I was a long term bear on US casinos in 2007, more on the fact that I thought Las Vegas exemplified all the things of American consumerism that were going to change - namely excess. (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) I was not quite as up to speed on the extreme debt exposure of MGM Grand (MGM) and Las Vegas Sands (LVS) in particular, which served to threaten bankruptcy at a point. (Oct 28, 2008: Las Vegas Sands is now a $4 Stock) At their worst these stocks fell some 98%+ from peak to trough but it is becoming clear that these two have become "too big to fail"... with Las Vegas Sands ahead of pace of MGM Grand in fixing its situation. I was under the mistaken assumption that banks would come collect their collateral but with zero major homebuilder bankruptcies, only 1 major public commercial REIT, and zero Las Vegas casinos it seems leniency is the new way of the US world.

So while I still think Las Vegas as a tourist attraction, will take much time to get back to "normal" and the casinos are effectively handing away rooms (I literally saw a deal from Burbank, CA to Wynn Resort ON PRIVATE JET including HOTEL for just over $500), survival no longer seems to be as much of an issue. (Dec 23, 2008: Wynn Encore Casino Struggling to Fill Rooms During Launch) If in the greatest collapse of housing and commercial real estate almost none of our public companies in those sectors go bankrupt it appears "creative destruction" is something from a bygone era.

In this space specifically we've noted some amendments of credit terms (Apr 22, 2009: Wynn Resorts, Las Vegas Sands Amend Credit Terms) and it continues almost monthly.