Reveling in their misery or, schadenfreude on the boardwalk

 

Under water

Under water

Revel Casino in Atlantic City to close. Following closely behind Trump Casino. Mr. Trump, wisely, had only his name attached to “his” casino. Morgan Stanley investors have already lost a $billion on the Revel fiasco and now, two years after its opening, hedge funds are set to lose still more.

If these guys are the smartest guys in the room, how low, exactly, is that hurdle?

21 Comments

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21 responses to “Reveling in their misery or, schadenfreude on the boardwalk

  1. Cos Cobber

    You see, the ‘not so smart’ ones are bumped down to real estate. And now you understand 05-07.

  2. weakleyhollow

    The hedge fund manager was the smartest guy in the room. He was playing with other people’s money, and made out for quite a few years, both on income and taxes.

  3. Anonymous

    wow that’s a big nut to choke on.

  4. Anonymous

    The one who is really laughing is the builder. He got paid, in full.

    • FF

      Nope. The Morgan guy who originated a multi billion dollar loan got paid his fee in full, upfront – and will probably earn a disposition fee for unloading this unsaleable piece of junk. Morgan also likely got an “asset management fee”, and a fee to place the debt with their investors, who I would guess at this dollar level are the same pension funds that are light on money to pay their obligations. The owners of Revel likely got paid a fee to land the relationship with Morgan. the contractor got paid, and there was likely a fully paid fee for operating the place into the ground. It is highly unlikely anyone personally involved in this debacle had any true loss and likely profited handsomely and this is what happened in the mid-2000’s and is happening all over again. The finance players get paid so long as they can convince the rubes on the other end, be them salaried pension fund managers at California Teachers Pension Fund, or the UAW or wherever that this is a “sure thing”.

      • Anonymous

        FF that’s what I was ultimately referring to–the bagholders will be choking on this one. The agents and risk transfer folks will be awaiting lawsuits!

      • Ghost of the FAR Czar

        FF – in this case it wasn’t a loan originated and sold to someone else. Believe it or not, it was a direct investment by MS with their own money. They bought the land in 2006 with corporate funds/shareholder money and funded the start of construction until they pulled the plug in 2010 and the hedge funds took over to finish the construction. This is one time where your DNC script on the evils of Wall Street doesn’t fit the facts.

        • FF

          If this is the case, then I shudder to think why anyone invests with them ever again. I saw the projections for the gambling industry a few years ago, don’t need an MBA to see that AC was in a death spiral.
          As far as that DNC talking points crack goes, my comments reference a way of doing business that is likely what most who read the post thought because its the general way of doing business.

        • AJ

          DNC talking points? Yeah, right. As if Debbie Wasserman Shultz or Obama even has a clue.

  5. Anonymous

    I hear the four seasons is looking to buy it

  6. Publius

    The hurdle is 2 and 20

  7. Walt

    Dude –

    Dude!! Now just I heard that Lauren Bacall has croaked!! She was 89, so she had a good run. But still. Right after Robin Williams? This is hard to take.

    She was quite the little stud muffin in her day.
    http://www.trbimg.com/img-53eabca3/turbine/la-et-lauren-bacall-obit-pictures-012/950/16×9

    Did you know she was married to Dirk Bogart, who was also a big star in his day. Who is going next? Mickey Rooney? He might as well. That little midget has already banged anything that moved in Hollywood. Can you explain that? I can’t.

    But we still have Abe Vigoda, so that is good. And Jimmy Dean, the sausage king. We don’t want to lose him. Breakfast would really suck. And Elvis!! I saw him in Whole Foods last week, so thank goodness he is still around.

    If Bob Hope bites the bullet this week, I may lose it.

    How are you holding up with all this bad news? Pee Wee Herman is still in good health, so I assume you are doing fine.

    Your Pal,
    Walt

  8. Anonymous

    Read today that Gov. Cuomo still believes that casinos are a better investment for NY than fracking. Yeah, right. Meanwhile Christie has called for a summit to address the AC situation and will be pressured to abandon a plan for a casino in the Meadowlands.

    • These guys – Cuomo and his swarm – truly would prefer low-paying waiter and valet jobs and poor people forking over their money to the state than the creation of real jobs and real wealth. Yet they claim the cloak of champions of the poor and, worst of all, the chumps believe them.

  9. Anonymous

    Revel closure now announced to be 5AM 9/2 with hotel operations shutting down 11AM 9/1. Also reported Friday floundering Caesers Entertainment positioning to put Ballys and Caesers into bankruptcy. AC is in a spiral dive without a parachute. After the closure of the Revel, Showboat and Trump Plaza, along with the closure of the AC Hilton, AC will have lost over 8000 casino related jobs in 2014. Unemployment in AC will surpass 20%. To add insult to injury, just hours before the start of the air show, the State of NJ approved Atlantic City’s application to raise homeowners property taxes 29%. Ouch.