Opening Comments
Picture of the Day
Via Carota Review-West Village Gem
Quick Bites
Markets, 10 Year Yields, PPLI-Tax Loophole, AMZN Shipping
John Paulson View, Starting Salaries, Newsom Recall, Ida Photos
7,000 Steps/Day, Smart Toilets, Nicholas Cruz-Political Correctness
Milk Crate Challenge-Social Darwinism
Virus/Vaccine
CDC Travel Guidelines
Mu
Israel 4th Dose?
Real Estate
Boca
Miami
San Diego
Detroit Rents
12 Cities Forecast for Highest Price Increases
Forbearance
Asian Home Markets
Opening Comments
I was hoping to have amazing fishing pictures to share with you, but we basically got skunked. We are in the shoulder season with the dolphin and tuna largely gone and the wahoo and sailfish yet to fill in, given the water temperatures remain hot. I find September is one of the worst fishing months. However, we did have a little excitement. Jack hooked into a bonita, and as he was feverishly reeling it in, it seemed he lost the fish. He did lose it at the hands of a big bull shark. The other excitement can be found in the video of the day.
Video of the Day
The ocean is a remarkable place, and despite some litterbugs who try to destroy it, I seem to find beautiful things every time I go out. Jack, my friend, Dustin, and I went on Friday at about 5pm and fished until 9pm. We were met with a school of friendly porpoises right off the beach who decided to follow my boat for a while as I was gong about 25mph. Check out this 15 second stunning video Dustin shot with his iPhone 12. Just think of the quality of this video from a phone relative to the technology of 10 or 20 years ago. My 14-year-old daughter, Julia, edited the video for the Rosen Report. I also am including a photo I took of the sunset. Look at how calm the ocean was on Friday night. Remarkable.
Via Carota - Incredible Food from Florence-Hip Vibe and the Place to Be Seen
51 Grove St/New York, NY 10014/(212) 255-1962
Places such as Via Carota is what I miss most about NYC. It is cool and hip and combines great food with fantastic people watching. The rustic decor is inviting with its dark woods, brick walls and long vintage high top bar; it makes you want to linger a while. The restaurant limits online reservations to 30% which means that you wait in line at 4pm to give your name. It is a little irritating, but worth it. If you want to impress your date, go early, put your name down for 8pm and it is sure to dazzle. It is the West Village after all.
One of my dear friends who is a senior Wall Street executive names Via Carota as his favorite in the city, and it is for good reason. From the website: Via Carota is the West Village gastroteca of cherished downtown chefs Jody Williams and Rita Sodi. Inspired by the 17th-century villa in the hills near Florence which Sodi once called home, Via Carota honors old-world Italian roots, life style, food and décor. I have reviewed iSodi previously, which is another gem.
I have eaten at Via Carota a half dozen times and have never been disappointed. Given the pandemic, they have expanded outside seating, which is causing a bit more pressure on the small kitchen. Despite this new wrinkle, the service was solid.
Jack and I went at 5pm on a Saturday night and had to wait in line 15 minutes despite open tables. We got a table outside, where countless pretty people were sitting. I have seen a bunch of A list actors in my various visits. Most notable about the crowd was the age was about 30% younger than the typical Boca scene. I did not see any blue haired people, trip over any walkers, canes, wheelchairs or oxygen tanks.
As usual, I ordered a bunch of dishes to give a variety of tastes. The fried zucchini with garlic was great. My favorite appetizer was the raw tuna over Tuscan beans. I get it every time and it is so good, even down to the quality of olive oil they use.
We also ordered the rice and spicy pork fritter. For the main entrée, Pappardelle with a wild boar ragu.
The wine list is good enough, but not remarkable, with 100% Italian selections only with prices from $50-200+. Again, the homeless people came by begging as we dined, which is definitely not an ideal disruption to a lovely experience otherwise.
Via Carota is a fantastic date place or happening place to hang out and be seen. There ain’t nothing like this in Boca from a food, people watching, or atmosphere vibe, and it is a great place to go for lunch or dinner while walking around the West Village.
Food A-
Service A-
Ambiance A
Wine List B
Quick Bites
The Dow retreated on Friday and the S&P 500 slipped from a record high after the August jobs report came in short of expectations, showing the impact of the delta-fueled Covid resurgence. The Dow lost 74 points, or 0.21%, to 35,369, while the S&P 500 edged lower by 0.03% to 4,535 after holding a slight gain in afternoon trading. The broader market index was supported by tech stocks, which helped to lift the Nasdaq Composite by 0.21% to 15,363. Nonfarm payrolls increased by 235,000 in August, the Labor Department said Friday. Economists surveyed by Down Jones were expecting 720,000 jobs. The report marks a significant slowdown from July’s revised number of 1.053 million and comes as the delta variant of Covid-19 has led to health restrictions being put back in place in some states and cities. This article discusses how a restaurant manager in Virginia was so desperate for staff that she hired people with bad attitudes. That did not work out so well.
Ten-year yields barely budged this week after mixed jobs data –- disappointing payroll growth coupled with faster-than-projected wage increases –- lowered expectations that the Federal Reserve will rush to pare its asset purchases. The employment figures marked the end of a potentially momentous stretch that also featured a long-awaited speech by Fed Chair Jerome Powell, which also did little to sway yields. While bond-market veterans including Bill Gross have sounded the alarm about the risk of surging yields, the spread of the coronavirus’s delta variant is holding the Fed back on its plan to taper debt buying. The result is that the market has defied doomsday predictions and stuck to a narrow range. Friday had loomed as a potential day of reckoning for bond traders, should a robust jobs figure spark bets on a more hawkish Fed stance at policy makers’ next decision on Sept. 22. But the addition of 235,000 jobs last month was well short of forecasts, even as average hourly earnings rose twice the median estimate. The 10 year bond yield remains at 1.32%. Since 1962, the 10 year has averaged 5.97% for perspective.
A Bloomberg article on Private Placement Life Insurance (PPLI) may explain a loophole in the Biden tax plan against the wealthy. The threat of higher taxes — what President Biden calls making billionaires and millionaires pay their “fair share” — isn’t the only factor sparking interest in PPLI. A little-noticed change in U.S. insurance law at the end of 2020 makes the tool more powerful, at the same time that competition among insurance carriers and advisory firms is giving rich investors more flexibility, lower costs and a wider choice of products on PPLI platforms. As long as assets are held in a PPLI policy, they escape taxes. When a policyholder dies, heirs inherit the PPLI’s contents tax-free. Those perks strike at the heart of Biden’s plans to get the very wealthy to pay more taxes on their investments, especially on capital gains that currently aren’t levied if assets are held until death. “Private placement life insurance poses a serious obstacle to President Biden’s goal of guaranteeing that high-income individuals pay tax on large gains at least once per lifetime,” said Daniel Hemel, a law professor at University of Chicago, who’s been talking with Democrats in Washington about ways to limit the strategy. “PPLI is a massive loophole — entirely legal, easy to exploit, and politically very hard to close.”
Amazon is on a spending spree to grow its shipping business and isn’t content with only delivering products purchased on its own site. The company is now moving cargo for outside customers in its latest move to compete directly with FedEx and UPS. “They want to be a new kind of U.S. Postal Service where everything can get everywhere, but also quickly,” said e-commerce consultant Chris McCabe, who was a seller performance investigator at Amazon from 2006 to 2012. In my opinion, Bezos is one of the best CEO’s of all time. He is not scared to fail and this list of bad ideas from Amazon has some real dogs. However, I won’t bet against Amazon despite the fact that Bezos is off to space.
Ever since John Paulson bet against the U.S. housing market more than a decade ago, people keep asking him about his next big trade. The billionaire hasn’t found anything to rival his massive short, but it’s hard to top the $20 billion that Paulson made for himself and investors when subprime mortgage bonds collapsed and ignited the worst financial crisis since the Great Depression. Now though, more than 14 years after CDOs and credit-default swaps dominated everyone’s attention, Paulson is again seeing signs of excessive speculation. Paulson, 65, is increasingly concerned about rising prices, he said in an episode of “Bloomberg Wealth with David Rubenstein.” The rapidly expanding money supply could push inflation rates well above current expectations, he said, and gold, which he’s backed for years, is primed for its moment. His harshest words are for the hottest investments of this era. SPACs, on average, will be a losing proposition, while cryptocurrencies are a bubble that will “eventually prove to be worthless.” Paulson made billions during the crisis in what I would argue was the best trade of all time. Since his huge home run, his returns were not remarkable, but I thought his views in this Bloomberg story were compelling. I met Paulson a handful of times and recall a meeting in his office in early to mid 2008 where we were both so negative on the world, it could have been a “Debbie Downer” skit from Saturday Night Live.
Despite a global pandemic that caused massive unemployment and slashed earnings among working-class Americans, starting salaries for recent college graduates continue to rise. According to a recent report from the National Association of Colleges and Employers, the average starting salary for the college Class of 2020 was $55,260 — 2.5% higher than that of the Class of 2019 ($53,889 ) and 8.5% higher than the Class of ’18 ($50,944). Among graduates who majored in science, technology, engineering and mathematics fields, average earnings were even higher. I have previously written that I do not believe college is for everyone and think many students should attend a vocational school rather than a traditional 4-year education. Below are the highest average starting salaries and found the article interesting.
A SurveyUSA/San Diego Union-Tribune poll found Newsom beating back the recall by eight percentage points, and a Public Policy Institute of California (PPIC) poll released Wednesday night shows the governor leading by an even bigger margin. The new poll, conducted among 1,706 Californians between Aug. 20 to Aug. 29, shows that 58% of likely voters plan to vote "no" on the first question (Shall Gavin Newsom be recalled?) while just 39% plan to vote "yes." Newsom, armed with an eight-to-one fundraising advantage, has dramatically increased voter outreach and engagement efforts over the course of the final month.
The remnants of Hurricane Ida dumped flooding rain, spawned tornadoes across the Northeast and caused dozens of deaths in areas where the storm landed. So far in the Northeast, at least 51 deaths have been attributed to the storm. Overall, there have been at least 67 deaths across eight U.S. states related to Ida. I have seen crazy pictures of flooding. This NYC Subway picture is remarkable. Also, a reader sent me a photo of the famed 10th hole at the Winged Foot golf course.
Taking 7,000 steps a day during middle age can keep a person’s arteries healthy and reduce their risk of death by up to 70 percent, a new study concludes. The findings by researchers from across the United States suggest that this lower number is still enough to protect against serious heart complications — rather than the common recommendation of 10,000 steps per day. The study examined a group of adults between 38 and 50 who took at least 7,000 steps daily – about three miles – and discovered that these individuals were much less likely to die over the next decade. Mortality rates among both White and Black participants fell by 63 and 70 percent respectively compared to their sedentary peers.
The Future of Everything covers the innovation and technology transforming the way we live, work and play, with monthly issues on education, money, cities and more. This month is Health, online starting Sept. 3 and in the paper on Sept. 10. The next frontier of at-home health tracking is flush with data: the toilet. Researchers and companies are developing high-tech toilets that go beyond adding smart speakers or a heated seat. These smart facilities are designed to look out for signs of gastrointestinal disease, monitor blood pressure or tell you that you need to eat more fish, all from the comfort of your personal throne.
Has political correctness gone too far? I think so and this story irritates me. The Marjory Stoneman Douglas High School shooting hits close to home for me because it is 20 minutes from my house and shook the community as well as the country. My personal view is this “animal” should be able to be called anything and everything and would like to see him get the death penalty with a public stoning, hanging, or firing squad with bad aim. Prosecutors and witnesses in the future trial of Parkland school shooter Nikolas Cruz will not be allowed to use derogatory words to refer to the defendant, according to a ruling by a Florida judge. It would not be feasible, Broward County Circuit Judge Elizabeth Scherer said, to create "an exhaustive list of words," that should not be used to describe Cruz, who faces 34 counts of premeditated and attempted murder for the February 2018 shooting at a South Florida high school that left 17 people dead. But the use of terms like "animal" or "that thing" would not be permitted during the trial, Scherer said. However, Scherer's ruling, issued Friday, said the defense had also asked some words not be used -- like "school shooter," "murderer" or "killer" -- were not derogatory, but "normal words or terms that may be used to describe particular facts."
At the end of the day, the world is filled with idiots. I love good examples of Social Darwinism and of course, this one comes from Florida. The video seen in this link had me laughing at the moron’s expense. I hope he learned his lesson, but doubt it. It’s all fun and games until someone gets impaled by the edge of a milk crate. Miami cops are weighing in on the nationwide craze, hashtag #themilkcratechallenge. There are so many reasons why this is so wrong on so many levels. The risky social media trend involves a person climbing up highly stacked milk crates and walking back down as bystanders chant, cheer and even bet on your success or failure. Ideally, in a perfect world, you make it down without falling, and hurting yourself. Most people end up sprawled over a pile of crates. A PSA from the Miami Police Department shared on social media earlier this week wants to drive the point home: Do not attempt. “We have been made aware of the #milkcratechallenges that have been going around,” says the post. “There are some obvious dangers when participating in a stunt like this, however we’d like to remind you that falling uncontrollably from any height can cause you some serious injuries!
Virus/Vaccine
The data continues to improve, as the growth rates are slowing and we are closing in on a peak. I had suggested the peak would come late August/Early September and as you can see in the chart below, the case growth rates are slowing sharply from a few weeks ago. The 14-day change in cases was +7% relative to +172% a month ago. Hospitalizations grew at 12% relative to +74% in mid-August. Deaths grew at 53%, but were +116% in mid-August. The second chart is one I found on CNBC comparing data from Labor Day last year to this year and on all fronts we are worse off on data despite the vaccine.
The CDC has advised unvaccinated Americans against traveling over the holiday weekend, worried the festivities could kick off another surge in cases. New cases this week have climbed to their highest point since January, averaging 166,000 per day over the last seven days. New cases, however, are rising at a substantially slower pace than in recent weeks, and many scientists predict they will soon start to decline. The U.S. is heading into Labor Day weekend with just over four times as many Covid-19 cases and more than twice as many hospitalizations as at this time last year — despite having vaccinated 62% of the American population with at least one dose.
As the Delta variant of COVID-19 continues its deadly sweep across the U.S., officials say that they are keeping a "very close eye" on a new variant that may be able to bypass existing coronavirus antibodies. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said on Thursday that the U.S. is taking the variant, dubbed Mu, "very seriously," but that it hasn't taken an extensive hold in this country. "We're keeping a very close eye on it. It is really seen here, but it is not at all even close to being dominant," Fauci said. "As you know, the Delta is more than 99% dominant." Fauci said the Mu variant, technically known as B.1.621, has mutations suggesting "it would evade certain antibodies," potentially including those from vaccines.
Israel is planning to administer FOURTH Covid shot which could be adjusted to fight new variants as country battles wave of infections despite hugely successful vaccine roll-out. The country's national coronavirus czar Salman Zarka said the country needs to prepare for a fourth injection, which could be modified to better protect against new variants of the virus. 'Given that that the virus is here and will continue to be here, we also need to prepare for a fourth injection,' he told Kan public radio. 'This is our life from now on, in waves.'
Real Estate
A new house came on the market in Royal Palm in Boca. Remember, when I moved down 4 years ago, $12mm was a big # to be on the intracoastal. Here we have a house for over $20.5mm which is almost 20 years old and incredibly dated and not on the water. However, it is on almost 1 acre of land. I will be shocked if this house goes for this amount, but crazy prints continue to happen daily down here. The lot is amazing this close to the ocean with a big playground/yard for the kids. The inside of the house is tired in my opinion and definitely not my style. People today want more contemporary and do not love the Mediterranean Style as they did 20 years ago.
Mickey Drexler (J Crew) bought Calvin Klein’s house on N Bay Road in Miami and bought adjacent parcels controlling 1.3 acres. He has spent $43mm between the various purchases. The land value today is probably closer to $60mm with no house. The $12.9mm paid for the Calvin Klein house is probably worth $25-30mm today. Yes, N Bay Road is insanity.
I connected with a broker in San Diego. She specializes in a community called Racnho Santa Fe and I came close to buying there in 2017. It is about 20 minutes north of LaJolla and 4 or 5 miles east of the Ocean. When I looked 4-5 years ago, there was a ton on the market and homes were sitting unsold for years in some cases. Well, those days are gone. Prices have basically doubled since pre-pandemic. From the broker, “People want out of San Fran, Portland and some LA and many are picking San Diego.”
I spoke the a landlord of apartments in the Detroit and he is raising rents by 10% and does not believe he will get anyone to leave. His friend raised rents by 20% and not one person moved. Another reader who control apartments across the country suggested they are starting to move up 5% and expect to raise rents more in coming months. I wonder what happens to affordability as higher rents go through the system and rent becomes a larger portion of total income.
This article outlines the 12 cities with the highest home price growth forecasts for 2022. Shockingly, Miami or Palm Beach are not on the list. Shockingly to me, three of the cities are in California and #1 is Austin, Texas which is forecast to increase 37.1% by May 2022.
A reader sent me this interesting chart about homeowners in forbearance.
In a related Fortune article sent by another reader, there is some concern about all the homes in forbearance. At the height of the pandemic, more than 7.2 million homeowners were in the mortgage forbearance program, which allows some borrowers to pause their payments. The economy has since posted one of the fastest recoveries in history. Now, just 1.7 million borrowers are enrolled in the forbearance program. The Biden-Harris administration has made it clear it has no plans for another extension of the mortgage forbearance program, which is set to lapse on Sept. 30. Borrowers won’t all get removed at once, instead they’ll be phased out over a period of several months. Nonetheless, as Fortune has previously reported, this is a major shake-up headed for the housing market. In a nation of more than 80 million homeowners, 1.7 million might not sound like a lot—until you consider there are just over 600,000 homes for sale right now on realtor.com. In fact, this year housing inventory hit a 40-year low. So, if even a small percentage of these 1.7 million struggling borrowers opt to sell—rather than returning to their monthly payments—it could cause a shock in the housing market.
Seems from this article the hot housing market is a global phenomenon. Home prices in more than a half-dozen major cities across Asia Pacific, including Beijing, Auckland and Tokyo, jumped up by double-digit percentiles over the last year.Cheap mortgages and strong demand are driving up prices, much as in the U.S. and around the globe, according to CNBC. Topping the list was Auckland, New Zealand, where prices surged 25 percent in June from a year ago. New Zealand considered to be at high risk of a bubble.Prices rose 14.8 percent in Beijing, where concern about a bubble prompted Chinese regulators earlier this year to limit mortgages and loans to developers, many of which are heavily leveraged. Prices outside Singapore’s central region were up 13.9 percent, while the Japanese cities of Osaka and Tokyo had 13.5 percent and 12.6 percent year-over-year increases, respectively. Prices in Seoul jumped 12.5 percent. Average annual growth across the region was 6.4 percent year-over-year, the biggest increase in four years. In some parts of the U.S., signs are mounting that the frenzied market is slowing down, in part because high prices are driving away buyers.