Cutting to the Truth

This was likely bound to happen. As the G-O-TEA Shutdown has been dragging on, a certain "Sunny" politician up for reelection next year was bound to start fretting over the looming storm clouds. And now, that's exactly what's happening.

To be fair, it's not just about politics. It's also about the failure to achieve the most basic policy goal in Washington: Keep the government open and pay the nation's bills. And as long as this failure to perform the most basic function of government continues, the entire nation suffers... Including (amd especially) Nevada. And that's the other reason why Governor Brian Sandoval (R) is worried.

“Particularly at the end of the month, I think that’s really when we are going to start to see … some catastrophic issues going on for the state,” Sandoval said.

“Time is short. We have hundreds of thousands of Nevadans facing real consequences. The first of the month is right around the corner.”

Most immediately, 362,000 food stamp [or SNAP] recipients will see their benefits halt on Nov. 1 and the 500 state employees who administer that program will face potential furloughs if the shutdown is not resolved. About 425,000 women, infants and children [WIC] would also stop seeing food benefits.

To continue both programs without federal money would cost the state $50 million a month.

“We don’t have it,” Sandoval said, of the state’s $6.1 billion biennial budget. “We can’t afford it.”

And to make matters even worse, unemployment benefits, rape crisis centers, energy assistance programs, and Medicaid will also have to shut down soon if the federal government doesn't reopen. Even the Nevada National Guard is running dangerously low on the most basic supplies. This is no hyperbole, just fast approaching catastrophe.

So why hasn't Congress fixed this already? Why is the federal government still shut down? Perhaps subconsciously, Rep. Joe Heck (R-What?) provided the answer.

"In a way, when you know that no matter what you do, 50 percent of the district is not going to be happy, does it matter?” Heck said of his constituents. “Really, it frees me to concentrate on doing what I think is best.”

What is best, in Heck’s opinion, is withholding support for a clean budget resolution until Democrats make some concessions on deficit reduction. He is sticking to his guns on that, even if other House Republicans think it’s about time to give in to Democrats’ demands.

Nearly two dozen Republicans, many of whom have more partisan voting records than either Nevada GOP congressman — recently signed a pledge to vote for a clean budget resolution if it comes up.

“It would have to be a bill, and I don’t comment on hypothetical bills,” Heck said when the Sun asked if he might consider signing on.

But in theory, Heck is not on board.

“What is there associated with the clean (budget resolution)?” he asked. “How are we going to address our debt and our deficit?”

Actually, that's already been happening. The federal budget deficit has fallen fast and is now the smallest it's been in over four years. And on top of this, Senator Harry Reid (D) and his fellow Senate Democrats offered a budget with even more deficit reduction.

This year, we've been enduring a whole lot of austerity. In fact, many prominent economists have been warning that America has been enduring too much austerity. With America's economic recovery already fragile before the Shutdown Sh*tfest commenced, the last thing our economy needs is even more austerity throwing people out of work and reducing economic output.

Let's get real. This isn't really about deficit reduction. If it was, they wouldn't be demanding tax cuts that would add to the deficit.

So why are Joe Heck and so many of his G-O-TEA colleagues suddenly feigning concern for the budget deficit? Simple answer: Their obsession with destroying Obamacare (aka the Affordable Care Act) has led to dropping poll numbers and new worries about
Republican losses in next year's midterm election. So now, they're desperately grasping onto anything that can be construed as a "winning message".

After all, Republican infighting doesn't make a "winning message". And they don't want to admit that this Shutdown Sh*tfest was actually caused by their internal chaos. So instead, they continue playing this ridiculous game of "Pin the Blame on Someone Else". And today, they're pointing fingers at Democrats for "not wanting to cut the deficit" despite the fact that President Obama and Congressional Democratic leaders have agreed to drastic deficit reduction.

And that leads us back to Republicans' political woes. Rep. Heck tacitly admitted he's in political danger. And Governor Sandoval is going to greater lengths to distance himself from Heck, Senator Dean Heller (R-Why?), and Rep. Mark Amodei (R-Really?). Deep down, they and all their advisers know what Kevin Drum says is true.

It's crazy. How do you get across how insurrectionary this is? Raising the debt ceiling isn't a concession from Republicans that deserves a corresponding concession from Democrats. It's the financial equivalent of a nuclear bomb: both sides will go up in smoke if it's triggered. Ditto for the government shutdown. And ditto again for the piecemeal spending bills, which are basically a way for Republicans to fund only the parts of government they like but not anything else.

You can't govern a country this way. You can't allow a minority party to make relentless demands not through the political system, but by threatening Armageddon if they don't get what they want. It's not what the Constitution intended; it's not something any president could countenance; and it's reckless almost beyond imagining.

And most important of all, it's not something that should get written about as if it's just a modest escalation of normal political disagreements. It's not normal. At all. But how do you get this across? How do you get across just how non-normal it is that we're even talking about it?

This is why Governor Sandoval is now panicking. This is why Rep. Heck must grasp at straws to spin away his party’s reckless behavior. And this is why so many Americans can't wrap their heads around the unbridled insani-TEA on Capitol Hill. That's the dangerous truth behind the crazy spin.

Waiting for the End

It's been over a week now. And despite the occasional glimpses of light at the end of the tunnel, it appears that the light is just coming from the speeding train approaching us. The G-O-TEA manufactured crisis rages on, and we're all suffering as a result.

Yesterday, we debunked G-O-TEA memes on "compromise". Over the course of the past six months, Republicans blocked nineteen attempts to start bipartisan, bicameral budget negotiations. Republican "leaders" only changed their tune last week, just minutes before their Shutdown began.

Throughout the spring and summer, Congressional Republicans turned down multiple Democratic offers for budget negotiations. But now, we're supposed to believe the G-O-TEA Shutdown is all Senator Harry Reid's fault because he's "not playing nice"? If this situation wasn't so dangerous, we'd be laughing.

Yet now, Senator Reid is offering Republicans a way oit of their own manufactured crisis. Last week, they privately admitted they must end it before we reach credit default next week. And even a few Republicans have publicly admitted they're fighting a losing war. So why won't they stop the insani-TEA already?

All this time, Republicans have had the opportunity to end this unnecessary drama. But so far, they haven't done so. That's why Senator Reid is now offering them a way out. If they truly want to prevent the initiation of an economic collapse we haven't seen in eighty years, they can start by passing the very clean debt ceiling legislation they privately admitted they had to pass last week.

So why wait any longer? And why deny reality any longer? With each passing day of this manufactured crisis, the nation inches closer to complete disaster... And Congress wastes time on this crap that could be used to solve real problems.

So why are we still waiting for the end?

Double Dip Drama

So far this month, politicians on Capitol Hill have been breathing sighs of relief as various manufactured fiscal crises have been averted at the last minute. And at first, it looked like the economy has been humming along just fine despite the DC drama. However, today it looks like earlier assumptions may have to be thrown out the window. Believe it or not, the early Commerce Department Fourth Quarter economic report actually showed the economy contracted by 0.1%

So what happened?

First, federal defense spending fell at an astounding 22.2 percent annual rate in the quarter, which subtracted 1.28 percentage points from GDP growth. That was in part a reversal from the unusual 12.9 percent gain in the third quarter. But when the two quarters are averaged together, the defense sector was a drag on the economy in the second half of 2012 —and that’s before a “sequester” of automatic defense cuts goes into effect this year if Congress doesn’t act to avert it. The volatility in defense spending —and consequences for economic growth- -are a reminder of the impact that may be seen in the future as federal spending cuts go into effect.

The second major drag on growth was from businesses inventories. Firms drew down their inventories by more than $40 billion, which subtracted 1.25 percentage points from GDP growth. In effect, by selling goods sitting on their store shelves and in their warehouses, production in the nation’s farms and factories was not as high as one might expect given consumer spending.

The good news, though, is that the effect from inventories should go away in future quarters; businesses can’t simply run down their inventories forever. final sales, which adds inventories back in, rose at a 1.15 percent rate. [...]

GDP is the broadest measure of economic output, aiming to capture the value of goods and services produced within U.S. borders during a given time. The data over the last three years paint a portrait of an economy stuck in a pattern of steady growth, neither break out into a sharp enough pattern of expansion to push down joblessness nor to fall into a new recession.

Still, there are some reasons for concern in 2013. While consumption spending held up in the final months of 2012, that was before an increase in the payroll tax took effect in January. And negotiations over the sequester could result in steep cuts in defense and other government spending in the months ahead, putting further downward pressure on GDP.

Now this is an early estimate, and the Commerce Department may revise this figure as more data comes in. And it looks like one-time events like inventory drawdowns and wild swings of military spending temporarily threw the GDP out of whack. Excluding inventory, real GDP sales actually rose by 1.1% last quarter.

However, we still can't feel too sanguine about this. The report also suggested that Washington's austerity fetish is harming economic recovery. While much of what happened last quarter may be temporary blips on the radar screen, we may also be seeing real warning signs going forward.

So why did we see slight contraction in the GDP? In large part because spending cuts -- federal, state, and local -- shaved more than a full percentage point off GDP growth.

I realize the right doesn't want to hear or believe this, but when Washington spends far less -- in this case, the cuts focused on defense -- it takes capital out of the economy and undermines growth. It is, as a practical matter, a form austerity, which helps hit the brakes on the economy. This is Economics 101 and yet Republicans continue to insist that it is the only policy they really care about.

It's something to keep in mind as the Beltway's preoccupation with debt reduction, not the recovery, continues unabated. It's also a reminder that the automatic sequestration cuts may very well push the nation closer to a recession this year.

For nearly four years, Europe has been ravaged by fiscal austerity. As European governments, especially in "The Eurozone" (where the Euro is used as currency), have been slashing their budgets, unemployment has skyrocketed as GDP plummeted. Many economists have been chiding "The Eurozone" for engaging in way too much austerity that's only exacerbated their "Great Recession"... And they've been warning us not to repeat this mistake.

Yet despite this, Republican Congresscritters like Nevada's own Mark Amodei keep calling for more "drama" in the form of government shutdowns and "Fiscal Cliff" budget slashing. Remember that this is essentially the American version of "Eurozone Austerity". And the more we engage in this activity, the more likely we are to actually fall into "double-dip recession".

Senate Majority Leader Harry Reid (D-Art of the Deal) seems confident that Republicans will cave (again) on "The Fiscal Cliff". Now, many economists are hoping his recent words will soon come to pass. Even when inventory is excluded, GDP still only grew by 1.1% last quarter. And if we fall "off the cliff" this year, we may see at least 0.7% worth of GDP growth shaved off this year. Can Nevada's & America's economy truly handle any more fiscal drama?

10 of '10: Are We There Yet?

This week, I'm introducing 10 of '10, aka the ten most memorable Nevada stories covered here in 2010. Haven't we been through a lot this year?

And without a doubt, one of the biggest ongoing stories of 2010 was our brutal recession and whatever signs emerged of potential recovery. It seems the worst is finally over, but that's cold comfort to those here in Nevada who still can't find jobs.

Back in January, there was our first sign of hope when Goldman Sachs turned bullish on MGM Resorts as Vegas visitation numbers started rising again.

So is everything looking up from here? Apparently.

But is all the bad news over yet? Not so fast. Room rates are still hovering under $93 per night, and total spending is still down.

But at the very least, more signs are finally appearing and telling us that the worst is over and recovery is arriving. This is the third month in a row with year-over-year gains in tourist volume, and this is the first time since 2007 that Nevada casino winnings have actually seen year-over-year gains. Also remember that this is for November 2009... Before CityCenter opened!

And now with Wall Street giant Goldman Sachs betting on MGM Mirage's and Las Vegas' overall success, it's no longer looking so "crazy" to invest in Southern Nevada's future.

But still, we've had to deal with the changing dynamics of this town. In March, I wrote about the challenges posed by casinos investing more in emerging markets and less here in Nevada.

It's the law of diminishing marginal returns, plain and simple. As the 1990s Strip construction boom came to a close and the 2000s "luxury megaresort craze" began, Las Vegas began to reach the point of saturation with high-end megaresort casinos. The law of diminishing marginal returns began to take hold as the potential for profit decreased as the number of megaresorts vying for tourist dollars continued to increase.

This is why the Las Vegas of 2010 is a whole new ball game. We're no longer that tiny outlaw outpost in The High Mojave, but rather a maturing resort destination that already attracts over 37 million visitors annually. And while there are still some possibilities to expand that tourist pool, we don't have as much growth potential in gaming these days, like we did in 1950 or 1990. [...]

Now contrast this to newer markets, like Florida and Pennsylvania domestically and Macau globally. Pennsylvania and Macau are nowhere near full saturation yet, and Florida is a potential gold mine with already desirable tourist destinations that haven't yet been tapped by casinos. Now we can see why all the big casino companies are rushing to build abroad as they only agree to minor spruce-ups at their respective Las Vegas home bases.

So what does this mean? No, it's not the end of the world! Las Vegas will go on, albeit now as a more mature gaming destination rather than some place with unrealistic "limitless" growth potential.

And two days later, I wrote the rant I just can't stop using.

[... T]he casinos can no longer be counted upon as a "free ride". We can't just expect new casino construction to prop up demand for construction jobs, which props up demand for new housing, which props up demand for housing construction, which props up the rest of Southern Nevada's economy. We may have lucked out in seeing this model work from 1989 to 2007, but all it really did was hide the weaknesses in this shaky economic model that ended up being exposed when "The Great Recession" hit and all the artificial demand for new casinos, new homes, new whatever fell like a row of dominoes. [...]

Yes, there are signs of hope here. We're no longer seeing the mountain of foreclosures that seemed so mind-numbingly painful a year ago. We're no longer seeing the unemployment rate rocketing up to dangerous new highs, even though it's bad enough that it's still hovering around an already too high 13.8%. We are starting to see a return of economic growth, however so slight and lagging behind the rest of the country it is.

But again, I have to point out that we are lagging behind. We're especially lagging behind metro areas that have better PreK-16 education systems and more stable employment sources. Salt Lake City and Ogden, Utah, both have GMP (gross metro product) growth rates exceeding the national average and unemployment below the national average. Same goes for Denver, Boulder, and Colorado Springs, Colorado. So why is this? All of these areas boast a highly educated workforce employed in stable sectors like high-tech and biotech, and none were as dependent on the housing bubble and artificial "construction for the sake of construction" as Southwest areas, like Las Vegas and Phoenix (which is also lagging behind in economic growth).

So again and again, we come back to this dilemma. As long as our education system is broken and as long as we continue to make ourselves overdependent on the casinos and casino-fueled development, Las Vegas will continue to suffer under this radical boom and bust cycle that lives and dies on discretionary consumer spending. Sorry, but this is not how a major metropolitan area with 2 million residents and a state with over 2.7 million residents can survive!

So it all comes back to this. Will Nevada remember the lessons learned the hard way during The Great Recession? I have a feeling we have no other choice. Gaming revenue likely won't return to pre-recession levels until 2014. And moving forward, there's no more chance of "limitless" "growth for the sake of growth", as there just isn't much room left for The Strip to grow and competition can now be found almost everywhere.

Looking forward to 2011 and beyond, Nevada needs to look to more stable job sectors to find the stable economy we've always been looking for.

Casinos: Whither Circus Circus? The North Strip?

One upon a time, Circus Circus was MGM Mirage's most profitable casino. Ever since Jay Sarno was forced in the early 1970s to sell his then failing experiment to Bill Bennett, Circus Circus was transformed into a supreme moneymaking "grind joint" with low operating costs allowing the casino to make loads of money off low rollers.

However, this has changed. In less than two years, Circus Circus went from MGM Mirage's biggest moneymaker to its biggest money loser.

Circus Circus used to be fed by pedestrians coming up its way from the New Frontier, the Stardust and Westward Ho, but those resorts are gone. The detrimental effect has been considerable, MGM Mirage spokeswoman Yvette Monet says.

The next-door neighbors that Circus Circus has left are having more than their share of economic troubles, too. Financial figures aren’t available for the Sahara because it is privately held, but the property has been closing some of its rooms now and then to save operating costs. The Riviera reported a $5.6 million loss in the fourth quarter and is negotiating with creditors to restructure the company’s debt, which may include seeking bankruptcy protection.

For that same quarter, Circus Circus was MGM Mirage’s biggest money-loser on the Strip.

After expenses, the resort posted a loss of $3.4 million in operating income. It earned only $4 million in operating income for all of 2009, down from $33.7 million in 2008.

So why is this happening? Two reasons. First off, the recession forced the casinos into a "musical chairs price war" and downscale hotels/motels like Circus Circus have been left standing... Without a chair.

Circus Circus is a lower-rent property, and analysts and executives say budget properties are suffering as customers upgrade to well-appointed resorts that are offering deep discounts. If tourists can pay just a little bit more to stay at a more luxurious, newer hotel, they do it.

The industry has a name for this trend: price compression.

Think about it. Circus Circus regularly offers rooms for under $100 per night... But today, the same can be said of a number of more upscale Strip hotels. And for only $20-30 more per night, wouldn't you want to upgrade to, say, Luxor, Monte Carlo, or New York New York?

And speaking of that end of The Strip, that's the other reason why Circus Circus' fortunes have so suddenly changed. Much of The North Strip now consists of mothballed "skeletons" of former construction sites, so Circus Circus can't count on pedestrian traffic from nearby casinos like Excalibur can on The South Strip.

Excalibur is more centrally located on the Strip, with more walk-by traffic and proximity to higher-end hotels, and it posted operating income of $8.4 million in the fourth quarter. That’s within striking distance of the $8.9 million earned by neighboring Mandalay Bay, a much larger and more luxurious property that includes The Hotel, an upscale hotel expansion.

For 2009, Excalibur posted $48 million in operating income. That’s down from $84 million the prior year but was better than Monte Carlo, New York-New York and Luxor, which are more expensive properties with higher-end amenities.

Circus Circus and Excalibur earned vastly different amounts of a key profit indicator called EBITDA — earnings before interest, taxes, depreciation and amortization. By this measure, Excalibur earned $72.1 million against Circus Circus’ $27.1 million. Excalibur’s EBITDA fell 35 percent, which is more within the range suffered by other major casinos in the recession. Circus Circus’ EBITDA, however, fell by 52 percent.

Excalibur benefits from being "the low rent alternative" to Mandalay Bay, MGM Grand, and other nearby higher end MGM Mirage casinos. The same can't be said, however, of Circus Circus, since its next door neighbors are now... Well, nothing. The lot at the corner of Las Vegas Blvd. and Sahara Ave. is empty, and Echelon won't resume construction until 2012 at the earliest.

And obviously, it isn't just MGM Mirage feeling the pain with Circus Circus. Riviera and Sahara have also suffered from this curse of the mothballs, as Fontainebleau looks likely to remain a smoldering hot mess until Carl Icahn decides to finally finish it.

So in the coming weeks, months, and years, it will be interesting to see what happens on The North Strip, what was once "The Original Strip". Many of the casinos up there were once sturdy survivors... But will they be able to survive the rest of "The Great Recession"?

Worst of Great Recession Is Over, But Challenges Ahead: See, I Told You So.

(Also at Progress Now Nevada)

Hey, it's not like I enjoy proclaiming it all the time over here. But every once in a while, I must admit it can be a little satisfying to see a Brookings Institution study and Sun story confirm what I've been saying for some time now.

Local economic consultant Jeremy Aguero said the region must work to continue to provide adequate infrastructure, including water. He also made a subtle point about the relationship between the region’s strengths and weaknesses: “Right now, our biggest strength (low cost) is also our biggest weakness (because we underfund education).”

Las Vegas, relative to other cities, has low taxes and is filled with cheap buildings and cheap labor. The problem is that cheap, uneducated labor does not appear to be very useful at the moment or in the near future.

“The main policy implication is the human capital issue,” Parker said. “The extent to which Intermountain West cities are in recovery is highly correlated with education and skills. And we’re an outlier: We’re heavily dependent on industries that don’t require education.”

Indeed, the unemployment rate for those with a college degree is roughly 10 percentage points lower nationwide than those without a high school diploma, which probably understates the true picture because the undereducated are also more likely to be underemployed — they’ve dropped out of the labor force and thus aren’t counted in the official statistics.

Muro said this gap between those with college educations and those without simply confirms what’s been known for some time: “Education is a mainstay of success at the family, company, community and national level. There are few insights better documented than the benefits of education.” [Emphasis mine.]

As I said on Monday, the casinos can no longer be counted upon as a "free ride". We can't just expect new casino construction to prop up demand for construction jobs, which props up demand for new housing, which props up demand for housing construction, which props up the rest of Southern Nevada's economy. We may have lucked out in seeing this model work from 1989 to 2007, but all it really did was hide the weaknesses in this shaky economic model that ended up being exposed when "The Great Recession" hit and all the artificial demand for new casinos, new homes, new whatever fell like a row of dominoes.

However, it's not all bad news. Believe it or not, our long downward spiral finally looks to be over.

The worst of it finally appears to have passed.

After two years of economic decline, the gross metropolitan product of Las Vegas, which measures Southern Nevada’s total output of goods and services, grew slightly in the fourth quarter of 2009 [by 0.5% over Q3], according to a new report from the Brookings Institution.

The quarter also brought a substantial reduction in the foreclosure rate, although Nevada still leads the nation.

“When news has been bad for so long, things not getting worse is good news,” said Elliott Parker, a UNR economist.

Yes, there are signs of hope here. We're no longer seeing the mountain of foreclosures that seemed so mind-numbingly painful a year ago. We're no longer seeing the unemployment rate rocketing up to dangerous new highs, even though it's bad enough that it's still hovering around an already too high 13.8%. We are starting to see a return of economic growth, however so slight and lagging behind the rest of the country it is.

But again, I have to point out that we are lagging behind. We're especially lagging behind metro areas that have better PreK-16 education systems and more stable employment sources. Salt Lake City and Ogden, Utah, both have GMP (gross metro product) growth rates exceeding the national average and unemployment below the national average. Same goes for Denver, Boulder, and Colorado Springs, Colorado. So why is this? All of these areas boast a highly educated workforce employed in stable sectors like high-tech and biotech, and none were as dependent on the housing bubble and artificial "construction for the sake of construction" as Southwest areas, like Las Vegas and Phoenix (which is also lagging behind in economic growth).

So again and again, we come back to this dilemma. As long as our education system is broken and as long as we continue to make ourselves overdependent on the casinos and casino-fueled development, Las Vegas will continue to suffer under this radical boom and bust cycle that lives and dies on discretionary consumer spending. Sorry, but this is not how a major metropolitan area with 2 million residents and a state with over 2.7 million residents can survive!

We already know what's wrong with Nevada. We already know what's causing the prolonged suffering here in Las Vegas. When will we do something about it and start building the infrastructure for a better and more stable future?

Economic Recovery: How Washington Sees It vs. How Nevada Sees It

The difference couldn't be any more stark. In Washington, Senators are bickering over "partisanship"... No, scratch that. They're really just in another power struggle!

U.S. Senate Majority Leader Harry Reid is likely to face increasing mutiny from fellow Democrats in the wake of Indiana U.S. Sen. Evan Bayh’s surprising decision to retire, political analysts say.

The announcement last week by Bayh, D-Ind., once widely favored to win re-election, has shaken the 59 members of the Democratic Caucus and threatens to create an “every senator for him- or herself” mentality that could weaken Reid’s ability to lead, political scientists predict. [...]

“I think the problem Harry Reid has now is holding his caucus together,” said Eric Herzik, chairman of the political science department at the University of Nevada, Reno and a registered Republican. “The irony is that both wings of his caucus could become more strident, with liberals demanding that he move to the left, and more moderate senators saying: ’You’re killing me in my home state. I can’t go with you on this one, Harry.’ Reid is caught in the middle.”

Now obviously, there's some hyperbole with this RGJ piece. After all, the headline warns of "rebellion!" and the story speaks of "mutiny!" OK... So we'll soon be hearing of gun fights and outbreak of (another) civil war?

Still, there has been real rancor in DC lately. And as always, it seems like a number of the folks on Capitol Hill are more concerned about their own egos than delivering any real accomplishments.

Already, Harry Reid is having to deal with this as he tries to win over whatever GOP votes are available for the jobs bill. Yes, the Republicans may even try to filibuster away job help!

Senator Harry Reid of Nevada, the majority leader, has been trying to round up a few Republican votes for his version of a jobs bill,after he surprised the Senate and the White House by jettisoning many elements of a bipartisan proposal that had some momentum.

Mr. Reid’s $15 billion plan includes four central elements of that proposal, including a payroll tax exemption for companies that hire unemployed workers, but he dropped billions of dollars in business tax breaks and other extraneous initiatives.

Whether Mr. Reid can prevail remains uncertain and he now needs at least two Republicans to join Democrats to overcome any Republican opposition since Senator Frank Lautenberg, the New Jersey Democrat who was taken ill last week, is not expected to be present and voting.

In a warning to those intending to block the bill, Mr. Reid’s aides have let it be known that a Republican filibuster of his jobs plan does not mean that he will then turn around and offer the earlier bipartisan version. But just exactly what he will do is not clear. [...]

With Democrats intensifying their criticism of Republicans for opposing almost all legislation and erecting procedural hurdles even to measures and nominees they ultimately support, [Senate Minority Leader] McConnell [R-Kentucky] was also a bit defensive over suggestions that Republicans are simply tying up Washington.

Even when it comes to important work on bringing about economic recovery, it's all about political gamesmanship for some in Washington.

And apparently, all the political games getting all the media attention hasn't helped in getting Nevadans to understand what last year's stimulus package has been doing to bring on economic recovery.

The stimulus gave a significant tax cut to most people; it stabilized state budgets, including Nevada’s to the tune of a $1 billion, which prevented layoffs of thousands of teachers and saved hospitals that would have cratered in the face of a steep cut in Medicaid reimbursements; it provided money for extended unemployment benefits; and, it set in motion infrastructure projects, including a recently announced $34 million for a bus rapid transit line on Sahara Avenue.

Although the job losses have largely stopped, companies haven’t begun hiring again, so most Americans aren’t feeling very good about their economic prospects. [...]

So, not surprisingly, the stimulus doesn’t poll well. A CNN poll showed 56 percent disapprove.

But here’s the paradox: By wide margins, as high as 80 percent, Americans favor the provisions of the bill, including money for the unemployed, infrastructure spending and tax cuts.

As [Rep. Dina] Titus [D-Henderson] noted, however, the marketing of the bill has been less than stellar.

“No, we did not do a good job,” she said.

“People have forgotten it included the big tax break, they have forgotten the $250 check if you’re on Social Security or a veteran. Those aspects were not played up enough. And then money for the state — look where the state would be without it. Then there’s the continuation of unemployment benefits at a time when Nevada is second to Michigan” in unemployment.

Then Titus reiterated her point: “No, we didn’t do a good job selling it.”

And I'd add that it's become difficult to even "sell it" when talk of the stimulus often deteriorates to complete lies and distortions.

She noted many Americans mistakenly think the stimulus package and the $700 billion Troubled Asset Relief Program (TARP) — the bank bailout — are the same thing.

Titus is right. More than half of Americans think stimulus money went to help “bankers and investors,” according to the CNN poll. Which, aside from tax cuts that nearly all Americans received, is untrue.

For Titus, that’s doubly cruel: She wasn’t even in Congress when the first round of TARP money was approved, and then she voted against the second round.

For the Republicans, it makes perfect sense to "pass the buck" on TARP (which remember, was proposed by George Bush before he left office in 2008) onto President Obama and confuse the stimulus with TARP so that it's easier to just rail against "bailouts" and enrage the teabagger "masses" (more like a few small conspiracy kook crowds, but the media prefer big stories of "controversy" and "epic conflict" to real facts).

One of my all-time favorite bloggers, Desert Beacon, tackled the whole "stimulus issue" on Friday and looked through the spin to discover the facts.

The Republicans are certainly trying to drum in the message: "The Stimulus Bill hasn't created a single job." [TP] As has been that Party's practice, the message is phrased in highly generalized terms, as a blanket indictment of federal spending, without noting the specifics. One small specific from the Nevada State Health Division is instructive.

The American Reinvestment and Recovery Act (Stimulus Bill) paid for a $46, 232 supplement to the " Centers for Medicare and Medicaid Services (CMS) original $76,743 allotted in the FFY10 budget for ambulatory center surgery inspections bringing the total to $ 109,991. The additional ARRA funding will support the inspection of 13 ambulatory surgical centers, with a new CMS survey process that uses an infection control tool developed in conjunction with the Centers for Disease Control and Prevention (CDC)." [NSHD pdf]

If memory serves Nevada experienced a Hepatitis C outbreak in 2008 related to inspection issues? In May 2008, the Sparks Tribune reported: "Of the 50 ambulatory surgery centers now being inspected for unsafe practices by the state Bureau of Licensure and Certification, 22 haven’t had recertification surveys within a six-year time frame. In one case, the gap was 15 years. Twenty-one others haven’t been open long enough to have had a six-year inspection." With the cut backs in agency budgets currently under consideration, is it really rational to lash out at funding that supported someone inspecting another 13 ambulatory surgical centers?

There are larger pieces that receive wider public support, like spending on infrastructure. The American Reinvestment and Recovery Act included $144 billion for public infrastructure projects, and the level of public support was significant. USNWR reported: "A national poll released today (Jan. '09) shows that 94 percent of Americans support a national effort to build up the country's infrastructure. Meanwhile, 81 percent of Americans say they are prepared to pay 1 percent more in federal taxes to support infrastructure projects." There was another important item in the polling just cited.

"One caveat in the support for infrastructure spending, however, is how the projects are developed. More than half of Americans in the poll say that either the accountability or the transparency of the projects is their most important consideration in public works spending. That's three times more than those who say that achieving "measurable results" is their top priority." So, people placed "accountability and transparency" at a much level of concern than "measurable results," and they got it. However, one can't have it both ways; either the money gets spent quickly with less accounting or the money gets spent more slowly with more accounting. Fast or slowly, Nevada is getting $ 270,010,945 for infrastructure and public transit funding under the Stimulus Bill. [CBS] Are the Republicans really opposed to cash-strapped Nevada getting $270 million in public transportation and infrastructure funding? There are construction jobs to be paid for and the state budget isn't where those are going to be found.

So we are getting money. Just remember that it took so damned long because "Luv-Guv Gibbons" wanted to start a fight over who would have ultimate control over the stimulus funds. And obviously, that was much more important to him than actually setting up the needed tracking tools (to meet the transparency and accountability requirements) to receive those stimulus funds.

But hey, at least we're getting the money now. And we're seeing results. It's just that the Republicans don't want us to know that it's stimulus funds at work while the Democrats are busy trying to push the jobs bill in DC to bring back some more needed help and apply it directly to the unemployment crisis we're still facing.

So I can understand why a number of our neighbors are confused over what was done last year to promote economic recovery and what's being done this year to create more jobs. When all the media attention is on partisan and inter-party flame wars and ego stroking, it's hard to see how our government is doing us any good. But when we look beyond the petty politics and look at how the policy is being put to use here in Nevada and elsewhere throughout the country, we can start to get a better picture of how it's really working.

Recovery: Are We There Yet?

I know, I know. Tonight may be a little scary. After all, the "State of the State Address" will be on and we have to hear from "Luv-Guv Gibbons" one more time advancing stupid excuses for "policy" to fill the latest record busting budget deficit. I'm sure real, sensible ideas like making the mining industry pay its fair share won't be on his agenda.

Sigh...

Well, at least there seems to be some good news down here. Early indicators are pointing to a good February (and perhaps good rest of 2010?) for Las Vegas.

Gamblers are in town for the Super Bowl; over the Presidents Day three-day weekend, lovebirds will flock in for Valentine’s Day weddings on the same day that revelers will celebrate the Chinese New Year; wholesale clothing buyers will pack up for the mammoth MAGIC apparel trade show Feb. 16 to 19; and racing enthusiasts will drive in for NASCAR Weekend Feb. 27-28.

And let’s not forget the USA Sevens International Rugby Tournament and Fan Festival on Feb. 13 to 14, an event previously held in San Diego but now finding a home at Sam Boyd Stadium, with fans flying in from New Zealand, Australia and Kenya.

The convergence of these events, and more, is expected to draw more than 350,000 tourists to town — just a fraction compared with the Februarys of healthier years but still a heartening number after 15 consecutive months of year-over-year percentage declines that finally ended in September.

According to Las Vegas Convention and Visitors Authority data, September, October and November showed slight percentage increases in visitors. Anecdotally, December and January, which haven’t been totaled, were strong. That means February could be the month that analysts can affirm that a trend is under way. [...]

“If you get a good start with the Super Bowl, you can keep the momentum,” [Las Vegas Adviser's Anthony] Curtis said. “Often when things are good, they snowball. But if they’re bad, they’ll snowball as well. I think the last good Super Bowl weekend we had was in 2006. It went down in 2007 and it foreshadowed everything that happened. It was a great leading indicator.”

So perhaps folks like Steve Wynn can stop saying stupid things about President Obama and get back to business? It seems there are signs of recovery out here.

Again, I know we've talked about this before. Unemployment is still too high. We've yet to see a trend of positive GDP growth. And as I hinted at above, the state has yet to see the additional tax revenue we badly need.

But if the numbers aren't lying and visitors really are trickling back to Vegas to spend some cash and have a good time with us, then perhaps the worst is finally over.

Betting on MGM Mirage's (& Las Vegas')... SUCCESS? T. Rowe Price Is. For $277 MILLION!

Oh yes, you heard me right. The Baltimore investment firm is now investing a grand total of $277 million in MGM Mirage. But why, especially when so many are still expecting MGM Mirage to fail?

Apparently, we Americans love spending money so much that T. Rowe Price is expecting us to stop being tightwads and have more fun once it becomes clearer the economy is recovering.

[T. Rowe Price portfolio manager Joseph] Fath’s optimism for MGM Mirage is mainly based on macroeconomic trends, such as recent growth in the gross domestic product, rather than any grand company strategy. Lately, he has been poring over such mind-numbing statistics as retail inventories and manufacturing shipments — data that seem far removed from the glitz and salesmanship of the Strip.

In a phone interview, Fath said he thinks the figures serve as signals of business demand and an eventual indicator of whether Joe and Jane Pittsburgh — or their counterparts in, say, China — will splurge in Las Vegas.

“I feel better than I ever have this year,” Fath said with an audible sigh of relief that sounded out of place on the other end of the phone line, in the nation’s foreclosure capital.

“Things are absolutely better than they were six months ago. Job losses are slowing and home foreclosures are starting to clear. This will be a delayed recovery. But it’s a question of how fast things pick up and what that looks like.”

Some have made similar comments. But what sets Fath apart from the many skeptics who fear for MGM Mirage and Las Vegas tourism in general is his continued belief in a tenet of American culture: “This is a consumption nation. As people’s balance sheets get better, they will spend more.”

Even though Fath admitted later in The Sun's story that he thinks MGM Mirage went in too deep with CityCenter, he now also thinks expectations have been set so low that a modest profit for their new project will be enough to restore confidence in the company, and in Las Vegas... Despite still feeling bearish on other gaming companies with debt problems, like Harrah's Entertainment, Las Vegas Sands, and Station Casinos.

Given lowered financial expectations for CityCenter, the property, he said, only has to generate a modest profit for MGM Mirage stock to benefit. CityCenter will hurt the lowest-performing and least competitive properties, which isn’t necessarily a bad thing for the Strip or MGM Mirage, which owns several of the Strip’s more profitable resorts, he added. [...]

MGM Mirage will seek to refinance its heavy debt load, while likely taking cash out of CityCenter in exchange for debt on the mostly equity-financed project, Fath said. “There’s still heavy lifting to do, but the nasty stuff is done.”

This year will be bumpy, he warns, with business likely to grow in the second half of the year and into next year. “The average Joe needs to feel better about things and for that to happen, things like employment and housing prices need to pick up.”

And yet, many Strip resorts, especially those owned by MGM Mirage, have been able to maintain high occupancy rates by offering unprecedented deals. Thirty-five million visitors flocked to Las Vegas this year in a crummy economy.

“The demand is there. They need to book business at higher rates. But a lot of operators are scared to raise rates,” Fath said.

Well, casino operators have had good reason to be afraid of raising rates. In the dark, hard times of 2009, they had to lower rates just to fill the rooms and cut their losses. If even Steve Wynn agreed to do it, then what else could they have done?

However, things may be changing. Vegas room rates for New Year's Eve 2009/10 were up 4% over NYE 2008/09, and a number of hotels, from Aria to Paris to Sam's Town to The M, were all sold out by December 30. Now we're still nowhere near 2007 room rate highs, but occupancy looks to be flat... Which is a minor miracle of its own, considering all the new hotel rooms added last year on The Strip (CityCenter, PHo Westgate), on Paradise (Hard Rock's new towers), and in Henderson (The M Resort).

So perhaps we finally hit rock bottom at some point in 2009 and are poised for some kind of comeback in 2010? I hope so, and it looks like T. Rowe Price is betting so with its bet on MGM Mirage. And looking at the first tea leaves for 2010, perhaps better days lie ahead in the new year.

Hard Times Still Abound, Even As City Center Opens

Here are some rude reminders of our still brutal economic reality in Las Vegas, even while we witness the opening of what we hope will be "economic salvation":

- Greenspun Media (The Sun's owner) just laid off as many as 25 workers in a "consolidation effort".

- Binion's closed its hotel tower, which a long time ago was the famous Mint in its previous life.

- Clark County sales fell 16.5% in September.

- More distressed homeowners are turning to mediation to save their homes from foreclosure.

It's still tough out there, even with City Center just starting to open. Let's hope City Center's opening is a sign of better times coming.

Nevada Still #1 in Bankruptcies, But Credit Card Delinquency Down

Uh oh, more bad news...

The Administrative Office of the U.S. Courts reported that nationwide, bankruptcies for the fiscal year ended Sept. 30 surged 34.5 percent to 1.4 million -- with Nevada posting the highest rate in the nation.

Nevada led the nation in filings for the year with a rate of 10.49 per 1,000 people, well above the national rate of 4.52 filings per 1,000 people.

In 2008, Nevada was No. 2 in the nation with a filing rate of 6.39 per 1,000 people and the national rate was 3.38 filings per 1,000 population.

In Nevada in the 2009 fiscal year, bankruptcy filings totaled 27,560 -- up 64.5 percent from 2008.

It's obviously still hard times in Nevada this holiday season with so many people at risk to lose it all... But at least more people are taking extra precautions to avoid this financial disaster.

Also, credit report company TransUnion.com issued third-quarter credit card delinquency statistics, with Nevada again leading the nation with a rate of 1.98 percent.

That's the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards and compares to the national rate of 1.1 percent.

The national rate was down from 1.17 percent in the second quarter.

Despite leading the nation in this category, Nevada's numbers improved from the second quarter (2.19 percent) and the first quarter (2.44) percent.

In terms of dollars, the average credit card balance in Nevada was down 3.16 percent from $6,517 in the second quarter as Nevadans reduced spending and banks limited lending.

TransUnion.com projected that by the end of the year, the rate in Nevada is expected to drop again -- yet still lead the nation at 1.9 percent. Nationwide, the rate is expected to remain steady through the fourth quarter at 1.1 percent.

The new forecast reflects slightly more optimism about credit card performance in Nevada and around the country. Just three months ago, the national rate was expected to hit 1.2 percent and Nevada's rate was expected to grow to 2.25 percent by the end of the year.

Ain't it funny how it takes an economic meltdown like this to get people to become more financially savvy and prudent? It's too bad the federal government didn't require the big banks to be more prudent last year. But then again, it's always we the consumers who are required to be "fiscally responsible" while Wall Street gets more bailouts.

Well, at least people are being more responsible and credit card debt isn't as bad it used to be not too long ago. I guess we have at least some somewhat cheerful news today. Now excuse me while I check my bank account balance and prepare my December budget...

And in further economy news...

The House just voted to extend unemployment benefits in Nevada and 25 other states with 8.5% or higher unemployment rates for 13 more weeks.

Some 5 million people, about one-third of those on the unemployment list, have been without a job for six months or more, a record since data started being recorded in 1948, according to the research and advocacy group National Employment Law Project.

“It smashes any other figure we have ever seen. It is an unthinkable number,” said Andrew Stettner, NELP’s deputy director. He said there are currently about six jobless people for every job opening, so it’s unlikely people are purposefully living off unemployment insurance while waiting for something better to come along.

The current state unemployment check is about $300 a month, supplemented by $25 included in the stimulus act.

That doesn’t go very far when a loaf of bread can cost $2.79 and a gallon of milk $2.72, Senate Finance Committee Chairman Max Baucus, D-Mont., said at a hearing last week on the unemployment insurance issue.

Yep, this is why we need it. Hopefully, things will eventually turn around. Still, things won't turn around until people have money in their bank accounts. I'm glad we'll see another extension.

Home Cookin': It Isn't Just for Housewives Any More!

What is it about Mr. ELV's blog that always gets me thinking? Today, he talked about how he hasn't gone out for dinner in five days. I can see how this is shocking news for a restaurant critic, but this is pretty much my ordinary life. And worse yet, I know people who haven't gone out to eat in months!

Sometimes, it really sucks when I plan weeks ahead for a glorious night out with someone special... Only for it to be taken away when the someone special is hurt and in a wheelchair and/or a friend calls to borrow money from me because the bank screwed with his account. It really sucks that I can't eat out that often these days because I may be only one broken leg or one broken window away from financial ruin. And yes, it really sucks when my next great vacation full of culinary bliss is always at risk of vanishing away if I ever lose the roommate at the house or my dad needs money to pay for my grandmother's next trip to the hospital.

Let's face it, this rotten economy is ruining a good night out for all of us. So what do we do?

Fortunately, I still enjoy the privilege of eating out at restaurants about once or twice a week. The rest of the time, I've been eating in. Yes, I'm learning to cook more and more... And I don't feel sad or frustrated about it.

Last weekend, my dad was pretty wowed when I turned his beloved “eggs & potatoes” (yes, he really isn’t into “fancy food” like I am) into a breakfast frittata that had his taste buds singing. Let’s see, I also think my “Mexitalianese” stir fry with extra firm tofu strips, shredded carrots, sundried tomatoes, and Parmigiano Reggiano for dinner recently was another winner. I just can’t wait until tomorrow when I’ll have time to make my signature gnocchi dish (with crimini mushrooms, shittake mushrooms, and Manchego cream sauce) for dinner!

Maybe I’m weird, but I feel most comfortable when I’m in my home kitchen. Now don’t get me wrong, I enjoy eating out. I guess I just feel like I’ve accomplished something truly meaningful when I eat something that I cooked myself from scratch or near-scratch.

Perhaps this is looking on the bright side of the recession, but I feel glad in a way that I do more of my own cooking these days. And maybe by cutting out so much driving and by using "local" (or as close as we can get to it in Vegas) and organic ingredients in my own home cooking, I'm doing my part to reduce my carbon footprint and help save the planet. Ironically, living green also saves serious "green".

Yes, I guess I have channeled my inner "no really, she's for real housewife!" and I don't feel bad about it at all. ;-)

Las Vegas: "Jerk Magnet"?

I dunno. I'll let you decide for yourself. Here's the original LA Times story piling onto the "Vegas in hard times" theme... And here's Andrew Kiraly's response at LV CityLife.

Were these people victims of the recession? Or are they just reckless bourgeois wanna-be's in need of a financial reality check?

Monday Open Forum: Are the Luxury Strip Properties Self-Defeating?

(This is the first in what I hope can be a weekly gathering where we can talk business, pleasure, the arts, food, or whatever else we want to talk about here.)

Today's Sun piece on the four and five-star Strip casinos reducing their room rates really got me thinking. Is it all just too good to be true? Or just bad business?

I first remembered my trip here in March:

When I was still in the process of buying my condo in March, I needed a hotel to stay. I was first thinking of getting something closer to Henderson, but I couldn't help myself when I found a suite at Encore going for $120 per night via Expedia.com. This was my dream come true, and I FINALLY had the power to fulfill it!

For five days and four nights, I had one of the best weeks of my life. I ate at places like Sinatra and Daniel Boulud. I saw Le Reve. I partied at Blush. And of course, I FINALLY had a chance to laugh at the folks paying the same or more for inferior rooms on The Strip. ;-)

The article is quite correct about those of us who shop around for low rates at high-end properties. But contrary to what some the commenters are saying here, most of us online bargain-hunters aren't the typical "discount travelers". I actually put much of my hotel savings back into the local economy as I was able to afford luxuries like 5-star restaurant meals, more souvenir gifts for the family in California, and more gambling money. IMHO these Vegas hotels are now offering rooms at something closer to fair market value than ever before.

I know that the hotels will eventually raise rates again as the economy recovers and the desire to expand profit margins returns, but now really is the best time to see the best of Vegas at shockingly good prices. If I weren't already a Henderson homeowner, I'd probably be grabbing one of those $109 per night suites at Mandalay Bay's THE Hotel!

I know not all travelers, especially people who travel here, do as I do. I'm one of those odd ducklings that prefer to spend my hard-earned money on real meals and shows than on a "one-armed bandit". Maybe I am part of the problem. But then again, I at least spend some cash on food and entertainment. What about those travelers that don't do the restaurants and shows that have truly made this town great?

But ultimately, we the consumers can only be blamed so much for this problem. Ultimately, the casinos need to accept some responsibility for getting us into the dilemma. We can argue over whether or not Vegas has gone "too high-end" (for the record, I don't think so), but we can at least all agree that we should at least be getting our money's worth.

Here's another of my comments:

The megaconglomerates [Harrah's and MGM Mirage] have taken The Strip and turned most of it into a somewhat generic experience. So many of the casinos don't seem to have any character these days. While I'm certainly not one of those folks who wish for the "Old Vegas" days of mafia rule, cheap & crappy food, and rigid racial segregation, I can see how "New Vegas" hasn't always lived up to its promise with lame players' club benefits, low payout table games, "skin tight" slots, "celebrity chef" restaurants that are all celebrity and no chef, and once-overpriced rooms at the mid-range places that even Motel 6 would be embarrassed to call its own. (Hint: Don't ever stay at Harrah's or Imperial Palace! At least save up a few extra bucks to go to The Rio.)

The key here is value. I can't speak for all of you here, but I can say for myself that I don't mind paying for something good so long as I know it's truly good quality. Don't make me fork $100+ for a dinner for that I could have had at the neighborhood diner for 1/3 of the price. Don't expect me to spend more than $20 at the slots if I know all of that will just be flushing it down the drain. And for goodness sake, don't expect me to pay $10+ for a cocktail with cheap liquor!

I hope the "independent" casino bosses like Steve Wynn and Phil Ruffin still have enough sense in them to rethink "New Vegas" in a way that will really bring the consumers back and get them spending again. People want value. If we're paying a premium for "five star cuisine", that meal should knock my socks off. If we're paying for a luxury hotel, I want room to roam, a comfortable bed, and a big enough tub for me to enjoy a nice bubble bath. If I'm paying, I want real bang for my buck!

Yes, I know Steve Wynn isn't really the great political mind he thinks he is. But hey, we must admit that he knows how to run casinos well. Wynn and Encore are the crown jewels of The North Strip. And hopefully with the new promos he's trying at his properties, such as "Taste of Wynn" prix fixe menus at the restaurants and reduced room rates, along with amenities we expect from a good hotel/casino, like comfortable rooms, quality dining, and great entertainment, he can help in rethinking The Strip.

So can Phil Ruffin. He just took over TI from MGM Mirage, and so far things are going well. Perhaps if MGM Mirage and Harrah's had avoided taking on too much debt as he did, they wouldn't be in such dire straits.

So maybe with better corporate governance and more value being provided to consumers, The Strip will still be able to revel in all its luxury. Or maybe not? Got any ideas on what to be done to make those luxury Strip casinos make money again?

I Told You So.

See why huge cuts to the social safety net aren't the best way for a state to balance its budget? Just take a peek at what's happening next door.

On one hand, we learned that the Los Angeles Economic Development Corp. expects per capita personal income in Orange County to drop for a second consecutive year as unemployment continues to rise and retail sales continue to fall. And on the other hand, OC home foreclosures are expected to continue rising. Basically, Orange County doesn't look to be exiting this recession quite yet.

It's just too bad that we can't expect more stimulus to help us soften the blow. Thanks to Arnold's "stimulus killer" budget, most of the economic benefits from the federal stimulus that are helping the rest of the country bottom out and turn around will be offset by the draconian state budget cuts. So once again, California will be losing out at the very least... Or may even hurt recovery efforts for the rest of the nation.

And unfortunately, the "bidness lobby" here in Nevada still doesn't get it. No matter how much they try to steal business from California by telling them how "high" taxes are, those of us who've seen the budget crisis there firsthand know what the problems really are. And honestly, same goes for Nevada.

So will we have enough legislators (and hopefully a sane Governor, too!) in office in 2011 to realize all this?

Uh Oh, Station Casinos Goes Chapter 11

That is, Station is going bankrupt. However, they insist it will only be "reorganization" and it won't affect employees or gamblers.

Station officials today said the company's casino operating subsidiaries did not file for bankruptcy and that the company will continue normal operations at all of its properties under the direction of its existing management. In addition to cash generated from its operating subsidiaries and affiliates, the company has in place an agreement with its senior secured lenders that, subject to court approval, permits it to borrow, as needed, up to $150 million of cash from one of its non-operating subsidiaries. [...]

"All of our casinos will continue to operate as usual and we will continue to provide our guests with the same great value and entertainment choices they have always enjoyed at our properties," said Kevin Kelley, chief operating officer of Station Casinos. "From our loose slots, to honoring points earned in our Boarding Pass program, to our great promotions and contests ... it’s business as usual at Station Casinos."

Because of reductions in cash flow tied to the recession, the company is having difficulty serving its debt load of $5.74 billion and in February started negotiating with key bondholders regarding a proposed prepackaged bankruptcy filing in which bondholders would have made concessions and Station's owners, the Fertitta family and Colony Capital, would invest another $244 million in the company and remain in control of Station.

So for now, I guess I won't have to worry about the points I earn at Green Valley Ranch or my friend who works at Sunset Station. However, we'll probably need to keep a close eye on this one. Bondholders and others have been pressuring the Fertitta family for quite a while to sell some or all Station properties to Boyd Gaming. One bondholder even tried suing Station executives over possible debt restructuring. I don't know how likely it is that the Fertittas will keep their hold on this company, but I guess this is their last chance to keep the company in their family.

Hopefully whatever comes out of bankruptcy, it won't cause any more pain to Greater Las Vegas.

New Home Sales Show Sign of Recovery?

Maybe... But not so fast. Remember that this is being fueled by "bargain hunters" looking for deeply discounted foreclosure and short sale homes. Hopefully the buying spree will continue, but I don't know how it can if unemployment goes higher and wages fall lower.

The Commerce Department reported that sales of new single-family homes rose 11 percent in June, an increase that dwarfed economists’ expectations of a 3 percent increase. The pace of home sales rose to a seasonally adjusted rate of 384,000 a year, the highest level since November.

But the figures offered no sign that the housing market had returned to health.

Despite the monthly increase, sales of new homes were still down 21 percent from June 2008. The market is still swamped by a glut of for-sale houses. And new homes, facing competition from cheap foreclosures, are sitting on the market for close to a year before they sell, compared with a median time of six months on the market in 2007.

Yay, Nevada's #1 Again...

This time, in distress! No really, Nevada is the most distressed state in the nation!

[...] Nevada has the most “distressed economy” in the nation. The measure, done by the Kaiser Family Foundation, combines the number of foreclosures per housing unit (one in 64), the increase in unemployment and the growth in numbers of people on food stamps. In the last measure, Nevada was the second fastest-growing.

David Rousseau, director of statehealthfacts.org, said Nevada has topped the list since January, when it bumped Florida from the No. 1 position.

Service providers, meanwhile, are being stretched between falling tax revenues and budget cuts on one side and the increase in demand on the other. They worry how governments will pay for these services if the numbers needing them continue to grow.

Those seeking services are increasing faster than the recent grim projections made during the legislative session, according to Mike Willden, director of the state Health and Human Services Department.

About 209,000 Nevadans were on Medicaid in May, almost 5,000 more than the Legislature had approved funding for.

“If our assumptions all remain the same, and the caseloads are running higher, we’re obviously in extreme trouble,” Willden said.

This is just sad. And if there were any sense of justice here, social justice, we wouldn't have allowed those deep budget cuts that passed earlier this year and are already starting to cause extra pain to the "newly working poor" who now need that social safety net more than ever before. I know, I know, Gibbons wanted more and this was "the best we could get" with Raggio still pulling strings in the State Senate. But still, it sucks that we couldn't get real, progressive budget reform, and instead all we got was a little less distress than we otherwise would have had under Gibbons' plan.

Well, this still looks like a whole lot of distress to me.

Nevada Unemployment at 12%??!!

Yes, believe it or not, we're at 12% unemployment (link will be provided as soon as everyone else catches up with me- KLAS TV just reported it on air). This is depression level. I'm not kidding.

And again, this is what I was talking about yesterday about the need for more stimulus. With this much pain and suffering, the last thing we need is a pullout of public investment akin to what Republicans are calling for.