Opening Comments
Picture of the Day-Government Photoshop FAIL
Planes, Rental Cars, Ubers, Oh My!
Quick Bites
Markets, Diller on Movies, Biden on Big Tech, Hospitality Workers
Used Vehicle Prices, Value of Advanced Degrees
Rudy on Adams, Hamptons Squatter
Schools Teaching Whiteness Contract with Devil
Cost of Retirement, SEC Diversity Data, Olympics, Scary China Drone
Branson
Virus/Vaccine
Data-Cases +59% in the US in two weeks-Check this section today
Death Toll
Delta Shot
Unvaccinated Deaths
European Summer Travel-NOT
Real Estate
Record R/E Commissions
Surging Rents in the US
Older Miami Condo Pricing
Video on NYC Landlord Attempts to keep Office Tenants
Opening Comments
It was nice to sleep in my own bed in Florida, but duty called and I need to put back on my chauffeur hat and caddy bib to take Jack to tournaments. The break was much needed and eating home cooked food was a game changer. I made steak, salmon, chicken, fresh veggies, salads. Nice to not eat out three meals a day. Worked out every day and played a little tennis too.
The good news is I am receiving a ton of positive feedback from readers letting me know they enjoy The Rosen Report, the fun stories and find articles informative. Readers are opening far more of the links, but I continue to struggle with opens (50-60%) relative to 80-90% six months ago. I think part of it is delivery issues of Substack and part is with back to work, readers are not glued to screens as much. Contemplating pulling back to one time a week for a bit to see how things shake out.
In Quick Bites today, I have a bullet on the cost of retirement with my personal experiences, which some of the readers may find interesting. Today’s note has some interesting charts for my lazy readers who prefer pictures. Please remember, some email systems truncate the Rosen Report, so you need to click on the bottom to get the entire report.
Please pay attention in the Virus/Vaccine section today. Cases are up sharply, but far lower than the January 2021 peak levels. I just want to be sure people are paying attention to the new variants (Delta/Lambada).
Was on Jack’s bag in the rain all day. I am sure I missed a bunch of news today. Apologies. Novak Djokovic won his 20th major at Wimbledon today and is one win away for a calendar Grand Slam. In a recent note, I spoke about tennis greats and called Novak the winner. Now Federer, Nadal and Djokovic each have 20 majors. I think the Djoker has more to do and will solidify his place at the top of the list among a remarkable group of champions. For perspective, the Big 3 have won the last 56 out of 65 majors. That is called, “DOMINANCE.”
Picture of the day
The Office of the Director of National Intelligence (ODNI) was roundly mocked on social media Thursday for using an image on the cover of its annual diversity report that was obviously Photoshopped. The report, subtitled “Hiring and Retention of Minorities, Women, and Persons with Disabilities in the United States Intelligence Community,” featured a photo of smiling, diverse office staffers standing in a lobby, flanked by a woman in a wheelchair and a blind man with a seeing-eye dog. The title of the image on stock photography company Shutterstock is: “Portrait Of Multi-Cultural Office Staff Standing In Lobby.” Is this really what we have come to as a nation? We are so set on being woke that the ODNI is buying pictures on line AND photo-shopping in disabled people in an effort to appear diverse. It is revolting and disgusting. I find it sad, but awfully comical that this is how it played out. It looks as fake as a Kim K selfie with the curtains curved in the background. Is this the best our government can do? None of these people work for ODNI. What do you think world leaders are saying about us when we are caught faking diversity? Thanks RM, for sending me this article.
Planes, Rental Cars, Ubers, Oh My!
I have spoken at length about the various prices of homes, cars, commodities, consumer products, semiconductors, appliances, furniture, gasoline, salaries, logistics/shipping, and the list goes on. I was going to fly back to NY on Thursday night and my ticket was $220 on JetBlue and $280 after buying extended leg room. Of course, my flight was delayed. It was scheduled to take off at 3:45 but kept being pushed back. Once the new posted departure time was 9:00pm, I had no faith it would take off at all. So I decided to change my flight for the next morning and get my luggage back. I left the airport at 7:15pm and went back home. I later discovered the flight did not take off until midnight - 8 hours and 15 minutes after scheduled departure. Serenity Now. Nothing like sitting in an airport for 4 hours during a pandemic. This story gets better. I rescheduled my flight for Friday am from West Palm Beach at 8:15 and received a notice of another delay given the crew was en route, so I changed my flight yet again and finally left from Fort Lauderdale.
I wanted to rent a car at Newark and many of the rental car companies were sold out. Budget had no cars at Newark. I went on some third party service and look at the price of a car for one day and it is more than the flight. Look at the crap cars below. It is not as though I am trying to rent an Escalade or a Porsche. A Nissan Versa is $353/day. The car is for a Lilliputian. It suggests it seats 5 people. Maybe it seats 5 people who are less than 4 feet tall. A Nissan Pathfinder was $523/day. If you are traveling, be sure to have rental car solutions for your trip, as it very well may prove to be the most expensive part of your journey. I rented a car for 100 days and booked it a couple months ago. I got $65/day, but was initially quoted double that amount. Could you imagine if I tried to get that large SUV today for the rest of the summer? It would cost tens of thousands of dollars and be more effective to buy a car and sell it after the summer despite the friction costs. I have been told by a few readers about a company called Turo where individuals rent out their cars and given the pricing of the rental car industry, you can save money. I am yet to do it, but just went on the site and you can get better cars for cheaper than I would have thought. Sounds like AirBnB for cars. No idea how it works. I am told there is an app I have yet to download.
In a related matter, what about Uber & Lyft prices. Initially, the companies were subsidizing rides which were making them cheaper than cabs. It was awesome. I could not believe how cheap it was to get around NYC in an Uber. At one point there were 4 or 5 companies competing for your business and they were constantly offering 30-40% off rides. I took rides for $5 across town. It was too good to be true.
On one vacation to Miami about 5 years ago, we did not rent a car and just took Uber/Lyft around town. We saved a fortune and never had to find parking. I hate the hotel parking racket at $50/night and every time you go out to dinner, it is another $20. The only issue with Miami car services is that the chances of finding an English speaking driver are on an asymptotic line approaching zero.
Well, those cheap rider sharing services are over. My wife took an Uber from the UES of Manhattan to Newark airport and it cost $141. What? When I lived in NYC, that would have been $80. Given rental car prices, I thought I would take an Uber from Newark to PA. Well, they wanted $323 when I checked it mid-day, but ended up coming down to $230 when I checked later in the day. It is 78 miles. Given Uber lost $6.7bn last year, they are now focusing on trying to reduce losses. I guess that is a good thing for shareholders, but not so good for me trying to get from Point A to Point B.
Quick Bites
All three major averages notched record closes on Friday, rebounding from the previous session’s losses over concerns of a slowdown in global economic growth. The Dow rose 448 points, or 1.3%, to a record close of 34,870. The S&P 500 bounced by about 1.1%, closing at an all-time high of 4,369. The technology-heavy Nasdaq Composite rose just shy of 1% to close at a record of 14,701. The S&P 500 earned its sixth week of gains in seven. Friday’s comeback brought all three majors averages into the green for the week. The Dow rose 0.2% for the week. The S&P 500 and Nasdaq gained 0.4% and 0.4% since Monday, respectively. The stocks that led the losses on Thursday, reopening plays and banks, notched gains on Friday. Bank of America jumped about 3.3%, leading a bounce in financial shares. Royal Caribbean popped 3.6% and Wynn Resorts gained close to 2%. American Airlines and United Airlines both gained more than 2%. The small cap benchmark Russell 2000 rallied more than 2% on Friday.
Barry Diller made his name in the film industry as the chairman and CEO of two Hollywood studios, Paramount Pictures and what was then 20th Century Fox. Now, he is declaring the industry dead. "The movie business is over," Diller said in an exclusive interview with NPR on the sidelines of the Allen & Company Sun Valley Conference, a media and technology conference in Idaho. "The movie business as before is finished and will never come back." Yes, that has to do with a substantial decline in ticket sales and the closure of movie theaters during the coronavirus pandemic. But Diller, the chairman and senior executive of IAC, a company that owns Internet properties, said, "It is much more than that." According to Diller, who ran Paramount and Fox several decades ago, streaming has altered the film industry in substantial ways, including the quality of movies now being made. I was a huge movie person and have not been to a theater in almost two years. I am not rushing to go back. I prefer to watch a movie in my house. One person in R/E was telling me that the issue with movie theaters is they are hard to re-purpose given the layouts and closed movie theaters cannot easily be used for other businesses. I had not thought of that issue. This CNBC article suggested that the movie business was bouncing back until Delta emerged.
President Joe Biden signed a new executive order aimed at cracking down on anti-competitive practices in Big Tech, labor and numerous other sectors. The sweeping order, which includes 72 actions and recommendations that involve a dozen federal agencies, is intended to reshape the thinking around corporate consolidation and antitrust laws. Biden’s administration laid out the case that the biggest companies in the tech sector are wielding their power to box out smaller competitors and exploit consumers’ personal information. Yes, I believe Big Tech has become too powerful, especially Google, Facebook, Twitter and Amazon. Lots of info in the article.
A third of former hospitality workers say they won't return to the industry at all, per a survey by Joblist. They want better pay and benefits than the industry can offer, they say. Hospitality pays less than other industries, but the labor shortage is forcing companies to push wages up. Half of former hospitality workers said that they wouldn't return to their previous job in the industry, according to the survey. A third of former hospitality workers said they weren't even considering reentering the industry, according to Joblist's second-quarter survey of around 13,000 job seekers, first reported by Bloomberg.
Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.3% month-over-month in June. This brought the Manheim Used Vehicle Value Index to 200.4, a 34.3% increase from a year ago. On a year-over-year basis, all major market segments saw seasonally adjusted price increases in June. Pickup trucks outperformed the overall market, while most other major segments underperformed the overall market. The Manheim Used Vehicle Value Index below says it all. I spoke with car dealer. He said, “New car inventory is running 70% below normal and we are charging $2k over sticker, while others are charging as much as $5k for new cars.” He also received a Kia Telluride in from some moron who did not like it. Only had a couple thousand miles on it and was in perfect condition. He sold it well above the original sticker. So much for a car depreciating when you drive it off the lot.
Interesting WSJ article on graduate degrees and the cost vs benefit which is entitled, ‘Financially Hobbled for Life’: The Elite Master’s Degrees That Don’t Pay Off. I am personally not a fan 75% of the time. I believe many people should not even get a four year degree, but focus on a vocational education. The cost of a degree or graduate degree is very high and I am not convinced it is worth it. You take two years away from work while spending a couple hundred thousand. In my Wall Street experience, I rarely hire MBAs despite having one myself. I would never recommend getting an MBA today. Take the CFA instead. Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000. Yet two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year. The Columbia program offers the most extreme example of how elite universities in recent years have awarded thousands of master’s degrees that don’t provide graduates enough early career earnings to begin paying down their federal student loans, according to a Wall Street Journal analysis of Education Department data.
Eric Adams won the Democratic primary for mayor because he was the only candidate promising to do something about New York City’s crime problem. It’s a big job, so here are five tips from the most successful law-and-order leader the city has ever had: Rudy Giuliani. I was a fan of Rudy as my Mayor, but unfortunately, as I have mentioned, his recent actions and behavior have been a bit disappointing. The article goes into great detail and feel Adams needs to consider some of Rudy’s ideas.
Restore the anti-crime units
Reinstitute a modified policy of stop-and-frisk
Re-fund the police
Restore qualified immunity and morale
Scrap Cuomo’s bail reforms
Is this really what the eviction laws are supposed to do? A Hamptons squatter wont leave the home of a Holocaust survivor. To top it off, the squatter trashed the house and is now claiming financial hardship. She is a real estate agent. She must be awful because any real estate agent I know absolutely crushes it given the pandemic. Julie Rinke is the squatter. Do me a favor and don’t use her for your real estate needs in Long Island.
Markon owns the home and flew from Israel to use it and is unable to access the house.
More than two dozen public schools and school districts are pushing what critics say is a toxic kids' book that features a "[W]hiteness" contract with a devilish figure. A list published Thursday shows districts or individual schools in more than a dozen states promoting the book "Not My Idea" by Anastasia Higginbotham. Released by anti-critical race theory activist Chris Rufo, the reporting focused on public schools or districts. One was a Native American tribal school. I understand the reasons behind the new woke agenda, but I struggle to comprehend why teaching everyone to hate Whiteness is the result of it. If this is what schools want to teach, my children will not be enrolled. If your children are enrolled in schools which are teaching agendas you don’t feel are appropriate, hit em wear it hurts and reconsider your charitable gifts to the school.
People often underestimate how much their ideal retirement will cost, according to author Dan Ariely, a professor of behavioral economics at Duke University. Being tied to an office all day can make it harder to spend money, said Ariely. In retirement, the new hobbies and activities you pick up to fill your leisure time will eat into your fixed income. The best-selling author conducted a study that found most people expected they would need to replace about 75% of their salary to fund their retirement. Researchers then calculated how much the respondents would need based on their planned lifestyle. The numbers were way off, Ariely said. I feel I am able to give a very good perspective on this one. I agree that new hobbies add to your costs, but most of the people on my distribution who work live in NYC, CT, NJ, Long Island, Chicago, LA, SFO… They live in higher cost of living and higher tax states. I have found that despite my new hobbies, I spend about 60% of what I did in NYC NOT considering the tax ramifications or money taken out of the sale of the NYC apartment relative to the cost of the Florida home. Mind you, today, the R/E angle looks much different than 4 years ago with the moves in Florida prices. I find it is so much cheaper to live in Florida and believe if you retire, you probably don’t want to live in a high cost city with high crime, high taxes and bad weather. If you do it carefully, you can absolutely save money relative to when you were working. I also assume in many cases, while you were working, you needed a bigger apt/home given the kids were living with you. When you retire, you tend to be empty nesters and can downsize. I also feel that those living in the fast lane won’t fully retire and will be doing something on boards, consulting… which will lead to income. In a related story, this shows Georgia is a better state for retirement than Florida given costs. GA is the 3rd most affordable state, while FL is #14. One problem, I would never live in GA. I would live in FL, NV, TN, or MT. I have been planning to check out Nashville, but the pandemic got in the way. I have heard amazing things about it.
According to this Bloomberg article, the SEC may require fund managers to disclose staff diversity data. For another time, over drinks, I can tell readers a funny story of my meeting with Gensler (now SEC Chairman), which took place when he ran the CFTC. “I have asked SEC staff to consider ways that we can enhance such transparency,” Gensler said Wednesday at an SEC event. That could include requiring disclosure of “aggregated demographic information about an adviser’s employees and owners,” he said. Am I supportive of diversity? 100%. I am not opposing the idea of requiring the data be shown. I am concerned about what unintended consequences of showing the data might become. I feel strongly that the best and most qualified person should get any job. I worry that imposing these disclosure rules will push funds to hire people which check boxes, but may not always be the best candidates. I don’t know about you, but if a manager is investing my hard earned dollars, I want the most qualified people making the decisions. I don’t care about their race, gender or sexual preference, but care that they are the most well-suited individuals for the role. Undoubtedly, fund managers will scramble to meet presumed diversity requirements which could lead to the best person potentially not getting the role. I am sure some funds will get creative like the ODNI (picture of the day today) and Photoshop in diversity as well.
Japanese Olympics sponsors are cancelling or scaling back booths and promotional events tied to the Tokyo 2020 Games, frustrated by "very last minute" decisions by organisers and a delay on whether spectators would be allowed, sources told Reuters. The moves by more than a dozen companies, including Canon, Tokio Marine & Nichido Fire Insurance and Ajinomoto, highlight the delicate situation for sponsors, who have tied themselves to a Games now hit by the COVID-19 pandemic and public opposition. I feel for the athletes and their families. These athletes have worked years to prepare for this window and they cannot share it with spectators. Really sucks. China took yet another thing away from the world with their lies and deceit. Oh yeah, 4mm deaths and trillions of damage.
China has revealed it is developing a top secret underwater drone designed to track and destroy enemy submarines with no human input. The unmanned attack robot was first test fired in the Taiwan Strait a decade ago but its existence was not made public until now. The project to build the drone was funded by the People's Liberation Army and dates back to the 1990s, reports the South China Morning Post. Under testing, it was reportedly able to detect a dummy submarine, identify its origin and hit it with a torpedo. The craft is said to rely entirely on artificial intelligence and does not need any instructions from an operator. Just what the world needs, China with more fancy toys which can kill with no human interaction. I have been crystal clear that I blame the Chinese government for the pandemic, cover up, deaths, destruction. I do not trust them and this program is quite concerning.
Two Haitian-Americans with ties to South Florida — including one who previously worked as a bodyguard at the Canadian Embassy in Haiti — are among the 28 alleged assassins of President Jovenel Moïse, officials announced Thursday. James Solages, 35, and Vincent Joseph, 55, allegedly took part in the brazen attack on the Haitian leader, who was reportedly shot a dozen times at his Port-au-Prince home on Wednesday, officials said. His wife, Martine, was critically wounded. The two men were paraded along with 15 other suspects, all Colombian nationals, in front of journalists during a press conference late Thursday. In all, the hit squad comprised 28 gunmen, including 26 Colombians, officials said
Branson made it to space and back and has no additional plans for new trips. Big accomplishment. Exciting to see how far things have come with private companies and space travel.
Virus/Vaccine
SUBSTANTIAL increase in cases in the US. According to the NY Times data, the two week increase is +59% despite a 14% reduction in testing. Again, cases are fractional to peak levels, but now up sharply from a few weeks ago. For perspective, the US is now averaging 19k cases/day vs 254k/day peak. Hospitalizations are +5% over two weeks, but deaths are -27% and now total 225/day for the 7 day average. On vaccines, the data continues to dwindle and we are down to 500k/day vs 3.4mm of peak in mid-April. The US now has 52.1% of people fully vaccinated. I presume the lower deaths are largely attributable to vaccines and improved treatments. Also, deaths lag cases/hospitalizations, but do not expect to see a massive increase. Remember, peak deaths were well over 3k/day.
The global death toll from Covid-19 has reached 4 million, as a growing disparity in vaccine access leaves poorer nations exposed to outbreaks of more infectious strains. Even as rapid vaccine rollouts allow life to start to return to normal in countries like the U.K. and U.S., it’s taken just 82 days for the latest million deaths, compared to 92 days for the previous million, according to data from Johns Hopkins University. The real toll could be far higher than reported because of inconsistent calculations around the world. The developing world is shouldering a rising death toll. India accounted for 26% of the increase from 3 million to 4 million deaths, and Brazil about 18%. By comparison, the U.S., where more than 332 million shots have been administered, accounted for about 4% of the rise. The U.K. accounted for just 1,000 of the extra deaths, the data showed.
Pfizer and BioNTech announced Thursday they are developing a Covid-19 booster shot intended to target the delta variant as concerns rise about the highly transmissible strain that is already the dominant form of the disease in the United States. The companies said although they believe a third shot of their current two-dose vaccine has the potential to preserve the “highest levels” of protection against all currently known variants, including delta, they are “remaining vigilant” and developing an updated version of the vaccine. For each new variant, we will need a booster? I am out. What about Lambada? Where does it end?
This CNBC article suggests virtually all new COVID-19 deaths are unvaccinated people. Almost no one who has been vaccinated is being sent to the hospital or dying from the coronavirus, White House officials said. The remarks came as President Joe Biden’s Covid team focuses on the portion of the population that has not been inoculated against the virus. The continued push for vaccinations is now competing with the rise of the highly transmissible delta variant in the U.S.
France is warning its citizens against vacationing in Spain and Portugal in the latest sign that the rapid spread of the delta variant of Covid-19 could wreck Europe’s summer. With the migration of tens of thousands of holidaymakers already underway on the continent, European Affairs Minister Clement Beaune issued a “message of caution” and advised those who haven’t yet booked to go elsewhere or vacation domestically. The comments come as European Union countries introduce vaccination certificates intended to make travel easier. But the delta strain and the pickup in virus infections are hindering the reopening, with some governments delaying plans to ease restrictions, or even reintroducing them in some hotspots. No, I would not travel to Europe, Asia or Latin America this summer. My travels will be in the US for now, but next summer, we plan to to the kids for their 1st European vacation. Just maybe we make a documentary out of it. I have a feeling, it would rival the Chevy Chase “Vacation” movies from the 1980s.
Real Estate
The hot U.S. housing market is poised to deliver a banner year for real estate agents. Commission revenue -- the cut that brokers collect for helping buy and sell homes -- is on track to surge 16% in 2021, surpassing $100 billion for the first time, according to a new analysis by Knock, a property-technology company that lends customers money to buy a new home while helping them sell their old one. Personally, I am a bit surprised that commissions have not been cut sharply in the new tech world order with Zillow, Streeteasy and others. Many sellers still pay the full 6% on large sales (over $10mm). This is shocking to me. I negotiated my NYC sale to 4% and had throw up in my mouth when I had to pay it. Between co-op flip taxes, broker fees, cap gains, Obama Health Care tax…. it becomes incredibly costly. The Hamptons squatter must be quite bad at her job if in this market she is not selling R/E given the chart below.
Article from WaPo regarding surging rents in the US. Nationwide, rent prices are up 7.5 percent so far this year, three times higher than normal, according to data from Apartments.com. Analysts expect rent prices to keep climbing for the foreseeable future, a major burden for renters and a warning sign that higher inflation could linger far longer than the White House and Federal Reserve keep predicting.“I think we’re going to see increases for the next 12 to 18 months,” said Robert Pinnegar, president of the National Apartment Association. “We’ve never had three generations in the rental housing space, at least not in the numbers we’re seeing now.”
Interesting article from the Real Deal about pricing and demand for older condos on the heels of the building collapse. There has always been a pricing differential for old and new. However, the collapse has older building condo owners in a panic for obvious reasons. At some differential it makes sense. If I were buying a Miami condo today, I would demand a structural engineering report. The condo collapse in Surfside has put older buildings under the microscope: pausing deals, propelling associations to move forward with repairs, and generally creating trepidation for buyers and sellers. The partial collapse of Champlain Towers South, a 12-story, 136-unit condo on the southern border of Surfside near Miami Beach, is expected to lead to lower pricing in older buildings, experts say. Buyers, lenders and insurers will likely demand more information on inspections, repairs and recertifications than ever before. Ana Bozovic, founder of Analytics, a Miami-based real estate data firm and brokerage, called it a “real come to Jesus moment.” The effects go far beyond South Florida, as residents of older communities around the country are now flagging their concerns over delayed repairs, spotting rusty rebar, cracked concrete and leaks. “I’ve never in 15 years had anyone ask me how structurally sound a building is,” said Mark Zilbert, owner of the brokerage Zilbert. “After what recently happened, it will come up in every conversation.
CNBC video about how landlords are trying to keep commercial office tenants in the buildings. Some landlords are installing speakeasies, gyms, art installations, and remodeling lobbies. Landlords are also having to offer major rent concessions in terms of free months rent with many tenants wanting to downsize as well.