Monday, September 14, 2009

Revel Casino finds interesting partner to finish construction



Atlantic City is kind of like a paradise that never quite came to fruition. It was a good idea - in fact, a great idea. Beach, gambling, shows, what more could you want from a vacation? But instead of becoming the multi-day destination for wealthy executives from New York, Philadelphia, and DC that Mr. Trump and others were anticipating, it became a somewhat seedy mecca with lots of retired bus trippers. Atlantic City was eclipsed by a much more remote destination in desert of Nevada.

But now, in the midst of a financial crisis and stiff gambling competition from Pennsylvania and now Delaware, AC is making a comeback. A comeback that begins with the opening of the $2.5 billion Revel Casino and is slated to be followed by several more mega-casinos that will bring Atlantic City to the overnight destination status once envisioned by its earliest pioneers.

However, in late 2008 a credit crunch put a halt to the project and the hopes for Atlantic City revitalization seemed less likely than beating the guy who built hotels on Boardwalk and Park Place. So where does Revel Entertainment turn when they are out of money and they already have about a billion dollars sunk into the shell of a hotel and casino with no get out of jail free card? Where else, but the Chinese government. The get out of jail free card finally surfaced, and hopefully the bank error card is not about to rear its head.

Evidently, Revel Entertainment has entered into a $1.7 billion deal with China State Construction Engineering Corp. and Tishman Construction to finish out the mega-project intended to resurrect AC from the ranks of gambling town wash-ups.

The chief executive of Revel said, "This is not about financing...It's about a construction management agreement." It's not about financing? C'mon.

Apparently seeking international investment partners is becoming more of the norm for casino owner since MGM Mirage has had a partnership with the Dubai government to co-finance the $8 billion CityCenter casino resort on the Las Vegas Strip.

I suppose China feels that the economy in the US will have passed Go a couple of times by 2011 to warrant such a monstrosity of excess. However, I doubt they'll be paying many change orders until then.

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Thursday, September 10, 2009

What really happened on September 11, 2001 and do we really need to know?

On September 11, 2001, the World shifted from what it was to what it is.

Of course, like most people on this planet, I remember it like it was yesterday when it was actually eight years ago. I remember walking out of my car at about 8 am eastern time from the parking lot of the engineering firm outside Philadelphia where I was working. I remember taking the steps up to the back entrance of the office. I also remember pausing for a moment. With obviously no knowledge of what was about to occur and forever change the World, for some reason, I paused and looked up at the sky. I thought to myself, what a beautiful day.

And it was. It was a spectacular day. Now, I'm not one to stop and gaze in wild wonder of nature too much, but something was just a little bit different here. The sky was crystal clear and it was one of those summer days where you could feel the fall air starting to creep its way in. We rarely get days that clear in the northeast, but if it would happen, September is probably the time.

By about 9 AM an admin came up to the upstairs office and asked if we heard what happened to the World Trade Center in New York. She said a plane hit the building. My first thought was that it was a private plane that went out of control, which does happen from the time to time, but once I clicked on CNN.com and saw the inferno that was the World Trade Center tower I knew this was far from a miscalculation by a private pilot.

Shortly after watching two of the most famous and symbolic structures in the World crash to the ground, all I could do was stare out the window in sadness and disbelief about what was happening to our country.

Since that day our World has never been the same. But I feel like by now people are finally starting to get over the shock and terror of the situation and start to think about what exactly happened, why it occured, and what we can do about it. This has certainly been done before but now there are several websites like http://www.ae911truth.com/ that are pushing for more answers about what happened.

But does it really matter? Does it really matter what technical reasoning is behind the near perfect collapse of the two towers as well as WTC building 7? I'm not sure, but there are people out there that feel that they deserve the truth and will not stop until they get it. And frankly, there are probably enough unanswered and poorly answered questions about what happened on 9/11/01 to warrant some furthur explanation.

So let's assume that all the planned demolition and explosive theories are hogwash, and two jetliners did in-fact bring both towers perfectly to the ground even though the melted steel theory probably could not have happened - but say it did. There is a question that still burns hotter than any jet fuel could.

Building 7, evidently greiving from the loss of his two big brothers, decides to collapse pefectly into its own footprint. Building 7 was located clear across the street with WTC building 6 in between. The National Institute of Standards and Technology attributes the collapse to fire melting a "critical" column that sparked a cascade of floors pancaking on one another bringing the whole thing violently to the ground.

If there is some kind of cover-up going on and it someday becomes exposed, building 7 will be the kicker that foiled anybody's diabolical plans. It would be like those meddling kids on an episode of Scooby-Doo, because the explanation of its collapse makes less sense than the BCS bowl system.

Heck, maybe the owner of the building, Silverstein Properties just thought the building would be too much of a pain in the ass to repair and decided to "pull" it, to collect insurance money.

The conspiracy theories going on about 9/11 are vast and they range from somewhat legitimate to completely absurd. Some unanswered questions I have, beyond how the towers in New York fell, are as follows.

-How does a plane crash harmlessly into the farmland of Pennsylvania after some apparent "struggle" in the cockpit?

-Why was the WTC cleaned up so quickly leaving little steel for testing?

-If we can see in your bedroom window from outerspace, how can we not find Osama Bin Laden in some Batcave?

-Why did the US start a bizarre search for WMD and an invasion of Iraq shortly after 9/11.

-How did cell phones work on the planes?

-What were the details of the hefty insurance policy bought by Silverstien properites when they aquired the WTC buildings in mid-2001?

The bottom line is that we will probably never know exactly what occured that day or what occured leading up to that day, and at this point, I don't really care that much. I may sign the occasional petition and tune in to CNN when somebody makes some confession on their deathbed, but otherwise I'm going to live my life, be grateful for what I have, and hope to hell nothing like this happens again.

For those that feel they deserve more answers and in-fact deserve the truth, I cannot blame them. While any answers provided will do nothing to erase what went on and could be more hurtful than satifying, in many, the curiousity burns. Those who want the truth have the right to seek it - and it should probably be provided.


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Wednesday, September 9, 2009

The best way to keep tabs on your kids


Facebook, Twitter Revolutionizing How Parents Stalk Their College-Aged Kids
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Monday, September 7, 2009

Construction unemployment declines to 16.5%, but it may not be as good as it sounds




A recent ENR article reported that the construction industry unemployment rate declined in August to 16.5% which is the lowest in eight months. This was a relatively large improvement over the 18.2% rate for July; however, this is still over twice the 8.2% rate from last year. The funny thing about these numbers is that they were not seasonally adjusted and we all know that the employment rate in construction is more seasonal than ticket sales at the Six Flags water park.

Ok, maybe not that seasonal, but there is certainly significant seasonality in overall construction unemployment and for ENR to disregard this is a bit on the amateur side. Heck, they might as well be writing a blog...The below table shows construction unemployment for the last thirteen months and seasonality is certainly evident.


Construction Unemployment Rate, past 13 Months
2009
Month / Rate in %
August 16.5
July 18.2
June 17.4
May 19.2
April 18.7
March 21.1
February 21.4
January 18.2
2008
December 15.3
November 12.7
October 10.8
September 9.9
August 8.2



Note: Rates are not seasonally adjusted.


Source: U.S. Dept. of Labor Bureau of Labor Statistics


Another little confusing report was that the construction industry lost 65,000 jobs in August which was better than the 72,000 lost in July but certainly far from an increase in overall construction employment. Now, I'm not a genius, but I do find it a bit hard to believe how you can lose jobs in an industry and yet the unemployment rate decreases. This is hard for my idle mind to understand. It seems like the only way for that to happen is if the total number of people in the construction industry, either employed or not, decreases. Which I suppose is possible (and maybe even probable) if folks decide to bail on construction entirely to become massage therapists or something, but I certainly think it should be made clear somewhere in the article.

There is also some speculation from not only myself, that ENR may try to sugarcoat the employment data in an effort to avoid panic from sponsors and advertisers of the magazine. Plus, since they are a very popular industry magazine, they probably prefer to go light on the doom and gloom. I would.

Oh well, we'll see what happens, I suppose. But the reality of this situation is probably not as bright as some may lead you believe.

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Thursday, September 3, 2009

Can we blame our economy on the repeal of the Glass-Steagall Act?


What better time, than the day before a long Labor (or lack of Labor) Day weekend to start blaming others for the problems we have.
A commenter on a recent post of mine mentioned that the repeal of the Glass-Steagall Act is the cause of the World economic crisis. My initial response to this was, what the hell is the Glass-Steagall Act?

Well, in a nutshell, the Glass-Steagall Act was actually two acts sponsored by two Democratic Senators Carter Glass and Henry B. Steagall back in 1932 and 1933. The first, passed in 1932 allocated paper currency for the Federal Reserve System, so I think it was the first step in moving off the gold standard which we eventually did in 1933.

Then the more influential Glass-Steagall Act came in 1933 which basically separated, for the first time, commercial and investment banks in reaction to the failure of a large number of commercial banks in the early part of 1933.

But then, in the middle of a gangbuster economy of 1999 two (you guessed it) Republican Congressman introduced a repeal of the Glass-Steagall Act and it was eventually signed into law in November 1999 by Bill Clinton. By repealing this Act the lines between loans, securities, and deposits were blurred and banks were allowed to pull their tricky games of bundling mortgages and selling them as mortgage backed securities. Basically, they were allowed to be the greedy crooks they are.

Before the Act was repealed, sub-prime mortgages were five percent of all mortgage lending and by the time 2008 rolled around they were approaching 30 percent. And this makes perfect sense because a bank could afford to take more risk if they could sell the mortgage and make profit that way as well. Was Bernie Madoff in on this deal?

There is actually a lot of heated debate (at least on the web) about what caused this massive downturn and there will certainly never be a clear scapegoat, but it's always fun to sit in our armchairs and blame people other than ourselves. What better way to spend Lack of Labor Day?











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China's Response to the World Economic Crisis



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Wednesday, September 2, 2009

Running a company is like being the captain of a sinking lifeboat



I really like analogies for some reason. When people ask why something happens or what it is like to be in a particular situation, I much prefer presenting a situation that others can relate to rather than get into specific details that nobody is going to understand anyway.

Not everyone may understand what it is like to run a company since they have never done it. And nor have many been the captain of a sinking lifeboat. However, I think it is pretty clear what you need to do when you are sitting in the front of a boat with water pouring over the sides and you have a couple of five gallon buckets in your hands. You start bailing water (costs) out of the boat, of course, until the buoyancy of the boat is greater than its weight and the weight of the passengers (employees).

But what do you do if you can't keep up with the onslaught of water and even with everybody bailing endlessly with five gallon buckets, the boat keeps going lower and lower into the freezing cold waters (bankruptcy)? You guessed it. You throw somebody off the boat!

But who? The heaviest? The least able to bail? Men? Women? Children? People you aren't friends with? The last one to get on the boat?

It may make sense to throw the biggest liability to the boat off first. In the case of a company this would be the one with the highest salary who doesn't produce enough to justify their cost. On the boat, this would be the person whose bailing to weight ratio is very low.

However, on the boat, like in a company, there are little alliances and politics going on. This guy is buddies with that guy, and this guy has done so much over the years, and this one is young enough to deserve some time to prove themselves. Yadda, yadda, yadda.

But we all know who will not be thrown off the boat. The captain!

There is no way the captain (business owner) is going to be taking a dive in the freezing cold waters to save those on the ship. No f'ing way! He or she will be the last thing with a pulse on that boat before it goes down. So the captain may have some tough choices to make about who gets tossed, but recognizing how to keep the boat afloat is really not that hard.

Of course the captain has to worry about a mutiny and such which may have some similar comparison to a company, but when the business owner holds the money, they might as well have access to the eject button on everybody's seat.

So what is the point of this somewhat peculiar diatribe? The point is that if you are the captain of the boat, you've got a much better chance of survival. Honestly, its really not that hard to keep a company alive during a recession as long as your company is big enough to just drop employees until you are profitable again. In organizations where the majority of costs are in their staff, like construction companies, you can easily drop the dead weight, or pick off the low hanging fruit until your boat is back above water.

It's just not that hard - as long as you're the captain.

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