Trump’s tax cuts could expire after 2025. Here’s how top-ranked advisors are preparing

• Baby-faced Tren de Aragua crew at NYC migrant shelter targets Times Square — and they’re getting away with it

  • There are many downsides for open borders.

  • Aurora Apartment Building Owner: Gang Controlling Properties

  • Meet one of Tren de Aragua’s ‘Little Devils’ — a 15-year-old migrant terrorizing New York City in armed robberies

• Three illegal migrants nabbed in Florida for allegedly sexually assaulting child

  • The victim was under the age of 12. I suggest the death penalty. Open borders have consequences.

• FBI Quietly Revises Violent Crime Stats Higher

  • This is not being broadly covered by the media. The original daa showed violent was -2.1% in 2022 but revised data by the FBI shows it was +4.5%.

    

• Berlin Freezes School Budgets While Allocating Billions For Migrant Housing

  • Wait. Are you saying mass immigration has a cost to tax payers? Of course, it does. Unmitigated disaster in Western Europe and the USA.

• Sushi chef sucker-punched unconscious leaving NYC subway stop in random broad-daylight attack: ‘Felt like a knife’

• Police expert says "criminals just don't really care" as more crimes are caught on camera

• I’m a doctor — here are 4 things I would never do because they’re bad for your body

• 5 lifestyle habits that can help you live to 100, according to leading longevity researchers

  • Hard to argue the ideas.

• 60% of Baby Food Sold in America Doesn’t Meet Nutritional Standards

• The electric field generating stitches speed up healing by 50%

• Nobel economics prize for 2024 awarded to Daron Acemoglu, Simon Johnson and James Robinson

• Rings get bigger as lab-grown diamonds catch up to naturals

  

• Evidence of alien life could be revealed next month as NASA filmmaker claims 'we've found it'

  • Readers know I believe we are not alone. I can’t wait to see this new info. The suggestion is life is 4.2 light-years from Earth. A light year is 6 trillion miles. It is going to take a while for Musk to get us there.

  • Mystery Drones Swarmed a U.S. Military Base for 17 Days. The Pentagon Is Stumped.

Real Estate

• I had reported Beckham paid $68mm for the N Bay Road waterfront mansion, but it was actually $72mm. The modern home is 14,270-square-feet and is located at 4736 North Bay Road. The developer paid $10mm for the land. If he spent $1,500/ft (doubt it) and had carrying costs of a few million, he made over $30mm on the sale.

• This Real Deal article outlines that NYC rents have fallen four out of the last five months. The suggestion is more people are moving to buying given lower mortgage rates. Separately, in speaking with multiple high-end apartment building owners in NYC, I am told they have seen a slowdown in traffic; it is getting harder to rent the more expensive product.

• A reader sent me a note from Evercore showing that shelter CPI is starting to come down.

  

• America’s nicest places came out. Provo, Utah took the top spot. Fort Greene, Brooklyn was #2. Other finalists included Silver Spring, Maryland; Cashiers, North Carolina; Butte, Montana; and Horseshoe Beach, Florida.

© 2024 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #726 ©Copyright 2024 Written By Eric Rosen.