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To: Johnny Canuck who wrote (44702)	4/6/2008 1:51:21 PM
From: Johnny Canuck	Respond to of 68384

Slowdown Hurting Gamblers' Casino Comps Sunday April 6, 1:35 pm ET By Wayne Parry, Associated Press Writer Economic Slowdown Could Lead Casinos to End Free Meals, Other Perks for Atlantic City Gamblers ATLANTIC CITY, N.J. (AP) -- While there may have been no such thing as a free lunch in the rest of the world, you could get one pretty easily here for three decades, along with a roll of quarters, as long as you rode the bus to a casino. ADVERTISEMENT But now that the economic slowdown has hit casinos as well, the city's 11 gambling halls are split on how desirable it is to continue to hand out free meals, hotel rooms or show tickets to gamblers. That's because for the first time, Atlantic City casino revenues declined last year, and out-of-state slots parlors continue to steal the resort's most reliable customers. Some casinos feel that the slowdown justifies cutting back on giveaways to help the bottom line; others feel that a slow period is when freebies are needed most. Since the first casino opened here 30 years ago, tour buses depositing herds of senior citizens out for the afternoon at the gambling house doorstep has been a big part of Atlantic City casino culture. It's now one the industry is trying to move away from -- gently -- so as not to antagonize loyal patrons as it seeks more affluent bettors. The amount of comps handed out in Atlantic City declined last year by 2.4 percent. Six casinos actually spent more on giveaways last year, while five spent less. Two of those, Trump Plaza Hotel and Casino, and the Tropicana Casino and Resort, were significantly down. Charles Lafferty, a retiree from Prospect Park, Pa., says he can feel it. "You can definitely tell it's slowing down," he said as he spoke with friends in the lobby of the Atlantic City Hilton Casino Resort. "One woman we come down with used to get hundreds of dollars at a time. Now she says it's a lot less." It's important to keep people like Lafferty happy: He lives eight minutes from a racetrack slots parlor in Pennsylvania but comes to Atlantic City because they make him feel like a big deal. "They give you free drinks here, and we get to stay overnight for free sometimes," he said. "We like that." But handing out free meals, drinks, hotel rooms, show tickets and cash is expensive. The city's 11 casinos collectively spent $1.63 billion on it last year. In an environment when casinos are being forced to tighten their belts to deal with an economic slowdown and intense competition from out-of-state gambling halls, comps can be the first place companies look to cut. But Nick Danna, a senior equity analyst at Sterne Agee & Leach, said turning off the freebie spigot will be hard to do. "It's a difficult culture to break," he said. "The expectation is still there; the customers are used to it. "There are certain customers that Atlantic City really shouldn't attract anymore because they're just not profitable," he said. "Then there are other customers they'd like to comp less, but it's very difficult because they (the customers) are used to it." Danna said the real opportunity for Atlantic City is in customers who currently look down on the resort, still viewing it as the domain of elderly people who clamber off buses with buffet coupons in hand. These folks tend to favor Las Vegas. So to attract them, Atlantic City casinos are spending billions on non-gambling attractions like gourmet restaurants, spas and shopping outlets. A frenzy of hotel construction is nearing completion, which will add thousands of new rooms. When day-trippers become less important, their perks tend to dry up. The Trump Taj Mahal Casino Resort, for example, reduced entertainment perks like free show tickets by about two-thirds last year. Trump Plaza Hotel and Casino handed out slightly more free drinks last year but actually spent less on them. And it significantly reduced the amount of cash it handed out to bus-trip customers. Yet the Tropicana, which was hurt by a severe cost-cutting drive last year that led to its owners being banished from Atlantic City, their license revoked, drastically increased its cash handouts to bus-riding players. Bally's Atlantic City gave out more free rooms and spent more on them last year but made up for it on food and drink comps, which were down. The Borgata Hotel Casino & Spa gave out more than 200,000 more free rooms last year but managed to spend almost exactly the same amount on it. It gave out no bus cash at all. Bus riders fared better at Resorts Atlantic City last year, with more cash going to a greater number of customers. And Harrah's Atlantic City more than doubled its spending on entertainment comps. Things like this are what keep Al Kramer, another Pennsylvania senior, coming back to Atlantic City. Clutching a coupon good for two free Hilton buffet meals or $10 in cash (he went for the cash), Kramer said he comes to Atlantic City at least 15 times a year. He does so even though Pennsylvania racetrack slots are much closer to his home. "They put us up in a room for free," he said. "You can't get that at the track." [Harry: I heard the same from a local in Las Vegas. He thought that business was done in a way he has never seen before. Usually Las Vegas is recession proof, but he said there is some change in pyschology that seem to effecting the number of people coming to the city.]

To: Johnny Canuck who wrote (44702)	4/8/2008 11:55:46 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68384

Financial Giants Split on Whether the Worst Is Over Tuesday April 8, 11:21 am ET Is it time to jump back into beaten-down financial stocks--or is it still too early? Even the financial giants themselves can't agree. Goldman Sachs said Tuesday that it has selectively upgraded shares of financial services companies as well as the brokerage and asset manager sectors. ADVERTISEMENT But the firm remains cautious on stocks of regional banks, mortgage and specialty finance companies and real estate investment trusts. Meanwhile, Merrill Lynch chief investment strategist Richard Bernstein warns against the dangers of "bottom-finishing" in financial stocks. "We continue to suggest underweighting financial stocks because of the myriad of risks facing the sector. This applies to financials in a global context, not simply to U.S. financials," Bernstein wrote in "The RIC Report." In upgrading the brokerage and asset manager sectors, Goldman said the recent fears have been exaggerated and are mostly reflected in the prices of the stocks. Both sectors were upgraded to attractive from neutral. "We have reached an inflection point for stocks with little credit exposure, or where exposure is marked to market," Goldman said in a research note. The firm expects a recovery in equity flow trends in the second half of 2008, but said this anticipated rebound is not yet priced into the stocks. "Many stocks offer upside twice that of downside risk, balance sheets are strong, and looking a bit further out to 2009, valuations appear extremely compelling," said Marc Irizarry, an analyst at the firm. Notably, Goldman added shares of Franklin Resources (NYSE: ben) and NYSE Euronext (NYSE: nyx) to its Convinction Buy List. These two stocks were upgraded to buy from neutral. Goldman also raised the price target of Franklin shares to $135 from $110, while the price target of NYSE shares was raised from $87 to $82. It also reiterated its conviction buy list rating for Morgan Stanley (NYSE: ms)shares. Merrill Says Underweight Financials However, Merrill Lynch's Bernstein reiterated the view that investors remain underweight on financial stocks. Merrill's U.S. as well as global quantitative strategy groups view financials as significant "value traps" -- stocks that appear to be undervalued, but have no visible catalysts to keep them from becoming even more undervalued. European and U.S. insurance companies, however, remain the preferred industry within the overall sector, Bernstein said. The analyst noted that investors appear to have considered only credit conditions and have largely ignored the coming slowdown in global growth. Investors are just starting to realize that the deflation of this credit bubble is not simply a "US subprime problem," Bernstein said. "Indeed, they are just beginning to see a tightening of global credit markets. The cost of capital is rising around the world, and financial markets are beginning to react to that fact," he said. Bernstein, however, said a contrarian view suggests that investors should start considering how financial companies will eventually grow once the sector goes through what promises to be a considerable consolidation and balance-sheet repair process. "The sources of growth for tomorrow's financial companies are likely to differ from those of today. The challenge for the long-term investor is to identify the catalysts for that future growth," he added. Fannie, Freddie Debate Rages Debate at the brokerages also raged regarding Fannie Mae (NYSE: fnm) and Freddie Mac (NYSE: fre). Goldman expects credit losses at the government-backed lenders to increase rapidly this year and exceed a peak last seen in the early 1990s. "We expect government-sponsored enterprise credit costs to increase throughout 2008, and remain at elevated levels to 2010 and perhaps beyond," analyst James Fotheringham said in a note to clients, in which he reiterated his sell rating on the two stocks. The credit losses will likely be most severe for mortgages backed by homes in "speculator states" such as California, Florida, Arizona and Nevada, he said. However, Lehman upgraded shares of Fannie and Freddie to overweight from equal-weight, citing the companies increased political standing, their ability to deploy capital and high-return investment options, which have improved over the past few weeks. Lehman expects the companies' stocks to "outperform" on steady market share gains and high returns on new business. Goldman was more favorable on shares of American Express (NYSE: axp), Bank of New York Mellon (NYSE: bk), and Janus (NYSE: jns), which all were upgraded to buy from neutral. Shares of Discover Financial (NYSE: dfs) were upgraded to neutral from sell, with its 12-month price target increased to $17 from $14. However, shares for Marshall & Ilsley (NYSE: mi) were downgraded to sell from neutral, with its price target reduced to $22 from $26. Meanwhile, shares of Wells Fargo (NYSE: wfc), Zion Bancorp (NASDAQ: zion), Lazard (NYSE: laz), Federated Investors (NYSE: fii), Knight Capital (NASDAQ: nite) and Och-Ziff Capital Management (NYSE: ozm) were all downgraded to neutral from buy. Goldman Sees Headwinds at Regional Banks Goldman expects the regional banking sector to still face headwinds in the construction and home-equity lending. The banks that are believed to be most at risk from capital strain include Citigroup (NYSE: ozm), Wachovia (NYSE: wb), Huntington Bancshares (NasdaqGS:HBAN - News) and First Horizon National (NYSE: fhn), Goldman said. Goldman added it is "particularly concerned" about funding risks for commercial lenders such as CIT Group (NYSE: cit), iStar Financial (NYSE: sfi), NewStar Financial (NASDAQ: news) and CapitalSource (NYSE: cse). --Reuters contributed to this report.