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Saturday Odds
May. 16th, 2009 02:22 pmSomewhere on my bookshelves I ought to have a copy of a book called Funny Money, a book from the mid-1980s that chronicled the collapse of Oklahoma's Penn Square Bank. Early on in the book there is a fine quote about how, if you had walked into Penn Square Bank in 1979, borrowed a couple of million bucks (which wouldn't have been difficult, because Penn Square was one of the first banks to spot that if you could sell loans on at a profit, the creditworthiness of the loans you granted was irrelevant) and then buried that $2m in your back garden, about four years later you could have walked into the office of the receiver of the by-now-bankrupt bank, offered 30 cents on the dollar, and had your hand bitten off.
I was reminded of this book when reading about Irish Life this morning, a bank which seems to have lent to similarly unreliable property developers in Ireland over the past few years, and has now admitted that it is unlikely to see any return on quite a bit of that cash. When I was in the west of Ireland in early 2007 it was clear that prices such as €235k for an ordinary house way out west in Mayo were unsustainable. But such subtleties were clearly lost on senior executives at most of the Irish banks. Michael Somers, CEO of the National Treasury Management Agency, which is overseeing the new bad bank agency, said he was "aghast" at the amount of money that was lent to small property developers.
Had none of these people read Funny Money? One has to assume not.
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I wrote last week that the next time a politician said that he or she was acting "within the rules" the response should be mockery. This week's Question Time took it beyond that. It was sheer home-blown anger. The politicians have now made a move which I've never seen in my lifetime. It's almost on a par with Cable & Wireless and then NTL giving up the ghost on their brand names when it comes to cable TV. Time after time I heard on the radio the past few days that so-and-so "declined to be interviewed". That's as close as you will ever get to a politician throwing in the towel.
Matthew Engel was spot-on in the FT this morning. He noted that the House of Commons used have members who were renowned in other fields -- he refers to Sir Christopher Wren and Sir Isaac Newton. These days no-one with any talent would want to become an MP.
+++++++++++++++++
I bought myself a new landline telephone today. My existing phone is about nine years old and showing its age. The replacement, another Panasonic, has the merits of two handsets, and, as predicted, a completely insane instruction manual. Curiously, the work that has gone into updating the phone hasn't gone into the instruction manual, which is remarkably similar (in design) to the instruction manual of the nigh-on decade-old Panasonic that the new phones are replacing. It's as if every time a function was changed, it was kludged on paragraph by paragraph to the old manual, with no overall analysis of the overall design. The Panasonic manual for my DVD recorded suffers the same flaw.
The result of this is that there is no "grand vision" in the manual. It is, for example, page 14 before you are told that you need to charge the batteries for seven hours before using the thing at all (it's page 15 before you are told how to turn the thing on and off). However, it does tell me eight pages earlier that I should not install the phone during an electrical storm, and that I should consult my doctor about using the phone if I have a pacemaker installed.
++++++++++++++++
It's an old adage in poker that the short-run is longer than you think. Indeed, I strongly suspect that my run from August to the end of March was down to good fortune. Good runs and bad runs are a bit like the market. They wait until you are convinced that it's not standard deviation before proving to you that they are.
Certainly since the start of April I've been seeing the obverse of this, scrabbling to small gains ($600 in six weeks and 30,000 hands) and getting that 'two steps forward, two steps back' feeling every week. The turnaround at Party has been the most stunning. Having run well there until April 8th, I've run like crap there ever since, losing back just over $1000 (maybe $1300 in open play) in a mixture of $100 and $200 buy ins. This about a 12,000-hand run -- quite substantial and enough to lead to doubts that you have been "found out". But the 12k number of hands isn't really that great. That's only about 800 pairs, of which only 90 or so will turn into sets. Throw in the AK, AQ, suited connectors, etc, and you have about 400 hands that "matter". Make it an 55:45 chance that you have a good win or a bad loss (say, $50 average) on those 400 hands. If you run 240 to 160, you are $4k up. If you run 190 to 210, you are $1k down. In other words, a twist on just 50 of those 12,000 hands can make $5k difference. When you look at it that way, it can easily be a bad run.
________________________
I was reminded of this book when reading about Irish Life this morning, a bank which seems to have lent to similarly unreliable property developers in Ireland over the past few years, and has now admitted that it is unlikely to see any return on quite a bit of that cash. When I was in the west of Ireland in early 2007 it was clear that prices such as €235k for an ordinary house way out west in Mayo were unsustainable. But such subtleties were clearly lost on senior executives at most of the Irish banks. Michael Somers, CEO of the National Treasury Management Agency, which is overseeing the new bad bank agency, said he was "aghast" at the amount of money that was lent to small property developers.
Had none of these people read Funny Money? One has to assume not.
+++++++++++++++++
I wrote last week that the next time a politician said that he or she was acting "within the rules" the response should be mockery. This week's Question Time took it beyond that. It was sheer home-blown anger. The politicians have now made a move which I've never seen in my lifetime. It's almost on a par with Cable & Wireless and then NTL giving up the ghost on their brand names when it comes to cable TV. Time after time I heard on the radio the past few days that so-and-so "declined to be interviewed". That's as close as you will ever get to a politician throwing in the towel.
Matthew Engel was spot-on in the FT this morning. He noted that the House of Commons used have members who were renowned in other fields -- he refers to Sir Christopher Wren and Sir Isaac Newton. These days no-one with any talent would want to become an MP.
It has become a second-rate job attracting a great many second-rate people, who are not even that skilful at fiddling their expenses.
+++++++++++++++++
I bought myself a new landline telephone today. My existing phone is about nine years old and showing its age. The replacement, another Panasonic, has the merits of two handsets, and, as predicted, a completely insane instruction manual. Curiously, the work that has gone into updating the phone hasn't gone into the instruction manual, which is remarkably similar (in design) to the instruction manual of the nigh-on decade-old Panasonic that the new phones are replacing. It's as if every time a function was changed, it was kludged on paragraph by paragraph to the old manual, with no overall analysis of the overall design. The Panasonic manual for my DVD recorded suffers the same flaw.
The result of this is that there is no "grand vision" in the manual. It is, for example, page 14 before you are told that you need to charge the batteries for seven hours before using the thing at all (it's page 15 before you are told how to turn the thing on and off). However, it does tell me eight pages earlier that I should not install the phone during an electrical storm, and that I should consult my doctor about using the phone if I have a pacemaker installed.
++++++++++++++++
It's an old adage in poker that the short-run is longer than you think. Indeed, I strongly suspect that my run from August to the end of March was down to good fortune. Good runs and bad runs are a bit like the market. They wait until you are convinced that it's not standard deviation before proving to you that they are.
Certainly since the start of April I've been seeing the obverse of this, scrabbling to small gains ($600 in six weeks and 30,000 hands) and getting that 'two steps forward, two steps back' feeling every week. The turnaround at Party has been the most stunning. Having run well there until April 8th, I've run like crap there ever since, losing back just over $1000 (maybe $1300 in open play) in a mixture of $100 and $200 buy ins. This about a 12,000-hand run -- quite substantial and enough to lead to doubts that you have been "found out". But the 12k number of hands isn't really that great. That's only about 800 pairs, of which only 90 or so will turn into sets. Throw in the AK, AQ, suited connectors, etc, and you have about 400 hands that "matter". Make it an 55:45 chance that you have a good win or a bad loss (say, $50 average) on those 400 hands. If you run 240 to 160, you are $4k up. If you run 190 to 210, you are $1k down. In other words, a twist on just 50 of those 12,000 hands can make $5k difference. When you look at it that way, it can easily be a bad run.
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