Thursday, March 5, 2009

Is this a depression yet?

Today's closings on Wall Street:

MGM Mirage is at $1.89 a share, Las Vegas Sands is at $1.99. Less than two years ago, in October 2007, MGM peaked at $96.40 a share and LVS peaked at $138.93.

Now what, Jim and Sheldon?

In happier -- and surprising news -- the M Resort is boasting tremendous first-week business. And the Las Vegas Sun reports today they're hiring 250 more employees to handle the demand and yesterday they said 20,000+ people had signed up for their iMagine players club.

Maybe Marnell has the right idea -- abandon the Strip as we know it and build a new one!


Pete said...

I just glossed over a story at marketwatch relating how there are 700 trillion in derivative contracts out there in the financial world and no one can really say how much those contracts are really worth (no doubt some Vegas debt is a tiny little bit of that). If we aren't in a depression yet we probably will be soon.

GregoryZephyr said...

The only depression we are in is in the mind of the media. The traditional definition is 10%+ decline in GDP. We are nowhere near that. Yes, it's bad. And some parts of the country are probably experiencing near-depression like declines. But, we'll come back. We always have. I grew up in Duluth, MN in the early 80's when the "Iron Range" of northern Minnesota practically shut down. Many towns in that area became modern ghost towns. But, eventually, things improved.

R-J Guy said...

greg: so it's all a media invention that this economy has layers upon layers of problems? This isn't an ordinary economic disaster. In no recession in your lifetime did the largest banks in America fail or did credit seize. "We always come back," you say. Well, sure. We came back from the Great Deepy, too, but that didn't make it any less of a disaster or generational experience. Unemployment is now at a 30-year high and nobody thinks that's its peak. It's a little short-sighted to suggest that this is media hype. As someone in the media, I assure you I wish we didn't have to write and read this gloomy shit every day.

GregoryZephyr said...

My point is not to minimize the economic pain of the current problems. However, to ponder or suggest we are in or headed for a depression is inappropriate unless backed by specific evidence. If you were on the ground in Iraq 2 years ago, you would have experienced conditions that soldiers may have experienced in World War II. However, to suggest or imply that we were headed for World War III would have been irresponsible despite how bad conditions were at that time. Another example: less than a year ago, the media gleefully hyped every pundits comment that we were in fact heading for $200 a barrel oil. The reality is that few can even approximate near term economic forecasts. The media does a disservice to the public by promulgating the views of so-called experts. It was the same on the upside too: I seem to recall that 2 years ago, every story was about how housing and stocks were never going to go down.

Anonymous said...

Another difference between WW II and the Iraq War. Our involvement in the former lasted less than four years. Our Iraqi quagmire will soon celebrate its sixth birthday.

David McKee