Opening Comments
UFOs or Foreign Spies?
Quick Bites
Markets, Bitcoin, Greyscale, WMT/TGT, Mortgages, Yellen Tax,
Blockchain, Supply Chain, Global Warehouse Prices,
Trump Investigation, Soho Rezoning, Ransom, EV, 111 Year Old Diet
Virus/Vaccine
Real Estate
General Comment
CA Housing Market Chart
WSJ Article on R/E Bubble
Real Home Price Chart Over Time
Opening Comments
Unfortunately, rough seas have me not fishing my last week down here, which is peak season for Mahi and Tuna. I have a busy evening and am hitting send early tonight as a result. I have been working out more now that my ailments are behind me. I must admit, I was wearing masks in the gym and it is quite challenging to lift weights. I am fully vaccinated. I went yesterday and no one was wearing a mask for the 1st time. It felt good to work out more freely. I also started shaking hands again with friends, something I basically had not done in over a year. I was unsure if the handshake would go the way of the dodo bird, extinct since 1662.
I decided to build an artificial putting/chipping green in the back yard using Celebrity Greens. The technology today is remarkable and they can get the greens to roll 13 if you want and can hold a chip shot. I was promised it would be done prior to my departure. Shocking, that again, supply disruptions prevented the materials from getting in on time. The logistics issues are getting far more serious. Shipping and trucking rates have skyrocketed and supply chains continue to be stretched. Big Quick Bites story on supply chains.
Given the length of the UFO video today, I have no video of the day. I want readers to watch the 60 Minutes story.
I have documented that my handy man skills are fairly weak. I prefer to bring in reinforcements when something is broken if it is more than a light bulb. My wife was screaming at me that her TSLA charger did not work. Son of a…. I tried plugging it into the wall and got shocked to hell. Was it a set up? Did Jill rig the outlet to do this to get me back for something? I will never know the answer, but called the electrician immediately before I burned my house down.
The Rosen’s are off Friday and given travel, the Reports may bounce a bit on timing. Remember, you can go to https://ericrosen.substack.com/ and see prior reports written on Susbtack. My delivery issues persist with probably 40% of subscribers not receiving it regularly.
A reader from Pacific Palisades called me very angry about the homeless fires blazing just behind her house. Living in a $7mm home next to homeless encampments is quite disturbing and fires continue to blaze. She feels less safe as homeless people are now wandering around her neighborhood. Her house overlooks the Pacific with some of the best views I have seen. I took these pictures from her backyard when I stopped in LA about 8 years ago on my way to surf in Fiji. On the bottom of the hill is the homeless sight just off the beach.
UFOs or Foreign Spies?
I have often written about UFOs and found any related story to be something Rosen Report readers found interesting leading to comments and clicks. Over the past couple years, as sightings have become more frequent and documented, I am now a believer that something else exists out there and do not think it is likely made by a foreign government. The laws of physics are being defied by objects with no wings, propulsion devices, plumes, yet can travel 80,000 feet in less than a second. They can turn and rotate in ways that defy physics. Given the increased sightings by Navy pilots in recent years and footage being declassified, the mainstream press is starting to cover the topic more frequently.
For many years, I never missed a 60 Minutes episode; it was among my most favorite shows. With turnover of anchors and weak stories, I cooled on the program. Well, 60 Minutes covered a big story on UFOs, also knows as UAP (Unidentified Aerial Phenomenon). The 13 minute video contains interviews with Luis Elizondo, Navy pilots and a senior Department of Defense official. Elizondo is the former director of the Advanced Aerospace Threat Identification Program, the secretive Pentagon unit that studied the national security implications of UFOs. He claims they have identified objects that can fly 600-700 G-forces, evade radar and can fly through air or water with no wings or propulsion devices. WHAT? One Navy pilot said he saw UFOs EVERYDAY for two years. A 2015 video is crazy. Looks like a flying saucer and rotates and you can hear the pilots in shock at what they are seeing. The pilot believes it is one of three things: 1) Secret US technology, 2) An adversary spy vehicle or 3) Something other worldly.
David Fravor (Top Gun graduate) and Alex Dietrich, both Navy pilots are interviewed and walk through an insane sighting witnessed by four pilots. A little white, “tic tac” looking object the size of his F-18 was spotted 100 miles off the coast of San Diego. Fravor followed it in his plane. The UFO turned on a dime, followed him and disappeared into thin air only to be acquired on radar 60 miles away in 5 seconds. This suggests the object traveled at 43,200 MPH. For perspective, the fastest military jet, Lockheed SR 71 Blackbird, can travel 2,100 MPH. So there is an object that can travel 20x faster than the fastest US military plane and turn on a dime as well as disappear? Elizondo investigated the specific sighting off the San Diego coast and brought it to the Pentagon. He was able to get three videos declassified. Christopher Mellon, former Deputy Assistant Secretary of Defense, believes with a high degree of confidence the objects are not made by the US Government. Mellon leaked the videos Elizondo had declassified in an effort to increase awareness of the sightings. Senator Rubio has called for a detailed analysis to be done by June.
There is a NY Post article interviewing Elizondo as well and he is a firm believer this is a nation security threat. Elizondo made clear that UFOs have been observed to have qualities that are nothing less than otherworldly. He described vessels flying at 11,000 miles-per-hour and being able to turn “instantly.” Providing a comparison, he explained, for our most advanced jets going at the same speed, “if you wanted to make a right-hand turn, it would take you about half the state of Ohio to do it.” This Youtube video goes over various sightings and is 3 minutes in length with some pretty interesting footage. According to Elizondo, the videos released are a fraction of what the government has in its possession and the others are far more compelling. One is taken from approximately 50 feet from the cockpit, but has not been released publicly. One released video shows an object flying, going into the water and coming out of the water and insane speeds. Remarkable technology.
If you watch these videos and do not believe something is out there, I would be shocked. There have been too many sightings by too many Navy pilots for this to be nothing in my opinion. What do these reluctant pilots have to gain by coming forward? They have been ridiculed and made fun of for discussing their experiences. My question is why don’t the pilots attempt to shoot down the UFOs? What would happen? I presume the objects would evade a rocket, but want to find out. I do not believe these UFOs are from foreign governments. Too many sightings and the technology seems too far ahead of what we have in the US based on all the interviews I watched.
I feel it is time for the government to open up Area 51 and show us what they know about UFOs. Obama said, “We don’t know exactly what they are, but sightings appear real. We can’t explain how they moved, their trajectory … they did not have an easily explainable pattern,” the former President said of growing reports of sights, many recorded by the Navy.
This History Channel story outlines the 5 most credible modern UFO sightings and is dated in 2019.
I am sharing a picture of the Lockheed SR 71 mentioned above because it looks cool.
Quick Bites
U.S. stocks cut sharp losses and ended the wild session far off their lows on Wednesday as cryptocurrency prices largely recovered, but the weakness in speculative pockets of the market still weighed on sentiment. The Dow Jones Industrial Average closed 165 points lower, or 0.5% to 33,896 after dropping 586 points at its low of the day. The S&P 500 fell 0.3% to 4,116 as nine out of 11 sectors registered losses. The tech-heavy Nasdaq rebounded from a 1.7% loss earlier and closed flat at 13,299 as some of the major tech stocks reversed higher including Facebook, Netflix, Microsoft and Alphabet.
The major averages briefly added to their losses in afternoon trading after the Federal Reserve’s minutes from its April meeting hinted at reconsidering its asset purchase programs in upcoming meetings. Wall Street had another wild session with tech stocks sliding in the morning as investors were rattled by a sudden plunge in cryptocurrencies including bitcoin. Later the weakness spilled over into other sectors with the S&P 500 dropping 1.6% at its session low. The exception was a handful of retailers that reported solid earnings including Target. I feel these corrections are healthy in general. The market was resillient today as it could have been a LOT worse.
Bitcoin and cryptos have been hit hard since Musk made the comments about the environmental impact of mining Bitcoin coupled with regulatory concerns. I understand electric vehicles are better than traditional cars on the environment, but you do realize the charging of electric vehicles is far from clean as are his $70mm jet and the rockets being launched into space. Ark Investments suggests 76% of miners use clean energy. That seems high to me, but what do I know. Other reports suggest lower and I am in the sub 50% camp as a hunch. But the environmental impact of Bitcoin is not as severe as one might think based on renewable energy. Either way, Bitcoin is getting rocked. After trading as high as $65k+ in mid-April, it hit approximately $30k on Wednesday before rebounding back to $38k. It is now down 41% from the highs in a little over 1 month and was down 53% earlier in the day relative to peak. Wednsday’s sell off was partially attributed to comments out of China as the Banking Association warned members of risks with digital currencies. In general, crypto has been hit hard recently. I looked at 100 cryptocurrencies on Wednesday am and only 4 were up for the past 7 days. Mind you, I had no idea there were so many of these things. I have heard of less than 10% of them. The three larger cryptos (Bitcoin, Ethereum and Binance Coin) were down 30%, 36% and 40% respectively during the last 7 days as of 3:45pm Wednesday. I am hardly the crypto expert, but if you look at the charts, there have been a handful of large downdrafts in the past 4 years. I feel this is a severe one in depth and speed, but I am not writing off crypto and have added to the position on weakness. I will be trading a position of between 1-3% of my net worth in crypto. Some aggressive people have 10-20%. NOT ME. 3 month Bitcoin chart below. Was $8,000 lower this am.
Greyscale Bitcoin Trust. I have bought this in the past and spoke with an “expert” today. To be clear, I am NOT a Bitcoin expert. He is concerned the discount to NAV may increase in coming months as more shares are issued, but over time, it will revert closer to NAV. I had been buying at big discounts to NAV. If this indeed falls significantly on a NAV basis from here, I will feel the compelled to add significantly to my position, so this is something I am watching. At one point, it was trading at a 40% premium to NAV.
Walmart CEO Doug McMillon said customers “want to get out and shop” as they get Covid-19 vaccinations and socialize again. Sales of merchandise for personal care, travel and celebrations have picked up at its stores and website. The company expects that spending spree to continue, as U.S. consumers re-emerge into the world and spend money they stashed away during the pandemic. Target had similar comments and strong #s as well with sales +23% and in store sales +18%. I have a slightly different view. I have become conditioned to shopping on line and going forward will be spending far less time at brick and mortar stores than pre-pandemic. However, I agree with socializing, I will be doing more of that this summer than last.
Applications to refinance a home loan increased 4% from the previous week but were 2% lower than the same week one year ago. The refinance share of mortgage activity increased to 63.3% of total applications from 61.3% the previous week.The average purchase application size hit $411,400 — the highest since February. The average rate for 30-year fixed-rate mortgages increased to 3.15% from 3.11%.
Treasury Secretary Janet Yellen called for business leaders to pay higher taxes to support government stimulus spending, and backed stronger labor unions and lowering barriers to foreign competition. In a speech to the U.S. Chamber of Commerce, Yellen reiterated the White House’s intent to raise taxes on corporations and the highest earners as part of an ambitious infrastructure spending plan. The administration also is seeking a global corporate minimum tax in an effort to stop companies from relocating their bases to avoid higher levies at home. “With corporate taxes at a historical low of one percent of GDP, we believe the corporate sector can contribute to this effort by bearing its fair share: we propose simply to return the corporate tax toward historical norms,” Yellen said in prepared remarks for the Chamber’s Global Forum on Economic Recovery.
Interesting article about hacking into crypto currencies.Until recently, blockchains were seen as an “unhackable” technology powering and securing cryptocurrencies — but that’s no longer the case. Hackers have gotten away with nearly $2 billion worth of cryptocurrency since 2017 by attacking the unique vulnerabilities of blockchains, MIT Technology Review reports. In one recent attack, a hacker was able to gain control over Ethereum Classic’s network and rewrite transaction history. As a result, the attacker was able to “double spend” cryptocurrencies, getting away with some $1.1 million. Until the Ethereum Classic incident, hackers were generally aiming their sights at exchanges, the places where people trade and hold cryptocurrencies.
This is another story about supply chains from Bloomberg. Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world is seemingly low on all of it. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said on a call this month. Clients are “trying to get everything they can because they see high demand,” Jennifer Rumsey, the Columbus, Indiana-based company’s president, said. “They think it’s going to extend into next year.” Good interactive chart in the link. In speaking with people who import from China, some container costs have more than quadrupled since pre-pandemic. Meaning if you want to ship goods from China to the US, your costs have gone from $3,000 to over $12,000 for a container in many cases. Think of what that does to the price of the goods shipped.
Logistics properties cost $24.90 a square foot in the U.K. capital in 2020, soaring 13% in a year, according to data from real estate firm Cushman & Wakefield Plc published Wednesday. Consumers responded to Covid-19 lockdowns by shopping more online, pushing retailers to bolster their delivery services, particularly in Europe where suitable logistics sites were already scarce.
NY Attorney General adds, “Criminal Capacity” to probe of the Trump Organization. The attorney general office's investigation into the Trump Organization, which has been underway since 2019, will also continue as a civil probe, but the office recently informed Trump Organization officials of the criminal component. "We have informed the Trump Organization that our investigation into the organization is no longer purely civil in nature. We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA," James' spokesman Fabien Levy told CNN. The investigation surrounds inflating or deflating asset values for different purposes.
Mayor de Blasio is forging ahead with a controversial rezoning plan for Soho as part of his “racial justice” legacy — despite an ongoing lawsuit by local opponents. The plan would create 3,500 new apartments including 900 affordable units to the upscale area plus an update of 50-year-old regulations for business owners and artists. The City Planning Commission officially kicked off its public review process Monday — angering locals who are trying to stop it from going ahead in court. How many more reasons is DeBlasio going to give wealthy NYC residents to pack their bags? Hopefully, the next mayor is a little more balanced.
DarkSide, the hacker group behind the recent Colonial Pipeline ransomware attack, received a total of $90 million in bitcoin ransom payments before shutting down last week, according to new research. Colonial Pipeline was hit with a devastating cyberattack earlier this month that forced the company to shut down approximately 5,500 miles of pipeline in the United States, crippling gas delivery systems in Southeastern states. The FBI blamed the attack on DarkSide, a cybercriminal gang believed to be based in Eastern Europe, and Colonial reportedly paid a $5 million ransom to the group.
Italian supercar maker Lamborhini has announced that it will launch a fully-electric car in the second half of the decade. Lamborghini laid out “a roadmap to the decarbonization of future Lamborghini models and of the Sant’Agata Bolognese site,” its factory headquarters. The next 10 years sees the company transition to hybrid models before it launches a fully-electric car. I am all for electric vehicles and clean cars. We have a TSLA. However, I am not sure the silence of an EV engine is as awe inspiring as the tradition motors in these fancy sports cars.
Australia’s oldest-ever man has included eating chicken brains among his secrets to living more than 111 years. Retired cattle rancher Dexter Kruger on Monday marked 124 days since he turned 111, a day older than World War I veteran Jack Lockett was when he died in 2002. Kruger told Australian Broadcasting Corp. in an interview at his nursing home in the rural Queensland state town of Roma days before the milestone that a weekly poultry delicacy had contributed to his longevity. “Chicken brains. You know, chickens have a head. And in there, there’s a brain. And they are delicious little things,” Kruger said. “There’s only one little bite.” I have no desire to live to 111 years old, nor do I have the desire to eat chicken brains. Let me guess; it tastes like chicken.
Virus/Vaccine
Data for the US continues to improve with cases, hospitalizations and deaths all trending in the right direction. The 7 day average for cases is down to 32k and there are currently 33k hospitalized in the US. The 7 day average death rate is approaching 600/day. More than 1.51 billion doses have been administered across 176 countries, according to data collected by Bloomberg. The latest rate was roughly 25 million doses a day. In the U.S., 276 million doses have been given. In the last week, an average of 1.77 million doses per day were administered. Yes, a lot of people have been vaccinated, but we have declined from 3.4mm doses/day to 1.8mm.
Thailand reported its highest number of Covid-19 deaths in a single day Tuesday as officials struggle to contain a third coronavirus wave ripping through overcrowded prisons. The Southeast Asian country's justice minister said authorities are hoping to prioritize vaccinating more than 300,000 inmates and jail staff by diverting doses from the health ministry. On Monday, Thailand reported 9,635 new coronavirus cases -- the highest number of new infections since the pandemic began, according to its Covid-19 task force (CCSA). Of those cases, 6,853 -- more than 70% -- were found in eight prisons and detention facilities across the country.
India on Wednesday reported more coronavirus deaths in a single day than any other country at any time during the pandemic, while infections continued to spread through vast rural areas with weak health systems. The Health Ministry reported a record 4,529 deaths in the past 24 hours, driving India’s confirmed fatalities to 283,248. It also reported 267,334 new infections, as daily cases remained below 300,000 for the third consecutive day. The numbers are almost certainly undercounts. The previous record for most daily deaths from the coronavirus was set on Jan. 12 in the United States, when 4,475 people died, according to data from Johns Hopkins University.
Texas Gov. Greg Abbott — whose controversial early coronavirus reopening plan was slammed by President Biden as “Neanderthal thinking” — boasted that the state had zero daily COVID-19 deaths on Sunday. He added that the state also had the “lowest 7-day Covid positivity rate ever” and “the fewest Covid cases in over 13 months.”
Real Estate
General Comment
A friend bought a place less than 2 years ago for $2.4mm. He put it on the market and sold it in less than 48 hours for $4mm for a 67% return before broker fees. This house was in Boca, just east of I-95. All markets down here are hot, but South Florida is not alone. Today’s R/E section discusses broader markets as well.
The pandemic is burnishing California’s reputation for costly housing. In the latest sign, home prices in the state shot past $800,000 for the first time in April, according to data released Monday by the California Association of Realtors. The new median value of $813,980 is up 7.2% from March and 34% from a year earlier, when pandemic lockdowns mostly froze the housing market. The surge is, in many ways, a snapshot of what’s happening across the U.S., where tight inventory and low mortgage rates are fueling a rally in home prices. Last week, the National Association of Realtors reported that the median sale price for a single-family home rose to a record $319,200.
WSJ Magazine article entitled, ‘Is There a Real Estate Bubble?’ and Other Questions to Consider When Buying or Selling in 2021. Given the number of questions I get from readers on the subject, I thought I would include the article. Both urban and rural markets are discussed.
Jim Reid from DB had the Home Price Index chart which I thought was interesting. Around many parts of the world housing markets have surged during the pandemic. Huge stimulus, low and suppressed interest rates, government tax incentives, demand for more space in the new world, and limited supply have created a boom that surely few could have predicted when the pandemic started.
US. Real home prices were the same in 1999 as they were in 1894. So home prices were range bound around inflation for over 100 years. Over the next 7 years they rose over 60% inflation adjusted before slumping 35% in the next 6 years. From these lows they are now back up nearly 55% and less than 1% off their all-time real adjusted highs and over 10% above pre-pandemic levels. They could hit record real adjusted highs when the latest data is released next week.
The scale of the rise is nearly on the same national scale as it was in the lead-up to the US housing bust that precipitated the GFC. A new paradigm or a huge worry on the horizon?