Roubini says Auto Debt/Equity holders to get wiped out...

He is basically saying the auto guys (shareholders/debtholders) are toast. I'd back his position because I agree with it.

There is simply significantly too much capacity and not enough demand. The auto companies would burn through $35 billion in NO TIME at all given the 35% Y-Y decline in auto sales. They need to shut down factories, DRASTICALLY reduce costs and eliminate brands/models that simply don't sell enough units to generate profits.

"Loss Leaders" for one model is one thing but an ENTIRE brand is another. I don't understand what most U.S. auto companies brands actually stand for in the first place! Chevy is value, Cadillac is supposed to be luxury (VERY expensive domestic luxury auto company).....what does Chrysler, buick, dodge, GMC (professional built?), Lincoln and Mercury Mean?

This is another reason for my "eternal pessimism" re: the markets of late....

Dan Ross
http://www.BetterBizBooks.com

Go Elf Yourself! The Holidays have arrived folks! Share Some Smiles and Humor this Holiday Season!

Send your own ElfYourself eCards

Dan Ross
http://www.BetterBizBooks.com

Social Networking & Company Uses

About 2 minutes in the example comes up re: social media.

Dell & Starbucks are two notable examples I can come up with that are utilizing social media to re-connect with their customers and look for ways to improve their operations. When it doubt ASK THE CUSTOMER!



Dan Ross
http://www.BetterBizIdeas.com

Market Review - Nov 9th, 2008

So, as the week comes to an end, what did we see and, more importantly, what SHOULD we be forecasting?

1) Unemployment levels on two reports wednesday (challenger gray and some other private report), then one more on friday (gov't data) confirmed that unemployment is at 6.5% and 10 million people. I thought we were due for a record unemployment rate (in my generation) but this number is climbing quicker than I thought. What concerns me is the number of people who are REMAINING on unemployment (continued claims) within the data. I believe that number is at its highest levels in nearly 25years. WOW! Below is a 14 year graph I found in an AP press release. I could have pulled the data myself but I am a bit pressed for time today. I have got tons of stuff to get done in the next 1-2 weeks before family comes into town as I am sure everyone reading this does too :)





2) Obama won the election on Tuesday and the stock market slid 10% on Wed/Thurs. as the market was reacting to his tax policies and their impact? No, the lousy unemployment data came out on Wednesday, which shocked the hell out of everyone. On top of that, U.S. auto companies began pandering for $$$ on Wednesday looking for a handout from Uncle Sam. Lets remember that just about every U.S. poll had Obama winning this for weeks, maybe even months now.

Here is a picture of the situation Obama is going to be walking into.



Here is my take on the U.S. auto companies and their situation: I don't see how Uncle Sam can hand out BILLIONS to many banks that irresponsibly lent out $$$ and had senior executives that directly profited from those risky lending behaviors. The impact reaches globally. While we worry about job loss here in the U.S. as well as in industrialized nations developing nations worry that a financial crisis will turn into a HUMANITARIAN crisis where the world's poor are forgotten and die of starvation. That point should NOT be lost on everyone. I am NOT liberal but I do like to think of myself as socially responsible.

Getting back to the point, to bail out Wall Street, who are apparently going to get FAT bonuses this year, and turn a blind eye to blue collar workers is LUDICROUS.

Now, having said that, lets realize a few things about the auto industry.
1) They have been uncompetitive for 25 years and have been saying the same rhetoric for as many years. The graph below highlights this.
2) There is more health care costs in a car than steel. Some cost containment/restructuring has to happen BIG TIME.
3) Letting one of them go into bankruptcy would have a MAJOR ripple through on the economy (suppliers, cities, etc.)

Where I take exception to giving them $$$ is this:
1) What will be different? What will fundamentally change that will enable them to make money or gain marketshare back? I just don't see why we should toss good $$$ after bad $$$.



2) No company should be allowed to pay dividends. These loans shouldn't be flowing to the shareholders as these guys are LOSING $$$.

3) While giving $$$ to bankers is bad, at least we know they are doing things differently today, right? I mean the percentage of people geting approved for loans has dropped NOTABLY in this credit crisis and those that can get a loan are oftentimes having to pay a higher interest rate to get financing. RISK is now being priced into the banking system whereas it was NOT before.
K, that's about it for now......This issue just gets me IRRATE.

3) Thursday (and throughout the week) was the first REAL numbers of retail sales for October. We also had Cisco comment about October sales. They were the first technology comment to really comment on a full month of October sales and are regarded as an industry "bellweather" company.

* Auto sales were off 25% + for the auto industry.

* Wal-mart was up 2.8% month-over-month. Quite impressive

* Most department store chains were down 10%-20% based on comparison store sales (comps.) This Christmas sale season is really starting to look bleak quickly



* I also noticed that Walmart was running some SERIOUS sales on Saturday a.m. such as a Compaq Computer for $299 and a 46" LCD for $799.

So we found out that consumers continued to take on debt in September but they must have REALLY cut back in October. More comments after the graph below

Americans are clearly becoming more pessimistic as a result of the loss of jobs. The Reuters/University of Michigan preliminary index of consumer sentiment fell to 56.3 in November, the lowest level since 1980, from 57.6 the prior month, according to the Bloomberg survey median.

4) Finally, and it would be RIDICULOUS of me to neglect this. Oil is in the low 60s and many people here in the loan star state are finding regular unleaded as low as $1.90 a gallon now. I've seen $2 - $2.05 being quite common but a few are lower. Why is gas 40 cents more now for premium vs. 20 cents before? I have noticed a widening of that gap in the last few years.

Good luck to all in the next week. I hope everyone has a wonderful holiday season ahead.

Dan Ross
http://www.betterbizideas.com/

Guy Kawasaki on his new Book

Guy was the marketing guy behind the first McIntosh and now runs his own VC company. He was an Apple Fellow and helps entrepreneurs now. He has written over 8 books in his years and this is basically an "entrepreneurs manual". At 500 pages it might take some time to read! Probably full of tons of useful info. though.



Dan Ross
http://www.betterbizideas.com

The Sequoia “RIP: Good Times” presentation: Here it is

For those seeking info. on private equity Venture Capital (VC) is one of the biggest components. This is "value add" type of creation, in my opinion. They take people with an idea, give them $$$ and management tips, and then watched their garden grow.

I don't see as much "value creation" in private equity as I do in VC work. Too much private equity (LBO stuff) is financial engineering/optimization. While some companies are PHENOMENTAL at changing management structures, practices, etc. they tend to be more evolutionary vs. revolutionary.

Sequoia Capital on startups and the economic downturn

View SlideShare presentation or Upload your own. (tags: depression recession)

Inflation vs. Deflation - Let the debate begin! Small Businesses and Deflation

Let the debate begin.

I for one, think Deflation and Inflation will be fighting for quite awhile. Deflation is here and it is getting NASTY in a hurry (oil from $140 a barrel to $60 in 4 months?) but the governments of the world have the printing presses going OVERTIME to avert such a situation. So, as the printing presses go wild to prop up the economy (and add inflationary worries) get prepared for WILD, VOLATILE markets. Get your employees and customers prepared for WILD, VOLATILE markets. If you look like you know what is going on you are 20 steps ahead of the next business. Below is a video from yahoo discussing the situation. Below are some helpful tips for businesses to succeed in this environment.

>

Six ways for small businesses to prepare for deflation:

1. Scenario Planning: This is what successful, large enterprises do LEAPS and bounds better than smaller enterprises. Typically because they have resources to dedicate SOLELY to this purpose. They develop action plans based on various changes to their industry and look for threats and opportunities based on how they see things playing out in their industry. How will input prices and market forces (like interest rates) impact their company/industry. Which companies have too much debt or are poorly hedged with commodity exposures? Which management teams have depth and can survive an exodus of talent given a volatile market? Deflation may not cut across all sectors equally since commodity prices swing more wildly than semiconductor prices. How will your company adapt?

2. Inventory Reductions: Imagine buying oil as an input for your business at $140 per barrel in July. Today it is $60 per barrel. The business that has to sell its products at $140 is either going to sell at a loss or sell for a MUCH higher price than the business that bought at $60 per barrel. The raw materials cost can destroy a business with such volatility. As such, you need to operate your business on the Just-In-Time (JIT) inventory model or learn to order smaller amounts in shorter cycles to take advantage of dropping prices and optimizing profits.

3. Avoid Commodities: Have you seen oil come down from $140 + in July to the low 60s recently? You can count corn, soybeans, natural gas, etc. in that same bucket/set of issues. Commodity based businesses will have MORE volatility in the next 12-18 months than you can shake a stick at. You need to reposition your business as a niche marketer of high value goods. You need to be selling on VALUE and not on price. How can you add value?

4. Increase Productivity: Not all deflation is negative and wealth destroying. Deflation can benefit small business by making technology affordable. In such an environment you would be well served to buy technology boosts the productivity of your company. This should enhance the bottom line and give you more flexibility with your financials.

5. Cut Costs: Understand which costs are truly adding value in your enterprise. Which costs can be upgraded at the same cost? (ie. better quality) At the same time understand what costs are "nice to have" goods and services. Are you getting maximum productivity in your employees? Is there "dead weight" and which employees truly go "the extra mile" for your customers.

6. Review Contracts: This is a HUGE concern, especially for manufacturing companies. Holding a long-term contract during a period of dropping prices locks you into a high price point. On the contrary, negotiate longer contracts with clients if at all possible to hold your margins and profits.

Dan Ross
http://www.BetterBizIdeas.com/

Stock Market soars 10% but is it for real? Interesting Charts below...

Today the Dow closed up over 900 points or 10% today. Other indexes (S&P and Nasdaq) were up over 10% as well.

GM & Chrysler are asking for $$$. Ford as well.

Consumer confidence hit a new low today. PLUMMETING well below market forecasts, yet the market finished up significantly. This is nothing short of ludicrous to me. The consumer is 70% of the economy and we haven't seen them pull back like this, without a CONSUMER stimulus package, in AGES. Things are going to get worse before they get better.......Just my 2 cents.

The Fed started their meeting today. They'll announce their rate cut tomorrow. If they don't announce a cut to 1% on the Fed Funds Rate the market will sell off. I have posted two graphs of the S&P 500 at the bottom of this email.

While today's move of 90 + (10%+) on the S&P 500 was a HUGE move I haven't seen the market close above, and then stay above, the 20 day moving average in ages. Once a stock or index moves above such a threshhold they typically pop up some more and then re-test going below the average, on the upswing (bullish cycle.) The market still has 32 points to get to the 20 day moving average from the chart below. I'll get more optimistic once the market gets above and then stays above that average for another 30 days. By then the market might have a chance to make a run at a longer-term bearish indicator like the 20 week (100 day) moving average. The 20 week moving average is still NOTABLY higher at 1188 but moving downwards quickly.

The Bottom Line: I think this downtrend is still in full effect for the time being. I will sit on the sidelines with my "powder dry." I don't see a reason to put a bunch of my 401k to work and take it out of money market funds right now....



Dan Ross
http://www.BetterBizIdeas.com

Supply / Demand gone upside down in China?

First off, China finds some serious amount of natural resources in their country. It will take time to be mined & shipped (needs infrastructure) but it does have global implications for supply/demand for natural resources over the long-term. They want to import less and use more domestic sources of commodities.

http://english.people.com.cn/90001/90776/90884/6520297.html

Since the beginning of September, major Chinese steel manufacturers have announced to slash production upon falling steel prices on the domestic market.

http://english.people.com.cn/90001/90778/90857/90860/6517391.html

The Aluminum Corporation of China Ltd. (Chalco), the country's largest aluminum producer, said on Wednesday it would cut production in line with falling demand and prices. The total capacity reduction would be 720,000 tons a year or 18 percent of the company's annual production, said a company statement.

http://english.people.com.cn/90001/90776/90884/6520346.html

My take: It should be noted that the Chinese were GOBBLING up every conceivable natural resources before the Olympics to feed their economy. Since then, they have really quieted down and, as supply/demand levels are coming back to true equilibrium, the volatility in the commodity and financial markets has been STAGGERING.

I personally think they got wind of the slowing economy and put the brakes on their purchases of raw materials. After all, they would bring in the raw materials and export products worldwide. Their economy is 50% export right now from what I have read. They are trying to stimulate internal, domestic demand to offset the weakness in their export economy. I expect quite a few more rate cuts in China over the next 1-2 years, which will stimulate their consumer economy at some point.

Dan Ross
http://www.BetterBizIdeas.com

China: Significant Policy Change in Property Market - loosening of credit to increase domestic consumption

So the number of real estate deals is down 72% Y-Y during their holiday period. Some people are now taking a "wait and see" approach and are staying on the sidelines. People say that the remaining potential buyers are "marginal" buyers who have to stretch to afford a home.

http://english.people.com.cn/90001/90776/90884/6510493.html

The government is easing credit requirements to buy property. This should help to sustain real estate prices. Please note, however, that Chinese finance rules say down payments of 30% are being reduced to 20%. I guess they never heard of our 0% down financing here stateside and the wonderful results it has generated :)

http://www3.uobgroup.com/assets/pdfs/Flash_1023A.pdf

Source: http://english.peopledaily.com.cn/200208/09/eng20020809_101182.shtml

Then there is the rumor of U.S. Investment banks selling their chinese owned properties. Chinese politicians/developers are worried that this may cause a drop in commercial real estate values.

http://english.people.com.cn/90001/90776/90884/6511242.html



My take: There are a few investment plays on China real estate.

XIN - XINYUAN Re: Holdings (real estate development) - It focuses on developing residential projects consisting of multiple residential buildings that include multi-layer apartment buildings, and sub-high-rise or high-rise apartment buildings, as well as auxiliary services and amenities comprising retail outlets, leisure and health facilities, and kindergartens and schools. The company also develops small scale residential properties; and leases certain properties, including an elementary school, a clubhouse, a kindergarten, and parking facilities, as well as offers real estate related services, including landscaping and installing intercom systems. As of December 31, 2007, it completed 14 projects with total gross floor area (GFA) of approximately 1,001,199 square meters; 7 projects with a total GFA of 1,069,144 square meters under construction; and 6 projects with a total GFA of 1,452,013 square meters under planning. The company was founded in 1997 and is headquartered in Beijing, the People�s Republic of China.

EJ - E House Holdings - Basically a real estate broker. More volume = more profits (once they cover their costs) This is the safer play on chinese real estate development. It primarily offers real estate agency services to real estate developers of residential properties. The company also provides real property brokerage services, and intends to provide listing and brokerage services, which include sales and rentals. E-House (China) Holdings focuses its secondary real estate brokerage services in three metropolitan areas within China, including Shanghai, Wuhan, and Hangzhou, as well as in Hong Kong and Macau. Its real estate consulting services include land acquisition consulting and real estate development consulting; and other consulting services to investors interested in purchasing businesses with land or other real estate assets, as well as to banks, real estate trade associations, and governmental property and planning agencies. The company�s real estate information services comprise the CRIC system, which supports its primary and secondary real estate services, and consulting and information services. The CRIC system consists of real estate sales data in China covering information on land, residential, office, and commercial spaces, as well as real estate related advertisements. The company was founded in 2000 and is headquartered in Shanghai, the People�s Republic of China.

Dan Ross
http://www.BetterBizIdeas.com/

Will lower oil prices cause social unrest and terrorism to rise? What about the impact to global capital markets?

Countries have a tendency to increase their government spending when times are good.

Governments would be best served by undertaking projects that have a short or defined time span / implementation. These would be capital spend projects like roads, bridges, power plants, water treatment centers and other "infrastructure projects." This way, when revenue sources fall they can cut their spending to get their budgets balanced and not run protracted deficits. Where governments get into trouble is when they increase spending notably by increasing social security benefits or other "welfare" type of projects that generate year-after-year (continual spending). When the revenue source declines the governments either have to run a deficit, cut the spending to the chagrin of those who become dependent on the services (who vote as well) or increase taxes. At some point the American taxpayer/consumer/economy is in for a BIG awakening due to continually rising national deficits and a RIDICULOUS national debt.

Argentina's economy is in trouble right now for this very reason. They spend too much each year on continual spending and can't pay back their loans.

In the gulf region (Saudi Arabia, UAE, Qatar, Kuwait, Bahrain and Oman) many governments are at risk of running deficits in 2009 due to a falling price of oil. Oil was $140 + a barrel in July 2008 and has fallen as low as the high 60s in recent days.

The rgemonitor ( http://www.rgemonitor.com ) ie estimating that the lowest breakeven oil price that would bring 2008-2009 budgets into balance "is in Saudi Arabia ($30/bbl), followed by UAE ($40/bbl) and Qatar ($55/bbl). Therefore, that means that Saudi Arabia can maintain the current level of budget spending even if the oil price were to fall to $30/bbl." However, this year Saudi Arabia is undertaking many capital projects and, as a result, they need oil to stay above $49/barrel in 2009 to avoid running a deficit. Apparently Merrill Lynch is estimating the average breakeven for GCC is $50/bbl. Bahrain and Oman are at risk of running 2009 deficit if the oil price remains around $70/barrel (IMF).

Another thought: If Saudi Arabia runs a deficit what will the impact be to the global capital markets? The Far East and Gulf Regions have been the biggest investors in the last few years, running large surpluses each year. Who will then have $$$ to invest in re-capitalizing banks or buying U.S. government paper? The demand for U.S. paper would decline in such an event and who would finance our deficits? This would lead to excess paper supply and the U.S. dollar falling in value. This, in turn, could cause inflationary pressures to come back.

Another thought (v2): Venezuelan President Hugo Chavez said Wednesday that his nation could withstand the global financial crisis even if the oil price falls to 55 U.S. dollars a barrel, Venezuela's national TV channel reported. On Tuesday, Economy and Finance Minister Ali Rodriguez Araque presented to lawmakers the Venezuelan budget for 2009, which was formulated based on an average oil price of 60 dollars per barrel. U.S. policymakers have to love this as falling oil will cause more social unrest in Venenzuala and Chavez has less free $$$ to hand out to other Latin American countries to support his rhetoric against the U.S.

Dan Ross
http://www.BetterBizIdeas.com

Great Observation by Cramer - Which companies saw this coming?

Dan Ross
http://www.BetterBizIdeas.com

Updated Las Vegas info.

Not sure if everyone is aware of this:

Boyd Gaming Corp. recently postponed work on its $4.8 billion Echelon resort in Las Vegas. The Las Vegas-based company, whose ratings were lowered by Moody's last week, also suspended its annual cash common dividend. They have a steel framed building up and that is all that will be completed for the next 6 to 12 months. Bet Vegas gov’t officials were happy to see that! NOT!

MGM Mirage announced wednesday they weren’t going to give out bonuses & their ratings were cut. Meantime, Kirk Kerkorian sold his Ford stake to protect his majority stake in MGM. Rumor has it that he needs to raise more $$$ to finish the CityCenter project so he’ll put $$$ to work with foreign investors.

Then, wednesday as well, LVS sands says that they need to raise a BOATLOAD of $$$$ ($2 billion) to finish their Macau (Cotai strip) property. Adelson, the CEO, thinks banks over there will be more receptive than U.S. banks. The Cotai Strip project in Macau, due to be completed in 2011, is to include retail malls plus hotels that will be operated by some of the biggest names in hospitality, such as Sheraton, St. Regis, Hilton, Conrad, Shangri-La and Traders.

http://biz.yahoo.com/ap/081022/las_vegas_sands_adelson.html?.v=1

Dan

Microsoft getting aggressive with Chinese Copyright Infringement

http://english.people.com.cn/90001/6518941.html

My take/thought: How does a U.S. or European based business, that pays for authorized, legal software, compete with a Chinese company that buys cheap, fake (stolen) software? It lowers their overall cost of doing business. Labor is already cheaper and it hurts the competitiveness of nations in competing in the global economy. That is the truth!

This boils down to:

(1) Microsoft wanting to be paid for their innovations and

(2) Countries/businesses being able to compete with each other on a global basis.

Those people who have their screens turn black can buy legitimate software from an approved microsoft re-seller and effectively push out of business non-legitimate software vendors. People who bought illegal software need to report such sellers to the authorities, who then need to punish/jail such offenders for THEFT.

Now, there are other options for those that DO NOT want to pay for Microsoft's "expensive" products. Go use Google's software or other software. See how it works for you/them in the global workplace. It DOES NOT work well since everyone else has Microsoft. Once they became the "global standard" the value of their sofware increased as the number of people on the network increased. The only people who can really utilize such software are people that use it for their own purposes or don't do business on a global scale, therefore not sharing their spreadsheet/documents with others, so that formatting doesn't become an issue.

Update: With Microsoft's announcement sales of Kingsoft software are up 50% in China. Over 100,000 people are now using their software and they are publicly traded in Hong Kong for those interested. Still a very, very small number but it will be worth watching over the next 5-10 years. I find the chinese culture is very patient, thinking in years and decades whereas the American culture is very short-term oriented, thinking days, weeks, and months (sometimes years.)

http://english.people.com.cn/90001/90781/6520298.htmlhttp://media.corporate-ir.net/media_files/irol/18/189890/news/Announcement2008InterimReport.pdf

Recession growing in more states - Great Video

Nice graphical representation of what is going on in the economy. Texas is fairing well (thank god) but CA and FL are getting POUNDED based on what I hear/see.

Here is another great video re: are we in a recession or not....



Dan Ross
http://www.betterbizideas.com/

Argentina Throws the Markets in the Crapper Today

So Japan was down 7% pre-market. Bottom line there is that the Japanese Yen, their currency, is SOARING vs. the EURO and U.S. $$$ so their exports and economy are going to get pinched in a big way. Either they sell for less profits overseas or increase prices. Their economy is PURELY export related. Their economy is NET savings (they loan their $$$ to the U.S. via gov't bonds), another reason why their currency is appreciating.

Then, as the day went on we get word that Argentina privatizes their pension funds for $30 billion. This is VERY interesting given that they are negotiating to re-structure their debt. Over 10,000 layoffs were announced today as well. Then the stock market started sliding and finished down 5% on the day.


Watch CBS Videos Online

http://news.yahoo.com/s/afp/20081022/bs_afp/financeeconomyargentina;_ylt=AjjrskeJsxVE0RGrFxe4LZCyBhIF

So here are a few other thoughts. Let me know re: your opinion.

1) Spain is a big trade partner/banker of Argentina, going back to colonial days. Their banks are in danger if Argentina defaults on $150 billion in debt. Seems like a reasonable thought/concern.
2) What is Citigroup's exposure?

3) I keep watching this video and think, the bank he won't mention by name is Citigroup. BAC is 10% international revenue, JPM about 25%-30% and Citigroup about 50%. If Citigroup goes belly up the counterparty risk WORLDWIDE would go through the roof and the entire world banking system could seize up......Yikes! I keep thinking....Citigroup, Citigroup, Citigroup..... Your thoughts?


Watch CBS Videos Online

I also need to publish this link re: someone mentions Citigroup and a few line items in their financial statements that were published earlier this year. Basically they had TONS of assets subject to being written down.

http://www.moneyshow.com/video/video.asp?t=4&wid=608DA58E31394BE0AAD5E89435E2FCBB1

Dan Ross
http://www.BetterBizIdeas.com/

MGM Not Giving Bonuses this year / Ratings Cut

I've been saying for awhile that Casinos (namely Vegas) were going to be trading down and impacted negatively in a big way ever since I went there in January and to Tahoe in February.

http://betterbizbooks.blogspot.com/2008/04/moreless-freebies-in-2008-from-casinos.html

To me, the rooms were too expensive, the food was too expensive and the freebies/comps. were going down the toilet. I expect a certain level and what I got vs. prior years was same quality and MORE expenive due to high occupancy rates. Given that the consumer was stretched, that the economy was declining, I was cautious about Vegas.

Well, yesterday MGM announced they were unlikely to give performance bonuses due to weak results. Then today their rating got cut and the stock price got pummelled. At the same time, Kirk Kerkorian announced he was going to sell his Ford Stake at a HUGE multibillion loss yesterday. Jim Cramer seems to think it is a defensive move given the decline in MGM stock and Kirk's 50%+ stake in the company. If he needs to raise capital to complete the 4800 hotel room / 2800 condo/hotel room City Center Project he will need to inject capital of his own into the company to maintain that majority ownership.



http://www.cnbc.com/id/27293136/?for=cnbc

As you can see from the stock charts neither have done well and, with things getting worse in the economy, I don't see things picking up anytime soon.



MPEL, for what it is worth, said they have enough cash on hand to finish the first two phases of their ENORMOUS project in Macau, City of Dreams. Their stock continues to languish. MPEL shares have bounced off their lows at $2.30 to close today at $4.15 (nearly a 100% bounce). I am still taking a "wait and see" attitude on MPEL as I don't see the stock price bouncing notably higher if MGM keeps on tanking.

http://biz.yahoo.com/ap/081017/melco_crown_dreams.html?.v=1

Last week a major casino developer announced they were going to stop progress on a casino project in Vegas. Most of the steelwork is done but they still are delaying it by 6 months to a year due to funding concerns and overall concerns re: the economy and filling rooms, etc. When casinos aren't getting finished in Vegas you know things are tough!

Oh, and today Harrahs announced completion of the 6th tower at Caesars Palace and they are finishing up their convention center there as well. Caesars, from what I have been told, is the most expensive casino ($$$ spent developing/renovating) in all of Las Vegas. It is regarded as the PREMIER property in Vegas for Harrahs.

http://biz.yahoo.com/ap/081021/nv_harrah_s_caesars_palace.html?.v=1

Dan Ross
http://www.BetterBizIdeas.com/

Joseph Stiglitz on the Credit Crunch

Free of charge on ITUNESU. It is one of the most popular downloads.

I guess he was speaking at Oxford in England when this was recorded.


http://deimos3.apple.com/WebObjects/Core.woa/Browse/ox-ac-uk-public.1628072299.01628072304.1703858239?i=1409537071


Dan Ross
http://www.BetterBizIdeas.com

Video Game Sales to Avoid Economic Slowdown?

The general investment thesis behind video games is as follows (no particular order);

1) More gamers due to multiple generations of people that have played video games. Really since Atari in the 80s the number of "gamers" has been growing. As you start to think about Chinese/World Youth you understand that there are HUGE growth opportunities in the next 10-20 years in this segment.

2) TIME. I cannot empasize this enough. In the video below, the mom's explanation is what it is all bout. She buys a video game vs. taking her kids to a movie because a movie only lasts 2 hours and then it is done. The kids will be entertained for days so the cost per hour of entertainment is LESS with video games.

3) Dropping console prices = more units sold.

4) More games are being produced, which will stimulate demand. Now that the game developers have an idea what consoles consumers like, and the associated demographics/development costs/sales expectations with each console, they will make their investments accordingly.

My Take: I think this segment of the economy will be LESS impacted than other sectors this Christmas season. I think the consumer is REALLY pulling back the reins right now and that overall sales data will come out in early November. People think it will be bad but I think it will be WORSE than they think. I hate being pessimistic :( I think patience is the name of the game when it comes to investing right now. Cash is king

Dan Ross
http://www.BetterBizIdeas.com/

Economic Slump is hitting China workers now

China's exports are drying up due to a weakening economy. Mattel and others don't need as many factories working given rising inventories and weakening demand.

I have to wonder if all the Chinese scandals are catching up to the economy as well. Toys with lead paint a few years ago, milk this year.....

Dan Ross

http://www.BetterBizIdeas.com