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Las Vegas Faces Its Deepest Slide Since The 1940S

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http://www.nytimes.com/2010/10/03/us/03vegas.html?_r=1&ref=business

LAS VEGAS — There are many cities across the country that are beginning to see the first glimpses of the end of the recession.

This is not one of them.

The nation’s gambling capital is staggering under a confluence of economic forces that has sent Las Vegas into what officials describe as its deepest economic rut since casinos first began rising in the desert here in the 1940s.

Even as city leaders remain hopeful that gambling revenues will rebound with the nation’s economy, experts project that it will not be enough to make up for an even deeper realignment that has taken place in the course of this recession: the collapse of the construction industry, which was the other economic pillar of the city and the state.

Unemployment in Nevada is now 14.4 percent, the highest in the nation and a stark contrast to the 3.8 percent unemployment rate here just 10 years ago; in Las Vegas, it is 14.7 percent.

August was the 44th consecutive month in which Nevada led the nation in housing foreclosures.

The Plaza Hotel and Casino, which is downtown, recently announced that it was laying off 400 workers and closing its hotel and parts of its casino for eventual renovation, the latest high-profile hit to a city that has seen a steady parade of them.

“It’s been in bad shape before, but not this bad,” said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. “If you look at the gaming revenues, they have declined and continue to decline over the past three years. “

“Sept. 11 set off a two-year slowdown,” Mr. Schwartz said. “But nothing of this magnitude.”

Mayor Oscar B. Goodman said in a recent interview that he was “very bullish on our future,” offering as evidence the packed airplanes he encountered both ways on a recent trip east to appear on “The Colbert Report.”

But, he added: “Our daily room rate average is not what it was. Our hotel room rates are bargains now. People aren’t spending on gambling as they have in the past. Ordinarily Las Vegas was the last to go into a recession and the first to come out. This one is different. As soon as they feel secure in their financial position, then Las Vegas will come back stronger than ever.”

The drop in the city’s gambling revenues, at first glance, tracks historical trends: Americans cut back on recreational travel and gambling during a recession. There are some signs that gambling revenues, which are down to 2004 levels, have at least stabilized. After months of precipitous decline, revenues increased 3 percent in the first quarter of 2010, but then dropped 5 percent in the second quarter, according to the Center for Gaming Research.

“I think we are bumping along the bottom,” said Stephen P. A. Brown, the director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, which has been tracking the downturn. “Expectations are that once the U.S. economy turns around, the gaming industry will begin to improve.”

What is worrisome now is the nature of this economic downturn, when many people saw the value of their retirement funds or homes collapse. Economists say people are less likely to gamble as freely as they have in the past, particularly baby boomers, who may now be rattled about their retirement years. In one sign of this, while there were more people coming to Las Vegas in recent months, gambling receipts have remained stagnant.

“The big players, the ones who gamble the big money, I’m not sure they have it anymore,” Mr. Goodman said.

Gambling by Nevadans — itself a steady and critical stream of revenue — has also fallen off as a result of high unemployment, and analysts see no obvious way to turn that around anytime soon.

“Although gaming dropped with this economy, don’t automatically assume that when the economy comes back people will start gaming at the same level,” said Keith Foley, a senior vice president at Moody’s Investors Service who tracks the industry. “We put this in the grand scheme of things. This is a highly discretionary form of spending. People lost their savings.”

So revenues have stabilized by declining even more!!!

The Las Vagas casino's weren't around in the 20's/30's so this is whole new territory now, the decline could be for a decade.

Still everyone can take comfort in knowing it's all contained...

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for starters, Las Vegas has had the Main course and soon to be desert.

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I was out there last year and was surprised by the number of homeless people sleeping rough both in Vegas and LA.

Gambling is a mugs game!! Course the other explanation is more people are coming to realise this?

Or visitor numbers have not decreased the slowdown is because more are walking away winners?

I went to Vegas for a few days for a look. Other than a few $ in fruit machines for recreation I am noit interested in gambling. I will not be returning.

Edit to add.

Bloo's comment about desert is not very far from the truth. Vegas has a chronic water problem.

It is supplied from the lake which resulted from the hoover dam.

There are some pictures doing the round on the net showing the brand new bridge under construction (and it is impressive) which is to replace the road route over the dam and provide a new link between Arizona and Nevada. These show the tidemark of the reservoir and how far the water level has dropped over recent years.

Unless they work out a solution Vegas' days are numbered anyway

Edited by geezer466

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Gambling is a mugs game!! Course the other explanation is more people are coming to realise this?

I was there a while back: there were a lot of people, but the casinos were pretty empty most of the day, no more 'if you sit in front of a machine and you're not gambling we'll throw you out', we got a 50% discount on the one show we went to and saw miles of apparently unsold property developments. The Hoover Dam is also in trouble because they've been sucking out more water from the lake than is coming in from the river, so the future doesn't look good either way.

Ultimately casinos are places where poor people go to give money to fat corporations, so if the poor people have no money the corporations are in trouble.

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i've been to las vegas as a tourist and loved it.

but it's a funny old place alright.

it's not too difficult to imagine it being forced to downsize fairly spectacularly.

It is imploding there as it relies on discretionary spending from tourists, many of them from the USA!

Here, it is becoming clear that without any real cuts as yet, the UK is sliding gently towards another recession. Just as the likes of me warned, we wasted loadsa money supporting a phoney recovery, instead of allowing the housing market to find its own level and paid far too much 'saving' banks. Brown and Darling will go down as the worst double act in Uk politics for a couple of hundred years.

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I was there for my 40th one month ago today.

Also went there for my 30th & it was noticeably quieter this time. But I don't care, I love the place, roll on 50!

Hmmm ...

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Brown and Darling will go down as the worst double act in Uk politics for a couple of hundred years.

It was not a double act . It was Brown and Brown , he was chancellor for ten years then took over as Prime minister but was still running the chancellor's job , Darling was just a puppet . That is why we got in such a mess 13 years of a power hungry despot in charge of the countries money and the last three years he was able to do it without Tony Blair trying to put the brakes on him.

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http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/9029563.stm

The effects of the economic crisis are still being felt in many parts of the United States and the closure of a museum dedicated to a Las Vegas showman reveals further evidence of the fading of the American dream.

You could make a good case for arguing that modern America was born in 1954. The hydrogen bomb was tested on Bikini Atoll, giving us both the weapon and the swimsuit, the Supreme Court heard the case which resulted in the end of racial segregation in American schools and France gave up its grim struggle to hang on to the colony of Vietnam.

Just as significantly in a way, a flashily-dressed concert pianist called Walter Valentino Liberace earned $2m (£1.3m), and this was back in Eisenhower's America where you could still hire a decent piano player for that kind of money.

He was not just about the tunes of course. Liberace once described his act as classical music with the boring bits left out and his act included a version of Chopsticks. A certain type of modern celebrity invented itself around him.

Like Elvis, Garbo and Chaplin, Liberace was recognised all over the world by a single name. Americans enjoyed stories about how he drove his pet dogs around in a limousine and how, when he saw a piano he wanted in a museum, he bought the whole museum to make sure he got it.

He knew the darker side of celebrity too.

He spent most of his life denying or trying to ignore rumours that he was gay and once successfully sued the Daily Mirror for a sneering and charmless article which said so more or less explicitly. When he was asked how he felt about first being libelled and then winning in court he famously declared that he had cried all the way to the bank. His fans who cared nothing about the rights and wrongs of the court case loved him all the more.

Shining star

The truth is that Americans - and plenty of people in the wider world - were in the mood for the kind of flamboyant fabulousness that was Liberace's stock in trade. The dark uncertainties of the Cold War were beginning to erode the sense of prosperity and stability that America had rebuilt since 1945.

If we were going to be bombed back into an irradiated nuclear winter anyway, went the reasoning, then we might as well listen to someone playing Roll Out the Barrel at 500mph while we waited. Liberace illuminated a dark age. He liked to drive himself on to stage in a Rolls-Royce which he had customised with candelabras and bodywork made of mirror glass.

His costumes were all sequins and ostrich feathers in shades of hot pink and crushed purple and he celebrated the bicentenary of American independence in a pair of glittering hotpants in sparkling red, white and blue. It worked too. When he was asked how he was doing he said simply: "Remember that bank I cried all the way to? Well I bought it."

So, when the local newspapers out here in Las Vegas reported that the Liberace Museum was closing down I felt I had to go before it was too late. I could not help noticing that previous visitors included Paris Hilton and Michael Jackson - almost as though this is where you come to learn how to be a celebrity.

There was a time when the museum attracted 450,000 visitors a year. Now it is down to about 10% of that. When I stopped by, certainly, business in the section of the souvenir shop where they sell the diamante waistcoats was looking a little sluggish.

Fickle fame

In part, of course, the closure is natural enough. Fame does not last forever and even the brightest flames of celebrity eventually flicker and die. But it seemed to me there was something more profound at work here too.

Liberace was such an improbable figure that once the museum is closed it will be hard to believe he ever existed at all

Just as Liberace felt like an adornment to the anxious, but prosperous age which he lit up, so he feels like a jarring presence in an age when America's boundless sense of optimism has been badly dented by the grim persistence of the recession. Seventy percent of the houses in Nevada are worth less than the loans used to buy them and 10% of them are empty.

Add in unemployment in double digits and an American Dream which seems less affordable with every passing year, and you can sort of see why people have stopped going to worship at the shrine of a man who collected Rolls-Royces. It is a pity in a way. Liberace was such an improbable figure that once the museum is closed it will be hard to believe he ever existed at all.

There is fighting talk among fans that the museum could make a comeback one day if the mood of the nation changes again.

In truth, it is hard to imagine, but it is an engaging thought.

After all, there are already plenty of ways of measuring the American economy but this would be as good as any. If the country were ever to re-discover its taste for ostrich feathers and Rolls-Royces decorated with diamonds then you will know for sure that the recession is over.

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We thought about going to the Liberace museum but it was too far out of the way. That and the declining number of people who even remember him are probably as much a factor in its closure than the economic climate.

From what we were told the fundamental issue is that it's part of a charity he set up to help future artists through school and if it loses money then they're depriving kids of assistance so they can't justify keeping it open; it might return at some point, but they'd probably sell off some of the exhibits to try to recoup the recent losses for the school fund.

Edited by MarkG

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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