Sad Day For America
6/30/24
Opening Comments
My last piece was about my sale shopping skills where I decided I am the GOAT on all things sale related. One of my readers questioned my blazer purchases, suggesting they won’t get worn. In one week, I wore two of them. Blue and black blazers will get lots of use, especially in NYC, as they are both lightweight and a perfect fit. The most opened links were the Ozempic weight loss and risk story and the armed moped riders stealing the $100k watch outside of Carbone.
My recent piece on my mentorship program is still resulting in more impressive signups of mentors with amazing backgrounds. I have consultants and lawyers as well as professionals in R/E, P/E, and Hedge Funds, Family Office, Advertising Software, Accounting, Tech, and Energy all willing to help me help the next generation of leaders. After a mentee reaches out to me and we speak, I will then connect them with the appropriate mentor from my list.
On Tuesday, I was invited to Chris Broder’s (JPM Bond Trader) retirement party after 28 years athe firm It was great to see the old team and Broder was a solid trader who worked on my team for many years. Good luck to him in the next chapter. Broder has the tie on in the photo below.
Last year, I wrote a newsletter entitled “Hamptons-Bloom Is Off the Rose.” After spending 8 hours in the Hamptons, I am not swaying from that statement. We were invited by our dear friends, Brad and Lisa, to have a drink at Senonack Golf Club Friday night. I love it there. The setting is stunning and I always enjoy my time with Lisa and Brad. We left the house at 7:01pm and at 8:15pm we were still 1 mile away from the club. How far away was Sebonack from the house? A total of 5.5 miles. Don’t get me wrong, the Hamptons are beautiful. But they are too crowded today to justify the expense. We turned around and went back home. All-in, it took 1:35 minutes to never get to our destination. To make matters worse, there was no cell service and we were unable to reach our friends to tell them why we were no-shows. I already have blood pressure issues. I did not need this on Friday night. Let’s not forget about last year’s note comparing cell service in the Hamptons to Botswana.
Markets
JPM Market Sell-Off Call
Phantom Debt/Buy Now Pay Later
Walgreens Earnings
Great Wealth Migration
US Rental Market
Monoco Rental Market Insanity
Home Prices Cooling
More Commercial R/E Woes
Pictures of the Day-Uber is Too Expensive
I cannot take it anymore. Uber was the best thing ever a dozen years ago. Now, the pricing models in NYC blow my mind in a bad way. After dinner Wednesday night in Noho, I wanted to go 3.3 miles to the Upper East Side. The quoted rate was $61.96 BEFORE tip. It was not raining. Including a 15% tip, it would have been $21.6/mile. I refused to take an Uber and walked a few blocks to get a cab that cost $24.50 WITH tip.
Democrat Debate Disaster
During the 2020 Presidential campaign, I began questioning Joe Biden’s mental acuity and felt even then that he was too old and unfit for office. As a result, I was called a MAGA-hat-wearing nut. When I inserted videos into the newsletter showing an unsteady Biden, I was told it was a bad camera angle and “Fox News Propaganda.” For four years straight, I have been vilified by left-leaning readers for speaking the truth about Biden.
Thursday night’s debate, which had 51 million viewers and was the most watched event in CNN history, showed the world that I am not crazy, that Biden cannot run for President, and that, in my opinion, he lacks the ability to stay President for the remainder of his term.
Biden looked old and frail. His voice was weak. He had multiple incidents where he made zero sense after mumbling. The Democratic party, Jill Biden, Joe Biden and his family should be ashamed that they are making a man in Biden’s condition run. What about the doctors at Walter Reed who performed physicals on Biden and suggested he was “Fit for Duty” in February of 2024? They should lose their licenses. His blank stares were disturbing and concerning.
The Democrats tried to invoke the 25th Amendment on Trump. Based on Biden’s condition, I believe the Republicans should be considering invoking the 25th Amendment on Biden (and I am not alone, as numerous articles suggest. ) There is far too much geo-political risk today to have the President of the USA in this condition with an historically unpopular VP behind him.
The Left and the Right both eviscerated Biden’s performance but the truth is, this was an avoidable disaster. The incredibly biased media has protected Biden at every turn and made up excuses for him in an effort to protect their candidate. In addition, the Democratic Party crushed any other candidates who tried to run, would not allow Biden to debate in the Democratic Primaries and essentially kept him in hiding. It has been crystal clear to many that he should not be running, and the debate was the last straw. But don’t take my word for it.
CNN’s Van Jones, a close friend of Biden who CRIED on air with joy when Biden won the election called Biden’s debate performance “painful.”
I also thought Left-leaning hedge fund manager, Bill Ackman’s tweets were spot on (below). Bari Weiss also wrote a scathing article about the press and discussed Eric Holder’s vilification of Robert Hur’s report questioning Biden’s mental acuity. Weiss cites a NYT piece from last week titled How Misleading Videos Are Trailing Biden as He Battles Age Doubts. The story, says Weiss, “went on to attempt to convince readers that ‘there is the distorted, online version’ of Biden, which is merely ‘a product of often misleading videos that play into and reinforce voters’ longstanding concerns about his age and abilities.’”
Now, The NYT Editorial Board wants Biden to leave the race. That should be a mic drop moment given the bias of the paper.
Meantime, China mocked the debate as “Very Entertaining.” Consider what other world leaders like Putin, Kim Jong Un and Khamenei might be thinking about Biden and American leadership, too. I will not be surprised if we see some additional action from bad actors due to this global perception of weakness in the Oval Office.
I felt Trump started off relatively strong and more balanced but started reverting to old behaviors toward the end. Any debater would have eviscerated Biden, so, although Trump was hardly stellar, I cannot find a Democrat or Republican who believes Biden won the debate or showed himself well. I do not believe Trump achieved the level of dominance he should have, but am of the opinion that Biden’s performance was so awful, it made Trump look great in comparison.
It was a sad night where both candidates told falsehoods during the debate and there were too many to go over here. “I wish the CNN moderators did more fact-checking, letting the audience know when things are said that are flatly false,” columnist Nicholas Kristof of The New York Times wrote on X. “Not sure how it helps for a platform to transmit falsehoods disguised as facts.” Most of the media suggested that Trump told more lies than Biden. I feel they should have some fact checking live with the ability of the audience to see when it is a clear mis-statement.
The lowlight was an argument about golf handicaps, which was an embarrassing exchange and beneath the office of the United States President. Then again, if we want to reduce the national debt, maybe we should hold a Pay Per View 18-hole golf event, “Trump vs Biden in a Battle For America.” Just like in the fake world of professional wrestling, the loser has to retire.
Prior to the debate, Democratic pollster and Biden supporter Nate Silver published a blog post titled “The presidential election isn’t a toss-up.” In it, Silver concedes that his own data show Trump as the clear frontrunner. He was even quoted in the New York Post as saying: “The candidate who I honest-to-God think has a better chance (Trump) isn’t the candidate I’d rather have win (Biden).”
Post Thursday’s massacre, the betting odds for the election have changed dramatically in favor of Trump. Prior to the debate, I thought the race was too close to call. After the debate, I do not see how Biden has any chance even with so much hate around Trump.
My LEFT most readers sent me countless emails of pure panic during and after the debate. The Democrats are scrambling to replace Biden, for good reason. I do not believe Harris or Clinton are the answer. The markets suggest Newsom. Although I believe he looks the part, I do not see how Newsom can run based on the current state of affairs in California, which I have outlined far too many times in my notes (highest taxes, highest gas prices, highest natural gas prices, weak grid, highest homelessness, high crime, sanctuary cities, weak education system, overly woke policies, COVID mandates, wealth and corporations leaving in droves, massive deficits…..). I thought Dean Phillips (Minnesota Representative) did a good job in interviews and on the All-In Podcast some months ago, but he was destroyed by the Biden Team and unable to raise money. Democrats are running out of time to replace Biden. Two years ago, I called that Michelle Obama would be the Democratic nominee. She said “No” already. Will she say it again? Jamie Dimon’s name is being bantered about as well, but I don’t think he will throw his hat in the ring.
After the debacle, Jill Biden created a real life Saturday Night Live skit with her pandering comments congratulating Joe: “You did you such a great job,” she said. “You answered every question.” Seriously, it was a train wreck. Despite this, Biden vowed to stay in the race and go to the next debate. Biden had fundraisers in NYC and the Hamptons in the past few days as though all was normal.
Again, I saw the whole event as a sad night for America and one that made us look both weak and without a leader. SHAME ON ANYONE PUSHING THE OBVIOUSLY FALSE NARRATIVE THAT BIDEN IS “FINE.” The U.S. looks like a joke in the eyes of the world. The President of the United States must be strong and able to make critial decisions and based on the debate peroformance and so many other mis-steps, we clearly do not have that in Biden.
Quick Bites
U.S. stocks ticked down Friday as traders digested fresh economic data that indicated slowing inflation, as well as better-than-expected consumer sentiment figures. Traders also wrapped up a strong first half of 2024. The technology-heavy Nasdaq led the way over the first half, climbing 18.1% as the artificial intelligence craze captured investor excitement. The broad S&P 500 jumped 14.5%, while the blue-chip Dow lagged with a gain of about 3.8%. The 2-Year Treasury started the year at 4.25% and is now 4.75%, while the 10-Year started at 3.86% and is now 4.39%. The Yen fell to a 38-year low and Japan is signaling they may prop it up.
Interesting perspective from JPM’s strategist, Marko Kolanovic. JPMorgan’s Kolanovic Warns S&P 500 Will Plummet 23% by Year-End. “There is a clear disconnect in the huge run-up in US equity valuations and the business cycle,” the strategists wrote, adding that the S&P 500’s 15% year-to-date gain isn’t justified, given waning growth projections. “There is a risk that an opposite of the hopeful expectation could play out in coming quarters where growth decelerates, inflation remains firm, and long-term rates don’t move sharply lower.” JPMorgan’s strategists stand out among Wall Street’s megabanks in flagging the risk of a big US stock selloff. Peers at firms including Goldman Sachs Group Inc. Citigroup Inc. and Bank of America Corp. have steadily ratcheted up their S&P 500 targets this year. And Morgan Stanley strategist Mike Wilson, who last year stood alongside Kolanovic in his bearish calls, has stopped issuing such warnings. In a related note, Goldman’s Tony Pasquariello believes the risk of a drawdown in markets is rising and suggests hedging portfolios.
I have written extensively about the consumer and fiscal irresponsibility. This CNBC story is about “Phantom Debt” associated with Buy Now Pay Later (BNPL). I am adamantly opposed to these loans and concerned that consumers continue to spend money they do not have. The number of buy now, pay later loans increased nearly 1,100% between 2019 and 2021, according to data compiled by the Consumer Financial Protection Bureau. The debt that accumulates from these loans is referred to as “phantom debt,” because it’s unclear just how much is out there and how well consumers are paying them back. Juniper Research estimates these transactions could reach nearly $700 billion by 2028. Watch the video above to learn more about the risk phantom debt poses to the economy. This Bloomberg article is entitled, “Americans’ Pandemic Savings Are Gone — And the Economy Is Bracing for Impact.”
In a related consumer note, Walgreens reported disappointing 3rd Q earnings and slashed full year outlook which sent the stock -20% Thursday. The company plans on closing a lot of stores. ″’We assumed ... in the second half that the consumer would get somewhat stronger” but “that is not the case,” Walgreens CEO Tim Wentworth told CNBC. He added that “the consumer is absolutely stunned by the absolute prices of things, and the fact that some of them may not be inflating doesn’t actually change their resistance to the current pricing. So we’ve had to get really keen, particularly in discretionary things.”
A reader, Barry, sent me this interesting article entitled, “The Great Wealth Migration.” This year is shaping up to be a watershed moment in the global migration of wealth. As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty, and social upheaval, millionaires are voting with their feet in record numbers, seeking greener pastures and safer harbors for their assets and family interests. The conflicts in Ukraine and Gaza, far from being isolated and contained battlegrounds, have drawn in major world powers, and are threatening to escalate into broader regional and possibly even global conflagrations. At the same time, growing polarization and fragmentation across many of the world’s nations is eroding social cohesion more generally, fueling a rising sense of unease and anxiety. An unprecedented 128,000 millionaires are expected to relocate in 2024, eclipsing the previous record of 120,000 set in 2023. To put this in perspective, it's a 16% increase from the 110,000 who moved to a new country in the pre-pandemic days of 2019. This great millionaire migration is a canary in the coal mine, signaling a profound shift in the global landscape and tectonic plates of wealth and power, with far-reaching implications for the future trajectory of the nations they leave behind or those which they make thei r new home. Charts are from Visual Capitalist. They have amazing charts.
Israel/Middle East
‘A disastrous event’: All-out war between Israel and Hezbollah could devastate both sides
Iran threatens ‘obliterating war’ if Israel launches offensive against Hezbollah
Shabbat tables to bomb shelters: Rockets, drones pour over northern border
Trump criticized for 'Palestinian' insult in debate with Biden
Read the literature. Cannot make this stuff up.
Anti-Israel protesters clash with cops outside of Biden’s big-money NYC fundraiser
Other Headlines
Dollar Soars to Fresh 2024 High as Fed Diverges From Major Peers
Federal Reserve says all 31 banks in annual stress test withstood a severe hypothetical downturn
Micron shares slide after revenue forecast fails to top estimates
Nike stock sinks after company projects larger sales decline than expected in 2025
Nike was -20%+ on Friday and after hours.
Chewy stock pops 34% after Roaring Kitty posts a dog picture, then gives it all back
Any idiot who follows Roaring Kitty should lose 100% of their money.
Nearly half of American EV owners want to switch back to gas-powered vehicle, McKinsey data shows
McKinsey & Co.'s Mobility Consumer Pulse for 2024, released this month, found that 46% of EV owners in the U.S. said they were "very" likely to switch back to owning a gas-powered vehicle in their next purchase.
NFL loses 'Sunday Ticket' trial, ordered to pay $4 billion by federal jury
Right outcome in my mind.
Are Chipotle’s portion sizes getting smaller? One analyst put the theory to a test
Warren Buffett has finally revealed what will happen to his money after he dies
Bandits storm NYC restaurant and rob diners as crowd looks on
Turkish migrant arrested for allegedly raping 15-year-old girl in his car in Albany
Haitian migrant accused of raping teen girl in Boston freed on $500 bail
Dozens of incidents in recent months of murder, rape, and violent behavior from illegal immigrants. Maybe a border is not such a bad idea after all.
German woman given harsher sentence than rapist for calling him ‘pig’
I agree here. We are all dumber due to reliance on technology. I don’t even know my home phone # or my kid’s cell #.
New York to ban phones in city’s classrooms amid fears for ‘fully addicted’ children’s mental health
Google is testing facial recognition technology for campus security, starting at site near Seattle
Dodgers' bat boy saves Shohei Ohtani from potential injury thanks to quick reaction time
Sign this kid. Amazing reflexes.
Bomb squad deliberately burns down Conn. home after finding enormous trove of fireworks inside
The 50 Best Pizzerias in America for 2024, Ranked
There have been 3320 UFO sightings reported in Colorado this year, earning it a 12th spot ranking for states with the most reports, according to the National UFO Reporting Center.
Aliens haven't contacted us. Scientists found a compelling reason why.
I cannot fathom that Earth is the only planet with civilization. I believe we are not alone and remain ready for abduction by aliens so I can report it in the Rosen Report.
Real Estate
Good CNBC article about the rental market. Many major U.S. cities have seen apartment prices soar in the past year, even as the typical American has seen pandemic-era rent inflation cool substantially. For example, renters in Syracuse, New York, saw monthly rents for one- and two-bedroom apartments on the market jump the most relative to other big cities: by 29% and 25%, respectively, since June 2023, according to data in Zumper’s National Rent Report. Zumper analyzed median asking rents for apartment listings in the largest 100 U.S. cities by population. Rents have also risen by at least 10% for both one- and two-bedroom apartments in other major metros: Lincoln, Nebraska; Chicago; Buffalo, New York; Madison, Wisconsin; Rochester, New York; and New York City, according to Zumper.
I knew Monaco was expensive, but this WSJ article shows just how pricy an apartment is in the World’ Most Expensive Rental Market. With a budget of $30,000 a month, a Manhattan couple looking for a luxury rental apartment could afford a 3,100-square-foot Central Park West corner apartment, with three bedrooms, 9-foot beamed ceilings and picture windows overlooking the park. Take that same rental budget to tiny, glamorous Monaco, and they could expect to spend that much on a modest two-bedroom apartment of less than 1,200 square feet, with a small kitchen and windowless bathroom but a nice waterfront location near the Casino de Monte-Carlo. Amazing pictures in the article.
CNBC article about home prices cooling and active listings increasing. Some of the heat is coming out of home prices, even though they’re still higher than they were a year ago. Several new reports show the price gains are shrinking and home sellers are starting to give in after a stagnant spring market. For the first time since the start of the Covid-19 pandemic, when home sales ground to a halt, the typical house sold for slightly less than its asking price — 0.3% lower — during the four weeks ended June 23, according to real estate brokerage Redfin. A year ago at that time the typical home was selling at list price. Two years ago it was selling at about 2% above list price.
Danny Wrublin’s firm, a repeat partner of KKR’s, sold 2568 Broadway and 226 West 97th Street for about $43 million to Nathan Benelyahou’s NJB Management Corporation. The properties are only about one-third rent-stabilized, which Benelyahou pegged as a positive. “Kind of rent-stabilized is the key,” he said, noting that the properties are generating cash “very nicely” and the ground-floor retail is “great.” Now factor in inflation and the loss is quite substantial.
Hollywood's Biggest Retail Center Sent to Special Servicing. Ovation Hollywood: 462,827-square-foot retail site’s $211.3mm CMBS loan ($457 PSF) is expected to default imminently. The building was purchased for $320mm ($691 PSF). The occupancy was 77% occupancy as of 2023.
© 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™ #695 ©Copyright 2024 Written By Eric Rosen.
