Opening Comments
My last note was about Motek, a great Middle Eastern restaurant with multiple Miami locations. Dozens of readers responded about how much they love Motek as well. The video of the young basketball player who took a rescinded scholarship offer and used it as motivation was by far the most opened link. The other popular link was about changing your communication style to put you in a position of power.
I am fishing in Venice, Louisiana with readers this week. I had to fly out of Miami airport today at 8 am (limited flights from Ft. Lauderdale) and will be returning Saturday morning. The target species are redfish and yellowfin tuna. Hopefully, Hurricane Helene stays away from me. Early send as I am fishing this afternoon. I am sure I missed some news today with the travel.
I left my laptop on the plane. I have no updates from today and sent this from my phone. Apologies
My kids want to go away for the winter break. I have written extensively about the absurdity of vacations today and may need to take out a loan to take a trip in late December. Who can afford these prices of thousands a night per room? If anyone has any grand ideas that are nice and not going to break the bank, I am all ears. Taxes and fees are more than I spent 20 years ago on the accommodations!
I have mentioned the game, Uncovered Shorts, which takes one minute to play. I am addicted. They ask you four questions. The first two asks a “unique” answer, meaning: the least obvious. In Tuesday’s game, I loved one of the questions that shows if you don’t innovate, you die. Check out the question and best answers below. The largest companies in 1967 all faced huge challenges since their dominance. I guessed GM, which was a good answer, but also is no longer a dominant company.
I have spent thousands of hours writing the Rosen Report and have made amazing connections. I love the interaction with my readers. Some praise me for what I do, while others are critical. I welcome all commentary and had an amazing interaction this week with a reader who disagreed with some comments I wrote about the 2024 election. He wrote me a heartfelt note that was done respectfully. Despite not agreeing with my take I enjoyed his perspective and our discussion. Keep them coming. rosenreport@gmail.com
Video of the Day-Jeff Bezos Math
Influencer Money Grab
Quick Bites
Markets
Private Credit Concerns
Men Leaving the Workforce
Deathbed Regrets
2024 Election
Israel/Middle East
Other Headlines
Real Estate
Indian Creek Security
Miami R/E Bubble?
Argentina Ended Rent Controls-The Result Will Surprise You
Other R/E Headlines
Video of the Day-Jeff Bezos Math
One of the keys to success is intellectual honesty. As a kid, I wanted to be a pro surfer or pro basketball player. As you may have guessed, I was not close to being good enough to play at the elite levels of any sport. Having a 5’ tall mother and a 5’7” father coupled with the last name Rosen made being a pro athlete virtually impossible. I focused on my strengths and ended up having a pretty successful career. This short video has Bezos talking about his desire to be a theoretical physicist when he was at Princeton. He could not solve a quantum mechanics math problem despite hours of trying, so he asked for help from the smartest kid at Princeton, who solved it in his head. A lightbulb went off and Bezos realized being a mathematician was not in his cards. We are all better off for him coming to the right conclusion and starting the most disruptive company of all time. I think his net worth of $209bn is also slightly larger than it would have been had he gone the math route.
Influencer Money Grab
We live in a very different world than when I grew up. I got my first cell phone at 27 and did not own a computer until the same age. I did not own a computer in college! Now, 4-year-olds play on iPads and if kids don’t have a smartphone by the 6th grade, they may as well be a lepper. I have never been a social media person but have recently fallen into the rabbit hole of watching videos on Instagram, Facebook and YouTube. They send you exactly what you want. I get a lot of surfing, fishing, restaurants, and cooking videos. Now and then something random pops up. I opened a 50 Cent (rapper) video and now I am getting overrun with rapper videos.
A lot of content is created by influencers on platforms including YouTube, Facebook, Instagram and Twitter and it is resulting in massive paydays. Many of the biggest influencers are younger and many did not go to college. I am shocked at the number of people making millions of dollars and, in many cases, creating silly content. Most people will not make it in the big-time influencer world, but those who do are paid handsomely.
This article is about an Alabama sorority sister who will spend $200k in 4 years on clothes, dues and events to be a sorority sister. The idea seems incredibly stupid. However, she is an influencer and will make $2mm through her social media channels. She posts about her sorority experiences and offers tutorials on how to rush the sorority you want to join.
Look at Mr. Beast, the most popular person on YouTube who brings in $700mm/year but reinvests most of it into high-quality video production. He went to East Carolina University and dropped out two weeks into his freshman year to focus on a YouTube career. His company is worth over $1bn and he taught a class at Harvard. Many of the top paid YouTube stars are people I have never heard of in my life, yet make tens of millions of dollars as influencers.
Nastya is a little girl who went to the same school as my kids in Boca. She makes almost $30mm/year through her channels. Ryan Kaji is a little boy crushing it as well. He has a huge following around fun and games and his own toy line. One of Ryan’s videos had over 2bn views and he had a movie released this August entitled, “Ryan’s World the Movie: Titan Universe Adventure.” At the age of 6, he made Forbes top earners list with $11mm of income.
Big stars get paid millions to send a short Instagram post as outlined in this link. Think of the influence of Taylor Swift. Not only does she sell out stadiums, airlines see a 25% increase in traffic when she puts on a concert. And when she endorsed Harris on social media, hundreds of thousands also registered to vote in short order. When she performs shows in a town, the mayors often comment on how big of an impact her shows have on revenues. There is now a term, “Swiftonomics” for her economic impact. Her Eros Tour has grossed well over $1bn and it is not done. She has 300mm followers on Instagram.
Chas Lacaillade, manager to many prominent influencers, told me, "While many may wonder at the sums YouTube creators earn and the power they command, the skeptical should first consider that to gain this stature these Influencers effectively disintermediated some of the oldest and most powerful institutions in media. In the modern era, one YouTube video can draw a larger audience than the Super Bowl. An Instagram post can spark more conversation on modern culture than the Oscars, and a Tik Tok post can drive more product sales than a TV commercial that required the combined efforts of an ad agency, production company, media buying agency, and television network."
My point is simple, top influencers are making big money. Sometimes, they are spending a lot to create content, but when you get millions or billions of views, it pays for itself in spades.
Quick Bites
The two big news items were the weaker September consumer confidence data and the China stimulus. The consumer confidence index fell to 98.7 from 105.6, the biggest monthly decline in three years. The China stimulus exceeded expectations and sent stocks higher in the region with the Shanghai Index +4.2%. "This is the most significant PBOC stimulus package since the early days of the pandemic," said Capital Economics analyst Julian Evans-Pritchard. Stocks are hanging in very well despite the Middle East headlines and consumer confidence concerns and Nvidia was up almost 5% . Oil rallied on the China stimulus news.
This Bloomberg article is entitled, “Private Credit Faces Worst Reckoning Since ‘08, NY Life CIO Says.” The private credit market is set to face a “reckoning moment” and a period of difficulty it hasn’t seen since 2008 amid risks of inflation and recession, according to Jae Yoon, chief investment officer of New York Life Investment Management. Yoon’s comments come as private credit faces a cocktail of risks, from an outsized Federal Reserve interest rate cut to excessive competition leading to slashed margins. Patrick Dennis, co-deputy managing partner at Davidson Kempner Capital Management, warned last week that private credit defaults are the biggest market risk the company’s trying to evaluate. “The recovery rate is coming down, there are too many players and too much money chasing deals and covenants are getting lighter and lighter,” Yoon said, referring to a loosening of restrictions placed on borrowers. Pick your manager carefully. How experienced they are in times of trouble and restructurings is a key factor in my mind.
Interesting CNBC article about men leaving the work force that suggests technology impacts and offshoring of manufacturing have played a big role. It also discusses the reduction in the number of men going to college and the impact on jobs. Men have been steadily dropping out of the workforce, especially men ages 25 to 54, who are considered to be in their prime working years. According to the U.S. Bureau of Labor Statistics, the unemployment rate for prime age working men was 3.4% in August 2024. This number primarily includes those who are unemployed and looking for a job. But about 10.5% of men in their prime working years, or roughly 6.8 million men nationwide, are neither working nor looking for employment, compared with just 2.5% in 1954. “The long-term decline in labor force participation by so-called prime-age men is a tremendous worry for our society, our economy, and probably our political system,” said Nicholas Eberstadt, a political economist at the American Enterprise Institute. A study by the Pew Research Center found that men who are not college-educated leave the workforce at higher rates than men who are. At the same time, fewer younger men have been enrolling in college over the past decade. There is a good 12-minute video in the link with charts and data. Men who do not attend college have taken a big hit to income on an inflation-adjusted basis over 50 years (last chart).
I felt this CNBC article outlining big regrets from people on their deathbeds was interesting and could teach us all some lessons. Over the years of caring for ill hospital patients, Ungerleider — a doctor who specializes in internal medicine — has observed regrets among people near the end of their lives. “Being proximate to the end of your life really allows you — pushes you — to be present because that’s all you have,” says Ungerleider, 44, host of the upcoming “Before We Go” podcast and founder of the nonprofit End Well Foundation. “That is true for all of us. Throughout our lives, this present moment is all we have.” I was very fortunate professionally, which allowed me to retire early. Given my father passed away when I was 5 years old, I wanted to give my kids something I never had, which was a present father. Although I missed out on amazing career opportunities and money, I got time with my family and was with my kids a lot more than I would have been had I continued running in the rat race. I know my situation is very fortunate, but I do not regret it for one second, as my kids are leaving for college soon. I have actually had a few conversations recently about going back to work.
2024 Election
Voter registration is spiking, particularly among young adults
Harris’ critics sound off after VP is endorsed by IRS-affiliated union
Court rules nearly 98,000 Arizonans whose citizenship hadn’t been confirmed can vote the full ballot
Why should we allow people who have not been confirmed US citizens the ability to vote? 37% are registered Republicans and 27% are registered Democrats. Shockingly, most of the voters are from Maricopa County.
Manchin won’t endorse Harris over vow to gut filibuster to codify abortion rights
Trump threatens ’200% tariff’ if John Deere moves production to Mexico
Trump says he gave 'biggest tax hike in US history' in blunder and wipes drool from mouth
Trump has definitely had more gaffes in 2024 than in 2016.
Secret Service uniformed officer accidentally shoots himself while on duty
The embarrassment at the Secret Service continues
Would-be Trump assassin Ryan Routh stalked ex-president for month, prosecutors say
Biden says ‘for years too little has been done’ on fentanyl
Well, how many millions of illegal immigrants have come in under this administration? How many gang bangers, drug dealers, prisoners and bad people have cross the border and are now living in the US? Over 250k have died from Fentanyl overdoses in recent years.
Every reader knows about my positive views on Dimon. I have written extensively about government waste and this piece from May 2023 entitled “I’m From the Government and Here to Help,” was very well read on the subject. With $2 trillion deficits in perpetuity, mounting debt levels, rising interest burden, aging population, underfunded entitlements and general government inefficiency, we need real business people to spend time reducing government waste.
Israel/Middle East
It sure feels as though the Middle East is escalating by every measure. Israel is fighting on many fronts and has hit 1,300 targets in Lebanon recently. The oil market is suggesting things won’t get out of control. However, it is starting to feel different than it has been in recent months, and not in a good way.
Iran president warns of 'irreversible' consequences of wider regional war
US is sending more troops to the Middle East as violence rises between Israel and Hezbollah
Macklemore performed at 'Palestine Will Live Forever Festival' in Seattle. I will never listen to this loser’s music again. Macklemore: I am willing to fly you to Gaza if you want to live there for the rest of your life.
Other Headlines
Spending deal averts a possible federal shutdown and funds the government into December
Jony Ive confirms he’s working with Sam Altman on a secret project
What really happened in Ukraine with Hunter and Joe Biden: Exclusive Miranda Devine book excerpt
FBI stats show murder fell 11.6%, the largest single year decline in 20 years
Scary story in an area of a gunman using a fully automatic weapon with the intention of shooting a single target but killing 4 and injuring 17 others.
Why are DAs against people suffering consequences for bad acts?
Take back the once great city and have consequences for crime.
US homelessness explodes after hitting record last year as migrants flood streets
Cal Fire engineer faces arson charges, suspected of sparking 5 Northern California wildfires
Pro-police coffee shop owner wins $4 million in free speech suit against university officials
What country do we live in? You support police and are vilified by school administrators, forcing a coffee shop to close. At least the owner was awarded some money.
Indiana judge rules prison must provide transgender surgery for inmate who killed baby
Are you kidding me? He strangled his 11-month-old stepdaughter and wants gender reassignment surgery paid for by the state. Why should Jonathan C. Richardson, also known as Autumn Cordellionè, have any rights after killing a child? I prefer the death penalty to sex surgery for him. Click the link and look at this murderer.
Only 33% of millionaires consider themselves wealthy, report finds. Why it’s so hard to feel rich
Sunken superyacht believed to contain watertight safes with sensitive intelligence data
Storytelling.
Incomes spiked over 17% in 1 year for households in this state—it’s not Florida, Texas, or New York
UCL demographer’s work debunking ‘Blue Zone’ regions of exceptional lifespans wins Ig Nobel prize
Heavy metal exposure could increase cardiovascular disease risk, study finds
Ex-Pentagon Official Discusses Government's Hunt for UFOs: 'I Have To Be Careful What I Say'
Been a while since I posted on the UFO subject. I believe Louis Elizondo has some credibility after working in the Pentagon as a senior intelligence official on UFO projects. He has tried to expose information about UFOs. He has been on 60 Minutes sharing his views on UFOs and wrote a new book, Imminent. I believe we are not alone, but sadly I have am yet to be abducted and taken in a UFO. Aliens, I am available and want to write about it in the Rosen Report.
Real Estate
I have been to Indian Creek in Miami Beach twice and it is the most fortified residential community I have ever seen. There are armed guards everywhere and they patrol the waters around the island by boat. If you live there, your boat has a transponder to alert the guards of your coming and going. That way, they also know when a non-resident is approaching. This is where Bezos, Brady, Icahn, Brahman, David Guetta, Julia Iglesias, Eddie Lampert and many other titans live. I looked at a property when I first moved down. Had I bought it, I would have made tens of millions of dollars based on today’s values. This Business Insider article outlines Indian Creek security. The new cameras at the entrance allow the police to view a visitor’s face and pull up their driver’s license and license plates. Check out some of the security equipment: A high-tech radar fence encircling the island. According to public records, the system features 10 thermal cameras and 17 radar sensors mounted at nine locations along the island's perimeter, in addition to 30 traditional cameras. The radar sensors overlap, creating what the records call a "geofence" that can detect anything that comes within a half-mile of the shore. The project cost about $1.6 million — equal to about a quarter of the village's annual budget.
In terms of homes on the island, 40 Indian Creek, which was built in 1991 and sold in 2010 for $9.3mm, sold again recently for $64.5mm. 12 Indian Creek, which sold in 2006 for $18.7mm and in 2014 for $28mm, sold in October 2023 for $79mm. 28 Indian Creek sold for $87mm in June of 2024 (Bezos bought) and sold for $2.5mm in 1998.
Miami R/E has exploded since the pandemic. The great migration has sent prices soaring with high-end inventory limited. Pre-pandemic, the most expensive sales in Miami were $50-60mm (Ken Griffin’s Faena PH and one on Indian Creek). Now, a handful of sales have happened over $100mm and at least 20 sales over $50mm. On N. Bay Road, two sales have happened recently in the $50mm+ and high $60mm range. UBS thinks Miami is in a R/E bubble. There is limited high-end inventory. I do not think the price appreciation will continue but I would be surprised with a big correction at the high end. I can see lower-end condos coming under some pressure. We are already seeing some price reductions and inventory in Edgewater and Bal Harbor condos. Lots of new construction going on there. There is a full UBS report but I do not have it via link. It goes into detail on many cities across the globe if you can track it down.
I have been critical of government regulation and have written about the awful 2019 rent laws in NY and the damage they have done. This WSJ article is entitled, “Argentina Scrapped Its Rent Controls. Now the Market Is Thriving.“ For years, Argentina imposed one of the world’s strictest rent-control laws. It was meant to keep homes such as the stately belle epoque apartments of Buenos Aires affordable, but instead, officials here say, rents soared. Now, the country’s new president, Javier Milei, has scrapped the rental law, along with most government price controls, in a fiscal experiment that he is conducting to revive South America’s second-biggest economy. The result: The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170%. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40% decline in the real price of rental properties when adjusted for inflation since last October, said Federico González Rouco, an economist at Buenos Aires-based Empiria Consultores. My favorite line from Ronald Reagan was “The 9 most terrifying words in the English language are I’m from the government and I am here to help.”
Other R/E Headlines
Goldman's Old Headquarters Turned Into $4,000-A-Month Apartments
$4,000 for a studio in the financial district. These office buildings are hard to convert. I have not seen the finished product.
© 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™ #720 ©Copyright 2024 Written By Eric Rosen.
I have some confusion, Mr. Eric, how do you handle the upcoming deadline for Corporate Transparency Act compliance?