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"This has been a challenging but momentous year for MGM MIRAGE culminating with the opening of CityCenter in December. We generated significant cash flows and kept our buildings occupied at 90% even in a brutal economy because we are equipped with the highest quality resorts, the preeminent brands, and the finest employees in the industry. We have profoundly improved our cost structure and are actively building revenue to maximize operating leverage as the economy shifts into recovery mode. Our forward convention booking pace accelerated again in the fourth quarter with over 440,000 future room nights booked."

- Jim Murren, MGM MIRAGE Chairman and Chief Executive Officer



  • There has been aggressive price discounting among our competitors, we haven't been doing it though ...
    • Well LVS wasn't either ... so who was?
  • Claims that airlines have added seats to flights, and auto traffic has grown as well.. expect visitation to be up this year... still feel very comfortable that 38MM people will visit Vegas in 2010
  • MGM is the biggest Baccarat player - especially in the high end
  • The 440k room nights they booked in 4Q09 excludes Aria but isn't all for 2010, and its double what they booked in the 4Q07, and half of the bookings are from new customers
  • Group bookings in 2010 - mix was 11.3% (convention mix as a % of total portfolio) was 16% in 2007.  Expect that they will be back in the mid teens by 2011... that mix shift allows them to occupy rooms with more profitable customers
    • They aren't aggressively pricing this business - rather at rates competitive with leisure rates
    • Prices that they are getting are close to 04/05' and what they are booking for 2011 is close to 2007
  • Down to 16% attrition compared to 12-13% historically
  • International marketing was very successful - driven by their Asian visitation
  • Synergy between Aria and other properties has been very profitable so far, since they are now getting customers that were going elsewhere... that's their plan for growth too
  • How is Aria doing?
    • Reviews have been "outrageously great"
    • Volumes are ramping up
    • Opportunity going forward is almost "unlimited"
  • Bellagio is up in almost every metric and luxury portfolio is doing well.. no cannibalization from Aria. All properties had Baccarat increase ex- Aria
  • YTD occupancy is up y-o-y and room rates have been improving (I assume that means less negative?) They are up y-o-y right now.. because of CNY
  • We know we've gained market share 
  • The environment remains challenging and likely will remain so for sometime, but we see light at the end of the tunnel
    • Fundamentals improving and so is the balance sheet
  • 4Q results were impacted by impairment charges resulting from their decision to write off the AC "City Center East" development. They also adjusted thier accrual for the CityCenter guarantee to $150MM from $68MM previously
    • I assume this means that condo sales may be worse or capex to complete is higher?
  • Why do they say that things improved when the declines got less bad due to easier comps? It's not the same thing.. Improve means increase... not slowing declines
  • MGM Detroit continues to garner almost 40% market share
  • MGM Macau was impact by lower hold (EBITDA was only $46MM... I'd like to see them continue to argue that they can do $300MM of EBITDA in 2010 when they only did $161MM this year)
  • Aria benefited from high hold
  • New R/C would have a 20-25% paydown to extending lenders, LIBOR +500bps with 2% LIBOR floor still in place
  • Have $1.1BN of availability under the R/C which reflects the payoff of $293MM of bonds this past week that just matured
  • 2010 1Q Guidance
    • Total Stock comp: 10MM
    • Corporate expense: 30-35MM including 4MM of stock comp (this q included some severance and bonus accrual and hence came in 10MM above guidance)
    • Pre-opening should be minimal compared to 4Q2009
    • D&A: 160-170MM
    • Gross Interest expense: 265-275MM with no capitalized interest
    • Capex for 2010 will be a little higher than 200MM
    • RevPAR is expected to be decline less than what they saw in 4Q09
  • City Center update
    • About 1,000 contracts need to be closed out now that everything is open
    • Dec occupancy was 62% with an ADR of $236 for Aria
    • Booking trends in transient and leisure improving each week
    • Elvis set to have it's official opening next week
    • On residential - 30% price adjustment and mortgage finance assistance. Received 400 applications to date as a result.  Mandarin closings began and will take about 6 months
    • Crystals is continued to build out - opened with 41% tenants, will be 56% occupied by 1Q2010 end and 85% by 2010 YE (looks like they had some slippage in occupancy since last call)


  • Relaunching their marketing program next quarter- and expect it to be more effective than before and should help core properties and help them yield rooms more appropriately
  • Convention group used to be over 40% of its room mix historically, claim that the mix there is starting to improve
  • AC strategy
    • Already announced that they are looking to sell their 50% interest
  • Macau strategy 
    • Well we made "a lot of money" in January, and 4Q09 wasn't as good because of hold but volumes are improving (if they're so good why don't they disclose them?)
    • Luck was also on their side in January for more details see our January Macau note and the MGM IPO note. We estimate table win was $145MM in January
  • Contribution from Borgata was up slightly y-o-y but won't disclose the numbers
  • 100% of the rooms are open at Aria since about 5 weeks ago
  • $150-200MM reserve for City Center - what does that mean?
    • Yes there are roughly $150MM of cost over-runs
    • Entitled to use first $244MM towards construction - may have to put that out in 1Q2010
  • Gross casino receivables  - $261MM vs. $244MM in 4Q08 (predominantly LV)
  • Think that RevPAR will turn positive in the 3rd quarter, and should be no worse than flat if not up for the year.
    • I assume this includes Aria rooms which skews the number? Either way, with all the comps RevPAR is kind of meaningless since they can assign any rate they want to those rooms.  So bottom line will tell the story more so than "RevPAR"
    • Rates turn positive in April, and the rates they have on the books for 2011 are similar to 2008
  • What % of 2010 and 2011 books are net new to Las Vegas vs. stealing share from competitors or just rebooked cancelled conferences?
    • About 50% is new business to MGM Mirage in terms of convention business, of that maybe 50% of that is new to Las Vegas
    • Think that convention business will be low teens of their total business this year
  • How much secured debt basket they can issue?  $800-850MM range
  • Margins in MS & Detroit are better than competitors because these are market leading assets
    • One of the Detroit competitors has been aggressively buying business and they won't do that
    • Tunica is just doing great
    • They are cross marketing Detroit, Biloxi & Tunica more successfully than they have been able to do in the past
  • 2010 EBITDA expectations?
    • They don't give guidance but they expect cash flows to improve if RevPAR improves
  • Have 845 rooms at Vdara turned over to the hotel and the remaining are under contract.  In May, once the closing process is complete they can turn the remainder over to the hotel
  • Sources of liquidity over the next few years:
    • Cash flow from operations
    • Disposition of AC
    • IPO in Macau
    • Ramp up of CityCenter and as is underleveraged and as it matures they can recapitalize it
    • Opportunistic access to capital markets, right now more focused on secured because it's cheapest now
  • Who is City Center cannabilizing if its not them?
    • Won't know for a few months
    • Not Bellagio, it's benefited them, foot traffic at Bellagio has improved significantly and occupancy and ADR are up at Bellagio
  • Difference between transient and group rate?
    • Leisure and group differential is about $60

Dirty Deficit

Position: Short the UK via the etf EWU


We wrote a note yesterday titled “Exceptional Uncertainty” to discuss recent (lagging) macro data points that further confirm our bearish view on the UK economy. Today, we received the UK’s January Net Borrowing figure, which at 4.3 Billion Pounds is a notable bearish call-out as it is the first time since 1993 that Great Britain has recorded a deficit for the month of January. 


David Kern, Chief Economist at the British Chamber of Commerce, said: “The worst than expected January figures further emphasize the dangers facing Britain’s international credit rating. The public finances are always in surplus in January due to large seasonal tax revenue, but the deficit this year reinforces the need for credible and specific deficit-cutting measures in the next month’s budget.”


While we agree with Kern’s latter point that deficit-cutting measures are needed NOW, the heightened political environment between the Conservatives and Labour with an election to be called before June will include more talk than detailed action, which should only prolong the country’s economic underperformance.   


We shorted the UK via the etf EWU in our model portfolio yesterday. Below we’ve noted our TREND (3 months or more) level of resistance for EWU.


Matthew Hedrick


Dirty Deficit - EWU


R3: WMT: Execution-Mart


February 18, 2010


WMT’s  triangulation of sales, gross margins and inventory is as good as it’s been this cycle, and now we start to anniversary tougher numbers. Management’s tone shift towards execution could not come at a better time.





Last week we took a look at Wal-Mart in some detail (see our note from 2/11) and walked away with the conclusion that shares are likely range bound.  Our viewpoint stemmed from the fact that Wal-Mart’s fundamental results are likely to remain incredibly consistent, but also contained to a narrow range of outcomes.  Today’s 4Q results further confirm to us that there is little opportunity for a major breakout on the horizon.  However, it is notable to point out that management’s tone is very upbeat on margins and expense control, while at the same time decidedly less upbeat on sales.   2010 appears to be setting up as an execution story, one in which results will not be entirely dependent on a consumer recovery or a meaningful topline acceleration.  Let’s look at the quarter:


WMT came in five cents above the high end of guidance ($1.17 vs. $1.08-$1.12, Street was at $1.12), driven primarily by solid expense control, gross margin expansion, and strong results from international.  F/X did benefit the quarter by approximately $0.02; however, the focus this morning will likely be on the divergence between domestic same-store sales performance and the solid EBIT expansion. Sales came in lighter than expected at -2% in the domestic stores vs. a flattish expectation.  Management attributes the weakness to deflation in grocery and electronics as well as a slight decrease in customer traffic.  This marks a sequential deceleration in traffic from prior quarters (recall that 3Q traffic was up 1.5%).  Management expects difficult comparisons in 1Q to continue to put pressure on the topline, a trend that is expected to improve gradually as 2010 progresses.   On a 2Yr basis same store sales momentum decelerated for the third quarter in a row. 


In a slight shift in tone, management focused on the operational improvements underway at Wal-Mart aimed at driving gross margins higher through better sourcing and efficiencies as well as to leverage expenses even with a sluggish domestic topline.  It is clear that the bar has been lowered for sales expectations in the near term.  Interestingly, the often used term “price leadership” was not nearly as prevalent on the 4Q call as it was going into the holiday.  Perhaps self-driven deflation has been partially to blame for the weakness in sales.  Certainly the law of large numbers creates tough hurdles for traffic growth.  Guidance for 1Q also implies a deceleration in same store sales on a 2-yr basis, a trend which has now been building for three quarters .  The real question now is how much upside can really be generated without a sales benefit.  Clearly 1Q and full year guidance, of $0.81-$0.85 vs. Street at $0.85 and $3.90-$4.00 vs. Street at $3.97 respectively, takes into consideration a topline that will remain muted at least over the next couple of quarters.  With the Street “warming up” to the name since the new year, sentiment may be tempered as customer traffic dipped into negative territory for the first time in while…


Look at WMT’s trajectory on our SIGMA chart. The triangulation of sales, gross margins and inventory is as good as its been this cycle, and now we start to anniversary tougher numbers. Management’s tone shift towards execution could not come at a better time.


R3: WMT: Execution-Mart - 1




  • Whether the WAG/Duane Reade transaction ultimately works is still unknown, but the big win here is for the people of New York. With plans to continue remodeling stores (30 are complete and they are substantially better than the typical store) and to keep the brand name, customers should benefit from improved pricing, better systems (especially pharmacy), and hopefully improved service levels. Imagine if consumers actually didn’t dread going into a Duane Reade?
  • OfficeMax noted that for the first time in many quarters, revenue from new customers exceeded revenues lost from former customers. With that said, sales of lower margin consumables continue to adversely impact the product mix as discretionary sales are still under pressure.
  • With the wind at its back thanks to the Shape-Ups frenzy, SKX is taking several steps to offset challenging comps in the 2H including 10%+ store growth in 2010 and new licensing agreements that include a kid’s apparel line to launch this quarter.  As the company looks to sustain its growing top-line, management noted they expect to break ground for its new DC in the 1H and to become operational in 2011 – towards the back-end of prior expectations of 2H F10 to 1Q of F11. With backlogs up 40% heading into Q1 and new Shape-Up related product extensions rolling out over the next few quarters the timing of the DC transition is likely to become increasingly important as capacity tightens perhaps unsustainably towards the back half of 2010.




Simon Urges General Growth to Accept Bid - Simon Property Group Inc. shot back Wednesday at General Growth Properties Inc.’s rebuff of Simon’s $10 billion takeover bid in a strongly worded letter that urged serious talks and warned the offer “is not open-ended.” The letter from chairman and chief executive officer David Simon addressed to General Growth ceo Adam Metz called on him to accept the unsolicited bid for Simon Property’s bankrupt rival as being in the best interests of General Growth’s shareholders and creditors. For the entire text of David Simon's letter, click here. “I want to reiterate that our offer is not open-ended, and we have a number of other opportunities under consideration,” Simon wrote. “We sincerely hope you will engage seriously with us without further delay.”  Simon emphasized the advantages of doing a deal with Simon now rather than going forward with the bankruptcy process. General Growth said Tuesday that Simon’s offer wasn’t sufficient “to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the company’s shareholders.”  <wwd.com>


Whole Foods, Bed Bath & Beyond to Cut Suppliers Sourcing Fuel from Oil Sands - To cut their carbon footprints, retailers Whole Foods Market and Bed Bath & Beyond are dropping suppliers that source fuel from Canada’s oil sands (also known as the Alberta Tar Sands), reports the Financial Times. While Whole Foods Market has switched to suppliers sourcing U.S. crude oil, Bed Bath & Beyond instituted a new policy that encourages its transportation providers to avoid high impact fuels including those from refineries using Tar Sands. The decisions are not expected to impede the flow of Alberta oil to the U.S., which represents a fifth of all U.S. energy imports, but it does send a signal against synthetic crude oil from Alberta, reports the Toronto Star. Both companies are responding to ForestEthics’ campaign launched last year to urge U.S. corporate companies away from oil sands fuel, which has a higher carbon content than conventional crude oil, reports the Financial Times. ForestEthics is negotiating with more than 30 companies to adopt similar policies, according to the article. The oil sands represent the largest oil reserve outside Saudi Arabia and reduce Washington’s dependence on Middle Eastern fuel, reports the Financial Times. <environmentalleader.com>


True Religion Targets Online Counterfeit Operators - Counterfeits have been a problem for leading premium denim labels like True Religion and Seven For All Mankind. True Religion Brand Jeans is employing a new weapon in its fight against waves of counterfeiters that have taken their wares from the cold streets to the warmer environs of the Internet. The Vernon, Calif.-based premium denim label was among the first brands to enroll in tests of Site Staydown, a new service from online brand security firm MarkMonitor that promises not only to shut down Web sites hawking knockoffs, but also to keep them closed. MarkMonitor began a wider rollout of Site Staydown this week, noting the apparel and footwear brands involved in the pilot program were able to shut down more than 100 sites they identified as selling counterfeit or pirated goods. Deborah Greaves, True Religion’s general counsel, said the company noticed an increase in the number of counterfeits being sold online in the summer. While the brand had seen online counterfeiting before, Greaves said Web activity exploded in mid-2009 on sites with dubious domain names like discountbrandjeans.com and myluxuryjeans.com. Some cyber squatters had gone so far as to register domains that included the company’s name.  <wwd.com>


Bernard Chaus in Default on CIT Facility - Bernard Chaus Inc. has informed the Securities and Exchange Commission that it is in default on its credit agreement with The CIT Group, putting its ability to continue as a going concern at risk. The New York-based sportswear firm didn’t specify which of its financial covenants weren’t met and said CIT was continuing to provide it with financing following an agreement on revisions and amendments to an earlier pact reached on Sept. 10 and now set to expire on Sept. 18, 2011. Chaus is seeking further revisions but noted that its ability to go forward could be in peril should CIT opt to demand immediate payment or terminate the agreement. Obligations under the new agreement are secured by a “first priority lien on substantially all of the company’s assets, including accounts receivable, inventory, intangibles, equipment and trademarks and a pledge of the company’s interests in its subsidiaries.” The September agreement provides Chaus with a $30 million revolving line of credit, which includes a $12 million sublimit for letters of credit. Its covenants cover financial measures such as tangible net worth, minimum EBITDA and leverage ratios, according to the Form 10-Q filed with the SEC this week. <wwd.com>


Ace Hardware adds mobile site to its multichannel toolbox - Retailers going mobile have been making mobile sites, apps and texts a part of their multichannel strategies, especially in using m-commerce to help shoppers get to stores and find useful information while in stores. Ace Hardware Corp. is no exception. The merchant has launched a mobile site that does not complete purchases but instead gives shoppers a tool to use while out and about or in an Ace store. The home page makes the goal of the site clear with a bold headline: “Welcome to the Ace Hardware mobile site. Get in. Get help. Get on with your life.” The first function offered is a store locator, where shoppers can enter a Zip code and get a list of stores ordered by distance. <internetretailer.com>


Yue Yuen's Revenues Climb 14% in January - Hong Kong's Yue Yuen Industrial (Holdings) Ltd, the world's largest contract footwear manufacturer, announced that its operating revenue in January grew 14% to $502.45 million from $438.89 million in the same month of 2009. <sportsonesource.com>


McQueen Business to Continue Despite Founder’s Suicide - The Alexander McQueen business will go on despite the suicide last week of its founder and creative director, said Robert Polet, president and chief executive officer of Gucci Group. "We believe in the future of the brand," said Polet, speaking at PPR’s annual results presentation here. "Lee was very proud of the people working in his company, and so am I." He added that a McQueen collection would be presented during Paris Fashion Week. In 2000, Gucci Group, the luxury division of PPR, swept in and bought a 51 percent stake in McQueen’s company, bringing an end to the designer’s rocky stint as Givenchy’s couturier at rival luxury group LVMH Moët Hennessy Louis Vuitton. The acquisition set the stage for expansion via signature boutiques in the fashion capitals of London, New York and Milan; a secondary line called McQ licensed to Italy’s SINV; men’s wear and leather goods, and collaborations with the likes of Puma, Samsonite and the mass retailer Target.  <wwd.com>


New Credit Card Regulations Take Effect Monday -  Swiping that card at the check out counter will soon have a whole new meeting for some consumers. Beginning Monday, new credit card regulations will kick in some of which will benefit consumers. One of the biggest changes is that credit card companies must give the consumer 45 days notice before making any changes on the account; changes that include interest rate hikes. "If the consumer disagrees, they can close account and will be given 5 years to pay off the balance," Romero said. It doesn't stop there; with part of the new 'Credit Card Act' creditors won't be allowed to charge you over the limit fee instead, your card will be denied. However one regulation states that creditors will no longer allow anyone under the age of 21 to obtain a credit card without a co-signer and that got mixed reactions from consumers. <newswest9.com>

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After last weeks impressive drop, claims took a step back this week, rising 31k to 473k from 442k the week prior (revised up 2k). This brings the 4-week rolling average down 1.3k to 467.5k from 468.8k last week.


The trend in claims, while still improving, is at the high end of the range depicted by our three standard deviation channel in the following chart. That is to say, the trajectory of improvement has slowed considerably over the past five weeks. We think it's still too soon to call a reversal of the trend in the recovery, but on the margin we think claims remain the best predictor of future credit trends. As such, this data represents a temporary overhang on our bull case for consumer finance companies like American Express.


Joshua Steiner, CFA



Men With Brooms

“It's not just a rock.  It's forty-two pounds of polished granite, with a beveled underbelly and a handle a human being can hold.  Okay, so in and of itself it looks like it has no practical purpose, but it's a repository of possibility.”

-Paul Gross


Keith and I have enjoyed watching the first few days of the Winter Olympics in Vancouver.  The opening ceremonies were breathtaking despite a few minor glitches and Canada has already had a strong showing in competition.  In fact, Canada is currently sitting in fourth place in medal count and has won two gold medals.


While this is a great start to the Olympics, most Canadians are of course waiting for the medal round to begin for Canada’s most dominate sport.  That sport is, of course, curling.  While I’m sure most of you thought I was going to say hockey, and while we Canadians are pretty darn good at hockey, we dominate world competition in curling.  In fact, there have been 51 World Championships for curling and Canada has won 31 one of them and finished in the top three more than 90% of the time.  Never has a nation so dominated a major international sport!


In the short term, I am confident that Canada’s domination in curling will continue. In the longer term, for Canada to dominate, she will have to continue to do all the right things.  As we look around the global macro map this morning we see a number of countries that have dominated historically, and are now starting to lose, to use a curling term, “the hammer”.


Most notably this morning on that front is Great Britain.  For the first time since 1993, which is as long as records have been kept, Great Britain has recorded a deficit for the month of January.  Since January is typically the month of the most tax receipts, this is a concerning data point for Her Majesty’s fiscal health, as revenues should be higher than expenses in January. 


This burgeoning deficit is only one of many concerning factors in our economic model for Great Britain.  As our European Analyst Matt Hedrick wrote yesterday, Great Britain also has a growth problem (GDP up only 0.1% last quarter), an unemployment problem (7.8% unemployment which is the highest in 12-years), and looming inflationary pressures (CPI up 3.5% year-over-year in January).  Curling has a rule that allows a team to concede defeat when a win seems very unlikely.  While we are not sure Great Britain will concede defeat on her economy, we will remain short her in our virtual portfolio via the etf EWU.


As we prepare our virtual curling brooms for the market "bonspiel" to open this morning and review the global macro news from our “hack” here in New Haven, we are encountering a number of data points that are important to highlight before the “lead” throws the first few "rocks" today.


First, the dollar is up again to nearly a nine month high versus the Euro.  This is on the back of an expectation for better relative growth in the U.S.  While the U.S. probably doesn’t deserve much more than a golf clap for outgrowing the United Kingdom and the Eurozone in this year’s market bonspiel, the fact remains capital will flow to those economies that recover quicker.  The U.S. dollar price action this morning continues to support our long position in the U.S. dollar in our virtual portfolio via the etf UUP.


Second, the IMF announced its intention to sell just over $6BN in gold this morning.  This has gold selling off just over one percent this morning.  While this move has the gold bugs scrambling, it is obviously a supportive data point for our bearish case on gold based on an increase of supply into the markets.


Finally, we wanted to highlight a key point from the municipal bond world this morning.  We currently have no position in that market, but are starting to see signs that the domestic municipal bond market could be going the way of sovereign debt.  This morning the Los Angeles School district announced a $1.75BN bond offering.  While we are all for school improvements, selling massive amounts of debt when you are running a deficit (as Los Angeles is), is not the best strategy if you want to win in the last “end”.


“Hurry hard” is one of many expressions that curlers yell at their rocks as they are sliding down the ice.  While sweeping the ice in front of your curling rock will help it move faster, yelling at a rock will have a limited real impact and is really much more of a tradition.


The global macro market "bonspiel" is not dissimilar.  While we can hope that our positions go our way and we can yell at our Bloomberg screens, as “Skip” McCullough likes to say, “Hope is not an investment process.”  The best process is in fact to get your brooms on the ice early and prepare for the market "bonspiel" while your competitors are still celebrating yesterday’s successful “hit and rolls”.


Good luck at the rink today,


Daryl G. Jones

Managing Director





XLK – SPDR Technology — We bought back Tech after a healthy 2-day pullback on 1/7/10.


UUP – PowerShares US Dollar Index Fund — We bought the USD Fund on 1/4/10 as an explicit way to represent our Q1 2010 Macro Theme that we have labeled Buck Breakout (we were bearish on the USD in ’09).

CYB - WisdomTree Dreyfus Chinese Yuan — The Yuan is a managed floating currency that trades inside a 0.5% band around the official PBOC mark versus a FX basket. Not quite pegged, not truly floating; the speculative interest in the Yuan/USD forward market has increased dramatically in recent years. We trade the ETN CYB to take exposure to this managed currency in a managed economy hoping to manage our risk as the stimulus led recovery in China dominates global trade.

TIP - iShares TIPS — The iShares etf, TIP, which is 90% invested in the inflation protected sector of the US Treasury Market currently offers a compelling yield. We believe that future inflation expectations are mispriced and that TIPS are a efficient way to own yield on an inflation protected basis.



EWU – iShares United KingdomThe TREND of higher y/y inflation and stagnant growth = stagflation. For a country with the UK's balance sheet and leadership problems, that’s not good.  


SPY – SPDR S&P 500We re-shorted the SP500 at an attractive re-entry point on 2/16/10. We are bearish on US Equities for the immediate term from this price. Shorting green.


XLE – SPDR EnergyWe remain bearish on Oil for the intermediate term TREND and bullish on the US Dollar on the same duration. Everything has a time and a price.  


GLD – SPDR Gold We re-shorted Gold on this dead cat bounce on 2/11/10. We remain bullish on a Buck Breakout and bearish on Gold for Q1 of 2010, as a result. 


RSX – Market Vectors RussiaWe shorted Russia on 2/9/10 and maintain our intermediate term TREND bearish view on the price of oil.


XLP – SPDR Consumer StaplesThe Consumer Staples sector finally broke both our TRADE and TREND lines on 2/8/10. Given how many investors own these stocks because it was a "way to play the weak US Dollar" last year, we have ourselves another way to profit from a Buck Breakout with this short position.


EWJ – iShares JapanWe re-shorted Japan on 2/2/10 after the Nikkei’s up move of +1.6%. Japan's sovereign debt problems make Greece's look benign.


IEF – iShares 7-10 Year TreasuryOne of our Macro Themes for Q1 of 2010 is "Rate Run-up". Our bearish view on US Treasuries is implied.


The Macau Metro Monitor, February 17th, 2010



Per-capita spending of visitors increased by 1% YoY to MOP 1,807 in the fourth quarter of 2009.  Analyzed by place of residence, per-capita spending of Mainland visitors took the lead, at MOP 3,563; per-capita spending of those from Southeast Asia; Taiwan, China; and Hong Kong amounted to MOP 1,814, MOP 1,606 and MOP 1,212 respectively.The average length of stay of visitors held stable at 1.1 days, same as the fourth quarter of 2008, with Mainland visitors staying an average of 1.3 days.



Preliminary estimates showed that 230,000 passengers, slightly lower number than Tuesday's, passed through the Gongbei border. About one in four, ~90,000, were Chinese mainland visitors. From Lunar New Year Eve to yesterday, a span of five days, the total number of passengers who passed through Gongbei reached 940,000, representing a 5% growth YoY (Mainland visitors increased by ~8,950 YoY). 


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