Opening Comments
Picture of the Day-California Wildfires
Roberto’s-Old School Italian with a Rustic Vibe
Quick Bites
Markets, Consumer Sentiment, M&A, Biden on Holiday
Taliban, Eviction Moritorium, WHO/China Debacle
NYC Gunman, Earthquake in Haiti
Virus/Vaccine
Data
CDC Mistake on Florida Data
Gottlieb on Delta
Hospital Beds
More 30-39 year old hospitalized
Florida Schools
Chart of Austrialian Lockdown Effectiveness
Real Estate
Housing Market Cooling
Most Expensive Small Towns in America
Opening Comments
In my last piece, I complained about spellcheck not working. However, I did not misspell reliant intentionally when I mentioned I had become too “relaint” on spellcheck. I did receive dozens of emails on the topic after sending it. I also received numerous notes about the music piece and it seems as though it resonated with many. I still do not have spell check on Substack and cannot figure out why. Expect more mistakes. Apologies in advance.
Summer is finally wrapping up and I am looking forward to my own bed and cooking in a couple weeks as well as doing some fishing. The rental car will approach 8,000 miles by the time it is turned in about 95 days from the initial rental. Right now, it is at approximately 7,200 miles.
With the end of August and people going on holiday, I am going to take a couple weeks off. Recent opens are dipping again. Enjoy the rest of the summer.
Lastly, I want to thank my loyal readers and contributors. So many of you send me story ideas, comments or links which help me a great deal. I appreciate it.
Picture of the Day-California Wildfires
A month-old wildfire burning through forestlands in Northern California lurched toward a small lumber town as blazes across the U.S. Western states strained resources and threatened thousands of homes with destruction.
Crews were cutting back brush and using bulldozers to build lines to keep the Dixie Fire from reaching Westwood east of Lake Almanor, not far from where the lightning-caused blaze destroyed much of the town of Greenville last week.
The entire town of about 1,700 people was placed under evacuation orders Aug. 5 as the blaze inched closer.
To the northwest, the Monument Fire — one of at least three large blazes sparked by lightning last month — continued to grow after destroying a dozen homes and threatened about 2,500 homes in a sparsely populated region. U.S. Forest Service officials said Friday that flying embers ignited spot fires as far as a mile ahead of the main blaze in the Shasta-Trinity National Forest.
Another article suggested 21k federal firefighters are on the scene, twice last year’s level.
Roberto’s-Old School Italian with a Rustic Vibe
I had not been to Arthur Avenue in many years. Jack had a practice round in Northern Westchester on Thursday and decided to stop for some Italian food on the way to NYC. We were torn on which place to try and I called a few friends. The consensus best place was Dominick’s, but they were closed for vacation. It is a family style restaurant with communal tables, but am told it is the best on the block for food. One reader told me the new Yankee Stadium has taken away a lot of business from Arthur Avenue as there are nicer restaurants at the stadium now.
We decided on Roberto’s, an old school Italian with a rustic vibe. We were very casual and the restaurant was half full. Between the menu and extensive specials, there is something for everyone (pastas, meat, fish, poultry) plenty of sides and nice antipasti.
We started with grilled calamari and shrimp, a simple dish wich was good. Jack and I split a special pasta with short-rib ragu which was solid. I had not had a short rib ragu in a long time and enjoyed it, but could have used a touch more sauce. The other entrée was a chicken Scarpariello. My issue with small pieces of boned chicken is there is not a lot of meat and it is a lot of work to eat it. I enjoyed the taste, but spent far too much time trying to get chicken off the bone. I could have eaten another entree as the heat definitely has sapped my energy recently.
Overall, I thought the ambiance was a little weak. The food was good, not amazing and the service was solid. The wine list is extensive. It seems Arthur Avenue could use some patrons. Head on over and check it out. I would think as temperatures drop a little, it would be a nice spot to walk around and explooure the restaurants around Arthur Avenue. The prices were reasonable, as they are not offensive, but not cheap.
Food-B
Ambiance-B
Service-A
Wine List-B+
Quick Bites
The S&P 500 and Dow hit fresh all-time highs on Friday as both indexes capped off modest gains for the week. The Dow finished the day up 16 points to close at a record 35,515, while the S&P 500 added 0.16% and finished at 4,468, a new closing record. The Nasdaq ticked up just 0.04% to 14,822. The blue-chip Dow and the S&P 500 rounded out the week with muted gains of 0.8% and 0.7%, respectively, amid light summertime trading volumes. The tech-heavy Nasdaq Composite underperformed this week, down just under 0.1%. “The SPX continues to grind higher amid mixed economic data and a lack of consensus among Fed speakers as to when to begin tapering,” wrote JPMorgan’s Andrew Tyler. “The bull case remains intact despite factor/sector leadership remaining inconsistent.” The VIX (measure of volatility) is almost at one year lows sitting at 15.5. Bitcoin is back to approximately $47k. Oil is at $68/barrel. Natural Gas is at $3.85, a very high level. A year ago it was at $2.23 and two years ago at $2.9. Traditionally, natural gas is lower in the summer and higher in winter. Nat gas is +42% YTD. Tight supply and the heatwave contributing to the rally.
U.S. consumer sentiment fell in early August to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases. The University of Michigan’s preliminary sentiment index fell by 11 points to 70.2, the lowest since December 2011, data released Friday showed. The figure fell well short of all estimates in a Bloomberg survey of economists.
A runaway 2021 merger boom with almost $1 trillion of pending deals in the U.S. threatens to run headlong into the Biden administration’s new, tougher antitrust regime. Federal Trade Commission Chair Lina Khan’s warning of a more aggressive stance to block deals, disclosed Thursday in a letter to Senator Elizabeth Warren, is the newest signal of a far more restrictive environment for mergers and acquisitions, according to lawyers and bankers.
President Biden got back to his vacation Friday, spending time at Camp David as the Taliban roars across Afghanistan and other crises mount on the home front. Mr. Biden is expected to spend the weekend at the presidential retreat in Maryland’s Catoctin Mountains before continuing his summer holiday next week at his home in Wilmington. Mr. Biden has made no remarks on the rapidly deteriorating situation in Afghanistan since Tuesday. He has no public events on his schedule this weekend. Meanwhile, nearly 140,000 new COVID-19 cases were reported in the U.S. on Thursday, up from the 35,000 new cases on the same date last month. Gasoline prices reached their highest level in years, but the pump isn’t the only place where consumers are feeling squeezed. Prices for goods and services are climbing higher in a wave of inflation. And Mr. Biden’s Homeland Security Secretary acknowledged this week the administration is facing a “serious challenge” at the southern border. In July, U.S. Customs and Border Protection apprehended 212,672 people, the highest total in two decades. You will not find a lot of reports calling out Biden for a rough patch, but I feel this has been his worst showing since his presidency began. The Afghan debacle is largely on him in my opinion as is the border and oil/gas situation. No, I do not blame him for the pandemic and have been clear I did not blame Trump either. Biden’s approval rating is hoovering in the 50% area (new lows) based on his recent performance. His public speaking engagements continue to be cringe-worthy in my opinion and he appeared to be confused on the White House lawn as well. I cannot imagine this President can make it through another 3+ years. Getting ready for the Kamala show. Her approval ratings have fallen as well and are not too pretty.
U.S. Marines began arriving in Kabul on Friday to help evacuate embassy staff as the Taliban offensive continued its sweep through Afghanistan. The battalions are expected to be in place by the end of the weekend, and will be capable of supporting the evacuation of several thousand people a day, both U.S. citizens and Afghan nationals. Militants captured two of the country’s largest cities in recent days, and a Pentagon spokesman said they appear to be trying to isolate Kabul before moving on the city. President Joe Biden, who in April announced that all U.S. forces in the region would be withdrawn by Sept. 11, on Thursday ordered 3,000 troops be temporarily deployed to the capital to help evacuate embassy personnel. The troops are expected to arrive within 24 to 48 hours. The below chart is telling with respect to Biden’s timing of the announcement. Will he take any responsibility and will the press hold him accounatable or will they be more interested in his favorite ice cream flavor? This is a WSJ article on the topic. Not pretty. Biden’s statement Sunday: “One more year, or five more years, of US military presence would not have made a difference if the Afghan military cannot or will not hold its own country,” Biden said. “And an endless American presence in the middle of another country’s civil conflict was not acceptable to me.” I think the charts below are pretty telling.
A federal judge has denied a request from landlords to put the Biden administration’s new eviction moratorium on hold — even though she believes the freeze is illegal. US District Judge Dabney Friedrich said Friday her “hands are tied” because she doesn’t have the authority to halt the moratorium. The Alabama and Georgia Association of Realtors filed a federal lawsuit in Washington, DC, last week pushing for evictions to resume after the Centers for Disease Control and Prevention revealed the temporary ban was reinstated and would expire Oct. 3. In a written decision, Friedrich said the CDC’s new temporary ban was “virtually identical” to the version she ruled was illegal back in May.
The World Health Organization expert who led a controversial joint probe into the origins of the coronavirus pandemic says in a documentary airing Thursday night on Danish television that Chinese colleagues influenced the presentation of their findings. Speaking to Danish documentarians, Peter Ben Embarek said Chinese researchers on the team had pushed back against linking the origins of the pandemic to a research laboratory in Wuhan in a report about the investigation. “In the beginning, they didn’t want anything about the lab [in the report], because it was impossible, so there was no need to waste time on that,” Ben Embarek said during the interview. “We insisted on including it, because it was part of the whole issue about where the virus originated.” I have been consistently critical of both the WHO and CDC for the handling of the pandemic. Yet another example of the WHO’s failures. The WHO is in the back pocket of the Chinese government. Trump was 100% correct in withholding funds to the WHO in my opinion.
Disturbing new video shows a gunman open fire in broad daylight while running in the middle of a Harlem street. The video, released by the NYPD Thursday, shows the triggerman blasting off multiple rounds at an unknown target just before 1:45 p.m. Aug. 1 on 7th Avenue near West 148th Street, according to police. No one was injured, police said. The shooter took off on a scooter heading south on the avenue, cops said.
At least 227 people were killed and hundreds were injured and missing after a 7.2 magnitude earthquake struck Haiti on Saturday, and Prime Minister Ariel Henry said he was rushing aid to areas where towns were destroyed and hospitals overwhelmed with incoming patients.
Virus/Vaccine
The data remains concerning, but case growth is slowing. Cases grew 66% in the prior two weeks. For perspective, on July 24th, the prior two-week case growth was+172% and on August 3rd it was 139%, so the growth rate appears to be slowing. However, cases are up from 12k at the end of June to 128k/day. Hospitalizations grew 74% in the prior two weeks and now are running just under 73k after being approximately 16k at the end of June. Deaths are up 116% in the prior two weeks and are averaging 651 for the 7-day average and were at 175 in early July. The death rate has increased sharply recently as at July 24th, deaths were growing at 19%, August 3rd at 49% and now over 100%.
The CDC is misrepresenting Florida’s coronavirus case counts from this past weekend, according to the state’s Department of Health (DOH). On Monday, the CDC announced that Florida had reported new 28,317 cases for Sunday, August 8 — a figure that would have set a new record in the Sunshine State. It also reported 28,316 new cases for the day prior, and 23,903 for last Friday. State officials dispute those numbers. On Monday night, the DOH’s official Twitter account stated that the number of newly recorded cases for all three days was substantially lower than what the CDC is claiming, coming in at 21,500 on Friday, 19,567 on Saturday, and 15,319 on Sunday. I have been consistently critical of the CDC and WHO. Here is another example. I do not know if it was an honest mistake or politically motivated, but the CDC must be better. We rely on their unbiased data. Make no mistake, Florida is still a mess, but the CDC case numbers were far higher than actual it appears.
Dr. Scott Gottlieb told CNBC on Friday he expects the coronavirus to become an endemic virus in the U.S. and other Western countries after the recent surge in delta variant infections calms down. “We’re transitioning from this being a pandemic to being more of an endemic virus, at least here in the United States and probably other Western markets,” Gottlieb said on “Squawk Box.” An endemic virus is one that remains in the American population at a relatively low frequency, like the seasonal flu, for example. “You’re going to see the delta wave course through probably between late September through October,” Gottlieb said. “Hopefully we’ll be on the other side of it or coming on the other side of it sometime in November, and we won’t see a big surge of infection after this on the other side of this delta wave.” I find it hard to believe the Delta wave will last as long as Gottlieb suggests looking at other curves. I will be shocked if Delta is still climbing in October based on other curves, the vaccine, immunity from contracting the virus, more strict rules…
With Covid-19 case numbers surging across the United States and many unvaccinated Americans falling ill, the number of available hospital beds has been dwindling in parts of the country. Some hospitals now report their intensive care units, which are usually reserved for the most critically ill patients, are full -- a grim reality that's forcing health care leaders to make tough decisions, whether that be redirecting new patients to other facilities, canceling surgeries or creating makeshift ICU beds in the middle of emergency rooms. More hospitals are limiting elective surgeries and procedures. I am hopeful we have weeks, not months before we see a break. As mentioned, case growth is slowing. I still need a colonoscopy and am holding off again in light of the recent surge.
Thirty-somethings, who are in prime ages for work and parenting, had largely avoided hospital stays for Covid-19 during earlier phases of the pandemic because of their relative good health. Yet the age group is seeing new Covid-19 hospital admissions increase during the recent Delta-driven surge, which doctors and epidemiologists attribute to the failure of large numbers of Americans to get vaccinated and their highly active lives. The rate at which adults ages 30 to 39 are entering hospitals with Covid-19 reached about 2.5 per 100,000 people as of last Wednesday, according to the latest data from the U.S. Centers for Disease Control and Prevention and Department of Health and Human Services, up from the previous peak of roughly 2 per 100,000 people in early January.
Just days after fall classes started for Florida's Brevard Public Schools and after the school board voted against a mask requirement, there are more than 470 Covid-19 cases among students and teachers and roughly 1,060 people are in quarantine, according to the latest data from the district. Of the 473 positive cases, roughly 385 are students and 88 are employees, the data shows. The cases are distributed across more than 50 elementary, middle and high schools and account for less than 1% of the district's total student population, which is around 73,000. Classes began on Tuesday. The private schools start this week and I fear we will see more outbreaks as kids go back to school with many unvaccinated.
This chart does not seem to be a ringing endorsement of lockdowns in preventing the spread. It seemed to happen in CA when lockdowns were in place, people were gathering in friend’s homes. Not sure about the Aussies.
Real Estate
The pandemic created a frenzied real estate market in much of the United States that has yet to let up, with demand for housing still outpacing the number of homes coming on the market, giving sellers a heavy upper hand in most of the country. But economists say the market cooled off a bit in July — perhaps a sign that the wild price appreciations of the past year may have scared off some buyers who prefer to wait until things calm down, to stay put or to continue renting. Nationally, U.S. median home prices held steady from June to July at $385,000. That’s up 10.3 percent from last year at this time, according to the latest data from Realtor.com. It’s slower growth than the 12.7 percent increase in June 2021, and it marks the third month in a row in which the year-over-year gains have slowed. I hope this is the case. The R/E markets have defied logic and crap is selling at insane prices in virtually every market. The trend of insane growth just cannot continue.
Big-city dwellers may dream of slashing expenses by moving to the country. But owning a home in a small town can be just as costly as a major metropolis — and in some cases, properties may be pricier. That’s according to a study from LendingTree, which analyzed home prices in some of the country’s most expensive small towns. The analysis shows the most expensive small towns are typically popular vacation spots for the affluent, where homebuyers make their money elsewhere. For example, Vineyard Haven, Mass., Breckenridge, Colo., and Jackson, Wyo., have median prices at $699,500, $579,600 and $549,800, respectively. By comparison, someone may spend $613,400 on a home in Los Angeles or $563,700 on property in San Diego.
Traditionally, buying a home instead of a renting one has often been considered the better option because you’re building equity. But as of late, as the pandemic has transformed the U.S. housing market, renting is coming out on top for those looking for no-stress monthly payments. According to a recent LendingTree study, costs related to renting were lower than those of homebuyers with a mortgage. “Across all of the nation’s 50 largest metropolitan areas, renting is considerably cheaper than homeownership until you’ve paid your mortgage off,” says Jacob Channel, chief economist at LendingTree. “Often, home prices and rent prices rise together. Although lately what we’ve been seeing is that home prices have been rising considerably faster than rent costs are.”