Opening Comments
Picture of the Day
Illegal Immigration-How Did We Get Here?
Quick Bites
Markets, 3rd Q GDP, Headline Inflation
Energy/Food Prices, New Tax Proposal
China Hypersonic, Greenhouse Gas by Country
Prescription Drugs, Passport “X,” Fired for Being White Male
Rutgers Professor Whites are “Villains”
KY School Principal in Hot Water
Other Headlines
Virus/Vaccine
Data-Continued Improvement
My Daughter’s School Mask Mandate Changed
Florida Cases and Rates are Improving Substantially
Booster Eligible
NYC Workers/Fire Department Closures
Real Estate
My General Comments
Hamptons Inventory
Malibu House Offered at 50% from Ask
Opening Comments
Happy Halloween to all the Rosen Report readers. I fondly recall my kids when they were younger and the excitement around the holiday. They are 14 and 15 years old now and Halloween is no longer as cool as it once was. This was Halloween 2008 with Jack in his favorite bear costume and Julia as Elmo. They ain’t so little anymore.
My son, Jack, and I took a trip for a few days to Memphis, where we had Memphis BBQ at a place called the Germantown Commissary. I would say it was good, but not remarkable. Solid brisket and ribs, but the chicken disappointed. It is a hole in the wall place and has some very good BBQ sauce. I think my own ribs taste better. It was a fun experience, but fell short of the hype. Southern Social across the street is much better and a higher end dining experience, albeit at a higher price point.
We drove from Memphis to Nashville on Thursday and saw my good friend, Chris. We all went out to dinner and received a nice tour of city. The restaurant, Adele’s is very good, and I enjoyed the food and ambiance. We sat at the bar in front of the chefs cooking in an wood burning oven. For starters, we had delicious meatballs with polenta and salmon carpaccio.
I had a great salmon entree and Jack and Chris had huge pork chops. The wine list was good enough. The vibe in the room felt more like NYC or Chicago with a lot of young people. We drove by Broadway (the bars and music scene), but given a 6:30am flight, we did not partake. I had not been to Nashville in 20 years, and I was very impressed. I could absolutely live in or around Nashville. This is something I would never have thought possible. Nashville has 700,000 people and growing. The restaurant and music scenes are top notch and Vanderbuilt is right in the town. The weather is pretty good as well. The growth and big companies with offices downtown were surprising. Another no income tax state.
On another note, a loyal reader, Gershon Distenfeld, won a World Series of Poker bracelet and donated 100% of his $204k to charity, as he did the previous year. It is good to see some of my readers are so philanthropic. Congrats, my friend.
I like to see what the most clicked on articles were report and in the past couple weeks, I have found stories in “Other Headlines” have been at or near the top of those that readers want to know more about. Looks like I am keeping it.
Picture of the Day
The picture below is a list of parts I need in order to service my boat. The supply chain strikes again. Boat engines require service every 100 hours. Think of it like changing the oil for your car every 10,000 miles. We are coming into heavy season where I will be hosting a lot of guests coming down and my boat is in dire need of its scheduled service. However, I cannot find these parts for my three engines. Given the vast network in the Rosen Report, I thought I would try to use it to help me out. Anyone know how to find these parts? According to my mechanic, there is no ETA at any parts department for them.
Illegal Immigration-How Did We Get Here?
I have written countless pieces about how the world has gone mad and the overly woke ways in which we live today. I am really at a loss for the latest Biden proposal of paying illegal immigrants $450k/person and $1mm/family (WSJ and Forbes articles). Lawyers representing the families are requesting $3.4mm/family according to this Yahoo article which clearly supports large payments. “The Biden administration is correct to provide relief to the children and families affected by the government’s horrific practice of family separation,” ACLU attorney Lee Gelernt said in a statement. “Their suffering is something they will always live with, and it is a deep moral stain on our country. We need to make it right, and this includes not simply any monetary support, but also a path to remain here. This is what is right and fair.”
I want to start by saying what happened with the separation of approximately 5,500 children from parents was unthinkable and I did not support the policy. However, I also do not believe people who came into the US illegally should be paid $450k per person or $1mm/family. I believe they should be sent home to go through the proper channels to obtain legal entry into the US. They did break the law. Think of the precedent and what will happen in the future if we were stupid enough to make these payments. I want to put $450k into perspective in a few different ways.
Most of the immigrants were from Central American countries which have the following gross national income per capita (Honduras $2,200, El Salvador $3,650, Guatemala $4,490 and Mexico $8,480) The US government wants to give these people/families approximately $1bn in total. Do you know how much the next of kin of a fallen American hero who dies in combat receives? The answer is $100k according to this US Government website. The NY Post suggests the government gives $400k in death, but two official government websites contradict that amount. In speaking with people in the armed services, I believe the differential is due to insurance which can be purchased by the individual to get to the higher amount. So, an AMERICAN life who died serving the country is worth 80% less than an illegal immigrant who was separated from their family? Am I seriously the only person who questions what is happening here? The average US Army cadet makes $39k/year for perspective.
What is the median and average net worth of an American by age? See the chart below according to CNBC. Remember, the averages are skewed by the uber wealthy, so I feel the median is more representative of reality. The $450k payment would make people who illegally come into our country far wealthier than the median household in the US. Many of these households have worked and paid taxes for decades. Do we still think the proposed payments are fair? Under the Biden proposal, these illegal families would have a $1mm net worth or 4 to 5x the median US household.
I spoke with a reader and friend who is irate. It took her 17 years to LEGALLY obtain American citizenship. She attended college, worked, paid taxes and followed the protocol per the proper legal channels. She has had substantial jobs and has been a value-added member of society. Now, people who come illegally and break the law will get up to 200 times the average annual income of their country? I presume these proposed payments are tax free. I spoke with an Australian pro golfer today. Coincidentally, he told me it also took him 17 years to become a citizen going through the proper channels, yet illegal immigrants will be paid 4.5 times the amount a dead American soldier’s family will receive for his/her passing? Mike Cembalest (JPM), recently wrote: “highly educated immigrants who qualify for green cards wait an average of 16 years before receiving them.” Remember, AOC blasted the Trump policies, but still believes conditions under the Biden Administration are still, “barbaric.” Does this mean the $1bn contemplated payments is the beginning?
I am a firm believer that LEGAL immigration is one of the things which has made America a great melting pot. Here is a list of 10 immigrants to America, but there are thousands more behind it. Names include Albert Einstein, Sergey Brin, Levi Strauss, Joseph Pulitzer, I M Pei, Henry Kissinger, Nikola Tesla, Ayn Rand, Andrew Carnegie, Elon Musk and countless others. This article suggests there were 45mm immigrants in the USA in 2018 for perspective. I am not opposed to immigration, but I am not supportive of paying obscene amounts of money to people who broke the law despite the separation issues. I fully support legal immigration and going through the proper channels and process. The longer such incredibly moronic proposals happen the greater the divide in this country in my opinion. In four counties of NY alone, 5,000 unaccompanied children between 10/1/20 and 8/31/21 came to schools who had illegally crossed the border. With public education costing approximately $28k/child, that is $139mm for NY taxpayers to support.
How did we get here and how do we get home?
Quick Bites
The U.S. stock market set another round of record highs on Friday as Wall Street looked past disappointing results from major companies to wrap up its best month of the year. The S&P 500 rose 0.2% and the Dow added 89 points. The Nasdaq rose 0.3%. All three closed at record highs, and the S&P 500 and Nasdaq had their best months since November 2020. Amazon shares dropped 3% after the e-commerce giant badly missed earnings and revenue expectations for the third quarter. Apple stock fell 2.4% after the tech giant’s quarterly revenue fell short of expectations amid larger-than-expected supply constraints on iPhones, iPads and Macs. It was the first time Apple’s revenues have missed Wall Street estimates since May 2017. Microsoft surpassed Apple to be the largest listed company in the world by market cap. Despite the recent disappointing results from Big Tech, the stock market has been raking in records amid solid earnings even with global supply chain concerns. About half of the S&P 500 have reported quarterly results and more than 80% of them beat earnings estimates from Wall Street analysts. S&P 500 companies are expected to grow profit by 38.6% year over year. In my mind, markets were helped by some of the more aggressive proposed tax plans likely not coming to fruition as well. The 10-Year Treasury is at 1.56%, oil is $83.2, and Bitcoin $60.3k.
The U.S. economy grew at a 2% annualized pace in the third quarter, its slowest increase since the end of the 2020 recession. Decelerations in Consumer spending and residential investment helped keep the number lower. Weekly jobless claims fell more than expected last week to a fresh pandemic-era low of 281,000, below the 289,000 estimate.
Headline inflation, including food and energy, rose at a 4.4% annual rate in September, the fastest since 1991. Core inflation, which is the Fed’s preferred gauge, increased 3.6% for the 12 months, the same as in August but still also the fastest pace in 30 years. Personal income declined at a faster pace than expected while consumer spending increased and was in line with forecasts. Employment costs rose more than expected and at the fastest annual pace in 19 years. Wages and salaries rose 4.6%, compared with 2.7% from September 2020. The headline inflation rate was pushed by a 24.9% increase in energy costs and a 4.1% gain in food. Services inflation rose 6.4% on the year while goods increased 5.9%. Everyone I know who is trying to hire is struggling and it is clear it is everywhere. I was in Memphis and Nashville and it is no different there. I have been writing and concerned about inflation since the beginning of 2021. Bill Ackman is calling for the Fed to raise interest rates and cut its monthly asset purchases. He and I don’t always agree, but we do on this topic.
Another article suggesting inflation will rise and discusses the impact of higher energy prices on food. Oil and gas prices have risen dramatically this year as a result of under-investment and recovering demand. Higher fuel prices are weighing on global food supply chains, with transportation and farming costs continuing to climb.
The proposed Billionaire Tax seems to have died and a new proposal has come forward. The plan would raise revenue by levying a tax surcharge on those making more than $10 million a year, raising taxes for some high-income business owners and strengthening IRS tax enforcement, according to the outline. There would be a 5% surtax on modified adjusted gross income of more than $10 million, and an additional 3% (or, a total 8% surtax) on income of more than $25 million, according to a summary of provisions released Thursday. The surtax is estimated to raise $230 billion over 10 years. It would kick in after Dec. 31. “I don’t want to punish anyone’s success; I’m a capitalist,” President Biden said in a speech Thursday. “All I’m asking is, pay your fair share.” The framework doesn’t raise the current top 37% income tax rate or 20% top rate on investment income (with the exception of multimillionaires subject to the proposed surtax). It also wouldn’t impose new required distributions from big retirement accounts or alter rules around estate taxes and trusts, for example. I was opposed to the original billionaire tax plan on unrealized gains and glad it was not passed as outlined in the prior Rosen Report. It just felt wrong to me. This seems a bit more reasonable, but I continue to believe the US has a bigger problem and that is one of out of control spending.
In the wake of China's test of a hypersonic missile, the second most senior US general said Thursday that the pace at which China's military is developing capabilities is "stunning" while US development suffers from "brutal" bureaucracy. The outgoing Vice Chairman of the Joint Chiefs of Staff, General John Hyten, echoed Secretary of Defense Lloyd Austin's characterization of China as a "pacing threat" while calling Russia the most imminent threat. "Calling China a pacing threat is a useful term because the pace at which China is moving is stunning," Hyten told reporters at a Defense Writers Group roundtable Thursday morning. "The pace they're moving and the trajectory they're on will surpass Russia and the United States if we don't do something to change it. It will happen. So I think we have to do something." I am losing faith in the US government. It is not a Biden thing, it is a DC thing. The bureaucracy is overwhelming and waste is astonishing.
China and the United States are the world's two biggest greenhouse gas emitters, so any attempt to address the climate crisis will need to involve deep emissions cuts from these two powerhouse nations. China's emissions are more than double those of the US, but historically, the US has emitted more than any other country in the world. I am all for cleaner energy and reducing greenhouse gases. However, as you can see from the chart below, if just the US participates and China, India, Indonesia, Russia and the EU do not, how small of a dent will we make. I strongly support a harder stance to make others comply. Not with crazy Green New Deal ideas, but more aggressively reducing greenhouse gases. This Sunday afternoon Biden headline on Bloomberg is promising: “Biden Chides Russia, China for Failing to Pledge More on Climate.”
Prescription drug prices have become a key target of criticism by those calling for reforms to the U.S. health care system. Upon taking office, President Biden vowed to lower these prices. His plan called on Congress to allow Medicare to negotiate drug prices with manufacturers, allow prescription drugs to be imported from Canada, impose an out-of-pocket spending cap for those on Medicare, and limit annual price increases. Unfortunately, the plan was dropped from the latest White House spending bill after key Democrats objected to it. And according to Pfizer (PFE) CEO Albert Bourla, politicians are going at it from the wrong angle anyways. “The issue of drug pricing is a real issue in the U.S.,” Bourla said during Yahoo Finance's All Markets Summit. “But it is not the issue that some people think and present.” I agree 100% with Bourla. We definitely have a problem with drug prices and health care costs more generally. I contacted Jamie Dimon three years ago about the JPM, AMZN, Berkshire Hathaway healthcare initiative. I was willing to go back to work just because of the horrific health insurance experience I had and wanted it fixed. It ended up not working out, but the fact that I actually considered it shows the size of the problem. For all you trying to move to Florida, good luck getting health insurance for your family unless you work for a real company. Look at the chart below. Why are Americans paying over 2.5 times the price of other countries for the same medication? The answer, it seems, is partially due to the fact that the US does not regulate or negotiate the prices of new drugs when the come onto the market as do other countries. Also in play is the focus on drug safety rather than cost-effectiveness.
The United States has issued its first passport with an “X” gender designation, marking a milestone in the recognition of the rights of people who do not identify as male or female, and expects to be able to offer the option more broadly next year, the State Department said Wednesday. The department did not identify the passport recipient, but Dana Zzyym, an intersex activist from Fort Collins, Colorado, told The Associated Press in a telephone interview that they received it.
A former top executive at a North Carolina-based health care system has won $10 million in a legal battle over his claim that he lost his job because he is a white man. David Duvall, a former senior vice president of marketing and communication at Novant Health, was awarded the money by a federal jury in Charlotte on Tuesday. In his lawsuit, Duvall had alleged that he was pushed out of his job without warning or explanation in July 2018 as the company tried to diversify top leadership positions. The health care company had argued that Duvall was fired because he had poor leadership skills. In light of what is going on in the US, I am surprised Duvall won the case. Some pockets of sanity still exist if indeed he was fired as the story suggests.
The ineptitude of Americans never ceases to amaze. What a great idea it was by the students to get lap dances for the faculty for the homecoming party. The faculty did not seem to mind. There are more pictures in the article of administrators dancing with scantily clad high school students. What is wrong with this picture? A Kentucky school district is investigating after a teenage boy gave lap dances to his high school principal and other staff members during a homecoming event. Other provocative photos of spirit events at Hazard High School posted on social media showed teen girls parading around the gym dressed as Hooters waitresses and boys being paddled, according to the Lexington Herald-Leader. Hazard Independent Superintendent Sondra Combs told the paper Wednesday that the incidents are under investigation.
A professor at Rutgers University said that white people can’t afford to have children and “kind of deserve it” in a September virtual conference hosted by a prominent black-oriented publication. Brittney Cooper, a professor of women’s and gender studies and Africana studies at Rutgers, made the statement during a session of the Root Institute conference. Cooper also said that she wants to say, “We gotta take these motherf*****s out,” but that she can’t because “I don’t believe in a project of violence” and that “our souls would suffer” from doing so. “I think that white people are committed to being villains in the aggregate,” she said. I am not really sure how to begin here. How does she have a job? If Rutgers has responded, I cannot find it anywhere. How has the school not disciplined a professor for such horrible speech? We all know the answer of what would happen if a White professor said the same thing about any other race. I don’t condone any of it. Remember, I wrote at length (The World Has Gone Mad 10-20) about a University of Chicago professor who was ridiculed and cancelled for suggesting merit matters, but a professor who hates on a specific race is fine? Sorry, Professor Cooper is a hater who needs to be reprimanded or fired for her words. I do not condone hate of anyone.
Other Headlines
Romantic encounters between Cuban zoo animals surge during quarantine quiet
Cuban exile told sons he trained Oswald, JFK’s accused assassin, at a secret CIA camp
New York Attorney General Letitia James announces run for governor
Burr’s brother-in-law called stock broker one minute after getting off phone with senator
Crypto Crackdown Is ‘Tip of the Iceberg’ as CFTC Seeks More Powers
Mikey Williams, 17, signs historic footwear and apparel deal with Puma
How crazy is the used car market? This auction sparked a bidding war over a two-year-old minivan.
In the middle of a crisis, Facebook Inc. renames itself Meta
NYC luxury tower accused piling up trash in front of West End supermarket
ISIS threat forces Virginia police to beef up security at malls, shopping centers outside DC
Biden's job rating sinks to 42 percent in NBC News poll a year from midterms
Loudoun County mom says 6-year-old asked her if she was 'born evil' because she's white
An NFT Just Sold for $532 Million, But Didn’t Really Sell at All
Virus/Vaccine
The good news is the data continues to improve. The bad new is the rate of improvement has slowed decently. Cases fell 13% and are now averaging 73k/day. Hospitalizations dropped 17% and are at 51k, while deaths fell 12 % and are 1.3k/day. In the US, 58% of the population is fully vaccinated, while 85% of those over 65% are fully vaccinated.
My daughter’s school announced the end of the mask mandate starting Monday absent assemblies or other large indoor gatherings. In the last 4 weeks across approximately 1,500 students and I presume another few hundred in faculty there were a total of 2 cases. Interestingly, both were upper school students. My daughter is the lead in the school play which is a musical and they had mandated masks for the performances. I sure hope this means she does not need to wear one for the January performances, so she can belt out her solos. I will report the case count in coming weeks to see if there are any significant increases.
Florida reached the lowest case rate in the nation (8 per 100,000) after a tough run. I just don’t believe the media is speaking about it enough. Let’s be critical when it is bad, but at least comment when it improves. The two-week daily case change is -39%. Also of note, Florida is 60% fully vaccinated relative to 58% in the US. However, when you look by county, the data is remarkable. Fully vaccinated-Dade County 76%, Broward 65%, Palm Beach 62%. When you get to Central or North Florida, it is a different ballgame. Glades county 31%, Dixie 32%, Baker 33%, Washington 30%. The charts below are for Florida only. You can see the massive spike in cases over the summer and the sharp fall after.
If you're vaccinated against Covid-19 and wondering if you're eligible for a booster shot, the answer is probably yes. After months of debate about who should be eligible for a booster, an analysis done for CNN shows that at least 89% of vaccinated American adults are eligible once enough time has passed since their original shots.
The FDNY shuttered 26 fire companies citywide on Saturday due to staff shortages caused by the COVID-19 vaccination mandate, according to furious elected officials, who ripped the move as “unconscionable” — and warned it could have catastrophic consequences. The mandate is expected to be enforced beginning Monday, and 26,600 city workers across all city agencies were still unvaccinated as of Friday night, according to City Hall. Those who don’t have at least one jab will be suspended without pay. The NYPD stood at 84 percent of personnel vaccinated, and the Sanitation Department was at 77 percent. This headline from LA is similar. LA Sheriff warns vaccine mandate causing 'mass exodus' among personnel
Real Estate
My neighborhood has 11 active listings relative to 65-70 pre-pandemic. I am starting to see some of the delusional listing prices sit unsold and come down. One broker recently said “People have gone from aspirational pricing to delusional pricing.” Continued issues around getting supplies to build or fix. I am doing a little work in the pool area and the contractor cannot get the supplies. He said it has been months in back log.
Saturday night, my wife and I went out to dinner in Boca with two couples we recently met and had a great time. One couple is from NYC and their kids attended Columbia Grammar. He was a hedge fund manager and now the CEO of a SPAC. The other gentleman is a recording artist and entrepreneur and he and his wife are from LA with two young children. Yes, I have played guitar with him and yes he made me sound awful given his voice is so good. But with enough glasses of wine, I am convinced I sound less offensive. The point is, the new people coming to Florida in the past couple of years are younger, more hip, and much different than South Florida 10 years ago.
Homebuyers clamoring to own property in the Hamptons are coming away empty. Just 397 homes traded hands in the Long Island resort towns in the third quarter, down 35% from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Demand was as hot as ever. There just wasn’t enough inventory to meet it. Listings tumbled 41% from the third quarter of 2020. It was the second-largest drop in the firm’s records, which date back to 2007, and the eighth straight quarter with a year-over-year decline. Any decent R/E market is facing the same issue of limited inventory. Some places have inventory down 80-90% from pre-pandemic levels.
My kids and I love Million Dollar Listing LA. We always watch it and this home was on it a few times as the developer is a complete nut and fired a bunch of brokers. The Malibu estate was listed for over $75mm at one point and no broker can deal with Scott Gillen. I thought it was interesting that it is now listed for $34mm. The house looks AMAZING and I believe has been listed for close to 3 years. Every time a new broker is hired, Zillow starts back at zero days. It is not on the water, but has spectacular views. At some point near this price, I would think this is a buy. I have never been to the home. The tour on the TV show made this house look great.