Zoom Gloom

9-4-22

Opening Comments

A reader sent me a note about his spatial awareness and bragged about his aluminum foil game being perfect with no waste. He is a Silver Medal Olympian and clearly more skilled than I am, as my foil game does not touch my Tupperware skills as noted in Spatial Awareness.

I have written extensively about the crisis in Europe on energy prices. Good news is prices have fallen in the past week. Bad news is the prices are sky high. AccelorMittal is idling its steel plant in Germany due to energy costs. In Norway, a coal mine was going to shut, but can’t due to lack of alternatives. Michelin Star chef, Tom Kerridge told Bloomberg that the annual energy bill at his UK pub jumped from 60k pounds to 420k pounds. Readers need to understand that I feel strongly that things will deteriorate in Europe. Italians are burning energy bills outside town hall in Naples and singing, “We don’t pay the bills.” The 2nd picture is people protesting electric bills in Prague. Now, in Poland, people are lining p for days and sleeping in car to buy fuel for the winter. I have been all over the energy story because I am concerned about the ramifications. I believe the issue in Europe has the potential to lead to serious chaos and deaths. Bad energy policies have consequences and “Going Green” too early, before alternatives are ready for prime-time, has serious ramifications. On Sunday, Germany announced a Euro 65bn inflation relief package.

• Picture of the Day-World Gravy Wrestling Championships

• Zoom Gloom

• Quick Bites

  • Markets

  • YTD Performance Stocks/Bonds

  • Freight Rates Collapsing

  • Insider Trading of Congress

  • Fiery Biden Speech

  • Woke Teachings Continue

• Other Headlines

  • Crime Headlines

• Virus/Vaccine

• Real Estate

  • General Comments-$107mm Miami Sale and $29mm Gulfstream Sale

  • Other Headlines-Lots of Good Ones Today

Picture of the Day-World Gravy Wrestling Championships

• In Lancashire in Northwest England, the 26th World Gravy Wrestling Championships were held. The contest required 350 gallons of gravy. In the two-minute scraps, points are scored for fancy dress, comedy effect and entertainment value.

Zoom Gloom

The ability to read a room is an important one. I cannot tell you how many professional situations I have been in where I thought I would take a meeting in one direction and found body language of the people in the meeting to suggest it was not resonating. I quickly switched up the game plan and pivoted to something which resulted in more positive affirmation. I feel one of my biggest strengths is making connections and presenting in person because of my ability to read a room and pivot when needed. Obviously, my boyish good looks and incredible sense of humor and humility play a role as well.

I am growing concerned about the impact of remote work and the Zoom craze and the impact on developing of social skills. Many video calls I am on today have people with just a photo (can’t see live) or it is challenging to read the body language given the angle of the camera or the fact that it only shows a face. One analyst at a large firm told me he has been on camera with his colleagues less than 10 times in over one year. He said, “Sometimes it feels like being stuck in isolation working alone in your apartment - not good for mental health. But I do not feel like a young professional. I feel more like an old college student.”

I believe human interaction is good for development, and I am working with him to get him in front of people for a new job where he can work in person. He is an anomaly. He moved BACK TO NYC to get back into the action and try to get a traditional job in the office.

I have written about numerous young readers who are struggling in the new Work From Home (WFH) world with little or no physical interaction. They want to be, “In the Room,” so to speak to see deals materialize firsthand. They feel they are missing out on teaching moments. I vividly recall on old boss at Continental Bank, Pete Vaky, who was a great manager. I corrected him in a meeting with a client and saw he was not happy based on the look on his face. After the meeting, we stayed in the conference room, and he outlined why he had a problem with what I did, and he was 100% correct. It was a teaching moment that was very effective, and I remember it almost 30 years later as though it happened yesterday. He always said, “Praise in public and chastise in private.”

I am supportive of WFH, especially hybrid models. I love the flexibility and efficiency of no commute times. I am concerned about productivity issues and what is lost in translation over a call or Zoom with little or no human interaction. Too many young professionals are complaining to me that they want to be in person to better develop skills and to learn how to read a room. There is zero chance I would have achieved the success I did if I had been in a WFH environment. I am glad I am not a young professional today for many reasons, but hope more companies allow for some in-person interactions to help the development of young talent and provide a more human element to the workplace. Interestingly more companies are pushing for more in-office time and Jefferies CEO want a return to office to end “lonely home silos.” This WSJ article is entitled, “Enough, Bosses Say: This Fall, It Really Is Time to Get Back to the Office,” is another one suggesting WFH is not for all companies.

Also of note, many large firms do first round interviews through a computer. Meaning your first interview is basically an AI system asking you questions over zoom, and you have two-to-three-minute answers which are video recorded. If you get through that round, then you have an in-person meeting. Again, I feel a core competency of mine would be eliminated and I probably would not get the call back. I don’t enjoy being 52- years-old, but glad I am not 22 trying to make it in corporate America today.

If I were working remotely, I would try to get into the office for some face time if at all possible. I also firmly believe that some in-person time is helpful for your own development and that of others. I would start networking outside of the office if I were a young professional looking to improve my game. Join a charity of interest or a professional group. If you want to improve your public speaking skills, something like Toastmasters could be interesting. You need to take control of your career. Don’t complain; make it happen. As noted previously, I mentor a couple dozen young professionals each year and now have a dozen successful readers to help me. If you are looking for ideas or assistance, the Rosen Report is the right place for you. It is gratis, so I make it up in volume! I have such impressive people in R/E, Medicine, Media, Business, Finance, Markets, Energy, Music….waiting to help you.

Quick Bites

• After a challenging market performance for three weeks, non-farm payrolls rose by 315k which was in line with estimates and well below the July number of 526k. The stock market reacted positively as the numbers were effectively, “Goldilocks,” meaning ideal. Wages continued to rise, but slightly less than expectations, while the unemployment rate rose to 3.7%. Important note, the participation rate rose .3% to 62.4%, and that is the highest since March 2020 when it was 62.7%. However, mid-day, Gazprom announced the Nordstream I Pipeline would remain shut to Europe citing technical issues. I am not convinced this is true and believe it is Russia sending a message over price caps on Russian oil by the G-7. Stocks sold off on the Nordstream I news and ended the day lower. After rallying through the morning, the Dow erased a 370-point gain and finished the session lower by 338 points, or about 1.1%, at 31,318. The S&P 500 fell roughly 1.1% to 3,924, its lowest close since July. The Nasdaq declined 1.3% to 11,631, recording its first six-day losing streak since 2019. All of the major averages were lower to end the week, with the Dow and S&P losing roughly 3% and 3.3%, respectively, while the Nasdaq fell 4.2%. The jobs report and weaker stocks helped the Treasury market rally with the 2-year settling -13bps to 3.39% and the 10-Year -7bps to 3.20%.

  

• Given the market volatility, this bullet discusses some of the individual stock moves, indices, commodities, currencies, crypto and global bond action. I created a chart of YTD performance of some select stocks and indices. I did not pick the biggest winners and losers always, just a select set. You can click on the index link and see more details as there are drill downs on each sector. Most of the best performers were energy related, but only selected a few in that sector. Note that only Energy and Utilities are positive YTD. I also am including a Bloomberg article on the global bond market rout with a couple interesting charts.

  

  

  

• I called for inflation to peak a couple months ago, and everything I see points to that being the right call. Professor Jeremy Siegel was on CNBC and suggested 26 out of 27 inflation indicators have come in under expectations. Freight/Trucking rates had gone parabolic since the spring of 2020 and you can see in the charts that is no longer the case. The Freightwaves National Truckload Index fell by well over 50% YTD (1st chart). Truck rates per mile are -45% since late 2021 as well (2nd chart).

• I have been very critical of the laws which seem to be “friendly” to members of Congress with respect to insider trading. This is a partisan issue in my mind. Nancy Pelosi’s husband, Paul, sold stock in Nvidia in late July of 2022 and a month later, restrictions on Nvidia selling to China and Russia were put into place. It just wreaks. Since the passage of the bill, Nvidia stock is -24% in a week. These politicians should not be allowed to trade stocks. There was a 60 Minutes episoed on this topic and Steve Kroft played aggressive on the subject and calls out both sides. It is a 10-year-old clip, but it makes my blood boil. If I did what members of Congress do regularly, I would go to jail. The John Boehner exchange was laughable. Kroft also goes into insider information on R/E deals with Speaker Hastert. Kroft goes after Pelosi (9 min mark) and it is worth the watch. The exchange with Pelosi about a Visa trade where they were allocated in the IPO is actually good enough to be an SNL skit. You cannot make it up. The STOCK Act was passed in 2012 to prevent insider trading by politicians. I am not sure why members of Congress continue to trade stocks.

  

• President Biden gave a fiery speech on Thursday night, and I listened in its entirety. I thought Biden did a surprisingly good job articulating a message (not major bumbling and stumbling), but feel it was too dark, aggressive and divisive. I was hoping him to unify and that was clearly not the case. President Biden Thursday aimed to frame the state of U.S. politics as a battle between "equality and democracy" and a GOP allegedly assaulting those principles in a campaign-style speech at Independence Hall in Philadelphia. The president's address continues a recent pattern of increasingly aggressive and divisive broadsides against his political opponents. Biden recently said Republicans are embracing "semi-fascism."  “There’s no question that the Republican Party today is dominated, driven and intimidated by Donald Trump and the MAGA Republicans. And that is a threat to this country.” Biden said Trump supporters were a threat to democracy and then Friday morning changed his tune. He denounced MAGA Republicans 13 times in the speech. He spoke of Trump’s unwillingness to turn over power and was outraged. I agree, it was not good for the country. However, do you recall this story prior to the election? Hillary Clinton says Biden should not concede the election 'under any circumstances.' Biden went into detail about how bad Republicans were for assaults and aggression. I agree there were bad actors. Does Biden remember the behavior towards SCOTUS at their homes over Roe v Wade? Someone was intending to kill Kavanaugh. I denounce violence regardless of the source absent self-defense. I agree that we have seen things get out of hand, but it is both sides. Some of the Right has gone too far as has some of the Left. I just felt that Biden painted too wide of a negative brush in this speech and felt it was a missed opportunity for unity. This AP article is a good summary and includes McCarthy’s rebuttal. With few exceptions, the left-wing media loved Biden’s speech. I feel this speech was far darker than Trump’s 2016 RNC speech and look at the 2nd picture of headlines after Trump’s speech. Remember, in 2016, Trump was not President, yet was vilified for a “dark” speech which was benign relative to Biden’s speech. We need a less biased media in the US. I don’t see how anyone of sound mind could suggest that Biden’s speech was not sharply darker than Trump’s both in tone and appearance. I re-watched the entire hour plus speech from Trump in 2016 to make the statement emphatically. I do not support Trump, Biden or Harris in 2024. I just call out hypocrisy. Also of note, Biden used Marines as props for his speech which was called out by CNN and a violation of the Hatch Act.

  

  

• Can we get back to reading, writing, and arithmetic. I am growing frustrated with the politicization of education from nursery through college. A New York City private school administrator has been secretly recorded confessing that she sneaks her liberal political “agenda” into the classroom and complaining about “really awful” white Republicans. Jennifer “Ginn” Norris, who works at the Trinity School on the Upper East Side, was filmed by conservative outlet Project Veritas saying that she tries to “disrupt” wherever she can and that she and other teachers have been “sneaking” their activism in through the cracks and has been put on leave since the story broke. A high school student told me that last week the teacher went off on “Don’t Say Gay” bill. I read the bill in its entirety and did a summary in a report in an April 2022 Rosen Report. The bill asks that teachers not discuss sexual orientation or gender identity with kindergarten through 3th graders. I do not want teachers speaking of such things with my kids at that age. The bill never says, “Don’t Say Gay.” Yale received a $1mm grant to study the “anti-racist problem” of video game hair. One of the finest academic institutions in the world could do so much with $1mm, but wants to spend it on video game hair? I don’t know what video game hair means, but apparently below is an example. Let’s get back to teaching as the kids have fallen behind due to lockdowns and bad curriculum coupled with questionable teachers with agendas. Let’s teach kids skills and not indoctrinate someone else’s agenda.

  

Other Headlines

• Brace for ‘Recession Shock’ as Outflows Rock Equities, Bank of America Says

• Bank of America announces zero down payment, zero closing cost mortgages for first-time homebuyers in Black and Hispanic communities nationwide

• Amazon loses effort to overturn historic union election at Staten Island warehouse

• Surging Copper Demand Will Complicate the Clean Energy Boom

  

• Canada might be getting a 1,000 kph vacuum-tube train

  

• Yale psychiatrist loses attempt to get her job back after assertions about then-President Trump’s mental health

  • I thought this was an interesting case and agree with the result.

• Prison inmates received more than $1 billion in COVID-19 stimulus checks, IRS admits

  • I wish I was making this up.

• Think Biden's student loan write-offs are unfair? Just take a look at the fine print

  • QUITE concerning and worth the read. Suggests the true cost will be $1 trillion and of course, the tax payers pick up the bill.

• Twitter, Facebook Regularly Coordinated With Biden Admin To Censor Users

  • No one has a problem with this? The bias of the media and social media must change. If it went in the other direction, I would say the same thing. This is too much bias.

    

• Trump raid judge to unseal detailed inventory of what FBI seized at Mar-a-Lago, delays special master ruling

• Scrutiny builds over FBI’s discovery of empty folders at Mar-a-Lago

• Donald Trump Aims to End 'Confusion' Over FBI Photo of Top Secret Documents

  • Trump claims the FBI staged the picture and nothing was on the ground.

    

• Thousands of migrants are pouring into NYC from Texas, straining a shaky shelter system. When will it hit a tipping point?

• Reading, math scores fell sharply during pandemic, data show

  • Math scores dropped by 5 percentage points for white students, compared with 13 points for Black students and 8 points for Hispanic students. This is not a shock. Not only did lock downs cost trillions in economic damage, they also caused major damage to students who are falling further behind.

• Even more evidence links highly processed food to a greater risk of cancer and death

  • A pair of studies suggest that a diet high in ultra-processed food raises one's risk of colo-rectal cancer and mortality overall.

• Amazon took all U.S. solar rooftops offline last year after flurry of fires, electrical explosions

  

• Jackson, Mississippi, water crisis: Repairs have begun at the water treatment plant but residents are still without clean water

  • With a big part of the country in drought and some being over run by too much water, is there a solution that Musk can come up with?

• In Timothée Chalamet's humble opinion, social media is contributing to "societal collapse"

  • I agree 100%. I want the Kardashian experiment to end. What I see is so damaging to children and adults alike.

• Gavin Newsom's in-laws fled from California to Florida during the pandemic, records show

  • Your in-laws left your state for Florida? Maybe homelessness, crime, high taxes, regulation, mandates, fires, floods, droughts and earthquakes ain’t that great. Also of note, Newsom’s in-laws made a sizable donation to DeSantis. Thanksgiving might be a wee bit awkward.

• OnlyFans Owner Gets Over $500 Million in Dividends in Two Years

  • This story suggests that Blac Chyna made $240mm on Only Fans in 2021. If my readers want to pay me $20mm/month, I am willing to do Only Fans.

• Bigfoot sighting reported at South Carolina state park

• Afghanistan’s Taliban mark anniversary of US-led force withdrawal

  • Parade with the billions of dollars of equipment we left behind.

    

Crime

• NYPD enacts emergency rule enforcing Times Square as a gun free zone ahead of new NY law

  • Finally, NYC has solved the crime issue. The sign makes it crystal clear that Times Square is a “Gun Free Zone.” It is now safe to hang in Times Square again.

    

• Hate Crimes Against Jews in NYC Resulting in One Jail Day

  • “Of the 118 adults arrested for anti-Jewish hate crimes in New York City since 2018, only one has been convicted and sent to prison.” I want criminals to have consequences for hate crimes, shoplifting, violence… I am adamantly opposed to these soft on crime situations.

• Good Samaritan slashed across face in NYC subway station: cops

• A vicious psych-al: Here’s what happened to homeless man who attacked me in NYC

  • Concerning story of soft on crime policies told by a victim.

• New NY gun law applicants have to provide social media accounts

  • I love this idea. Too many wackos with violent social media posts can buy guns.

• NYC thieves ram car into SUV in $20K heist on Upper East Side

  • A CRAZY story on 91st. Read it. Watch this short video.

• He pleaded guilty in a child sex crime case. 10 days later, he's accused of killing his ex and burning her house and body

  • No jail time for raping a child and then kills his ex and burns the body. I will not stop writing about these incidents until we get tougher on crime. Great call, judge.

    

• A volleyball player’s hate crime accusation falls apart

• A 4-year-old took a loaded gun to his South Texas school. Now his father faces charges, police say

• Carjackers interrupt couple having sex, leave them naked in the streets

  • Brazil. Video is crazy. The couple is left naked on the street.

Virus/Vaccine

• Illinois professor says going maskless indoors a ‘manifestation’ of racism, will boot non-compliant students

  • I am not sure what to say at this point other than this is incredibly disappointing.

    

Real Estate

• My quick general comments are two recent sales. In Miami, Adrienne Arsht sold her compound for $107mm, far less than the $150mm ask. Highest price in history for Miami. Rumor is that Ken Griffin bought it, but not confirmed. I don’t know how many homes/condos Griffin owns between Palm Beach and Miami, but it might be 10 or more. Between land, homes, condos and the $363mm for the new offices in Miami, he may have spent $1bn in Florida. For one Palm Beach estate, he spent $350mm assembling land! In Gulfstream (just north of Delray), a beach front home sold for $29mm after selling for $10.5mm in May of 2019. It is on 1.3 acres and I am told by a broker that it is more of a tear down for most of the clients he brought to see it. Unheard of for these prices in Gulfstream for what is apparently not a great house (below).

Other R/E Headlines

• The U.S. housing market downturn will be worse in 2023, forecasts Goldman Sachs

• Redfin Reports More Sellers Retreat Amid Falling Prices, Volatile Mortgage Rates :: Redfin Corporation

  • The average home sold for less than ask for the 1st time in 17 months during the four-week-period ending 8/28 according to Redfin.

• Is Tampa Bay’s housing market cooling off? Real estate experts say it is

• Texas’ housing market shows signs of cooling down after the pandemic drove it to new heights

• The 7 most affordable U.S. states to retire—and none of them are Florida

• London Super Prime Keeps Flying as Property Market Wobbles

• Manhattan Office Market Shakes Off Summer Blues With Leasing Up 40% Over Last Year