Opening Comments
Video of the Day-Adele
Mr. Hamburger Man
JPM Private Bank Analysis of Tax Policy
Quick Bites
Markets, Bitcoin ETF, AAA Gas Prices
Supply Crunch, NFT Loans
Zuckerberg $419mm on Elections
New Male Contraception, China Hyper-sonic Missile
Big Art Sale, NYC on Drugs, Woke States of America
Other Headlines
Virus/Vaccine
Data-Continued Improvement
J&J
Delta Air Ditches Vaccine Mandate
Heart Inflammation in Teens
Real Estate
My General Comments
Real Deal-Hamptons, NYC, South Florida
Douglas Elliman-Manhattan/Brooklyn Rental Market
Opening Comments
When I find a story, many times it is on a pay site (NY Times, Washington Post, USA Today…), I then need to find a similar one on a link which is free as I am sure all my readers do not have access to every media outlet. I will only pay for so many. When I cannot find the story elsewhere, I use the pay sites. Lots of new readers for the Rosen Report. Please send story ideas, feedback, agree, disagree…In some reports, 25% of my Quick Bites are ideas sent to me from my loyal readers.
I went down to stay with a friend and fish in Islamorada in the Florida Keys. The fishing was quite good and we caught dozens of Dolphin (Mahi) and some Wahoo, Kingfish and a few other species. I bought a new type of rod for slow-speed jigging. The tackle is light (20 lb test) with very light fishing rod and small reel. You drop down a heavy piece of metal with a hook which is called a jig. When it gets to the bottom, you lift up the rod to create movement. Well, BAM, a huge fish ate the jig. Unfortunately, it was very hard to get the big fish in and it happened every time (picture below). Reeling in a huge fish on light tackle only to be sharked is quite irritating. Below is a portion of a 50 or so pound Amberjack which was eaten by a large shark during the catch. Son of a…. The green jig is in the Amberjack’s mouth.
However, we were about to catch this nice 30lb Wahoo. I lost my Scales fishing hat when the boat was doing 45mph, so I had to use my neck gaiter as a hat.
Video of the Day
Adele has a new single, “Easy on Me” which was viewed 20mm times in 12 hours and 66mm times in 2 days. The British star’s highly anticipated fourth album, slated to arrive Nov. 19, comes six years after the Grammy-award winning “25.” It will debut in a much different music marketplace, where streaming now reigns over traditional sales. Many fans are saying “30” is the musician’s landmark divorce album, as it comes after the singer-songwriter finalized her divorce from charity executive Simon Konecki. I am convinced Adele has the best voice on the planet and is one hell of a song writer. Her much publicized weight loss had zero impact on that massive voice of hers. Hard to give this talented performer enough accolades. Not sure why, the song brought a tear to my eyes. Damn she is good. She is a 10 out of 10 vocally and it is more clear to me that I am no better than a 2 after thinking I was a 3 for years.
Mr. Hamburger Man
I had the good fortune of working on Wall Street for decades and although we worked hard, we had a lot of fun. Prior to the Global Financial Crisis, when entertaining budgets were more meaningful, we entertained clients at fantastic venues. I have been to countless sporting events (World Series, Final Four, NBA Finals, Boxing Title Matches, concerts, Broadway shows…). I also had the pleasure of taking clients, many of which were close friends, on various “outings.” Some fun ones were golf and ski trips.
Growing up in South Florida, I had never been on skis in my life but started snowboarding at age 27. Given my years of surfing and skateboarding, snowboarding came quite easy and became pretty good in no time. Every year, I would do a couple ski trips with different clients to beautiful places (Jackson Hole, Telluride, Aspen, Vail, Park City, Snowbird….). Given the amount of transactions you do with your bigger clients, you become quite friendly with them in many cases. The trip discussed in today’s Rosen Report was to Jackson Hole, Wyoming, a stunning location with very good skiing.
I recall bringing a few clients on this trip (Mike, Mark and Dan). We were very lucky in that it DUMPED snow for the days prior to our arrival and snowed the entire time we were there.This day had the single most epic snow conditions I have seen with stomach-to-chest high powder everywhere.
I bought crazy ski hats from Paragon Sports in NYC to mess around with the clients. My one client, Mark, was always the jokester, so I bought him a hat in the shape of a massive hamburger. No one wore helmets 20+ years ago and I handed him the hat when we got to the lodge he said, “There is no way I am wearing that awful hat.”
I said, “No problem. It is mine now and everyone is going to love it. I won’t give it to you after I make it famous.” The hat looked like a huge Big Mac with bun, burger, lettuce, cheese, onions, mustard and ketchup. What’s not to like?
The next day, we went out skiing and I wore my new massive hat and was mauled by everyone on the mountain. People loved it and then Mark wanted the hat after all. Despite the fact that he was my client, I refused and I wore it proudly. We had a fantastic ski trip in the best conditions of my life and I continued to wear the hat for over a decade until I started wearing a helmet.
The next year I was on trip in Park City with clients wearing the hat and got separated from my group in heavy storm conditions. On the mountain, I saw a little kid by himself in the trees. I went over to be sure he was fine and the kid was crying as he was separated from his family and alone. He thought my hat was the coolest thing ever and I grabbed his hand and pulled him back to the clearing. He called me “Mr. Hamburger Man,” in a little kid’s voice who cannot make the proper pronunciation. I got him to the bottom of the mountain slowly, as he was 5 or 6 years old. I was looking around for his family and found the ski patrol. Turns out there was a search party looking for this kid and the patrol was very thankful I found him. They accompanied me to bring him to his family and there were lots of hugs to go around. Mr. Hamburger Man was the star of the show and the name stuck. Whenever I wore it, I was the center of attention. I gave it away years ago, but have many fond memories. Mark, the hat was yours and you did not capitalize on it. You could have been rich and famous! Oh, you are anyway.
JPM Analysis of Tax Policy
Good analysis from JPM Private Bank on tax policy. I wanted to highlight this based on the number of emails I receive on tax questions. The link summarizes the new proposals and gives suggestions. Too much for me to put in the Rosen Report, but worth a look. I am hearing from a few sources that eliminating step-up basis is likely off the table. I hope this is correct.
Quick Bites
U.S. stocks rose Friday as better-than-expected third-quarter earnings reports boosted the Dow Jones Industrial Average to its best weekly performance since June. The Dow gained 382 points, or about 1.1%, to 35,294. The S&P 500 added roughly 0.8% at 4,471, and the Nasdaq rose 0.5% to 14,897. The three major indexes closed the week higher and are positive on the month. The Dow sat 0.9% below its all-time high. The S&P 500 and Nasdaq Composite were 1.6% and 3.3% off record highs, respectively. Goldman Sachs beat earnings expectations on Friday. The stellar report came after earnings beats from other big banks earlier in the week. Financial heavyweights JPMorgan, Bank of America, Morgan Stanley and Citigroup were among the firms topping expectations. “The banks painted a strong and healthy picture of the US consumer,” said Edward Moya, senior market analyst at Oanda. The 10-Year Treasury is at 1.57% and oil is up to $82.7 after hitting a high of $85 on Friday.
The bitcoin futures ETF from ProShares will begin trading next week, an amended filing from the company indicated late Friday, marking a milestone moment in the development of the crypto industry in the United States. The Securities and Exchange Commission had not formally approved the creation of bitcoin futures ETF as of Friday afternoon and the agency may never make a formal declaration of approval for it. But the ProShares’ announcement indicates that the agency is unlikely to block the listing at this point. Bitcoin is over $61k after being below $30k in late July.
According to AAA's average gas price calculator, the national average cost of a regular gallon of gasoline hit $3.297 on Thursday, the highest since September 2014, when the average monthly cost hit $3.387. The U.S. Energy Information Administration reported a national average cost of $3.272 per gallon in September 2021, the highest price since September 2014, when gas cost $3.484 per gallon on average. Last week, West Texas Intermediate (WTI) crude futures, the U.S. oil benchmark, topped $80. I have been driving a ton in the past month and the cost to fill the tank is up sharply.
The supply crunch of semiconductors for carmakers will likely continue through 2022, though the shortage may become less severe than what was seen in the past summer, according to a senior executive of Bosch China Investment. Chip producers were only able to meet about 20% of clients’ orders in July and despite some improvements in the situation in August, more than half of the demand still couldn’t be satisfied, Jiang Jian, a vice president of Bosch China, said on the sidelines of the China Auto Supply Chain Conference. The squeeze is expected to extend through next year, with the gap falling to about 20% of the levels seen in the first half of this year, he said. I am a believer things will get better, but am not yet convinced we are getting to pre-pandemic supply chain issues in coming months.
What could possibly go wrong with buying NFTs and borrowing against them? In the ongoing run to turn everything into a non-fungible token, savvy traders and entrepreneurs have recently taken a few steps to squeeze more investment opportunities out of their JPEGs. Case in point: it’s now a thing to take out a loan and offer up an NFT as collateral. Take NFTFi, a peer-to-peer lending platform described by Coindesk as a "pawn shop for NFTs." The core premise is that you can mortgage your NFT in exchange for other crypto that can be sold for cash while keeping your NFT safe—if you can repay the loan. NFTFi told Coindesk it had done over $12 million in volume since its launch in June 2020, with an average loan size of $26,000 and as high as $200,000. Default rates are just shy of 20 percent, the platform told Coindesk. I have not “invested” in NFTs and do not plan to do so. Maybe they become the next hot thing forever and I will kick myself for passing on it. Am I too old at soon-to- be 52 to get it? I don’t know, but give me art I can hang on my wall, appreciate looking at it and study the artist and the history behind his or her work. I hope these NFTs implode, but just not convinced that will come to fruition tomorrow. This link shows the 14 most expensive NFTs ever. Some of them are the ugliest things I have ever seen.
A former federal election official on Thursday called the $400 million-plus that Mark Zuckerberg spent to help finance local elections a “carefully orchestrated attempt” to influence the 2020 vote — and recommended that all states ban private funding of election offices. Hans von Spakovsky, a former Federal Election Commission member, said the billionaire Facebook founder’s donations to a pair of nonprofits that doled out the cash to nearly 2,500 counties in 49 states “violated fundamental principles of equal treatment of voters since it may have led to unequal opportunities to vote in different areas of a state.” “My reaction is that this was a carefully orchestrated attempt to convert official government election offices into get-out-the-vote operations for one political party and to insert political operatives into election offices in order to influence and manipulate the outcome of the election,” said von Spakovsky. It just feel wrong to me and I would say the same thing if it was someone spending $400mm for Republicans. I believe there should be rules which limit the amount of “donations” to elections. According to Forbes, there are 30 people in the US with a net worth of $24bn or more. Think about the influence multi-billionaires can have on either side on elections. Something needs to be done. For Zuckerburg, couple the spending of $419mm with the censoring of Republicans and I feel he has too much influence over elections and the morons in DC need to do something about it.
A groundbreaking form of male contraception which uses a kind of “testicle bath” to prevent pregnancy has been unveiled in Germany. Rebecca Weiss, an industrial design graduate from the University of Munich, took out the top prize at Germany’s James Dyson Awards for the ultrasound-based contraception for men. Named COSO, the device uses ultrasound deep heat to cause sperm mobility in the testicles to be modified and temporarily cease. It means the female egg cannot be fertilized by sperm during sex, with users simply needing to use the device every few months for the contraception to take effect. Call me crazy, sure sounds better than a vasectomy.
To me, this is China making a big statement to the US and the world. I have been extremely critical of the Chinese government and the role played in the pandemic. This missile test is a bit concerning. China tested a nuclear-capable hypersonic missile in August, showing a capability that caught U.S. intelligence by surprise, the Financial Times reported, citing five unnamed sources. The report late on Saturday said the Chinese military launched a rocket carrying a hypersonic glide vehicle that flew through low-orbit space, circling the globe before cruising towards its target, which it missed by about two dozen miles. "The test showed that China had made astounding progress on hypersonic weapons and was far more advanced than US officials realized," the report said, citing people briefed on the intelligence.
The self-destructing art piece created by Banksy sold Thursday for a record $25.4mm for the mysterious British street artist, according to Sotheby's auction house. The piece, "Love is in the Bin," originally sold at auction in 2018 for about $1.4 million at Sotheby's London in a viral stunt. The bottom half of the canvas of "Girl with Balloon," arguably Banksy's best known work, began to shred as soon as the gavel hit, sealing the original sale. There is just too much money chasing everything in the world. The IRR on this art is almost 163% for a total return of over 1,800%. Stocks, NFTs, art, R/E, cars, boats and everything else are selling at crazy prices. I just am not convinced this is such a big positive and worry what ends it.
New York City’s war on drugs is over. The junkies won. The New York Police Department waved the white flag last week — upon orders to surrender from Albany — directing officers to let drug addicts freely shoot up on city streets, and even let them share needles. “Effective immediately, members of the service should not take any enforcement action against any individual who possesses a hypodermic needle, even when it contains residue of a controlled substance,” states a directive to NYPD commanders issued last Friday and obtained by The Post. Eric Adams, the city has never needed a new mayor more than today. Please step in and on Day 1, have a plan to make sweeping changes to clean up the NYC. If you can, please find something to arrest DeBlasio for and send him to Rikers for a month. Anything. Jaywalking, stealing $320k from the city for security, bad management…
In the Woke States of America, things just continue to be absurd. A school district in Michigan has not only canceled Halloween ahead of October 31, but also gone ahead and canceled Valentine’s Day, which is still four months away. East Lansing Public Schools announced the decision to cancel the two holidays this week, according to the Lansing State Journal, claiming the decision was made in the name of equity and inclusion. Assistant Superintendent Glenn Mitcham wrote in a letter with other public school principals that every year, children could be found crying on Halloween “because they don’t have the same kind of costumes that other kids have or they didn’t bring the same amazing valentines that other kids do.” Are we protecting anyone with these ridiculous ideas? So let me get this straight, in life, you will always have what everyone else has? Someone is always smarter, wealthier, faster, bigger, better, more handsome, prettier…. Kids need to learn this now. Clearly, Christmas and Hanukkah need to cancelled as some families can afford nicer gifts than others. If you don’t have something someone else has, here is an idea…kids can WORK FOR IT. I paid for my own college and worked through my MBA at U of C with a portion of the tuition paid by my employer. I did it and if I can do it, anyone can. I cleaned toilets and dishes to by my 1st pair of Nike shoes in 1980. I will never forget the feeling of accomplishment I had when I bought my own shoes at 11 years old. I washed a lot of dishes and toilets for them and it was worth every penny. The shoes can be seen below and showed me at a young age that work ethic matters. I loved playing basketball, but was never good enough to amount to anything. I believe it is unfair that Lebron makes $30mm/year on the court and I don’t. NBA, I am ready for my $30mm contract. It is only fair. I am not as physically gifted as Lebron at 6’8” and 270 lbs, but I feel if we want to be equitable, giving me a $35mm contract would help me feel the world is fair. Sure, I suck at basketball, but that seems unimportant. Participation trophies and teaching kids crap will bring down this once great country which is quickly losing its dominance. Me in 1980 with Nanny and Papa Joe and my hard earned kicks. My grandmother was 5’ for perspective, so I was not exactly towering over anyone at 11 years old.
Other Headlines
Goldman Sachs CEO says wage inflation spreading through the economy
DC Council member who said Jews control weather running for DC Mayor
Hundreds of Amazon & Google employees sign anonymous letter opposing deal with Israel
Violent fossil fuel protesters arrested after storming Interior Department, injuring officers
Labor flexes its muscle as leverage tips from employers to workers
Lazy crane operators making $250k a year exacerbating port crisis
Tennessee fans pelt field, hit Lane Kiffin after chaotic ending to Ole Miss win
Nearly 40% of California state workers are unvaccinated against COVID despite Newsom order
Biketoberfest: Nazi-symbol hats spark outrage at Florida bike festival
Musk Trolls Bezos Over Wealth. He Could Have Talked About Tesla Stock Outperforming Amazon.
Virus/Vaccine
The continuations of improvements were more impressive this week as all categories were down double digit percent. Cases fell 23% to 83.7k. Hospitalizations dropped 18% to just under 63k and daily deaths fell 17% to 1.57k.
An influential Food and Drug Administration advisory committee on Friday said the agency should authorize boosters of Johnson & Johnson’s single-shot Covid-19 vaccine to the more than 15 million Americans who have already received the initial dose. The unanimous vote – by the agency’s Vaccines and Related Biological Products Advisory Committee – is a critical step before the U.S. can begin giving second shots to J&J recipients, some of whom have said they are anxious to get the additional protection. One dose of J&J’s vaccine has been shown in studies to be comparatively less effective than the two-dose messenger RNA vaccines made by Pfizer-BioNTech and Moderna.
Delta Air Lines is the only U.S. carrier to hold off on enforcing a coronavirus vaccine mandate for employees and CEO Ed Bastian reported that it’s been an effective tactic for vaccination rates and compliance. The Delta head revealed on "The Claman Countdown" that the company has reached a more than 90% vaccination rate and expects it to rise another 5% within the next month without a mandate in place.
This is a WSJ opinion piece about COVID and I thought it was interesting. In New York City, I often see people walking down the sidewalk, masks hanging low over their chins, looking fearful and dodging one another. The health benefit from these wary rituals is minimal to nonexistent, and they illustrate the toll that fear of Covid-19 has taken on mental health. A new global study published in the Lancet examines 48 data sources in an attempt to quantify that toll. The authors report a world-wide increase of more than 129 million cases of major depression and anxiety disorders compared with pre-pandemic figures. They attribute this to the “combined effects of the spread of the virus, lockdowns, stay-at-home orders, decreased public transport, school and business closures, and decreased social interactions, among other factors.” The rise in mental-health problems was correlated with both infection rates and restrictions on personal behavior: “We estimated that the locations hit hardest by the pandemic in 2020, as measured with decreased human mobility and daily SARS-CoV-2 infection rate, had the greatest increases in prevalence of major depressive disorder and anxiety disorders.”
Real Estate
I spoke with someone who bought a condo in South Florida maybe 18 months ago and the building is currently being built. He paid $4.2mm for it and was offered $8mm if he sold it. The unit will be ready in 9 months. I just went to Islamorada in the Florida Keys fishing. I spoke with a R/E broker who works in the Parkland/Boca area and Keys. He told me things are so hot in the Keys, he is spending more time there. It is hard for me to fathom markets are hotter than Palm Beach, Broward and Miami, but the Keys are hot too. I speak with brokers in dozens of markets and cannot find one who suggests the market is not hot (San Diego, LA, Scottsdale, Aspen, Park City, Hamptons, NYC, Palm Beach, Miami, Keys, Lake Tahoe, Austin….).
The world’s tallest residential building is giving out some sky-high discounts. A mystery buyer has plunked down $40.83 million for a five-bedroom, full-floor spread at Central Park Tower on 57th Street. That’s a steep 35% off the original $63 million asking price. The $40 million stunner is on the building’s 112th floor. At 6,700 square feet, the sky pad comes with floor-to-ceiling windows — and views of Central Park — along with herringbone floors, a corner chef’s kitchen and a double-height living room. I just do not like this location at any reasonable price, Sam I am. I do not like green eggs and ham.
Good article from Real Deal about Hamptons, NYC, South Florida on the R/E front.
This year is chock-full of luxury deals across the Hamptons, New York City and South Florida, according to a new report by Bespoke. The Hamptons has had 87 deals at or above $10 million so far this year, totaling $1.6 billion. New York City counted 173 transactions making up $2.9 billion. Meanwhile in South Florida, there were as many as 279 deals, totaling $5.4 billion. “The big takeaway is that 2021 is outperforming 2020, which is sort of hard to imagine,” Bespoke Managing Director Joseph De Sane said. In the third quarter, The Hamptons saw 24 trades, slightly higher than the 20 listings during the same period in 2020. However, there was a 24 percent decrease in average sale price, from about $20 million to $15 million. New York City, which struggled with sales last year with the pandemic putting the city on lockdown, marked a 192 percent increase in sales volume. The third quarter had 68 sales totaling over $1 billion. In the third quarter of last year there were just 23 sales. Jared Halpern from Douglas Elliman sent me some rental market highlights from Manhattan and Brooklyn below.
MANHATTAN
"The year over year increase in new lease signings continued to ease as concessions given by landlords slid."
Net effective median rent rose year over year but fell short of the same period in 2019
The number of new lease signings rose year over year for the twelfth straight month, but at a more modest rate
The market share of new leases with landlord concessions fell to their lowest rate in nearly four years
Doorman median rent has been rising sharply in recent months as non-doorman median rent continued to decline
New development median rent continued to expand year over year as existing median rent remained flat
New leases at or above $10,000 per month saw its largest market share on record
Luxury listing inventory fell by more than half over the past year to its lowest level since 2015
BROOKLYN
"The year over year increase in new lease signings was the most for September since 2008."
New lease signings rose to their highest level for a September since at least 2008
Net effective median rent rose month over month for two of the past three months
The market share studios and 1-bedrooms rose year over year