Wednesday, August 25, 2010

BloggeRhythms 8/25/2010

I never expected to be quoting Steve Wynn, of Las Vegas fame, regarding his views on the economy. But in a recent interview on CNBC he made several very blogworthy comments.

He recently finished the new Encore Beach Club, which opened for the Memorial Day weekend. He tore down and rebuilt a $13 million entrance to the $69 million club because he didn't want his patrons viewing the slew of half finished developments across the street which stalled in the downturn. He said, “There were going to be 10,000 rooms across the street and they all went bust.” So he changed the whole front of the resort to close it off and create a "sensual" adults-only escape.

Even more passionate about where the country is headed, he speaks of “wild, uncontrolled spending,” and “unbelievable, unsustainable debt,” while planning to split his company headquarters between Las Vegas and Macau. He's put a bigger emphasis on Macau, because of its tremendous profitability, and has no qualms about dealing with the Chinese government, saying "Macau has been steady. The shocking, unexpected government is the one in Washington.”

His major concerns here are, the prospect of inflation, of the FHA repeating the mistakes of Fannie and Freddie, and the cost to business from the new healthcare law. “We’re on our way to Greece, in the hands of a confused, foolish government,” he says. “It’s got to stop. It’s got to stop.”

Now, Mr. Wynn may sound a little overboard in his views, but has certainly proved beyond doubt that he usually knows what he's doing, because he's been tremendously successful throughout his business career. Much moreso than most.

It also seems that he may be a bit different by concentrating on Macau, but not so odd when it comes to managing his funds. Because at the moment, many of our country's top businesses are sitting on huge stores of accumulated cash which they seem reluctant or afraid to spend or invest.

According to The Washington Post, "Non-financial companies are sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession. And as several major firms report impressive earnings this week, the money continues to flow into firms' coffers."

The newspaper goes on to say that the "good news from big business hasn't translated into much promise for jobless Americans" because these businesses aren't hiring more workers, regardless. A major theory is that these companies don't want to expand when they're not sure there's the consumer demand to justify it. And, confidence still isn't quite there. Beyond that, they're also nervous about their ability to borrow if the financial system comes under stress again.

Lastly, Boone Pickens says "According to the June oil import numbers, we are still importing approximately 12 million barrels of oil per day at a cost of about a billion dollars a day to get it. About 70 percent of that oil is used as transportation fuel even though we have resources here that could fuel our vehicles. It just doesn't make any sense that we continue to send money abroad when we can keep it in our economy and in our wallets." My arithmetic indicates that's a significant part of our deficit.

So, what all the preceding quotes, from some pretty smart people, tell me is our nation's being run by a bunch of mis-guided, unqualified stooges who are burning our hard earned dollars hand over fist, and haven't a clue as to how to fix it.

Yet, there's also another alternative, almost too far out to mention but certainly not beyond belief. It's possible that the strengths of our nation are being dismantled and neutered one-by-one, weakening us to the point that someone with cash can step in and buy up the pieces on the cheap. (fuel distribution, vehicle manufacturing, banks, health-care facilities, insurers, real estate, etc.) But, that couldn't happen in America, could it?

Now, I have no doubt that just about every incumbent today has a very high probability of being voted out of office, conspiracy possibilities or not. But, if by some horrible chance that doesn't happen and we stay on the same track, ...not only will Steve Wynn move permanently to Macau, anyone with half a brain who can afford the airfare is going to go with him.

That's it for today folks.

Adios

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