Opening Comments
Picture of the Day--Food Chain
It Was a Catching Day, Not a Fishing Day
Quick Bites
Markets, Earnings Warnings, Aug 29th Drone Strike
France-Rocky Terms, House Squatter/NY Commercial Rent Control,
B-School Rankings, Childhood Obesity, Trump Loan
AOC-Tax the Rich Designer, Geo-Location Tracking, Spam Calls
LA High School Class Posters, Inbreeding Today vs Prehistoric Times
Virus/Vaccine
Data
FDA on Booster
Moderna Outperforms
CA Data Best in Country
Real Estate
Boca House Story
Miami New Listings-Some off Market
Greenwich, CT Update
Opening Comments
Lots of nice recommendations for my back from inversion tables, to Pilates to yoga. Thank you for the help and my back is improving. I wrote extensively about Facebook in my last note, yet did not attach the WSJ story. This is a follow on article, The Facebook Files, which highlights many of FB’s shortcomings. I did not have time to read all of it, but shows that oversight is needed. Hit send early today. Big Quick Bites section in the report.
I went to the golf club the other day and was wearing an old pair of Air Jordan basketball shoes. I am not one to keep sneakers, but liked the way they looked and wore them 2 times a year. I never pay attention to the collectible sneaker market. A young employee says, “Mr. Rosen, you have some amazing shoes.”
I replied, “Thanks. They are 20 years old, I think.”
The young man tries to tell me he thinks my shoes are worth $1,500-2,000. I said, “Let me be crystal clear, I think I paid $80 for these old, stinky dawgs. If you want to give me $1,500, I will walk home barefoot.”
He asked to see my shoes up close and came to the conclusion they were not the fancy “Concord” shoes he thought. False alarm. It would have been a much better story had he paid me $2,000 and I walked home barefoot. Turns out they are worth $40 and I threw them away as the soles fell apart the next day.
Picture of the Day
This crocodile is catching a small fish that is catching an even smaller fish, in a stunning display of how the food chain works. This photo went viral shortly after it was taken by Massimiliano Bencivenni in Brazil. This small fish leaped up to catch its dinner but was swallowed by a hungry crocodile mid-air! In nature, you're never far away from your predator. How the photographer managed to get such a clear shot of this incredible instant is unclear. I love nature pictures and have seen some amazing things while fishing in the ocean. I felt this picture was interesting enough to justify Picture of the Day.
It Was a Catching Day, Not a Fishing Day
My son, Jack, and I had a good friend, Danny, (qualified for the US Mid-Am) in town. He stayed with us for five days and is a lovely guy who wanted to fish. You can follow Danny at the Country Club Collection on Instagram if you enjoy golf. I took Danny and Jack out on the boat in search of Mahi-Mahi (dolphin-not the mammal). They call it “fishing” not “catching” for a reason. However, on this day, it was “catching.” I went out about 13 miles on a calm day in search of structure (weeds or debris) and was disappointed to not find much. Fish are prevalent when you see a large patch of weeds or debris. Out of the corner of my eye, I saw something in the water (old flip flop) and gunned the boat towards it. Turns out I saw the beginning of a weed patch which eventually turned thick. Unfortunately, our friend, Danny, was feeling a bit seasick and crashed on the floor as seen in the pic below. Sorry Danny, note the Gatorade bottle in hand. At another point, he fell asleep with a PB&J sandwich in his hand. Just plain funny. Give him credit, he awoke to screaming reels and jumped into the mix and caught a bunch of fish. No, he never puked or the pic could have made the Rosen Report. My boat, my rules!
Weed patch
I ended up trolling only to catch weeds given they were scattered. Then we found a nice grouping of weeds and the catching began. I drove the boat from patch to patch and we caught a couple dozen Mahi in two hours. We trolled with 3 rods and at two separate points we were “tripled,” meaning 3 fish on at one time. It is pandemonium when this happens as lines are crossing and I need to drive the boat while fishing and helping everyone and getting fish off hooks. This is one of the many fish Danny caught.
Here is one of Jack’s dolphins
Here is another one. They look so amazing right out of the water, but change color quickly.
We were well off shore and the boys wanted to golf, so I charged home doing 40mph only to find a big bamboo log at 700 ft of water. Again, we slammed the fish both trolling and using the small pilchard we caught on the way out. Pilchard are bait fish and very effective for a host of species. The small ones are amazing for dolphin. When you catch one dolphin, you leave it in the water and it attracts the others in the school many times. At one point around the log, there were 20 dolphin. From there, the boat can be surrounded and you pitch the pilchard on a hook and it is a feeding frenzy. I keep throwing live ones out to chum up the fish. We caught so many that I let more than half of them go (good Karma), but it was a hell of a day with lots of fun. Had we stayed out and fished all day rather than a few hours, I am convinced we could have caught 100 of them!
I found this pretty picture of a school of Mahi underwater. I have seen 30 or more around my boat and it is incredibly exciting. These are beautiful fish and they flash blue and green in the water. It is stunning. When you throw some live pilchard into the water, the feeding frenzy begins and you generally get a fish on the hook in 20 seconds when they are schooling. However, on one occasion last year, I was surrounded by Mahi and I could not get them to bite anything. It only happened once and hope that does not happen again.
This is a pilchard and when they are schooling, there could be many thousands of them in thick bait balls as seen in the second picture.
After you are done, you then need to clean the boat. When you catch a ton of fish, the boat is covered in fish blood, guts and it is a painful process. Then you need to clean the fish. Lots of work, but was a good time and made up for a couple weak fishing outings in the past few weeks. It is near the end of Mahi season and the real fishing (wahoo and sailfish) begins soon as the water temperatures cool. I hope to have more days like this with lots of fun, fish, sun and only gone for a total of 4 hours.
Quick Bites
Stocks dipped on Friday as investors remain cautious due to a resurgent Covid virus, a Federal Reserve meeting next week and a historical tendency for September to be a weak month for equities. The Dow Jones Industrial Average lost 166.44 points or 0.5% to close at 34,584, dragged down by a nearly 2.9% drop in Dow Inc. The S&P 500 shed 0.9% to 4,432 and the Nasdaq Composite lost 0.9% to close at 15,043. Mega-cap technology stocks were mostly in the red, with social media giant Facebook dropping 2.2% and Alphabet falling just shy of 2%. Apple lost 1.8%, and Microsoft slipped 1.7%. History is not on the market’s side with the S&P 500 averaging a 0.4% decline for September, the worst of any month, according to the Stock Trader’s Almanac. Friday in particular begins a historically weak period for stocks as those September losses typically come in the back half of the month. Still, stocks closed on Friday with losses for the week. The Dow slipped less than 0.1% this week, for its third straight week of declines. The Dow has not had a 3-week losing streak since September 2020. The S&P 500 fell nearly 0.6% since Monday for its second straight week of losses. The Nasdaq Composite dropped close to 0.5% this week. For the month, stocks are also trading in negative territory. The Dow is down about 2.2% in September. The S&P 500 is off by nearly 2% this month but still just 2.5% from its all-time high. The Nasdaq has lost 1.4% this month. I hope we see a more meaningful pull back. Markets which go in one direction scare me and lull investors into a false sense of security.
An alarming number of companies have warned that profits won’t meet expectations when they report in a month. While just a small part of the S&P 500, their earnings have historically been the most correlated to the indexes of all sectors, a study by Bank of America Corp. found. “It’s been upward earnings revisions that have supported stocks here and rather high valuations,” Jeffrey Kleintop, chief global investment strategist for Charles Schwab & Co., said in an interview on Bloomberg TV with Caroline Hyde. If “we start getting some disappointment, as we’ve recently had with the economic data, that could undermine the key support for the market.” How much profit is priced in the current market? Assuming the S&P 500’s price-earnings ratio slips back to its five-year average of 19.6, that implies index-wide profits of $228 a share. Analysts are skeptical. They cut their estimates for the first time since March, expecting 2021 profit to stall near $200 a share, data compiled by Bloomberg Intelligence show.
I was a bit surprised to see the stats quoted in the CNBC article about building emissions, which seem high to me. I know environmentally friendly buildings have become very popular and assuming this data is true, it may be only the beginning. Buildings currently represent 39% of global greenhouse emissions, according to U.N data. Almost one-third (28%) of the global total is the result of running buildings — referred to as operational emissions, while 11% comes from building materials and construction. “It is a widely unknown fact,” Avi Naidu, co-founder and managing director of Taronga Ventures told CNBC’s “Squawk Box Asia” Friday. “Many people think that it’s transport, it’s methane, it’s food that is a big driver, but actually it’s the built environment,” said Naidu, whose company invests in innovation within real estate and construction.
The Pentagon says it has now concluded that a U.S. drone strike in the final days of the U.S. evacuation from Kabul, Afghanistan, killed an aid worker and multiple members of his family, including 7 children on Aug 29. General Frank McKenzie of U.S. Central Command made the announcement at a briefing Friday. Biden’s approval rating is down to 42-46% in most of the polls I read. The negative feedback in the polling articles as stated Biden’s handling of the pandemic, border crisis, Afghanistan, the drone strike, unemployment, health concerns... Of note, after 240 days in office, Trump’s approval ratings were 39%, so Biden is beating Trump by a few points. Obama was 53% and G.W. Bush was 83% at the 240 day mark, while Clinton was 48%.
The Biden Administration announced a partnership between the US, UK and Australia France said it will immediately recall its ambassadors to the United States and Australia, where the US and UK agree to assist Australia in acquiring nuclear-powered subs which will allow the Australian Navy to help counter Chinese nuclear-powered vessels in the region. France said it will immediately recall its ambassadors to the United States and Australia, in protest of the submarine deal unveiled earlier this week.
How did this housing story go on for 23 years? Why would such ridiculous favoritism for the tenant be viewed as a good thing while crushing the bank? The house value must have quadrupled in that time yet he did not make a mortgage payment and lived for free all these years? NY has done so much harm to lenders and landlords in favor of “protecting” bad acting tenants. Some of the things I hear going on in NYC are scary from a landlord’s perspective. Own with caution. A Long Island man who hasn’t paid his mortgage in 23 years doesn’t qualify for pandemic housing protections because he’s been staying in the home illegally, a judge has ruled. Guramrit Hanspal, 52, bought the three-bedroom, 2.5-bath home in 1998 for $290,000, making a single mortgage payment before the house was foreclosed upon in 2000. But Hanspal stayed put, filing for multiple bankruptcies and lawsuits in various courts in a never-ending — and so far quite successful — bid to stave off eviction. In NY, there is a new commercial rent regulation bill in the works which is horrible for landlords. The policy would impact retail and office tenants that occupy 10,000 square feet or less, and manufacturing tenants of 25,000 square feet or less. The ten-page legislation, seeks to develop a commercial rent regulation framework that resembles residential rent stabilization in New York State. Along those lines, landlords would have to register their commercial rents for new leases with the city after the law takes effect. Hard for me to want to own anything in NY given the way they treat landlords. Can’t collect rent, lock you in at low rent levels, yet you must pay your R/E taxes and mortgage.
Bloomberg article on B-School rankings with some surprising results from my perspective. How is Dartmouth #2 and Wharton #9? Shocked to see Duke at #15. Surprised Northwestern is so high as well. Again, I don’t recommend B-School for your career on Wall Street. I would do a CFA instead. If you want to change careers and go from consulting to Wall Street or something like that, maybe, but generally stay away from MBA candidates despite being one myself (University of Chicago #4). I did not like my experience at U of C at all. I learned ZERO and it was the biggest waste of time. Thank goodness my firm at the time, Continental Bank, paid for it. My teachers were professors who never worked and knew nothing about the real world of business. I cannot speak to what they do today, but I would not recommend it. Also, it is Chicago where the motto is “where fun goes to die.” If I had to go to B-School, depending on what I wanted to do for work, I would consider Stanford, Harvard, Wharton or Duke.
Stanford
Dartmouth
Harvard
Chicago
Northwestern
Columbia
UC Berkeley
MIT
Wharton/Virginia
NYU
Obesity is a major epidemic in the US and I find we spend too much time on the virus and not enough time on the weight issue. I am not a fan of BMI as a measure of obesity given a muscular person will show up as overweight or obese, but this study gives you a directional idea of the impact of the pandemic. The rate of body mass index change in children nearly doubled from March to November 2020 compared to the rate of BMI change before the Covid-19 pandemic, according to a study published Thursday in the US Centers for Disease Control and Prevention's report on morbidity and mortality. The CDC team used a medical record database to compare BMI changes in 432,302 US children between the ages of 2 and 19 before and during the pandemic. BMI is a measure that uses height and weight data to track changes in weight relative to height. All of the children in the study experienced significant increases in their rate of BMI change during the pandemic, except for children who were underweight, the report found.
A $100 million loan on Donald Trump’s Fifth Avenue tower was moved to a watch list Monday because of “lower average occupancy,” according to information compiled by Wells Fargo & Co. The debt, sponsored by the former president himself, is secured by the 244,482 square feet (22,700 square meters) of office and retail space in Trump Tower. Occupancy has dipped to 78.9% from 85.9% at the end of 2020, according to Wells Fargo, the master servicer of the loan. Revenue from the property was $33.7 million in 2020, according to the loan documents. In the first quarter of 2021, it was $7.5 million. I am sure this is a combination of a tough retail market and some tenants who just won’t go into a building with Trump’s name on it.
Talk about irony. AOC wears a dress to the $30k/ticket Met Gala which says, “Tax the Rich.” Her designer, Aurora James, owes debt in multiple states. Aurora has three open tax warrants in NY State for failing to withhold income taxes from employees’ paychecks. So, AOC was given a ticket for free to a $30k party, wears a dress that says “Tax the Rich” and her own designer does not pay taxes. No one else finds this comical? There is now an ethics complaint over AOC’s “impermissible gift” of a $30k ticket.
Crazy story of a man going on a bike ride with his phone and the police using geo-location to track him as a suspect because he was near the scene of a robbery. Make no mistake, big brother is watching. All my criminal readers should leave their phones at home when they are robbing banks.
The amount of spam calls, especially vehicle warranty is stunning. My children (no license or car) get called 3 times a week. Please make it stop! Apparently the FTC is listening to my frustration. The Federal Communications Commission recently implemented a set of industry rules known as STIR/SHAKEN to help mitigate spam. Experts say the standards can help block spoofing and is a good start, but scammers will find new ways to steal and cheat. Third-party apps and large telephone providers like T-Mobile, Verizon and AT&T currently offer spam blocking apps for customers looking to limit scammers.
Love the teaching at this LA public high school, NOT. How is the teacher not fired? How is this allowed? If America sucks so much, why don’t you try China, Venezuela, Saudi Arabia, Afghanistan, Yemen, Cuba or any other country of your desire? A classroom at a Los Angeles public high school was decorated with hateful posters reading “F–k the Police” and “F–k Amerikkka” — as well as a Black Lives Matter flag, photos show. The vicious, anti-American posters, shared on social media, adorned a history classroom at Alexander Hamilton High School. One picture shows a poster declaring “F–k Amerikkka, This is Native Land” and another taking aim at law enforcement officials. “Policing is a violent, anti-black settler institution that originated as slave patrols,” the poster reads.
This is one I did not see coming. I would have gotten this one wrong and I admit it. Inbreeding is practice people often link to the distance past and prehistoric humans. However, a new genetic study finds only three percent of prehistoric people were the offspring of cousins. For comparison, researchers say that number is actually ten percent today. The findings come from a genomic analysis of 1,785 individuals who lived over the last 45,000 years. Sex between cousins or second cousins has become over three times more common, according to an international team working on the project. “Parental relatedness of present-day humans varies substantially across the globe, but little is known about the past,” writes lead author Dr. Harald Ringbauer of the Max Planck Institute for Evolutionary Anthropology and his team in the journal Nature Communications.
Virus/Vaccine
Improvement in the data with cases and hospitalizations falling and deaths growing at a slower rate than prior weeks. See charts below. The US vaccination rate is 55% for fully vaccinated. There are approximately 64% given at least one dose in the US according to Bloomberg.
An FDA advisory panel on Friday endorsed emergency approval for the Pfizer vaccine booster shot at least six months following the second dose among people ages 65 and older and those at high risk of occupational exposure and severe COVID-19. The vote was 18-0. The vote will now go before the FDA to issue a final decision. The panel earlier Friday afternoon voted to reject licensure of Pfizer's booster vaccine in people ages 16 and older, at a vote of 2-16. During the deliberations, panel members suggested older, vulnerable populations may benefit from boosters, but noted insufficient data among younger groups and concerns over potential increased risk for heart inflammation, particularly among males ages 16-17. I am happy that the FDA came to this conclusion. We have enough trouble getting people to get vaccinated. Suggesting they need booster shots constantly will only make people less interested. I personally do not want to take shots constantly and mentioned I would not be getting a booster even prior to the FDA comments.
Moderna's COVID-19 vaccine is slightly more effective than Pfizer's or Johnson & Johnson's in preventing hospitalization, though the gap widens substantially four months after vaccination, the CDC said Friday. The data, collected from nearly 3,700 people at 21 hospitals in 18 states over five months (including Montefiore in the Bronx), add to a growing body of evidence that while all the vaccines work well, the Moderna shot remains the most effective over time. Overall, the study said, the Moderna vaccine was 93% effective at preventing hospitalization for COVID among American adults without compromised immune systems. Over the same study period (March 11-August 15), the Pfizer vaccine was 88% effective and the J&J vaccine was 71% effective.
California, which at one point was the country's epicenter of COVID-19, is now the state reporting the lowest positivity rate per 100,000 people, according to data collected by Johns Hopkins University. As of Saturday evening, 24.99 new confirmed cases were reported for every 100,000 people in California, Johns Hopkins University data found. The state reported a daily average of 8,172 new cases over the past eight weeks, and averaged 92 deaths due to COVID-19 complications per day during that same time period, according to the California Department of Health. As of Saturday, more than 77% of California's population is vaccinated, according to the state's Health Department.
Real Estate
This is a crazy story about Boca Real Estate. A person I know was trying to sell their double lot, 13,000 square foot house for ages with no takers. It was a home which needed a lot of work. Turns out, a developer bought it 18 months ago ($9.4mm range) and tore down the house and put up 2 homes on the canal (NOT Intracoastal). I am told they are EACH going for over $20mm. Over $40mm of likely proceeds with combined costs of maybe $23-25mm maximum including build-out? The market is that crazy down here.
My friend, Devin Kay, the South Florida R/E broker to the stars, sent me his new listings which are below. One is off market. He just sold my friend a house in the $9mm range. Check them out.
6300 N Bay Road
Miami Beach, FL
One of the only available opportunities to acquire an Estate size property on the most sought after street in Miami Beach, North Bay Road. This classic Pancoast home can be renovated & updated to your desired tastes or build your Compound on this oversized 25,215 SF Lot w/ 103' on the Open Bay. Enjoy breathtaking Wide Bay and Downtown Miami skyline views from one of the most coveted locations in Miami. Upper North Bay Road offers a private Residential setting which is conveniently located within Walking Distance to La Gorce Country Club & a short drive to Bal Harbour Shops, Sunset Harbour or South Beach. Take advantage of this opportunity to live amongst some of the most valuable homes that Miami Beach has to offer as North Bay has quickly become the most sought after address in town.
25,215 SF Lot - 7,765 SF House - 103' of WF on Open Bay
Asking $26,500,000
OFF MARKET
5327 N Bay Road
Miami Beach, FL
Contemporary masterpiece situated on the most sought after street in Miami Beach, North Bay Road. This newly built architectural stunner boasts 4700 SF of designer curated interiors, top of the line finishes, high ceilings & a layout that is perfect for both family enjoyment & experiencing the ultimate Miami Beach lifestyle. Nestled behind private gates on Upper North Bay Road, the home is conveniently located in between South Beach, Sunset Harbour & Bal Harbour where you'll find the best shopping & dining Miami has to offer. Just steps away from La Gorce Country Club.
7,737 SF Lot - 4700 SF House - Custom Built in 2016
Price Upon Request
5245 N Bay Road
Miami Beach, FL
Coming in Fall of 2022. Incredible Brand New Tropical Modern home on Coveted North Bay Road. This 4 Bed 4.5 Bath Smart Home will push the boundaries of Architecture & Design while offering a level of sophistication that will be sure to impress the most discerning clientele. This Flood Resilient design boasts luxurious finishes & organic materials, incredible elevation, 9-16' ceilings & 2 car garage on the ground level. Featuring 3, 865 Interior SF, the layout is ideal for both families or someone who wants to enjoy the ultimate Miami Beach lifestyle. The Architecture & Design's intent was to bring the outdoors inside, creating a tropical setting & an incredible sensory experience. The outdoor space is an entertainers dream w/ a lap pool, outdoor dining & living area, lush landscape & more.
7,738 SF Lot - 3,865 SF House - Completion in 2022
Asking $4,750,000
5324 Pine Tree Drive
Miami Beach, FL
Coming Fall of 2022. Incredible Brand New Tropical Modern home on Pine Tree Drive. This 4 Bed 4.5 Bath Smart Home will push the boundaries of Architecture & Design while offering a level of sophistication that will be sure to impress the most discerning clientele. This Flood Resilient design boasts luxurious finishes & organic materials, incredible elevation, 9-16' ceilings & 2 car garage on the ground level. Featuring 3,783 Interior SF, the layout is ideal for both families or someone who wants to enjoy the ultimate Miami Beach lifestyle. The Architecture & Design's intent was to bring the outdoors inside, creating a tropical setting & an incredible sensory experience. The outdoor space is an entertainers dream w/ a lap pool, outdoor dining & living area, lush landscape & much more.
7,567 SF Lot - 3,783 SF House - Completion in 2022
Asking $4,550,000
Greenwich, CT Data by Mark Pruner
It’s the second week of the fall market and we are up 10 listings from our all-time low of 260 listings at the beginning of September. If you are thinking about listing your house now is the time to do it. The buyers are out there.
On the good news side we have two numbers 801 and 908. The first number is the total number of single-family home sales so far this year. Last year, which was a stellar year, we only had 863 sales. We only need 62 sales to surpass that and we have 3.5 months to go in the year. We presently have 107 contracts waiting to close, which when added to sales comes to 908 transactions so far this year. If we get an additional 92 sales in the fourth quarter, which is very doable, we will break 1,000 sales for the year, something that’s never happened in Greenwich.
The fly in the ointment is having enough new listings. One of the primary ways that we got to 908 transactions, while never exceeding 342 listings in inventory for any week of the year is the return of the upsizer to Greenwich. When I grew up in town we had steady increases in house prices and hence equity. Homeowners took that equity and used it to buy bigger homes. Having people move every 7-8 years was not uncommon. Lots of Greenwich houses got sold, but each purchase generated a listing to help drive sales. It’s always difficult to know where buyers are coming from, but most of my clients that are looking to buy are upsizers in Greenwich. (If anyone knows of a nice condo coming on in downtown Greenwich, I’ve got a couple of buyers.)