Opening Comments
Picture of the Day-$500mm Dog
I am a Crypto Idiot
Quick Bites
Markets, HY Update, Gas/Beef Prices, Retailer Pricing
Inflation/Biden Approval Ratings, Manchin-BBB
CNN on Steele Dossier, Venezuela Going Capitalist?
Rittenhouse-Not Guilty, SFO Louis Vuitton Robbery
Apple Automated Car in 2025?
Other Headlines
Virus/Vaccine
Data-BIG SPIKE in cases. Tide is turning. Expanded Section Today.
Boosters Approved
Germany rules
Riots in Rotterdam over COVID Restrictions
Gibraltar Case Growth Despite over 100% Vaccination Rate
Real Estate
My General Comments
5 Yr Boca Community Data-Does not Tell the Whole Picture
European Rentals
US Inventory Levels
Opening Comments
I am consistently getting more likes from my readers. Thank you for hitting the “heart” button and I am hopeful the Rosen Report continues to grow, entertain and educate the readers. I am also receiving countless supportive emails and calls which has been great and has helped me to reconnect with many people as well as make new connections. Also, whenever I add Mike Cembalest’s research to my notes, it is always the top opened link. He is funny and covers all the important topics in detail.
A friend asked me to help him deliver a boat from Fort Lauderdale to Jupiter in rough seas. The plan was to fish a little along the way. Holy guacamole, it was rough out there. I looked like a drowned rat after about 5 minutes and lost my hat in 25 MPH winds. Yes, we caught a few fish, but got worked along the way. I was reeling in a small barracuda which was maybe one foot long. I brought it right next to the boat and a 6 foot barracuda jumped out of the water and ate its little brother. It was crazy. I did not have a video of it, but this is what a jumping barracuda looks like.
This is what barracuda teeth look like.
We are having a full house for Thanksgiving. Lots of guests staying with us and people coming over for the big dinner. On the menu everything will be homemade and will include fennel crusted turkey, cranberry sauce, mac & cheese, assorted roasted veggies, sweet potatoes with marshmallow, stuffing, apple pie, cookies, brownies and I am sure I forgot something. It also happens to be my birthday on the 25th and people have called me a turkey for years. The subject piece below does nothing to dissuade people from calling me that name. Happy Thanksgiving to all.
I don’t think I will send out a piece on Wednesday as everyone is travelling and preparing to stuff themselves. I get angry when my open rates plummet after spending so much time on these pesky Rosen Reports.
My friend, Leland, is exactly one day older than I am, and each year he sends me the same text “What a difference a day makes.” I am beating you to it this year, LTH, Happy Birthday.
Picture of the Day
The world’s wealthiest dog, is selling one of his homes. Gunther VI, a German shepherd that many call the world’s wealthiest dog, could fetch $31.75 million from the sale of his mansion in Miami. The 8,400-square-foot home at 3029 Brickell Ave. was previously owned by pop superstar Madonna before it literally went to the dogs. When German countess Karlotta Liebenstein died in 1992, she left her vast fortune to her dog, Gunther III. Without any children, she willed her $80 million estate to her dog and put human managers in charge. In 2000, Gunther Corp., which at the time was for the benefit of canine Gunther IV, bought the home at 3029 Brickell Ave. from Madonna for $7.5 million. Over the years, the fortune has passed down to successive generations of German shepherds and is reportedly worth near $500 million today. “The jet-setting dog travels by private jet, eats steak and caviar for dinner, owns multiple yachts and collector cars, and even purchased a rare $1.1 million white truffle at auction,” a spokeswoman stated. I am not a fan of German Shepherds given they shed quite a bit and despite being very obedient, a dog of this size would destroy my house and light carpets. However, if I am to get $500mm, this dog will sleep in my bed and I will make sure Gunther eats gourmet meals of whatever he likes and will even clean up his crap. Good boy, Gunther VI. Now give me the money! I hear Gunther VI likes to fish, so do not be surprised if I own him and he gets a brand new fishing boat on his dime. Dogs like to stick their heads out the window when in a car, so it seems to me Gunther VI better buy me a nice convertible as well. I love you Gunther VI. Good dog.
I am a Crypto Idiot
I never thought I was stupid, but I had a troubling situation last week. I joined an investment network, 3i, which is meant to share ideas and provide the members investment opportunities in higher returning assets in venture, private equity, real estate, crypto… I have been impressed with what I have seen in the short time and actually invited a handful of people to join with me. I feel I will make investments I otherwise would not have known about had I not joined the club. For those interested, reach out and I am happy to connect you to the founders. The members are entrepreneurs, hedge fund managers and family offices primarily.
I would not say I am savvy around crypto. I had my shot and I whiffed. My son, Jack, was playing on the “Friday Night Lights” flag football league at Asphalt Greens in NYC from 2013 through 2015. On his team was a kid who was not a star athlete, but tried hard. The boy’s father never missed a practice or game and we became friendly. I asked him what he did for a living and he said, “I own Bitcoin ATMs.” I had no idea what this meant and asked a few questions. He told me I was an “idiot” for not knowing about Bitcoin. I vividly recall the look on his face during our conversation where he was in shock that I was not involved. Bitcoin was $60--$80 at the time. I ran a hedge fund at the time and had heard of Bitcoin, but thought it was a bit of a joke and would surely crash to zero. He had about 80% of his net worth in Bitcoin at a price of $10-50. I thought the guy was a moron. Guess who had the last laugh? I invested zero up until about a year ago. Yes, I more than doubled my money, but who cares. High school drop outs made 100 or 1000 times or more on their crypto “investments.” This brings me back to the frustrating call I had on Wednesday of last week.
The call last week was meant to educate the investment consortium on crypto and there were a few experts discussing such matters. I listened intently and the more I heard the more stupid I felt for missing it, especially having been given the “heads up” in 2013. I listened and honestly felt as though they were speaking another language. They were talking about crypto assets and related matters I have never heard of before: Defi, Fork, IPFS, HTTP, Layer 1 & Layer 2… and other terms which were confusing. Lots of discussions about NFTs, the Metaverse and other crap which made me feel like a complete moron. One of the speakers was talking about some crypto he invested in at 60 cents which is worth over $200. How is this possible? Why does this not happen to me, even for $50k which would have returned $18mm!
The speakers were saying words I did not understand and I was growing increasingly frustrated. They were suggesting that the future was passing me by and no one seemed to care that Eric Rosen of the infamous Rosen Report was not participating. I am so tired of hearing stories of people who invested in crypto currencies at pennies and made millions or billions. I thought Ether was a winner, but was told why others would be better and felt even more brain cell challenged for not even thinking about why one crytpto might win over another. The one hour Zoom call is available for 3i members and it is incredibly informative. After the call, I sent this email to the founders of 3i with the subject matter “I am Mad at You”:
I have never felt like a bigger idiot than I did on that Vinny call today. Jesus, I am a complete moron. I know nothing about crypto, meta and did not understand 60% of what the hell he was talking about. I went to the University of Chicago for my MBA and thought I was relatively bright until this afternoon at 4pm when I realized my IQ is on an asymptotic line approaching zero. Son of a...... Vinny, whoever that guy is sure impressed me. If you don't hear from me again it is because I stabbed myself to death with a fork after realizing I missed the boat. Seriously, I thought it was great, but it made me realize I know nothing. Thank you very much.
One of the experts suggested a large pullback is coming. I have decided to allocate money to people who can understand these concepts and who will find early stage investments in crypto and related assets. I realize I lack the capacity to do it myself. I am a crypto idiot after all, ya know. I felt like the dunce pictured below.
Quick Bites
Stocks struggled on Friday as concerns over a resurgence of Covid-19 weighed on global markets, though tech shares pushed higher. The Dow fell 269 points, or 0.75%, to 35,602. The S&P 500 ticked 0.14% lower to 4,698. The Nasdaq Composite advanced 0.40% to 16,057. The S&P 500 still ended the week 0.3% higher after a slew of stellar earnings reports from big retailers and strong U.S. retail data helped it fight heightened concerns about inflation and gave it a leg up when Covid worries emerged. The blue-chip Dow fell 1.3% for the week, while the tech-heavy Nasdaq Composite got a 1.2% boost. YTD, the Dow is +16%, S&P+25%, and Nasdaq+25%. Equities took a hit after Austria announced early in the day that it would re-enter a full national lockdown due to a spike in Covid cases. That followed new restrictions for unvaccinated people in Germany, introduced Thursday as a fourth wave sent daily cases to a record high. The 10-year Treasury Bond is yielding 1.54% and oil fell 4% on the week and closed at $76. Seems as though European lock-down fears weighed on the commodity.
I have not given a HY market update in a bit, so here we go. The J.P. Morgan US High-Yield Index returned -0.02% , and is now up 5.03% YTD. The yield to worst increased 2 bp to 4.82%, and the spread increased 2 bp to 392 bp. The par weighted average price decreased $0.09 to $101.05. The average price for BB bonds decreased $0.07 to $104.22, for Bs the price decreased $0.05 to $101.96, and for CCCs the price decreased $0.26 to $97.64. BB rated bonds yield 3.65%, B rated bonds yield 5.12% and CCC rated bonds yield 7.73%. With limited yield in the HY market, investors are forced to take additional risks in equity or less liquid assets.
Behind unleaded gasoline, beef prices have risen the most on the Consumer Price Index (CPI) since October 2020, rising 20.1% in the past year, according to the Bureau of Labor Statistics. This is the highest single year increase in beef prices since 2003, when a cow was diagnosed with mad-cow disease for the first time in the U.S., which caused a beef recall. Normally, beef prices usually fluctuate between 1% and 5% each year according to BLS data. The article suggests labor shortages and packaging limitations are driving the price of beef. I buy a lot of meat and in the past two months, I have seen some prices increase 15% for perspective. I went to Whole Foods on Friday and felt virtually every item I bought was up double digits since prior to the pandemic. This WSJ article is entitled, “Supply-Chain problems show signs of easing.”
This is a CNBC story entitled, “With 30-year high inflation, investors reward the retailers willing to hike prices for shoppers.” A round of retail earnings revealed a divide between the retailers that are trying to keep prices low for customers and those that passing on higher costs. Big-box chains Target and Walmart were punished by investors after delivering third-quarter earnings reports, despite the results topping analysts’ expectations. While shares of department store operators Macy’s and Kohl’s, TJ Maxx owner TJX and lingerie retailer Victoria’s Secret rallied as the companies raised prices and kept inventories tight. Those retailers who do not raise prices given higher input and labor costs can only hold off so long or the stocks will dramatically under-perform in my opinion.
The subject of this CNBC story is partially what is driving President Biden’s sharp decline in his approval ratings. Many Americans are suffering from sticker shock after seeing prices rise in recent months. A new survey from Country Financial finds that 88% of Americans are highly concerned about inflation. That’s as consumer prices soared to a more than 30-year record high in October, as measured by a 6.2% year-over-year change to the Consumer Price Index, a government measurement of how prices change over time. The poll by Country Financial, conducted between Oct. 22 and 25, found that many Americans do plan to cut back their spending. Of the 1,031 adults ages 18 and up surveyed, 48% said they plan to reduce their spending on restaurant meals and takeout. Multiple articles are suggesting Thanksgiving dinner will be +14% over last year with the turkey alone +24% according to this NPR article.
The Quinnipiac University Poll came out and President Biden’s approval rating is now at 36% and this was after the passing of the infrastructure bill which I thought would give Biden a bump. The poll finds that 87 percent of Democrats approve of Biden’s job performance, while 94 percent of Republicans disapprove (4% approve). But Independents approval rating is 29% and those voters could be key to the victory in next year’s midterm elections. I found a Gallup poll from November 13-19 of 2017 to compare it with the Quinnipiac Poll on Biden. Republicans gave Trump an 81% approval rating, Independents 34% approval rating and Democrats an 8% approval rating. Comparing the two polls, Democrats support Biden more than Republicans supported Trump during the same period in their terms. However, Independents were more supportive of Trump than of Biden and Democrats were more supportive of Trump than Republicans of Biden. There are other good charts in this link. The passing of the Build Back Better Bill in the House may give Biden a boost, but I believe the Democrats need to move toward the center to improve in the polls. Still lots of time until the midterms, but the polling trends do not look good for the Democrats. The link goes into detail on polling around the preferred party to control the Senate and House and it is not the Democrats according to the poll.
The House did pass the Build Back Better bill, but it will be interesting to see if Manchin and other moderate Senators will do to it before considering approval. Manchin is getting pushed by both sides and I think it will be hard for him to fight until the death. I presume it will get approved with some things taken out or total amount reduced as Manchin publicly opposed provisions such as paid family leave, the Clean Energy Performance Program and federal tax credits for union-made electric vehicles. Manchin has also raised concerns about the legislation's impact on the national debt and inflation as consumer prices for food and gas rise across the country. The CBO suggested the BBB bill could add $367bn to the Federal deficit, lower than many feared, but the WH continued to insist the bill will not increase the deficit. I will be shocked if the bill passes as is, but would be surprised if Manchin has the will to block it in total. I do not believe the bill is needed today, but some aspects should be considered in the future.
CNN published a lengthy piece Friday admitting the anti-Trump Steele Dossier has been discredited after the network spent years promoting it at every turn. The dossier was used as the roadmap for CNN and other liberal outlets to paint former President Donald Trump as compromised by Russia. CNN’s piece, "The Steele dossier: A reckoning," by reporter Marshall Cohen, detailed why "the credibility of the dossier has significantly diminished." "A series of investigations and lawsuits have discredited many of its central allegations and exposed the unreliability of Steele's sources. They also raise serious questions about the political underpinnings of some key explosive claims about Trump by shedding new light on the involvement of some well-connected Democrats in the dossier, and separate efforts to prod the FBI to investigate ties between Trump's campaign and Russia," Marshall wrote. I am happy to see CNN write a piece and admit the famed dossier was “significantly diminished.” All news outlets should admit being wrong when it happens and correct the record in my opinion. Christopher Steele is pictured below. The more I read about the dossier the more incredible it sounds that it was supported by so many for so long. I am hopeful there are more arrests over it and that some of the bigger fish are caught.
This is a great WSJ article on Venezuela and the economic collapse under the socialist regime. However, they are seeing signs of life because they are adopting capitalism according to the author, Kejal Vyas. I had a college professor tell me capitalism is evil and he prefers socialism. I suggested I send him to Venezuela some years ago. Interestingly he declined, but he certainly won’t go now that it is adopting capitalistic ways. A dozen casinos are opening here in a country where the Socialist government had banned gambling as a capitalist vice. And stores that were barren just a couple of years ago are now flush with imported goods, ranging from $8,000 bicycles to frozen desserts from the Cheesecake Factory. After seven years in which the economy contracted 80%—what economists call the biggest collapse in decades for a country not at war—Venezuela’s economy may have bottomed out. Gross domestic product will rise anywhere from 5% to 10% in 2021, the first year of growth since authoritarian leader Nicolás Maduro took office in 2013, business consultants and economists estimate. The bounce is largely attributed to the scrapping of an ossified state-led economic model in exchange for an anything-goes version of capitalism that Mr. Maduro started to introduce, little by little, in 2019.
Kyle Rittenhouse was found not guilty on all charges. I must admit I was not following every twist and turn of the case. Rittenhouse, 18, would have faced a mandatory life sentence if found guilty and convicted of first-degree intentional homicide. The first link is from CNN and this one is from Fox. The Fox link includes the 1 minute video of the verdict being read and the Rittenhouse reaction. President Joe Biden told reporters Friday that "the jury system works" after he was asked about Kyle Rittenhouse being found not guilty on all charges. In a longer statement issued by the White House a short time later, Biden said, "While the verdict in Kenosha will leave many Americans feeling angry and concerned, myself included, we must acknowledge that the jury has spoken." This other CNN link is entitled, “Here’s what legal experts say helped acquit Kyle Rittenhouse.” According to the article, the state did not prove Rittenhouse provoked violence. Also, prosecutors failed by trying to paint Rittenhouse as an active shooter according to the CNN piece. There were protests in various cities and a riot was declared in Portland (1st picture). Rioters also destroyed cars in Queens, NY after the Rittenhouse verdict and one person was caught with a hatchet and a hammer (2nd picture).
I have written extensively about how bad cities like San Francisco have become due to shoplifting, bail reform, homelessness and utter chaos. This story does nothing to change that view. It appears most of the Louis Vuitton store was cleaned out. There is video in the attachment of men running out of the store to a silver Ford Mustang with their hands full of goods. My question is will they be released or held accountable? Multiple CVS, Walgreens and Target stores are closing in SFO. At what point will the politicians side with law-abiding citizens? There is no price for me to move to SFO. I wrote about my son, Jack, and I going to SFO for three days and how bad it was relative to the city I knew and loved. Multiple suspects have been arrested after a Louis Vuitton store in San Francisco was hit by thieves. Social media video shows some of the chaos that has unfolded there tonight - smashed store windows, police and people running in the street. Also, looting in Chicago again and a Neiman Marcus and Gamestop.
Apple may be sharpening the focus of its long-in-development electric car. Bloomberg sources claim Apple is now shifting its attention to a fully self-driving car, not just a more conventional vehicle with semi-autonomous features. New project leader Kevin Lynch wants the very first model to drive itself, the insiders said. The company is reportedly speeding up its plans to match. Where Apple had recently targeted a launch in five to seven years, the sources said it was now aiming for 2025, or just four years. The plan is believed to be “fluid,” however, and revolves around Apple completing its full autonomous system on time. Apple supposedly finished much of the “core work” on the car’s processor. I hope they have the automation working better than TSLA as another story of concern over self-driving: A CNN reporter tried Tesla's Full Self-Driving in New York City. It kept trying to turn into oncoming traffic. However, if this is the look of the car, I have no interest. It is one of the ugliest cars I have ever seen and there is no steering wheel planned for the car.
Other Headlines
At 1.9%, Nebraska Now Has the Lowest Unemployment Rate of Any State, Ever
If you don’t get a 6% raise, are you taking a pay cut due to inflation? Here’s what experts say
Elon Musk emails at Tesla in October 2021: Music, direct orders
I appreciate his direct management style about giving direct orders
KKR makes a non-binding $12 billion takeover bid for Telecom Italia
Americans Load Up on Firewood as Home-Heating Costs Skyrocket
President Biden Briefly Transferred Power to Vice President Kamala Harris During Colonoscopy
Manhattan school to sort kids by race during social justice discussions
Passenger's weapon accidentally discharged at the Atlanta airport, causing panic and halting flights
No place is sacred: Addicted Americans use cell phones at weddings, funerals, on the toilet!
Tiger Woods hits golf balls in video 9 months after car crash: ‘Making progress’
Horrific story of mental and physical abuse by disgusting parents. If you have not read about this, it is unbelievably bad. I don’t feel jail is a strong enough sentence. How can someone do this to anyone let alone their own children?
Virus Vaccine
In recent weeks, I have discussed how case growth started deteriorating and the combination of cold weather and indoor activities may be contributing to the deterioration. The data has turned markedly worse in recent days. The two-week case growth was +29% and after over two months of improvement. Also, hospitalizations are now going in the wrong direction at +5%. Although deaths were -9%, the rate was declining far faster in recent weeks. On my 11/6/21 report, I wrote that cases were -3%, hospitalizations -13% and deaths -20%. My point is there has been a major turn of events in two short weeks. The Midwest and Northeast continue to see the worst case growth, but now the South is starting to increase as well. The hardest hit states were all in the Northeast or Midwest with two week case growth: (CT+117%, RI+87%, MA+83%, MI+78%, NH+73%, IN+70%, IL+62%, ME+57%, NJ+55%, MN+53%). The second chart shows the cases by region and the third chart shows hospitalizations by age. We continue to see the young rarely admitted.
Hospital Admissions
The FDA authorized Moderna’s and Pfizer’s Covid vaccine booster shots for all U.S. adults Friday, after reviewing new data supporting the extra doses. The CDC still has to authorize the distribution before people can start receiving the shots, which could start this weekend. The CDC’s independent panel of vaccine experts is scheduled to meet Friday to review the new data. CDC Director Rochelle Walensky on Wednesday said the public health agency would “act swiftly” after the FDA has reviewed the data and provided its authorization.
Police opened fire on protesters in rioting that erupted in downtown Rotterdam around a demonstration against COVID-19 restrictions late Friday night. The Dutch city’s mayor called it “an orgy of violence.” There were rallies across Europe and Australia. With cases on the rise and new lock down concerns, I expect to see more protests and riots.
Gibraltar has cancelled official Christmas celebrations despite its high vaccination rate and relatively low number of infections. The small British territory tightened Covid restrictions over the festive period following a spike in cases. Residents have been urged to limit mixing as much as possible in new guidelines announced last Friday following a rise in cases. Gibraltar's vaccination rate is currently at a peculiar 118 per cent, taking into account the fully vaccinated Spaniards who travel across its border each day for work. The good news is deaths do not seem to be escalating, but we need to wait a few weeks to see if that holds true as deaths lag case growth by weeks.
Real Estate
I went through an incredible amount of data to do some calculations for a community in East Boca Raton called Royal Palm (I live there). It is a higher end community and the data is meant to show price moves in recent years. The one thing this does not capture is the amount of homes bought to be torn down or massively renovated. For example, I know of one house bought and then knocked down and rebuilt. The price of the knockdown was $3.3mm a couple years ago and the new house is worth closer to $17mm today, but is not for sale. Another example was a tear down house was bought for $9.3mm and broken into two lots and the new homes are being built and EACH will both sell for the low $20s. In the most recent example, a tear down sold for $3mm on 6/16/21 and it is being built with a listing price of $15.5mm. Despite these crazy data points, the numbers below are telling. My point is the numbers do not fully reflect the cost of a home today, but shows the trend. Also note the amount of homes sold this year was 98 relative to a few years ago where it was in the 50s or 60s. Out of 750 homes there are 9 for sale today and generally there were 60-75 (pre-pandemic). The homes for sale range from $5-45mm for perspective. Today, I feel anything under $3mm is a tear down and some as much as $10mm on the water could be as well. With building costs rising fast, I believe the cheapest newer home would be in the $6mm range and it would be on a 12,000 square-foot lot. A nice golf course house would be $10mm range or more and on the water you are looking at high teens or more for newer homes. I am not convinced such prices are reflected in the charts below.
I thought the South Florida real estate rental market was crazy and the Bloomberg article below suggests parts of Europe are worse. My friend recently rented a small 2 bedroom condo in Boca for $10k/month for 6 months furnished. It was $3,500 pre pandemic. Skyrocketing demand is hitting up against strict rent regulations in Berlin, sparking some unusual deal-making. Renters say they are being asked to spend small fortunes on furniture and appliances to sign a lease. In other cases, it’s several months’ rent in cash to agents as a fee. Some tenants are even agreeing to pay more than what’s legally allowed, either because they don’t know the law — or they just want the apartment, according to real estate agents. In Germany, it’s common for apartments to come with just the bare bones — oftentimes without appliances or even kitchen cabinets. So it’s not unusual for tenants to sell their belongings to the next occupant. But whereas in the past, that might have meant expecting to pay about 1,000 to 3,000 euros for some of the hand-me-downs, renters and agents say that lately they’re seeing exorbitant markups. One ad recently asked 25,000 euros ($28,300) up front for kitchen equipment, a TV and furniture — including a couch, bed, garden furniture and other items. The rent for the one-bedroom apartment was 930 euros a month.
Earlier this year, Realtor.com estimated the gap between the number of homes needed and the number of homes available at 5.24 million. That estimate in June represented an increase of 1.4 million above the estimated 3.84 million gap in 2019, primarily because residential construction hasn’t kept up with household formations. From January 2012 to June 2021, 12.3 million new American households were formed, but just 7 million new single-family houses were built, according to Realtor.com.
Eric enjoy your family & friends Thanksgiving feast !