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The Rosen Report: Disconnected At Sea-Fishing Up a Storm

March 17, 2022
Eric Rosen

Opening Comments

This is an abbreviated note. I was in the middle of the Atlantic Ocean with no internet for a couple days. As a result of that and the Super Bowl, this is short and sweet and an early send. I felt the volatile markets, inflation readings, Treasuries, and Ukraine justified some Rosen Report. Some of the data outlined is a bit concerning. I wrote this Saturday night after everyone went to sleep.

This was my prior report, “I’m a Social Media Moron.” We got a lot of new subscribers this week, and I want you to see what my reports generally entail. Today’s is not indicative of the regular volume. No Real Estate section today for the 1st time in months.

  • Picture of the Day-Optical Illusion

  • Disconnected At Sea-Fishing Up a Storm

  • Quick Bites

    • Markets, Treasury Bonds

    • Inflation/Bullard Comments, Car Prices

    • Consumer Sentiment, Russia/Ukraine Explained

    • Biden Approval Ratings

    • Trump-White House Documents

    • John Durham Papers on Spying Accusations

  • Other Headlines-Highlighting Crime and Lack of Consequences

  • Virus/Vaccine

    • Data-Improvements Across the Board-Cases -78% from Peak

    • Booster Potency

    • Vaccine for Kids

Picture of the Day

I am always amazed when I see these types of pictures. I am showing it as I saw it, and you will find the proof of the illusion below just prior to Quick Bites. It is crazy how your mind adjusts as the real picture is quite unflattering. Upon first glance, you might not spot what's wrong with the upside down image of billionaire Telsa founder Elon Musk. (see above Quick Bites for the answer).

Disconnected At Sea-Fishing Up a Storm

I slept on the beautiful 68’ Viking Sport Fishing boat on Thursday night as the captain was leaving the dock at approximately 3am Friday. This beautiful boat is $6mm and it is a fisherman’s dream. I slept in a small room with bunk beds which were 2 feet apart. I fell asleep easily at about 11pm. However, I was awoken by the sound of what seemed like a bad gear shift in a manual sports car. This horrendous sound would go on for 15 seconds at a time as the captain was using his “bow thrusters” to steer the big boat away from the dock. I did not go back to sleep as I was getting tossed around like a rag doll in the open ocean. Seas were 3-4 feet but it was so rough in the cabin that I could not sleep on the top bunk for fear of falling. Sleeping on the bottom bunk meant that I would hit my head when we crashed into waves. You can see the bunk bed in the video below. I slept on the floor in a 2 ft by 5 ft area. I crawled to use the bathroom as I was worried about re-injuring my bad calf given how much the boat was bouncing around. Luckily, I never get seasick. It made the trip more of an adventure. I wish I had this evening on film as it was quite funny, but the great fishing, fun people and experience made it worth the while. The boat is similar to this one. There is a 2 minute video of what a similar boat looks like here for those interested. My room was shown at 1:19 of the video.

I had been checking my phone instinctively all night and the last email I received was at 2:40am Friday. Given I am a prolific user of email and text, it felt odd to be so out of touch. Sadly, these damn smart phones have becoming addicting. I must have checked my phone 25 times Friday and zero signal. I must be delusional thinking I am important enough to matter that I cannot enjoy myself for 36 hours. Did I mention my love/hate relationship with technology?

We started fishing at 6:30am Friday and were largely trolling for Yellowfin Tuna, Mahi, Wahoo and maybe a Blue Marlin. We hooked into many Mahi and a couple nice Yellowfin in short order. We saw a couple Blue Marlin, but did not catch them. You always look for birds feeding or large debris floating and the video shows both. I was reeling what was likely an 80lb Yellowfin and got sharked not so far from the boat. We also got a decent Wahoo. The short video shows some of the fishing and fish.

Me with a decent Mahi. Those buggers are slippery.

This was a small Yellowfin Tuna which was hit by a shark right next to the boat.

This is the bigger Yellowfin Tuna. They taste amazing.

It was a beautiful day and lots of fun and the fancy boat made it very enjoyable as you can take a break in the air conditioned cabin and watch satellite TV. I was watching the market tank in the afternoon on the heels of the Ukraine news from the middle of the ocean. Still no phone connection despite checking constantly. I need to go to phone rehab.

We had a great dinner on Friday night and woke up Saturday am to do fish again. Friday night, I slept on the couch and actually got a few hours of sleep. When I woke up, of course I checked my phone and zippo! However, we very quickly hooked into a large Mahi (close to 50lbs) and it literally spit the hook 10 ft from the boat and within minutes, got another one. Check out the size of this beast which is in the 40lbs range. Nate and the mate, Gunner with a beautiful fish. This was clearly the fish of the trip. The 1:38 second video of fishing can be found here.

I got this picture of the above Mahi jumping next to the boat and it is on the video. These fish are fun to catch as they do many aerials during the fight.

We also “Deep Dropped” which is a form of fishing using electric reels to drop bait to 1,500 feet of water to catch snapper and grouper. We caught a few of each. In total, we caught maybe 20 Dolphin, 2 Yellowfin Tuna, 1 Wahoo, 2 Queen Snapper and two Grouper. I did not take a picture of the Snapper, but this was one from a previous trip, so you can see the beauty. This was from my boat and you can see the large electric reel in the background. Note the eyes are so big given the limited light in deep water. These are the best tasting fish to me.

The fishing trip was a great adventure with a good group of people, and fishing on a beautiful boat made it all the more enjoyable. The crew was on top of everything and helpful. Unfortunately, my addiction to being connected made it very hard for me to feel relaxed, being so out of touch. I currently have a few deals going and pride myself on my responsiveness. I am actually saddened that my phone reliance took away from a once in a lifetime opportunity. I believe being “disconnected” once in a while is healthy and we have all become too dependent on the crack phone, especially our kids. My wife, Jill, goes ballistic on the kids staring at the phone. One time, Julia had a friend over and they were glued to their phones rather than in conversation and I kind of lost it myself. I need to practice what I preach!

Interestingly, I was not alone, when we got within about 15 miles from the shore in Florida, every other person on the boat was frantically trying to check for those life altering messages. I had over 600 emails and 20 texts and many are from readers in 36 hours. My calf is on ice today as it was a bit too much with the rough seas. The Rosens are likely going to the owner of the boat’s house for a Super Bowl party. What do you think he is serving for dinner? I am ready to go back and catch more fish next week and will probably need another break from my phone anyway.

This is the optical illusion photo from Picture of the Day

You'll notice that his facial features aren't quite right. Flip the image upside down and you'll spot that the South African's eyes and mouth are actually the right way up. The brain is not able to spot the small changes when the figure in it is upside down but notices right away once it's flipped 180-degrees. It's an illusion that has been around since 1980 when a scientist created what's thought to be the first iteration. It was shown in a paper by Peter Thompson, of York University, and featured a doctored image of former UK Prime Minister Margaret Thatcher.

Quick Bites

  • Stocks slid on Friday as increased tensions between Ukraine and Russia sent oil spiking and led investors to dump risky assets like equities. Shares were mostly flat on the day until Ukraine-related headlines in afternoon trading caused traders to dump stocks and buy Treasury Bonds. The Nasdaq fell 2.78% to 13,791, while the S&P 500 dropped 1.9% to 4,419. The Dow tumbled 504 points, or 1.43%, to 34,738. Stocks moved sharply lower in afternoon trading after a jump in oil prices that appeared to be tied to increased concerns about Russia taking military action against Ukraine. With about 2 hours left to the trading day, U.S. National Security Advisor Jake Sullivan said at a White House briefing that there were signs of Russian escalation at the Ukraine border and that it was possible that an invasion could take place during the Olympics, despite speculation to the contrary. Both the U.S. and U.K. have called for their citizens to leave Ukraine as soon as possible. Sullivan noted that the U.S. is not certain that Russian President Vladimir Putin has made a final decision to invade Ukraine. But “it may well happen soon,” he said. Also, on Thursday, a red-hot inflation report spooked the market sending the Dow down 600 points at session lows. On the week, the Dow was -1.1%, the S&P was -1.9% and Nasdaq was -4.6%. Year to Date, the Dow is now - 4.4%, S&P -7.3% and Nasdaq -11.9%. The high growth stocks have been hit the hardest on rising rates and the pandemic slowing down, while the more established Dow components have outperformed. BTC is down slightly to $42k and ETH is -4.4% to $2,8k.

    • Treasury Bonds all rallied on the flight to quality on Friday. The 2-year is now trading at 1.49% and the 10-year is at 1.91% after hitting 2.06% earlier in the day. On Thursday, the 2-Year moved by 20bps, which is massive. In my Omakai Sushi report from 1/30/22, I wrote extensively on the 2s/10s Treasury curve and it is down to 42bps. The spread was 266 bps in December of 2013 Look at the chart below and you can see the 2s/10s was 158bps 3/31/21. According to one website, the average spread is 93bps, but was unable to verify that number. Traditionally, steep yield curves (indicated by a high 2s10s reading) are often followed by strong economic and financial market performance, while flat yield curves (indicated by low 2s10s readings) are followed by weaker performance. I used an edit function to circle prior low points in 2s/10s and the metric is accurate in predicting recessions wen 2s/10s goes to zero or negative. The vertical grey bars are recessions and the current 2s/10s rate is declining rapidly. The 30-Year- Fixed Rate Mortgage is at 4.02% or +43% in a year as it was well under 3% one year ago. Most consumers are concerned more about the monthly payment and rising rates will have a large impact on affordability. Refinance applications are down 52% and purchase applications were down 12% from one year ago.

  • As concerns around inflation soar, American consumers’ outlook on the trajectory of the U.S. economy has deteriorated, worrying some experts that negative attitudes could dampen expenditure and put a dent in economic growth. The University of Michigan’s closely-watched consumer sentiment index fell to 61.7 in early February, hitting the lowest level since October 2011. January saw a reading of 67.2. Recent declines in the measure have been driven by weakening personal financial prospects amid rising inflation, less confidence in the government's economic policies, and the least favorable long-term economic outlook in a decade, the University of Michigan said in its latest report Friday. This data does not bode well for Biden and the Democrats for the mid-terms unless sentiment improves dramatically. The substantial change in Democratic states COVID restrictions is partially due to improved data and due to the growing disdain of the rules which will make elections challenging for the left. The index below shows we are approaching the levels from 1974, 1980, 1990, and 2008/9. Consumer sentiment is down 19.7% for one year.

Other Headlines

  • Atlanta Fends Off Wealthy Enclave’s Effort to Leave the City

    • Buckhead movement collapses amid opposition, logistic hurdles

    • Secession would have dealt deep blow to capital’s finances

    • This would have been a disaster for Atlanta, but part of me wanted the movement to pick up steam to put all cities on notice that citizens will become aggressive if officials are unwilling to get to the right answer.

  • Rand Paul said he hopes trucker protests "clog up cities," including during Super Bowl and in DC

  • Beto O'Rourke flip-flops again on confiscating AR-15s as polls show him trailing Texas Gov. Abbott

  • Chloe Kim begged reporters for snacks because she was starving after her gold-medal victory

    • China sure knows how to throw a party. Starve the athletes. The accommodations, food, treatment of those testing positive for COVID…. has been outrageous.

  • China orders athlete to delete photos that showed flooding in Olympic Village

    • Nothing like free speech and press in China.

  • Virus/Vaccine

    • The charts are all moving in the right direction. Cases fell 67% from the prior two week period and are now averaging 178k/day. Cases are now 78% from the peak level of 807k/day on 1/14. Hospitalizations were -34% and are averaging below 97k with 19% in ICU. As suggested would happen, deaths declined 5% from the prior two weeks and are averaging below 2.5k/day now. The John’s Hopkins Positivity rate was 29.8% a couple weeks ago (2nd chart) and it has fallen down to 10%.

    Eric Rosen
    The Rosen Report