Farewell. The Flying Pig Has Left The Building.

Steve Hynd, August 16, 2012

After four years on the Typepad site, eight years total blogging, Newshoggers is closing it's doors today. We've been coasting the last year or so, with many of us moving on to bigger projects (Hey, Eric!) or simply running out of blogging enthusiasm, and it's time to give the old flying pig a rest.

We've done okay over those eight years, although never being quite PC enough to gain wider acceptance from the partisan "party right or wrong" crowds. We like to think we moved political conversations a little, on the ever-present wish to rush to war with Iran, on the need for a real Left that isn't licking corporatist Dem boots every cycle, on America's foreign misadventures in Afghanistan and Iraq. We like to think we made a small difference while writing under that flying pig banner. We did pretty good for a bunch with no ties to big-party apparatuses or think tanks.

Those eight years of blogging will still exist. Because we're ending this typepad account, we've been archiving the typepad blog here. And the original blogger archive is still here. There will still be new content from the old 'hoggers crew too. Ron writes for The Moderate Voice, I post at The Agonist and Eric Martin's lucid foreign policy thoughts can be read at Democracy Arsenal.

I'd like to thank all our regular commenters, readers and the other bloggers who regularly linked to our posts over the years to agree or disagree. You all made writing for 'hoggers an amazingly fun and stimulating experience.

Thank you very much.

Note: This is an archive copy of Newshoggers. Most of the pictures are gone but the words are all here. There may be some occasional new content, John may do some posts and Ron will cross post some of his contributions to The Moderate Voice so check back.


----------------------------------------------------------------------------------------------------

Tuesday, December 28, 2010

A 60% house edge is high...

By Dave Anderson:


Most casino games have house edges of anywhere from a few tenths of a point to the high single digits.  Play a game long enough, and the casino will eventually get the money.  A decent pile of chips should last a player who does not go all in a good long while. 


The Detroit pension funds pushed a decent stack of chips into the Pittsburgh casino.  And they got burned as the Rivers Casino is in selective default already and is consistently underperforming all official projections.  The Detroit Free Press has the relevant details: [h/t Chris Briem]


Each fund invested about $97 million in the venture first pitched by Detroit casino magnate Don Barden, who later lost his controlling interest in the casino.


Trustees wrote down the value of their investment to $39 million each.


60% loss rate is a massive loss rate.


This is important to the Pittsburgh region because the Rivers Casino was supposed to solve all the difficult public finance and quasi-public amenity problems that we can not afford.  The revenue is pledged to paying off the new Penguins arena, revitalize at least one neighborhood, save the city libraries and fill significant gaps in city, county and school district revenue streams.


The selective default that the happened in June 2010 was the conversion of the Detroit pension fund debts into equity.  That reduced the debt payment requirements by approximately 50% over the intermediate term.  This is the only way that the casino has been able to meet current operating expenses as slots and table revenues have never bounced to the state or Wall Street projections, much less the ownership's original projections.


Using a back of the envelope calculation (actually a front of my daughter's coloring sheet calculation), the revaluation of the Detroit stake implies a project value in the high $300 to low $400s which would be a project loss rate of roughly 50%. 


Something has to give at this point, and given that the arena's financing is only backed by a moral guarantee from the state, and the state legislative majorities have absolutely no reason to help Pittsburgh or Allegheny County out, my guess is that we'll see a nice long fight in a bankruptcy court over the obligations of the county authority that actually owns the new arena and the state's moral guarantee obligations.  My bet is the county loses that fight eventually and somehow eats a massive shit sandwhich. 


 


 



Posted by at
Labels:

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)