A researcher at the University of Pennsylvania's Wharton School of Business started getting curious about the difference in the happiness of homeowners and renters. Assistant Professor Grace Wong Bucchianeri analyzed a survey of 600 women in Franklin County, Ohio. Some were homeowners. Some were renters.
Bucchianeri found "little evidence that homeowners are happier... in fact, they consistently derive more pain from their homes" than renters.
Perhaps their unhappiness is health-related: "They are also more likely to be 12 pounds heavier and report a lower health status and less joy from health."
The punch line: The survey was taken in 2005 – at the height of the bubble.
Homeowners might be unhappy and unhealthy, but they're not as miserable or sick as homebuilders.
Ratings agency Egan Jones yesterday described the pending merger of homebuilders Pulte and Centex as "tying [two] drunks together to walk a straight line." The merger is set to close this September. Neither Pulte nor Centex brings in enough earnings to cover interest expenses, yet somehow they think combining the two companies will help them survive.
One of our favorite whipping boys, casino company MGM Mirage (MGM), says business is turning around. CEO Jim Murren says business in Las Vegas has clearly "bottomed out," and his company will not sell any Vegas casinos because the offers would be too low...
Murren's not even talking with anyone about selling any of MGM's numerous properties on the Las Vegas strip. That's because he knows he'd get his face ripped off if he tried selling anything now. About six months ago, MGM sold Treasure Island to Phil Ruffin for net proceeds of less than eight times pretax, pre-interest cash flow. I doubt it would get even that much today.
MGM will need to sell something, probably soon. A compliance waiver on a $7 billion credit facility expires in 12 days, on June 30.
When distressed real estate investors like Carl Icahn are the only ones buying casinos, you know you have a problem... especially when they're paying 20 cents on the dollar, as Icahn did recently.
Icahn has made himself and his investors four times their money in distressed casino investments twice before. Now he's doing it again. A couple weeks ago in a bankruptcy auction, Icahn was the sole bidder for Tropicana Entertainment, which owns world-class casino properties in Atlantic City and Nevada and smaller properties in Indiana, Mississippi and Louisiana. He bought it all for one-fifth the price offered a year ago.
To learn how you can make four times your money riding along with Icahn's distressed real estate investments, without having to invest millions in his hedge fund, click here.
In the most recent issue of Extreme Value, I noted, "Big box stores Circuit City and Linens 'n Things have gone bankrupt. Sharper Image, Levitz, Bombay, Harvey Electronics, and Lillian Vernon are all either reorganizing or liquidating under bankruptcy protection."
Add one more to the list. Clothing retailer Eddie Bauer is in "Chapter 22," its second Chapter 11. The first one occurred in 2003 when then-parent company Spiegel went bankrupt. Eddie Bauer emerged from that one saddled with $300 million in debt. Eddie Bauer's current bankruptcy petition lists assets of $476 million and debt of $426 million. It was offered $202 million for its assets by a private equity firm.
S&A Oil Report editor Matt Badiali discovered what could be the most profitable gold investment of the year... And it's right in our backyard. Two mining companies are currently working to develop one of the largest gold deposits in the world... One is a giant, multinational mining company, and the other is a tiny junior miner.
Despite the obvious size difference, both companies will eventually own half of the new mine... And by buying the junior miner today, we can buy its half of the gold deposit for $13.60 an ounce... almost 99% less than today's spot price.
This little company has the biggest upside potential in gold today. Two other giant mining companies already bought shares in it... at a 30% premium. That means some of the smartest guys in this industry believe shares are worth at least 30% more than current prices. Once this company actually starts producing gold, the returns could be astronomical. To learn more about the S&A Oil Report, and access Matt's latest report, click here...
The government hates competition, and apparently it's tired of not making any money with the current gold mania... The U.S. Mint is touting a new 2009 Double Eagle Saint-Gaudens.
The original 1907 Double Eagle, designed by artist Augustus Saint-Gaudens, is considered by many to be the most beautiful coin ever made. Saint-Gaudens put an image of Liberty on the front and a soaring eagle on the back. You can see a picture of it here.
To create a clean and beautiful coin, the artist placed the mandated "E Pluribus Unum" on the very edge, and omitted the optional "In God We Trust" – causing an uproar after his death.
The 1907 coin never made it into circulation, because the government didn't have the technology to mass-produce ultra-high relief coins.
The new coin, available June 24, is a reissue of the original and sells for $1,289 – a 37% premium to gold's current spot price. It's an exact replica, from remakes of the original mold, except for a few, small changes. The government added the Roman numerals for 2009 (MMIX) and "IN GOD WE TRUST."
New high: Allied Nevada (ANV).
More enlightened thoughts on human relations in today's 'bag... The feedback e-mail is always open for business at: feedback@stansberryresearch.com.
"I see no reason to torture. Get a group of the detainees together, pick one, shoot his ass. Ask the others if they have anything they would like to offer. If not kill 'em all." – Paid-up subscriber Fred
Ferris comment: Oh, that's much more humane.
"The real torture was watching those people jump from the upper floors of the World Trade Center 8 yrs ago, because our 'representatives' and 'intelligence' agencies can't see past their own political campaigns. About the only thing Bush II did was keep us safe, but I think that was mostly Chaney's gig... Torture is a little upside down bath water? What's beheading? Just quick, painful death?... I would go through waterboarding myself if was to save my family." – Paid-up subscriber Michael Bugglin
Regards,
Dan Ferris
Medford, Oregon
June 18, 2009