Who Can Afford it?-Vacations+Weath Report
10-13-24
Opening Comments
My last note was about my Catch Miami dining experience. The most opened links were the video of the day about Sofia Loren’s life lesson and the 7 secret calls between Trump and Putin. Early send today as I went fishing early today.
Eight Sleep Update + Reader Review. I traveled recently and slept so poorly relative to my Eight Sleep Pod 4 experience. The ability to adjust the mattress cover to a cool temperature setting allows me to fall asleep quickly and stay asleep for longer than before I owned it. A recent reader review: "One week in, what a world of difference. Thank you again for making the recommendation! I can’t believe how cold it can get, amazing stuff." Given my new partnership with Eight Sleep, I can give Rosen Report readers $350 off the Pod 4 Ultra or $200 off any Pod 4. Just visit eightsleep.com/rosen/ and use the code ROSEN. Check out what has become a far better sleep experience for me since I started using the Eight Sleep Pod 4.
I thought this was a funny post. Sadly, I check everything on the list except for having a MySpace account. I received 23 points on the list out of 24. I will be 55 years old in 6 weeks, so I am indeed old.
Markets
Hurricane Milton
Consumer Data
Health Insurance Costs Skyrocketing
Lesson in Supply & Demand from Northwestern Football
Florida R/E Woes in Some Markets (West Coast)
Boca Raton High End-WOW
Video of the Day-Rafa Retired
Rafael Nadal announces his retirement from tennis. He is an all-time great and will be forever linked to Federer and Djokovic. His 22 grand slams put him at #2. He is one of 8 men to win a career grand slam and has won the French Open a record 14 times. He would likely have more grand slam titles, except for the fact that he has had a lot of injuries. Rafa won 92 singles titles and 11 doubles titles giving him almost $135mm in career earnings. Nadal is in the top three in Grand Slam titles, Finals appearances and Semifinal appearances. This is my favorite lesson from Rafa: it is a short video about the importance of body language and a lesson to all, especially kids who play sports at a high level. 1-minute video. Body language is one of the 100 things that kept me from being a professional athlete.
Who Can Afford This?-Vacations
I have written about the absurdity of taking a vacation today. One of my most widely read notes was “Skiing is for Billionaires,” written after I took my daughter to Utah on a ski trip. Well, my frustration level has only increased since last April when we went skiing. I don’t love leaving Florida from November through April. The weather is nice, my house is great, I have a boat and live near the beach. However, my kids want to get away and they are soon leaving for college. I am not sure how many more family vacations we have left, so I acquiesced, holding back tears due to the price of a vacation.
Last December, we went to Nizuc in Cancun. It was expensive and BORING. There was nothing to do there and the food was a “C” at best. I boycotted returning to the scene of the robbery, as I felt violated. Anywhere I looked in Mexico or the Caribbean was OFFENSIVELY priced. Some friends are going to Mayakoba, which is again in Cancun. There are 4 hotels on the property. I called and, given my legendary frugality, asked for the CHEAPEST of the 4 hotels. The absurd rate only includes breakfast for 2 people and totaled $24,900 for 6 nights. Also of note, this is at the beginning of the holiday, which is less expensive than over New Year’s. A 2-bedroom is basically the same price as two regular rooms. Remember, this is NOT all-inclusive. What is shocking is these hotels are booked solid. There is limited availability, despite the insane prices. I ended up booking 5 nights and got a small discount. Still quite offensive. There is a padel court on the premises, so there is a saving grace.
A comparable two-bedroom villa at the Rosewood Mayakoba (most expensive hotel at Mayakoba) was a mere $86,670 or $14,445/night including $22,420 in taxes and fees. WHAT? Are you kidding me? Who can afford this?
I speak with incredibly affluent readers who are in shock and dismay about taking the family on holiday. I just spoke with one who stayed at a fancy resort in the Turk’s and Caicos, called the Amanyara. He said, “Is there an inside joke that I am missing? How can people afford these vacations?” He spent over $4,000/night on a room with his wife and complained about feeling sick around the cost of everything from breakfast to the nearly $400/hr massage and overpriced drinks and food. The hotel charges 27% for service charges and fees for all dining. He and many of my readers who have means are apoplectic about the cost of a holiday today.
I just don’t understand how there are so many people who can afford such lavish holidays. I vividly recall going on holiday to Miami in December 2008 and staying at the Fountainbleau. We stayed in a 3 bedroom condo for $450/night and it included breakfast. It was 30% occupied in 2008. Now, a 2-bedroom is $5,060/night before taxes and fees and is not available despite showing rooms on the site. When will the madness end?
Here is a list of some of the most expensive hotels in the world. I just cannot comprehend this stuff. Prices range from $40k/night to $1.4mm/week. I would rather buy a house! And I was complaining about $4k/night.
I did some legwork and uncovered that, as of 2023 according to Altrata and data from JPMorgan, the number of Ultra High Net Work (UHNW) families has exploded during the past 20 years. Globally, 157k individuals were controlling $14.2 trillion in 2004. By 2023, those numbers grew to 426k individuals controlling $49.2 trillion and by 2027, the group is expected to grow to is expected to grow to 528k. Maybe this is why I throw up when I try booking a vacation. I may do a deeper dive into the Altrata data if readers request it.
Quick Bites
Earnings season started with JPM (+4.4% Friday) and Wells (+5.6% Friday) announced and both stocks performed well despite the fact that Jamie feels the stocks is expensive and bought a small amount back in the quarter. The bank index was +3% on the day and is at two-year highs. Stock indices continued the upward climb with the S&P hitting its 45th all-time high of the year. The major averages also registered a fifth straight week of gains. The S&P and Nasdaq jumped 1.1% each, while the Dow toted a 1.2% gain. Despite the rates markets not cooperating, stocks continue to perform. The 2-year closed at 3.95% (+37bps since rate cut) The 10-year hit 4.11% Friday before settling at 4.09% (+45bps since the rate cut). Watch rates. If the 10-year continues to climb, I question how long stocks will rally. Check out the last chart of Buffett’s preferred measure of valuations (Found it in Whitney Tilson’s newsletter). PPI was flat for the month and +1.8% from a year ago.
Given I just complained about the cost of a vacation owing to the immense wealth in the world, I felt these stories about consumers struggling were a major juxtaposition. I thought it was concerning that the Federal Reserve just posted data showing a record number of people are working multiple jobs. This is ~300,000 above the peak seen before the pandemic and ~600,000 above the 2008 peak. Furthermore, the number of part-time jobs has jumped by ~3 million over the last 3 years to a near-record 28.2 million. In Massachusetts, EBT (food stamps) use jumped 34.6% since July 2023. In a related story, credit card rates hit a new record of 23.4% as total credit card balances are at all-time highs of $1.14 trillion. For perspective, in 2018, Americans paid $160bn of interest on cards and now pay $318bn, while card delinquencies are rising. What about auto delinquencies (last chart), they are rising sharply for prime and subprime. Nothing to see here. The consumer is fine.
When you work for a company of any size, you don’t think about healthcare as much, as you are given various plan options at what tend to be affordable rates. This is especially true if you are working at a major corporation. When you are an independent contractor or retired prior to qualifying for Medicare, it is another story. I was paying $4k/month for AWFUL coverage with massive deductibles. This WSJ is entitled, “Healthcare Premiums Are Soaring Even as Inflation Eases.” The cost of employer health insurance rose 7% for a second straight year, maintaining a growth rate not seen in more than a decade. The back-to-back years of rapid increases have added more than $3,000 to the average family premium, which reached roughly $25,500 this year. The system is broken, as my annal spend on health insurance, deductible, out of pocket expenses, concierge doctors, and prescriptions… is OUT OF CONTROL and I know I am not alone. There are a lot of good charts in the piece. Let’s not forget about auto insurance costs skyrocketing in the past 4 years (+56%).
Hurricane Milton hit the West Coast of Florida hard with 100mph winds and up to 15’ of storm surge leaving 3mm without power. St Pete had 18.3” of rain in 24 hours. The roof of Tampa Bay Baseball Stadium was badly damaged. However, it appears the overall damage in Tampa is less than feared. The damage between Helene and Milton will be in the many tens of billions. I have seen pictures from Wellington (15 miles west of Palm Beach) and Fort Pierce (60 miles north of Palm Beach) with a lot of tornado damage. Where I live in Boca Raton, we had heavy wind gusts of 40-50mph, but overall, it was not very bad. Thank you to all my concerned readers who sent emails and texts to check in on my family.
Supply and demand are basic principles taught in economics class. This WSJ article is entitled, “The Hottest Ticket in College Football Is…Northwestern?” The team is not strong and has no big stars, yet the football tickets are among the hardest to come by. Why? The normal stadium seats over 47k and is being redone. The team is in a temporary stadium that seats 12k, lead to a massive reduction in supply and created a frenzy for tickets. Despite being 1/4 the size, the temporary stadium is bringing in more money than the former facility. The small format has double the premium seating and ticket prices have exploded. Tickets for last Saturday’s home game against Indiana started at $129 on the school’s official site, an increase of more than 900% on the $17 average secondary-market price for last season’s home opener. And that’s just for the cheapest seats in the house. A perch behind the south end zone would set you back $249, while shelling out for the highest tier of luxe season tickets costs $3,049.
2024 Election
I look at betting markets and have historically used PredictIt. I am told the volumes on Polymarket are much higher. I look at trends rather than absolute numbers. Post the Biden/Trump debate Biden crashed and Trump exploded. When Harris entered, in short order, Trump crashed and Harris exploded. Recently, Trump has made a sharp move higher on Polymarket and PredictIt. Harris had a 6-7point lead just a couple of weeks ago.
Harris’ political operation crosses $1 billion raised for the 2024 election
Harris releases medical report, drawing contrast with Trump
Trump should release his medical records.
AOC warns of ‘out and out brawl’ if Harris ditches Lina Khan as FTC chair
CBS aired Kamala Harris giving two different answers to the same question
I am all for a fair interview and asking probing questions while being respectful. I have often written about media bias. Why was Trump’s full interview released by 60 minutes in 2020 but Kamala’s not? Even former CBS reporter Catherine Herridge feels there is precedent, given the release of Trump’s interview.
Trump Launches Incomprehensible Stream of Consciousness: ‘The Level of That Circle Was Great’
The link has a video of Trump. Rambling.
The fact that the two top candidates for President in America are the clown show named Harris and the clown show named Trump is not a great statement for this country.
Another sad statement that Trump needs it.
Israel/Middle East
Amid the awful developments in the Middle East, there appears to be some good news. Israel’s recent strikes on Hezbollah headquarters may have burned $1.5bn in cash and 2,000 pounds of gold. These terrorists only used the money to try to kill Jews and destroy Israel. Remember, the Biden Administration has been against Israel bombing. This article is critical of the Biden/Harris administration and the role it played in helping Iran improve its nuclear capabilities. Captured documents reveal Hamas’s broader ambition to wreak havoc on Israel
IDF strikes terror site in former Gaza school; Palestinians say 28 killed
Iran’s Secret Warning to U.S. Allies: Don’t Help Israel, or You’re Next
The threats through diplomatic channels have prompted Arab states to tell the U.S. that they won’t aid any attack on Iran
'We will f*** you like Hitler did,' French highschoolers reveal experiences of antisemitism
“Dirty Jew” and “We will do another October 7” are just two examples of the antisemitic verbal abuse comments hurled at Jewish middle and high school students in France.
Jamie Dimon says geopolitical risks are surging: ‘Conditions are treacherous and getting worse’
Brown University rejects pro-Palestinian students’ demands to divest from Israel
Nothing would ever get me to send my child to this school.
Other Headlines
How Florida Keeps Electricity Plentiful and Rates Low
The Sunshine State has steered clear of green policies that are creating a grid crisis in other states. Florida relies on natural gas for 75% of its electricity, more than any other large state. That’s remarkable because of the five largest states, the other four—California, New York, Pennsylvania, and Texas—all have significant natural gas reserves, while Florida has none. My electricity bills are a fraction of when I lived in NYC and my Florida house is more than 2x the size of my NYC apartment.
Tesla shares drop 9% after Cybercab robotaxi reveal ‘underwhelmed’ investors
Uber rallied 11% on TSLA weakness. YTD TSLA is -12% and UBER is +48%. Those involved in the Cybercab reveal were quite disappointed. Let me make this clear; I am not getting into a car with no driver, steering wheel, or pedals anytime soon.
Boeing to cut 17,000 jobs as losses deepen during factory strike
33% of homeowners would hire a ‘questionable’ contractor to save money, report finds
Trust me. Being cheap with contractors is a bad idea and will cost you more.
Bitcoin’s inventor is a mystery. An HBO filmmaker thinks he found him.
Florida threatens to criminally charge TV stations airing abortion rights ad
Shocking video captures moment ex-Gov. David Paterson, stepson are beaten by mob on NYC street
Think of how much better and safer the city was under Bloomberg. Half of NYC wants Bloomberg back as Mayor. I wonder why? He is 82 and better than the clown show of DeBlasio and Adams… or the moron, Cuomo.
Arizona college student accused in random classmate stabbing has attempted murder charge dropped
13 witnesses watched Kaci Sloan stab another student in the classroom. One student jumped in to save the stabbed classmate. "After reading her Miranda Rights, the defendant admitted she came to class to hurt somebody and was planning the attack since the night prior." Why was the attempted murder charge dropped? She should rot in jail.
San Francisco To Shutter 9% Of Public Schools As Budget Crisis Explodes
From January 2019 to December 2023, 13,994 minor patients received gender-transition treatments, with 5,747 undergoing sex-change surgeries and 8,579 getting hormones and puberty blockers, according to Do No Harm's database. A majority of the body-modification procedures.
40-year-old CEO shares her No. 1 productivity strategy: ‘It’s a lesson I’ve had to learn over time’
Brilliant idea. Sounds as though it will do well. Pics look nice.
I wonder why?
Do You Prefer Hard or Soft Luggage? Travelers Care—a Lot
I need pockets. I hate hard luggage with no pockets.
Elon Musk reveals his thoughts on what he believes is behind the UFO sightings in the US
As much as I admire Musk, I am upset at his statements. He thinks these “UFOs” are secret US Government new weapons programs. Come on Elon, tell me there are aliens in our midst.
I want clear evidence of what I know exists. We are not alone.
Gang of 100 'angry' raccoons leave woman too scared to leave house
In the Hamptons, raccoons would eat our garbage filled with dirty kids’ diapers. It was disgusting.
Real Estate
Concerning WSJ article entitled, “The Great Florida Migration Is Coming Undone.” A combination of housing costs, school availability, insurance prices, real estate taxes, hurricanes… all factor into the equation. Not all markets are being impacted. The high-end in Miami and Palm Beach remain quite desirable with limited quality inventory. Across much of Florida and especially along the western coast, a surplus of inventory and dwindling buyer interest are slowing sales and keeping homes on the market longer. That is cooling off what had been one of America’s biggest housing booms this decade. Florida’s population soared between 2021 and 2023, making it the fastest-growing state during much of that period. Remote work and other lifestyle changes that were spurred by the pandemic accelerated a migration trend to the Southeast, and the Sunshine State in particular. Florida’s population soared between 2021 and 2023, making it the fastest-growing state during much of that period. Remote work and other lifestyle changes that were spurred by the pandemic accelerated a migration trend to the Southeast, and the Sunshine State in particular. However, the migration has slowed by every measure including diver-license exchanges. The number of such exchanges among domestic drivers was 41% higher in the first half of 2022 compared with the first half of 2019—a pandemic-era peak. In the first half of this year, it was 12% higher than the first six months of 2019. Hurricane Helene and Milton will only make matters worse, especially on the West Coast. Hard to find insurance will become even more challenging and more expensive. Some insurance premiums are +400% over the past 5 years. Zillow now shows climate risks for homes. Given the dynamics and the storm, there will likely be more aggressive sellers of West Coast R/E in Florida. Many have struggled to sell on the West Coast of Florida and I cannot imagine it will get better near term.
In my community in Boca Raton, called Royal Palm, a new golf course home just sold for $19.75mm. It is an all-time high for a golf lot in my community. For perspective, I bought a bigger lot on the golf course for $6.3mm in 2017. This is a new home that is 10% larger than mine. In 2017, one home sold for over $10mm and that was on the water. See the data below on my community. Note the massive increase in the average price of homes sold. My community is now $11.7mm on average and that includes numerous tear downs. I do not believe prices will continue to increase at the pace we have seen and feel affordability, insurance, maintenance costs, lack of available schooling, golf, hurricanes… will all play a role. The point is, new, high-end product remains hot. I am told a home sold for $100mm+ in Boca on 5th Avenue. It is approximately 2.5 acres on the direct Intracoastal and a 30k foot home. I don’t understand why someone would spend $100mm to live in Boca.
© 2024 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #725 ©Copyright 2024 Written By Eric Rosen.
