NBA, Here I Come-Also A Short Survey on the Rosen Report

2-1-23

Opening Comments

Reader Survey-I want to ask all my readers to take a 2-minute survey regarding the Rosen Report. I am trying to improve the output and need some feedback. I would truly appreciate you taking a couple minutes answer some questions about how you consume the report and likes/dislikes in an effort to make it better. The link to the survey is here. I will pick two readers at random who complete the survey and send them a gift of a solid new Cabernet wine I uncovered. If you are not a wine drinker, I will come up with something else for you.

On 2/9/23 at 11am EST, I will be moderating a panel hosted by Prometheus Alts with some impressive fund managers as seen in the picture below. Prometheus is an innovative tech platform that brings investors and alternative fund managers together to connect quickly, simply, and socially.  My readers are invited to the event.  You can register here for the live panel.

I went to Miami at 6am today (Wednesday) for a conference. The result is I will not have all the news updated this afternoon, as I will be on a catamaran excursion. I will do my best to fill in what I can from the road. Excuse typos from my phone.

I am eating at Joe’s Stone Crab tonight for dinner which is always a treat. I believe the restaurant did $38mm in sales in 2019 and FAR more today. For a quick bite, I love Joe’s Take Away, which has great sections, but comes at a steep price.

• Pictures of the Day-New Gallup Poll

• NBA, Here I Come...In My Dreams

• Quick Bites

  • Markets/Fed

  • Charts on the US Consumer

  • Way Too Early 2024 Polls

  • $10 quintillion Asteroid

• Other Headlines

• Crime Headlines

• Real Estate

  • Miami R/E Brokers Down Sharply-Explained

  • 2022 Migration in #s From Blue to Red

• Other R/E Headlines

• Virus/Vaccine

Pictures of the Day-New Gallup Poll-Most Important US Problem

• This gallop poll came out on 1-30-23 and I thought the findings were interesting about the most important problems in the US. The 1st chart is the total survey and the clear winner is “The Government/Poor Leadership followed by Inflation and Immigration.” The 2nd chart shows the survey by political party and both sides agree that Poor Leadership and Inflation are big issues, but differ on Immigration. The last chart is of economic confidence and as you can see, it is off recent lows, but 80 points off pre-pandemic levels.

NBA, Here I Come...In My Dreams

I feel that if I could have been anything, a star NBA point-guard would have been my dream. If it were not for the fact that I am 5’9”, I think I had a chance. The only other things holding me back were my dribbling skills, shooting ability, passing accuracy, vertical jump, ability to play defense, over-all speed, strength and rebounding. Other than those few things, I feel I would have been a very strong NBA perennial All-Star.

A couple weeks ago, All-Star Luka Doncic scored 60 points, 21 rebounds and 10 assists against the Knicks it what was one of the greatest performances in the NBA. He shot 67.7% from the field. I kept watching the highlights of the game just before I went to sleep and had a crazy dream.

In my dream, I was playing in the NBA as a point-guard at 53-years-old. Given my advanced age, I was only able to play one game per week, but I was averaging 60 points, 21, rebounds and 10 assists during the games I played, just like Luka did against the Knicks. I was a fan favorite, as the NBA is not long on 5’9” Jews, and I was getting all kinds of sponsorship opportunities and speaking engagements. I was a hero….then I woke up only to realize it was just a dream, much to my chagrin. This picture was a few months ago and yes, that is was my hair which is far thinner now due to the COVID related hair loss. Call me crazy, I look NBA ready. I am sure many 7’ centers would be quite intimidated by my presence at 5’9” and 166 lbs.

It reminded me of a story in 2009 when I met with Herb Simon (Simon Property Group), the owner of the Indiana Pacers. During the deal meeting I spoke about my basketball skills, the desire to play in the NBA and the fact that a Jewish kid of my size would fill arenas and sell out jerseys. I felt it would have been a great to have a then 39-year old of my stature in the league. Clearly, my sales skills were underwhelming, as I was never offered a contract; even a one-day contract as a show of good faith. I am sure Simon regrets passing up on greatness. Note the Pacers have not won an NBA title. With me, they might have won a couple.

Looks like the only NBA career for this kid is in his dreams, so you are stuck reading the Rosen Report for a while. If any NBA General Managers or coaches are reading, you know how to reach me. Put me in, coach. I’m ready to play and could be the first player/team CFO in NBA history.

Quick Bites

• Stocks have had a stellar start to 2023. The S&P 500 and Dow are up about 6.2% and 2.8% in January in their third positive month in four. The Nasdaq has risen nearly 10.7% in January. As of yesterday, 63% of companies in the S&P 500 had beat earnings and we are seeing more signs inflation is going in the right direction. Tuesday, the Employment Cost Index came in at 1%, which was below the 1.1% expectation. Recent positive earnings by GM, AMD, Pulte, Exxon and others as well. I do feel the market is anticipating a pause in hikes in short order, something I suggested would happen. Meta shares jumped 17% on better-than-expected revenue and a $40bn buyback after the close. The Fed came out with 25bps as expected. It was the 8th hike and took Fed Funfs to 4.5-4.75%. I listed to some of the speech and felt Powell was lessHawkish than recent meetings, and markets rallied off the lows with the S&P up 2% from the 2:30pm levels. Powell acknowledged the disinflation process has started. The Nasdaq rallied 2%, led by AMD (12% post earnings). I was thinking one more hike after today, maybe two. He does not believe the Fed will cut rates this year. I am not convinced of that yet. The 10-Year Treasury rallied 12bps and is yielding 3.4% compared with 4.21% in November. The 2-Year Treasury rallied 9bps to 4.11% as of 3:30pm.

  

  

• Regional lenders and banks with big credit-card businesses continued to profit from borrowers who ran up credit balances at higher interest rates in the fourth quarter. But many tightened their lending standards and set aside more money to cover potential loan losses, signs that they don’t expect the good times to last.  But there are signs that some households are coming under pressure. Borrowers have put more purchases on credit cards, but they chipped away at balances at a slower rate. Delinquency rates on credit cards and consumer loans in the fourth quarter approached or hit levels they were at before the pandemic, when stimulus and lower spending on services allowed consumers to bulk up their savings and pay down debt. I have been writing about my concerns around the consumer for a few months, and my agita is growing about what happens in 2023. Good WSJ article entitled, “The U.S. Consumer Is Starting to Freak Out” and discusses crashing savings, record credit card balances, higher rates, expenses vs income, retail sales and other topics all suggesting the consumer is getting squeezed. However, on CNBC, The January Consumer Confidence was 107.1, less than expectations and prior months. Exceptions were almost 109.5. The Janurary ISM manufacturing index fell 1point to 47.4 and came in below expectations of 48, yet another sign of a slowdown. However, Michigan Consumer Sentiment was +8% in January, beating forecast.

  

• Florida Governor, Ron DeSantis opened a lead over Trump among likely voters in the New Hampshire 2024 Republican presidential primary. Less than half of the likely GOP primary voters think Trump should be running. In South Carolina, DeSantis has nearly a 20 point lead over Trump regarding next year’s Presidential Primary. DeSantis has 52% and Trump, just 33% according to the poll. Despite agreeing with a handful of Trump’s policies (pro-growth policies, crime, border, Israel, Trade, Abraham Accords, Warp-Speed, economy pre-pandemic…). I do not feel he should run for office or get support/funding. Data suggests Trump is struggling on fundraising and spent $22mm to raise $24m according to this October 2022 Bloomberg report. This article suggests many wealthy megadonors are backing DeSantis or anyone but Trump (Ken Griffin, Schwarzman, Robert & Rebekah Mercer). NBC reported Trump is struggling on fundraising and most of are from low-dollar donors. Trump is too divisive and his roll in January 6th events makes him un-electable. I hope these polls prove true, and we have DeSantis, Hailey or Sununu rather than Trump. I also do not want to see the current President or VP get the Democratic nomination. I want age limits instituted for President. Let’s get some new, and more age-appropriate candidates for both parties. The 2nd chart are recent head-to-head polls in the way too early polling for 2024. I saw this headline late on Tuesday, “Nikki Haley Plans to Enter Race for 2024 Republican Presidential Nomination.”

• NASA has revealed the schedule for a rocket launch that will visit an asteroid that is valued at 70,000 times the global economy. The US space agency will launch a SpaceX Falcon Heavy rocket holding sensitive scientific equipment in October 2023 from Kennedy Space Centre in Florida. NASA’s website says that the rocket will travel for around three and a half years before it gets to the Psyche asteroid. The asteroid has an average diameter of 220 kilometers and is believed to be made of mostly iron and nickel. Its size and makeup gives it an estimated worth of $10 quintillion. Call me crazy, but if I had $10 quintillion, I would share it with all my most loyal Rosen Report readers.

Other Headlines

• Global economic outlook slightly ‘less gloomy,’ Europe ekes out growth

  • The IMF now expects global growth will slow from 3.4% in 2022 to 2.9% in 2023. That’s up from a forecast of 2.7% in October. The upgrade in the outlook reflects China’s “sudden reopening.”

• Jim Chanos: Bear market is doing something unheard of in my career

  • He is a short-seller, so take his commentary with a grain of salt, but he claims that “Things are not cheap,” given multiples today. The article gives specific numbers and suggest the S&P can fall sharply.

• U.S. Chicago Purchasing Managers Index (PMI) came in at 44.3 vs forecast of 45.0 and prior of 45.1.5th straight month below 50.

  

• Apple’s expected to post its first revenue decline since 2019 on Thursday

  • The PC and smartphone markets are slumping as consumers and businesses digest sales from the pandemic and cut costs to prepare for a possible recession.

• Snap shares plunge on weak revenue as company again declines to provide a forecast

  • Shares fell 13% post earnings.

• AMD beats on sales and profit but warns of a 10% revenue decline in Q1

  • The stock was +4% post earnings. This explains why AMD is doing better than Intel.

• GM smashes expectations and guides toward a strong 2023, despite margin squeeze

  • The stock was +8% on the news and it appears supply-chain problems eased.

• Exxon smashes Western oil majors’ earnings record with $56 billion profit for 2022

  • The Biden Administration and other governments need to work with their energy companies to produce more. Don’t threaten them with taxes and regulation. If you want a desired outcome of an industry vilified, maybe use a carrot, not a stick.

• Pfizer expects 2023 sales to decline by as much as 33% compared with record-breaking 2022

• Cathie Wood’s Innovation ETF notches best month ever as beaten-down tech stocks roar back

  • +27% in January.

    

• Historic Crash for Memory Chips Threatens to Wipe Out Earnings

  • Collective industry operating losses are projected to hit a record $5 billion this year. Inventories — a critical indicator of demand for memory chips — have more than tripled to record levels, reaching three to four months’ worth of supply. Another sign of the fragility of the consumer.

    

    

• Here’s why Nike is suing Lululemon over shoe designs

  

• Trump’s woes grow with grand jury probe of porn star hush money

  • Trump has so many lawsuits and investigations, I wonder what his legal bill for 2022 and 2023 will be?

• Trump sues Bob Woodward and publisher for $50 million over use of his interview recordings

• FBI searching Biden home in Rehoboth, Delaware

• Rep. George Santos says he won’t serve on House committees while investigations are ongoing

  • A slight positive development in what has been a train wreck. He needs to be dismissed from Congress, but make no mistake, he is not the only habitual liar in politics. 78% of voters in his district believe he should step down. McCarthy, do the right thing for the country and expel this man from Congress, even if the seat turns Blue. It is the right thing to do.

    

• Migrant standoff in NYC turns ugly as 10 outside activists move against media with open umbrellas

• 64% of Americans are living paycheck to paycheck — here’s how to keep your budget in check

  • For the first time, more than half of all six-figure earners also said they were stretched too thin, a jump from 42% a year ago. 

• Self-made millionaire: Here are 8 things rich people do differently that make them 'ultra wealthy'

• I’ve helped hundreds of people land 6-figure salaries. Here’s why you’re getting job interviews—but no offers

  • Some good thoughts in the link with examples of how to address questions.

• Rare Van Dyck painting sells for $3 million. The owner originally bought it for $600

  

• Doing this effortless habit can help relieve stress, improve your heart health

  • Shockingly, one of the things is showing gratitude. I did not see that one coming.

• Ultraprocessed foods linked to ovarian and other cancer deaths, study finds

• Australian mining company loses radioactive device, nuclear agency joins outback search

  • This thing is dangerous and tiny. It fell off the back of a truck. What are the chances they find something so small that was lost on a 700 mile trip?

    

• Meteorite containing material billions of years old discovered in Antarctica

  

• Tom Brady Retired, “For Good” in this short and emotional video.

• San Antonio Zoo will let you name a cockroach after an ex and feed it to an animal

  

Crime Headlines

• Gunman busted in execution-style NYC slaying of stage actor

• Sixth police officer suspended following fatal beating of Tyre Nichols

  

• Initial Police Report on Tyre Nichols Arrest Is Contradicted by Videos

• 4-year-old walks into DC hospital with gunshot wound, police say

• About 150 West Palm Beach homes targeted with antisemitic messaging in one night, one of multiple incidents in recent weeks

• 10 wounded, 2 critical, in drive-by shooting in central Florida

• 91-year-old woman with dementia punched, knocked into concrete in SF attack

  • What the hell is wrong with people? Who attacks a 91-year old woman? The punishment must be severe to deter such awful crimes.

    

• Vancouver Embarks on Bold Experiment to Decriminalize Hard Drugs

• California cops shoot dead double amputee, 36, as he tries to run away from them on his stumps: Police department says officers feared he was going to 'throw his knife at them'

Real Estate

• The pool of the city of Miami’s active agents shrunk by 36.3 percent in the fourth quarter of last year, compared to the same period of the 2021, according to a report by AgentStory, a Miami-based company that tracks agents and their deals. The report found Miami had 4,529 active agents as of the fourth quarter, down 2,580, year-over-year. However, there are 22,286 registered agents in Miami, but only 20% are active. According to a report from the Miami Association of Realtors, Miami-Dade County residential sales dropped 48 percent in December, year-over-year. I believe a big part of the drop off is lack of inventory, but clearly, higher rates are contributing to the affordability issues and slowdown as well. High-end homes and condo prices are holding up well in Miami. I do believe that the condo markets in Miami and Palm Beach are more likely to see some pressure relative to single-family homes, given the sheer number of new condo developments coming to market. According to Devin Kay (Douglas Elliman agent), sales volume has only dropped because we have little product to sell, not because demand has changed. The wealthy buyers all want new / newer waterfront homes and or trophy luxury condos, of which we have hardly anything for sale. Every top broker in Miami was down 30-40% in 2022, simply because we have no inventory to satisfy our buyers . That is one of the main reasons you are seeing wealthy buyers flock to luxury new developments that are still 2-3 years from completion.  This article is entitled, “South Florida by the numbers: A look back at 2022,” and outlines lots of good data on the market.

• This article outlines the migration in 2022 from Blue to Red states, a trend I believe will continue for all the obvious reasons (WFH, taxes, quality of life, cost of living, weather, homelessness, crime…). Florida saw the biggest influx of new residents, some 319,000 people, a total population increase of nearly 2%, according to an analysis released on Monday by the National Association of Realtors. In terms of sheer volume, the Sunshine State was followed by Texas, the Carolinas, Tennessee, Georgia, Arizona, and Idaho. The state with the most outbound migration by population was California, with more than 343,000 people leaving the state. The Golden State was followed by New York, Illinois, New Jersey, and Massachusetts. New York had the largest overall decline in its population share, a 0.9% drop. When you look at the migration, in many cases, it is wealthier people who have the means to relocate, which will create significant budget issues in the states seeing large departures. This Bloomberg article gives more details on the topic.

  

  

Other Real Estate Headlines

• London’s luxury home sellers turn to WhatsApp as private sales surge

  • Off-market home sales surged in the British capital in the final three months of 2022, accounting for more than one-in-five (22.3%) transactions, according to Hamptons International.

• Real estate agents say they can’t imagine working without ChatGPT now

• Blackstone ramps up tenant evictions

  • This comes after a long moratorium on evictions due to the pandemic.

• Look inside luxury Los Angeles condos seeking record prices

  • Article discusses $50-100mm condos in LA relative to the current record of $22.5mm.

    

Virus/Vaccine

• Data continues to improve across the board.