“Everything being a constant carnival, there is no carnival left.” – Victor Hugo
In the 1985 comedy classic Lost in America, Albert Brooks and Julie Hagerty play David and Linda Howard, an upper-middle-class couple barely keeping up with the Joneses in Los Angeles. When David gets passed over for a promotion at work and lashes out at his boss, he finds himself out of a job. After convincing Linda to quit hers, the couple liquidates their assets, purchases a Winnebago, and leaves the City of Angels in search of a new beginning.
All is well until the couple rolls into the Desert Inn Casino in Las Vegas. As it turns out, Linda has a secret gambling problem, something David discovers after waking up alone in bed. He eventually finds his exhausted and agitated wife at the roulette wheel where she has been feverishly gambling away the couple’s savings throughout the night. Unluckily for the Howards, she lost it all.
In the most memorable scene of the movie, David begs the casino manager – played by actor Garry Marshall in a brilliant cameo appearance – to return the couple’s nest egg. Marshall’s character looks on with an incredulous stare as David pitches a scenario in which returning the Howard’s money could be spun as a marketing coup, suggesting the quaint slogan “The Desert Inn Has Heart.” You can probably guess how it went.
Much like The Desert Inn, Wall Street is designed to separate punters from their capital. As the Everything Bubble™ continues to deflate, legions of gamblers find themselves wishing they left the casino much earlier, working their way through the stages of grief, and no longer ridiculing those who avoided the tables altogether on the way up.
As longtime readers of Doomberg will know, we’ve been fascinated by the saga of AMC Entertainment Holdings (AMC) from our earliest days, a situation we first wrote about back in August of 2021. As this symbol of speculative excess stumbles toward what appears to be an inevitable bankruptcy filing, the script has taken a turn for the absurd, delivering one of the most bizarre situations in the history of the US capital markets. Not satisfied with having already evaporated billions in retail investor cash in service of the well-heeled owners of the company’s debt, AMC CEO Adam Aron is continuing to suck every last penny from the coffers of the very supporters who have kept his chronically injured company afloat much longer than underlying fundamentals would have justified. With the climax seemingly behind us and resolution fast approaching, it’s time we took another look at AMC. Let’s dig in.