The Brilliance of Eric's Stupidity

5-31-23

Opening Comments

I received numerous emails after my last note about government waste and inefficiency, “I’m From the Government and I am Here to Help.” In the end, we need to demand better use of our hard-earned tax dollars. We give away too much money to too many and waste money at every turn. We need balanced budgets and should start running a surplus. I don’t know all the details of the Debt Ceiling deal, but the little I read does nothing to comfort my concerns that spending will get under control. I continue to harp on fiscal responsibility for both sides of the aisle. The runaway spending is carless and the debt levels are unsustainable. The last budget surplus was 23 years ago.

Note that two 8 seeds are in the finals. The Miami Heat and Florida Panthers both made it through. Not bad for little old sleepy Miami. The Miami Heat currently have 876 points and 39 starts from undrafted guys; the rest of the league has 778 points and 31 starts.

The piece today is about my stupidity, so I thought I would give even more fodder. I took a tennis lesson Sunday afternoon in late May in South Florida. Bad idea.

I heard from readers about some NYC restaurants I need to try this summer. By far, the most suggested restaurant was Torrisi (new Major Food Groups) in Soho. My itinerary is shaping up, and I will be bouncing around a bit. The time is largely between NYC, Philly, Bethlehem PA, Hamptons, and Marion, MA. Some of Jack’s tournaments are in off-the-path places. In 2020, during the pandemic, I was staying at hotels for literally $60/night and they were 10-20% occupied. The same hotels are looking for $400-600+/night and are booked solid now. People are spending on experiences and cutting back on items. These are Courtyard by Marriot, Homewood Suites and Spring Hill Suites going for these amounts-not including taxes and fees!

• Picture of the Day-Mahi Fishing in May

• The Brilliance of Eric's Stupidity

• Quick Bites

  • Markets

  • Dimon For President?

  • More High Schoolers Going to Work, Not College

  • Overly Woke High School Debate Judges

• Other Headlines

• Real Estate

  • Worst Performing Residential Markets in the US

  • Toronto Condo Market in Trouble

  • LA Office Market Troubles

  • Jupiter House Sells for $27.5mm

  • Miami Commercial R/E Volume Plummets

Picture of the Day-Mahi Fishing in May

I went out with a couple of friends Tuesday morning and caught some fish. Unfortunately, a storm came and we have to move fast to avoid it. The nice thing about my boat is it can do 68 mph when needed given it is 900 horsepower. The clouds were ugly and I drove into the inlet quickly and docked at a hotel to let the storm pass before going back out. RESPECT the ocean. It gets nasty in a hurry out there and if you are not careful, bad things can happen. Yes, the mahi tacos I made with avocado crema were delicious.

The Brilliance of Eric’s Stupidity

In the summer 2006, I threw my back out for the first time and was literally crawling, as I was unable to stand. The surgeon said, “You need to start swimming to strengthen your core and alleviate pressure on your lower back.” Given my years of surfing, I knew my way in the water, but my stroke was not efficient. If I mention the word “surfing” I must put in a couple shameless pics which were prior to the surgery.

Coincidentally, Chris Jacobs (Olympic Champion Swimmer) worked with me at the time at JPM. I said, “Jake, I need your help. I want to improve my swimming stroke. Can you come to the pool with me a few times to work on it?” Chris is in the water below after anchoring the 4x100 medley relay at the 1988 Olympics where the team won the gold medal!

Chris responded, “I need to get back in swim shape and this will be the perfect opportunity to do it.”

We met at the YMCA on 47th and 3rd Ave at a little after 5am three times a week. It was a humiliating experience. Swimming with someone who is about as close to a fish as one can be is intimidating and frustrating but pushed me to be a better swimmer. In no time, I learned flip turns and was swimming at a much higher level than prior to Chris’ help. Make no mistake, the Olympic Committee was not looking my way, but I was at least respectable in the water. My record for one mile was 26-minutes which was not awful for someone approaching 40. Of note, the record is 14 minutes or so. Chris definitely improved my swimming stroke.

In the summers, my trading desk hired dozens of summer analysts/associates from college and business schools. One young man named Carlo came to me and said, “I heard you and Chris swim in the morning. Would you mind if I joined you? I am on the swim team at USC.”

“Of course, you can join us,” I responded. Well, it was Carlo (20-year-old Adonis) in one lane, me in the middle lane, and Chris in the other lane to my right. In my infinite stupidity, I tried to keep up with world-class swimmers. I was humiliated that these fish, I mean people were making me look bad. Chris is 6’4” and his huge feet are like flippers. My competitive spirit got the best of me. The result was I over-exerted myself and swam too hard in an attempt to keep up with world-class athletes. It was not my finest moment. Instead of back surgery, I tore the labrum in my right shoulder. The truth is I am not sure I could have run faster than they could swim. “If you can’t amaze them with your brilliance, dazzle them with your stupidity.”

I had the surgery in late 2008 at HSS and ended up with a bad infection. I felt something was wrong, but the doctor thought I was crazy, and the infection basically disintegrated my long thoracic nerve. Had I been given antibiotics when I complained, the outcome would have been different. The result was a great deal of pain and scapula winging. I could not lay on my back and my arm was in agony.

I ended up needing physical therapy for a year, and unfortunately, 15 years later, my right arm remains about 40% of what it was prior to the injury. However, during PT, I met some amazing people. In my next piece, I am going to discuss how a relationship evolved and how I ended up mentoring NBA basketball players.

The torn labrum due to swimming in an effort to avoid back surgery will go down as one of my all-time dumbest moves. At the time of the injury, I was 37 years old and could still do 40 wide-grip pull-ups at one time without thinking about it. Since my injury, I cannot really serve a tennis ball due to excruciating pain when lifting my arm over my head.

What is the ultimate lesson here? Know your boundaries and appreciate the greatness around you rather than deluding yourself that you belong with elite athletes when you are not one. The sad part is, I could write a new Rosen Report about the stupid things I have done each day for the next hundred years and not run out of material. If you get in the water with an Olympic Champion, you should observe and learn but not try to keep up.

As an aside, Chris Jacobs swam between 10-18 miles per day when training. I want you to think about that for a second. How many of my readers can run that far in a day? I did not belong in the pool with Chris, but in my infinite wisdom attempted to keep up. Yeah right!

Quick Bites

• The markets initially reacted positively to the Debt Ceiling but were basically unchanged Tuesday as more opposition to the bill grows. Wednesday, markets sold off despite the deal passing the House Rules Committee (7-6). The Floor vote will take place Wednesday at 8:30 pm. Stocks sold off slightly on Wednesday with the major indices down approximately .5%. Interestingly, May was kind to tech stocks with the Nasdaq +5.8%, while the S&P was +.3% and Dow -3.5% on the month. Although Treasury yields were down today on concerns over the Debt Ceiling, the trend has been higher yields in recent weeks. On May 5th, the 2-year yield hit 3.73% and is now 4.40% for perspective. I am of the opinion the Fed should NOT raise rates at the next meeting and the Fed Board of Governors, Phillip Jefferson, suggested a pause as well. Oil had a rough month in May and was -11% MTD to $68. Today, weaker China demand helped to push oil lower.

  

• Any Rosen Report reader knows I am a big fan of Jamie Dimon. I had the pleasure of working for him and have seen him in action in times of crisis (GFC). I have often written about Dimon and pushed him to run for President. “I love my country, and maybe one day I’ll serve my country in one capacity or another,” Dimon, 67, said in a Bloomberg Television interview. Jamie, the country is in peril and needs your leadership. The frontrunners for the Democrats and Republicans are absolute morons and far too old for the position. You have accomplished a great deal in the business world, and led by example to create the most important financial institution in the world. I was there before you arrived in 2004 and trust me, your presence was felt immediately. I am begging you to run, and I am available to assist in any way I can. To use a Biden expression, “Come on, man.” The time is now; the country cannot wait almost 6 years. We need to get back to the Center politically and your experience, leadership, and presence are just what America needs right now. You believe in a fortress balance sheet and fiscal responsibility and it seems our leaders (both parties) have lost their way on this topic. $32 trillion in debt and growing is leading us on a dangerous path in this country. You have plenty of senior leadership at JPM who can run that ship. A bigger ship is careening rudderless and needs you to take the helm. Bill Ackman agrees and commented on Jamie’s potential run for President.

  

  

• More high-school graduates are being diverted from college campuses by brighter prospects for blue-collar jobs in a historically strong labor market for less-educated workers. The college enrollment rate for recent U.S. high-school graduates, ages 16 to 24, declined to 62% last year from 66.2% in 2019, just before the pandemic began, according to the latest Labor Department data. The rate topped out at 70.1% in 2009. Job growth at restaurants, theme parks and other parts of the leisure and hospitality sector—which tend to employ young people and typically don’t require a college degree—has increased more than twice as fast as job gains overall in the past year. There also remains a high number of job openings in construction, manufacturing and warehousing, fields that often require additional training, but not college degrees. The unemployment rate for teenage workers ages 16 to 19 fell to a 70-year low of 9.2% last month, fueling larger pay increases.  Given what they are paying in the service sector, it is getting harder to justify spending huge money on college for many kids today.

  

  

• I try to call out overly woke issues and teachings, as I believe they are dangerous. I was so upset after reading this article on debates written by a former high school debater. Kids in high school are given a topic to research and then just prior to the debate are told who the judge will be presiding over the event. There is a database called “Tabroom” where they can read about the judges preferences. Listen to these comments listed “paradigms,” which outlined the judge’s preferences.

  • Lila Lavender, the 2019 national debate champion, whose paradigm reads, “Before anything else, including being a debate judge, I am a Marxist-Leninist-Maoist.  . . . I cannot check the revolutionary proletarian science at the door when I’m judging. . . . I will no longer evaluate and thus never vote for rightest capitalist-imperialist positions/arguments. . . . Examples of arguments of this nature are as follows: fascism good, capitalism good, imperialist war good, neoliberalism good, defenses of US or otherwise bourgeois nationalism, Zionism or normalizing Israel, colonialism good, US white fascist policing good, etc.”

  • Debate judge Shubham Gupta’s paradigm reads, “If you are discussing immigrants in a round and describe the person as ‘illegal,’ I will immediately stop the round, give you the loss with low speaks” — low speaker points — “give you a stern lecture, and then talk to your coach. . . . I will not have you making the debate space unsafe.” I feel unsafe reading this.

  • X Braithwaite, who’s judged 169 debate rounds with 340 students, has her own disclosure policy in her paradigm, which uses a racial epithet: “1. N****s don’t have to disclose to you. 2. Disclose to n****s.” I checked Tabroom and X Braithwaite indeed said it and it can be found here.

  • Other points from the author/debate coach. “A black student I coached was told by a judge that he would have won his round if he hadn’t condemned Black Lives Matter.” He then talks about kids who go into the debate defeated because the student’s argument cannot win against the woke judge after they read the paradigm. I thought judges were supposed to be impartial. Wrong answer.

  • Could you imagine if a paradigm read, “I am an unabashed capitalist who believes in free markets and pro-growth policies?” I don’t think you will find many of those paradigms on Tabroom. I spent 30-minutes on Tabroom, and not all are offensive to be clear, but I did not find any pro-capitalist paradigms either.

  • In this article, a high school student alleged censorship after she says a judge at a recent tournament “warned” her not to bring up former President Trump because it would be “inappropriate.” She was debating Biden’s foreign affairs track record.

Other Headlines

• Dimon calls for Washington-Beijing engagement in first China visit since 2021 controversy

• Turkey’s lira sinks to fresh record low after Erdogan re-election

  

• Advance Auto Parts shares plummet after dismal results, cuts to outlook and dividend

  • The stock was -29% Wednesday morning after earnings. The auto parts supplier blamed its results and bleaker outlook on higher-than-expected costs, inflationary pressure, supply chain problems and lower, unfavorable product mix. The dividend was cut sharply, lowered forecast and missed earnings badly.

    

• What Costco’s Baskets Reveal About Consumer Finances

  • I have been writing about my consumer concerns for over 6 months. Record debt levels, higher rates, inflation, crashing savings… We are starting to see more cracks and presume it will deteriorate further in 2023. Costco is seeing more traffic from those who earn over $80k, but are seeing a slowdown in discretionary, big-ticket purchases. The CFO said that customers are ditching pricier beef products for cheaper pork and chicken.

• Chewy shares surge after earnings beat on top and bottom lines (Stock +12%)

• Amazon workers plan to walk out over ‘lack of trust’ in leadership

  • Amazon employees worldwide plan to walk off the job to highlight concerns about recent layoffs, a return-to-office mandate, and the e-retailer’s environmental record. The article suggests 1,900 out o 350,000 worldwide may walk out today.

• Twitter Is Now Worth Just 33% of Elon Musk’s Purchase Price, Fidelity Says

  • I wrote MULTIPLE times that I felt Musk overpaid by $29bn on a $44bn purchase price. The difference is, I wrote it 10/30/22.

• Goldman Sachs is cutting jobs again amid Wall Street deals slump

  • Goldman Sachs is preparing for its third round of layoffs since September as Wall Street firms adjust to a slump in deals activity. Less than 250 in this round.

• Nvidia crosses into $1 trillion market cap before giving back gains

• ‘Everyone is a programmer’ with generative A.I., says Nvidia chief

• Jon Taffer warns staff shortages at restaurants could be solved with AI and robots

  • Automation will dislocate MILLIONS of people out of jobs.

• Secret audio tape among evidence collected by DA in fraud case against Trump

  • How is this guy the front-runner? How many lawsuits can he fight at one time? The NY Criminal Case goes to court during the March primary and the judge made it clear to Trump he cannot have conflicts. This article suggests his legal team is clashing just when they need to work together.

• Republican-led Texas House impeaches state Attorney General Ken Paxton

  • Democrats and Republicans voted him out and outlined 20 articles of impeachment. I have not followed this super closely, but seems to me the right decision was made here. Of note, you need to be pretty sleazy for the disgusting politicians to think you are sleazy.

• Tara Reade, who accused Biden of sexual assault and had claims debunked, has just announced that she has defected to Russia during a press conference with convicted Russian spy Maria Butina.

  • I thought the woman was credible. After listening to her press conference where she spews her love for Russia, she lost any credibility with me.

• Bidens offer ‘safe harbor’ to Hunter as he flails over scandalous reports, new messages show

  • President Biden claimed he had no knowledge of his son’s business dealings and the suggestion is the are emails that prove otherwise. The House Oversight Committee revealed the Bidens constructed a “labyrinth” of corporations to transfer millions from foreign deals.

• Chris Christie to announce 2024 presidential bid

• John Kerry: Farmers Must Stop Growing Food to Meet ‘Net Zero’ Goals for ‘Emissions’

  • According to the rocket scientist, Kerry, our ‘lives depend” on farmers ceasing operations. I just want you to think about that for a second. “Mitigating methane is the fastest way to reduce warming in the short term,” Kerry claimed as he took aim at livestock farmers. “Food and agriculture can contribute to a low-methane future by improving farmer productivity and resilience,” he further stated. To be clear, the Kerry family had their OWN gas-guzzling private plane (Gulfstream IV-SP ) until he was forced to sell last summer by the mob. After he was criticized for taking the jet to receive a climate award in Iceland in 2019, Kerry said: “If you offset your carbon, it’s the only choice for somebody like me who is traveling the world to win this battle.” So, he does not want you to eat food, but it is ok for him to emit far more metric tons of CO2 in a single flight than you cause in a year driving a car. Makes complete sense. His plane emitted over 300 metric tons of carbon since Biden took office as of July 2022, but he wants famers to stop producing food. It is almost impossible to listen to the utter stupidity which comes out of DC today. If the conversation calculator I used was correct, 325 metric tons of carbon is equivalent to the COs emissions from 134,091 gallons of gas consumed or 3,054,896 miles driven. Note, 828 million people in the world are facing hunger and 3 billion cannot afford a healthy diet. Yes, making less food seems like a brilliant idea.

    

• Migrant children in NYC left alone to drink, do drugs, ex-Midtown hotel worker says

• Only 33% of BLM's $90M in donations helped charity foundations

  • Great chart in the piece.

• This Twitter story is about soft-on-crime policies and their impact on innocent people. No link.

  

• Video shows dozens of teens attacking Marines on Southern California pier during Memorial Day weekend

• Lululemon fired two employees that confronted masked robbers

  • Two Georgia women — including an assistant manager — are blasting Lululemon for sacking them from their jobs after they called the police while three masked men pillaged the store. History will not view this “woke” period fondly. The idiocy of letting criminals run free and vilifying innocent people for calling the police is disgusting.

• At least 9 shot, including minors, as Memorial Day gunfire erupts in Hollywood Beach, Florida

  • You just don’t see this very often near me, but it happens. Scary. I grew up going to this beach.

• Chicago shootings: 53 shot, 11 fatally, in Memorial Day weekend gun violence across city

• Outraged critics rip CUNY law grad’s ‘hate-filled’ commencement speech, demand billions in tax dollars be stripped

  • In her vitriolic May 12 graduation speech at the public City University of New York’s law school, newly minted grad Fatima Mousa Mohammed called for a “revolution” to take on the legal system’s “white supremacy’’ while blasting city cops and the US military and claiming Israel carries out “indiscriminate” murder.

• North Korea toddler, parents jailed for life after being caught with Bible

• Texas Girl Born in Jail Heading to Harvard After Graduating at the Top of Her Class

  • Raised by a single father and her mother never played a role in her life. Amazing story. She had a mentor who proved critical in her success. Please give back your time to those in need.

• I'm an ER pediatrician. I won't let my kid do these 5 summer activities

  • Fireworks, unsupervised swimming, swimming in rough ocean, sun without protection, riding a bike without a helmet.

• Harvard-trained psychologist: If you use any of these 9 phrases every day, ‘you’re more emotionally secure than most’

• Up to 1.7 billion T. rex dinosaurs lived on Earth, a new study found. But scientists aren't sure where all the bones went.

  • I don’t believe this one. 1.7bn T-Rex dinosaurs? Less than 100 have been found. No chance there was 1.7bn or there would be bones all over the place. They were 40 feet long and 12 feet tall weighing up to 15,000 pounds.

• Groundbreaking Israeli cancer treatment has 90% success rate

  • An experimental treatment developed at Israel's Hadassah-University Medical Center has a 90% success rate at bringing patients with multiple myeloma into remission. With advances in medicine, AI and new drugs and treatments, people will live longer. Some suggest someone alive today will live to 150 years old. Not sure I buy that, but expect lifespans to increase. We need to solve the entitlement issues now.

    

• Chinese fighter jet cut so close to US spy plane it caused turbulence inside cockpit

• Kamikaze drones strike ‘in earshot’ of Putin’s palace as mushroom cloud fills sky in ‘worst attack on Moscow since WW2’

• North Korea says it will launch its first-ever military spy satellite to monitor U.S. drills

Real Estate

• The nine U.S cities where home owners are losing THOUSANDS on their house values: Median sale price in San Francisco drops a staggering $220,000 from a year ago. Some large price/percentage drops are listed. Here are a few, but the article outlines more. Oakland, CA -16.1%, San Fran -13.4%, Austin, TX -15.3%, LA -7.8%, Salt Lake -10.9%. This chart was from a different article.

  

• Toronto Condo Investors Are Losing Money in a Bad Sign for Renters. Even though rents in Canada rose by a record amount last year, interest rates rose even faster as the Bank of Canada increased its benchmark to 4.5% from 0.25% to combat surging inflation. That left 52% of leveraged investors closing on new Toronto rental condos stuck with negative monthly cash flow, according to the report. Most buyers who got mortgages in 2022 have negative cash flow.

  

  

• I keep writing about the continued migration to Florida. Yes, things have slowed slightly, but here is another example of the high-end sale. A local doctor in Jupiter sold a house on the Loxahatchee River for $27.5mm to a retired tech executive. The sale marks the priciest in Jupiter since a race car driver sold his waterfront Admirals Cove mansion for $24 million in 2021.  The Shikaras bought the 6.25-acre property for $2.7 million in 2012, records show. To me, the house is ugly. On Palm Beach or North Bay Road, the house would have been far more expensive.

• Miami and Miami Beach commercial sales volume plunges 80% in first quarter

  Office deals experienced the biggest drop-off of 97 percent, compared to the same period of last year. In the multifamily sector, sales volume hit $40.6 million in the first quarter, down 83 percent compared to $235 million in sales volume during the first quarter of last year, the report states.