MJ, Tiger, Brady, Gretzky and E Rosen In the Same Sentence

2/26/23

Opening Comments

I want to remind readers that some email systems truncate the Rosen Report and require you to “View the Entire Message,” by hitting the link. Many readers don’t realize it and only get about half of what is written in my notes. Apologies. Gmail truncates the note. I am trying to make pictures smaller to help alleviate this issue.

We went to a restaurant in Delray called Casa L’Acqua, an Italian joint which did not disappoint. Although South Florida is hardly a hotbed of culinary delight, it is improving each day. I prefer this place to Delray’s Tramonti, and Delray actually now has a handful of decent eats. Crowd is not young, but food is solid. Definitely going back, and prices were not offensive.

Please read the last Quick Bites on healthcare and an 800 # you should consider for travel insurance. It was given to me by a doctor who swears by it.

Flying to Atlanta on Monday and back Tuesday night with Jack for a new set of clubs from Taylor Made, so I may be a little out of pocket.

• Video of the Day-High School Student Speech about Woke Teachings

• MJ, Tiger, Brady, Gretzky and E Rosen In the Same Sentence

• Quick Bites

  • Markets

  • Zip Recruiter

  • Jamie Dimon on Inflation/Fed

  • US Healthcare is Broken

• Other Headlines

• Real Estate

  • US Housing Market Value Declines

  • NY State Millionaire Exodus, but Still Strong

  • Mortgage Rates/Demand

• Other R/E Headlines

• Virus/Vaccine

  • WSJ Reporting Lab Leak Most Likely Cause of Pandemic

Video of the Day-High School Student Speech about Woke Teachings

• A reader sent me this 5 minute video of a high school student from Rosemont High School in Minnesota. The boy’s name is Brad Taylor, and he felt that school became unhealthy environment. It appears the video is over a year old, but I am just seeing it for the 1st time. Given I have two children in high school, I have a great many interactions with kids between 15-18, and I consistently hear about how woke schools have become. Even if you are way on the Left, I would think you would be concerned the fundamentals of education have largely been thrown out to teach kids about pronouns and woke ways. This articulate kid eviscerates the school board, and hope you take a few minutes to watch it. At some point, we are going to look back at this period in the world and ask ourselves, “How the hell did we get there?” To get an education, the kid is leaving his school. Maybe, just maybe things have gone too far? Don’t forget about the fancy Chicago private school which is teaching kids about sex toys or the numerous schools which withheld National Merit Scholar awards in the name of equity.

MJ, Tiger, Brady, Gretzky and E Rosen In the Same Sentence

I want to be crystal clear on something. The likelihood of me winning a gold medal in the Olympics at any point in my life was on an asymptotic line approaching zero. However, with the new idiotic sports included, I now have a shot. If the Olympic Committee can include Rhythmic Gymnastics, Trampoline, Curling and Flatwater Canoeing, they surely can add the only sport I would definitely win the gold medal. Curling is effectively sweeping ice with a broom. Come on, man. I believe I can be in the same conversation as the all-time greats if my sport is added.

As my readers know, I spend a great deal of time on the golf course with my kids. Given my back issues, I am unable to play much anymore. So what do I do? I look for golf balls (ball hawking) and I fish for bass at the same time. I believe I am the single best person in the world at the combination of ball hawking and bass fishing. Sure, individually there are better people at each, but NO ONE is better at me than both. Also, the added danger is battling the gators and snakes. Experts only please.

My record for golf balls in one day is 84. Most of these are ProV1s, Taylor Made TP5s or high quality Callaway balls. I have caught 24 bass in one day as well. One magical day, I found 72 high quality golf balls and caught 18 bass including a 7-pounder. This is a record which will never be broken. Think MJ going 6-0 in NBA finals, Tiger winning 6 straight US Jr and US Amateur golf tournaments and Brady winning 7 of 10 Super Bowls. Yes, that is the company I will keep if my sport is allowed in the Olympics

I am asking my readers to reach out to the Olympic Committee to support me for a new sport called, “Fish-Ball Hawking,” which is the only possible way I can win a gold medal. Let’s face it, this is way more exciting to watch than “athletes” doing the splits with a broom in hand in order to sweep a puck on ice.

Here are some pictures to prove I am truly elite. For those who want to support my Olympic journey, I am selling autographed golf balls and fishing lures. You can say you knew me before I dominated the Olympic Games. At 53, I think I still have a solid 3 games in me. Let’s go USA.

Quick Bites

• U.S. stocks fell sharply Friday after the Federal Reserve’s preferred inflation gauge showed a stronger-than-expected increase in prices last month. The Dow fell by 336 points, or 1.0%. The S&P 500 and Nasdaq slid 1.0% and 1.7%, respectively. The major averages also ended the week with their biggest losses in 2023. The S&P 500 was down 2.7%, marking its worst week since Dec. 9. The Dow fell almost 3.0% this week. The Nasdaq closed 3.3% lower, notching its second negative week in three. The core personal consumption expenditures price index, the Fed’s preferred measurement of inflation, rose 0.6% in January and 4.7% from the prior year, coming above economists’ expectations. The Treasury market sold off yet again. Initially bought my Treasuries a little early, but keep adding to the position. The 2-year is now yielding 4.8% or +12bps and the 10-year is now 3.95% or +7bps on the day. The 1st chart is from Nick Gerli showing the 1-year Treasury paying over 3x the dividend yield of the S&P. I am not suggesting a crash as he does, but do think stocks are less interesting than bonds. I prefer front-end Treasuries to stocks in here and munis are worth a look. The 2s/10s curve (great predictor of recessions) is now -83bps. Since 1976, any time the 2s/10s has gone inverted, we have had a recession. University of Michigan Consumer Confidence was above expectations at 67 vs 66.4. The last chart is interesting showing a spike in bets that stock market volatility will increase.

  

  

  

• If you believe the CEO of ZipRecruiter (ZIP), then the jobs market is cooling, as employers slow down hiring. ZIP stock plunged on weak guidance last week.

  From the CEO, "In the first few weeks of 2023, employers have moderated their hiring plans and reduced recruitment budgets in response to an increasingly uncertain macroeconomic backdrop. Online job postings in our marketplace remained in line with the low point of the 2022 holiday season, rather than following the longstanding seasonal pattern of beginning a run-up in January. ” The CEO also said, “there's going to be as softer hiring environment throughout 2023.” Stock is -26% over past 5 days. The implication is it will take longer to find a job, and the leverage is moving back to the employer from the employee. Couple this story with what I am starting to see on the consumer, and more cracks are showing. I continue to harp on my concerns about the consumer and the last chart shows the breakout of over $16 trillion of debt.

  

  

• Jamie Dimon said Thursday that containing inflation remains a work in progress for the Federal Reserve, while noting the U.S. economy continues to show signs of strength. “I have all the respect for [Fed Chair Jerome] Powell, but the fact is we lost a little bit of control of inflation,” Dimon said in an interview with CNBC’s Jim Cramer during the “Halftime Report.” Dimon himself said he expects that interest rates could “possibly” remain higher for longer, as it may take the central bank “a while” to get to its goal of 2% inflation. “The U.S. economy right now is doing quite well. Consumers have a lot of money. They’re spending it. Jobs are plentiful,” Dimon said. “That’s today. Out in front of us, there’s some scary stuff.” I feel I got the peak inflation call down to the week, but thought we would see a little bit more improvement by now. I am questioning some of the jobs and retail data, as to me, it seems difficult to believe. My base case was for a rate cut prior to year-end-2023, that is no longer my base case, but not totally off the table either. Remember, the Fed left rates at zero and QE WAY TOO LONG. The biggest inflation contributor was the Fed’s dovish policies for too long. Free money handouts from the administration did not help either. Former Fed Gov Frederic Mishkin is one of the authors of a paper suggesting the Fed can’t tame inflation without “significantly” more hikes that will cause a recession.

  

• My friend and his long-time girlfriend went on a ski trip to France last month.  Unfortunately, she became ill a couple days into the trip with a serious infection.  The crazy situation resulted in 3 different ambulance rides and multiple trips to the ER.  She ended up having one ambulance ride of over an hour. She was on IV, MRIs, X-Rays sonagrams and a battery of tests, but has since recovered. Unfortunately, they did not buy travel insurance. However, unlike the US where a short ambulance ride can be $2,000, the ENTIRE healthcare costs of all the tests, hospital stays and ambulance rides was under $4,500. This is reasonable, but not covered unless you have special travel coverage below. In the US, it would have been $20,000 or more. My wife broke her wrist in Vail 4 years ago. I should have called an Uber, but called an ambulance and got a bill for $2,000 for a 1.1 mile ride where they gave her a bag of ice.  The surgery was $68,000 and she did not stay one night. I was in the hospital for 3 nights with Dengue Fever with blood tests and a spinal tap, and the bill was $55,000.  According to an article in JAMA from 2021, "The US spends more of its gross domestic product (GDP) on health care than other high-income countries yet ranks last in access to care, administrative efficiency, equity, and health care outcomes, according to the nonprofit Commonwealth Fund." Here are the findings summarized showing the US last of 11 developed countries which analyzed performance on 71 measures across five categories — access to care, care process, administrative efficiency, equity, and health care outcomes.  When it comes to mortality and life expectancy, the US finished at the bottom of the pack again. My point is simple, the US healthcare system is broken. Not only do we spend significantly more for care, it is worse than our peers. A doctor gave me this number for travel medical and evacuation coverage called Travelguard. 800-826-4919. It is key for evacuation coverage which can be hundreds of thousands, and the coverage is very reasonable I’m told.

  

Other Headlines

• Nvidia stock rises after slight beat driven by A.I. chips

• Rolls-Royce shares soar after annual results crush expectations

  • Stock was up almost 20%. Strength of uber wealthy consumer is impressive.

• Berkshire Hathaway fourth-quarter operating earnings fall 8%, cash hoard swells to nearly $130 billion

• 401(k) retirement savings account balances sank in 2022, Fidelity says

  

• One of Europe's top banks is being sued for financing fossil fuels

  • I can’t figure out why energy companies are reticent to increase production. Can you? The Chart below is from the EIA and can be found here. Future production is in trouble in the US, and one big reason is the vilification of the industry and concerns about regulation. The cancelling of the Keystone Pipeline sent a clear message. NY is trying to eliminate gas stoves and any fossil fuels in homes and commercial buildings.

    

• Newsom’s proposal to cap oil profits in California meets skepticism in first public hearing

  • Bad idea Gavin. Your state has the highest gas prices in the country, highest natural gas prices, among the worst power grids, highest taxes and you want to punish oil companies? Check out the chart below of CA oil production over time from the EIA. Wait, why would oil companies not want to produce in your state?

    

• Black families’ net worth is up since Covid, but wealth gap stays wide

  

• Dilbert’ Dropped by Newspapers Over Scott Adams ‘Racist Rant’

  • Scott Adams, Dilbert creator, called Black Americans a “hate group” and urged white people to “get the F#@* away” fromBlack people in a YouTube video.

• NYC charters outperform public schools— and do it at less than half the cost per student

  • Charter schools spend $17.6k/student, while public schools spend $35.9k/student. Great charts in the link to show the outperformance. There are 141k kids in charter schools and 903k in public non-charter. Nearly half of NYC DOE grads at CUNY need remedial classes.

• Trump’s grip on the Republican base is slipping — even among his fans

  • I am adamant that I want new blood in the White House and feel strongly that Trump or Biden are the wrong choices. I am hopeful that we get new and younger people to lead the country. Please tell me that Trump and Biden are not the best we got.

  • Ron DeSantis beats Donald Trump by 24 points in GOP matchup, poll shows

    • Unfortunately, I don’t have a great deal of confidence in the poll below.

      

• Liz Cheney blasts Marjorie Taylor Greene's call for a ‘national divorce’ between liberal and conservative states

• ‘Sound like Mickey Mouse’: East Palestine residents’ shock illnesses after derailment

• Florida shooting spree leaves 3 people dead, including a child and a TV news employee covering one of the shootings

• DC teen tries to carjack 'grandma' with cancer but gets brutal reality check: 'You going to jail'

  • The Washington, D.C. woman told the teenager 'baby, you better shoot me, because you’re not taking my car.' I love this woman.

• Philadelphia police say 7 shot near school yard, including 5 teens and 2-year-old

• Florida student beats teacher for taking Nintendo Switch

  • Kid was 6’6” and 270 lbs and beat the female teacher unconscious. I hope he goes to jail for life. Awful video.

• US Jews on alert as white supremacists plan antisemitic 'day of hate' Saturday

• I spent 5 years interviewing 233 millionaires—here's the No. 1 career move that made them rich

• Will Humans Live to 150? Science Is Working on It

  • Interesting Bloomberg article. Think of the impact on healthcare costs, Social Security, Medicare…if people start living another 20 years let alone another 70. People will need to work until they are 125.

• NYC hospitals spending more than $90M on Midtown hotels for migrants

  • Remind me why the open border which has brought over 5mm illegal immigrants into the country is a good thing. The taxpayers are footing the bill for bad border policies.

    

• Mississippi State pitcher Jurrangelo Cijntje goes viral for ambidextrous talent

  • The kid threw 96mph with his right arm and 92mph with his left in the same game. Insane video.

• Daily use of marijuana raises risk of heart disease, study finds

  • Interesting, apparently, in NYC, you can sell weed with no license and no consequences. Sell a beer without a license and you are screwed.

• If you follow these 5 sleeping habits, you're 30% less likely to die from any cause

• Death of Clinton aide tied to Jeffrey Epstein ruled suicide

  • I was never a conspiracy theorist, but have become one. How is it possible that a man was tied to a tree and then shot in the chest with NO GUN found near the deceased yet it is ruled a suicide? No, I do not believe Epstein committed suicide either.

• Billionaire financier Thomas H. Lee found dead of self-inflicted gunshot wound in NYC office

  • I am a bit surprised by this news. I knew Tom and met with him a handful of times in my career. He was very nice and supportive. I will always think of his amazing Snapple investment when I think of Tom Lee. He made 32 times his money in a couple years.

• Rare type of brain surgery was being performed 3,500 years ago, say archaeologists

Real Estate

• The value of the US housing market shrunk by the most since the 2008 as the pandemic boom fizzled out. After peaking at $47.7 trillion in June, the total value of US homes declined by $2.3 trillion, or 4.9%, in the second half of 2022, according to real estate brokerage Redfin. That’s the largest drop in percentage terms since the 2008 housing crisis, when home values slumped by 5.8% from June to December. Interesting Bloomberg article.

• New figures from the New York State Department of Taxation and Finance shows that the millionaire exodus from the Empire State that began during the Covid-19 pandemic did not let up in 2021.  The number of those earning more than $25 million that fled the state in 2021 is 1,453, just 520 less than the amount that left at the height of lockdowns and intense social distancing.  Despite the apparent shortfall, there still are around 80,000 millionaire taxpayers in New York, a number that's up from the 70,000 or so that were there in 2020. The top one percent of earners in New York account for close to half of the state's income tax revenue. However more than eight percent of New York's uber-wealthy, those making above $25 million per year, left in 2021. The new data comes as woke states such as New York and California see a mass exodus amid surging house prices and raging crime. I can only tell you that in my 5.5 years in Florida, the people have changed dramatically. Younger, wealthier, more educated and successful people are moving to South Florida. I am blown away by the people I meet and connections I have made in the past couple years, which dwarf my first nearly 4 years. The wealth migration is incredibly impressive. What does that do to the places which are seeing the exodus of wealth (tri-state, IL, CA…)? Couple this with the R/E tax issues given commercial R/E is crashing and that should leave some healthy budget deficits which need to be filled.

  

• Mortgage applications decreased 13.3% for the week ending February 17 compared to the previous week, according to the Mortgage Bankers Association. Mortgage demand was down 56.8% compared to the same period last year. The purchase index declined 18% from a week earlier and was down 41.5% from the same period in 2022. The refi index decreased 2% from the previous week and was down 72% from the same week a year ago. Mortgage rates jumped to 6.62%, the highest rate since November 2022. The Affordability Index suggests the average home is less affordable than in 2008.

  

Other R/E Headlines

• This Florida city was just named best place to live in the U.S. Miami isn’t even close (Naples was #1)

• Pimco-Owned Office Landlord Defaults on $1.7 Billion Mortgage

  • The buildings — in San Francisco, New York, Boston and Jersey City, New Jersey — are owned by Columbia Property Trust, which was acquired in 2021 for $3.9 billion by funds managed by Pimco. The mortgages have floating-rate debt, which led to rising monthly payments as interest rates soared last year.

• Chicago’s Downtown Now Has More Residents Than Before Covid Pandemic

  • I would have never of guessed it. Chicago has become a crime-ridden hell hole. I know countless people from there given my 13 years in the city. I speak with many who live in the suburbs who have not come to Chicago in 5 years.

• Rockstar Energy Creator Asks $50 Million for Home He Bought Last Year. ‘It’s Never Been Slept In.’

  • Fantastic pictures in the house with an interactive link.

    

Virus/Vaccine

• Death numbers improving sharply.

Lab Leak Most Likely Origin of Covid-19 Pandemic, U.S. Agency Now Says

• Since the beginning I have suggested my view was the lab leak and received nasty notes about my views.