Mike W.'s Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/365246/comments http://seekingalpha.com/article/134775/comments?source=feed#comment-496205 496205
Creation of new securities via IPO, etc., simply shifts my cash unto your balance sheet. It takes no money out of the system. There is a reason why they say the government regulates the money supply. That is because they are the only party that can change the balances held. If the government wishes to increase the amount of money on the sidelines they pour ink into a machine and then use that to buy securities (Treasuries) from you. You now have cash that never existed before. The reverse must also be true. But when they sell you Treasuries the cash evaporates as magically as it was created.

So corporate issuance, for example, is not the answer. It comes back to Uncle Sam.


On May 02 07:35 PM Egg wrote:

> Riddle me this...
>
> I've heard that phrase "money on the sidelines" used constantly over
> the years, but did anyone ever stop to really consider the fact that
> that money will always be on the sidelines?
>
> You see if the current money on the sidelines is used to buy stocks,
> that means that someone has to sell that money on the sideline their
> stock. So that sold stock is now money on the sideline, making the
> overall money on the sideline the same as before. Hence net zero.
>
>
> The only way that money on the sideline can truly come into the market
> would be through secondary stock offerings and IPOs.
>
> Other than that, it's always a net zero effect.
>
> So please stop using the term money on the sidelines since the term
> itself is a fallacy.]]> Fri, 08 May 2009 19:41:28 -0400
Creation of new securities via IPO, etc., simply shifts my cash unto your balance sheet. It takes no money out of the system. There is a reason why they say the government regulates the money supply. That is because they are the only party that can change the balances held. If the government wishes to increase the amount of money on the sidelines they pour ink into a machine and then use that to buy securities (Treasuries) from you. You now have cash that never existed before. The reverse must also be true. But when they sell you Treasuries the cash evaporates as magically as it was created.

So corporate issuance, for example, is not the answer. It comes back to Uncle Sam.


On May 02 07:35 PM Egg wrote:

> Riddle me this...
>
> I've heard that phrase "money on the sidelines" used constantly over
> the years, but did anyone ever stop to really consider the fact that
> that money will always be on the sidelines?
>
> You see if the current money on the sidelines is used to buy stocks,
> that means that someone has to sell that money on the sideline their
> stock. So that sold stock is now money on the sideline, making the
> overall money on the sideline the same as before. Hence net zero.
>
>
> The only way that money on the sideline can truly come into the market
> would be through secondary stock offerings and IPOs.
>
> Other than that, it's always a net zero effect.
>
> So please stop using the term money on the sidelines since the term
> itself is a fallacy.]]> http://seekingalpha.com/article/88569/comments?source=feed#comment-405339 405339
Look at the pathetic return on investment that these projects produced. MGM and Dubai World will be lucky to generate 5-6% on invested capital for the CityCenter project. Even the much adored Steve Wynn is getting smoked. His Encore project was a monument to himself and will never be a serious money maker.

In most industries the solution to this dilemna would be to take out capacity/supply. But how do you do that in Las Vegas? Do you start emploding casinos like the Imperial Palace or Excalibur? Imagine what the Strip would look like afterwards? Gaps between pearly white teeth. How many casinos would you have to tear out to offset CityCenter? Encore? Eschelon? Fountainbleau? You simply cannot take out capacity in any meaningful way.

That leaves you hoping that demand not only rebounds but grows. I won't debate when the economy is going to turn around but I am of the belief that the amount of wealth destruction that has taken place is going to take years, if not decades, to fix and that leaves visitors reluctant to pry open their wallets.

There will be several bankruptcies in the next twelve months. My top candidates are LVS and MGM. WYNN will make it through by virtue of its ability to set room pricing on the Strip and the money that it prints in Macau (which can tax efficiently repatriate to the U.S.).

Carnage pure and simple. The length of the buffett line doesn't change that. A cheap, hot meal will always sell.


On Aug 01 01:26 PM PhillipKing wrote:

> I would just like to point out to the "TruthMissle" that if you took
> any time to do any due dilligence rather than just write indignant
> comments, you would have noticed on the author's blog that this article
> was written before BYD delayed their Echelon Project. Since they
> just announced that this morning, it certainly just seems like it
> was unfortunate timing for the author.
> If you did take the time to listen to Boyd's call though, you would
> have noticed that they are only temporarily delaying the Echelon
> project not cancelling it. They only expect this to be a short term
> measure.
> On another note, I was just in Las Vegas two weeks ago and I fully
> agree with the author, it is more crowded than it ever has been.
> I had a wait of an hour and a half just to get into buffett at the
> Rio. And the foreign tourists are coming in droves too...these casinos
> are still making money the way I see it, but they're spending so
> much too on projects like Echelon and City Center. I fully agree
> with the author that they'll turn it around as soon as these projects
> are completed.
>
> Phillip]]> Fri, 27 Feb 2009 00:02:09 -0500
Look at the pathetic return on investment that these projects produced. MGM and Dubai World will be lucky to generate 5-6% on invested capital for the CityCenter project. Even the much adored Steve Wynn is getting smoked. His Encore project was a monument to himself and will never be a serious money maker.

In most industries the solution to this dilemna would be to take out capacity/supply. But how do you do that in Las Vegas? Do you start emploding casinos like the Imperial Palace or Excalibur? Imagine what the Strip would look like afterwards? Gaps between pearly white teeth. How many casinos would you have to tear out to offset CityCenter? Encore? Eschelon? Fountainbleau? You simply cannot take out capacity in any meaningful way.

That leaves you hoping that demand not only rebounds but grows. I won't debate when the economy is going to turn around but I am of the belief that the amount of wealth destruction that has taken place is going to take years, if not decades, to fix and that leaves visitors reluctant to pry open their wallets.

There will be several bankruptcies in the next twelve months. My top candidates are LVS and MGM. WYNN will make it through by virtue of its ability to set room pricing on the Strip and the money that it prints in Macau (which can tax efficiently repatriate to the U.S.).

Carnage pure and simple. The length of the buffett line doesn't change that. A cheap, hot meal will always sell.


On Aug 01 01:26 PM PhillipKing wrote:

> I would just like to point out to the "TruthMissle" that if you took
> any time to do any due dilligence rather than just write indignant
> comments, you would have noticed on the author's blog that this article
> was written before BYD delayed their Echelon Project. Since they
> just announced that this morning, it certainly just seems like it
> was unfortunate timing for the author.
> If you did take the time to listen to Boyd's call though, you would
> have noticed that they are only temporarily delaying the Echelon
> project not cancelling it. They only expect this to be a short term
> measure.
> On another note, I was just in Las Vegas two weeks ago and I fully
> agree with the author, it is more crowded than it ever has been.
> I had a wait of an hour and a half just to get into buffett at the
> Rio. And the foreign tourists are coming in droves too...these casinos
> are still making money the way I see it, but they're spending so
> much too on projects like Echelon and City Center. I fully agree
> with the author that they'll turn it around as soon as these projects
> are completed.
>
> Phillip]]>