Archive for July, 2011

Translating Corporate Speak: Wynn [Unforeseen Upside Edition #5]

Steve Wynn used to discuss business trends on his quarterly conference calls. No longer necessary now that the Macau business generates almost a billion dollars of revenue and over $300mm of EBITDA per quarter. Instead, he is free to opine on the macro and political situation. It’s still the most entertaining call of the quarter even though it is sad when he no longer feels the need to mock investors and competitors. But at least he’s calling Jeff Immelt a Judas. Someone had to.

Wynn on Obama:

Well, here’s our problem. There are a host of opportunities for expansion in Las Vegas, a host of opportunities to create tens of thousands of jobs in Las Vegas. I know that I could do 10,000 more myself, and according to the Chamber of Commerce and the visitors and convention bureau, if we hired 10,000 employees, it would create another 20,000 additional jobs for a grand total of 30,000.
I believe in Las Vegas, I think its best days are ahead of it, but I’m afraid to do anything in the current political environment in the United States. You watch television and see what’s going on on this this debt ceiling issue, and what I consider to be a total lack of leadership from the President, and nothing is going to get fixed until the President himself steps up and wrangles both parties in Congress.

But everybody is so political, so focused on holding their job for the next year that the discussion in Washington is nauseating. And I’m saying it bluntly that this administration is the greatest wet blanket to business and progress and job creation in my lifetime. (our emphasis) And I can prove it and I could spend the next three hours giving you examples of all of us in this marketplace that are frightened to death about all the new regulations, our health care costs escalate, regulations coming from left and right, a President that seems, you know – that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they’re frightened of this administration.

And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America. You bet. And until we change the tempo and the conversation from Washington, it’s not going to change. And those of us who have business opportunities and the capital to do it, are going to sit in fear of the President. And you know, a lot of people don’t want to say that. They say “oh, God, don’t be attacking Obama.” Well, this is Obama’s deal. And it’s Obama that’s responsible for this fear in America. The guy keeps making speeches about redistribution, and maybe we ought to do something to businesses that don’t invest, they’re holding too much money.

You know, we haven’t heard that kind of talk except from pure socialists. Everybody is afraid of the government. And there’s no need – there’s no need, you know, soft pedaling it. It’s the truth. It is the truth. And that’s true of Democratic businessmen and Republican businessmen, and I am a Democratic businessman and a – I support Harry Reid, I support Democrats and Republicans, and I’m telling you that the business community in this country is frightened to death of the weird political philosophy of the President of the United States. And until he’s gone, everybody is going to be sitting on their thumbs.

Wynn on taxation on capital abroad:

If the government – if the administration in Washington isn’t frightening the dickens out of those of us who create jobs and build buildings and make lives for their employees, they’re attacking China where in the case of my company, the vitality of capital to improve Las Vegas has come from.

You know, it’s the double whammy. American companies that have ventured abroad to broaden their markets are bringing money – have reinvested much of that in America. And so the rhetoric about offshore capital, there would be a lot more of it brought back here if the government did intelligent and encouraging things to bring capital back. But this is a very business, job creating unfriendly administration and that’s the plain truth of it. And so you know, you want to build condominiums? Why? You want to protect yourself in this environment. Everybody is in a defensive crouch, except for Jeff Immelt, who is sort of a Judas goat. (emphasis ours)

Wynn on TSA:

Coming to the United States is tougher than going almost anywhere else in the world. Homeland Security has, you know, we seem to have been safe more or less but so much of it is excessive and irrational, you know, like patting down babies and old ladies and stuff like that. But it is very difficult – it’s more difficult today to get to the United States for people who have been coming here for years, for decades.

Our customers that are big businessmen that have been coming to America for 10, 15, 20 years, are asking us for help to relieve the bureaucratic congestion of government overregulation in this area. We’ve talked to Homeland Security. They’re aware of the problem. So is Customs and Immigration and the State Department. And you know, when we talk to any given individual in those organizations, in those bureaucracies, they’re very sympathetic. And they know the truth of the complaint.

And they know the truth of the fact that these things are very often excessive and unnecessary. But yet there seems to be a tremendous amount of inertia to move government in America, whether it’s the deficit management and coming to some kind of logical conclusion before August 2 or whatever it is, or whether it’s getting visas. Everybody has a clear understanding of the problem, but when it comes to our government it seems to be getting more and more sclerotic, more and more inflexible. By its own device, it keeps growing and growing and getting more and more onerous, more and more sluggish in its responses to real problems, and sluggish in its ability to take advantage of real opportunity. And it’s frustrating for me because I got a front row seat.

Update: While Wynn failed to mock investors or competitors, we were remiss not to include his mocking of some (past) customers.

We did not lower our rates like some of our competitors did. We’ve come to the conclusion here, incidentally, I’d like to add this parenthetically, having tried this before and failed, we don’t want to make the mistake again. This place is not set for price cutting. We lower the price, we can fill the rooms in an instant because they’re such fancy rooms. But we get people that carry their beer in from 7-Eleven, move their own bags, and don’t eat in our fine dining. We can’t use them. This is not a place for folks that have that kind of economy mentality. (our emphasis) This is a place for people who expect superior service, higher quality food, beverage and everything else.

Ben Bernanke announces Quantitative Easy

Hi everybody. It’s me, Ben Bernanke. As many of you know, I’ve been extremely busy. During Quantitative Easing I and II, I’ve spent almost all of my time finding just the right amount of flation. This is very difficult for one person to do, but don’t worry — I have a calculator that helps me compute the perfect amount. Not sure it would be possible without my calculator; I can see why every other central banker in history couldn’t get it right and why all their systems ended in some sort of systemic catastrophe. Between my calculator and the advance of knowledge, monetary science is better understood at the present time than in those days of old.

But what hasn’t changed is how much people hate things being hard. I know I do. And in spending time with my calculator, furiously pushing her buttons, I realized that QE I and II were just too hard for me. And in receiving a deluge of explicit and implicit inquiries from the market about when QE would end, what would happen when it did end, why QE wasn’t just blowing bubbles for the sake of blowing bubbles, I realized that QE I and II were just too hard for you all, too. So I sat down and said to my calculator, “Calculator, markets are too hard. Let’s make them easy. Let’s help boost assets prices with a new program called, Quantitative Easy.” My calculator didn’t reply but I could tell from the light reflecting off her display that she loved the idea.

So here we go everyone. Quantitative Easy. I know there will be a rush of people asking questions, so let me answer some obvious ones for you now:

What is Quantitative Easy? Quantitative Easy will be a program run by me, Ben Bernanke, that will make asset prices go up. This in turn will lead people to be happy. It will get their juices flowing, their animal spirits will stir in their hearts, and they will buy things. If we all agree to buy things, even if we we can’t afford to, then everyone will get rich. Easy.

How will it work? Asset prices, all of them, will go up. Like I said: QE I and II were too hard, people were constantly trying to figure out which assets would go up and when. Worse, people were worried that asset prices might actually go down at some point. Crazy, I know. Quantitative Easy is going to be easy. Everything is going to go up. Forever.

What should I buy? A horse. A rainbow. Mykonos (which is for sale fyi). Netflix stock. A mansion in Vancouver. A 1987 Topps Mark McGwire card. A slightly used Japanese nuclear plant. US Treasuries. Portuguese bonds. The only limit is your own creativity.

How can the Fed afford to do this given its balance sheet? That’s a good question. Next question, please.

Where will the money come from? We have a very complex process, involving machinery and paper, too complex to get into here. Make it easy for yourself and don’t try to understand it. Just trust us.

This sounds to good to be true. Is there a catch? No. Would I lie to you?

You Cannot Escape Doom

One of the other two writer/PMs signed up Mister Juggles’ email for something called “Roubini Global Economics” (ed note: we will not be linking any of the mentioned material for reasons that will be made clear, bear with us). “They” made a huge mistake. At the time it seemed innocuous enough – “hey this guy sometimes has some insights, just like sometimes that dead clock over there tells me what time it is.” Roubini Global Economics is an attempt to parlay the Dr. Doom schtick into serious global economic monitoring with a Doom bias. Fine, knock yourself out buddy. Nouriel Roubini’s role in the project is as “Chairman,” and all of Latveria rejoices in his genius. Sample headlines include: “Meltdown, Anyone?” (Mar’08), “Are Commodity Prices Getting Ahead of Fundamentals?” and “Green Shoots or Yellow Weeds” (May’09). But there were too many emails, too much self-promotion, and too much repetition. I can only take so much information and so much email before I just tune it all out. I unsubscribed two years ago. Simple enough, really.

Except that I didn’t stop getting various RGE emails. No, no, no, into my inbox, Roubini still snuck. Email types received include: “The RGE MONITOR,” “The RGE Content Weekly Roundup,” “Welcome to the New EconoMonitor,” “New and Improved RGE Newsletters,” “From Nouriel’s Blackberry,” and “From the Desk of Nouriel Roubini.” I unsubscribed over and over and over and Nouriel did not go away. And he was a goddamned sneak about it, too. Like, for a couple weeks, I’d be in the clear and think: “Finally, this unsubscription took! I’m a-OK and Roubini free!” Then boom I’d get an email like: “From Nouriel’s Blackberry: Greek Contagion Risks – Much Ado About Relatively Little”; Roubini’s way of saying: “I’m not done with you yet, I’m economic hepatitis.”

And like in my lifetime fight against hepatitis, I roared and I raged. The whole thing gave me pause. What does it mean that since 2008 I have been unable to unsubscribe from Nouriel Roubini’s bearish soothsaying? Maybe it’s not the RGE that is unsubscribeable at all. Maybe, just maybe, what is really unsubscribeable is doom. You, one, me, we, WE cannot unsubscribe from doom.

Recommendation: You cannot escape doom.