Monday, November 24, 2008
Letter from Las Vegas
Clever advertising notwithstanding, it turns out that what happened in Vegas not only didn’t stay there, but the consequences have taken down nearly every investment bank in America, caused bank runs in England, wiped out Iceland’s entire banking system, and helped set back the market value of the S&P 500 by a decade .
But what about Las Vegas itself?
What is happening in a city that once advertised itself, essentially, as a place to come and cheat on your wife?
We received the following report from a regular visitor to the various trade shows that make Las Vegas their home, and thought it worth passing on to our readers.
When I visit Las Vegas I make my way to the airport exit and enter a line to get a taxi to the hotel.
On every occasion prior to tonight I have encountered a line of people numbering in the hundreds (sometimes several hundred) who wind their way up and down four rows that stretch up and down a wide sidewalk outside the airport exit.
Not this time. There were perhaps three dozen people in line. No need for four rows. One was enough. Instead of the usual 5 to 10 minute wait (I was always amazed at how efficient they were hustling 100s of people into taxis and out to the casinos), I was in a taxi within a minute.
The taxi driver, a guy in his 30s from Brazil who had been in Vegas for 10 years, told me that the volume of people he sees is down 30% compared to last year. And the people who come don't leave their hotel. They aren't going out at night. So his business at the hotels is down.
How is the real estate market right now in Las Vegas? He said it’s great if you want to buy a house at a good price. He bought 8 years ago for $170,000, says his house is now worth $230,000, but three years ago it was worth $450,000. That's when his wife wanted to sell and move into an apartment, and buy a house back home in Brazil. But instead they refinanced, taking out $50,000 cash. Now, “It’s okay as long as I work and my wife works and we can pay our bills, and better if we can save a little.”
The hotel is another story.
Usually, when I book a room in Las Vegas it’s $79-99 a night at the Luxor through Orbitz. I can walk to the Venetian where the conferences are and where the rooms normally cost $300-400. This time I booked at the Venetian. Reason? It cost $120/night. But that's not the end of the story.
I get to the registration desk and the clerk asks if I want to be upgraded to a suite. I tell him no, I’ll just take the room I booked. He then registers me on the computer, hands me my key with a map of the hotel and tells me he gave me a suite anyway.
What happens in Vegas is happening everywhere!
I Am Not Making This Up
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The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.
Posted by Jeff Matthews at 8:13 AM