It was a fascinating trip in many ways and the “end of an era’” as well since one of the main reasons we made the journey was to visit relatives who are now racing the clock to get everything squared away before the moving vans show up in a couple weeks to take them to Arkansas after having lived in Las Vegas for more than 20 years.

They managed to sell their house in North Las Vegas at about the same price they paid back in the late-1980s, a 2012 housing success story if ever there was one for one of the nation’s worst housing markets.

Since they’ll no longer be there, we have even less of a reason to go back there which is why it seems unlikely that we’ll ever visit the place again. If we ever return to Southern California, we’ll likely pass through, but I’m guessing that we’ll never spend the night there again or walk the streets and take in the sights.

Despite the opulence of places like the Venetian, Wynn, and Palazzo, the area had an even greater underlying sense of despair and an obviously growing divide between the rich and the poor that make it all a little depressing to take in – kind of like the troubled relative who shows up at a family gathering with a nice car and a nice, tidy appearance when you know from hearing the family talk about him that the guy’s life is a mess.

From the outside, things appear just fine, but beneath the shiny veneer, it’s a different story.

We stayed at Treasure Island since they had a great deal on rooms at mid-week and it’s right in the middle of the strip with great views.

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Like the airlines and just about every other hotel in Las Vegas, after you get the super-low rate, you get nickeled and dimed for everything and I’d have to imagine that there are many, many people in the hotel and gaming industry whose sole job it is to figure out new and ever more ingenious ways to separate people from their money.

Since, aside from maybe a total of an hour over three days in front of a video black jack machine, we don’t gamble, making money on the two of us is especially difficult, however, they certainly did try and that’s one of the things that makes the place increasingly less fun to visit as we get older – this sense of desperation about getting your money.

Now, a lot of this view of things is shaped by the fact that we’re on the other side of 50 right now, no longer approaching a visit to Sin City with the wild-eyed enthusiasm (and looser wallets) of 20-somethings that continue to be drawn to the place simply because it would appear that anything is possible.

Clearly, we’re getting too old for this stuff and, now living in the wide-open spaces of Montana, we have much less tolerance for being in close proximity to the masses, so, the whole place had a different feel to it after not having been there in four years.

As always, people-watching was half the fun of the trip and, My God!, we’re a fat nation.

From kids to teenagers to young adults to the middle-aged to senior citizens, everyone seems to be carrying around an extra 10, 20, 30 pounds or more. Based on the obesity data I’ve seen, it’s even worse in other parts of the country, but, it was again striking that so many people have become so fat.

I didn’t set out to capture any of these folks on film (and really didn’t take many pictures on the trip at all), but even the photo below of the Fashion Mall happened to include a few people early in the morning who could clearly drop a few pounds.

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We were reminded that a lot of people in this world still like to smoke and that the practice will likely never be outlawed in Las Vegas casinos since people with addictive behaviors make great casino patrons. As I said, we didn’t gamble much, but wherever we did stop for a few minutes, there always seemed to be an elderly chain-smoker within an unacceptable proximity.

As we’re early risers, we saw the usual all-night poker games going on at 7AM and it brought to mind the brief conversation I had with the guy who sold us our house here in Montana (a short sale where they were underwater well into six figures) where a career as a professional gambler was seen as an appealing choice since nothing else seemed to be working.

The population of the Greater Las Vegas area has clearly changed since we visited there frequently in the 1990s. The thump-thump-thump sound of a car pulling up next to you at a stoplight was something that brought back memories of Southern California and provides another reminder of how powerful a force demographics is. Just watching the school kids cross the street about a mile or two from the strip tells you a lot about how the population is changing.

With unemployment as high as it is in Las Vegas, I imagine the place is no longer seen as a salvation for those in Los Angeles seeking greener pastures and maybe a better option for raising a family.

Pete Rose was in a Caesar’s Palace sports-memorabilia shop signing autographs and, after spotting the sign announcing his appearance, I just poked my head around the corner to have a look. He was sitting at a table waiting for someone to approach, no doubt willing to sign an autograph, pose for a picture, or do just about anything else for the right price. Our eyes briefly met, as if we were both trying to determine if we knew each other, and then I ducked back out of view.

It was kind of weird, especially since my parents have been big baseball fans all their life and were affected more than most from Rose’s fall from grace over the years.

There were lots of other interesting things to do and people to watch – one thing about Vegas that is really nice is that you can just walk and walk and walk and just take it all in, making a whole day of it on the strip – but, the biggest thing that kept popping back into my head was that signs of growing inequality were everywhere.

This was most evident after we left Pete Rose at Caesars and crossed the street where, prior to getting back to the Venetian, the Palazzo, and the Wynn hotels, you go through the seedier Margaritaville area where you can almost smell the despair.

Of all the observations that were made during our trip, this was probably the most profound one – the rich are getting richer and the poor are getting poorer – and it’s all on display on the Las Vegas strip.

Now, we had never been inside the Wynn or the Palazzo before and, along with the bridge near Hoover dam, those were some of the things we looked forward to seeing, but, the spotless floors and windows, the fake grass out front, the gaudiness of it all inside, and the sheer ridiculousness of the things they were selling in all those stores just kind of hit me.

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Everything is nice to look at, but it’s just striking how you can go from opulence to despair just by walking a couple hundred yards.

There must be enough wealthy people visiting Las Vegas who think nothing of buying $500 handbags to keep all these shops afloat and, as you watch the middle-aged Hispanic lady spraying a little Windex on some shop window at 7:30 A.M., hours before they open, you then think of fashionable 20-something hourly workers who will show up at 10 A.M. to open up shop, and then to the wealthy patrons that might stop in… and you realize this is a microcosm of our economy  and our society today.

Fewer people have the option of following in their parents footsteps with a middle-class factory job. Instead, they take what they can get in support of the spending habits of those who have money. This goes on to different degrees in other parts of the country, but, it just jumps right out at you when you visit Las Vegas.

I can’t imagine what the place will be like in another 5, 10, or 20 years and I don’t think I want to find out.

A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.

Sometimes Bernanke doesn’t even go that far. He simply says he doesn’t see inflation. The Fed chairman recently described the prospects for price increases across the board as “subdued.”

“Sudden” is more like it. The thing about inflation is that it comes out of nowhere and hits you. Monetary policy is like sailing. You’re gliding along, passing the peninsula, and you come about. Nothing. Then the wind fills the sail so fast it knocks you into the sea. Right now, the U.S. is a sailboat that has just made open water, and has already come about. That wind is coming. The sailor just doesn’t know it.

“Sudden” has happened to us before. In World War I, an early version of what we would call the CPI-U, the consumer price index for urban areas, went from 1 percent for 1915 to 7 percent in 1916 to 17 percent in 1917. To returning vets, that felt awful sudden.
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History has other examples. In 1945, all seemed well: Inflation was 2 percent, at least officially. Within two years that level hit 14 percent.

All appeared calm in 1972, too, before inflation jumped to 11 percent by 1974, and stayed high for the rest of the decade, diminishing the quality of life for whole cohorts.

The fact that financial repression is now official government/central bank policy and that it’s been more than a generation since we’ve seen high official rates of inflation in the U.S. will surely make dealing with rising prices even more difficult this time around.

Also, this ominous warning was offered:

The greater the denial before, the faster the inflation accelerates after.

Yikes! Suddenly, tomorrow’s CPI report seems a whole lot more interesting…

There’s also this offering by a Muppet (the term used by some at Goldman to describe clients who they were “ripping off”) and it includes the following joke that begs the question of whether bankers have finally surpassed lawyers in the jokes department:

What’s the difference between a dead cat on the road and a dead banker on the road?

There are skid marks around the cat.

Didn’t that used to be a lawyer joke?

Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.

That second one is kind of a shocker, that is, unless those 23 percent of respondents who said there were going to receive a pension but didn’t have a pension retirement plan thought they were being asked about social security.

And this chart says a lot about how the fortunes of aspiring retirees are changing:

That area circled in red has gone from around 50 percent to 60 percent over the last ten years and will likely continue to go higher in the years ahead as long as Ben Bernanke is running the Federal Reserve and savers continue to be punished.

Some would say the time to sell gold is now… Gold just isn’t the misunderstood, widely shunned asset it was a few years ago. Isn’t the bull market now long in the tooth, with better opportunities to be found elsewhere?
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The reason I own gold is because I’m worried about the long-term solvency of developed market governments.
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Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. Until it does, the temptation to inflate will remain, as will economists with spurious mathematical rationalisations as to why such inflation will make everything OK (witness the IMF’s recent recommendation that inflation targets be raised to 4%: IMF Tells Bankers to Rethink Inflation – WSJ). Until it does, the outlook will remain favorable for gold. But eventually, majority opinion will accept the painful contractionary medicine because it will have to. That will be the time to sell gold.

Grice also gets in a in a jab or two at economists:

…economists look down on disciplines which might teach them it, such as history, because they aren’t mathematical enough. True, historians don’t use maths (primarily because they don’t have physics envy) but what they do use is common sense, and an understanding that while the economic laws might hold in the long run, in the short run the political beast must be fed.

I don’t know about you, but I feel much better now…

He calls the environment at the firm “toxic and destructive” and lays the blame at how leadership has changed, noting that “if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence”. The conclusion? Get rid of the “morally bankrupt people, no matter how much money they make for the firm”.

FT Alphaville had this interesting take on what may have motivated Mr. Smith to vent:

I wonder how his exit interview went. He must have had a little twinkle in his eye…

As expected, there were no changes to short-term interest rates, existing policies were unchanged, and no new policy moves were announced.

The Fed acknowledged an improving labor market and rising oil prices while also downplaying the threat of spillover effects from Europe, that is, now that the European Central Bank has finally seen fit to print up more than a trillion dollars for the greater good.

“Steady as she goes” is what equity markets were waiting to hear and they responded accordingly (Susie Gharib and Tom Hudson no doubt had twinkles in their eyes on PBS’s Nightly Business Report) while gold and silver traders were again disappointed to hear nary a mention of further central bank money printing on this side of the Atlantic and many of them exited positions as a result.

None of that should come as much of a surprise.

But, what was interesting about today’s meeting was that the policy statement released after its conclusion had a few subtle changes as annotated in the graphic below, something that has been the exception to the rule lately.

First, they removed the statement about slowing global growth (see note 1) when, in fact, economies around the world are either tipping into recession (e.g., Spain, Italy) or ratcheting down their growth forecasts (e.g., China, India).

Second, they chose to replace the word “modest” with “moderate” (see note 2) when it came to updating how they view prospects for economic growth in the U.S. I suppose that’s an upgrade, but not a very bold one.

Lastly, when discussing inflation and their dual mandate of stable consumer prices and low unemployment (see note 3) they changed “at levels consistent with the dual mandate” to “at the rate most consistent with its dual mandate” which I have no idea what to make of.

Of course, maybe they had some new guy update the policy statement and he didn’t know that people scrutinize every little change.

Then again, maybe they’re trying to send some sort of message…

The results of the stress tests are slated for release on Thursday (don’t look for any big banks to fail badly) and, given all the bad press that Bank of America has received in recent months about its long-term viability, it should be interesting to see how it fares.

Of course, if banks’ assets had to be marked to market, few of them would likely pass this or any other stress test, however, that’s just a minor detail.

The post title is a paraphrasing of words of wisdom from Caddy Shack’s Carl Spackler:

So I jump ship in Hong Kong and make my way to Tibet, and I get on as a looper at a course over in the Himalayas. You know, a caddy, a looper, a jock. So, I tell them I’m a pro jock, and who do they give me? The Dalai Lama, himself. Twelfth son of the Lama. The flowing robes, the grace, bald… striking. So, I’m on the first tee with him. I give him the driver. He hauls off and whacks one — big hitter, the Lama – long, into a ten-thousand foot crevice, right at the base of this glacier. And do you know what the Lama says? Gunga galunga…gunga – gunga galunga. So we finish the eighteenth and he’s gonna stiff me. And I say, “Hey, Lama, hey, how about a little something, you know, for the effort, you know.” And he says, “Oh, uh, there won’t be any money, but when you die, on your deathbed, you will receive total consciousness.” So I got that goin’ for me, which is nice.

I wonder what that was that Austan Goolsbee muttered to himself there…

From the RJ Matson archive at the St. Louis Post Dispatch.