![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
Pure Nectar
Mar. 4th, 2012 03:29 pmI went to the Sainsbury's in Lewisham shopping centre on Friday for my weekly shop. It's probably the first time that I have done so in 12 years. But I was already in Lewisham market to buy meat, vegetables and fruit, and Tesco has failed to stock two of my weekly staples for a while now - viz, Flanahan's Organic Oats and Nescafé's Blend 37.
Most of the stuff that I bought in Sainsbury's was exactly the same as in Tesco, except with a Sainsbury's label. There were bigger chickens, but the own label stuff was roughly the same price and roughly the same size. Oh, and they did have Blend 37.
So, perhaps the time has finally come to apply for a Nectar card. Given tghe number of flights I've booked which would have been eligible, it's a bit ridiculous not to have applied for one before.
+++++++++
I've thoroughly enjoyed the Bettany book "All The Devils Are Here" on the 2008 financial crisis and what led up to it. I think it's a little bit "anti-bank" and "pro-regulation", but not excessively so. And there were some interesting facts of which I was unaware, not least that it wasn't really AIG Financial Products that brought down AIG; it was the stock-lending department, which decided that a liquid investment on the funds it had on deposit for lending out stock for counterparties who had gone short, would be triple-A-rated subprime mortgage securitizations. Whoops.
The stock-lending department of a giant insurer should be one of the most boring in the universe. Obviously as a life assurer you have a lot of cash on hand. With this, you buy stock. One way to make a bit of extra money on that stock is to lend it to trading houses and hedge funds which have gone short that stock. You can't actually sell a stock that you don't have. What you do is borrow it (from a life assurer such as AIG or any other large investment operation) and then sell it. You pay a small fee to borrow that stock but you also have to put up collateral.
The stock lenders then put that collateral into money-market funds or any other super-safe investment. Eventually the short-seller completes his trade (buying it back at he hopes a lower price) no longer needs to borrow the stock, and gives it back to the lender, receiving his collateral in return, minus the fee.
Since AIG was very "siloed", the stock lending department looked to increase its profit, and it decided one way to do this would be to buy triple-A rated stock that paid higher rates. The mistake it made here was thinking that the important point was the rating, whereas really the important point was the liquidity. When the subprime market tanked, AIG couldn't sell its securitizations for cash. But it needed the cash to pay back the short-sellers who were returning the borrowed stock. Result, bankruptcy.
Of course AIG FP was also a disaster area, not l;east because, even though it stopped playing the subprime market in 2006-ish, the deals it had already made allowed the CDO managers to swap "like for like". This meant that many of those managers swapped, say, triple-A rated 2005 deals (which were probably double-A at best) for triple-A-rated 2007 deals (which were double-B at best). Never underestimate the incompetence of those guys in suits who try to blind you with flash numbers.
++++
I was reminded of all this by a dispute going on between other incompetents -- that being the people at Fannie Mae, the people at Bank of America, and the mortgage insurers at AIG and elsewhere.
There were 90,000 "unresolved" mortgage insurance rejections floating around at the end of 2011. That's about $9bn in debt that no-one wants to take responsibility for.
Where did the money go? Well, for once, this isn't one where you can say that the banks took it. Let's assume it was one very expensive house.
Joe Brightspark was a self-employed contractor. This, as far as the mortgage broker was concerned, made him the head of a multinational. The wholesale lender (Countrywide, soon to be bought by Bank of America) was quite willing to lend Joe Brightspark $9bn to buy a home on the Hamptons that had cost only $6bn the previous year. But, hey, it was a rising market, eh?
The wholesale lender then insures the mortgage with AIG and transfers it to Fannie Mae.
So, Joe Brightspark gets his luxury home (which, TBH, he plans to sell on for $10bn in a couple of months). The mortgage broker gets $450m commission. The wholesale lender makes another $45m for itself. It pays AIG $10m for insurance against default. Fannie Mae takes the mortgage onto its books, paying $9bn to the seller, $90m to the wholesale lender (which passes on $45m in commission and $10m in insurance payments) and keeps a house "worth" $9bn on its books to make sure everything is in balance.
Then the market tanks. Joe Brightspark can't sell the house for $10bn after all, and, since he only takes home $2,000 a month, he can't quite manage the mortgage repayments of $60m a month. Fannie Mae activates a "repurchase" agreement against the now Bank of America. BofA in turn goes to AIG, the mortgage insurer. AIG looks at the property and says "what were you doing lending $9bn to a bloke earning $2k a month on a property that was only worth $6bn, tops?" It refuses to pay out on the policy.
Bank of America, therefore, refuses to accept Fannie Mae's repurchase requirement, insisting that it can't expect its shareholders to pay for cock-ups on the part of everyone else.
Net result? $9bn in "floating debt" that no-one wants to take responsibility for, and which no-one at the moment is writing to book. As this is a book of 90,000 houses, not one, it will be some time before those houses are sold off and some kind of liquidity is realized.
+++++++++++++++++
I'm running bad and therefore playing bad at cards at the moment. Six buy-ins down (about one and a half of them my fault entirely) in a weekend can be termed "character-building", "disappointing", or "fucking infuriating". It was especially so in that I had ground my way out of a hole in the middle of February and was back to virtually level for the year, with some bonuses to come.
I gave up posting hands on the blog because the poker responses were not very useful. The last thing you need when you have self-doubt and want some helpful analysis is for someone effectively to say "you're a fucking idiot", when what you need is more along the lines of "yes, there's an argument for your line, but have you thought of this?"
Normally the reasoning behind "you're a fucking idiot" is "any line which the writer would not take himself in that position". That's partly because most people see all setbacks at poker as a result of other people's stupidity rather than their own flaws (the only flaw they usually accept is that occasionally they go on tilt, and they often believe that if they could conquer tilt then they would be massive winners). I am a bit of an exception in that I can see my own flaws all-too-clearly, and also that I don't succumb to serious tilt (where tilt is the belief that, the bigger your bet, the better your hand becomes).
Anyway, it's another notch in the "I need a change" post. Don't know what that change would be. Going completely cold turkey on online poker would leave a bit of a hole -- and ex-drinkers can't afford holes in their time. I'm gradually easing off and much of it is "just filling time". I saw a post on Facebook from a US player who wanted to share a place in Costa Rica for a month or two in order to play online. However, on being questioned on this, he said that he didn't like online poker - it was "just a job", and he didn't like travel (many Americans are perfectly happy where they are, with their family, and see absolutely no reason to go anywhere else or expand their horizons).
So, in effect, this is the kind of person I am playing against now - someone to whom it is "just a job" (24-table 24-hour-a-day multi-identity grinders from Russia, China, Taiwan, South Korea, and so on and so on) and who wouldn't want to travel to play anyway. I have no right to moan about this -- I can't have been much fun for social players to play against in the past, and these people are just taking it to a more extreme level. What I have to do is figure out what I am going to do about it. I could play single table games like 2-7 triple draw, but I don't really enjoy knowing that I am "the mug" at the table. I could play live, but I don't really fancy the idea of mixing with the great unwashed in live poker settings, and I've had so many years of being able to shout at the screen when something particularly irritating happens, that keeping my counsel at some donk celebrating when hitting a two-outer for a £400 pot might be a bit difficult. From a profit perspective, that is what you have to do (keep your counsel), but from a mental health perspective, I think that I would have to tell the guy what I thought.
Oh well, I've researched the stories; now I suppose I had better write some. The end of the weekend sucks.
+++++
One final thought. "Any one-line 'wise saying' in poker can be shown to be wrong in at least one important respect". Discuss.
_______________
Most of the stuff that I bought in Sainsbury's was exactly the same as in Tesco, except with a Sainsbury's label. There were bigger chickens, but the own label stuff was roughly the same price and roughly the same size. Oh, and they did have Blend 37.
So, perhaps the time has finally come to apply for a Nectar card. Given tghe number of flights I've booked which would have been eligible, it's a bit ridiculous not to have applied for one before.
+++++++++
I've thoroughly enjoyed the Bettany book "All The Devils Are Here" on the 2008 financial crisis and what led up to it. I think it's a little bit "anti-bank" and "pro-regulation", but not excessively so. And there were some interesting facts of which I was unaware, not least that it wasn't really AIG Financial Products that brought down AIG; it was the stock-lending department, which decided that a liquid investment on the funds it had on deposit for lending out stock for counterparties who had gone short, would be triple-A-rated subprime mortgage securitizations. Whoops.
The stock-lending department of a giant insurer should be one of the most boring in the universe. Obviously as a life assurer you have a lot of cash on hand. With this, you buy stock. One way to make a bit of extra money on that stock is to lend it to trading houses and hedge funds which have gone short that stock. You can't actually sell a stock that you don't have. What you do is borrow it (from a life assurer such as AIG or any other large investment operation) and then sell it. You pay a small fee to borrow that stock but you also have to put up collateral.
The stock lenders then put that collateral into money-market funds or any other super-safe investment. Eventually the short-seller completes his trade (buying it back at he hopes a lower price) no longer needs to borrow the stock, and gives it back to the lender, receiving his collateral in return, minus the fee.
Since AIG was very "siloed", the stock lending department looked to increase its profit, and it decided one way to do this would be to buy triple-A rated stock that paid higher rates. The mistake it made here was thinking that the important point was the rating, whereas really the important point was the liquidity. When the subprime market tanked, AIG couldn't sell its securitizations for cash. But it needed the cash to pay back the short-sellers who were returning the borrowed stock. Result, bankruptcy.
Of course AIG FP was also a disaster area, not l;east because, even though it stopped playing the subprime market in 2006-ish, the deals it had already made allowed the CDO managers to swap "like for like". This meant that many of those managers swapped, say, triple-A rated 2005 deals (which were probably double-A at best) for triple-A-rated 2007 deals (which were double-B at best). Never underestimate the incompetence of those guys in suits who try to blind you with flash numbers.
++++
I was reminded of all this by a dispute going on between other incompetents -- that being the people at Fannie Mae, the people at Bank of America, and the mortgage insurers at AIG and elsewhere.
There were 90,000 "unresolved" mortgage insurance rejections floating around at the end of 2011. That's about $9bn in debt that no-one wants to take responsibility for.
Where did the money go? Well, for once, this isn't one where you can say that the banks took it. Let's assume it was one very expensive house.
Joe Brightspark was a self-employed contractor. This, as far as the mortgage broker was concerned, made him the head of a multinational. The wholesale lender (Countrywide, soon to be bought by Bank of America) was quite willing to lend Joe Brightspark $9bn to buy a home on the Hamptons that had cost only $6bn the previous year. But, hey, it was a rising market, eh?
The wholesale lender then insures the mortgage with AIG and transfers it to Fannie Mae.
So, Joe Brightspark gets his luxury home (which, TBH, he plans to sell on for $10bn in a couple of months). The mortgage broker gets $450m commission. The wholesale lender makes another $45m for itself. It pays AIG $10m for insurance against default. Fannie Mae takes the mortgage onto its books, paying $9bn to the seller, $90m to the wholesale lender (which passes on $45m in commission and $10m in insurance payments) and keeps a house "worth" $9bn on its books to make sure everything is in balance.
Then the market tanks. Joe Brightspark can't sell the house for $10bn after all, and, since he only takes home $2,000 a month, he can't quite manage the mortgage repayments of $60m a month. Fannie Mae activates a "repurchase" agreement against the now Bank of America. BofA in turn goes to AIG, the mortgage insurer. AIG looks at the property and says "what were you doing lending $9bn to a bloke earning $2k a month on a property that was only worth $6bn, tops?" It refuses to pay out on the policy.
Bank of America, therefore, refuses to accept Fannie Mae's repurchase requirement, insisting that it can't expect its shareholders to pay for cock-ups on the part of everyone else.
Net result? $9bn in "floating debt" that no-one wants to take responsibility for, and which no-one at the moment is writing to book. As this is a book of 90,000 houses, not one, it will be some time before those houses are sold off and some kind of liquidity is realized.
+++++++++++++++++
I'm running bad and therefore playing bad at cards at the moment. Six buy-ins down (about one and a half of them my fault entirely) in a weekend can be termed "character-building", "disappointing", or "fucking infuriating". It was especially so in that I had ground my way out of a hole in the middle of February and was back to virtually level for the year, with some bonuses to come.
I gave up posting hands on the blog because the poker responses were not very useful. The last thing you need when you have self-doubt and want some helpful analysis is for someone effectively to say "you're a fucking idiot", when what you need is more along the lines of "yes, there's an argument for your line, but have you thought of this?"
Normally the reasoning behind "you're a fucking idiot" is "any line which the writer would not take himself in that position". That's partly because most people see all setbacks at poker as a result of other people's stupidity rather than their own flaws (the only flaw they usually accept is that occasionally they go on tilt, and they often believe that if they could conquer tilt then they would be massive winners). I am a bit of an exception in that I can see my own flaws all-too-clearly, and also that I don't succumb to serious tilt (where tilt is the belief that, the bigger your bet, the better your hand becomes).
Anyway, it's another notch in the "I need a change" post. Don't know what that change would be. Going completely cold turkey on online poker would leave a bit of a hole -- and ex-drinkers can't afford holes in their time. I'm gradually easing off and much of it is "just filling time". I saw a post on Facebook from a US player who wanted to share a place in Costa Rica for a month or two in order to play online. However, on being questioned on this, he said that he didn't like online poker - it was "just a job", and he didn't like travel (many Americans are perfectly happy where they are, with their family, and see absolutely no reason to go anywhere else or expand their horizons).
So, in effect, this is the kind of person I am playing against now - someone to whom it is "just a job" (24-table 24-hour-a-day multi-identity grinders from Russia, China, Taiwan, South Korea, and so on and so on) and who wouldn't want to travel to play anyway. I have no right to moan about this -- I can't have been much fun for social players to play against in the past, and these people are just taking it to a more extreme level. What I have to do is figure out what I am going to do about it. I could play single table games like 2-7 triple draw, but I don't really enjoy knowing that I am "the mug" at the table. I could play live, but I don't really fancy the idea of mixing with the great unwashed in live poker settings, and I've had so many years of being able to shout at the screen when something particularly irritating happens, that keeping my counsel at some donk celebrating when hitting a two-outer for a £400 pot might be a bit difficult. From a profit perspective, that is what you have to do (keep your counsel), but from a mental health perspective, I think that I would have to tell the guy what I thought.
Oh well, I've researched the stories; now I suppose I had better write some. The end of the weekend sucks.
+++++
One final thought. "Any one-line 'wise saying' in poker can be shown to be wrong in at least one important respect". Discuss.
_______________
