Visit Vegas - While It's Still There!

There is chilling news today from MGM-Mirage, the largest owner of casino resorts in Las Vegas. We get this from Bloomberg News:

MGM Mirage, the casino operator controlled by billionaire Kirk Kerkorian, said auditors questioned its ability to stay in business as the company won a two-month bank reprieve to restructure its debts.

Auditors raised “substantial doubt” about MGM Mirage’s ability to continue, the largest casino owner on the Las Vegas Strip said today in a filing. The company also reported a $1.15 billion fourth-quarter loss after writing down properties because of shrinking gambling revenue.

The auditor’s comments increase the likelihood MGM Mirage will seek bankruptcy protection from creditors.


Gambling revenue slid 17 percent across all of MGM Mirage’s properties because of a 17 percent slump in Las Vegas table game betting and a 12 percent decline in slot-machine takings.


Revenue per available room, a measure of rates and occupancy known as Revpar, tumbled 21 percent at MGM Mirage’s Strip properties in the fourth quarter, as occupancy dropped to 85 percent from 93 percent a year earlier, and the company charged on average $31 a night less for rooms in Las Vegas.

Gambling revenue in Las Vegas, the biggest betting center in the U.S., fell the most on record last year and continued to tumble in January, cutting sales at MGM Mirage, the owner of 10 casino resorts in the city including the Bellagio, Luxor and MGM Grand. MGM Mirage is the biggest employer in Nevada.

MGM Mirage is not alone. Harrah's - the other major casino player in Las Vegas, and the largest casino operator in the world - is also in danger of default. Las Vegas Sands, the owner of the Venetian resort, has lost 95 percent of its stock value this year, and many construction projects in the city that never stops growing are now abandoned - waiting for more money to come available some day.

I know from personal experience that times are tough in Sin City. Just this week, I made reservations at the Paris casino for later this summer, and was able to land three weekdays for FREE. Now, I do like to gamble when I go to Vegas, and I did receive the deal because the casino knows I will likely gamble a good bit at Paris. However, I am not obligated to gamble a single dime on the trip. Last summer, when I stayed at Paris, under the same circumstances, with the same level of gambling under my belt, I had to pay 59 bucks a night.

If you look at hotel rooms in Las Vegas for this summer, you will find LOTS of good deals. I found rooms at Bally's - for anyone - for 45 bucks a night. Bally's has really nice rooms, and it's in the middle of the action. There are tons of similar deals to be had!

I would hate to see any of the major casinos go under, and I don't mean to be crass, but hard times for the casinos often translate to good times for the small-time gambler. As I've already noted, hotel rooms are going for a song this summer, and casinos will go the extra mile to make sure you sit down at a table or a slot machine, too.

I remember back in 1995, I had a convention to go to in Los Angeles, and as long as I was flying all the way out west, I decided to detour to Las Vegas for a couple of days of gambling on my way out to L.A.. I remember reading in the Wall Street Journal that the Stratosphere was struggling to emerge from Chapter 11, and was pulling out all the stops to get people to visit - including cranking up the slot machines and guaranteeing a 98 percent payback on dollar slots. That means for every 100 dollars you churned through the slots, on average and over the long haul, you would receive 98 dollars back.

I decided to stay at the Strat, and within a couple of hours of arriving in town, I hit a dollar slot machine for 2500 dollars - the biggest jackpot I've ever hit - before or since!

Few places in America have taken this recession as hard as Las Vegas, because people out there bought into a dream. It's a place where even hotel maids were able to buy their own homes because of the steady tourism growth and constant need for labor. Between the mortgage crisis and the downturn in the economy, many of those homes are now in foreclosure, and many of those workers are out of jobs.

I'm going to make it my personal economic stimulus mission to contribute to the Las Vegas economy this summer, and help those folks out.

That is, unless I get LUCKY!

Here's Proof We haven't Learned A Thing...

As the federal stimulus money starts to pour out of the government's coffers into state and regional agencies, the decision-makers at the local levels are getting to decide how to best spend the money. The idea (at least as far as I understand it) is to use that dough to create jobs by fixing infrastructure - preferably in projects that will take a good long time to complete. The hope is that by the time these projects are completed, the economy will be in good enough shape to sustain the workers who will be benefitting now from the stimulus program.

So can anyone explain to me why Metro is planning to spend a huge chunk of its stimulus money - not on capital projects - but to keep the current system going? Metro has a 30 million dollar budget hole, and was looking at cutting service to close the gap until board chairman Jim Graham stepped in with a plan to use stimulus money instead.

Critics say using stimulus money to balance Metro's budget this year will only move the problems to next year, when no new stimulus money will be forthcoming. But Graham told us at WMAL today he's optimistic the economy will recover enough by next year so that Metro won't have the same budget problems it has now.

Isn't this how America got into the trouble it's in today? By spending money NOW and worrying about how to pay our bills later? Using optimism as some sort of credit plan is not the smartest idea I've heard, either, Mr. Graham!

Metro loses money with every person who rides a train. For every dollar you spend to ride Metro, some government (MD or VA or DC or the Feds) is paying another dollar to subsidize your trip. By failing to cut service, Metro is hoping to keep people riding. That is all well and good from a public policy standpoint. But the more people ride, the more it costs taxpayers to keep them riding. Financially, it could very well make sense to cut some of the lower-volume train and bus service.

Montgomery County, which I have railed on regularly in this blog, will release its budget plan this week, and County Executive Ike Leggett is promising he will not use a single stimulus dollar to balance the county's books. I have a lot of problems with how Montgomery County conducts its business, but I am with Mr. Leggett on this point.

If your credit cards are at their spending limit and you find a wad of cash in the street, you don't go buy yourself a new car... you pay down your debt.

It's called being fiscally responsible. Montgomery County (at least in this case) is.

Metro is NOT.

So Does This Make Rahm Emanuel "Little John"?

Could Barack Obama possibly do a better job of portraying Robin Hood if he tried? The President has spent his first month in office giving away as much money as he can, and now, he's promising to get it back by taxing the wealthest Americans... literally taking from the rich and giving to the poor!

This is all going to play well with the masses - but I think it's also developing a dangerous "where's my piece of the pie" mentality. Yes, I did bitch last week about the fact that I'm paying to refinance my mortgage, while millions of Americans who were not so careful about their credit are getting bailed out for free. But I also realize that if every American expects and receives a handout from the government, then we're never going to get out of this economic mess.

I think some people really DO expect a chicken in every pot - some bit of entitlement. They hear about stimulus money and their mouths start to water. First of all - President Bush gave us free stimulus money last year - to no apparent positive effect. I dumped most of mine in Las Vegas!

The state of Virginia has about four billion dollars in stimulus money coming, and Governor Tim Kaine posted a website last week asking Virginians how they thought the money should be spent. So far, there have been more than 3,000 responses - and many of them are from people who want the money to be given to themselves - to pay for college or to pay off loans. Their requests so far exceed 85 billion dollars - 20 times MORE than the state will be receiving.

We're never going to recover if people don't start realizing that the government can't simply give us everything we need. Someone will have to pay the bill for all of this - and so far, it looks like that task will fall to the wealthy. But sooner or later, that stream is going to run dry as well.

President Obama is in a tough spot. He has to get money from some place. I just wish he would be more discerning about where it's all going.

The November election showed us in no uncertain terms there was a pent-up frustration with the way the country was being run over the past eight years. There was clearly a message of change being sent to Washington.

But it was NOT a message of pocket change.

Which is all we're going to be left with if this spending and taking doesn't stop.

Should I Have Intentionally Gone Broke?

I just received the good news! Our application to refinance our home mortgage has been approved, and the closing papers are in the mail! This is happening despite the fact that I am grossly underemployed and loans have been scarce to come by. Robin and I managed to get the loan (30-year conventional, 4.75% plus one point) because we have excellent credit, and because we have a good bit of equity in our home - at least 40 percent of its value.

We have been responsible over the years with our money. We pay our bills on time. We've been careful to pay off our credit card bill every month, and we've never had more than one car loan at any one time. We've taken plenty of expensive vacations, but they've never been paid for by credit card - we've always saved up for them in advance. To put it simply, we haven't spent over our heads, and we've been rewarded by earning the ability to acquire loans at excellent rates. All of which makes me wary of what's going to happen on Wednesday.

That's when President Obama will be announcing his plan to help Americans who are at risk of foreclosure to keep their homes. It's not yet clear exactly what the President will be announcing, but according to the Associated Press, this is how it is expected to go:

A Democratic Senate aide said the plan is likely to include hefty payments designed to encourage the lending industry to lower mortgage rates or reduce the total principal amount owed by borrowers. The idea has become attractive to Obama officials, the aide said Friday, because it is expected to be far less expensive than having the government buy up loans out of mortgage-linked securities.



Howard Glaser, a mortgage industry consultant who served in the Clinton administration, said if 2 million borrowers' payments were lowered by $500 a month, it would cost the government and lenders $6 billion each per year — assuming lenders match half the cost.


Unlike previous loan modification plans, borrowers would not have to be in default to qualify, according to people briefed on the plan.



I don't want to put the cart before the horse, but if this story is correct, it sounds like the government will refinance the homes of people who were at risk of foreclosure, and lower their home payments by hundreds of dollars a month. People who bit off more than they could chew, and purchased homes they could not afford will be getting the same break that I just got - The break that I earned with my good credit and that I paid for with several thousand dollars in closing costs!


I hope the report is wrong and that I am wrong. But if the report is right and so am I, then SOMEONE is going to have to explain to me why I just spent my entire adult life trying to do the right thing with my credit. Is the government going to compensate me, too? I don't want the government's money, but if it IS going to help these at-risk homeowners, then that help needs to come at an equitable price. Any government aid should become an investment in the home. If the home is sold down the road, Uncle Sam should get its piece of the equity back, with interest.



And if the government wants to knock a hundred grand off the cost of my new loan, that would be OK, too! (Not really, but you get my point!)

I Love The Smell Of Desperation In The Morning!

When we were traveling on vacation in California two years ago, Robin and I chuckled over a bumper sticker we saw. It read "God Bless Our Stupid President". That's really how I'm feeling about our Presidential candidates right about now. Hillary wants to give Americans a gas tax holiday, and allow the average driver to save about 70 bucks this summer - enough to take the family to Outback once. Meanwhile, Barack wants to issue another stimulus check.


Look - Lord knows I could really use some extra cash right now, but how much longer can we really go on looking the other way? Our probable future President, whoever he or she may be, wants us to pleasure ourselves, and not worry about the fact that we're shooting ourselves as a nation in the foot with every extra dollar the nation borrows in the name of economic stimulus. Any extra money rebated back to Americans isn't coming from some secret bank account - it's yet more national debt.

Meanwhile, to make matters ever worse, we must worry about what this kind of political thinking says about us as a nation. Clinton and Obama are now just openly pandering - there's not even really a shred of dignity left between the two of them... And yet, we're supposed to go into a voting booth in November, hold our noses and make a choice? God help us. And don't for a minute think all of this is some sort of oblique endorsement of John McCain. He's out of the spotlight for the moment because he can enjoy watching the other two beat each other's brains out, but I'm sure McCain will have ample time to shame and embarrass himself down the road!

I think perhaps the real villain in all of this is the election process itself. I used to make a joke in the newsroom that, because of the length of the presidential campaign, no one stands a chance of still being liked by the time election day rolls around... Joe Gibbs and Jesus Christ could be the candidates, and we'd still be holding our noses in the voting booth!

The good news at the end of the day is that Hillary and Barack's plans to give away more cash will likely be vetoed by President Bush if either bill lands on his desk. God Bless Our Stupid President, indeed!