If This Is A Recovery, Explain the Dismal MGM Mirage (MGM) Earnings

MGM Mirage (MGM) has catapulted to favorite short, ahead of Credit Bubble Stocks bellwether Winnebago (WGO), based on its dismal first quarter results that belie any claim of a recovery.

Net revenue for the first quarter of 2010 was $1.46 billion. Excluding reimbursed costs revenue mainly related to the Company’s management of CityCenter, the Company earned net revenue of $1.36 billion, a decrease of 4% from 2009.

Revenue down from first quarter 2009! After a whole year of "recovery"!

Occupancy was down to 85% compared to 87% in the year-ago quarter. Is their new property (City Center) is just cannibalizing the old ones?

Extremely overpriced - unless you think they are going to somehow recapture 2007 levels of revenue and profitability. That will be tough given the capacity increases and decrease in demand since the peak!

When you think about it, Las Vegas gambling is a leveraged play on California discretionary/idiotic spending. Who wants to go levered long on the California middle class? Not me!

Disclosure: Short MGM and loving MGM puts.