A Stern Glance

Business Wire will host a a free luncheon on The Impact of Social Media on Traditional News Reporting on March 11, 2010.  John Edwards of Las Vegas Review Journal, Steve Green of Las Vegas Sun and George McCabe of B&P Public Relations will provide their own unique insight on the impact that social media has had on traditional news reporting.

11:30 am – 12:00 pm: Networking & Lunch
12:00 pm – 12:45 pm: Program
12:45 pm – 1:00 pm: Q & A
Location:
Gordon Biersch Las Vegas
3987 Paradise Road
Las Vegas, NV 89169

To register, please RSVP
to billy.russell@businesswire.com

Construction spending was $884.1 billion in January 2010, 0.6% below December 2009 and 9.3% below January 2009.  Construction spending is 27.1% below its March 2006 peak.

Personal spending  jumped by a larger amount than expected in January but Americans’ incomes barely budged as millions of Social Security recipients did not get their usual cost of living boost. The weak income growth could depress spending in the months ahead, acting as a further drag on the fragile economic recovery.

The Commerce Department reported today that personal spending rose by 0.5 percent in January, slightly better than expected. But incomes edged up only 0.1 percent, significantly lower than the 0.4 percent gain that economists had expected.

The income gain was the weakest showing in four months and raised more concerns about whether consumers will be able to keep spending at a sufficiently strong pace to support an economic rebound. Consumer spending is closely watched because it accounts for 70 percent of total economic activity.

The 0.1 percent rise in incomes was below the 0.4 percent gain that economists had expected. The weakness came even though private wages and salaries were up by $16.1 billion at an annual rate, compared to a $2.3 billion gain in December.

However, households did not get the usual boost they see from the government’s annual cost-of-living adjustment for Social Security and other benefits. The 50 million recipients of Social Security saw no gain at all in Janury because of low inflation, the first time that has occurred in more than three decades. In January 2009, incomes had risen at an annual rate of $41.1 billion because of that year’s cost of living adjustment.

For the past two years, income growth has been held back by job losses caused by the worst recession since the 1930s. For all of 2009, personal incomes actually fell by 1.7 percent, the weakest showing since the Great Depression year of 1938, when incomes had fallen by 7.7 percent.

In January, after-tax incomes actually dropped by 0.4 percent, the biggest monthly decline since last July.

With after-tax incomes falling as spending increased, the personal savings rate dipped to 3.3 percent in January, down from 4.2 percent in December. For all of 2009, the savings rate had risen to 4.3 percent, the highest annual savings rate since 1998.

Inflation continued to be a no-show. A price gauge tied to personal consumption edged up a small 0.2 percent in January and was unchanged when volatile food and energy prices were removed.

Feb. 26, 2010
Copyright © Las Vegas Review-Journal

No increase expected for gasoline prices

By JOHN G. EDWARDS
LAS VEGAS REVIEW-JOURNAL
Government predictions about the price of crude oil suggest that the cost of gasoline should remain relatively flat this year and increase about 5 percent next year, an economist with the American Petroleum Institute told a meeting of the CEO-CFO Group on Friday.

The forecast was based on crude oil price predictions by U.S. Energy Information Administration. The administration projects that crude will stay around $80 a barrel this year, slightly more than Friday’s closing price of $79.66 a barrel price, with regular gasoline going for a national average of $2.70 gallon.

The administration forecasts crude prices will rise to $84 a barrel next year.

John Felmy, chief economist for the American Petroleum Institute, made the observations during a speech to the CEO-CFO Group at Lawry’s The Prime Rib.

Antitrust laws prevent Felmy from predicting energy prices, but he said gasoline prices closely correlate to crude prices. So if crude prices are stable, it follows that gasoline prices probably will be as well.

Refiners lost money on gasoline production in the fourth quarter of last year, he said. “It looks like their margins are going to remain about constant.”

Retailers mark up gasoline about 10 cents a gallon but must deduct the costs of doing business from that, he said.

The price of gasoline affects the costs of Californians who drive to Las Vegas. It is also a key factor in consumer spending.

“Higher energy costs are a drag on the economy,” Felmy said.

The average U.S. household uses 850 gallons of gasoline a year. So if the price increases by $1 a gallon, that’s $850 less the family has to spend elsewhere, he said.

“If (gasoline) prices go up, that money doesn’t get spent on other things,” Felmy said.

On the other hand, the demand for diesel closely tracks changes in gross domestic product. Diesel prices seem to suggest that the nation’s GDP is slowing this quarter in comparison to the last three months of 2009, he said.

The possible switch to electric hybrids and plug-in electric vehicles will be slow, based on experience, he said.

From the discovery of oil and its replacement of coal as the No. 1 fuel in the country, 90 years has passed, he said.

“It’s going to be decades” before the number of new electric-car sales exceeds those of gasoline-powered vehicles,” he said. “We are going to use oil for the foreseeable future.

“So, if we’re going to use it, we might as well produce it here.”
 
Find this article at:
http://www.lvrj.com/business/no-increase-expected-for-gasoline-prices-85649212.html

 Sales of previously occupied homes took a large drop for the second straight month in January, falling to the lowest level since summer. It was another sign the housing market’s recovery is faltering.

The National Association of Realtors said sales fell 7.2 percent to a seasonally adjusted annual rate of 5.05 million from a downwardly revised pace of 5.44 million in December.

The results, the weakest since June, were far worse than forecast. Economists expected a slight increase to a rate of 5.5 million.

Sales declined throughout the country, falling the most — nearly 11 percent — in the Northeast. Sales fell by about 7 percent in the South and Midwest and by more than 5 percent in the West.

Potential buyers have left the market this winter because the deadline for a tax credit for first-time buyers was extended. It had been set to expire on Nov. 30, but Congress extended the deadline until April 30 and expanded it to existing homeowners who move.

The median sales price was $164,700, unchanged from a year earlier and down 3.4 percent from December.

The inventory of unsold homes on the market was down slightly at 3.27 million. That’s a 7.8 month supply at the current sales pace, up from a recent low of 6.5 months in November.

The bleak report comes after the government reported Wednesday that sales of newly built homes plunged 11 percent to a record low in January. The report, which measures signed contracts to buy homes rather than completed sales, also came as surprise to economists.

The main question hanging over the housing market this year is whether interest rates will rise, and by how much. The Federal Reserve’s $1.25 trillion program to push down mortgage rates is scheduled to expire on March 31.

The economy rocketed ahead at a 5.9 percent pace in the final quarter of 2009, stronger than initially estimated. But the growth spurt isn’t expected to carry over into this year.

The fresh reading on the nation’s economic standing, released by the Commerce Department TODAY, was better than the government’s initial estimate a month ago of 5.7 percent growth. It would mark the strongest showing in six years.

Even so, it didn’t change the expectation of much slower economic activity in the current January-to-March quarter.

Roughly two-thirds of last quarter’s growth came from a burst of manufacturing — but not because consumer demand was especially strong. In fact, consumer spending weakened at the end of the year, even more than the government first thought.

Instead, factories were churning out goods for businesses that had let their stockpiles dwindle to save cash. If consumer spending remains lackluster as expected, that burst of manufacturing — and its contribution to economic activity — will fade. Continue Reading »

Wynn Resorts Ltd <WYNN.O> on Thursday reported its quarterly net loss narrowed amid a 36 percent jump in Macau revenue and a full-quarter contribution from its second Las Vegas resort.

Wynn, which last October raised $1.8 billion via a Hong Kong listing of shares in Wynn Macau Ltd <1128.HK>, reported a net loss of $5.2 million, or 4 cents per share, compared with a year-earlier net loss of $159.6 million, or $1.49 cents per share.

Adjusted for property charges and other items, the Las Vegas-based company posted a profit of 8 cents per share, which beat the average analyst estimate of 6 cents a share, according to Thomson Reuters I/B/E/S.

Earnings before interest, taxes, depreciation and amortization rose to $196.8 million from $127.5 million.

Quarterly net revenue rose to $809.3 million from $614.3 million.

John Felmy will be speaking to the CEO-CFO Group on February 26th. He is the Chief Economist at the American Petroleum Institute (API) where he oversees economic, statistical and policy analysis on oil. Felmy will be talking about how high gas prices would affect Las Vegas. 
 
Date & Time:  February 26th, Friday, 11:30 Check-in, 12 PM Lunch 
Place & Cost: Lawry’s Prime Rib, Members $30 and non-members $40.

Orders to U.S. factories for big-ticket manufactured goods shot up in January by the largest amount in six months, but the strength came from a surge in demand for commercial aircraft.

Demand for autos, machinery and a host of other products fell last month, indicating manufacturing is still facing hurdles that could slow the economic recovery.

The Commerce Department reported today that orders for durable manufactured goods jumped 3 percent in January, the biggest increase since a 5.8 percent increase last July. However, excluding transportation, durable goods orders fell by 0.6 percent, a weaker showing than economists had expected.

The drop in orders excluding transportation followed solid gains of 2 percent in both December and November.

For January, the 3 percent rise in overall orders was led by a 15.6 percent increase in demand for transportation products. That gain was propelled by a more than doubling in demand for commercial aircraft, where orders jumped by 126 percent. This offset a 2.2 percent drop in orders for motor vehicles, a sector that continues to face tough times.

The 0.6 percent drop in orders outside of transportation reflected a big 9.7 percent plunge in demand for machinery, which offset a 1.9 percent increase in orders for primary metals such as steel.

Orders for non-defense capital goods, excluding aircraft, fell by 2.9 percent in January following solid gains in the two previous months. This category is considered a proxy for business plans to invest in new equipment to expand and modernize.

For all of 2009, orders for durable goods fell by a record amount as U.S. manufacturers were battered by a deep global recession.

The hope is that improving outlooks in the United States and globally will make 2010 a better year for U.S. manufacturers. American companies are benefiting from a rise in demand for U.S. exports, reflecting in part a drop in the value of the dollar for much of 2009.

The Institute for Supply Management reported that its gauge of manufacturing activity rose to 58.4 in January, marking the sixth straight month of expansion. It was the strongest reading for manufacturing activity since 2004.

The Federal Reserve reported last week that output at the nation’s factories rose by 1 percent in January, the biggest manufacturing gain since August.

The overall economy as measured by the gross domestic product grew at an annual rate of 5.7 percent in the October-December quarter of last year but nearly two-thirds of that growth came from a swing in inventories, a boost that is expected to quickly fade.

The government will release a revised estimate of fourth-quarter GDP on Friday with economists expecting the overall number to come in unchanged at around 5.7 percent.

Station Casinos, Inc. announced today that it has reached an agreement in principle for the comprehensive reorganization of the Company with certain of its key mortgage lenders holding the debt secured by  Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, and Sunset Station Hotel & Casino.  The Company is also making significant progress on its restructuring discussions with other creditor groups. The Company filed its chapter 11 reorganization cases last July and has been in negotiations with lenders and other constituents for almost a year and a half.  The Company anticipates filing a plan of reorganization in March of this year and achieving confirmation of that plan during the Summer.
 
As part of the proposed reorganization, the Company expects to significantly reduce its  secured and unsecured debt and also would have substantial liquidity in the form of new revolving credit facilities and certain equity infusions.  Following the consummation of the reorganization, the management of the Company would continue to be led by Frank Fertitta and members of the current management team.  In addition, Frank and Lorenzo Fertitta would make a significant reinvestment in the equity of the reorganized Company along side certain other current creditors and investors in the Company.  Assuming definitive documentation is agreed to by all parties, the Company expects formal announcement of the proposed reorganization transactions, including a description of the material terms and conditions thereof, to be forthcoming in the next three weeks.