Opening Comments
Picture of the Day
Suspension of Disbelief-Outer Banks/Netflix
Quick Bites
Markets, August Performance
Nurse Shortage/$8,000 Per Week, McD Hiring 14-15 Year Olds
Social Security, TSA Data
Wind Energy Growth, Lake Tahoe Fires
SFO Pays $300/month not to Shoot
AMZN not Screening Drivers for Pot
Virus/Vaccine
Data
ICU Beds
Moderna More Antibodies
Israel 3rd Dose
Real Estate
My General Comments
Miami Home Story-Crazy Prices
Boca Rent Example (one bedroom)
National Home Prices
Converting B&B to Single Family
Opening Comments
I have no idea what happened, but some subset of my readers were sent a one month old report “Boxing Like a 4 Pack a Day Smoker” earlier today. I was not home and did not send it. I have asked Substack how this happened, but no word back. The joy of no phone support strikes again. Apologies for those who received it in error, as it appears to be an old report.
The last note received quite a bit of banter as a follow up with most of the action about Afghanistan, my lack of handyman skills and the obesity angle. In response to my last note, one reader pointed out the excess death chart regarding my attached story around some hospital patients testing positive for COVID-19, but not being admitted for it. I never suggested the pandemic has not been deadly, I just believe many people are being diagnosed without symptoms which brings up the hospitalization numbers. Clearly, the chart below shows a couple major spikes well over the threshold for excess deaths.
Today’s note is a bit shorter, as with back to school coupled with some additional consulting assignments, I have been a bit busier lately. Readers, keep sending me story ideas and comments. I appreciate those who continue to forward the Rosen Report to others and hit the “like” button. Apparently, Substack tracks this data and then brings the most liked stories to the top of lists.
Yes, it is boiling down here. Don’t visit until November, trust me.
I have written a few more restaurant reviews and will be including them in upcoming reports.
Picture of the Day
Louisiana communities battered by Hurricane Ida are facing a new danger: the possibility of weeks without power in the stifling, late-summer heat. Ida ravaged the region’s power grid, leaving the entire city of New Orleans and hundreds of thousands of other Louisiana residents in the dark. And there’s no clear timeline on when power will return. Louisiana Gov. John Bel Edwards said 25,000 utility workers were in the state to help restore electricity, with more on the way. Officials say it could be weeks before electricity is restored in some spots. At least four deaths were blamed on the storm. I spoke with two parents of Tulane students. Classes are cancelled for two weeks, then will be held one month on-line and then back to campus. One parent told me his kid was quite upset after just settling into freshman year. My cousins lived in New Orleans and lost everything in Katrina. They lived on Lake Pontchartrain and their house was demolished. The entire family left the area for D.C. as the thought of going through it again was too much. New Orleans is looking at a heat index of 105 degrees and many have no power.
Binge Watching-Suspension of Disbelief
From time to time, I read a book my daughter, Julia, is reading so we can discuss it and I can be sure she is comprehending properly. I have also decided once in a while to take a TV series recommendation from her, so I can understand what she is watching to give us some common ground for dinner discussions. She has been talking about a show called, Outer Banks which was the most popular show on Netflix this summer. In a week in late July, the show was viewed for twice the amount of time as the next rated show according to Nielsen. It is a tween/teen favorite and highly followed show about haves and have-nots battling it out in the Outer Banks. The show is drama and suspense filled with a good-looking cast. Comically, the high school cast is 22-28 years old in real life and that is only the beginning of where the suspension of disbelief comes into play.
To 'suspend disbelief' is to temporarily accept as believable of events or characters that would ordinarily be seen as incredible. This is usually to allow an audience to appreciate works of literature or drama that are exploring unusual ideas.
If you decide to watch Outer Banks, you seriously need to accept how utterly ridiculous the scenarios, events and outcomes are in the show. Initially, I was just upset about the absurdity of what I was trying to watch. Unfortunately, I became addicted and although I have never been a binge watcher, I crushed 8 of the twenty shows the other night until 3am. It is one of the lowest points in my life. Here I am at soon to be 52 years of age watching a show about high school kids, but we digress. I have sworn off of cable TV for a while, so I needed something to watch. Yes, let’s go with that angle. My daughter, Julia, was very excited I was watching and kept asking me where I was in the series asking about what I thought. There are two seasons so far with 10 episodes each. I will say that each episode does a good job of ending on a cliffhanger.
I finished the second season and as embarrassing as it sounds, I am anxious to see the third season. When it comes to believably, I am of the opinion it is more likely for me to see Sasquatch riding a unicorn while playing Rachmaninoff’s Concerto Number 2 on piano, while blindfolded than the events which unfolded in Outer Banks. So, if you decide to watch, make sure you are willing to suspend disbelief or don’t waste your time. I will say if you are watching with young kids, there are some mature scenes (drugs, violence sex talk), but no nudity. Common Sense Media has it rated 15+, but parents and kids rate it 12+ for watching. Some serious plot twists and turns keeps you on the edge of your seat. I could not find the picture I described of Sasquatch, but this was the closest thing out there.
Afghanistan Update
President Biden pulled out the last troops out of Afghanistan. Unfortunately, it appears Americans have been left behind, something Biden vowed he would not do a couple months ago. Blinken suggested 100-200 Americans remain, but is committed to helping them leave. Also some Afghans who were very helpful to Americans during the war were left back as well. Although I am not of the opinion this withdrawal went well, Biden did something 4 other Presidents did not do. And that was to exit a bad war which cost approximately $2 trillion and thousands of lives. Ending wars is not easy and exiting faced many challenges. I do think it could have been done in a much better manner, but it is done now. Interestingly, Ann Coulter praised Biden for having the courage to exit. Time will tell the consequences of the ultimate decision to leave and the way in which we left. I just wish we did not leave the Taliban weapons and equipment, but it is done. Below is a picture of Christopher T.Donahue, the last troop to leave Afghanistan using night vision goggles.
For perspective, this article outlines some #s from the 20-year war which I found interesting and scary:
The number of US service members to die during the war sits at roughly 2,400.
More than 20,000 Americans were wounded during that time also, according to the Defense Department.
About 1,144 other allied troops were killed in action.
At least 66,000 Afghan troops and more than 48,000 Afghan civilians have been killed, too, said the US Special Inspector General for Afghanistan Reconstruction (SIGAR), a US government watchdog.
And roughly 75,000 Afghans have been injured in the war since 2001.
The US has spent an estimated $2.313 trillion on the war since invading Afghanistan, according to the Watson Institute’s Costs of War — or $300 million a day, Biden said Tuesday.
An estimated $837 billion has been spent on the fighting alone, said an August 2021 SIGAR report, citing Department of Defense figures.
Quick Bites
The S&P 500 closed the first trading day of September near the flat line as the strength in technology shares faded, while investors digested a disappointing employment report. The broad equity index climbed 0.3% to kick off September trading. The tech-heavy Nasdaq Composite advanced 0.8% to hit a new intraday record high. The Dow Jones Industrial Average dipped 30 points. Apple jumped as much as 2% to an all-time high, but pared gains to about 0.5%. The VIX closed at 16.1, down 39% in a year. Remember, it closed at 83 in March of last year.
Private payrolls rose by 374,000 in August, well below the Dow Jones estimate of 600,000 though above July’s 326,000, according to ADP. Most of the new jobs came from leisure and hospitality, which added 201,000 positions. The ADP tally comes two days before the Labor Department’s non-farm payrolls report. The two counts have differed widely this year.
August marked the 7th straight month of gains. The S&P 500 rose 2.9% in August, while the tech-heavy Nasdaq Composite climbed roughly 4% for its third winning month in a row. The blue-chip Dow lagged but still added 1.2%.
With the economy reopening and labor scarce, all kinds of U.S. workers have been getting pay raises. Some of the biggest are going to a group that’s on the front-line of the fight against Covid-19: travel nurses. There are about 30,000 open positions for travel nurses nationwide, according to data from SimpliFi, a health-care staffing firm. That’s up some 30% from last winter’s peak, and still climbing. Salaries have jumped too, with rates as high as $8,000 a week advertised for a three-month assignment. I have written extensively on the topic of rising prices and wages. I thought this Bloomberg article and two charts below were interesting. $8,000/week for a nurse seems a bit excessive. The average general practitioner physician makes approximately $174k/year in the US for perspective. At $8,000/week, in 3 months, a nurse may make up to $104k given the demand today.
Interesting article about McDonald’s looking for 14-15 year old workers as they cannot fill positions. Other restaurants have closed the dining room to allow for delivery or pick-up only as they cannot find enough labor inside the restaurant. Another Texas restaurant, Layne’s Fried Chicken Fingers, is promoting teens and early 20s into management positions paying in excess of $50k. In my opinion, many high school students should not attend traditional 4 year colleges. If some can make $50k/year or more with no degree, they should not go to 4 years of school and pay a couple hundred thousand for an education in my opinion. Obviously, if you are very bright and are going to a top school, it is a different story. I spoke with a small business owner and he has given all employees raises in recent months given many have threatened to quit as the demand for workers is skyrocketing.
Social Security will have to cut benefits by 2034 if Congress does nothing to address the program's long-term funding shortfall, according to an annual report released Tuesday by the Social Security and Medicare trustees. That's one year earlier than reported last year. By that time, the combined trust funds for Social Security will be depleted and will be able to pay only 78% in promised benefits to retirees and disabled beneficiaries. The Covid-19 pandemic and economic recession are to blame for moving up the depletion rate by a year, driven by the big drop in employment and resulting decline in revenue from payroll taxes. The trustees also project a higher mortality rate through 2023 and a delay in births in the short term.
The TSA data was at 1.6mm travelers on 8/30 relative to 711k in 2020 and 2.3mm in 2019.
Good CNBC article on wind energy. The DOE noted wind energy was able to provide more than half of in-state electricity generation and sales in a few states. 42% of new electricity generation capacity in the U.S. came from land-based wind energy -- more than from any other source -- according to numbers in a series of reports from the Department of Energy (DOE) this week. According to research by DOE’s Lawrence Berkeley National Laboratory, a record 16,836 megawatts of new utility-scale land-based wind power capacity was added to U.S. energy infrastructure in 2020, representing about $24.6 billion of investment in new wind power. Last year, the DOE noted, wind energy was able to provide more than half of in-state electricity generation and sales in a few states. Iowa led the pack with wind power providing 57% of its in-state electricity generation.
I am a huge fan of the Lake Tahoe area. I have been there over a dozen times and find the combination of the mountains and lake remarkably beautiful. I came close to buying a second home in Martis Camp in Truckee. They sent thousands of firefighters, 25 helicopters and an arsenal of more than 400 fire engines and 70 water trucks. Yet the fire still advanced and has now burned more than 300 square miles. I read in another report it may take weeks to contain it. A day after an explosive wildfire emptied a resort city at the southern tip of Lake Tahoe, a huge firefighting force braced for strong winds Tuesday as residents in neighboring Nevada were put on notice to be ready to flee. The city of South Lake Tahoe, usually bustling with summer tourists, was eerily empty and the air thick and hazy with smoke from the Caldor Fire, one of two major blazes plaguing California. On Monday, roughly 22,000 residents jammed the city’s main artery for hours after they were ordered to leave as the fire advanced, chewing up drought-stricken vegetation.
A new program in San Fransisco will pay people at high risk of shooting someone not to pull the trigger to help alleviate rising gun violence in the city. The Dream Keeper Fellowship is set to launch in October and pay 10 individuals $300 each month to not be involved in shootings, Sheryl Davis, executive director of the Human Rights Commission, told Newsweek in an interview Tuesday. Davis explained that the program is not "transactional," but will rather focus on making investments in communities most impacted by violence. I am quite disturbed by another crazy initiative out of San Francisco. Paying people not to shoot someone seems like a joke, but is not. The attached article is Newsweek.
Amazon.com Inc. has a solution for a potentially crippling shortage of delivery drivers: Recruit pot smokers. The company is advising its delivery partners -- the mom and pops that operate the ubiquitous blue Amazon vans -- to prominently advertise that they don’t screen applicants for marijuana use, according to correspondence reviewed by Bloomberg and interviews with four business owners. Doing so can boost the number of job applicants by as much as 400%, Amazon says in one message, without explaining how it came up with the statistic. Conversely, the company says, screening for marijuana cuts the prospective worker pool by up to 30%. When your next package smell like Ganja, you will know why.
Amazon said it is seeking to hire about 55,000 people globally among its corporate and technology ranks during a recruiting event set for Sept. 15, as the e-commerce giant continues a hiring spree begun at start of the Covid-19 pandemic. The Seattle-based company is aiming to fill roles in cloud-computing unit Amazon Web Services, as well as in divisions such as Amazon Studios, advertising and its broadband satellite Project Kuiper.
Virus/Vaccine
As you can see, case growth is slowing sharply despite a big increase in testing. Yes, we still have cases increasing, but at 14% vs 172% case growth in late July. Hospitalization growth is slowing as well, while deaths remain relatively steady at 93%. If you look at the 7-day average, COVID-19 admissions fell 2.4% from a week early, the first drop since June. Florida cases were down 15% and have largely been declining for the past two weeks. Guam, West Virginia, North Dakota, Ohio, Indiana, Pennsylvania, South Dakota, Nebraska, Montana, Tennessee, Kentucky, South Carolina and Wyoming are seeing case growth of 50%+ recently.
As Covid-19 cases surge across the US, particularly among unvaccinated Americans, hospitals have been pushed to their limits treating the influx of patients -- and five states are nearly out of ICU beds. Alabama, Georgia, Texas, Florida and Arkansas have less than 10% left of their ICU bed capacity, according to data from the Department of Health and Human Services. Many articles and doctors have suggesting prioritizing vaccinated people over unvaccinated when hospitals fill up.
Moderna Inc.’s Covid vaccine generated more than double the antibodies of a similar shot made by Pfizer Inc. and BioNTech SE in research that compared immune responses evoked by the two inoculations. The study is one of the first to compare levels of antibodies produced by the two vaccines, which are thought to be one of the important components of the immune response. It didn’t examine whether the antibody differences led to a difference in efficacy over time between the two shots, which both were more than 90% effective in final-stage clinical trials. The research looked at antibody levels against the coronavirus spike protein in about 1,600 workers at a major Belgium hospital system whose blood samples were analyzed 6 to 10 weeks after vaccination. The participants hadn’t been infected with the coronavirus before getting vaccinated. Levels among those who got two doses of the Moderna vaccine averaged 2,881 units per milliliter, compared with 1,108 units per milliliter among those who received two Pfizer doses.
Interesting Wall Street Journal article about Israel and vaccination policies. Israel is upping the vaccine ante, pressing citizens to get Covid-19 booster shots and saying those who don’t will face restrictions on traveling, dining out and other activities. Holders of Israel’s vaccine passports must get a third dose of the Pfizer -BioNTech vaccine within six months of their second dose, or lose the so-called green pass that allows them more freedom. “We are updating what it means to be vaccinated,” said Israel’s coronavirus czar, Salman Zarka, at a press conference Sunday unveiling the new policy.
Real Estate
I have a reader friend looking to buy in South Florida between Boca and Jupiter. They have looked at numerous communities and are struggling to find anything nice available in the $4-5mm range. It sounds inconceivable, but is true. Limited inventory, massive price appreciation and a healthy migration south and east from the Tri-State, Chicago, CA… are making it increasingly challenging to find a home. One reader had a buyer for his unlisted house for $12-13mm maybe 6 months ago, he passed. Now, he believes he can get $17-$18mm (not on the water), but beautifully done new construction with land. Markets are moving fast and furious.
House on market in Pine Tree Circle (Miami) near LaGorce for 3 years asking $20mm. Finally sells 5 months ago for $19mm. The buyer redid some landscaping for $200k and sold it for $28.5mm after buying it in June The address is 6385 PineTree Drive Circle. The good selling point is it is on one acre. However, the views do not seem super impressive and to me, the house seems a bit dated. For perspective, it was listed for sale in 2010 for $6.9mm and do not believe it sold.
A young friend of mine was renting a one-bedroom apartment in Boca on US near Trader Joe’s. She had been paying $1,800/month and they are now asking $2,500. Pretty big move in a year!
US Home prices rose 18.6% annually in June, up from the 16.8% increase in May, according to the S&P CoreLogic Case-Shiller national home price index. That is the largest annual gain in the history of the index dating back to 1987. Prices nationally are now 41% higher than their last peak during the housing boom in 2006. Unlike other median price surveys, which can be skewed by the type of homes selling, this measures repeat sales of similar homes over time. The 10-City composite rose 18.5%, up from 16.6% in the previous month. The 20-City composite was up 19.1%, up from 17.1% in the previous month. Phoenix, San Diego, and Seattle reported the strongest price increases of the 20 cities. Prices in Phoenix increased 29.3% year-over-year. In San Diego they rose 27.1%, and in Seattle they were up 25.0%. All 20 cities reported higher price increases in the year ending June 2021 versus the year ending May 2021. To me, this growth rate is unsustainable and I believe we will not see this continue for long. Despite low rates, affordability is getting challenging. I am in contact with many people looking move and they cannot find homes at various price points from $1mm-20mm+ in South Florida. I thought the chart below was interesting from this article. Note the move down between 2005 and 2010 (GFC) and then the rapid move up between 2010, 2015 and 2020.
WSJ article about people buying former Bed and Breakfast homes and converting them to single family. Given the lack of housing supply coupled with the challenges that many in hospitality have had since the pandemic, it makes total sense to me.