Opening Comments
Readers enjoyed the Carbone review in the last piece. Today is a little departure as the Southern Draw(L) section covers a lot of ground including Ken Griffin/Citadel leaving Chicago for Miami, as I decided to combine some politics into my piece on the welcoming Southern hospitality.
The travails of travelling have not subsided as I have logged over 3,600 driving miles since May 30. We were at the TownPlace Suites in Dothan, Alabama. The hotel was fine. However, the hotel room door did not open easily. Here is a 44 second video of me trying to leave Room #202 unsuccessfully. It literally took me 2 minutes to get out of the room. I have never been to a hotter place at 10:37am. It is uninhabitable and am told it gets worse in August. How is this possible? 110 heat index in the morning.
If you plan on flying, let me warn you that flights are limited, delayed and cancelled and prices have skyrocketed. I paid between $650-750 for one way flights from Atlanta to NY and Atlanta to South Florida on Delta coach class and then bag fees were $250 on top of that. I tried renting a car from various NYC rental companies and they were sold out. I had to get it outside the city in White Plains. LGA and JFK were sold out too. I received this message over a dozen times. The closest car Avis had to the city was Newark Airport and I was renting for one month.
As readership grows, I am getting more participants who email story ideas, questions, comments and it is appreciated. It helps to improve the Rosen Report as it is challenging to find all the stories solo. Thanks for helping. If you like what you read, forward it to friends and hit the “heart” button next to my name. I’m back in Boca for a few days now as well.
Picture of the Day-Coach Saves Drowning Swimmer
Southern Draw(L)
Quick Bites
Markets
JPM Bold Market Call
Demand Destruction (Gas)
Germany Close to Rationing Nat Gas-Trump Was Right
Roe V Wade Overturned
NY Gun Laws-Supreme Court Ruling
Concerning Biden Cheat Sheet
Other Headlines
Virus/Vaccine
Data
Real Estate
NYC-East Village Studio Chaos
Other R/E Headlines
Where US Housing Will Fall the Most
NYC Commercial Leasing Data
Mortgage Rates on the Rise
Picture of the Day-Coach Saves Drowning Swimmer
American artistic swimmer Anita Alvarez was in danger of drowning after losing consciousness in the pool at the world championships in Budapest before being rescued by her coach Andrea Fuentes. Spaniard Fuentes, a four-time Olympic medalist in synchronized swimming, jumped into the pool after she saw Alvarez sink to the bottom at the end of her solo free final routine. It was the second time Fuentes has had to rescue Alvarez after she leapt into the pool during an Olympic qualification event last year and pulled her to safety along with the American’s swim partner Lindi Schroeder. “I jumped into the water again because I saw that no one, no lifeguard, was jumping in.” In a statement on the US Artistic Swimming Instagram page, Fuentes said 25-year-old Alvarez would be assessed by doctors on Thursday before a decision was made on her participation in Friday’s team event. What an amazing response by the coach to save Anita’s life. What the hell were the lifeguards doing? Coach Fuentes, good on you. By the way, if Anita regularly loses consciousness, maybe swimming is not her sport. Something on dry land perhaps?
Southern Draw(L)
In the past few weeks, I have spent time across the South and stayed in Louisiana, Tennessee, Kentucky, Alabama and driven threw Mississippi, Georgia and West Virginia. I am starting to speak with a Southern Drawl as I have spent so much time down here. Add to it the fact that we are listening to the audio book, “To Kill a Mockingbird,” and it is narrated by Sissy Spacek in a heavy Southern accent and I am basically a Southerner. Despite the fact that the book is no longer allowed in schools due to the language (N word), it is still my favorite book. It would be impossible for me to live in these places absent Nashville. However, I find the Southern hospitality comforting, and the people friendly which is why I wrote the title as Draw(L). Now I understand why people are drawn to the Southern states.
There is something polite about people saying “Sir” or “Ma’am” when they address you. The people look you in the eye when they shake your hand and seem incredibly warm and friendly. The slow talk of the Southern accent makes them seem more welcoming to me, especially relative to the fast talking New Yorkers (I am one). I wrote of a golf dad who had his rental car stolen in Louisiana two weeks ago. He went to Hertz and they were sold out when he asked for a replacement. A local man in line felt sorry for him and OFFERED HIS PERSONAL CAR for the four days as the man was going away on business and did not need it. A stranger offered my friend in need his car and he took it as he had no alternative. There is a zero percent probability of this happening in NYC. People are just nicer down in the South.
I find that I am catching myself saying “Sir” and “Ma’am” to people now and I was born in Chicago and lived in NYC for almost 25 years! I feel the life is a heck of a lot simpler down in these parts relative to the big city. It is also a great deal less expensive and offensively hotter. In Dothan, AL, you can buy an 8,700 square foot home on 7.2 acres which is offered at $1.2mm. In Ashland, KY, look what you can get for $1.2mm. It is 8,700 ft on 1.3 acres. In Zachary, LA, you can get 4,000 feet on a whopping 16 acres for $800k.
Truth is despite the price of the homes, I would struggle to live in any of these places. However, Huntsville, AL was voted the BEST place to live in the US by US News & World Reports.
If you want the one city I could move to in the South tomorrow, it is Nashville. I could not believe what I saw. Real companies are downtown (Nissan, Bridgestone Americas, Dollar General, HCA, AllianceBernstein, iHeartMedia, Mitsubishi, The ICEE Company, and Amazon.) Nashville is adding thousands of high-paying tech jobs and that is more than the local workers can fill. Oracle is building a 254 acre project in East Nashville which will transform that part of the city. The restaurant scene is amazing and the music scene is even better. Downtown is called by NashVegas now for a reason. They have professional sports teams in the NFL Titans and the NHL Predators with a new $2bn football stadium going in as well. There is no state income tax and they have a big enough airport to get to where you want to go. Nashville has Vanderbilt, one of the best universities in the US, and it has a fantastic hospital as well. There are well over a dozen other colleges and universities in Nashville as well.
Your money does not go as far as the other small towns I mentioned, but relative to NYC, Chicago, LA… Nashville is cheap. I now understand why Nashville is growing and major companies are moving there. You can buy a 1,690 foot 3 bedroom condo downtown for $1.2mm. You can also buy a 5,000 foot house on 1.4 acres for $1.3mm. High-end condos go for $1,000/ft and high-end homes for $700/ft. Nashville has 1.2mm people and has almost doubled in size since 2000 for a reason.
In NYC, you can buy an 850 square foot 2 bed/1 bath condo with no amenities or doorman for $1.1mm.
My point is not that anyone should move to these places, it was to show what things cost in various cities. As more companies leave NY, NJ, CT, IL, CA… for greener pastures, I would 100% tell them to check out Nashville, Tennessee. In the news this week was Citadel leaving the hell hole formerly known as Chicago for Miami. They were the largest financial employer in the city with 1,000 employees and many make BIG money which means the tax base is shrinking. Also, the multiplier effect is gone with those people who were spending big money and supporting the local economy, something that AOC, Biden, Lightfoot, DeBlasio, Foxx, Bragg, Newsom and many others fail to understand.
Ken Griffin makes BILLIONS and pays people VERY well. He is relocating to Miami and cited safety and lack of leadership in Chicago. Griffin said regarding Chicago, “If people aren’t safe here, they’re not going to live here,” he said then. “I’ve had multiple colleagues mugged at gunpoint. I’ve had a colleague stabbed on the way to work. Countless issues of burglary. I mean, that’s a really difficult backdrop with which to draw talent to your city from.” As a reminder, my 63 year old sister has never lived anywhere but Chicago and is leaving after being robbed and cited safety as her top concern for the deteriorating quality of life.
Jamie Dimon said something very interesting at dinner a few weeks ago when asked a question about NYC and the deteriorating quality of life. He responded with a comment about how politicians have missed the boat and do not understand that there are real alternative cities today, unlike 1980. He mentioned places, like Nashville, Dallas, Austin, Miami, Charlotte as viable alternatives with vibrant cities, restaurants, night life, less crime, better weather, lower cost of living and better or no taxes.
Hopefully, the Citadel move is a wake-up call to the ineptitude of the Mayor, Governor and DA who all need to be replaced. Citadel is moving BOTH the securities business and the hedge fund business. What a major loss for Chicago. Elections have consequences and policies matter. Griffin has donated over $600mm to philanthropic causes in the Chicago area and paid hundreds of millions in state taxes with a net worth approaching $30bn. Many liberals vilify the wealthy, but here is a question: How many poor people have donated $600mm to the city of Chicago in an effort to improve the lives of its citizens? Rather than hating those who have been fortunate, maybe embrace them and say thank you for their generosity and billions of tax revenues.
Ken, I welcome you to Miami. If you need any assistance from me, you know how to get in touch as my cell has not changed. There are many great causes we could use your help with to assist those in need and I am involved in some of them. Welcome to Florida where the Governor and Mayors have a far better handle on crime, homelessness, regulations, support of business and less woke policies relative to Chicago, NYC, LA, SFO...
Given I am effectively Southern Folk now, I am giving lessons on how to perfect your Southern Drawl to all you Northerners who want to make the move. Lesson #1-Leave your sharp elbows in NYC, take a chill-pill, learn to talk real slow and be more welcoming like I just did to Mr. Griffin. Lesson#2 will cost you money. Y’all come back now. Have a blessed day.
Quick Bites
The Dow rallied more than 800 points on Friday, rebounding off the lows of the bear market last week and capping its first weekly advance since May. The Dow rose 823 points, or 2.68%, to 31,501, with gains accelerating in the final hour of trading. The S&P 500 was 3.06% higher to 3,912. The Nasdaq advanced 3.34% to 11,608. The major averages are wrapping up a big comeback week for stocks. The S&P 500 is up nearly 6.5% for the week, while the Nasdaq gained 7.5%. The Dow is 5.4% higher. Those moves followed the worst weekly decline for the S&P 500 since 2020. Last week, the broader market index closed down 5.8% for the week. The 10-year Treasury is 3.14% as it sold off 7bps. Oil rallied 3% to 107+. However natural gas sold off 1% and is approaching $6 after being as high as $9.3 a few weeks ago. Bitcoin was up slightly with Ether and they are trading at $21.5k and $1.25k respectively, off the recent lows. Of note, after crashing, the Russian Ruble has rallied to 7 year highs (1st Chart). Big moves in the Nasdaq on the week.
I have a lot of respect for Marko as he has had some solid market calls from his senior seat in the JPM research department. He is remaining bullish with a bold call. I do believe inflation will be less of an issue by year end, but am a bit surprised by his bold market rebound call. I would be surprised if we are done with the volatility. Marko Kolanovic, who has remained bullish on stocks in recent months despite sharp declines, said in a note to clients on Thursday that he and his team expect the S&P 500 to end the year at 4,800. That is 27.7% above where the broad market index closed on Wednesday and a few ticks above its all-time closing high of 4,796.56 reached on Jan. 3. “While the geopolitical tensions in Europe represent a significant risk to the cycle, we believe that a diplomatic solution in 2H22 is likely and should improve the inflation backdrop. JPM Economics is also forecasting inflation to moderate substantially later this year—in effect, reducing the probability of U.S. recession and earnings contraction. This backdrop combined with near record low investor positioning offers an increasingly attractive risk/reward going into 2H, in our view,” Kolanovic wrote. “Anything short of a recession will likely catch most investors completely wrong-footed, especially after broad correction that resulted in the average stock drawdown ~80% of the way to prior recession bottoms,” Kolanovic wrote.
I have discussed demand destruction due inflation and here is a perfect example. American drivers are starting to buy less gasoline as they feel the economic burden of record prices that continue to hover near $5 a gallon. In the first full week of June, gasoline sales at U.S. stations were down about 8.2% compared with the same week last year—the 14th consecutive week that sales have lagged behind 2021 levels, according to surveys by energy-data provider OPIS. One article suggests Biden’s Gas Tax Holiday will drive up demand and end up driving the price of gas higher. I stand by my call from about one month ago that inflation is peaking as demand destruction is kicking in and the higher rate environment coupled with capital market slowdowns and layoffs will mean inflation will slow. I do not have a call that inflation crashes, but will slow and be less of an issue in coming months.
Moronic policies around energy independence have crippling impacts on the economy. We are witnessing it in the US and in Europe. I will remind you that Trump warned the Germans about Russian energy reliance in 2018 and they LAUGHED IN HIS FACE (watch attached video). Trump talked about US energy independence which is something the Biden Administration abandoned quickly. How smart do you feel now Germany and Biden? Here is a concerning headline: ‘The whole market is in danger of collapsing’: Germany warns of a ‘Lehman moment’ if Russia cuts off natural gas to Europe. The German government moved closer to rationing natural gas on Thursday after Russia cut deliveries to the country last week in an escalation of the economic war triggered by Moscow’s invasion of Ukraine. Berlin triggered the second of its three-step plan to deal with gas shortages after the Kremlin-controlled energy giant Gazprom, the country’s biggest gas exporter, throttled delivery via the Nordstream pipeline by around 60% last week. Germany’s gas reserves are at 58% capacity, and the government now expects a gas shortage by December if supplies don’t pick up, Economy Minister Robert Habeck said. Note the chart is from 2020, but you get the idea.
The Supreme Court on Friday stripped away the nation’s constitutional protections for abortion that had stood for nearly a half-century. The decision by the court’s conservative majority overturned the landmark Roe v. Wade ruling and is expected to lead to abortion bans in roughly half the states.
The ruling, unthinkable just a few years ago, was the culmination of decades of efforts by abortion opponents, made possible by an emboldened right side of the court fortified by three appointees of former President Donald Trump. Many companies have announced financial support for employees who need an abortion and live in a state which will prohibit them. “We therefore hold that the Constitution does not confer a right to abortion. Roe and Casey must be overruled, and the authority to regulate abortion must be returned to the people and their elected representatives,” Alito wrote, in an opinion that was very similar to the leaked draft. The Southeast appears to likely ban abortions leaving those who seek one to travel a potential great distance at great cost. Although many companies have come forward to pay for related travel expenses, many will not be afforded the luxury or access. Although I understand both sides of the equation, I am concerned this will lead to back alley abortions. What about rape, incest? We have yet another major issue to divide America. I am just not sure how much more the country can take. At some point, the straw will break the camel’s back and fear we are close. Guns, Abortion, Defund Police, Immigration, Taxes, Regulations, Foreign Policy, Welfare, LBTGQ, CRT, Energy Independence/Environment, Election Integrity, Deficits, Crime, Bail Reform, Racism, Healthcare, Wealth Gap, COVID Mandates, Wokeness….Too many to mention all of them. Now Justice Thomas says gay rights and contraception rulings should be next. The pendulum needs to swing back towards the center in a hurry. I believe the Roe v Wade ruling and potential changes Thomas is suggesting could backfire for the Republicans. Now Senators Manchin and Collins are blasting the Supreme Court ruling and feel a bit duped by Justices Gorsuch and Kavanaugh in their testimony. The LAPD arrested a man attacking an officer with a torch during an abortion rights protest.
The Supreme Court struck down a New York state law requiring applicants for a license to carry a gun outside of their homes to have a “proper cause” to do so. The court said the law violated the Second Amendment. The ruling is a major victory for gun rights advocates who had challenged New York’s restrictive law, which makes it a crime to carry a concealed firearm without a license. Top Democrats in New York condemned the decision and warned it will imperil public safety. The 6-3 ruling in the case is a major victory for gun rights advocates who had challenged New York’s restrictive law, which makes it a crime to carry a concealed firearm without a license. Given the crime in NYC, I won’t be surprised if this leads to vigilante justice. What can possibly go wrong with a bunch of hot headed New Yorkers carrying guns legally in heavy traffic, on tight subways, ball games and crowded streets? NYPD Offical: SCOTUS gun ruling could turn NY into ‘Wild East’.
I am writing this not in an effort to be funny or cruel, but to showcase the state of the US President today. As the leader of the free world, it is important to have the mental acuity to make challenging decisions in short order. This piece is incredibly concerning as the President needs very basic instructions to do menial tasks. I cannot imagine Obama, Clinton or Trump or any other President required such basic direction. Photos taken at a White House meeting with cabinet members show specific directions listed for President Biden. "YOU enter the Roosevelt Room and say hello to participants," the first bullet point read. "YOU take YOUR seat." After a bullet point that said, "Press enters," the next one read, "YOU give brief comments," with a parenthetical statement reading, "2 minutes." Biden ended up speaking for roughly eight minutes. Once when the "Press departs," Biden was then told, "YOU ask Liz Shuler, President, AFL-CIO, a question," with a note that Shuler was "joining virtually." The final bullet points read, "YOU thank participants" and "YOU depart." This reads more like instructions for a 6-year-old getting directions for a school play. Each day it becomes more clear that Biden is unfit for office and the rumblings from the press and even Democrats are starting to come to that conclusion.
Other Headlines
Biden signs bipartisan gun safety bill into law: 'God willing, it's going to save a lot of lives'
Fed Chair Debunks Biden Claim Inflation is Putin Price Hike
Sorry Biden, the inept Fed Chair disagrees on Putin Inflation. “No inflation was high before, certainly before the war in Ukraine broke out,” said Powell succinctly. Everyone disagrees with the lie below other than the Biden Administration.
United Airlines will cut 12% of Newark flights in effort to tame delays
Netflix lays off 300 more employees as revenue growth continues to slow
JP Morgan reportedly laying off hundreds in mortgage business
Yelp closes three US offices, says remote work is its future
Closing, NY, Washington & Chicago and downsizing Phoenix
A seafood restaurant in Alabama is closing down because it cannot find enough cooks
Intel warns Ohio factory could be delayed because Congress is dragging its feet on funding
Cadillac Plans to Price Its Future Celestiq EV Around $300,000
A Tesla for $70k or a Caddy for $300k? Is this a joke?
The Metaverse Lures Brands Like Nike and Gap With New Ways to Market and Make Money
Federal Investigators Search Home of Jeffrey Clark Ahead of Jan. 6 Hearing
CNN, NBC, MSNBC journalists say Republicans can't be covered equally with Democrats
Just read this article and commentary from the liberal media about how to cover the left vs the right. Talk about media bias.
A shoplifter with 122 busts under his belt was released on his own recognizance Wednesday thanks to controversial bail reform laws Bragg typically defends.
DA Alvin Bragg cuts break for women allegedly caught on video attacking NYPD cops
How is it possible to attack cops and not face charges? I feel attacking an officer should be made into mandatory jail time of 3 years.
Brown University ‘mindfulness’ course offered only to minority students
Read this article. It is incredibly concerning that an Ivy League institution is discriminating against Whites and Asians.
Florida man arrested at Disney, allegedly had gun, knife, and ammunition | Fox News
This could have been a disaster. Glad they caught him.
Biologists capture largest python found in Florida at 18 feet
An early Rosen Report was called, “Invasive Species” and I spoke about these pythons. Check this out! It ate a deer. I hope I never see one of these.
Florida house party: 'key players' identified in break-in of $8m mansion, authorities
Kids broke into a home when people were on holiday and threw a huge party trashing the place and stealing valuables. The rocket scientists posted pictures of themselves and now face jail time. It is called Social Darwinism.
European leaders formally accept Ukraine as a candidate to join the EU
Russian Troops in Ukraine Face ‘Extraordinary’ Casualty Rates: U.K. Intelligence
Putin 'calls up obese 20st retired general to lead forces in Ukraine'
Virus/Vaccine
Cases are roughly flat over the last month despite the noise from two holidays. However, the positivity rate has skyrocketed to over 14% from 2% in March. Although hospitalizations have grown in the last month, growth appears to be leveling off. Deaths have remained relatively consistent in the past month in the 350/day context.
Real Estate
It’s a snapshot of the horror that is now the NYC rental market. A mob of apartment hunters recently lined up and waited more than an hour — street-side and up several flights of stairs — to view a 371-square-foot, one-bedroom, third-floor walk-up listed for $2,337.39 in the East Village. “It’s ridiculous,” 36-year-old apartment hunter Aidan O’Donoghue, who captured the wild throng on camera, told The Post. “By the time you think about [renting] an apartment, it’s gone.” The rent-stabilized unit at 169 Ave. A — about the size of a single-car garage — is now considered relatively cheap. Earlier this month, the median rent for a Manhattan apartment surpassed $4,000 for the first time. The small one-bedroom has an estimated rental market value of nearly $3,000, according to real estate agents — which no doubt fueled the chaos that unfolded over its June 12 open house. How many reasons do you need to leave NYC? Crime, cost of living, taxes, weather, filth, wokeness… Almost, $2,400 to live in a 371 square foot walk-up apartment in the East Village is ridiculous. I am a hard pass. In Wynwood (Miami), you can get a 1 bedroom apartment with a huge pool, fitness center, parking garage, doorman…. for the same price and not worry about being killed on the subway.
Other R/E Headlines
Where US Home Prices Will Fall Amid Increased Interest Rates
US home prices will likely fall in the most overvalued markets, projects Mark Zandi. But it will fall short of a crash.
NYC office leasing deals are heating up
Good stats on rents and occupancy rates. Here is one from the article: Partnership for New York City survey of 160 companies found just 38% of workers present each day with 21% in two days per week. A whopping 78% expect hybrid work to become the norm.
All shoulkd be made aware that the Provincial Government of Quebec Canada just passed a Law
Bill 96 saying all companies US, Canadian etc have to operate in FRENCH ONLY and must all talk between employees must be in French. They can enter and seize cellphone, computers etc. without any Court warrant to see if all your records and communications are in French. They also passed a law Bill 212 saying if you wear a religious symbols such as a cross, headscarf, Kippah etc.you can not work for the Quebec GOVERNMENT IF YOU WORK WITH THE PUBLIC SUCH AS A TEACHER, JUDGE, POLICEMAN, plus in the medical field a doctor or nurse etc should refrain from talking any other language but French among themselves and to the PATIENT..
Birth and Deat6h certificates are only in French and they are even thinking of FRENCH only tombstones
.Oh by the way Quebec has signed a very large contract to supply Hydro Electricity to NY State/City.
I would suggest that one should not invest in this province under these rules
The Canadian Federal Government under Prime minister Trudeau has done Zilch.
My mother was born in Quebec. Only spoke French until 15. Trust me, I hear you.