Gambling Trends

In the never ending quest to relate real life events with financial trends, news from MGM cutting 440 employees from MGM Grand due to a decline in gambling is in my mind clearly a sign that the wealth effect is in reverse. When people are flush, they are more apt to head to Vegas to try their luck-not anymore. What does this mean for the casino on Wall Street? Probably less volume, and in fact the volume figures have declined in last 3 weeks. Part of this is due to the de leveraging of the financial institutions. Hedge Funds are going the way of the Dodo bird, since they were not hedge funds at all, but rather overlevered pools of capital. Some will survive, but most will fail. Unless of course the FED bails them out. Another reason for interest rates to rise as the buyers (black box gurus running a failed model) retreat.