Very Concerned, So I Just Have To Ask ...

Please don't hate me for asking this ...

If Las Vegas is making so much money, then why does it seem that Casinos and other businesses are failing at such an alarming rate? Why is there so much unemployment? Why is the housing market so down? Repos at alarming rates and such? Isn't this Fun Central USA? If so, why all the negatives? Oh and what's up with Lake Meade and that low water level. I want to move to Las Vegas, but should I be alarmed by all this?

 

Vegas speculatively overextended. It busted there more explosively than most other places. Beyond that, I'm no economist or financial whiz.

Fun Central? The Vegas of casinos (Vacation Vegas) and the Vegas of neighborhoods (Real Vegas) are different animals. Vegas is a big city like any other struggling with what all big cities struggle, and here the mono-industry is perhaps more mono than anything since Detroit at its peak. Vacation Vegas is fundamentally unreal.

As for the lake. We've had a lot of chats here about the history and reality of the watershed, if you want to do some research in the archives. But the easiest thing to remember is the Colorado River flows at Rate X on average. When its waters were divvied up in the '20s the allocations were based on an estimate of streamflow that was 2 times X. In historic terms, the river has run at flow rates of X divided by 2 for long periods of time. Big pipeline, not much water. Lastly, Nevada is the lowest man on the totem pole when it comes to lower basin allocations, getting a tiny fraction of what by law -- the Supremes -- goes to CA and AZ. If you are interested in the subject I can suggest some good reads.

 

In Las Vegas, I really don't think casinos are failing at all. They probably aren't making anywhere near what their investors want, but I don't think any of the established ones are in danger of going dark.

Yeah, I know about CET filing for bankrupcy. That's a business move. Just like sending out a new offer, or jacking up a resort fee.

A major client of mine in the LV market hires from two pools. One is a general pool, where if they have a pulse and can speak half-way decent English and show up, they have a job. The other is for technical people who need some definite skills and can pass a moderate background check. There is currently a glut of people in the general pool, they can be very choosy about who they hire for these jobs. For the latter, it seems like everyone in the vicinity who qualifies is already working someplace else.

From talking to the people, I hear that the housing market in Green Valley is good, with any nice home on the market getting snatched up quickly, but for nearby "Hender-Tucky", yes, there are many repossessions and such.

 

Thank You Ken ... Yes, I would appreciate any info that pinpoints my concerns.

 

My view is that CETs casinos in Vegas generate pretty good cash flow and returns... the problem is that CET has been run into the ground with things like using debt to expand and way overextending itself.

When CET fails and there are five or six strip casinos up for sale, there is going to be hell to pay. It won't be pretty, there will be a lot of people out of work as they slash costs, and a lot of uncertainty.

I blame the overseers who ever let two companies buy up both of the strip. It is sheer stupid folly and Vegas is about to pay the price.

That's my 2 cents.

 

Thank You dmr ... I appreciate the info. I am just being a little cautious. Picking up stakes an moving to a new location is a somewhat harrowing experience at best, but I think the move would be a good one if I can get a better than even break on not losing my shirt to do it. Again, thanks.

 

Royal Flusher ...

What do you feel is going to happen IF this scenario of yours occurs and what kind of time frame do you perceive as plausible?

 

Neither is new but two of the best in the field:

Donald Worster, "Rivers of Empire: Water, Aridity and the Growth of the American West"
Marc Reisner, "Cadillac Desert: The American West and its Disappearing Water"

Why do you want to move to Vegas?

 

Thank You for the Resources on water ... I will seek them out.

The reason I want to move to Vegas is to retire there, and is also due to the weather (Lack of humidity) and I also have friends who live there, as well as other friends whom are relocating to Vegas as well.
I also like the idea of being close to everything I need or want other than casinos. I am not a gambler of note. I play a little chump change poker with friends, but I put my money in MY piggy bank... not a casino's. I also like the fact that in no time I can be in the mountains snow skiing. Short plane ride to LA, San Fran or Denver. I have lots of reasons to move there, I guess.

 

You seem to be approaching it with far more of a plan than most.

 

Funny you should say that ... because among my peer group I am called "The Planner" lol Most come to me when they need to break down an issue and organize it into a workable outline.
Having said that, yes I do have a plan, because I have wanted to do this for a long time and the time is near or so I believe anyway. Once I am there, maybe we can have a coffee or lunch and I can get you to help me plan how to get under 85.

 

I really don't see Caesars getting broken up. That's not to say they won't sell some of their non-core properties like Rio, Circus Circus etc.I think there are a lot of macro-economic issues in Vegas that don't happen in other areas. The vast majority of workers work at the casinos or in something that's related to the casinos (catering, hospitality, transportation, tourism etc.). Vegas is extremely heavy on tourist traffic and conventions. When 2009 or so happened and the economy tanked, they took a large hit with companies cutting back on conventions, travel etc. Workers also had/have a lot less disposable income overall. To boot, I think the prices of everything; especially land on the strip were severely over-inflated and companies like Boyd spent way too much money on land. Things are getting a lot better than they were there but they're still not great. The economy had changed and you have people that want a cheap vacation but don't want to gamble, which is where the casino's used to make most of their money from. The gambler crowd is shrinking I think and it's more spread out with legalized gambling in many more locations now. Anyways, it's definitely not an easy explanation but there are a lot of things that added up to the perfect store. If you look at Caesars specifically, they did the leveraged buy out at the worst time possible in hindsight. They took out high interest loans (I think they're 10-12%?) and with the changed economy/demographics, they're barely able to maintain the payments on just the interest even so there's no end insight unless they go with the bankruptcy option. Just my thoughts/opinions though! I could go on and on...

 

yes.

Vegas is a great place to visit

and a terrible place to live.

 

For the hookers, and "free" booze of course. Oh, wait.... that's why I want to move there.

 

I bet CET would love to sell Circus Circus... except they don't own it.

I think the next big hit will be CETs bankruptcy though. I wouldn't be surprised if this recent timeline of January to file gets pushed back once again, but I see them eventually filing to reorganize. Hell, I suspected that back when they were taken private by the private-equity firms. I've seen time and time again, private-equity firms buying up companies, sprucing them up, only for them to go into bankruptcy within a few years, all the while, the PEF's are raking in cash from the company, especially after an IPO. There may be a few sell offs in non key areas, Rio, some locals properties, but CET has protected several assets by tossing them into other corporations to basically keep the people they owe money's hands off them when they do file. They will come out a leaner company and will eventually be taken private again, only to issue another IPO in several years to repeat the process or sell it off to someone else.

What does this mean to Vegas proper? Short term, a lot of people will lose their jobs and move out of the area. But, if you are looking to move there for retirement, I wouldn't be that concerned with it unless you plan on buying investment properties like everyone else seems to be doing out there right now.

I can't see Vegas going the way of Atlantic City anytime soon.

 

If lack of humidity is your thing, I'd suggest Phoenix. All the good things about Vegas and not as much crime or poverty. Indian casinos 20 minutes away and Vegas a quick flight or drive.

 

Lol, good point. Friday rum! That just leaves the Rio since I'm sure they want to keep PH, Paris, Ballys, cromwell, flamingo, lync, harrahs, caesars and NOBU (which they don't own I think). Other properties outside of vegas could be for sale as well. I'm surprised they're still trying to expand even under such a heavy debt load (Japan, other US jurisdictions etc. )

 

You can move to vegas or not, but dont even for a second think that somehow vegas will run out of water, run low yes, stop wasting yes, but unless if something far more severe happens, water will not be a factor. You asked why the housing market is down? The recession from 2008 is just now being recovered from, major casino's with thousands of rooms were very vulnerable to modest drops in business, they were built with the expectation that they would have 90% occupancy( in debt to the max) and when that didn't happen for an extended period the effects cascaded down through the whole city.

Vegas is still unique, it can still thrive, atlantic city is finished, no one needs to go there anymore, they can get their gambling fix where they live, no need to drive to that rundown city to spend their money.

One thing about living in vegas is that it sounds a whole lot better when you're not there, when you're planning your trip you think, yea it would be great to live there and have the chance to do that everyday, but when you go there and drive around, and really see the city away from the strip, you think "what a dump".

If i were you I'd move to arizona, close enough to just pop in, but far enough way to still be fun.

 

Yeah, yeah... Las Vegas has been "failing" for decades - according to the naysayers. Yet, it persists.

Bill

 

I'm sure that every Las Vegas fan has thought about moving to Las Vegas at least once.

Personally, Las Vegas is about the last place I want to live. (Well, maybe I would choose LV over something like Angola or Saudi Arabia.) I quickly forgot about that idea after my first Las Vegas trip in the summer! It's just too {expletive}-ing hot! (I say this as it's locally colder than a wiccan's boobie outside and the talking heads are talking about snow and more snow.)

We fantasize that living in LV would be very much like vacationing there, but I seriously doubt that it's ever the case. The big problem is that you don't have Las Vegas to take off to anymore!