Time

[peterbirks]

Part of my problem when I start trying to play at a higher level all the time is that my lack of comfort with the stakes mixes (during the week) with a lack of motivation to play.

So, what happens is that I get to a level of profit that I would be quite happy with, after just a quarter of an hour, and I say to myself "do I want to be here?" and the answer is, no, so I quit and go to watch some TV, or do something in the flat that "needs doing".

Of course, you can see where I am heading here. The net result is that, if I have a "lucky" month, I end up winning not much more than I would have won at the lower stakes, but having played considerably fewer hands. If I have an "unlucky" month, I end up playing considerably more hands for considerably less profit. The final outcome appears to be a slightly lower profit for considerably fewer hands -- not quite the result intended when moving up in stakes.

The obvious solution if I am thinking as a serious player is to "buckle down" and to try to focus for as long at the higher level as I used to at the lower level, playing according to the same profit and loss principles, except that I multiply them by two. It's a bit silly playing at $200 buy-in, while applying $100 buy-in profit and loss principles.

However, it's the old "easier said than done". I'm managing this at the weekend, but during the week, I find it very difficult. Yeterday I just clocked up about 50 hands at each site (FTP and No IQ) and quit when I was $25 up both times. In terms of variance, that's not even a single hand that goes beyond the flop (SD at $200 buy-in for me is about $160 per 100 hands, I think). But I just said "fuck it, $50 is $50".

I know it's the wrong attitude, but it's the bane of being full-time-employed while trying to "think" like a pro player.

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Northern Rock took out an injunction against the FT today to stop it publishing details of future scenarios put together by The Crock. This is a fine example of making things worse. Sure, the memo was confidential, but, once out, it's best to leave it out and to explain things, rather than try to suppress it.

Not that the scenarios should have surprised anyone. Still owing money to the BoE by 2010? Well, hardly a shocker. Potential buyers want interest payment holiday? Again, not the biggest revelation in the world.

It seems that Northern Rock should have gone into administration and that the potential buyers have all come to the conclusion that, as is, Northern Rock equity is worth 0p (US equivalent = 0¢) per share. But the government feared another run on banks, so it wouldn't let it fail. This leaves us in a farcical situation with the government unwilling to make anything look like a rescue (because this would undermine confidence) but unwilling to let the bank fail (because this would undermine confidence). This seems to me to make it odds-on that some complex "restructuring" will take place (a break-up by any other name) that will be put together in a manner too complex for anyone on the Six o'clock News to understand. They will therefore trot out the Government/Crock/purchaser's line about how it's a "solution". The best way to do this would be to sell off the infrastructure and the securitised mortgages, leaving behind some real shit to be run-off in the fashion of a closed book life fund. This run-off part could be government-backed on the quiet, while the "name" part was sold on. As far as Joe Public and the BBC News is concerned, it's still Northern Rock, but to the purchaser, it's Northern Rock 2007 PLC.


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The rising price of scrap metal has led to a spate of lead thefts from the roofs of churches - 1,800 this year compared with 100 last year. It's probably just a few commercially aware gangs who are responsible -- a couple of years ago they were digging up cobblestoned streets overnight to sell the bricks. However, they are clearly helped by the Uk's mad building regulations.

I'm kind of ambivalent on the building rules in the UK. Anyone who has driven through some US suburbs, where the malls simply repeat themselves every few miles or so, rather like a low-budget cartoon background, can't but help appreciate the architecture of England. But the rules relating to Grade II and above buildings are such that, if you ever consider buying such a house, you should quickly go to have a lie-down. At Grade I level, you need to be a multi-millionaire just to maintain the place.

Why is this? It's because any replacement has to be the same as that which is replaced (the extent of "sameness" varies according to the Grade). So, the churches, having had all their lead stolen, have to replace it with, yes, more lead, which then gets stolen, and so on. In some cases the replacement rules are good, because they are necessary to maintain character, but in others they are just plain silly. And this is one of them.

Comments

[jellymillion.livejournal.com]

Wouldn't the securitised mortgages be a lesser problem? In that they've been packaged up and sold on, with just the administration of payments to be done.

The problem is funding the unsecuritised loans, or at least, the amount that isn't already funded from deposits. And they need a viable credit rating to do that without incurring a negative spread. I can't see how they can get a workable credit rating without the Bank of England (or HM Treasury) offering to underwrite any such borrowing. And I guess they're a bit over half way there, and to heck with competition.

The lead thing is hilarious. It's an ill wind and all that.

[real-aardvark.livejournal.com]

Well, I could be mistaking the intelligence level of the Six O'Clock News, not to mention that of the general public, but I would have thought that the sort of solution that you are describing (and which is being proposed by others) will cause massive public ructions. It's hard to see how even the most obscure SIV could conceal the underlying con. Mind you, short of outright nationalisation (instead of the present short-term nationalisation), it's hard to see what other options the Government have. A prime example of walking in without an exit strategy, I fear.

When the government flings huge amounts of money at the NHS, to little perceptible benefit, the City and "Fleet Street" (whatever it is now) scream like stuck pigs and denounce "public wastage."

When the government flings huge amounts of money at a failed bank, and then allows private equity to walk away with the bit that is now financially healthy, the City and a fair bit of Fleet Street see it as "avoiding a run on the banks."

Me, I'm neutral. I see both types of expenditure as evidence of deranged incompetence.

[peterbirks.livejournal.com]

Sorry Pete, but I re-edited my previous comment to get rid of some typos, and it moved it below your reply. Although this serves to make you appear remarkably prescient as to what I'm going to say, it does make things rather confusing for the lay reader.

The BBC's acuity when it comes to financial matters doesn't strike me as over-deep; or, rather, if it is, they don't let on at the six o'clock news level. The question is, what kind of headline are they likely to go for ... "Northern Rock Saved", or "Northern Rock Get-out Scandal"?

One would be a clean and simple story (deposits guaranteed, solution of long-running problem, etc) that the news compilers could understand, that it would reckon that the viewers could understand and which would be in line with the governmental and Northern Rock spin.

The other would be a messy, complex story that would take quite a while to explain, that would go against the spin wished for by the government and the buyers of Northern Rock Lite, and which would leave many a viewer saying "er, so what?"

After all, a £4bn or thereabouts potential hit to the taxpayer (after run-off, it could well be brought down to a couple of hundred million or so) is bad news, but the government will claim that the run-off will cost nothing. By the time it transpires that there is a cost to the taxpayer, a few years later, the headlines will have passed.

PJ

Lay Readers

[(Anonymous)]

Sorry, must have missed that. Although, if you have formed your own Church, the count the autochthonous Greek Pre-Trullan Orthodox Church in as co-adjutants. Yes, I understood your point the first time I read it (I think); and I understand it as you repeat it (I think). I like the additional theory about the end cost, though ... one (a Ball, or a Darling, perhaps) could argue that an eventual £200 million is chump change compared to a "Run On The Banks." Which nobody outside the financial "community" cares about, anyway. We're all up to our great-grandparents' knees in debt, so what difference does it make? A run on Canary Wharf, or that insurancy bit of Shoreditch, or the brand-new freshly-minted WC1 "have I got a (severely leveraged) deal for you, guv!": now, that would be a different matter. Allow me (as a Brummie) to point out that this whole thing is eerily similar to the '70s, and the way that governments of either stripe chose to handle the albatross that was British Leyland. True, the scale is a little different (a couple of magnitudes bigger, in N-Rock's case. Unless they release a huge hit album soon, which appears unlikely), but the essential details are the same: (1) Criminally incompetent management. (2) Ludicrous underfunding (in BL's case, because of risk aversion. In NR's case, because of the opposite). (3) Inbred idiocy. (4) Inbred idiocy. (5) A search for the "silver bullet." (6) A politically inept government who can only see the short-term downside, and not the (unquantifiable -- see Taleb) long-term downside, and literally have no plan. (7) No possible way out, short of (one way or the other) liquidation. (8) Leaving things in the hands of Civil Service mandarins (one of whom is my favourite great-aunt, so I'm not necessarily biased) and assuming that they can make a sensible decision on what would, in normal times, be regarded as "None of the Governmentt's business." I may have missed something out there. In between (3) and (4), you might want to add "inbred idiocy," but it's not really necessary. In the interests of science, I got into an argument in the pub tonight with a geordie who assumed that I was a statistician and then complained (once I'd explained that I'd got A levels in the other two varieties) that "there's no such thing as Pure Maths". Obviously, I started with Euclidean geometry and the axioms on which it's based -- hand-waving the Riemannian three varieties of parallel lines as I did so -- and went on to Goedel, whose theorem I fear I failed to explain owing to (a) lack of knowledge, but (b) and more importantly, being drunk. He did see the point about the parallel lines axiom, though, so overall it's a win. I was going to explain the concept of multiple infinities when he (or was it me?) pointed out that if maths is pure at all, it's only ever pure within a cultural context. Which brings up the interesting point: if you're dealing with an Amazonian tribe, whose only concept of ordinal number is [one, two, many], how do you express infinity? And, more to the point, how do you express the concept of multiple infinities, starting with the idea of an infinity of rational numbers? I actually think that it would be easier to explain this to an ignorant tree-munching savage in the Amazon basin than it would be to yer average first-year maths student in a Russell-group university. Which you may think is a digression. It is not. To return to my scientific experiment (well, it wasn't exactly double-blind), I checked out the Ten O'Clock news on the Beeb, and you're right. Wednesday's was particularly heavily loaded with science-related subjects, up to and including "Monkey glands in my primordial DNA soup." And you're right. They did a shit-awful job of explaining even the basics -- Can You Hear Me, Lord Reith? (cont, ad infinitum)

It's better to tick the Dont AutoFormat box. Not that much better. But better.

[real-aardvark.livejournal.com]

Money, however, is a different matter. Let us not disparage the average punter with a crap house, a huge mortgage, a devastated pension, five thousand quid owed on his three-year-old daughter's FaceBook account, and a six-month-old car that makes farty noises because he can't get the credit to exchange it for a new farty car. I think these people are wiser than you believe. Well, maybe not wiser. In fact, I think they've been nothing but lucky fucking ignorant morons for the last decade or so. (A little bit of personal prejudice against stupid and ignorant people, there.) I do, however, believe that they will jump on whatever solution applies to Northern Rock, because it will be by definition an obvious waste of a lot of money in a short period of time, and (more importantly) the people who caused the problem -- ie, financial engineers -- will be the people who benefit from the problem. At this stage, the best that Darling and Brown can hope for is a 1930s-style recession, so that everyone forgets the little stuff. And luckily, Gordon has prior form in this area. After all, he's hardly likely to fall back on the Gold Standard, is he?

[peterbirks.livejournal.com]

Yes, the securitised mortgages are much the lesser problem, that's why they could be sold off. Similarly the infrastructure could be sold off. That would leave unsecuritised stuff behind, which could be "quietly" shuffled off into an unsold special vehicle and run off to close. Effectively the solvent bit of the crock is split off (keeping the Northern Rock name) and sold to private equity. The insolvent bit (now rather more insolvent than it was before, since it will have lost the support of the solvent bit) is not sold, but loses the Northern Rock name. That should be sufficient to confuse the six o'clock news, and it won't gather the headline "Northern Rock fails".

PJ