Probably no industry besides housing dove into the cheap money orgy with more reckless abandon than Las Vegas casino conglomerates. The Strip has many cranes in the air helping build hotels that will total about 10,000 rooms, or would have since one project is idle. The music stopped and Boyd Gaming’s Echelon had nowhere to sit down. We’ll soon see if other chairs are removed from the game. There is no need for the cranes elsewhere in the world so they’ll just stay put, abandoned but lit up so aircraft won’t crash like Boyd’s stock.
The major players on the strip are hung over after relentless expansion with MGM now falling about $1.2B short of funds on the estimated $10B City Center. Harrah’s went $15B in debt going private, gobbling up casinos nationwide building their family to over 50 properties. Wynn and Las Vegas Sands made ill-fated investments in Macau. Station Casinos which owns seven properties catering mostly to locals is flirting with bankruptcy. Most of these stocks are trading at less than 5% of their peaks last year.
The troubles these companies face are of their own making and none will get a government bailout. Unfortunately for them and their employees they’re getting the opposite from Washington, a huge kick when they’re down. President Obama has stated that he doesn’t want any company who receives federal funds to spend money in Las Vegas. People jump when this President says to so there have been 340 event cancellations in the past 90 days; 111,800 people who won’t be spending money in Sin City. Many of the 46,000 people who are directly employed through these meetings will presumably sit idle. Mayor Oscar Goodman has asked for an apology for driving this stake through the Las Vegas economy. Good luck with that.
A few years ago when these projects were on the drawing board it looked like Las Vegas needed the extra capacity. The nearly a million people who were visiting each week tested the airport's capabilities, formed lines outside the restaurants and clubs and paid top dollar for rooms. The city that once gave away rooms, food and drink to make it up at the blackjack tables was getting $1000 and up for a bottle of Cristal. The population in the Las Vegas Valley was growing at 60,000 per year.
The boom brought riches but the crash is worse. Las Vegas has unemployment approaching 10%, leads the country in foreclosures and has another distinction: Forbes’ wrote about Vegas being the most abandoned city by home vacancy in the country. People are looking for greener pastures, which aren’t difficult to find since they live in a desert. The people who remain employed are seeing their hours and benefits slashed, home equity vaporized and their communities destabilized. There will be no end in sight until the demonization of Las Vegas business trips is lifted, or in other words there is no end in sight.
There is a message Nevada will send to President Obama but sadly will have to wait until the 2012 election.
Thursday, March 12, 2009
Saturday, March 7, 2009
No Respect
The new President is showing signs of the inexperience we were warned about. After six weeks in office his cabinet is still not complete, Americans have their wallets in lockdown and he’s managed to alienate our two closest allies. Keep in mind that our President has never been in charge of anything except his campaigns and the Harvard Law Review. He’s never run a business or a government agency or picked up the public relations skills those would have required.
This on-the-job training has left British Prime Minister Gordon Brown doing his best Rodney Dangerfield "No Respect" all the way back to London. There was no joint appearance in front of flags planned until Brown begged and even then the opening remarks were skipped for questions from the press. When gift-giving time came, Brown handed President Obama a pen holder carved from timbers of the HMS Gannet which will match the desk in the Oval Office made from wood of its sister ship HMS Resolute. Like someone who forgot Christmas was coming Obama must have ran to Best Buy to fetch a stack of 25 DVD’s of American movie classics including Gone With the Wind and Ishtar. OK, not Ishtar but it wouldn’t matter if it had been that and the entire Friday the 13th catalog; the DVD’s aren’t compatible with UK DVD players and never mind that Brown isn’t a movie buff anyway. The Brown children got models of the Obamas new helicopter. Big woop. Our new President then abruptly Brown to go to a party. No respect at all, I tell ya.
Sending chills throughout Israel not just for her cackling, Secretary of State Hillary Clinton was in the Middle East giving away $900M to the Palestinians who could hardly contain their laughter while promising not to give a penny to Hamas. She’s also made overtures to Iran who replied that President Obama is following the same “crooked ways” as George Bush. To summarize, we’re trying to buy friends in Palestine and Iran who want to destroy our only ally in the region. And they wouldn’t mind destroying us too.
George Bush built a coalition of over 30 countries in our Iraq War efforts with Great Britain in the forefront. If the time comes for a similar military engagement I wonder if our President will get a return phone call. George Bush kept Israel from attacking Iran’s nuclear sites, averting all-out war in the entire region. I doubt President Obama will be able to keep restraining the Israelis or will even try.
President Obama’s promise of The United States finally being respected in the eyes of the world must have had an asterisk.
This on-the-job training has left British Prime Minister Gordon Brown doing his best Rodney Dangerfield "No Respect" all the way back to London. There was no joint appearance in front of flags planned until Brown begged and even then the opening remarks were skipped for questions from the press. When gift-giving time came, Brown handed President Obama a pen holder carved from timbers of the HMS Gannet which will match the desk in the Oval Office made from wood of its sister ship HMS Resolute. Like someone who forgot Christmas was coming Obama must have ran to Best Buy to fetch a stack of 25 DVD’s of American movie classics including Gone With the Wind and Ishtar. OK, not Ishtar but it wouldn’t matter if it had been that and the entire Friday the 13th catalog; the DVD’s aren’t compatible with UK DVD players and never mind that Brown isn’t a movie buff anyway. The Brown children got models of the Obamas new helicopter. Big woop. Our new President then abruptly Brown to go to a party. No respect at all, I tell ya.
Sending chills throughout Israel not just for her cackling, Secretary of State Hillary Clinton was in the Middle East giving away $900M to the Palestinians who could hardly contain their laughter while promising not to give a penny to Hamas. She’s also made overtures to Iran who replied that President Obama is following the same “crooked ways” as George Bush. To summarize, we’re trying to buy friends in Palestine and Iran who want to destroy our only ally in the region. And they wouldn’t mind destroying us too.
George Bush built a coalition of over 30 countries in our Iraq War efforts with Great Britain in the forefront. If the time comes for a similar military engagement I wonder if our President will get a return phone call. George Bush kept Israel from attacking Iran’s nuclear sites, averting all-out war in the entire region. I doubt President Obama will be able to keep restraining the Israelis or will even try.
President Obama’s promise of The United States finally being respected in the eyes of the world must have had an asterisk.
Wednesday, March 4, 2009
There is a growing spat between the White House and Rush Limbaugh, the person they branded as leader of the Republican Party. That the Obama Team can pull that off shows the dearth of leadership in the GOP, despite the fact Limbaugh has never held elected office. New leader of the party, Michael Steele, hasn’t been given the same hero worship as President Obama despite being African American. The Democrat arguments can be boiled down to “Stop criticizing our spending initiatives and jump aboard” and “You don’t have a plan.” Why they’re making a Nixonian attack against a private citizen is a discussion for another time.
There is no reason for the Democrats to include Republicans in the spending frenzy which is why they didn’t. Republicans have 178 seats in the House of Representatives or 41%, which equals their representation in the Senate. In case you didn’t notice they have 0% of the White House. The only chance of blocking the Democrat agenda is a Republican filibuster in the Senate, unfathomable because of the revolting left-leaning Sens. Snowe, Collins and Specter.
Unfortunately for President Obama he will own the results of the $787B Stimulus Package, $400B spending bill and monster $3.6T budget. The Dems had no input from the GOP in writing these boondoggles but still wants its fingerprints on them so as to place blame later. If you listen closely you’ll hear that the cure for eight years of too much spending is more spending.
There is no plan from Republicans in general but several remedies from Conservatives, which unfortunately are two very different breeds. Cut the corporate income tax, privatize Social Security, allow more drilling for oil in America, cut taxes in general, cut government spending across the board, stop the bailouts. Yes, let the unhealthy companies fail including the Big Three automakers and Citibank. There will be pain for a while especially for union workers but new companies will spring from the ashes with better business models and no obligations to repay bad loans, union contracts or pensions.
What I just spelled out are the bare bones of a plan. Those on the left won’t even acknowledge that there is a debate over these issues let alone debate them. Welcome to the new era of bipartisonship.
There is no reason for the Democrats to include Republicans in the spending frenzy which is why they didn’t. Republicans have 178 seats in the House of Representatives or 41%, which equals their representation in the Senate. In case you didn’t notice they have 0% of the White House. The only chance of blocking the Democrat agenda is a Republican filibuster in the Senate, unfathomable because of the revolting left-leaning Sens. Snowe, Collins and Specter.
Unfortunately for President Obama he will own the results of the $787B Stimulus Package, $400B spending bill and monster $3.6T budget. The Dems had no input from the GOP in writing these boondoggles but still wants its fingerprints on them so as to place blame later. If you listen closely you’ll hear that the cure for eight years of too much spending is more spending.
There is no plan from Republicans in general but several remedies from Conservatives, which unfortunately are two very different breeds. Cut the corporate income tax, privatize Social Security, allow more drilling for oil in America, cut taxes in general, cut government spending across the board, stop the bailouts. Yes, let the unhealthy companies fail including the Big Three automakers and Citibank. There will be pain for a while especially for union workers but new companies will spring from the ashes with better business models and no obligations to repay bad loans, union contracts or pensions.
What I just spelled out are the bare bones of a plan. Those on the left won’t even acknowledge that there is a debate over these issues let alone debate them. Welcome to the new era of bipartisonship.
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