Leaving Las Vegas.... Literally
With apologies to Sheryl Crow one of the areas we've been targeting since 2007 (
Oct 3, 2007: A Top in Casino Names? Wynn and Las Vegas Sands) (
Nov 1, 2007: China Can't Save Las Vegas Sands - It's Getting Crox'd), before it was fashionable to pick on the Strip is showing some breakneck degradation. Just as I said back then people were in denial of what is coming down the road, I continue to believe the same denial is there today; it has just shifted to different sectors. I do love watching some of the most famous commentators now claiming they warned you all along during their TV rants (laughable) Many of the "I told you so" folks were denying we were in a recession in early 2008 because "the data did not say so". Or saying once gas prices fell the consumer would be back last summer. Now they clearly predicted this plight? Revisionism at its best.
The cult of American consumerism continues to be "right sized" (
Apr 14, 2008: Things I've Been Negative on Since Fall 2007)
I cannot continue to stress enough how wrong analysts are on 2008 estimates and any company with focus on the US consumer is simply going to be blown apart in due time - if not this earnings season - then in the future. We are told daily how "cheap" these stocks are; this is based on the fictional body of work called "analysts 2008 estimates". Don't believe the hype. The subprime nation (us) is in trouble. Consumers make 70% of GDP. Its a consumption culture where the consumer is being drowned in negative wealth effect from housing, inflation from the Federal Reserve/global forces, and underemployment if not outright unemployment.
(Apr 2: The Underemployment Rate is Rising) It is bad out there in the bottom 60% and it's creeping up to the formerly immune 20-40 percentile as well. It is the perfect storm and I will utter the most dangerous words a financial commentator can ever utter - it *IS* different this time.
People were asking me for individual names for shorts - I continue to
stress the same themes I've stated since last summer - anything consumer related or based on American conspicuous consumption - it will all go. These stocks bounce every time the bulls pass their... well bull...
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