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My Four cents' worth
Oct. 7th, 2008 01:26 pmMetro this morning had a bit of a filler which temporarily proved, in my eyes, that non-finance people should never be allowed to write about finance. In a wrap-up of the currencies, the report claimed that sterling fell "slightly" against the dollar, "to $1.74 from $1.78". Heavens, I thought to myself, I'd hate to see what the writer considered a large fall.
But perhaps I was being harsh, for I soon learnt that the Icelandic krona had fallen 45% against the euro ahead of the Icelandic PM's speech (the Icelandic PM is, I presume, a distant relative of Keir Hardie). Now, 45%, that's defintely a fall. But, in these interesting times, it just gets mentioned in passing amongst the minor points that the entire Icelandic banking system is collapsing and that Mrs Sprogthorton of Ormskirk might lose her savings because she thought that IceSave was Iceland Stores' version of Sainsbury's Bank (Iceland is, of course, owned by Kaupthing). Landsbanki went into receivership this morning. And a Commerzbank analyst said that "we would not be surprised to see the Icelandic krona lose its function as a medium of payment".
Well, that's not something you hear from a banking analyst every day.
++++++
Apart from muttering sotto voce over the past week that I was "a bit worried about RBS", my other general prediction of "the next stage" of the crisis was that a major heavily leveraged (but profitable) non-financial would go under becase it could not roll over its credit facility. The companies are not helping themselves here. General Motors drew down $3.5bn of a $4.5bn revolving loan facility "because it could". It's taking money out of the banking system (and there is very little of that to spare) and putting it under the bed. General Motors will not be winning any friends amongst those in the banking world who are around when GM next needs a helping hand. More worryingly, if you, as a bank, see companies acting this way, you are hardly likely to renew a rollover credit facility when it expires.
It's even worse for a leveraged company who needs to roll over money that has already been borrowed. It used to be that the only thing the bank looked at was wether you had serviced the interst payments and your embedded value was good enough (and they didn't look too closely at the latter). In these rather different times, the corporate borrower is like the family coming to the end of its rather generous fixed-rate loan.
For some companies, paying interest at the higher rate (or perhaps not being able to arrange funding at all), could be the straw to break the camel's back.
An old trick at this point would be to do a debt-for-equity swap, and this might still actually work, in that the equity could be sliced and diced by the very clever people in the derivates rocket science department who kind of helped this mess start in the first place. next thing you know, you have new "assets" to replace the old "assets" because no-one believes in the old ones any more.
+++++++++++
The first night of $200 6-max didn't go badly. I won the grand sum of $5 on Betfred (and also cleared my bonus and cleared my account). Late in (my) evening I struggled for 500 hands on Pokerstars, finally emerging the grand sum of $40 up after I got paid off with a set.
In both cases I sat down at three tables (rather than five/six) with $100 rather than a full stack, mainly as a matter of self-discipline. If you don't have much ammo, you can't be too speculative. However, it soon became clear that the more aware players at the table know that half-stacks are likely to be playing in, well, a half-stack way. This gave me the opportunity to start playing more "naturally" (i.e., in a full-stack style pre-flop and on the flop) because, in a weird inversion of logic, cleverer opponents showed me more respect because of the smallish size of my stack. Some Continuation bets with pure rubbish that committed 35% of my stack elicited folds from the better players.
However, to try this against the weaker players made little sense, because they are playing their own cards rather than opponents' stack sizes.
The whole caboodle was rather spoiled by an interregnum of $100 full ring on Pacific, where I got a fish all in with my 99 against his A6 on a board of A639. Unfortunately he spiked an ace. At least this gave me the opportunity to say "n1" and act as if it was all part of the game. With luck at least one German would have seen this and noted that it was a better metagame response than typing "YOU **** ING DONKEY, LUCKY FISH".
Fortunately Holdem Manager tells me that I'm still up on all-in EV on Pacific this month, so that's a good way of not tilting when you experience a bad beat.
I suffered bad software and connectivity problems yesterday. An upgrade of Handgrabber took ages, and still seems to only manage one table of Pacific at a time. Pokertracker 3 just wouldn't load at all, so I downloaded PT3 Build 3, and finally got it to kick in after 20 minutes of struggle. At first I couldn't get Pacific to start at all, but a download there did the trick. However, I then seemed to suffer frequent short burst of disconnection (five seconds at a time). This probably cost me about $20 in an hour or so and eventually got so annoying that I quit my tables, despite the presence of a number of fish. And finally, the Hud layout on Pokerstars was all to shit. That took me a long time to sort out.
$200 six-max will be a struggle and my main fear is that I won't lose my "cushion", but my win-rate will be very low until I get the hang of things. Mind you, playing on Stars at 8pm Monday night is not going to find that many fish. Learning how to play the weekend games will be a completely different experience.
But playing lots and lots of hands is the only way to get the hang of how people play. I can't IdleMine and passively sit watching thousands and thousands of hands before playing. It just isn't in me. My mind wanders. I really ought to try to focus a bit more on hands where I have folded, I suppose, rather than browsing the web to see which bank has collapsed.
_____________
But perhaps I was being harsh, for I soon learnt that the Icelandic krona had fallen 45% against the euro ahead of the Icelandic PM's speech (the Icelandic PM is, I presume, a distant relative of Keir Hardie). Now, 45%, that's defintely a fall. But, in these interesting times, it just gets mentioned in passing amongst the minor points that the entire Icelandic banking system is collapsing and that Mrs Sprogthorton of Ormskirk might lose her savings because she thought that IceSave was Iceland Stores' version of Sainsbury's Bank (Iceland is, of course, owned by Kaupthing). Landsbanki went into receivership this morning. And a Commerzbank analyst said that "we would not be surprised to see the Icelandic krona lose its function as a medium of payment".
Well, that's not something you hear from a banking analyst every day.
++++++
Apart from muttering sotto voce over the past week that I was "a bit worried about RBS", my other general prediction of "the next stage" of the crisis was that a major heavily leveraged (but profitable) non-financial would go under becase it could not roll over its credit facility. The companies are not helping themselves here. General Motors drew down $3.5bn of a $4.5bn revolving loan facility "because it could". It's taking money out of the banking system (and there is very little of that to spare) and putting it under the bed. General Motors will not be winning any friends amongst those in the banking world who are around when GM next needs a helping hand. More worryingly, if you, as a bank, see companies acting this way, you are hardly likely to renew a rollover credit facility when it expires.
It's even worse for a leveraged company who needs to roll over money that has already been borrowed. It used to be that the only thing the bank looked at was wether you had serviced the interst payments and your embedded value was good enough (and they didn't look too closely at the latter). In these rather different times, the corporate borrower is like the family coming to the end of its rather generous fixed-rate loan.
For some companies, paying interest at the higher rate (or perhaps not being able to arrange funding at all), could be the straw to break the camel's back.
An old trick at this point would be to do a debt-for-equity swap, and this might still actually work, in that the equity could be sliced and diced by the very clever people in the derivates rocket science department who kind of helped this mess start in the first place. next thing you know, you have new "assets" to replace the old "assets" because no-one believes in the old ones any more.
+++++++++++
The first night of $200 6-max didn't go badly. I won the grand sum of $5 on Betfred (and also cleared my bonus and cleared my account). Late in (my) evening I struggled for 500 hands on Pokerstars, finally emerging the grand sum of $40 up after I got paid off with a set.
In both cases I sat down at three tables (rather than five/six) with $100 rather than a full stack, mainly as a matter of self-discipline. If you don't have much ammo, you can't be too speculative. However, it soon became clear that the more aware players at the table know that half-stacks are likely to be playing in, well, a half-stack way. This gave me the opportunity to start playing more "naturally" (i.e., in a full-stack style pre-flop and on the flop) because, in a weird inversion of logic, cleverer opponents showed me more respect because of the smallish size of my stack. Some Continuation bets with pure rubbish that committed 35% of my stack elicited folds from the better players.
However, to try this against the weaker players made little sense, because they are playing their own cards rather than opponents' stack sizes.
The whole caboodle was rather spoiled by an interregnum of $100 full ring on Pacific, where I got a fish all in with my 99 against his A6 on a board of A639. Unfortunately he spiked an ace. At least this gave me the opportunity to say "n1" and act as if it was all part of the game. With luck at least one German would have seen this and noted that it was a better metagame response than typing "YOU **** ING DONKEY, LUCKY FISH".
Fortunately Holdem Manager tells me that I'm still up on all-in EV on Pacific this month, so that's a good way of not tilting when you experience a bad beat.
I suffered bad software and connectivity problems yesterday. An upgrade of Handgrabber took ages, and still seems to only manage one table of Pacific at a time. Pokertracker 3 just wouldn't load at all, so I downloaded PT3 Build 3, and finally got it to kick in after 20 minutes of struggle. At first I couldn't get Pacific to start at all, but a download there did the trick. However, I then seemed to suffer frequent short burst of disconnection (five seconds at a time). This probably cost me about $20 in an hour or so and eventually got so annoying that I quit my tables, despite the presence of a number of fish. And finally, the Hud layout on Pokerstars was all to shit. That took me a long time to sort out.
$200 six-max will be a struggle and my main fear is that I won't lose my "cushion", but my win-rate will be very low until I get the hang of things. Mind you, playing on Stars at 8pm Monday night is not going to find that many fish. Learning how to play the weekend games will be a completely different experience.
But playing lots and lots of hands is the only way to get the hang of how people play. I can't IdleMine and passively sit watching thousands and thousands of hands before playing. It just isn't in me. My mind wanders. I really ought to try to focus a bit more on hands where I have folded, I suppose, rather than browsing the web to see which bank has collapsed.
_____________
