Opening Comments
My last note was about the 7-year anniversary of the Rosen family moving to South Florida. The most opened links were people who eat alone in public without feeling self-conscious usually possess these strengths and the short video comparing the 100 meter Olympic race from 100 years ago and today.
I was invited to a nice cocktail party on Sunday in Water Mill. The event was right next to Fairview Farm, and I have been friendly with the owner, Harry, for decades. I stopped in to say hello and buy a delicious pie made by his daughter, Meredith. When we drove just down the street a couple hundred yards to the party, there was chaos. Apparently, a woman was driving 70-80mph down the side street and appeared to be under the influence. She smashed cars along the way just minutes before we arrived. The street is a dead end, and she turned around and took off without stopping. Someone there saw the license plate and called the police. No one was injured but a bunch of cars were damaged. My friend’s 3-day old Range Rover needed to be towed. Had I not stopped at Fairview Farm, we could have been in an accident or hit walking to the party.
In my last note, I wrote about an exciting new development in battery charging that resulted in a lot of discussion. One of my venture capital readers reached out to the company to consider making an investment and was told the article was not accurate. This is the article they suggested we read to better understand the battery charging developments.
As my summer holiday winds down (back in Boca Saturday), I am happy with all the new connections I made with readers and 3i members. I ignited my love for padel and play every chance I get. Sadly, despite ample stretching, I pulled a calf muscle Monday to the point that walking is painful.
Markets
US Dollar Decline as Reserve Currency
Serena Williams Crushing it in Venture'
Hamptons Cell Service
Marc Rowan on MBAs
Comparing House Buying in the 80s and Today
Multifamily Weakness
R/E Taxes on Office
San Fran Hotel Weakness/Tourism Drop
Picture of the Day-ABC Kitchen Review
With Restaurant Week in NYC, I hit Jean-Georges’ ABC Kitchen on 18th Street. I have never been disappointed in the food there, but it had been years since my last visit. I started with a beautiful and light wax bean salad with cherry tomatoes. It came with a warm piece of grilled bread, and it was delicious. My entree was a corn nut crusted salmon with sauteed corn and scallions. The salmon was out of this world. I am not sure I have ever seen a more perfect cook on salmon, and I make it once a week. My readers know I love chocolate, and they had a chocolate layer cake on the Restaurant Week menu. It was beautiful and delicious with toasted marshmallows and little chocolate candies. The cake was beautifully moist and the frosting was different. For $60, you cannot find a better deal. Sit at the bar, have a glass of wine and enjoy the food. WOW.
New Idiotic Sport
In conjunction with the ending of the 2024 Olympics, I thought talking about a new stupid sport was appropriate. I have been critical of some of the Olympic sports. I question rhythmic gymnastics, trampoline jumping, breakdancing, the triple jump, race walking, 3 on 3 basketball, solo synchronized swimming (no longer a sport). Now, there is talk of the dumbest sport of all time gaining traction (thankfully no Olympic talk just yet). It is called Competitive Hobby Horse Riding. I am not lying. You hold a toy hobby horse between your legs and jump over fences. I do not know what hallucinogenic drugs people are taking to come up with these sports, but it had better not ever make the Olympics. If any new sport makes the Olympics, it should be padel!
You can watch the idiocy for yourself in this 2-minute Youtube video. I am not sure I can ever fully recover from watching it myself.
This WSJ article outlines an upcoming contest. The contest is slated to last eight hours and feature seven disciplines including dressage (a multistep routine usually set to music) and barrel racing (moving in a cloverleaf pattern around three cylinders). Other challenges involve jumping over the kind of horizontally arranged poles seen in dog-agility courses.
While it might sound like a scene from a Monty Python movie, excelling at competitive hobbyhorse riding requires athleticism and some contenders pay for training. Riders are expected to clear poles as tall as the ones that men’s hurdlers leap over in the Olympics—3½ feet—all the while holding their stick horses. The hobbyhorse world record, set in 2019, is 4 feet 6 inches, per the Finnish Hobbyhorse Association.
Competitive hobbyhorse-riding traces its roots to Finland, where the Finnish Hobbyhorse Association has put on an annual contest for more than a decade. This year’s event in June featured approximately 300 riders and 1,600 spectators, according to the organization’s 20-year-old president, Julia Mikkonen, who has several hobbyhorse-riding awards.
If my kid came home and told me they wanted to compete in Hobbyhorse Riding, they would be grounded for life. Let’s bring sanity back to sports and end the rise of yet another absurd in sport.
Quick Bites
Wholesale inflation data rose .1% vs .2% expected on Tuesday driving markets sharply higher. On Wednesday, CPI came out in line with expectations at +.2% which means the 12-month inflation rate is 2.9%, while Core CPI was .2% monthly and 3.2% annual. Stocks could not easily digest the data and went from green to red multiple times in the first minutes after the 8:30 CPI release. The Dow and S&P rallied but the Nasdaq and Russell sold off on the day. Treasuries sold off initially on the news with the 2 and 10 year yields 3-5bps higher but the 2 year ended up +1bps and the 10-year -3bps. We had Home Depot report disappointing numbers and cite the slowing consumer, while Bank of America discussed “stretched” consumers as well. Oil prices rallied to $80 but have since fallen back to $77 with a potential ceasefire.
I have written extensively about the US $ falling in terms of reserve status. I recorded a short video explaining the fall of the US Dollar on YouTube with Peter Boockvar and Alicia Levine and feel it is a great way to learn about it. I never included or sent this link. This article goes into detail about how the USD has fallen 14% since 2002 to become 58% of global reserves. “The US dollar has served as the world’s leading reserve currency since World War II,” the report said. “Today, the dollar represents 58 percent of the value of foreign reserve holdings worldwide. The euro, the second-most-used currency, comprises only 20 percent of foreign reserve holdings.” “But in recent years, and especially since Russia’s invasion of Ukraine and the Group of Seven (G7)’s subsequent escalation in the use of financial sanctions, some countries have been signaling their intention to diversify away from dollars,” researchers at the Atlantic Council said.
The pace of de-dollarization has picked up in recent years, and the researchers pointed to one development that has hastened this trend: the growth of BRICS. Here is a thought. Fiscal responsibility and some balanced budgets rather than $2 trillion deficits to infinity.
I am a big fan of Serena Williams who I believe is the GOAT. However, what she is doing off the court is impressive too. Following her retirement in September 2022, Williams focused more of her attention on the investment arena. With over a decade of investment experience, she took a pivotal step in 2014 by establishing Serena Ventures, a venture capital fund specifically designed to champion women and underrepresented founders, according to its LinkedIn profile. “I invest in a lot of companies, early companies, and I’ve always done this. I’ve actually been investing for over 14 years and just been an entrepreneur while I was playing tennis. As noted on its website, the company’s portfolio comprises 79% underrepresented founders, 54% women founders, 47% Black founders, and 11% Latino founders. Williams was determined and has since invested in more than 85 companies. What’s more, Williams estimates that 14 of her portfolio companies have gone on to reach unicorn status. Having 14 unicorns (companies that achieve a valuation of $1bn or more) out of 85 investments is amazing. She is winning yet again.
Last summer, I wrote a piece entitled, “Botswana Beats the Hamptons in This Regard,” about the awful cell service in the Hamptons. There is a NY Post article that outlines how prevalent signal boosters have become in an effort to reduce dropped calls. In my 45 days in the Hamptons, I would estimate 100 dropped calls and countless hours of no signal at all. The article outlines a 7.5” antenna that people are putting on their cars in an effort to boost the signal. Cell reception in the Hamptons has long been an issue, especially during the busy months when city folks and their iPhones come up for the weekends en masse, temporarily tripling or even quadrupling the population in some areas. Cell towers that have been approved for activation in East Hampton and Sagaponack are facing lawsuits from residents and it’s unclear if and when they will be put into operation. Yes, the Hamptons are beautiful, but the combination of the traffic, prices, and lack of cell service make it so frustrating.
Although I received my MBA from the University of Chicago nearly 30 years ago, I do not believe an MBA is worth it for most students. I would consider a CFA today. I mentor 100 kids/year and talk about it with many. Marc Rowan (Co-Founder of Apollo) discusses his similar view in a short video. I do believe if you want to change careers, an MBA could be worth it, but most do not need one.
2024 Election
Joe Biden reveals reason why he pulled out of race for the White House
Biden and Pelosi have not spoken since he dropped out.
Hunter Biden asked State Department for help securing Burisma project in 2016
Goldman Sachs says voters are shifting to Kamala Harris—and the odds of a blue wave are swelling
Harris more trusted on US economy than Trump: poll
Everyone can hate Trump, I get it. He is hard to like. However, for a poll to tell me that people trust Kamala over Trump on the economy I am scratching my head. Trump’s economic policies around growth, regulation, taxes, and energy independence… dwarf anything out of the current administration or anything Harris has suggested. On Monday, the White House press spokesperson said that Harris policies were the same as Biden policies. Harris has stated she wanted to end private health insurance, pass the Green New Deal, ban fracking, decriminalize illegal immigration, abolish ice, defund police, raise taxes… Please tell me how this will make the economy in America better. Trump came up with no taxes on tips recently and Kamala copied it, trying to pass it off as her own. Remember, in 2022, VP Harris cast the tie-breaking vote to let the IRS track worker's tips so they can be taxed. Until someone can articulate to me what her economic plan is, I do not see how it is possible to trust her more than Trump on the economy.
Screenshots Before and After: Wikipedia Deletes J.D. Vance’s Wartime Medals and Awards
I don’t care who you vote for. I want you to vote for the candidate that you believe is best for the country or the policies you feel are important. However, the media is so incredibly biased that many Americans are never getting the facts. The media hated Harris (lowest approval rating of any modern VP) and now she is on the cover of Time in a glowing review, despite refusing to be interviewed for the article. The same media told us the Hunter laptop was Russian Disinformation, there was Russian collusion with Trump, the Steele Dossier was real and Biden’s slip ups and miscues were “right wing” lies. The media is now covering for Walz and his revisionist history of his military service. The media is covering for Kamala who they originally called the Border Czar; now remarkably they are saying she had nothing to do with the border. I just don’t understand how Harris can go from the lowest approval ratings to the savior of America without taking a question, announcing a policy or accomplishing anything of substance. I don’t like any of the candidates. I just want the media to stop pushing a ridiculous agenda. Kamala has yet to discuss her policies and there are none on her website. Additionally, she required government issued ID to attend her rally, but does not want IDs to vote.
Trump was interviewed by Musk and it started off poorly with technical issues, which Musk attributed to a cyber attack, causing a late start. Even before the interview began, the E.U. sent Musk a letter, threatening him if he spreads “disinformation.” During the interview, there were complaints about Trump slurring his words and speaking with a lisp. Was it a poor connection or was something else going on. The word, “dentures” started trending on “X,” suggesting Trump had some issues. I did not listen for the full two hours. The 20 minutes I caught did not sound horrible to me. Trump made a stupid comment about Kamala Harris’ appearance. Please stop. Talk about your policies. How is Donald Trump going to improve matters. Stay away from looks, ethnicity, and race discussions. Those topics are beneath the office of the President.
FBI probing alleged Iran hack attempts targeting Trump, Biden camps
Israel/Middle East
Around 30 rockets launched from Lebanon into Israel, IDF says
Israel preparing for large-scale attack from Iran as US orders warships to accelerate deployment
US approves $20 billion Israel weapons package, including fighter jets
Kamala Harris says there are ‘too many’ civilian deaths in Gaza after IDF strike on school building
Jordan will not be a battlefield for Iran or Israel, foreign minister warns
Jewish man stabbed by attacker shouting ‘Free Palestine’ and antisemitic slurs in NYC
Want to end hate crimes? MANDATORY sentencing of REAL TIME in jail. Let me be DA in NYC for 90 days. I guarantee results. I will do it gratis.
Short video explaining Jew hate.
Sadly, I agree with these comments.
Other Headlines
Some differing opinions of the market. I believe there is an undeniable slowing in the consumer (sentiment and spending) and hiring, and more signs of a mild recession are showing (2s/10s, Sahm Rule, falling commodity prices…for example). I do not see impending doom, but the likelihood of more volatility between economic data, earnings, slowing consumer, and geo-political risks is undeniable.
Veteran investor David Roche expects a bear market in 2025, caused by smaller-than-expected rate cuts, a slowing U.S. economy and an AI bubble.
Market sell-off won’t last for one key reason, CIO says: There’s no tech bubble
BofA CEO says research team ‘does not have any recession predicted anymore’
Chinese Stock Trading Plummets in New Sign of Waning Confidence
Lots of speculation about Chinese economy and leadership out there.
Starbucks replaces CEO Laxman Narasimhan with Chipotle CEO Brian Niccol
Stock was +23% on news, despite recent challenges in the US and Chinese markets. Chipotle was -8% on the day.
Restaurant CEOs’ new favorite word is value as they aim to bring back customers
LVMH puts mark on Olympics as luxury brands embrace sports
Louis Vuitton Moët Hennessy (LVMH) is investing 150 million euros ($163 million) in the Paris 2024 Olympic and Paralympic Summer Games.
‘Deadpool & Wolverine’ tops $1 billion at the global box office
A nice sign that people are going to theaters again. Inside Out 2 did over $1.5bn as well recently.
No more fiscal favors? Calls to tax super-rich gain traction around world
Outlines wealth taxes in numerous countries.
‘Pulling a Joe Biden’: Reactions to Japanese Prime Minister Fumio Kishida’s resignation
CA has over 172k homeless and Newsom has finally had enough. He has spent $25bn on this issue with little to show for it. There were 131k homeless in CA in 2018.
Who is paying for this? If you live in NYC, you are.
The government is failing its citizens by allowing chaos with no consequences for crime. Vote out woke DA’s who don’t believe in punishing criminals. As I mentioned in a recent piece, I saw someone pull out a knife on the subway last week.
How is this good for America? We need a real border and ANYONE who is
illegal and is charged with a crime needs to be deported IMMEDIATELY.
NYC migrant accused in vicious beating of Times Square cops arrested again after he’s bailed out
You cannot make up the idiocy in some cities.
Crazed man punches French tourist in the head outside Midtown NYC Burger King
I have never had an energy drink. Never tried coffee and don’t drink soda or tea. I am a water or wine guy. I feel these energy drinks are very dangerous.
Digital health company Ro launches GLP-1 insurance-coverage checker to help patients navigate costs
AI model 98% accurate in detecting diseases — just by looking at your tongue
I wrote an article about this topic some months ago. Insurance companies are using drones to check out your roof, see if you have an undeclared trampoline or zip line and check on the condition of your house. These insurance companies are looking for excuses to cancel you. If you need insurance in any of the 50 states, reach out to my sponsor, Lang Insurance. They saved me money and have worked with dozens of readers.
Insurers deemed mold too risky decades ago. That coverage gap still surprises homeowners
Oklahoma family recalls hospital nightmare after college students allegedly drugged at Cancun resort
This is crazy. They drank drugged water ordered from the swim up bar at the resort. One college student had convulsions and was intubated at the hospital. The suggestion was they were trying to farm out her organs, sex trafficking, or massively overcharge her. This is a scary story. They had to spend $60k in medical treatments. I would not allow my kids to go to Mexico alone.
The Michelin Guide announced eight exciting new additions to their 2024 guide.
I have not yet been to these restaurants but hear OssoBuco is amazing.
4,000-year-old Babylonian tablets finally deciphered to reveal alarming predictions
Ukraine pounds Russia with drones and says it is advancing deeper
Real Estate
Interesting WSJ article comparing buying a house in the 1980s with today. The conclusion is today is less affordable despite the fact that mortgage rates in the early 1980s were 18%. The article has a dozen good charts but I am only including a handful. Today’s housing market is the most difficult in decades, a great frustration for millennials and Gen Zers looking for a starter home. Baby boomers can relate. Home-buying affordability dropped last fall to the lowest level since September 1985, and it fell near that level again in June. In 1985, when Ronald Reagan was president and Microsoft launched Windows 1.0, millions of Americans of the baby boomer generation were in their late 20s and early 30s, the prime first-time home-buying years. They also found themselves priced out of the market. But because buyers in the mid-1980s had much more housing supply available, homes became more affordable as mortgage rates fell in subsequent years. First-time home buyers these days have it considerably harder. While affordability is likely to improve by the end of the year if borrowing rates ease and inventory continues to grow, it won’t get significantly better for home buyers without a lot more home building, economists say. This article is a good sign: Mortgage refinancing surges 35% in one week, as interest rates hit lowest level in over a year.
Article from Globe St “The Not-So-Hidden Secret of Multifamily Distress.” Multifamily distress has jumped 100 basis points between June and July, which CRED iQ called a "staggering" growth rate. At the end of the previous month, it sat at 8.4%, the fifth consecutive record high and up from 2.6% in January. That's the third highest stress level among property types, according to CRED iQ, and includes all multifamily-securitized CMBS financing. Office and retail were in worse shape, but there is something scary when deep problems appear in an asset class with natural ongoing demand and little to no room for tenants to walk away.
Another Real Deal article is entitled, “Office building tax assessments soar amid shrinking sales values,” and shows the pain landlords are facing. With the Big Apple’s office vacancy rates hovering just below 25 percent, the assessed market values on them have increased, boosting the city’s tax revenue, the New York Times reported based on a new state comptroller report. The overall tax-assessed value of the city’s towers has increased by $2.5 billion over the past four years. It ticked up from $202.3 billion in July 2020 to a current $204.8 billion. I spoke with the owner of a building in NYC that has seen taxes +40% in 4 years while the value of the building has been cut in half. Sorry, the math does not work. Vacancies, lower rents, higher costs in terms of labor and skyrocketing insurance and taxes make for a disaster.
For decades, my favorite cities in America were NYC, Chicago, LA and San Fran. Awful policies, high crime, homelessness, drugs, and covid mandates have pushed residents, companies and some tourists away. This Daily Mail article is entitled, “One of America's richest cities sinks in massive hotel debt - as tourists stop choosing it for their vacations,” and outlines the hotel issues in San Francisco. Weekend hotel occupancy in June, a rough gauge for leisure travel, is down 22 percent since 2019 in the San Francisco-San Mateo region, compared to four percent nationwide, according to data firm CoStar Group. The Californian city's two biggest hotels, the Hilton Parc 55 and Hilton San Francisco Union Square, have lost a combined $1billion in value, according to the Kroll Bond Rating Agency. Policies matter. Elections matter. Handing out drugs, soft-on-crime District Attorneys, rampant homelessness, high crime…. push away wealth and tourism.
© 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™ #709 ©Copyright 2024 Written By Eric Rosen.
THANK YOU. I received a lot of notes about people feeling it was crazy. Who makes this stuff up?
Thoroughly enjoyed your commentary on idiotic sports.