Opening Comments
Jack and I were supposed to be in Florida as of Friday night. I will spare the details, but after 4 hours in the airport, we left and could not get another flight until Sunday. It was pandemonium at Logan (Boston) and it may be the subject of an upcoming report. Note to self, check your reservation carefully before heading to the airport. Leave a lot of time as the lines are long and crowds are feisty. Trying to get a rental car again was nearly impossible, but our good friend, Danny, saved the day and helped us secure one or we were in trouble.
I heard from an oncologist regarding from my piece on liquid biopsies for cancer screening. She is encouraged by the technology and uses it, but feels it is early stages and does not want to overpromise. She believes you need to continue to do traditional screening as well and do not believe I suggested otherwise. I plan on completing a liquid biopsy screening every few years and hope the technology will continue to improve and come down in price. A reader sent me this interesting video from a Stanford M.D, Ph.D. named Dr. Max Diehn who studies such Liquid Biopsy technology. This portion starts at the 19 minute mark and also discussed again in detail at 57 minutes. Diehn seems to have some reservations about the Liquid Biopsy technology today. I did get the “all clear” on the test, so hopefully I will sleep better now.
We made it back to Flordia Sunday afternoon and I am excited to be back, but less thrilled about the next couple months of weather Sending from my phone due to travel delays.
Picture of the Day-Father of the Year
Went to Nantucket, Not ACK
Quick Bites
Markets
Jobs Report
AMTD Digital-Wild Ride
Manchin-Schumer Bill Will Pass
Democratic Momentum Shifting
Wray “Deeply Troubling” Info Suppression
Other Headlines
Virus/Vaccine
Data-Improvements
Real Estate
General Comments
Other Headlines
Market Cooling
Why is Rent Skyrocketing
Lumber Price Chart
Picture of the Day-Father of the Year
Fun-loving Canadian dad Daniel Hashimoto successfully converted a household leaf blower into a flamethrower that his children use to “scorch” around their backyard. James, 11, and Sophia, 7, have declared it “the best toy ever” in a disarming video that’s now incinerating the internet. “To the children, it was not a deadly weapon, but more a dynamic and giggle-inducing obstacle,” their father Hashimoto, a 39-year-old animation worker from Prince Edward Island, told South West News Service. “They had a friend over to play on the patio, and we decided to let them have some supervised play with this electric leaf blower.” What could possibly go wrong? What a brilliant idea from dad. How about the Department of Family Services get involved. What idiot allows kids to play with a flame thrower? What are the chances that the house burns down or one of the kids is badly burned?
Went to Nantucket, Not ACK
Despite having travelled extensively in my life, I had never had the opportunity to go to Nantucket. One of the benefits of writing the world renown Rosen Report are the connections and new friends made from writing. In a recent note I wrote that I was in Massachusetts, with my son, Jack. A reader and old friend invited me to his home to check out Nantucket but Jack decided to stay back in MA and golf.
At 52 years old, I had a picture of Nantucket in my mind, and it turned out to be wrong in a good way. I have spent 25 years going to the Hamptons and thought Nantucket would be similar, but it really was not the case. I found Nantucket to be charming and quaint. One reader texted me about being in ACK and I responded, “No, I am in Nantucket,” not realizing ACK is the airport code and what many locals call the island. I felt like an idiot, but it shows I was not lying that I had never been to the island.
I took the ferry from New Bedford, MA to Nantucket which took about 1:40 minutes. My friend, Beau, met me at the dock and we walked to his 220-year-old beautiful home in town about 10 minutes away. We had lunch at the harbor at a Japanese restaurant called Yoshi. It was quite good, and the fish was fresh. Also, there were a ton of amazing boats in the harbor.
The houses are very similar to one another given the fact that there are very strict building codes and they are all basically in the shingled Nantucket style. There are no new modern glass 20,000 foot mansions which can be found all over the Hamptons. As an aside, I am a fan of modern architecture, but appreciated the historic homes in Nantucket. I did not see one Lambo, Porsche, Bentley, Rolls, Bugatti…It was a bunch of low-key jeeps and trucks with 90% being American made. For some reason, I thought there would be a much more ostentatious display of wealth, but found Nantucket to be pleasantly lower key than I expected. Part of lack of fancy sports cars could be due to the roads which are rough cobblestone in town and dirt in some other places.
We went for a drive and Beau was a tour guide extraordinaire and showed me the island and small villages within it. I saw Sankaty Head and Nantucket Golf courses, the beach, tons of beautiful homes and Bartlett’s Market, which is cute until you go to the cash register to pay, and it then the sticker shock sets in. Bartlett’s is known for their corn an people get a bit crazy about it.
I liked the small village of Sconset which is a tiny place with beautiful homes. They have a few stores, but again, the prices are at the more than double South Florida if not more. Island pricing is brutal for goods.
Beau and his wife, Beth, had a cocktail party to attend and they brought me along. It was at a small, but stunning home in Lincoln Circle. Check out the view from the deck. I sure could get used to seeing this everday. It was explained to me that some of the homes on the island are on cliffs, and there is fear they will fall over in a storm. Those homes are cheaper than I expected due to the fact that the towns don’t allow you to do work to prevent the catastrophic event. Other homes like the one from the party are high on the hill and safe from falling over making them far more desirable.
From there we went to Millie’s for tacos and there was a 45-minute wait at 8:15pm. The food was good, but again fully priced at $30 for 2 tacos.
I was up early, and we went to play tennis as Beau takes lessons at 7am. We hit with a young pro named, Pietro, from Italy who recently graduated from Cornell. I borrowed white clothes and shoes and a racket and it made me feel like I was at Wimbledon. I had not hit a ball in over 3 months, and the rust showed. The lesson was two hours, and I was nearing death as the picture shows. I was actually hoping the ball would not get hit to me so I did not have to move a the 1:20 mark. I was fortunate to take a break at 1:30, but got called back into action at 1:45. Beth (Beau’s wife) and I were playing Beau and the instructor who was amazing. It was close in points as we were playing the game, 105 (1 point if the other team hits it out or net, 5 points for a clean winner, 10 points for a clean volley, 20 points for a clean overhead volley and 30 points for a clean lob). Beth hit a clean lob over Beau’s head and Pietro did not put a racket on it giving us 30 points and basically sealing the victory. I now call my partner, 30 given it is a rare feat to get 30 points in doubles. The yacht club is beautiful as it is on the water. It was a great time and showed me I need to get back into tennis shape.
I had a remarkable time and hope to go back again one day to see more of the charming island of Nantucket. It is a special place which turns out to be far more endearing and low key than I expected. I also want to note that I saw no fewer than 500 people who could have been Ralph Lauren models given the ultimate “preppy” look. On the ferry back to MA, I took a picture of the biggest and nicest house I saw while on the Island. Nantucket sure is a beautiful place. Thank you Beau and Beth for being gracious hosts and welcoming me into your special home.
Quick Bites
Stocks ended the first week of August mixed after the better-than-expected July jobs print on Friday. The Dow gained 76 points, or 0.23%, to end at 32,803. Even with Friday’s gains, however, it fell on the week. The S&P 500 shed 0.16% to end at 4,145 and the Nasdaq Composite lost 0.50% Friday, falling to 12,658. Still, both the S&P 500 and the Nasdaq ended the first week of August higher. Oil prices continued to decline over economic slowdown fears and hit multi-month lows. Oil closed at $88.5/barrel which is +23.3% YTD and 40.2% over the past year. However, oil was north of $120/barrel in June as the graph shows below. The good news is average gas prices are down to $4.08/gallon in the US from a high of $5.01 in mid-June.
The labor market added 528,000 jobs in July, easily beating a Dow Jones estimate of a 258,000 increase. The unemployment rate ticked down to 3.5%, below the 3.6% estimate. Wage growth also rose more than estimated, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation is likely still a problem. The yield on the 10-year Treasury was at 2.83%, and the yield on the 30-year Treasury bond was up 10 basis points and trading at 3.068%. Meanwhile, the 2-year was up 20 basis points to 3.24%. The 2s/10s Treasury spread is out to -41 bps, the highest level I seen in this inversion.
Even after a retail frenzy that saw GameStop Corp. become the hottest stock in the world and a dog-themed joke cryptocurrency gain billions in value, the whirlwind trading in an obscure Hong Kong financial business stands out as spectacular. The rapid rise of AMTD Digital Inc. -- a barely profitable financial services firm -- is a tale that, while reminiscent of last year’s meme-stock frenzy, is even more mysterious. In a move that has puzzled the financial community, the company’s shares skyrocketed in less than three weeks from their $7.80 initial public offering price to an intraday high of $2,555, an eye-popping jump of more than 32,000%. AMTD’s IPO prospectus lists total sales of just $25 million for the year ended April 2021. Still, that didn’t stop the company’s market value from ballooning to $310 billion at Tuesday’s close, making it larger than industry stalwarts like Goldman Sachs Group Inc. and Bank of America Corp. I get frustrated when people make a killing on these crazy stocks, and then they crash and investors are shocked. Come on man. The second chart does a good job of putting the AMTD situation into perspective. The recent losses are bigger than the market cap of household names. At Friday’s close, the stock was still up over 4,500% YTD, but -61% since Tuesday including the -13% after the close Friday.
U.S. Senate Democrats passed a bill (51-50) that would address key elements of President Joe Biden’s agenda - tackling climate change, lowering the cost of energy and elderly people’s medications and forcing some corporations and wealthy Americans to pay more taxes. The Senate parliamentarian determined that the lion’s share of the health-care provisions in the $430 billion bill could be passed with only a simple majority, bypassing a filibuster rule requiring 60 votes in the 100-seat chamber to advance most legislation and enabling Democrats to pass it over Republican objections, Majority Leader Chuck Schumer said in a statement. I’m not convinced inflation is neutral here. This article outlines some concerns including inflation and increased income taxes. The second article definitely brings up some concerns. I just lack the infrastructure to go through it all in depth.
Interesting article suggesting the tide could be turning for Democrats. Although I still believe the Republicans are likely to do well in the mid-terms, I do not believe it will be the same resounding Red Wave as I thought a few months ago. Biden can point to a few more wins which I highlighted in my last piece as well-The passing of the semiconductor bill, bipartisan gun restrictions, the killing of Ayman al-Zawahiri (key 9/11 plotter) and the Manchin-Schumer deal likely to be approved this week. Are things finally turning around for congressional Democrats? A summer dominated by the Supreme Court’s overturning of Roe v. Wade and explosive January 6 Commission hearings have pushed the party to narrow leads in generic ballot polling. FiveThirtyEight’s tracker now has Democrats and Republicans tied while several recent polls have shown sharp gains for President Biden’s party when voters are asked who they would prefer to have control of Congress. On Tuesday, voters in Kansas—a state that hasn’t gone blue in a presidential election since 1964—strongly rejected a proposed amendment that would have likely banned abortion in the state.
FBI Director Christopher Wray said on Thursday that allegations of an FBI agent’s partisan social media posts and efforts to suppress information in the investigation into Hunter Biden’s business activities were “deeply troubling.” Speaking at a Senate Judiciary Committee oversight hearing, Wray appeared to condemn the alleged actions of Timothy Thibault, who he said was an FBI assistant special agent in charge at the Washington field office until “relatively recently.” I have written extensively on media and social media bias. Numerous outlets called Hunters laptop “Russian Disinformation” and would not allow stories on it to be posted or discussed. Senator Grassley sent a letter to the Justice Department and the FBI in late July saying that he had received “highly credible” whistleblower accounts alleging that Thibault had downplayed or discredited negative information obtained about Joe Biden’s son during the 2020 election. Based on Thibault’s social media posts which were hugely anti-Trump, this is very concerning. I would say the same thing if it were an agent surprising negative information on Trump.
Other Headlines
Walmart lays off corporate employees after slashing forecast
As East Coast ports add China trade, more bottlenecks for supply chain
Berkshire Hathaway reports operating earnings surge, but posts big investment loss amid market rout
Tiger Cubs Stung by Rout Dumped Stocks, Then Missed Rally
Tiger Global, Coatue & Tiger Grandcub D1 post small July gains
They failed to cash in on S&P 500’s best month since late 2020
Fed Governor Bowman sees ‘similarly sized’ rate hikes ahead after three-quarter point moves
'Unsustainable and shambolic': Flight attendants speak out on summer travel chaos
I can tell you first hand, US air travel is broken. Future story.
Meet the shoplifter with 101 arrests — and let go almost every time
Been arrested over 100 times and how many other times was he not caught? Please tell me why this is a smart crime policy.
Nearly 2,000 NYPD cops quitting before getting full pensions — a 71% jump from 2021
Given the crime issues and the vilification of the police, is this a shocker?
Pennsylvania moms react to education dept suggesting kids may use 'ne, ve, ze/zie and xe' pronouns
I agree. I am growing tired of the suggestion that morbidly obese people are healthy role models. How many morbidly obese 70 year olds do you see? Diabetes, heart disease, cancer, strokes, high blood pressure….I would say the same thing about showing a 5’11” model who weighs 115 pounds. Again, unhealthy.
FBI Director Details ‘Crazy’ Rise In Politically Motivated Violence Across U.S.
Both sides cited in the article.
Trump wins CPAC straw poll in Dallas
Let’s mandate an age limit for President of 75 so neither Trump or Biden can run. I also believe the demands put on a President are too great for an 80+ year old to handle.
Indiana becomes first state to approve abortion ban post Roe
Parts of Great Barrier Reef show highest coral cover seen in 36 years
Nature can affect human well-being in many more ways than you think
Beijing Simulates Attack on Taiwan as Chinese Exercises Extend Into Third Day
Chinese aircraft and ships crossed the midway mark of the Taiwan Strait
Nancy Pelosi’s Taiwan Gambit Reshapes Political Risk in Asia
Big market moves are unfolding in the wake of the speaker’s visit and China’s response. But they still probably underestimate the real impact.
Nuclear site ‘seriously damaged’
Parts of Ukraine’s Zaporizhzhia nuclear power plant have been “seriously damaged” by military strikes.
Virus/Vaccine
We live in a crazy word of COVID, Monkeypox and now polio as seen below. The COVID data is improving with cases decreasing by 8% and positivity down slightly from recent highs. Also, hospitalizations and ICUs are growing at lower levels than recent weeks.
New York Health Department says hundreds of people may be infected with polio virus
Real Estate
Citadel continues to build the Miami empire. Check out how quickly the seller made 9mm! Miami remains hot. Billionaire hedge funder Ken Griffin is continuing his Brickell shopping binge, scooping up properties across the street from the development site his Citadel bought this spring. In the latest deal, an entity led by Citadel COO Gerald Beeson bought the three-story, 12-unit apartment building at 1250 Brickell Bay Drive in Miami and the adjacent vacant lot at 1260 Brickell Bay Drive for $20 million, a deed shows. The seller flipped it for a major profit. It bought the property for $11 million in July and sold it to Citadel’s affiliate for a $9 million gain, records show. The apartment building was constructed in 1958 on 0.1 acres, and the next-door lot is 1,300 square feet, according to property records.
Other R/E Headlines
Home Sellers Cut Prices as Housing Market Cools
How higher mortgage rates—and frustration—are changing the playbook for sellers
Great charts.
Zillow economists: Here’s the home price shift coming for your local housing market in 2023
when I was living in Miami I always wondered who would be buying the 1250 Brickell Bay Drive building...now I know thanks to you. the 2 stores apartment building does not fit the region and can be demolished to accommodate something at least 3x bigger if they use the lot on its side....but $20M?! I am curious to see how they will extract value from it. Btw, across the street there is a parking lot that is the last sizable waterfront land in Brickell. Not sure what is the issue there, but seems to be an amazing land for an AAA development and it is there for years.