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!

NOT The Magic Of Disney!

Many people who read this blog know that I have a historical affinity for the Walt Disney Company. As a longtime fan, I have spent a good portion of my income supporting a Disney habit... a habit that, by financial necessity, has waned a bit in the past year or so.

Still, I have generally followed the business of the company. I am a stockholder after all, and I also have an ownership stake in the Disney Vacation Club. No one knows better than I how much Disney likes to part a Disney fan from his money.

So it was with this in mind that I read this morning about Disney's latest venture - D23. D23 is the "Official Community for Disney Fans" - a website that one can log into for free, but which requires you to fork over 75 bucks for the "good stuff".

I took a visit over to D23, and noticed immediately that it is affiliated with disneyshopping.com. Good thing, too, because Disney knows that its most loyal fans are also its biggest spenders!

What does a membership in D23 get you? A magazine four times a year. A membership certificate ("Suitable for framing!"). A membership card. Discounts to a four-day D23 Fan Expo in Anaheim in September. A "surprise" membership gift. AND - the "opportunity" to purchase exclusive D23 merchandise...

Who could afford to pass that all up???

I can. There was perhaps a time when I would have probably swallowed hard and pulled out the credit card. But I know from personal experience that when it comes to Disney, the "official" experience is never as good as the "unofficial" one. Disney is trying to cash in on something that everyone already gets for free. There are more Disney fan websites that carry more useful and more honest information than Disney does than I can count.

Disney is typically terrible at selling its own message because every word on its websites is designed to either avoid litigation or to induce you to buy something. If you want to book a Disney Cruise, for example, you can certainly do that at Disneycruise.com. But if you want decent information ABOUT a Disney cruise, you need to go some place else, like the DIS or allears.net, where you can get an honest opinion and hear helpful dos and don'ts.

It's interesting to note that even as Disney describes D23 as a "community", there are no bulletin boards on the site. No place for people to rant - or say something that can be construed as uncomplimentary towards the Mouse.

I am not alone in my assessment of this new venture. Just take a look at this blog and its responses from REAL Disney fans - people who make me look like a Disney lightweight! This day does not bode well for the company.

I don't begrudge Disney's effort to make a buck. That's why the company exists. But to ask its biggest fans to pay for something that REAL fans can already get elsewhere for free - and in THIS economy...

I smell backlash.

This Just In! People Refuse To Pay Five Bucks For Coffee!

As I have mentioned previously, I have never understood the consumer's allure for Starbucks coffee. I like the taste of the stuff, and if my wife is buying, I will gladly enjoy a venti house coffee. But paying upwards of five dollars to turn a cup of coffee into what amounts to be a milk shake just simply never made any reasonable sense.

Now with the economy on the toilet. Starbucks is hitting on hard times... It closed hundreds of stores last year, and is now realizing that people have even less money for such foolishness now than they did before the holidays. So Starbucks is really pulling out the stops. From the Financial Times:

Starbucks is to close more stores, sell a newly delivered $45m corporate jet and cut headquarters staff and worker benefits as it battles a slump in sales that has tracked the broader collapse in global discretionary spending.

The coffee retailer said on Wednesday that it would shut 300 more “underperforming” locations – 100 of them outside the US – after a 9 per cent fall in comparable sales in the last three months of 2008. It announced a first wave of 600 US store closures last summer.

The move will result in about 6,000 job losses, while an additional 700 corporate and support jobs will also be cut – half of them at its Seattle headquarters.

Howard Schultz, chief executive, said that since early December the company had seen a far more rapidly deteriorating global economy than it had expected before the holidays.

“The data shows that by virtually all statistical measures the pace of weakening in the business environment and global economy we were anticipating has been accelerating,” he said.

Mr Schultz has asked for his salary to be cut to less than $10,000 – from more than $1.2m previously – and the company is selling two of its three corporate jets, including a Gulfstream 500 delivered in December.

US comparable stores sales fell 10 per cent during the quarter, as fewer customers spent less on their visits.

International comparable sales also turned negative for the first time, with the biggest slowdowns seen in the UK and Canada, its two largest international markets. Starbucks has about 670 company-owned stores in Britain, and around 7,000 in the US.

The company said that it was also further reducing its planned new store openings in 2009, with 140 new US stores, down from its previous target of 200, and 170 new international stores, down from a previous target of 270. It is also cutting back on plans for new licensed stores.

I wonder if we'll look back a few years from now and look at the days of gas guzzling SUVs and premium coffee shops and the other examples of our high-spending, high risk economy as the "good times", or as times of wretched excesses. Either way - just as our grandparents exercised thrift as survivors of the Great Depression, I think we will all think twice before we return to our spending habits of old.

(By the way, by belittling Starbucks, I do not ignore the human toll this is taking. I have a nephew who is a barista at Starbucks. I hope he survives the cuts!)

Thanks, Fred (The Other Fred)!

I guess this is the week for actors-turned-politicians named Fred to appear with me on the beach! Earlier, we visited Fred Grandy. Today, we hear from Fred Thompson. The former Tennessee Republican Senator was not much of a Presidential candidate... Frankly, I don't think he was really all that interested in being President.

Still, when you mix Thompson's camera presence, political knowledge and southern drawl, he has a great way of explaining what a stinking mess our economy is in... This video is a little long, but give it a spin anyway... We have no one to blame but ourselves... Thanks, Fred!

A Rose Growing Among The Weeds!

Let's face it... there's a lot to not be happy about these days - especially with the economy being what it is... So we take our good news where we can find it! And I found it yesterday at the gas pump at Costco in Columbia, where I filled up the minivan for (drum roll please..... ) $2.12 a gallon!




It cost me less to fill up my minivan this week than it did to fill up my little Honda Civic last week! This prompted me to google "gas prices", and here's what I found out!

• Regular gas is now averaging $2.44 a gallon nationwide, down $1.11 cents in a month, and down $1.67 since the price peaked at $4.11 a gallon in July!


• Gas prices have fallen for 46 days in a row, and some analysts think the average price will drop another 25 cents or so before it bottoms out in December.


• Gas has not been this cheap in 19 months.


• The cost of crude oil has dropped even further than gas... Down more than 50 percent, from nearly $150 a barrel to 63 dollars a barrel this week.

One wonders what might have happened on Wall Street and at the ballot box if the spike in gas prices had never happened. There's really no way of knowing. But I do think the auto and travel industries would be in a lot better shape than they are now!

Still, I somehow don't think the SUV is on the verge of a comeback!

Some Friendly Financial Advice

More than six months after my involuntary dispatch from WMAL, I am still cleaning up the pieces... Specifically speaking, I am currently reinvesting the small pittance of cash that I had accumulated in the Citadel 401k plan during the eight months that I had worked for that company.

While I am doing this chore, I am also having a financial planner make some suggestions concerning my Disney 401k, which I had been contributing to for years until Disney sold our station and made me an ex-cast member.

The financial planner I'll be working with is Dan, the nice young guy from Merrill Lynch who took me, along with some other radio buddies, on a very unsuccessful fishing trip in the Chesapeake Bay a couple of months back. Here's hoping Dan is a lot more successful with my money than he was with a rod and reel! I'm sure Dan is already working on his speech explaining how my money will be safe, even though Merrill Lynch sold itself to Bank of America in a financial fire sale earlier this week!

I'm not particularly worried about who will be handling my money going forward, because they could hardly do a worse job of handling it than I have!

Here is some very important advice to anyone who has a 401k plan but hasn't looked at how it's doing lately. NOW IS NOT THE TIME TO LOOK! The Dow has dropped about a thousand points this week, closing yesterday at a three-year low. I guarantee you will be shocked if you take a peek. I had to print out a statement so I can review it with Dan, and I swear I got the vapors... OUCH!

Me? I'm no longer looking for one job... I better be looking for two!