New Delray Restaurant-Gabriella’s-I’ll Pass

5-28-25

Opening Comments

My last note was about my son being the valedictorian at his high school. We are all very proud of him. I received hundreds of emails, calls, and texts of support for my son and his accomplishments. THANK YOU. I was touched by all the words of encouragement and support. Many readers forwarded my newsletter which led to new signups. The most opened links were the things people in the happiest relationships do on the weekends and the ideal time to shower. Near the top was the story of the torture of the crypto owner and the involvement of the bombshell.

My last report discussed the proposed increased SALT deductibility limits, which were included in the House bill passed last week. What was not widely reported (and will have vastly greater impact on Rosen Report blue state readers) is that commencing in 2026, the Big Beautiful Bill as passed by the House included provisions which would end the ability of partnerships, LLC’s and S-Corps. to use pass-through entity tax (“PTET”) regimes to create deductible SALT payments. Affluent taxpayers will now bear the full brunt of their partnership, LLC, and S-Corp. state and local taxes. In 2025, an LLC member paying $1 million in state and local taxes using PTET would save 37% (i.e., $370,000). If the new prohibition is included in the final bill, then starting in 2026, that savings disappears and the exodus from blue states will most definitely accelerate. Of note, Senator Ron Johnson said there are enough GOP senators to stall the bill passed by the House. Musk suggests that the bill undermines DOGE’s work given it adds to the deficit; I agree.

Mike Cembalest of JPM fame put out his paper on the bill and can be found here. He too outlines the bill’s impact on deficits, which is growing them to the tune of $2.8-$3.4 trillion over 10 years.

Seats for game 5 of the Pacers at Madison Square Garden against the Knicks are out of control. I saw tickets for as much as $70k on the floor for the game.

• Picture of the Day-World University Ranking & Data

• New Restaurant-Gabriella’s-Ill Pass

• Quick Bites

  • Markets

  • Universities Selling PE Stakes/Liquidity Crunch

  • Falling Birthrates in the US and Europe

  • Air Traffic Control Issues-Underinvestment

• Tariffs

• Politics

• Middle East

• Other Headlines

• Health

• Real Estate

  • Tale of Two Markets

  • $55mm Teardown in Manalapan

  • Housing Slowdown Chart

  • Shrinking Home Sizes

  • Extravagant Homes from the Gilded Age

Pictures of the Day-World University Ranking & Data

The U.S. has 4.2% of the global population but 46% of the top universities per Times Higher Education’s 2025 world university rankings. I was a bit surprised by the 2nd chart outlining the fact that those with college degrees have more friends. With the Trump Administration trying to ban international students from Harvard, I thought the last chart was interesting. It outlines the schools with the most international students.

New Delray Restaurant-Gabriella’s-I’ll Pass

Gabriella’s is the new culinary hotspot in Delray Beach, Florida. I just went for the first time and am struggling to figure out why anyone thinks the food is special. The place had ZERO open tables at 6 pm on a Saturday. I sat at the bar and met a friend who was in from Houston.

The scene was lively, and the bar was hopping. A lot of 40 and 50-something people were eating, drinking, and having fun, and there were plenty of cougars on the prowl. The room is well-appointed and designed in a nice enough style. I would suggest better acoustics as the room was loud, but that could also be that age 55, I am no longer a spring chicken.

In terms of the food, the reviewers who rave about this place have zero taste buds and have never travelled to NYC, Chicago, LA, San Francisco, Paris, Tokyo or anyplace with a food scene. Open Table gives Gabriella’s a 4.6 out of 5 stars for food. WHAT IS WRONG WITH THESE PEOPLE? Check out some of these ill-informed reviews on Open Table:

Now for the real review. I want to start on a positive note. The service was snappy, and our food came out in short order. In terms of the food, it was not good. We started with the meatballs and salad. The meatballs were terrible. Dry and no flavor. The salad was far better. We had a decent firecracker shrimp, which had a little heat, and the texture was solid. The spicy rigatoni was AWFUL. I don’t mean bad, I mean on the verge of inedible. The portion was small, and that was a good thing as no one wanted to eat it. It was the worst spicy rigatoni I have ever tried in my life. If Carbone’s Spicy Rigatoni is a 9.5 out of 10, this one was a 3.

The bartender “highly” recommended the spaghetti nero, which is squid ink pasta, lobster, and shrimp. The pasta was cooked perfectly. The portion of lobster and shrimp was embarrassing. When I say a little light, it was less than a kiddie portion. Liked the flavor, but not enough meat for $34. It reminded me of the famous Wendy’s commercial from the 1980s, “Where’s the Beef?”

I hate ordering steak at a restaurant as it never compares with mine. The NY Strip was awful, as it was overcooked and dry at a $68 price point with ZERO sides. The quality of the meat for that price is embarrassing. It looked so lonely on the plate with nothing provided along side of it.

My wife had made a reservation for the family at Gabriella’s for next week. I called her on my way home and said, “Cancel it. I will never eat here again.” If you want a scene, go for a drink and maybe order the Firecracker Shrimp. Go over to Le Colonial right next door and get a far better meal. Better Italian in Delray would be Campi, Tramonti or Casa L’Acqua. Below is from my kitchen, all cooked by the author of the Rosen Report. It far exceeds anything I ate at Gabriella’s. Note the amount of lobster in my pasta. It might be 500% more than at Gabriella’s.

Scores out of 10 points

• Food-5.1

• Service-7.9

• Ambiance-7.7

• Price-Over Priced for the quality and portions

Quick Bites

• A combination of better-than-expected consumer confidence and yet another flip-flop on EU tariffs led to equity markets rallying sharply on Tuesday. Major indices were +1.5-2.5% on the day. Trump’s announcement of a delay in the 50% EU tariffs until July 9th was the biggest contributor to the rally, which saw tech stocks outperform. Wednesday had positive earnings from Abercrombie & Fitcha and Dick’s pushing those stocks higher, but broader markets closed down partially due to chip pressure on new tariff news. The VIX is back below 20 after hitting 60 in April. Interestingly, 10-year Treasury yields have fallen and are now back at 4.47% after reaching 4.60% last week. The Treasury rally brought 30-year mortgage rates back down to 6.97%. I was a bit surprised by the sharp increase in consumer confidence given the backdrop of tariffs, geopolitical risks, and the rate environment. But as you can see, the charts moved dramatically and the lower tariffs were outlined as the cause. After the close Wednesday, Nvidia reported earnings that beat on top and bottom line sending stock +3%. In the prior eight quarters, Nvidia beat expectations seven times. Also HP reported after the bell and fell 15%.

• I have recently written about Harvard, Yale and Princeton attempting to sell private equity portfolios given the cash crunch they are facing. As a result, I did research to understand how these institutions got into this mess. Also of note, Blackstone bought a $5bn PE portfolio from the NY City Pension Fund this week at a discount. Many of these institutions have 50%+ of their endowment in illiquid assets (PE, venture, real estate, private credit). Harvard’s 2024 letter outlined the conscious decision to allocate “significantly” more of the endowment to private equity (pg 12). Harvard has 39% in PE, 5% in R/E, and 32% in hedge funds. This article suggests 83% of Harvard’s assets are in illiquid assets. Given hedge funds tend to have lock-up provisions, those are considered illiquid, but not as onerous as PE or venture funds. A few years ago, Yale was allocated to illiquid assets as follows: Venture 23.5%, PE 17.5%, R/E 9.5%. Secondary sales of these PE stakes are likely taking place between 70-90% of NAV. I happen to believe that buying discounted stakes in PE exposures managed by quality managers makes sense. We have seen a sharp decline in IPOs and M&A activity in recent years that has reduced distributions to PE and venture investors. These factors, coupled with the potential of reduced Federal aid, has put some of these institutions in harm’s way. Also of note, many schools have taken out billions in debt. Harvard has $8.2bn of debt and the 3.15% bonds of 2046 are now trading at 66.5 cents, according to this Reuters article. Lesson, don’t have too much exposure to illiquid assets. Every 8-10 or so years, some major dislocation takes place and requires these funds to sell at discounts (2000-.com bubble, 2008 GFC, 2020-COVID, 2025-funding crisis).

• I have written frequently about the issues many countries face with mounting debt and aging populations. I will focus this section on fertility rates. US fertility rates have crashed from 3.58 to 1.79 since 1958. To maintain the population, a rate of 2.1 children per woman is needed. In 1945, we had 42 workers per retiree (WWII), and in 1950, the US had 16 workers per retiree. Today, the US has 2.9 workers per retiree. Check out Europe, which has seen fertility rates crash. Spain is at 1.12, Italy 1.18 and Greece 1.24. The ramifications of a shrinking workforce, coupled with people living longer is dire for entitlement programs. Denmark, Italy, the UK, and France have all recently increased retirement ages as a result. The US must follow suit. I know Musk is trying to save the world and have as many kids as possible, but people, he needs some assistance! This article suggests Musk has 14 kids, but I would not be surprised if that is understated.

• This is a very concerning article about the state of air traffic control today: “The Newark airport crisis is about to become everyone’s problem.” Itoutlines a shortage of air traffic controllers and outdated technology. What could possibly go wrong? The article outlines situations where pilots lost contact with air traffic control. The US has aging infrastructure, and countless billions needs to be spent on roads, bridges, tunnels, railways and critical infrastructure like the air traffic systems. This article outlines failed investments in data infrastructure required to support FAA operations. Although the agency’s budget has grown 50 percent over the last decade to $24 billion, it still isn’t enough to overcome decades of underinvestment. Last year, the FAA had to stretch a $1.7 billion maintenance budget to cover nearly $5.2 billion in outstanding repairs at air traffic control facilities. It had to spend nearly $532 million of its 2025 budget a year early to cover “uncontrollable employee compensation costs” such as mandatory overtime and the “surge” in hiring for new air traffic controllers.

Tariffs

• Trump delays 50% tariffs on EU to July 9

  • It was scheduled to be June 1st. The idiocy of these tariff announcements is insane. How many times has he imposed an outlandish tariff and quickly backed off? Markets want clarity and certainty, and his rollout has been awful. Trump has been getting panned for these bad tariff rollouts, and this was my favorite regarding the EU delay: Economist Justin Wolfers said, "Friday's EU tariff announcement lasted nearly the whole weekend, or 18% of a Scaramucci." Trump said, he is not “chickening out,” it is negotiation.

• India’s iPhone exports to the U.S. soared an estimated 76%. But Trump, Beijing won’t make further growth easy

  • While India grew iPhone shipments to the US by to 3mm units, China’s shipments sank 7% to 900k phones.

• Businesses are finding a workaround for tariffs — and it’s entirely legal

  • An interesting way to skirt some of the tariffs is called the “first sale rule.”

Politics

• Trump slams Putin after Russia’s deadly overnight drone and missile attack on Ukraine: ‘He has gone absolutely CRAZY!’

  • Articles suggest Trump is considering more sanctions on Russia.

  • Russia seizes Ukrainian border villages as its bombing campaign slows

    • Russia declares 'Trump's peace deal is dead' as Kremlin threatens to seize all of Ukraine

    • So much for Trump’s promise of a peace deal within 24 hours in office.

• Germany's Merz says Western allies no longer impose range limits on Ukrainian weapons

  • This is big news. Russia threatened Germany post the news.

• Jake Tapper Says Cover-Up of Biden’s Mental Decline ‘May Be Even Worse Than Watergate’

  • The CNN anchor says the media missed Biden’s health decline even though it was “in front of their nose.” The irony of Tapper and CNN pushing a book about the coverup is not lost on me. This same “journalist” and station were defending Biden at every turn. CNN reported cheap fakes, ageism, and a bogus cognitive decline narrative during Biden’s presidency. CNN crushed the WSJ for reporting on Biden’s mental decline due to the fact that the reporting largely relied on Republicans. Any longtime Rosen Report reader knows that I was questioning Biden’s mental acuity as far back as the 2020 election. I was demonized for it and cancelled by many readers as a result.

• Speaker Johnson: There Are ‘More Than 1.4 Million Illegal Aliens on Medicaid’

  • Johnson was on CNN when he made the claim.

• Trump: Canada ‘considering’ free Golden Dome for its statehood

• Border czar Tom Homan's security detail costs around $1 million a month

  • This seems insane to me. $12mm/year for security for the border czar?

• Musk’s role leading DOGE qualifies as ‘continuing and permanent,’ federal judge says

  • Fourteen states sued, suggesting DOGE violated the Constitution.

• Elon Musk Wants The US Government To Hang Up The Phone: 'Government Is Wasting About $100 Million Per Year On Unused Phone Lines'

• VA greets veterans with good news this Memorial Day: 10 new medical facilities

• Which political party do you trust more on each of the following issues?

• Trump Pardoned Tax Cheat After Mother Attended $1 Million Dinner

  • Not sure of all the details here, but felt it warranted inclusion.

• Fetterman, Often Absent From Senate, Says He Has Been Shamed Into Returning

  • The first-term Pennsylvania Democrat said his openness about his mental health issues has been “weaponized” against him, prompting him to start showing up for votes and hearings he considers useless.

Middle East

• US asks Israel to delay major ground invasion of Gaza amid hostage deal talks

• Netanyahu says Hamas Gaza chief Mohammad Sinwar has been killed

• Hamas tries to pull fast one on Trump’s Middle East envoy after latest cease-fire proposal: ‘Disappointing and completely unacceptable

• Former Los Angeles Deputy Mayor Will Plead Guilty to Making Phony, Anti-Israel Bomb Threat

  • He lied about getting a bomb threat and claimed that the “fake” person who called it in was tired of the city’s support of Israel.

• 'We'll burn Jews like Hitler did': BBC contributor in Gaza celebrates Jewish civilian death

• Left-wing influencer Hasan Piker gloats as he returns to Twitch after being yanked for comments about DC Jewish museum shooting

• Chanting ‘Death to Arabs,’ Israeli nationalists gather for annual march in Jerusalem

  • It is not only the Muslims preaching hate.

• Trump to yank all remaining federal funds to Harvard in latest blow to ‘very antisemitic’ Ivy League school

  • The ramifications for Harvard and Boston are dire if funding is cut.

• University of California Is Next Target of Trump’s Antisemitism Probe

  • Leo Terrell, who leads the Justice Department’s antisemitism task force, said the UC system should expect “massive lawsuits,” adding that universities “on the East Coast, on the West Coast, in the Midwest” are also likely to see legal action.

• Zohran Mamdani makes massive gains in NYC mayoral race — but still can’t topple Cuomo’s lead

  • Concerning that someone with these views is gaining traction in NYC.

Other Headlines

• U.S. economy will be growing faster than 3% this time next year, predicts Treasury’s Bessent

  • A combination of pro-growth trade policies, tax cuts and deregulation will soon lead to a pickup in activity after a 0.3% annualized contraction in the first quarter, according to the Trump administration. “We will be turning the corner toward the end of the year,” Treasury Secretary Scott Bessent said during a wide ranging interview.

• Fed worried it could face ‘difficult tradeoffs’ if tariffs reaggravate inflation, minutes show

• Super-long JGB yields extend climb from multi-week lows after weak auction

  • The yields are JGBs are something to watch.

    

• Self-Driving Tesla Suddenly Swerves Off the Road and Crashes

  • "The wheel started turning rapidly." I am not ready for self-driving.

• Xiaomi takes aim at Tesla’s bestselling car in China with its longer-range YU7

  • The car has a 472-mile range.

• Tesla’s Europe sales plunge 49% on brand damage, rising competition

• Macy’s cuts profit outlook as tariffs, promotions hit its business

• DJT shares fall 10% as Trump Media says it’s raising $2.5 billion to buy bitcoin

  • Market cap is $4.5bn for a stock with $4mm in revenues and -$122mm EBITDA. I told my readers this stock is a joke and would never touch it. Peaked in 2022 at around $100/share.

• Musk Vows to be ‘Super Focused’ on Companies Amid X Outages

  • Wait. Founding countless companies, running DOGE, and fathering over a dozen kids… and you are struggling. Who would have thunk it? I wrote about this in a piece called “Musk-Man or Machine."

• Why Booz Allen Hamilton Holding Corporation (BAH) Crashed On Friday

  • The revenues are almost exclusively from government contracts, and they announced large job layoffs and the stock fell 16% on Friday.

• OpenAI software ignores explicit instruction to switch off

  • A bit scary.

• Chaotic footage shows Miami police officer clinging to car hood for dear life before shooting driver

• The No. 1 communication mistake people make at work, from a Wharton psychologist—it can damage your reputation

  • I agree with this article.

• Summer 2025 is a ‘perfect storm for cheap flights,’ expert says: 5 destinations that won’t break the bank

• Record number of Americans seeking UK residency, says Home Office

• Ex-flight attendant caught smuggling 100 lbs. of deadly new drug made of human bones faces decades in prison

• Hawaii's Kilauea Volcano erupts with 1,000-foot 'lava fountaining'

  • I have never seen a volcano erupt, and it is something I would love to see.

• Scientists discover mysterious sphere in Colombia, sparking UFO speculation

  • The 4.5-pound orb was cold to the touch and etched with ancient symbols. There were no welds or seams that suggested it was man-made.

Health

• I’m a dermatologist — these overlooked signs on your skin may indicate cancer

• New brain scan can diagnose Alzheimer’s before any symptoms

• People are increasingly dying from cancer due to alcohol — group is most at risk

• Common daily vitamin could slow biological aging, major study suggests

  • Nationwide trial reveals vitamin D's potential to preserve DNA components linked to longevity

• This is the one body part you don’t want to forget to wash: ‘Always traps grime’

  • I had never really focused on this one despite 2-3 showers/day.

• Doctors, former patients warn of LASIK eye surgery dangers: ‘Biggest scam ever put on the American public’

  • I desperately wanted LASIK 25 years ago. I met an eye doctor who talked me out of it, as her role was to attempt to “fix” botched LASIK procedures. I am a daily contact wearer and never went through with the procedure.

Real Estate

• Interesting WSJ article, “The Ultra Wealthy Are Riding Out the Market Chaos in Luxury Real Estate.” It is a tale of two markets. The high end remains strong in many cities, while lower-priced homes are feeling more of the weight of affordability concerns (rates, insurance, maintenance, R/E taxes). Year to date, many markets have seen a significant increase in home sales in the $10mm+ market. The highest quality properties from Miami to Jupiter remain in demand despite sky-high prices. However, I spoke with a realtor in South Florida who focuses on the $1-3mm segment. He told me that more of his clients are offering up to a $50k rebate to buyers to help them with their mortgage rate. You can “buy down” your rate if you pay upfront, and sellers are getting creative to entice buyers with rebates to do just that.

  • $1mm mortgage at 2.6% has a $4,003 monthly payment and at 7% it is $6,553/month. This does not factor in that the house you could purchase for $1mm in 2021 is now sharply higher in price or that insurance costs have tripled in many cases.

• The WeatherTech founder (David MacNeil) bought an adjacent property to his home for $55.5mm. The new property had a home under construction that he plans to tear down. It is shocking how frequently the uber-wealthy buy adjacent properties to expand their estates. The in-the-works mansion at 1140 S. Ocean Blvd. in Manalapan is next door to an ocean-to-lake property MacNeil already owned through a limited liability company. The latest purchase has expanded MacNeil’s estate by 1.6 acres to 3.56 acres. It also added an extra 150 feet of frontage on the ocean and the Intracoastal Waterway, booting the total to about 343 feet of waterfront on the east and west sides of his estate. The seller of the partially completed house was asking $95mm if sold after it was done. For you Hamptons people, the seller was Joe Farrell.

• Torsten Slok from Apollo puts out the Daily Spark, and it regularly has interesting charts. A recent piece showed the housing slow down. Weekly data for homebuilder traffic points to a weak spring selling season, driven by mortgage rates near 7%, record-low consumer confidence, and a rising inventory of homes for sale, see chart below.

• Great WSJ article with amazing charts: “American Homes Are Shrinking. Why Are They Still So Unaffordable?” Builders have started making more entry-level starter homes, but not tons of them. The small homes they do build are still subject to rising costs for land and labor. Buyers who choose them have to contend with today’s high mortgage rates, which drive up their monthly costs. Builders have been focusing more on the starter-home market, particularly over the past few years as high prices and mortgage rates made bigger homes prohibitive for first-time buyers. Since 2017, the median size of new single-family homes has been generally shrinking. COVID stimulus, coupled with zero rates, pushed up home prices substantially. Now, mortgage rates have gone from 2.5% to 7% while insurance prices have skyrocketed in most markets. My comments in Quick Bites with lower fertility rates also mean less square footage is needed.

• This link outlines extravagant homes built during America’s Gilded Age. Massive estates that have ornate finishes are seen in the link. Although they are not my style, I appreciate them. The cost to build these today would be unfathomable. The Henry Clay Frick House and the Cornelius Vanderbilt II houses on 5th Avenue are bonkers. The estate homes have stunning gardens.

© 2025 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™ #789 ©Copyright 2025 Written By Eric Rosen.