Opening Comments
Picture of the Day
Wrecked
Quick Bites
Markets, Yellen on Inflation, El-Erian on Inflation
Zoom Shares, David Suzuki, Milwaukee Massacre
Arbery Case, Shoplifting/Looting, Art Market
Other Headlines
Virus/Vaccine
Data-Growth Continues, Albeit at a Slightly Slower Pace
Northeast
Europe
Real Estate
My General Comments-Depleted High End Inventory
Knight Frank on Miami Residential R/E
$14mm Weston House. Why?
Opening Comments
Happy Thanksgiving. This is a very abbreviated note given the holiday and my schedule, but there were a few things I wanted to get out there, especially after the scary accident with my wife, Jill, as well as the tragedy in Wisconsin. First, after you read my subject piece today, you will understand why health is key and be sure to be careful and stay safe over the holidays.
The response from the last piece entitled, “I am a Crypto Idiot” was overwhelming. The best open rate in months and hundreds of emails, texts and calls about it. I received an email after the report was published from a senior expert at a large crytpo trading platform. He offered to tutor me to make less slightly less of an idiot. I found the hour discussion remarkable. There is so much going on within the space I had no clue about and it was frustrating, exiting and concerning all at the same time. The metaverse seems to have some real legs behind it and the future interactions will be far different. I am going to be spending more time in the space and allocating more capital to it in different forms. Yes, currencies, on pullbacks, but through lending and other mechanisms as well as through funds to let the experts manage a block of that exposure. I will be doing a follow on to the “I am a Crypto Idiot” report as well. I am hoping to interview my new crypto expert for an upcoming Rosen Report podcast. I believe all those readers who are like me are going to have a heart attack when they learn about what is happening in the space and the wealth creation, even for teens.
For all those new readers, don’t be shy about sending me story ideas or comments on what I write. I do this solo and my loyal followers send me countless ideas each week which helps save me time. I would guess 20-30% of the stories I cite are sent from readers.
I need a new printer as mine broke, and the cost to fix it is the value of a new printer. I went to Office Depot and they had almost nothing in stock. I went to Best Buy as I bought a new laptop given mine was 11 years old. I asked for a laser printer. Watch this 12 second video. Out of stock for ALL of them. They had a few crap ink jets in stock. I looked at CDW.com for printers and again, the dozen I tried are all back-ordered. No supply chain issues here. I also suggested that on-line it showed laser printers in stock. The salesman said “We cannot account for all the theft.’ How do you steal a printer?
Picture of the Day-Snow Leopard Hiding in Plain Site
I love nature and seeing wild animals. This picture of a snow leopard hidden in plain site is remarkable. Can you see the leopard? It is just under the large block of snow and is perfectly camouflaged. The mind-boggling photo was taken high in the Himalayas in north-eastern India. Photographer Saurabh Desai began trekking in the Spiti Valley in 2019 with one mission. "I was on my search of the world’s most elusive cat which is also known as ‘Grey Ghost’ in the popular local language," he told My Modern Met.
Wrecked
My wife, Jill, went to pick up our daughter at the Town Center Mall in Boca on Saturday, November 20th. My wife drove into the mall off Glades Road when a woman ran a stop sign at the entrance to the mall. The result was the woman drove in front of my wife and Jill’s hood smashed into the passenger side of the woman’s Volkswagen. You can see there is a good deal of damage to Jill’s car. Interestingly, her airbags did not deploy, but the woman’s did. Jill’s neck hurts a bit, but no visible injuries at the time of the crash. She is a bit nervous about driving now given the incident, but hopefully that gets back to normal soon. On Sunday, she was in the passenger seat with me driving and was telling me to slow down and there was not a car within 100 yards of me. I will be blindfolding her if this backseat driving continues for much longer.
The woman who hit Jill spoke no English; not a surprise in South Florida. What was comical is she told the policeman in Spanish that Jill ran the stop sign and was at fault. Well, the woman did not realize my daughter is fluent in Spanish and knew everything she was saying. The police quickly were able to see it was clearly the woman’s fault for violating the rules of the road and not stopping. Jill had no stop sign and had the right of way. Shockingly, given the mall is private property, the police could not issue the woman a traffic citation, but did find her at fault in the police report. The other driver’s husband then tried to suggest my wife was driving recklessly. Thankfully an officer saw the entire accident and corrected him.
The car has been towed to a lot and was considered totaled. Now the irritating part begins. It is high season in Florida and Jill will need a long-term rental car, which a Rosen Report Reader, Danny, helped us secure for 30 days. Will the woman’s insurance pay for everything or instead, will my insurance company need to pay? Thankfully, Jill only seems to have some whiplash, but one second later and the woman would have T-Boned Jill’s car at her door.
The process and disruption are frustrating and I have spent hours on the phone to get rental cars, dealing with the insurance, tow truck company, police reports… Jill wants a new Tesla, but it appears the backlog could me many months. Any Rosen Report readers have any pull here? I put down $250 for a new Tesla Model 3 and they are saying January on the website. I guess that is not the end of the world. I wanted to get her the “Y” model, but it was not available until August.
I am hopeful our insurance prices will not go up due to an accident caused by someone else's negligence. I have a great insurance broker who helped me take care of everything for anyone who needs it. In the end, a car was wrecked, but Jill will be okay and that is all that matters. The outcome could have been a lot worse and we are thankful on this Thanksgiving holiday that no one was seriously injured.
Quick Bites
U.S. stocks pushed modestly higher on Wednesday as the recent jump in bond yields took a breather, allowing tech stocks to recover. The S&P 500 ticked up 0.23% to close at 4,701, while the tech-heavy Nasdaq added 0.44% to finish at 15,845. The Dow lost just 9.42 points and settled at 35,804. The recent rise in yields, which started around President Joe Biden’s decision to renominate Jerome Powell as chairman of the Federal Reserve on Monday, cooled slightly on Wednesday. The 10-year Treasury yield has traded above 1.68% this week after ending Friday at 1.55%. However, the benchmark rate had dipped to about 1.64% on Wednesday afternoon. Oil closed just above $78 and natural gas is at $5. Bitcoin and Ether were down slightly at $57.2k and 4.3k respectively. I am not convinced replacing Powell as Fed Chairman is the best idea despite not agreeing with a lot of his policies.
The ranks of those submitting jobless claims tumbled to their lowest level in more than 52 years last week, the Labor Department reported Wednesday. New filings totaled 199,000, a number not seen since Nov. 15, 1969, when claims totaled 197,000. The report easily beat Dow Jones estimates of 260,000 and was well below the previous week’s 270,000. The Labor Department did not indicate any special factors that caused the stunning fall, which could provide an important signal about a jobs market that has been struggling to come back since the Covid-19 shock in March 2020.
US Treasury Secretary Janet Yellen said Monday she expects current record-high inflation to ease, with monthly rates falling back to 0.2 or 0.3 percent in the second half of 2022. “I’m hoping and expecting in the second half of next year, to see monthly CPI (consumer price index) rates coming in more in the range of two tenths or three tenths,” Yellen told an annual meeting of the Greater Providence Chamber of Commerce in the state of Rhode Island. “I think in the second half of next year, we’ll begin to see inflation subside and the way you’ll be able to see that is by looking at monthly inflation rates,” added Yellen, who addressed the forum virtually. Although I do not see inflation persisting at current rates for very long, I am not convinced in Yellen’s thesis. Also, if the BBB is passed and infrastructure spending begins, I cannot see anywhere near .2% inflation in 2022. I believe it will be higher. Fed Minutes suggest they are ready to raise rates if conditions persist and can be found in this CNBC story.
I have met Mohamed El-Erian and maybe will tell the story in another Rosen Report. I have written as extensively as anyone about inflation for 9 months and believe I was an early call on the subject and have been critical of the Fed and the policies of Central Banks. Mohamed agrees. If a prominent economist is right, the Federal Reserve’s reaction to skyrocketing inflation is “going to go down in history as one of the worst inflation calls.” The Fed has said for months that inflation is a “transitory” trend triggered by the COVID-19 pandemic. Mohamed El-Erian, chief economic adviser at asset management firm Allianz SE, doesn’t agree. "They got stuck on the narrative and held on to it for too long," El-Erian says in an interview with Bloomberg. "The result of which is they're looking at inflation that is much higher than they ever expected ... much broader than they expected ... and that's going to last even longer than they expected."
Shares of Zoom were down more than 19% on Tuesday, putting it on pace for its worst day ever, after the video-chat company warned investors of a revenue growth slowdown, leading Wall Street firms to cut price targets on the stock. It’s the biggest one-day drop since Nov. 9, 2020, when shares fell 17.3% to $413. The company’s stock price has more than halved since then and was trading at about $198 as of mid-morning on Tuesday. I view this as a positive as it means kids are back to school and people are going back to work, which means slowing growth for the company.
David Suzuki, the godfather of the Canadian environmental movement, warned over the weekend that if politicians don’t act to reverse climate change, there could be attacks against oil and gas infrastructure. “We’re in deep, deep doo-doo,” said Suzuki Saturday, speaking at an Extinction Rebellion protest on Vancouver Island. “This is what we’re come to. The next stage after this, there are going to be pipelines blown up if our leaders don’t pay attention to what’s going on.” Nothing like making terrorist threats against critical infrastructure projects to get your point across. We are decades away from being able to rely on alternative energy such as solar, wind, wave…and need to have traditional energy sources to live. This winter is going to be eye opening when people get heating bills in the Northeast and Midwest.
The SUV driver who plowed into a Christmas parade in suburban Milwaukee, killing at least six people and injuring 48, was leaving the scene of a domestic dispute that had taken place just minutes earlier, Waukesha’s police chief said Monday. Members of the “Dancing Grannies” were killed and multiple children were in critical condition as well. Police Chief Dan Thompson said that there was no evidence the bloodshed Sunday was a terrorist attack or that the suspect, Darrell Brooks Jr., knew anyone in the parade. Brooks acted alone, the chief said. Brooks, 39, of Milwaukee, had left the site of the domestic disturbance before officers arrived, and was not being chased by police at the time of the crash. This man has been arrested numerous times. Online court records showed Brooks has two open criminal cases in Milwaukee Count and at least six other convictions for violent behavior. One of the pending cases involves Brooks allegedly running over a woman with an SUV AFTER he punched he in the face. Please look at the 33 second video of Brooks in this link where he talks about pimping an under-aged kid. He is also a convicted sex offender. Multiple violent arrests, yet was out on $1,000 bail only to injure dozens and kill multiple people. He also has an active arrest warrant in Nevada for “failure to obey sex offender laws.” What am I missing? He also had multiple anti-white posts and hates on the police. Some Tweets and Facebook posts are incredibly racist and are attributed to “MathBio Fly” who is Darryl Brooks rapper name. Also of note is some news feeds are suggesting countless inappropriate posts were quickly deleted from social media. Why is the media not more critical of Brooks and being out on $1,000 bail? The Milwaukee County DA, John Chisholm, elected in 2007, has been a bail reform supporter. In an interview with the Milwaukee Journal Sentinel the year he was elected, Chisholm said: “Is there going to be an individual I divert, or I put into treatment program, who’s going to go out and kill somebody?” “You bet. Guaranteed. It’s guaranteed to happen. It does not invalidate the overall approach.” I am for bail reform for 1st time, NON-VIOLENT offenders. I do NOT support bail reform for repeat offenders and violent ones. The man pictured below intentionally ran over innocent people and is being held on $5mm bail. I do not believe there should be bail at any price for this career VIOLENT criminal with pro-Hitler tweets and a history of horrific actions.
A jury here found three men guilty of murder in the shooting death of Ahmaud Arbery, whom they confronted as he was running in their neighborhood in early 2020. Travis McMichael, 35, chased Mr. Arbery with his father, Gregory McMichael, 65, and William “Roddie” Bryan Jr., 52, in two pickup trucks on Feb. 23, 2020. Travis McMichael shot Mr. Arbery three times with a 12-gauge shotgun, killing him. Travis McMichael was found guilty on all counts, including one count of malice murder and four counts of felony murder. Gregory McMichael was found guilty of four counts of felony murder and acquitted on a charge of malice murder. Mr. Bryan was convicted on three counts of felony murder and acquitted on malice murder and an additional felony murder charge. Mr. Arbery, a 25-year-old Black man, was unarmed when he was confronted by the McMichaels in Satilla Shores, a predominantly white residential area outside Brunswick. Prosecutors argued that Mr. Arbery was out for a run that day and that the defendants hunted him down based on unfounded suspicions that he was a neighborhood thief. I would have been shocked if these men would have been found innocent. Seems like the right outcome.
Bay Area is hit by THIRD consecutive day of looting as 50-strong hammer gang storms jewelry store after Macy's and Lululemon stores were hit: Thieves take advantage of woke 'misdemeanor' law. Sorry, CA politicians and DA’s, you need to charge criminals and have consequences. Some of these people have been charged dozens of times. The retailers and hard working, law-abiding citizens pay the price for the leniency. Stores go out of business and the owners lose big money. Then, the local residents have less places to shop. Please tell me why this is a good thing? In Chicago, a mother and daughter were carjacked by what looked to be a 10-year old. The incident happened in the middle of the day. If at 10 you are holding people up at gunpoint, I cannot imagine the path you are on as a teenager. Parents need to be involved in kids’ lives to be sure they get an education. Where does a 10 year old get a gun? Best Buy discussed “organized theft” on the earnings call. “We are seeing more and more particularly organized retail crime,” Chief Executive Officer Corie Barry said on a conference call with analysts. “You can see that pressure in our financials, and more importantly, frankly, you can see that pressure with our associates. It’s traumatizing.” The stock was down 17% with the earnings miss between supply chain, less on-line shopping and shoplifting. My view is if these criminals were punished for their crimes, the theft would be far less. Zero bail requirements and no consequences for bad behavior does not appear to be the world’s best deterrent. Who would have thunk it? Rodeo Drive was hit as well and now private security has been hired. Even CNN is suggesting the lack of consequences are driving the massive increase in crimes. This CNN link has some disturbing crime statistics. I believe if the Democrats do not get tougher on crime and bail reform, it is going to be a Red Wave in the mid-terms.
A combination of wealth creation from accommodative Fed policies and money made in crytpo/NFTs has propelled the art market to the stratosphere. These crypto millionaires/billionaires are buying a lot of it. The fall art auctions in New York set an all-time record, with more than $2.6 billion in sales, according to Pi-eX, an art data and analytics firm. A surge in global wealth, growing inflation fears and the continued collectibles craze boosted demand for the art and prices. Crypto wealth was on full display, as crypto “whale” Justin Sun paid $78.4 million for Alberto Giacometti’s Le Nez sculpture. The sale of two big collections — the Cox Collection at Christie’s and the Macklowe Collection at Sotheby’s — created a trove of quality art trophies for wealthy bidders.
Other Headlines
Thomas Jefferson statue removed from City Hall after 187 years
Pentagon Forms a Group to Examine Unexplained Aerial Sightings
On the road again: Travelers emerge in time for Thanksgiving
The Buttigieg presidential buzz has penetrated the White House
I have said it many times-I believe Buttigieg is poised for bigger things after the debate performances in the primaries and the infrastructure bill assuming things go smoothly.
More than 1 in 3 U.S. adults carry medical debt, survey finds
JPMorgan (JPM) Started Damage Control as Soon as Dimon Made China Joke
U.S. blacklists dozens of Chinese tech firms citing national security concerns
Covid-19 Vaccination Rate for Federal Workers Is 92%, White House Says
Virus/Vaccine
Cases continue to grow, but the growth rate has slowed slightly. For the past two-week period, cases are up 25% and are now almost 95k cases/day. The Delta peak was 162k cases/day in early September, but we were as low as 71k cases/day in early November. Hospitalizations are growing as well and were +9% for the two-week period with 51k hospitalized. However, deaths fell by 8% and were just over 1.1k/day. The Midwest and Northeast continue to see the largest increases in cases. Top states for case growth are: CT+120%, MA+81%, IL+73%, RI+69%, IN+69%, MI+67%, NJ+66%, NH+52%, NY+52%, DE+49%. As of November 23rd, the most fully vaccinated states were: VT 73%, RI 72%, ME, 72%, CT 72%, MA 71%, NY 68%, NJ 67%, MD 67%, WA 65%, VA 65%, NH 64%. My point is 6 of the top 10 states for case growth are among the most vaccinated in the country. On average, 59% of Americans are fully vaccinated for perspective.
The northern New England states of Maine, New Hampshire and Vermont, all highly vaccinated, are suffering from surges that are taxing hospitals beset by staff shortages and sicker-than-usual patients. New Hampshire Governor Chris Sununu told reporters Tuesday that the state is seeing its highest level of Covid-19 since the pandemic began, averaging about 1,000 new infections per day. He issued an executive order to help hospitals use their space more flexibly to add capacity. Massachusetts, too, is grappling with a surge that has boosted the number of hospitalized patients to 740 -- far less than previous pandemic peaks but still challenging for under-staffed hospitals.
I have very little faith in the CDC or the WHO, but this was an interesting story about potential deaths in Europe. The World Health Organization’s Europe office says projections show its 53-country region could face another 700,000 deaths in the coronavirus pandemic by next spring, topping 2 million in total. WHO Europe, which is based in Copenhagen, Denmark, also cited growing evidence of a decline in protection against infection and mild disease through vaccines, and said a “booster dose” should be given as a priority to the most vulnerable populations — including people with weakened immune systems — as well as people over age 60 and health care workers. Germany is set to decide on tougher Covid restrictions on Wednesday. Officials have been considering more Covid rules and even a full or partial lockdown. Germany is seeing a record daily number of Covid cases and mounting pressure on hospitals as the delta variant takes hold. Health Minister Jens Spahn has already issued a dire warning to Germans this week.
Real Estate
I did not have a ton of time, but just wanted to put something into perspective with respect to high end inventory in Florida. I checked out 3 communities (Royal Palm, Old Palm and Admiral’s Cove). All higher end communities in Boca, Palm Beach Gardens and Jupiter respectively. For Royal Palm, there are 750 homes and 9 are for sale. For Old Palm there are 333 homes and two are for sale and in Admirals there are 893 homes and 5 for sale. So, out of 1,976 high end homes, a total of 16 are for sale. This means the inventory is less than 1% and it is generally 8-10%. Not sure what else I can say other than, WOW! In the most sought after homes in Miami on North Bay Road on the water, there are approximately 200 homes and there are a total of four for sale. Two tear downs for $20mm and $26mm and two finished homes for $26mm and $42mm. So if we look across all 4 communities from Miami to Jupiter, we have a total of approximately 2,176 homes and 19 (.87%) are for sale.
Miami is set to reign as the most prosperous high-end housing market next year, according to a 2022 forecast Monday from Knight Frank. The South Florida metropolis leads the estate agency and property consultant’s global cities ranking, with its luxury property prices expected to grow 10% in 2022 on the back of high-demand stemming from Florida’s low-tax environment, the city’s competitive prices and the enduring appeal of coastal living. “It comes as no surprise,” Georgina Atkinson, regional head of Knight Frank’s U.S. residential business in Asia Pacific and the Middle East, said in the report. “Bidding wars have now risen to their highest market share on record as the market pace in Q3 2021 was the fastest recorded. Sales continue to surge and there is a chronic lack of inventory.” Coming in at a close second is Sydney, where prices are expected to rise 9% next year on the back of border re-openings, the return of investors and a “growing appetite among domestic buyers for second homes on Australian soil,” according to the report. This should not be a surprise to anyone who reads my reports. High-end Miami is virtually untouchable now and I do not see it changing near term despite the fact that I would not live there.
I have no idea why anyone would want to spend $14mm to live 20 miles west of the beach, but this 12,323 square foot house in Weston is available. For this money, you can be on the intracoastal. Why would you want to be this far west?