Economist 7/17/15

  1. Las Vegas’s economy is recovering—fitfully, but in a way that is more sustainable than its previous boom was.The engine of this growth was, and remains, tourism. Among American cities, only Miami and New York attract more foreign tourists, according to Euromonitor International. Domestic tourists too are legion. The ground floors of these palaces, with their vast smoky halls of card tables and slot machines, generated some $9.6 billion of revenue in 2014. Over a third of Las Vegas’s workers are employed directly serving visitors. Those jobs, which paid good wages to people of modest education.When banks’ own gambling on subprime mortgages turned sour and the recession hit in 2008, this machine ground to a halt. The number of tourists dropped precipitously—and those who came spent far less. Revenues tumbled, and population growth fell to almost nothing.. The city’s unemployment rate has fallen below 7% and the promise of a decent life for ordinary Americans once again seems in reach. Just 22% of Las Vegas’s residents have degrees, sharply less than the national figure of 29%. But average household income in the city has crept back up to $51,000, only marginally below the national figure
  2. As it has recovered, Las Vegas’s economy has diversified.One of the new employers in the city is Switch, a secretive firm which manages data for thousands of America’s biggest companies.Thanks to an ill-fated investment by Enron in the late 1990s, Sin City has a better fibre-optic network than almost anywhere else in America .Even the traditional casino business is operators across the Las Vegas Strip are redesigning their entrances to make them more appealing to people who do not like gambling.
  3. SAMSUNG pulled out the stops to woo investors in Samsung C&T, the group’s construction and trading division, ahead of a much-anticipated shareholders’ meeting on July 17th. Watermelons and walnut cakes were hand-delivered to shareholders’ homes;Investors were set to vote on whether a proposed merger between C&T and Cheil, Samsung’s de facto holding company, should proceed.The entreaties appear to have worked. On July 17th C&T shareholders approved the contested merger, with almost 70% voting in favour. (Earlier in the day Cheil’s shareholders had voted unanimously to pass the bid.)Elliott Management, an American hedge fund with a 7% stake in C&T, had been fighting to derail the deal ever since it was announced in May. Elliott claimed that the merger grossly undervalued C&T shares—by $7 billion—in the interest of easing a transfer of management from Lee Kun-hee, Samsung’s chairman, to his son Lee Jae-yong. The merger, which will take place in September, consolidates family ownership and gives the younger Mr Lee an additional 4.1% stake in Samsung Electronics, its flagship firm.
  4. SOME Greeks think Alexis Tsipras, their prime minister, went too far in confronting the EU. Stratos wishes he had gone further. At 26, he is a live wire. He studied economics at university but stopped three exams short of his degree to take an internship at a bank in Athens. A year ago he left his friends there, most of them struggling to earn, say, €650 ($710) a month in retail jobs, and he moved back to the island of Lesbos to help the family restaurant.EU-mandated taxes made life hard enough; but the capital controls imposed in recent weeks have wrought havoc. The 37-year-old entrepreneur used to be able to pay suppliers with credit; they now want prepayment, often in cash. Thanks to currency-export curbs he can no longer bring in the imported goods that were 80% of his product line.Some customers are not paying him at all. Others pay him via bank transfers, to which he has no access because of capital controls.

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