If ever there is such a thing as a Vegas guy, I am it.  I was born in Las Vegas, grew up here, ran around Downtown Las Vegas with my brothers and sisters when I was a young boy, and my family and our businesses are here.  As I tell people, when it comes to Las Vegas, I know where the bodies are buried, to say the least.  Today, Las Vegas is very much the same city I grew up in, only on steroids.  The outskirts of Summerlin and Green Valley are in high demand, but so is much of the city.  There is always plenty going on, and the weather, logistical proximity to California and other natural wonders (Grand Canyon, tax policy, etc) make it a fabulous place.  When you throw in the gaming, conventions, food, and now major league sports franchises and college events which take place year round, well, there are plenty of reasons why nearly 45 million people come here each year.  If only it was not one person too many.

 

My heart goes out to the families of those who lost their loved ones last week.  I am sure your thoughts and prayers do as well. The mass shooting which took place on Sunday that killed 58 innocent people and wounded over 500 shocked the nation.  Over the last twenty years or so, the frequency of these kinds of tragedies has increased, partly because of the emergence of extremist religions and their fanatical followers.  In addition, you have to consider the psychological profile and specific background of each person who commits these kinds of atrocities.  Nearly all have deep seated mental issues which were not addressed by those close to them, or authorities in a position to monitor danger signs which may have given society a clue about what could happen. Of course, politically, there is the wack a mole issue of gun control which arises every time something like this takes place.  My own feeling is there is no reason for assault and large clip automatic weapons to be owned by ordinary citizens.  In the case of the Las Vegas shooter, he brought 23 rifles to the hotel room. 23.  Which leads us to the next issue, that of liability and culpability, and you know the lawyers are lining up to file the lawsuits.

     

The tragedy has major repercussions in the business world.  For example, the largest casino and hotel companies have already changed their check in policies at Las Vegas hotels.  Wynn Resorts now has metal detectors for guests when they arrive and you have to believe MGM and Caesars Entertainment, which each control half of the hotel rooms on the Strip, are following suit.  Live Nation, which is the largest concert promoter in the globe (full disclosure, we have owned it for many years personally and for clients) will most certainly change and tighten security procedures at outdoor festivals.  The owner of the Mandalay Bay, the MGM, is going to have to defend charges of neglect and failing to protect their guests.   It is probable that at least for hotel and casino companies, Board of Directors and management teams will hire security experts and implement procedures to prevent anything like this from occurring again.  I would imagine hotels all over the country are going to analyze room locations on the upper floors of their properties to see if they have clear access and sight lines to any major events being held in close proximity.  You have to wonder how effective these actions will be because it is hard, maybe impossible, to defend against crazy.

 

 

Personally, it was a heartbreaking week for our city.  The bright spot was the world got to see the vibrancy and resiliency of our people and how it responded with such caring and compassion to the victims and their families.  All the money in the world will not bring back those lost ones, but Las Vegas has raised nearly $10 million for those families, along with all kinds of needed supplies, as well as badly needed blood, which is especially important for those with gunshot injuries.  Our city has now adopted the term, ‘Vegas Strong’ as a way to show the world it’s character and resolve.  It was never more evident than the last five days.

 

In the financial markets, a strong Purchasing Managers Index helped stocks post another positive week, making it four weeks in a row of gains.  The September jobs report came in soft with a loss of 40k thousand jobs, no doubt partly because of the stormy hurricane season.  Costco posted a nice earnings report but the stock got sold on fears of competition in the retail space and shrinking margins.  In the oil patch, as Hurricane Nate approaches the Gulf, the largest oil platforms are shutting down, so nearly 15% of our production will be temporarily idled.  Earnings season starts in earnest next week as the largest banks usually kick things off. The S&P 500 is expected to see a 6% increase in earnings with technology and energy being the biggest factors.

 

Globally, Catalonia roiled the political world with it’s vote to leave Spain, and the central government in Spain was none too pleased.  We will know more this week about what course Catalonia takes, but most of this is due to economics as Catalonia provides for 20% of Spain’s economy.  Logistically, it is on the northeastern coast of Spain and borders France and has the second largest city of Spain in Barcelona.  The European Union is quite concerned about this situation as the rest of the member countries are watching it quite closely, as is Ireland and Scotland, which if one puts on his memory cap, is not too thrilled with the Brexit vote. Venezuela has $ 3 billion in payments due to its creditors, specifically Russia, whose largest oil company, Rosneft (20% owned by BP) just bought an oil refinery in India.  The refinery is now being supplied by Venezuela, which lost some exports to North America with the weather problems, among other things.  You scratch my back, I’ll scratch yours.

 

Politically, Mr. Trump is going to upset the Iranians and all of Europe next week by saying the U.S wants to change the terms of the deal Obama struck regarding nuclear material and weapons.  Boo hoo.  Republicans are enthused about passing a tax cut but given the whopping accomplishments during the first year in power, and the deficit hawks which have an aversion to potentially increasing our already, I suspect it is going to be tough sledding to get it done.  Rex Tillerson, clearly impressed with Donald’s intellect (allegedly called him a moron), may be on the ropes too.  On the other side, the revelations by the NY Times about Harvey Weinstien’s notorious past, ahem, leave the big wigs in the Democratic in a tough position.  I am sure many are looking to take a vacation, maybe somewhere like Las Vegas, right?  After all, we are Las Vegas Strong.   

Thanks for reading the blog this week.  If you have any comments, thoughts, or questions about the blog or investing, please email me at information@y-hc.com