My Wife & Daughter Working Will Bankrupt Me
7-7-24
Opening Comments
My last note was reviewing a bunch of restaurants in NYC. The most opened links were the Presidential candidates walking off stage post the debate showing Biden struggling and the haunting discovery made under floorboards at Auschwitz.
The cover of the Economist says it all.
In one of the least athletic moves of my life, I hit my knee with my padel racket. It would have been a “Not Top 10” clip on ESPN. I am very happy no video evidence exists of the uncoordinated move that took me down like a sack of potatoes.
Teddy Gold (CEO of 3i Members) and I went to Sag Harbor on Tuesday night for drinks and attempted to eat dinner. EVERY restaurant was JAM PACKED. It was a nightmare. We had drinks at Le Bilboquet and Lulu and ate at The American Hotel (Justin Timberlake fame). The food was AWFUL. We need to have the burger at the Sag Harbor Tavern which is getting amazing reviews. Good luck getting in. We got an ice cream at the incredibly overpriced (common theme) Big Olaf. Two scoops are about $10 with no toppings and the ice cream is terrible. Despite this, there was a 20-minute line to get in. Welcome to the Hamptons during July 4th week.
Markets
Corporate Tax Rates
Income Migration
Biden Election Update
Hamptons Costs
Highest Cost States
America’s Best Towns
Hotel Valuation Examples in CA
Multifamily Deliquency Rates Increasing
Pictures of the Day-Boca Happy Hour Dinner Special
When I was back in Boca in mid-June, I decided to grab a bite with my sister and went to a place I had been previously, Corvina. It is a newer seafood restaurant that is quite good. I had no idea they run a crazy special during the summer between the hours of 5-6pm. Yes, it is early, but it is 50% off of EVERYTHING on the menu. The food is solid but you need to eat with a bunch of blue-haired people to get the special price. I also ordered a bottle of Chateau Montelena Chardonnay for $55 (normal price of $110). I enjoyed the meal and the prices even more. The portions are quite sizeable and everything we had was fresh and solid. I was waking up very early to fish the next day, so an early dinner worked for me. Not sure when the special ends for the season, but it is every day and there was a line out the door. I highly recommend Corvina. Remember, Boca is a culinary wasteland, and this is a nice addition to the community.
Food B+/Summer Discount Value is an A
My Wife & Daughter Working Will Bankrupt Me
The year was 2006 and my wife, Jill, had given birth to our first child, Jack, on January 10th. Yes, Jack and Jill are apparently a thing many find funny. I do too. Jill was a celebrity stylist as fashion editor for magazines Mirabella, Spin, Talk, and Radar. Her personal clients included Uma Thurman, Kate Winslet, Tyra Banks, Brooke Shields, Claudia Schiffer, Kristin Chenoweth, Natasha Richardson, and Michelle Monaghan, among many others. She dressed rock stars and A-List actors for a living. Jill was also on Oprah, E Network, the Today Show and others to discuss fashion. In 2005, Jill was named in Entertainment Weekly for her celebrity fashion skills. Shortly after she gave birth, E Network called to have Jill on for the Oscars in Los Angeles on March 6th, 2006. We lived in Greenwich Village in NYC at the time.
The opportunity to be on TV was good for Jill and her brand, so she flew out with a baby nurse and our newborn son. They stayed almost a week and had to get flights, hotel rooms (Beverly Wilshire), car and driver, meals, clothes…. The end result was a bill far in excess of Jill’s earnings for the show. I said, “Jill, if you keep working, I am going to file bankruptcy.” Although we get a laugh about it now, I did not find it so amusing at the time.
There is a saying that the apple does not fall far from the tree. Well, let me introduce my daughter, Julia. who is working at Love Shack Fancy in Southampton selling women’s clothes. They give salespeople a stipend to buy some things from the store as you are required to wear Love Shack clothes when working. The stipend got my daughter a handful of outfits but not enough for the summer, given she is working 5 days a week. So, Julia has been buying clothes at healthy discounts to finalize her work wardrobe. Given I agreed to pay for her clothes, her job is costing me money. Although the damage won’t be as deep as the LA disaster story, Julia is doing a pretty good job of buying clothes with her discount.
Julia just texted me another couple outfits asking if she should get it. I responded, “NOPE, you have done enough damage for now.”
I think I am better off if my wife and daughter don’t work as the economics of their jobs is painful. However, remember if you are in the Hamptons go buy clothes from Julia at the Southampton store. She has some big quotas and clothes to pay for! She sold $6,900 the other day in 7 hours. All kidding aside, Julia is learning a ton in her first stint in retail, and I am very proud of how she is performing. She is at work early every day and enjoys it. I believe learning how to sell, manage relationships, and present yourelf are keys to being successful in business.
Quick Bites
All non-bolded text below is excerpted from the cited articles. Bold are my thoughts.
The S&P 500 rose to a new high on Friday, posting a record close as the latest jobs report reignited hopes for rate cuts from the Federal Reserve. All three major indexes finished the week in the green. The Nasdaq advanced 3.5%, and the S&P 500 climbed nearly 2% during the period. Nonfarm payrolls increased by 206,000 for the month, better than the 200,000 Dow Jones forecast though less than the downwardly revised gain of 218,000 in May. The payroll data pushed the 2-year yield -9bps to 4.60% and the 10-year -7bps to 4.28%. Remember, recently, the 2-Year was 5.04% and the 10-year was 4.7%. Over $170 billion wiped off cryptocurrencies as market tanks on Mt. Gox bitcoin payout fears. Increased fuel demand during peak driving season and a tighter supply forecast pushed oil up for the 4th straight week and was almost $85/barrel before settling below $84.
President Biden is pushing for significant changes to make big corporations pay more taxes and quadruple the tax on stock buybacks, which benefit wealthy investors and CEOs with low-tax payouts. He wants to raise the corporate tax rate to 28% and the corporate minimum tax to 21%. Kevin O'Leary, a business owner and TV personality, recently said raising the corporate tax rate to 28% would make the U.S. the least competitive country in the G7. O’Leary explained, "Tax rates matter. You heard Trump talk about 15 to 21%. Add three to four for each state, and you get into the range of 21 to 24, 25 for U.S. corporate tax. That’s sort of in the middle of the road regarding the competition. Not the best, but if you go to 28 and add four percent, you are the most uncompetitive country in the G7." Why should we give companies a reason to not be in the US? I keep saying you cannot tax your way to prosperity. Force companies to pay a minimum tax on earnings but don’t make the taxes so onerous between Federal, City and State that the U.S. is uncompetitive. We have a spending problem, not a revenue problem. We run $2 trillion deficits with full employment, all-time highs in stock and real estate. It is unsustainable. Biden is running deficits of 5-6% of GDP during a strong economic period.
I have often written about Blue states and the poor management by politicians around crime, homelessness, taxes, quality of life, cost of living, schools… I am hardest on NY, CA and IL but they are not alone. I have made the analogy to going out for Taco Bell and charging $700. It just does not work. For me to spend big money, I better have a 3 Michelin Star experience. I feel Chicago, NYC, LA/San Fran… have so much potential but due to horrific policies they have become far less livable and have seen a massive departure of companies and wealth in recent years. I am a big fan of Chamath Palihapitiya who posted the note below. I am 100% in agreement with his comments. A lot of people hate on Florida but my 7 years there has been amazing, and my house value is +250% while my Park Avenue PH is down during the same time. However, as the last chart shows, it is not as though the Republicans run a surplus.
I am writing a good deal about Biden given the importance of the November election. I wrote for a long time that he should not be the 2024 Democratic nominee due to his cognitive condition and poor policies, namely the border issues. Post the debate, I eviscerated Biden and his team for not stepping aside. The drumbeat from once Biden supporters is growing louder. Disney heiress, wealthy Democratic donors say they won’t finance the party until Joe Biden drops out. I do not see any chance that he remains the candidate, and the betting odds are telling. This CNN article is entitled, “Democrats Start Moving to Harris as Biden Digs In.” Van Jones says Democrats are discussing ‘how’ to replace Biden, ‘not whether.’ Biden told Dem governors he needs more sleep, no events after 8 p.m. Wait, the most powerful post in the world cannot take meetings early in the morning or later in the evening? I watched the George Stephanopoulos interview and felt Biden answered the questions in far better fashion than the debate. However, he did nothing to make me feel he is a viable candidate for President and felt he was out of touch with the situation. Biden was in denial and did not do enough to change the minds of concerned Americans in my opinion. I felt Stephanopoulos asked probing questions. Most notably pushing Biden on getting an independent cognitive test and the President refused and stated, "I do a full neurological test every day.” If he is in such good condition despite the fact that now 80% of Americans are questioning him, he should do an independent cognitive exam. Even Sanjay Gupta wants Biden to take cognitive tests. This article suggests a prominent Parkinson’s physician has visited the White House 9 times. I have no way of knowing if he went to see the President, but if he did, Americans should know about it. In Friday’s interview, Biden doubted the polls that show him trailing Trump and feels he can finish a second term. Famed pollster and Biden supporter, Nate Silver has Biden’s chances at 28% and suggests that could be optimistic. I feel the chance Biden can serve a complete second term is on an asymptotic line approaching zero. I do not believe Biden is in condition to finish his term and believe the 25th Amendment should be considered.
Israel/Middle East
Hezbollah launches big attack on Israel, sonic booms rattle Beirut
Israel Takes Out 2nd Senior Hezbollah Commander In Less Than Two Weeks
Could you imagine being a Hamas leader and knowing that the Israeli forces will find you and kill you? These guys must sleep with one eye open.
This map shows the Jewish population in Arab states in 1948 vs Now.
Jews have been displaced by the hundreds of thousands, yet they are vilified and hated globally. They lost land and possessions.
Renowned Nazi hunter in France advises Jews to choose far right over far left in elections
“Marine Le Pen is the head of a party which supports Israel and supports the Jews,” Klarsfeld said in the interview Tuesday.
Other Headlines
Inflation makes holiday weekend barbecues more expensive than ever
$7.12/person, +30% from 2019 levels.
The pool party’s over as Americans ease up on backyard upgrades
The U.S. needs more of this critical metal — and China owns 80% of its supply chain
Tesla shares wipe out loss for the year with 27% rally this week
SoftBank stock hits its first record high in 24 years — Arm and AI helped it get there
Mod Pizza chain — with 500 shops in the US — could soon be filing for bankruptcy
Former Boeing inspector alleges ‘scrap’ parts ended up on assembly lines
What could possibly go wrong? Who has been running this company, the Three Stooges?
Greece becomes first EU country to introduce a six-day working week
The irony is not lost on me. Greece is the poster child for fiscal irresponsibility and has had more financial crises than I can discuss. Greece, good on you for trying to instill some work ethic and generate growth.
As calls grow for Biden to drop out, new poll shows Michelle Obama would beat Trump
France to deploy 30,000 police after election runoff amid fears of violence
UK election exit poll predicts Labour landslide in disaster for Rishi Sunak's Tories
The General Election exit poll has projected Keir Starmer will become PM with a landslide majority of 170 as the Conservatives are reduced to just 131 MPs, their worst ever result. The Labour Party is described as “Center-Left.” However, Populist Brexiteer Nigel Farage wins first-ever seat in British parliament. This article outlines why the UK election went Left as many other Euro countries are moving Right.
Newsom scraps plan to put California Prop 47 reform measure on ballot
California Democrats over the weekend had outlined plans to put a measure on the November ballot that would ask voters to approve major reforms to Proposition 47, a 2014 ballot measure that changed some theft and drug possession felonies to misdemeanors. But on Tuesday, they abruptly changed course and said they would not be able make Wednesday’s cutoff to finalize the measure’s inclusion on the ballot. Under Newsome, California has turned into a disgusting mess. Please do not put him on the Democratic ticket for President or VP.
Illegal immigrant caused DUI collision that killed 22-year-old in hit-and-run
How many people will illegal immigrants kill, injure, rape… in the US before the Biden Administration gets the message? Remember, Biden asked Harris to run point on the border fiasco. It did not go very well. If they go with the weak candidate, Harris, I hope they have a solid VP. Can I recommend Dean Phillips?
Sen. Bob Menendez declines to testify in his bribery trial as the defense rests
American Pride Remains Near Record Low
While the percentage of U.S. adults who say they are extremely proud to be American is near the lowest point on record, about two-thirds continue to be at least very proud. Republicans’ national pride, though near its lowest point, remains high compared with Democrats’ and independents’, although all party groups are significantly less proud than they were 20 years ago.
Now we know how much it costs to make a $2,800 Dior bag
Italian prosecutors found Dior paid $57 to produce bags retailing for $2,780.
State Farm seeking massive rate hikes in California as state's insurance crisis escalates
State Farm is looking to raise insurance rates for some California customers by more than 50% as the insurance giant weighs its future in the Golden State.
In a filing to the California Department of Insurance, the company's subsidiary in the state requested to hike homeowners' insurance policies by 30%, condo policies by 36% and renters' policies by a whopping 52%. Remember, one of my sponsors, Kevin Lang, of Lang Insurance (866-964-4434) offers Luxury Home, Condo, CO-OP, Auto, Valuables (Jewelry, Fine Art, Etc.), Umbrella, Flood, Excess Flood, Watercraft, Etc. in all 50 states. He has helped dozens of Rosen Report readers save a lot of money and improve coverages.
Bronny James Pick Named The 'Worst Decision' In Sports History
I hope it works out but doubt it based on Bronny’s USC stats that were awful. I just don’t believe he has what it takes to make it in the NBA but it will be fun to watch him, and his father play on the same team even if it was a dumb draft decision.
Women’s soccer draws private-equity interest as team valuations soar
Five years ago, the Reign (Seattle Women’s Soccer Team) sold for $3.5mm and a new transaction valued th team at $58mm.
Suspect Busted For One Cent Bank Robbery
Of course it was Florida.
Putin And Xi Advance Anti-West Alliance At Central Asian Summit
Real Estate
This CNBC article outlines the states with the highest cost of living for sinlge people.
This CNN article outlines America’s best towns to visit in 2024. The article goes into detail around food, wine, culture, outdoor events.. Some of these may be a good road trip for the summer for you.
Policies matter. High crime, homelessness, high taxes, strict COVID mandates, unwillingness for DA’s to prosecute criminals, anti-business sentiment…drives out wealth, business and does not attract tourism. San Francisco is a case in point. The value of San Francisco’s two largest hotels has plunged by $1 billion, with the city’s hospitality industry trailing the nation. The 1,024-room Parc 55 and the 1,921-room Hilton San Francisco Union Square are worth a combined $553.8 million, 65 percent less than their appraised value in 2016 of $1.56 billion, the San Francisco Business Times reported, citing Kroll Bond Rating Agency via a note from Trepp. Last summer, Virginia-based Park Hotels & Resorts defaulted on a $725 million loan tied to its Parc 55 at 55 Cyril Magnin Street and its Hilton San Francisco Union Square at 333 O’Farrell Street. In October, a receiver took control of both hotels, with plans to sell them in less than a year. The receiver has until Sept. 1 to find a buyer for both hotels or they’ll go into nonjudicial foreclosure. Despite their estimated plunge in value, the pool of would-be buyers is likely small, according to the Business Times.
I could not find updated articles on delinquency rates for multifamily housing, but the chart below is something to watch.
© 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™ #697 ©Copyright 2024 Written By Eric Rosen.
