I can look out my hotel room and see the Eiffel Tower, as I mentioned yesterday. Or the day before, I can’t remember. In any case, it is right down the road from an Egyptian obelisk.
What a city! There is a giant concrete sphinx…a glass Egyptian pyramid…another pyramid modeled after the Mayan form…a replica of what appears to be Angor Wat… a fairytale castle and the statue of liberty all within walking distance.
Not to be upstaged by the wonders of the ancient world, there is a huge TV screen set up on the marquis of MGM’s “City of Entertainment” colossus nearby. Even at a distance of a quarter of a mile I can watch various news clips and other attractions designed to lure me into the MGM play world. Further down the street, there is a smaller version of the Chrysler Building echoing the Manhattan skyline…and the Seattle space tower off to the right.
All of these architectural calamities are part of the world of illusion that is Las Vegas, making it America’s premier New Era city. Here, as in the rest of Nasdaq Nation, gaudy wealth knows no limits.
The city is remarkable – spread out in the desert for no reason other than there doesn’t seem to be anything to stop it. It sits in an empty stretch of barren, hot ground. Neither mountains, rivers, arable farmland, borders, good taste, laws, modesty, money or dignity have stood in its way.
People from all over the world come to gawk in wonder – as they also do at the Eiffel Tower in Paris and the real pyramids in Egypt. A Japanese couple walked through the lobby of the Four Seasons yesterday. They seemed stunned, shell-shocked. They walked nervously, as if they had accidentally taken a wrong turn and ended up in an amusement park in hell.
All around them clusters of shiny slot machines rang, clicked, hummed and buzzed. Dreary-eyed retirees and vacationers from Gary, Indiana, hunched over the whirring, flashing lights, occasionally raising their right arms to feed tokens into the infernal machines.
The gamblers did seem to be having a good time. But, who could fail to enjoy himself in a town that is like a giant circus – running 24-hours a day?
As soon as you get off the airplane, you’re greeted by slot machines. I don’t know of any other airport in the world that offers people a chance to get rich while waiting for their connecting flight.
Quick and easy is the name of the game in Las Vegas. The city was originally home to miners who hoped to strike it rich…and then a boomtown when the Hoover Dam was built.
Quickie divorce laws offered people a fast way to undo past mistakes. No-wait marriages gave them an opportunity to make new ones.
But what really put Las Vegas on the map was gambling, air-conditioning and low-cost air travel. You can get here cheaply and gamble in comfort. As a result, Las Vegas is now twice a big as Baltimore…and growing fast.
And the gaudier and more bombastic it gets – the more people like it. They are drawn to it the way a crowd gathers around an auto wreck – greedy for cultural mayhem.
A friend of mine took us up to show us the suite of rooms he is occupying on the top floor of the Mandalay Bay building. The luxury apartment is furnished in expensive medium-hip style with a vaguely oriental motif. It overlooks the city at night – with a spectacular view of its bright lights reaching out for miles in every direction.
“No one pays to stay here,” he explained. This was an accommodation given free to high rollers – who come to Vegas and lose big sums of money.
In fact, you get a lot for your money in Las Vegas. Even for those who are not big spenders, hotel rooms that would cost $300 in other cities – are just $150. Low room rates are a little like penny stocks – they give the illusion of a bargain. Ordinary people feel a bit like high rollers themselves – and spend their money as if they were Midwestern Trumps or California Icahns.
Gambling is not a bad way to lose money. Our host last night told us that his father had won $500,000 gambling back in the ’60s – real money back then. And one of the casinos advertises that it returns 96.5% of the money put into its slots. That gives investors, I mean gamblers, an average loss of only 3.5%, for as long as they choose to play.
Nasdaq gamblers, by contrast, have already lost about 4 times that much this year – and none got a free room or a floor show. Las Vegas at least gives its clients the illusion that they are having a good time.
Not only do the buildings in Vegas pretend to be something they are not, the people are phonies too. One club advertises that it is the home of Elvis imitators… “endorsed by Elvis-O-Rama,” no less. Another offers people impersonating stars such as Madonna, Gloria Estefan and Charlie Daniels. Why people would want to see these stars in person, let alone their imposters, is never explained. There is even a special guest appearance by Michael Colby, whoever he is, pretending to be Ricky Martin, whoever he is.
And no entertainment fraud would be complete without someone passing himself off as Michael Jackson – a role Mr. Jackson usually claims for himself.
Meanwhile, I see that Wayne Newton is still alive in Vegas – pretending to be immune to aging. And Rodney Dangerfield is still at the Hollywood Theatre. Thank God Barbra Streisand has moved on.
There are also a number of prestidigitators and animal acts, offering their own illusions. And a number of clubs offer adult shows, such as ‘Booty Magic’ and ‘Crazy Girls.’ If I were sticking around for a few days, I would certainly want to catch the ‘Midnight Fantasy’ at the Luxor.
We had dinner last night in the House of Blues restaurant on the top of Mandalay Bay. The d?cor might be described as Early Hippie Nightmare…or Bad Trip Chic. The walls were covered with fabric from India. Bright red, orange, yellow and blue, studded with bits of glass and bauble, it reminded me of a San Francisco head shop from the ’60s. The retro-effect was heightened by incense burning in a statue of Buddha that stood at the doorway…all it lacked was Ravi Shankar on the sitar in the background.
In addition to the Buddha, there were various bits and pieces that looked as though they had been looted from Hindu temples – including what looked like an entire miniature temple, complete with elephant heads and dancing female figures. But all the major religions were represented – there was also a Madonna and Child painting hanging in the corridor on the way to the bathroom.
Another restaurant in the Mandalay Bay complex offers thrill seekers a central wine storage column 3 stories high. When you order a bottle of wine, a woman is strapped into a harness and hoisted up the column to retrieve the wine.
Everything is fast and easy in Las Vegas. A friend of mine met a beautiful young woman last night. Learning that he was a plastic surgeon, she hiked up her skirt to show the work she had done on her left buttock.
“Can you do better than that?” she asked.
“Uh…” replied my friend, taken by surprise, “I don’t know. Let me see the other one.”
Your reporter…just telling you what I see and hear…
Las Vegas, Nevada October 6, 2000
*** The wealth effect has gone seriously into reverse. The Nasdaq is down 15% for the year. In very round numbers, that’s about an $800 billion loss. And the additional cost of oil is estimated to be about $161 billion.
*** The big question, of course, is whether the drop in the tech stocks represents a buying opportunity. Al Frank, perhaps the best stock picker in America, thinks so:
“With each day’s irrational overreactions,” he says, “more and deeper bargains are created. I like to think of myself as not greedy, but I feel like I am in a going- out-of-business candy store with much or the merchandise marked way down for immediate sale. I believe that in less than a year we will look back at this time, comparing it with early October 1998 and other almost unbelievable bargain periods, wishing we had more cash or more faith in value investing to pick up more of the distressed selling.”
*** Maybe. But it seems more likely that Mr. Bear is merely correcting three years’ worth of irrational overreactions on the upside…and he has a lot more work to do before his job is done.
*** Yesterday, the Nasdaq slumped 51 to 3,472, returning to the downtrend it started four days ago. Dell already trading below its 52-week low, fell another $2.63.
*** “People are worried about a slowdown in demand for the high-priced, high-growth stocks of technology companies. They’re looking for… investments,” said an investment strategist in a Reuter’s article. What a novel idea for the stock market: investing.
*** Still, the Dow, an index where you might presumably find a few companies in which it is worth investing, closed down 60 to 10,724. 1549 stocks finished lower; 1261 higher.
*** The S&P 500 rose just shy of 2 points to close 1,436.
*** Priceline.com closed down its “name-your-price” program for gasoline and groceries… their stock closed down $3. William Shattner couldn’t be reached for comment.
*** Gold rose 40 cents… and despite the ECB’s finest intentions, the euro dropped to $.86 against the US dollar.
*** Yesterday, just days after the Fed met and decided to keep US rates unchanged, the European Central Bank rose rates by a quarter point. In the world according to Wim (Duisenberg), tighter credit would create the best conditions for “continuing robust growth” in Europe. But the hike seems to have had the immediate and exact opposite effect. What’s more, it has undone what European, American and Japanese central banks thought they achieved on Sept. 22 when they bought euros en masse.
*** Oil prices rebounded a bit from Thursday’s dip – up 35 cents to $30.88 a barrel. Prices had dropped 90 cents on Bill Clinton’s announcement that the 30 million barrels released from the US strategic reserves would be awarded to 11 lucky oil companies…
*** “I do think we’re going to have enough supplies to get through winter,” the leader of the free world, and part-time logistical-supply specialist, was reported by Reuter’s to have said on Thursday. “I’m just going to watch it every day and do what seems indicated.” In the meantime, he said he wants the oil delivered to consumers quickly.
*** Whew, thank god… Clinton is watching the oil supply and getting it delivered quickly. Imagine what all those companies – those men and women who earn their livings day-in, day-out delivering oil to consumers – would do if they didn’t have the president telling them to “get it there quickly.”
*** High fuel prices have ignited strikes in Argentina this past week, too. Strikers there won the battle to have taxes reduced. But oil demand – outstripping delivery capacity worldwide – continues to enervate tax collectors… as prices rise, it becomes increasingly obvious to consumers how much gouging is really going on – on the way to the pump.
*** This winter’s “crisis” in the industrial world may just be the beginning of huge increases in the demand for oil worldwide. According to Marc Faber, “demand for oil is exploding in the emerging economies – especially in Asia.”
*** “Crude oil demand in China has doubled since 1992 to 4.4 million barrels per day,” says Faber. “Asia including Japan now consumes almost as much crude oil as the US. But consider this: Asia has more than 3 billion people, whereas the US has a population of only 265 million. In other words, while in the US per capita oil consumption is more than 24 barrels per year, in the case of emerging Asia it is less than two barrels.
*** “If all the global healing apostles and all the Asian bulls are right,” Faber concludes, “then oil demand is likely to explode there over the next two years.”
*** Electricity and coal, too, are increasingly in short supply. The “United States GDP and electricity demand have risen dramatically together, both up 60% since 1975,” Dan Ferris tells me. “The Energy Information Administration’s current forecast says electricity demand will continue to follow GDP growth through 2020. Why is this important? Coal – king coal – has tracked these increases impressively. Since 1970, coal demand by public electric utilities has risen 173%.”
*** Ferris has selected one company in particular he believes you should own if you want to take advantage of the dramatic rise in electricity usage brought on by the information age… (
*** Yesterday Addison told you about our agreement with Grant’s. As a reader of the Daily Reckoning you’ve been invited to receive a free trial subscription to the GrantsInvestor.com website. Today, he tells me the link he provided for you… well, it didn’t work. So he’s posed an alternative. If you’d like to accept Grant’s offer, go to the GrantsInvestor home page. Where it says “Received An Invitation?” type in this reservation number: 107202149.
*** Today in 1889 the Moulin Rouge – the cabaret most famed for attracting millions of Americans who believe it is the quintessential Paris – first opened its doors. Clichy, the neighborhood in which you’ll find it… is rife with bums, neon lights and tourist buses… but there are no slot machines. More below.