You have to admire the front
Jan. 9th, 2009 07:43 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksAn absolute top-notch piece of disingenuity from Alistair Darling yesterday. On Wednesday he had told the FT that a policy of "quantitative easing" was being considered. Unfortunately the whistle has been blown on this, and even the popular press has sussed that this means cranking up the printing presses. So, young Master Alistair hastened yesterday to say that the Treasury was looking at "a range of measures," but "nobody is talking about printing money".
Well, no, you aren't talking about it, you're talking about quantitative easing. That the latter is synonymous with the former means that you can do it without talking about it. The BBc, unfortunately, is not up to such subtleties of terminology, and fell for the government line, printing the headline "No plan to print money". Sorry, but that wasn't what Darling said at all.
Those of us stuck on long-term fixed rate mortgages might be temporarily spitting feathers, but there are a large number of people out there on trackers. Add that to the 25% cut in fuel prices in the past few months, and a hell of a lot of money has been pumped into the economy in the past few months (making, btw, the 2.5% cut in VAT even more laughable in its irrelevance). While those of us on fixed rates rein in our spending and wait for inflation to eliminate our debt (net result, one free house), those on interest-only trackers are better off today.
The first pushes of inflation look to me to be likely to appear around about August, when importers' hedges against currency movements will start to expire. Small-margin players such as Primark and other companies that import most of their products will have little choice but to raise prices. Areas where there is a shortage of labour and where the employees are being impacted by such rising prices, will see increases in wages far above "official" inflation.
+++++++++
Played 90 minutes of three-tabling $400 buy-in last night and survived a pre-flop all-in where my Aces ran into Jacks (Flop 8J3, natch, with no escape on turn or river) without much emotional impact. Having more than $6K in the account certainly helps here. I then went more than $500 down after shortish-stack blind called my pre-flop raise. I had AK and he had K9o. Flop came K9x and he played it well to take me for a little more than $100. I will have to look at this not-uncommon situation. One could argue that he has made his mistake by putting in 10% of his money pre-flop, but this is closer than one might think. The obvious answer is to raise more pre-flop, but I'm fighting against this wimp-out tendency. As the saying goes, you can always avoid letting opponents in when you have AA by raising all-in. But you don't. However, if opponents are declining to make their mistakes post-flop, then you have to force them to make their mistake pre-flop.
Fortunately, most opponents, even at this level, seemed quite capable of making some poor post-flop plays. I also spotted some errors of my own that I tucked away for future reference, but the key takeaways for me are that stack sizes and "do I want my opponent to make a mistake now or later?" are the important factors. In addition (and this somewhat states the obvious), there are two extremes in games. If no hands ever reach a showdown, then hand strength is irrelevant. If all hands reach a showdown, then hand strength is all. All games fall between these two extremes, and the importance that you allocate to hand strength (rather than position, etc) depends on where between these two extremes the game is situated.
Note that, because short-stacks are more likely to result in showdowns, this increases the importance of hand strrength. By logical progression, this decreases the importance of position. As we already know, position becomes more important as stacks get deeper.
Anyhoo, I turned things around and got out for break-even. And it's always nicer to recover from a loss than to lose back your winnings!
________________
Well, no, you aren't talking about it, you're talking about quantitative easing. That the latter is synonymous with the former means that you can do it without talking about it. The BBc, unfortunately, is not up to such subtleties of terminology, and fell for the government line, printing the headline "No plan to print money". Sorry, but that wasn't what Darling said at all.
Those of us stuck on long-term fixed rate mortgages might be temporarily spitting feathers, but there are a large number of people out there on trackers. Add that to the 25% cut in fuel prices in the past few months, and a hell of a lot of money has been pumped into the economy in the past few months (making, btw, the 2.5% cut in VAT even more laughable in its irrelevance). While those of us on fixed rates rein in our spending and wait for inflation to eliminate our debt (net result, one free house), those on interest-only trackers are better off today.
The first pushes of inflation look to me to be likely to appear around about August, when importers' hedges against currency movements will start to expire. Small-margin players such as Primark and other companies that import most of their products will have little choice but to raise prices. Areas where there is a shortage of labour and where the employees are being impacted by such rising prices, will see increases in wages far above "official" inflation.
+++++++++
Played 90 minutes of three-tabling $400 buy-in last night and survived a pre-flop all-in where my Aces ran into Jacks (Flop 8J3, natch, with no escape on turn or river) without much emotional impact. Having more than $6K in the account certainly helps here. I then went more than $500 down after shortish-stack blind called my pre-flop raise. I had AK and he had K9o. Flop came K9x and he played it well to take me for a little more than $100. I will have to look at this not-uncommon situation. One could argue that he has made his mistake by putting in 10% of his money pre-flop, but this is closer than one might think. The obvious answer is to raise more pre-flop, but I'm fighting against this wimp-out tendency. As the saying goes, you can always avoid letting opponents in when you have AA by raising all-in. But you don't. However, if opponents are declining to make their mistakes post-flop, then you have to force them to make their mistake pre-flop.
Fortunately, most opponents, even at this level, seemed quite capable of making some poor post-flop plays. I also spotted some errors of my own that I tucked away for future reference, but the key takeaways for me are that stack sizes and "do I want my opponent to make a mistake now or later?" are the important factors. In addition (and this somewhat states the obvious), there are two extremes in games. If no hands ever reach a showdown, then hand strength is irrelevant. If all hands reach a showdown, then hand strength is all. All games fall between these two extremes, and the importance that you allocate to hand strength (rather than position, etc) depends on where between these two extremes the game is situated.
Note that, because short-stacks are more likely to result in showdowns, this increases the importance of hand strrength. By logical progression, this decreases the importance of position. As we already know, position becomes more important as stacks get deeper.
Anyhoo, I turned things around and got out for break-even. And it's always nicer to recover from a loss than to lose back your winnings!
________________
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Nice
Date: 2009-01-09 10:12 am (UTC)Keith S
Re: Nice
Date: 2009-01-09 10:25 am (UTC)Paying down debt at the moment is the last thing that you want to do. I actually considered doing this at the back-end of last year (I am allowed to pay down 10% of the initial loan every year), since this would in effect be an investment at 5.89% fixed for six years, and I turned it down. Don't worry about non-existent interest rates at the moment. Put the cash into a two-year fix at whatever rate you can find. Then you can pay off the tracker debt bit in two years, when the rates will be going up again.
PJ
Re: Nice
Date: 2009-01-09 09:59 pm (UTC)Keith S
no subject
Date: 2009-01-09 12:25 pm (UTC)Doesn't that assume you are going to get constant pay rises above the inflation rate, which has never happened to anyone on this side of a boardroom and never will.
Also it means that house prices have to rise again (and bust again.) All-in-all that's a lot of pain just to get yourself to retirement age.
BTW I made 20% last year actively trading bullion with a 5 figure sum. With bank interest rates lower than the inflation rate I am unloading everything (6 figure sum) into bullion this year. Maybe a few oil and mining stocks. Either I double up or I double out.
no subject
Date: 2009-01-09 10:42 pm (UTC)a) if the value of what I owe is decreasing in real terms faster than the interest I am paying on it, I am in front. (Unfortunately, that's precisely what it is not doing at the moment!)
b) If it's generating a rate of return, what I need is for that rate of return to increase at the rate of inflation (while the cost of capital is decreasing because of said inflation). In fact the rate of inflation isn't really that relevant, provided the rate of return goes up faster than the cost of capital. Of course, the bigger the gap (which is where inflation comes into play), the better it is for me.
c) Wages HAVE risen above the rate of inflation (or, rather 'real' incomes have). This was one reason for pensioners moaning about pension increases being tied to inflation rather than to the average increase in incomes -- because the latter was higher than the former, which meant that pensioners over the years had been 'left behind'.
And, finally, I'm quite happy with your bullion punt (see my earlier predictions for the year).
PJ