Thursday, December 23, 2010

The Collapse of Las Vegas

Having lived there, I know Vegas pretty well. It was still booming when I left, but not now...

Las Vegas is to the real estate bubble what Detroit was to the US automobile industry – Empty condo projects, apartments poorly built to face the desert sun, and the collapse of commercial real estate.

If Wall Street is the hub of American finance then Las Vegas was the manifestation of credit dreams going viral. Las Vegas, the beating heart of Nevada had a tremendous boom with the real estate bubble because it played into the narrative of making it big. Where else can unknowns strike it big and have their name put up in lights? With Wall Street feeding the frenzy Las Vegas seemed to be an endless playground of free flowing capital. During the boom it was hard not to notice the high end Rodeo Drive like stores of Gucci, DKNY, and Prada covering the floors of many casinos. The stores were full and money seemed to flow like the exhaust of Maserati’s cruising up and down Las Vegas Blvd. If heaven on Earth for kids is Disneyland Las Vegas was the heaven of debt. What once seemed as an endless dream has burst into a barren desert nightmare. Las Vegas once boasting some of the fastest growth rates now has largely led Nevada into having the highest unemployment rate of all states in the country. If Michigan was the result of the offshoring of American manufacturing and the demise of the US auto industry Nevada is the exclamation mark at the end of the credit bubble era.

Las Vegas Bubble

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