Revel, the Atlantic City Casino Morgan Stanley poured $1.2 billion into and then booked a $1 billion loss on when the bank washed its hands of the place, which still haunts some senior executives’ dreams and is the word James Gorman whispers to employees with a knowing glance when it looks like they’re about to get in over their heads on something, is shutting its doors. Read more »
My point about pigskin offense and defense is the perfect metaphor for the world of investing as well. Offensively minded risk takers in the markets have historically been the ones who have dominated the headlines and won the hearts of that beautiful gal (or handsome guy). Aside from the rare examples of Steve Jobs and Bill Gates, however, the secret to getting rich since the early 1980s has been to borrow someone else’s money, throw some Hail Mary passes and spike the ball in the end zone as if you had some particular genius that deserved monetary rewards 210 times more than a Doctor, Lawyer or an Indian Chief. Nah, I take that back about the Indian Chief. The Chiefs, at least, have done pretty well with casinos these past few decades. [PIMCO Investment Outlook]
There’s a possibly true anecdote about Greek uncompetitiveness that goes like this:
“An online store is more complicated than a regular store basically because of the way payments are carried out,” explained Fotis Antonopoulos, one of the co-founders of www.oliveshop.com, which sells olive oil-based products such as cosmetics, mostly to foreign markets. …
Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector’s office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.
This is contrasted with the US system, where Antonopoulos says “I contacted the FDA and they sent us an e-mail with directions immediately. I filled in an online form and was done in five minutes. We received the approval 24 hours after making our application.”
Now, I’m sure you’re as horrified as I am that the people in charge of protecting our health and safety will let us smear olive-derived creams on ourselves without so much as examining the poop of the people providing the funding to the people selling those creams. Fortunately, though, US regulators keep watch over some aspects of our lives to make sure they’re not affected by shareholder irregularities. Specifically, they keep watch over our slot machines.
That is I suppose the genesis of this awesome Wynn thing. Quick recap (based largely on this report from former FBI director Louis Freeh because why not have a former FBI director involved): Steve Wynn had a friend, a Japanese engineer named Kazuo Okada, who runs a company named Aruze that was a 24.55% investor in Wynn Resorts when it IPOed in 2002 and a 19.66% shareholder as of … last week. Okada tried to open his own casino in the Philippines, maybe doing some shady stuff with Wynn resources including the “city ledger” account set up by Wynn to, as far as I can tell, allow Okada to gamble more efficiently. Also maybe doing some shady stuff like kind-of bribing Philippines regulators, which is a violation of US law and also a serious no-no in the casino world. Things got unpleasant and Okada accused Wynn of doing some bribing himself, which was followed by that Freeh investigation by Wynn finding conflicts of interest and bribery by Okada.
Then things got amazing: Read more »
Deutsche Bank Needs Less People Vomiting Outside Its Las Vegas Nightclub, More People Blowing Money In Its CasinoBy Bess Levin
As you may have heard, Deutsche Bank owns a casino (/hotel) in Vegas, called the Cosmopolitan. The Germans never intended to run the joint, originally merely funding the project by developer Ian Bruce Eichner but in 2008 Eichner had to go and default on his loans. No one else wanted to invest in the place, so DB decided to man up and finish the job itself, laying out an additional $3 billion of its own money. Allowing themselves to get momentarily excited, Deutsche scrapped Eichner’s plans and hired its own team of gambling and real estate experts, architects and interior designers. The Cosmpolitan now includes “a three-story crystal-strewn bar meant to evoke the inside of a chandelier” and guests in its hotel reportedly love the massive rooms that typically sell-out. Unfortunately, the bank is nowhere near close to breaking even on its investment (and lost $139.5 million in 2010), which might have something to do with the fact that no one is gambling there. Instead, visitors think of it more as a place to eat dinner, get drunk, and then vomit while waiting to get into a club. Read more »
If you haven’t read the document yet (and only one person has so don’t feel bad), have a looksee at the clip above, produced by the White House, which explains the impetus for the bill (“the careless risk-taking by Wall Street had to be stopped”), makes some references to banks playing craps with other people’s money, confidently states with the passing of Dodd-Frank, “you can rest a little easier knowing your home and family will be protected from the irresponsibility of others,” and never once mentions Fannie Mae and Freddie Mac. Perhaps most genius, however, was having the whole thing narrated by the soothing voice of Kal Penn, though if I had my preference, would rather listen to in this. Read more »