As with all of my visits to Sin City, I made a beeline to my inside guy ? a blackjack dealer at Caesar?s Palace. It?s been a slow summer and an even slower fall. With global warming delivering the hottest summer in history, the last place tourists wanted to visit was the desert. Midwesterners have been particularly hard hit, as the heat has caused crop failures on a Biblical scale and shriveled incomes. Still, business has been infinitely better than 2008-2009, and most hotels are modestly hiring.
It is wonderful strolling through the finally completed City Center. The glitzy, ultra-modern, Cesar Pelli designed, 16.8 million square-foot, 63- acre complex occupies a quarter-mile on the city?s fabled Strip between the Bellagio and the Monte Carlo Hotels.
It will unquestionably become one of the hedonist Wonders of the World. It includes the Mandarin Oriental, Aria, Veer, Vdara, and Harmon Hotels, offering 4,000 rooms and 2,600 condos. They are adorned by two casinos, a convention center, a new theater for a Cirque du Soleil show called Zarkana, and parking for 6,900.
No matter how healthy the rebound in Las Vegas may be, the forlorn Fontainebleau Resort remains abandoned. The $3 billion, 4,000 room, 68 story hotel, casino, and condo project was to be one of the city?s grandest yet. It was 95% complete when the crash hit and construction ground to an immediate halt, wiping out all of the original equity investors. Nobody does creative destruction like America.
Corporate raider, Carl Icahn, bought it for $156 million, then flipped the furniture for $200 million, getting the hotel for free. He is sitting back waiting for a foreign sovereign wealth fund to buy him out at a huge profit. That is what Carl does, bless his soul. In the meantime, the towering structure stands as a monument to the hubris, greed, and excesses of the 2000?s.
My global strategy luncheon at the Bellagio was a total blast, as usual. There was much speculation on the market impact of QE infinity, how the energy revolution was changing the investment horizon, when the bond market bubble would finally burst, and the chances of war with Iran. The guessing game was for which taxes would go up and how much. One gentleman from Canada kindly informed me that since January, he had made $1 million for his personal account from Trade Alerts on the Japanese yen. That?s why I do this job, to level the playing field for the regular guy.
However, navigating this immense convention center can be devilish. Some of my guests went to the U.S. Aids Conference in error, while some of the AIDS people visited my lunch by accident. They were politely redirected. This is why I tell people to allow an hour just to get from the parking lot, past the dancing girls and craps tables in the Casino, to their seat at my table.
I always enjoy doing these lunches, as the feedback I gain from readers is invaluable. Not only do I learn about new, unexplored asset classes and local micro business trends, there are always good suggestions on how I can improve my own service. I also have to confess that hearing about the latest Internet rumors and conspiracy theories is a real hoot. I tell people that all tips obtained from the Internet should be assumed to be wrong, unless, of course, they come from my own newsletter.
The Forlorn Fontainebleau
