Winner's Tilt
Sep. 28th, 2008 09:59 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksTo the Empire last night for a dinner in Chinatown with Mr Young. No sign of Dr Pauly and I've mislaid the mobile number i had for him. I may pop back tomorrow afternoon when it will be much quieter.
The change in the professionalism of the whole thing, even since last year, was staggering. If you remember (as I do) the desultory cash spent by ESPN on the Main Event in 2003, the sight of overhead cameras, fixed cameras, mobile cameras (although no steadicams as far as I could see, possibly useful if Mike Matusow blew up), spotlights everywhere, was like a step into another dimension.
Had a chat after dinner with a guy at the IP Network and another guy wo is at Betfred. Interesting to learn that Titan was the biggest site within IP. They've never even impinged on my consciousness. Victor also remembered Cromwells from the early 1980s. Long time passed and long times past.
++++++++
I'd been running spectacularly well this month (a glance at my Sklansky dollars in a downloaded trial version of Holdem Manager showed that my all-in EV was actually below the amount that I had really won -- an unheard of scenario -- and I'm running at 13.3 BB/100 over 21,000 hands). This brought on a famed case of "winner's tilt", although I reined myself in before too much damage was done.
The problem is that, when you run well for 20,000 hands or thereabouts, the inevitable eventual regression to the mean makes you feel that things are not going as well as they should, so you start pushing rather more marginal situations (these are often moves that would be right in the right circumstances, but the circumstances aren't right).
I decided to try to cure this by forcing myself to 6-table on Stars this morning with a half-buy-in. In effect this stops you making any "speculative" moves because your stack denies you the implied odds. It's a much simpler game to play, although it's rather more boring and it has a lower long-term EV. I ended up losing a dollar over 500 hands in 90 minutes, but this included three pre-flop all-ins against small stacks where AA lost to 76s, AK lost to JJ and JJ lost to AQ on a board of KTxxJ.
Pokerstars doesnn't flip the cards up in all-in situations in cash games, so here was I cheering the Jack on the river, only for it to be one of the 8 cards that cost me the pot. :-). Anyway, at least the Sklansky EV was well above real dollars. Normal service resumed :-)
I think it's good to switch buy-ins and strategies occasionally on sites that have Pokertracker enabled.It keeps the more aware opponents on their toes. But I can't bring myself to play short-stacked.
++++++++++
If, as expected, Bradford & Bingley is nationalized later today, with the mortgage book being shuffled over to Ron Sanders at Northern Rock, while the deposits are sold on to another financial institution, then we have an interesting toxic sludge scenario.
A few years ago a company called Resolution came up with the bright idea of buying closed life assurance books. The idea was that a number of companies had left the life business, but that still had to administer their old books. Indeed, my own Sun Life of Canada policy is one of these. So, Resolution took over the running of these books with the theory being that, as a specialist in this kind of operation, it could make more money from it than companies which saw closed life books as a non-core nuisance. And the fact that the companies saw them as a non-core nuisance meant that Resolution got the businesses cheap.
Clearly that situation couldn't last for long, and the margins quickly narrowed as other players spotted the potential.
So, the next move was to buy up pension funds. The principle was the same. A number of companies ran final salary pension funds that were closed to new entrants and would have loved to offload them. So, new companies come along as specialist closed pension fund operators.
It occurred to me that these toxic mortgages are exactly the same. They are long-term instruments that still generate income (members of pension fund who have not yet retired, subscribers to life policies who have not yet died, mortgagees who have not yet defaulted) but which require gazillions of capital to operate. It is, in essence, a classic run-off operation ("run-off" is a technical insurance term about a business where nothing new is being written, there is bundles in the bank, but you don't know what your long-term liabilities will turn out to be).
Northern Rock has, almost by default, become a kind of Resolution/Pearl Assurance run-off vehicle for mortgages. But, and this is the point Geoff has emphasized, these mortgages have a value. We just do not know what that value is (which is the same as with closed pension funds and closed life books).
The situation is ripe for a a new Resolution-like operation (indeed, perhaps the newly emerged Resolution Mark 2 will do this) to buy up toxic sludge. The problem is if, as is the case with some Irish banks, the amount that the new vehicle is willing to pay bears no relation to the fictitious value at which the mortgages are still sitting on the banks' books. But that's just a temporary situation. It would solve any "liquidity" problem fairly quickly.
What it would not solve is a situation where, if the banks write the value down to the price that Resolution Mark 2 is willing to pay, the bank becomes insolvent. But I would have thought that if this was a marginal insolvency, the mere ability to offer finality to investors would make it far easier to raise extra capital.
___________
The change in the professionalism of the whole thing, even since last year, was staggering. If you remember (as I do) the desultory cash spent by ESPN on the Main Event in 2003, the sight of overhead cameras, fixed cameras, mobile cameras (although no steadicams as far as I could see, possibly useful if Mike Matusow blew up), spotlights everywhere, was like a step into another dimension.
Had a chat after dinner with a guy at the IP Network and another guy wo is at Betfred. Interesting to learn that Titan was the biggest site within IP. They've never even impinged on my consciousness. Victor also remembered Cromwells from the early 1980s. Long time passed and long times past.
++++++++
I'd been running spectacularly well this month (a glance at my Sklansky dollars in a downloaded trial version of Holdem Manager showed that my all-in EV was actually below the amount that I had really won -- an unheard of scenario -- and I'm running at 13.3 BB/100 over 21,000 hands). This brought on a famed case of "winner's tilt", although I reined myself in before too much damage was done.
The problem is that, when you run well for 20,000 hands or thereabouts, the inevitable eventual regression to the mean makes you feel that things are not going as well as they should, so you start pushing rather more marginal situations (these are often moves that would be right in the right circumstances, but the circumstances aren't right).
I decided to try to cure this by forcing myself to 6-table on Stars this morning with a half-buy-in. In effect this stops you making any "speculative" moves because your stack denies you the implied odds. It's a much simpler game to play, although it's rather more boring and it has a lower long-term EV. I ended up losing a dollar over 500 hands in 90 minutes, but this included three pre-flop all-ins against small stacks where AA lost to 76s, AK lost to JJ and JJ lost to AQ on a board of KTxxJ.
Pokerstars doesnn't flip the cards up in all-in situations in cash games, so here was I cheering the Jack on the river, only for it to be one of the 8 cards that cost me the pot. :-). Anyway, at least the Sklansky EV was well above real dollars. Normal service resumed :-)
I think it's good to switch buy-ins and strategies occasionally on sites that have Pokertracker enabled.It keeps the more aware opponents on their toes. But I can't bring myself to play short-stacked.
++++++++++
If, as expected, Bradford & Bingley is nationalized later today, with the mortgage book being shuffled over to Ron Sanders at Northern Rock, while the deposits are sold on to another financial institution, then we have an interesting toxic sludge scenario.
A few years ago a company called Resolution came up with the bright idea of buying closed life assurance books. The idea was that a number of companies had left the life business, but that still had to administer their old books. Indeed, my own Sun Life of Canada policy is one of these. So, Resolution took over the running of these books with the theory being that, as a specialist in this kind of operation, it could make more money from it than companies which saw closed life books as a non-core nuisance. And the fact that the companies saw them as a non-core nuisance meant that Resolution got the businesses cheap.
Clearly that situation couldn't last for long, and the margins quickly narrowed as other players spotted the potential.
So, the next move was to buy up pension funds. The principle was the same. A number of companies ran final salary pension funds that were closed to new entrants and would have loved to offload them. So, new companies come along as specialist closed pension fund operators.
It occurred to me that these toxic mortgages are exactly the same. They are long-term instruments that still generate income (members of pension fund who have not yet retired, subscribers to life policies who have not yet died, mortgagees who have not yet defaulted) but which require gazillions of capital to operate. It is, in essence, a classic run-off operation ("run-off" is a technical insurance term about a business where nothing new is being written, there is bundles in the bank, but you don't know what your long-term liabilities will turn out to be).
Northern Rock has, almost by default, become a kind of Resolution/Pearl Assurance run-off vehicle for mortgages. But, and this is the point Geoff has emphasized, these mortgages have a value. We just do not know what that value is (which is the same as with closed pension funds and closed life books).
The situation is ripe for a a new Resolution-like operation (indeed, perhaps the newly emerged Resolution Mark 2 will do this) to buy up toxic sludge. The problem is if, as is the case with some Irish banks, the amount that the new vehicle is willing to pay bears no relation to the fictitious value at which the mortgages are still sitting on the banks' books. But that's just a temporary situation. It would solve any "liquidity" problem fairly quickly.
What it would not solve is a situation where, if the banks write the value down to the price that Resolution Mark 2 is willing to pay, the bank becomes insolvent. But I would have thought that if this was a marginal insolvency, the mere ability to offer finality to investors would make it far easier to raise extra capital.
___________
