Thursday, November 11, 2010

Dear Visitor to Miami: The Follow-Up...

So here's some interesting timing...right after I posted my "Guide to Miami" the other day, two similar items caught my eye.  The first (published one day after mine) is from the Wall Street Journal called "An Insider's Guide to Miami," and you'll find some interesting overlap. The second (published three days after mine) is from ESPN and mentions a particular Miami steakhouse that I also "reviewed."  The full text of both is below. (Gives me some credibility, right? ...right?)

Castles in the Sand

Red Light in the Blu Motel offers excellent dockside manatee-watching.

Ever since savvy developers began turning this riverside farmland into a millionaire's playground (and middle-class dream destination) in the 1920s, Miami has been equally built on style and scam. It's become a tradition for strivers and refugees arriving here to reinvent themselves—and, in the process, reinvent the city.
Miami is elastic, always retaking its shape, whether in the wake of the 1926 hurricane that flattened its beaches, or the "Scarface" era of cocaine violence in the early 1980s. The city would have to wait another decade before the South Beach renaissance would transform a tropical war zone into a hipster paradise.

The Standard Spa, Miami Beach
In Miami's latest reincarnation, artists have migrated from an increasingly out-priced South Beach to cheaper spaces across Biscayne Bay, reinvigorating mainland neighborhoods walloped by the condo bust and financial downturn. The annual carnival of art and money that is Art Basel Miami Beach (playing out across the city Dec. 2-5) is just the high point of a cultural scene that's remaking the peninsula yet again.
South Beach as buzz destination has largely been supplanted by areas like the Design District and MiMo (for '50s and '60s Miami Modern, the ongoing architectural vogue), filled with restaurants both haute and homey, as well as plenty of funky boutiques and clubs.
The Wynwood area plays home to sleek galleries and warehouse walls exploding with graffiti murals. Further south, there are more cultural nuclei in Little Havana, where nostalgia-chic clubs and galleries such as Hoy Como Ayer and Cuba Ocho vibrate with rhythms from new and old exiles. In North Miami, artist studios and independent galleries—as well as thrift stores and Caribbean markets—orbit the Museum of Contemporary Art.
Cubans may still be the largest and most visible group among the 69% of the city that is Hispanic, but more recent influxes of Colombians, Venezuelans, Argentines and Brazilians have brought new flavors and
dramas, as well as new candidates to soak up this city—and then rebuild it from scratch.
—Jordan Levin
The Restaurateur
[Miami concierge]
Michelle Bernstein
James Beard Award winner and co-owner of restaurants Michy's on the Biscayne corridor and Sra. Martinez in the Design District
Southern Fish Camp: Red Light in the Blu Motel. This two-year-old cafe has a great late-night menu, including wahoo fish dip and burgers, and an intimate bar scene. Excellent dockside manatee-watching. 7700 Biscayne Blvd.,
Catch of the Day: Garcia's Seafood Grille & Fish Market. Just pure sepia-tone Florida, and it's Cuban, too. You can dock your boat, jump out and have a fab meal. Everything is super simple, fried or grilled. I love the caramel-y sweet fried plantains with grilled lobster. 398 N.W. North River Drive,
China Grill: Hakkasan. Every Jewish girl loves Chinese, and this place is my go-to. They have Maine lobster with chive blossoms and they make their own tofu. It's inside the Fontainebleau. 4441 Collins Ave.,
Fine Dining-in-Residence: Casa Tua. It's a vine-covered mansion that feels like it's in the Mediterranean. Talk about sexy and romantic—it's like eating in a luxe, secluded private home with a courtyard. 1700 James Ave.,
Teen-and-Mom Shop: Rebel.This shop is really fun. You can get something super sexy or more covered up. They sell pieces by hip clothing lines and local designers. 6669 Biscayne Blvd., 305-758-2369
The Connoisseur
[Miami concierge]
Mitchell "Micky" Wolfson Jr.
Art and design collector; founder of The Wolfsonian-Florida International University Museum
Garage Sale: Carol Jazzar Contemporary Art. This independent curator's gallery, housed in the owner's garage has audacity, style, intelligence and it's not so easy to find, which makes it fun. 158 N.W. 91st St.,
Embarrassment of Riches: Las Tias. All of the opulent design and home accessory treasures of the former oligarchs' palaces seem to end up for sale at the baroque emporium co-owned by real estate agent and social diva Esther Percal. 2834 North Miami Ave.,
Diva Needs: C. Madeleine's. No longer Miami's best-kept fashion secret, this 10,000-square-foot designer vintage store draws the likes of ladies Madonna and Gaga. 13702 Biscayne Blvd.,
Poseidon Adventure: Stoneage Antiques. An ocean's worth of deep-sea nautical curios and other memorabilia, from diving helmets and cannons to sleigh bells and stuffed polar bears. A Mad-Hatter's wonderland. 3236 N.W. South River Drive,
Puppet Mastery: Pablo Cano Studio & Gallery. Artist Pablo is a genius of fantasy, known for his charming and huge marionettes that would give Julie Taymor pause.Address by request,
The Writer
[Miami concierge]
Edwidge Danticat
MacArthur "Genius" Award–winning author of "Brother, I'm Dying"; Miami resident
Bakery and Cafe: Buena Vista Bistro. They specialize in classic French fare. You can have a meeting here, or just breakfast with the girls. Its owners give my daughters free Madeleines. 4582 N.E. Second Ave.,
Designer Treasures: Angel's Vintage Boutique. A mother-daughter team scour estate sales in Florida and beyond to pack this funky little shop with archival designer wear (think '60s Chanel frocks). 4308 N.E. Second Ave., 305-573-4308
Voudou Culture: Libreri Mapou. Jan Mapou's Little Haiti landmark is a true cultural center, selling Haitian books, music and beaded voodoo flags. The scene vibrates with live drumming and poetry readings. 5919 N.E. 2nd Ave.,
Haiti Haven: Tap Tap. This little hangout has great ambiance and extraordinary murals on the walls. I love the Erzulie room, presided over by the Haitian goddess of love. The rum punch and kremas (a sweet, lethal cream liquor) are exceptional. 819 Fifth St.,
Story Villa: Books & Books in Coral Gables. This is one of the country's leading independent bookstores: a hub for Miami literati, with readings almost nightly, and an airy courtyard restaurant. 265 Aragon Ave.,
The Collector
Art patron, gallerist and co-founder (with husband Carlos de la Cruz) of the De La Cruz Collection Contemporary Art Space in Miami
Glass Menagerie: Fratelli Lyon. You eat surrounded by design at this Italian restaurant with sleek, bright, hyper-contemporary d├ęcor, in a glass bubble filled with top Italian wares from companies like Driade, Vitra and Maxalto. The furniture is always the latest. 4141 N.E. Second Ave.,
Real Deal: Michael's Genuine Food & Drink. Michael Schwartz's restaurant offers unexpected takes on American fare. The desserts, in particular, are mouth-boggling puzzles of flavor. 130 N.E. 40th St.,
Cuban Classic: Puerto Sagua. The simple family-style eatery has nourished Cuba nostalgists since opening in 1968. Check out the Scull Sisters' whimsical sculpted 3-D mural of Havana in the day. 700 Collins Ave., 305-673-1115
Art and Sole: Christian Louboutin. An intricate installation of colored stockings guards the entry to one of the Design District's latest boutiques. 155 N.E. 40th St.,
Basel Tops: Marni. Art world denizens come straight from the airport to shop at this outpost from the family-owned, high-fashion store. Art Basel is practically a Marni runway show. 3930 N.E. Second Ave., Page 2

Monday, November 8, 2010
Red, The Steakhouse, attracts LeBron, D-Wade

Red, The Steakhouse
If you're in Miami and hoping to sneak a peek at the Heat off the court, try Red, The Steakhouse, in South Beach, which has been a favorite eatery for Dwyane Wade and LeBron James.
The upscale steakhouse, which opened in 2009 and is an offshoot of the original Red, The Steakhouse, in suburban Cleveland, made it to Miami before LeBron, but James' move to the Heat hasn't hurt.
"LeBron was into the Red in Cleveland, but has been to the Miami Red more frequently," said Peter Vauthy, who is executive chef and one of the proprietors of Red.
Though the Cleveland location was a go-to spot for James, there haven't been any negative aftershocks because, Vauthy said, the Ohio location isn't near the Cavaliers' arena.
Red's shrimp carbonara pasta and chicken is a LeBron favorite. Meat eaters can follow the lead of Wade, who likes the C.A.B. prime steaks, Kobe beef, pastas, seafood and fresh lemonade.
"Since we opened, at least 30 different times we've had members of the Heat in Red, along with many current and former NBA players," Vauthy said.
Wade has been a regular since the restaurant opened. Chris Paul, Paul Pierce, Rajon Rondo, Hedo Turkoglu, Rudy Gay and Shaquille O'Neal have also sampled the fare.
Players can be difficult to spot because they often eat in a VIP section behind drawn curtains. They also usually arrive after normal dinner hours.
When Wade walks into the restaurant, "Everyone [gets] a bit starstruck and you could see the guests at the restaurant buzzing about it," Vauthy said.
The restaurant, which is owned in part by former NBA player Charles Oakley, is also frequented by NFL and NHL players. As the Heat's season gets into full swing, Vauthy anticipates an uptick.
"I'm sure we'll see an upswing due to the buzz and personality of having LeBron as one of our guests," he said.

Morning Note...

Happy Veterans Day…Please take a second to reflect on those who serve our nation in the military.  Not just this generation, but prior years and wars as well.  Realize that if it weren’t for their sacrifice, you might not be sitting in your cushy chair in our white collar world today.  Give thanks. 

Futures ~60bps lower this morning as yesterday’s late Cisco earnings & guidance (CSCO; -17%) have spooked the markets.  The tech-heavy NASDAQ futures are actually down 1.1% on the back of the CSCO news.  Note that treasury markets are closed today for the Veterans Day holiday.  G20 Summit in South Korea is ongoing.  Markets are slightly shaky in Europe this morning, as sovereign risk concerns in Ireland, riots in the U.K. yesterday, and higher margin requirements from clearing house LCH Clearnet cause nervousness.  The Continent is trading down ~60bps on aggregate this morning.  Asia was higher overnight.  Oil +15bps.  Gold +70bps.  USD +25bps.  Note that many newswires are reporting a major drop in foreclosures for October, which is a major head fake – recall that banks halted foreclosures for a period in order to get a better handle on the “robo-signing” fraud issue. 

In terms of commentary, it’s hard to gauge where the next catalyst comes from.  Some are arguing that fundamental news from CSCO may spark a round of profit-taking into year-end.  Others, myself included, think that the path of least resistance over the next six weeks or so if probably higher, just because many funds have missed the up-move and the “performance chase” by the hedge fund community could be on.  Regardless of what we see between now and the close of 2010, the bullish case for 2011 is murky at best.  Inflation chatter continues to make the rounds, unemployment is a concern, the balance sheets of European nations are a mess, and the United States of America will soon be re-branded as the United States of Debt.  It’s hard to be positive in the medium- to long-term considering the wall of worry ahead.  In the short-term, however, trading and performance-oriented dynamics may outweigh the fundamentals. 

Couple interesting tidbits from Bloomberg news this morning:

            Insider-Selling Jumps to a Record as Stocks Reach Two-Year High 2010-11-11 09:18:41.220 GMT

Nov. 11 (Bloomberg) -- Insider selling at S&P 500 companies reached a record in the past week as executives took advantage of a 2-year high in the market to sell their shares. 

* Executives at 125 companies unloaded shares between Nov. 3-Nov. 9 with sellers outnumbering buyers by more than 12 to 1
            * Readings are highest based on data going back to January 2004, according to
            * Total net sales reached $4.5b, helped by Microsoft CEO Steve Ballmer’s divestment of about $1.34b, his first in 7 years
            * Insider selling amoung 5,168 listed U.S. companies reached at 4-year high: InsiderScore
Investors Show Obama No Respect in Global Poll as Profits Surge 2010-11-11 05:00:20.0 GMT

Nov. 11 (Bloomberg) -- Investors around the world say President Barack Obama is bad for the bottom line, even though U.S. corporations are on track for the biggest earnings growth in 22 years and the stock market is headed for its best back-to- back annual gains since 2004. Pessimism about the impact of Obama’s policies on the investment climate is common to respondents everywhere, the latest Bloomberg Global Poll shows. At the same time, those outside the U.S. have favorable views of the president himself, while U.S. investors overwhelmingly have an unfavorable view, according to the quarterly poll of Bloomberg subscribers who are investors, analysts or traders conducted Nov. 8. The respondents also say the Republican victories in midterm congressional elections, which gave the party control of the U.S. House of Representatives, will be good for business.

Fed Easing Seen Ineffective by 75% in Global Poll Favoring ECB 2010-11-11 05:00:20.1 GMT

Nov. 11 (Bloomberg) -- Global investors doubt the Federal Reserve’s plan to buy more Treasury securities will boost the U.S. economy or bring down unemployment and say they believe the government is pursuing a weak-dollar policy, a poll shows. Three-quarters of those surveyed say the central bank’s securities purchases -- or quantitative easing -- will have little or no effect on joblessness, according to the latest quarterly Bloomberg Global Poll of 1,030 investors, analysts and traders who are Bloomberg subscribers. More than half say the Fed’s action won’t increase U.S. growth over the next year.    

Some trader talk from BofAMLCO:

Good Morning – Veterans day.  2/3 of our room the lights are out, and the bond market is closed.   Yesterday the market shook of some important issues.  China increased the required reserve ratio for all banks in an effort to contain the effect of hot money inflows on its economy.   The widening in Ireland's bond yields on an increase in margin required by LCH Clearnet, a clearing house, and the nervous reaction in risky assets both in Europe and the US put on exhibit the sovereign risk issue.  And finally, the release of the Treasury purchase schedule by the New York Fed and the subsequent rally in rates indicated the dominating theme of our outlook for credit – liquidity.   All these things could not keep a good market down.   We are making a very bullish call on commodities over in Europe today.  QE and the dollar.   Copper the big winner.  Keep buying the market, inflation is a coming, the bond market is telling you.   Have a good day.

VIA/B higher on an earnings beat.  IR to replace PTV in S&P500 index.  LVLT higher on confirmation it is primary content provider for NetFlix.  TSEM misses by 1c.  WPI announces secondary.  AMSC prices 4.6M shares at $35.50. CSCO lower on earnings and forward guidance.  BofAMLCO ups BVN, SCCO.  BCAP ups PETM.  CITI ups BLK.  DBAB ups NDN.  FBRC ups BMR.  MSCO ups ADSK, INTC.  BofAMLCO cuts TCRD.  BCAP cuts RSH.  CITI cuts FLEX, GWW, JBL, JBLU.  COWN cuts ZMH.  DBAB cuts CSCO.  FBRC cuts CLP, UDR.  BRKS beats by 5c.  CLNE announces 3M share offering.  CNQR lower on earnings.  FTK beats by 29c.  GLP announces secondary. 

S&P 500 PreMarket 8:30am (last/% change prior close/volume): 

Today’s Trivia:  How many total veterans are there in the United States?
Yesterday’s Question:  What are the two top selling spices in the world?

Yesterday's Answer:  Black pepper and mustard are the two top selling spices in the world.

Best Quotes: 
"This country's out of money and we better start thinking."
-Erskin Bowles

Erskine Bowles is a Democrat. He was Bill Clinton's Chief of Staff the last time this country ran a budget surplus. Now he's President of the University of North Carolina and Co-Chair of President Obama's Debt and Deficit Commission.

If you already haven't, google 'Bowles Pelosi' this morning and you'll see why professional US politicians are tee'ing up America's balance sheet to implode. The good news is that this isn't "new" news. Those who aren't paid to be willfully blind get it at this point. The American political machine has crossed its proverbial Rubicon.

This is going to be critical news for the next few weeks because yesterday afternoon Messrs Bowles and Alan Simpson (former Republican Senator from Wyoming), released a "draft" of their debt and deficit report that's due out on December 1st.

Commenting on the draft, compare and contrast these views:

1.       "Without tough choices, we're on the most predictable path toward an economic crisis that I can imagine." -Erskine Bowles
2.       This is "simply unacceptable" -Nancy Pelosi

Then consider the PR guy's take from Stan Collender (former Democrat budget analyst): "Mathematically, it apparently works... Politically, it is going to have a lot of trouble getting support from more than just the two co-chairs."

Finally, here's President Obama's take: "So before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts."


1.       Bowles is calling it like it is.
2.       Pelosi doesn't know what it is.
3.       PR guy knows what math is.

Question: Does the President of the United States have the leadership to listen, hear, and execute on the toughest fiscal decision of the century?

Ironically enough, as the Debt and Deficit Commission's draft was being released, I was sitting in Peter Orszag's office at Princeton University. Orszag, of course, just left Obama's team after running the OMB (Office of Management and Budget). He's done the math too.

We'll send a research report out to our clients later on today that goes through the details of Hedgeye's discussion with Peter, but the overall takeaway is that he not only agrees with our (and Reinhart & Rogoff's) conclusions about structural debts and deficits, but he agreed that we'll likely need another economic crisis in order to rid ourselves of this unbearable political polarization.

Now, to be clear, Orszag introduced and effectively utilized the word "polarization." At Hedgeye we use words like: fiat, conflicted, compromised, fools, risk, charlatan, dogma, etc... but it's all one and the same thing. And guess what Washington people? Americans have a Ph.D. in their gut on this too.

This morning Bloomberg released a poll (which I'll editorialize) that confirmed most of what the objective mind in you has already internalized:

1.       75% of people think Quantitative Guessing (QG) will be "ineffective"
2.       60% of people (down from 71%) trust Bernanke at the wheel
3.       44% of people trust Geithner has a clue on economic matters

Now at least Geithner is on the record admitting that he "isn't an economist." So when you read his quotes from the G20 this morning suggesting that the debauching of the Dollar has nothing to do with our professional politicians burning it at the stake, take his word for it - he doesn't do interconnectedness.

Back to Orszag, Bowles, and the American leaders who remain brave enough to stand up against the tyranny of a compromised Congress...

Fellow citizens, it's time. On this Veteran's Day we need to ask ourselves if the time to rid this country of Pretended Patriotism isn't now, when will it be?

As Peter Orszag stated plainly, the clock has been ticking. Any independent analyst who isn't trying to snag a banking bonus or Washington consulting fees gets this. US municipalities and states are already in fiscal crisis - they'll eventually need to be bailed out too (QE3). But who is going to pay for it? Will America allow Congress to raise the US Debt Ceiling in 2011? If America can't issue debt at these artificially low rates, what happens next?

Maybe Mr. Macro Market is already giving us a preview of the answer - US Dollar UP, and US Treasury Yields UP. This is new as of the last week. We're seeing immediate term breakouts in both. The Buck won't Burn forever - particularly if we find a President who gets that this debt and deficit buck stops with him.

My immediate term support and resistance levels for the SP500 are now 1206 and 1239, respectively. I covered some short positions on yesterday's opening market weakness and now have 10 LONG versus 11 SHORT positions in the Hedgeye Portfolio. I remain short the Euro (FXE) and long the US Dollar (UUP).

Best of luck out there today,