Tuesday, January 27, 2009

Back to the Blonkaments

I haven’t been playing the blonkaments for a while.  I could not even find a way to play more than a couple of the last Bodonkey series.  It’s a combination of me not pushing myself to play more poker, and schedule changes that make the playing during blonkament hours more difficult.  I used to have a window on Thursdays and occasionally other days to sneak a blonkament in, but no such luck anymore.  Well I had the urge, and played in the Mookie last week for the first time in about a year and it was a blast.  It’s always fun when you make a deep run, but it was also nice to face some quality characters along the way.  I should have been eliminated early on. 

Very early, I pick up QQ and UTG opens to 90.  I reraise to 270, and UTG re-re-raises to 666.  Alarms bells were going off big-time, and I decided to just call.  The flop came all low, and I basically had already decided I would go to war if that happened.  I guess I was hoping for an A or K on the flop to scare me off.  I forget exactly how it went down, but we got it all in on the flop, and I was against AA obviously.  A rivered Queen would put me back in business.  If I get a quick double up in these double stack events, I am good to go deep.  I don’t actively try to get a quick double up (ignoring the example hand above), but if I get one, I am already mapping my way to the Final Table.  Getting to 6k in chips, allows me to stay in “modified cash game” mode for hours, and from experience I tend to chip up when playing this way.  The key is allowing yourself the time to get into situations where you can accumulate lots of chips, and avoid bleeding away small amounts while you are waiting.  I played fairly aggressive based on the cards I was getting for most of the first hour, and eventually took the chip lead near the end of hour 1.

I was multi-tabling Bodog Beginner S&Gs while the Mookie started, and I got 1 & 3rd in the $16s, and 4th in a $32 as the second hour started, and was able to focus more on the Mookie.  I think I got up near 10k in chips, and then went through a long lull w/o cards.  I limp called a jam with 66 at one point, but the jam was from a semi-short stack on the button, and I was not giving credit for AA-QQ there.  I was against A7o and won the flip.  I got to call an all-in preflop with AA with two tables left.  I would arrive at the FT as the short stack with just less than 10k in chips.  Lucko was abusing the table with tons of micro preflop raises, and I was waiting my turn to get some, but I was pretty cold for much of the FT.  I was in a tough table position, with an unknown player on my left, that called me every time I entered a pot at the FT, and lucko one more to the left.  I was going to need cards to go to war with because it would be tough to push off either of these two deep stacks.  I doubled through lucko with QQ vs. AK.  I limped from UTG with KK, and busted the short BB when he hit top pair on the flop.  I was trying to trap lucko here, as he was raising a ton preflop, but he folded preflop.  I did get the auto-call from my left for some extra chips though.   I bled down with no cards, and when I finally over pushed with A8, my friend to the left came along with AT and I was out in 6th.  Mookie held on for an entertaining Heads-Up match with lucko.

Overall, I felt great about my play.  I always get criticized for playing too tight late, but it tends to work for me.  I came to the FT as the short stack, and lasted about an hour.  My big starting hands were paid off big time, and that can over come several orbits of nothing.  I big hand was still going to get paid off form me late.  AJo would have been good enough on my final hand.  I need to find a way to play more of these.  Maybe the BBT4 will be enough to get me back at the blogger tables.

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Wednesday, January 21, 2009

RIP Draftmix?

Draftmix was one of the first sites like ours to exploit the UIGEA exception on Fantasy Sports. It was started up by fellow poker blogger and complete tool Matt Maroon. Matt just loved to bash FantasySportsLive.com on his now dead poker chronicles web site. Check this post out from December 2007, where he raves about his site and states this about FSL.

"It's hilarious to me that they make the originality claim, when they're just a slightly less lame carbon copy of another site. My dog leaves more originality than that in tightly coiled piles on my front lawn daily".

I responded in the comment section with this gem.

"You have done nothing but trash our site, so I find it hilarious that you take offense to one simple comment in our blog. We plan on offering live drafts as an alternative method, never as the primary one. And if we suck so bad, why do you even bother trashing our site or even read our blog. The facts are simple. Your site missed the football season, which is a huge setback for you. Your contests only fill if there is free money involved. For some reason we have the most users, and we actually make money on our contests. It is very professional to trash your competition, so keep it up. It only helps us in the long run, because it makes you seem oh so jealous. And nice job ripping our spelling ability. I am sure that's what people look for when choosing a fantasy sports site."

I normally would never give lip service to the competition, but it was clear from the beginning that they would never really be a competitor. I did follow them for a while, because they were one of the better capitalized competitors out there. They were funded initially through Y-Combinator, and later through some secondary funding rounds (according to Matt). Well it gives me great pleasure to see that they have stopped running fantasy leagues on their site. I am not sure if they are doing this to cut their daily losses, or they are just buying time before they shut the site down like Instant Fantasy Sports did last year. Matt deserves what he gets, and his site never had a chance. They are doing some FaceBook stuff I guess, but that will be an utter failure as well.

If this is really it for them, they will probably go down as the worst start-up in Y-Combinators history. If you use Vegas style accounting (You don't count a Blackjack bet as revenue, you count what is won from the Blackjack players as revenue) which is appropriate for this type of business, their revenue is actually negative for the life of their company. Negative revenue for the life of a business is a pretty tough thing to pull off. It means that you are paying people to use your product, not the other way around. Hard to make a living that way, so I can understand why they are trying to cut their losses.

It really did not surprise me at all. I read the Matt Maroon blog for a while, because he would discuss his start-up from time to time. Pretty much everything he wrote their was dead wrong. He said the iPhone would not sell 10M units in 2008. Wrong! He said the Google Android phones would crush the iPhone. Wrong! He went out of his way to defend the Crap Vista Operating System. Wrong! He wrote a long post about Global Warming being a fact. Wrong! He never bothered to admit that this stuff was wrong, so I tried to point it out in a comment which he censored. Unfortunately, you can't censor me over here.

So Draftmix leaves the competitive landscape, and we are left with NBC, and a bunch of under capitalised new start-ups. We make things look pretty easy at FSL, but it really is not that easy. Our site was set up correctly from the beginning, and we are laser focused on our target customer. We also used you guys, the poker blogging community, to gain a quick critical mass of users. Without action on your site, its hard to attract new people and for that we will always be grateful to the poker bloggers. Best of luck Matt and Chris with whatever you decide to do next.

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Monday, January 19, 2009

Early Super Bowl Prediction


I have not felt so good about a superbowl pick since the Tampa Bay - Oakland Superbowl years ago where I made a four figure score.  I absolutely love Arizona +7.  I think they are going to win this one outright.  Arizona is peaking at the right time, and I have been unimpressed with Pittsburgh in the playoffs.  Arizona is going to put up points on anyone the way they are playing, the only issue is can they get stops on Defense.  The Arizona coach is only two years removed from being Pittsburgh's offensive coordinator.  Not only does he know the offensive personnel of Pittsburgh like the back of his hand, he also designed many of their plays/schemes.  That should be enough to slow down an offense that has not been very impressive in the playoffs.  The same thing was true in the Tampa Superbowl where Gruden was just one year removed from being Oakland's head coach.  He knew exactly what Oakland would do on offense, and absolutely crushed them as a 7 point dog.  Bet early and often because I think the line will be moving down.  Looks like the early action is all on Arizona +7. 


How Long will the Recession Last? How Deep?

I have serious doubts that an expensive stimulus package will do anything, but extend the pain of the current recession out for years.  We are currently paying the price for the last 10-20 years of consumer excess.  The U.S. consumer has been steadily reducing their savings rate in aggregate for a long time to the point of it going below zero percent.  The long term average savings rate for U.S. Consumers is 8% which is low compared to worldwide standards.  My take is that the savings rate will need to get back up to around 10% for a while before the economy can naturally bottom out.  Any stimulus that would encourage consumers to spend and not save just delays the point in time when the savings rate will increase to 10%.  It would also be nice if the Local, State and Federal Governments could live within their means, but I am not going to hold my breath on that one.  So the question is how much does the U.S. Economy need to contract before we hit bottom.  My guess is 10-12% based on the following logic.  Consumer spending accounts for about 70% of the economy.  In the most recent quarter, U.S. consumers have increased their savings rate to 2.8% and the economy has contracted by about 3% Year over year.  To get to a 10% savings rate it looks like the economy will need to contract at least 10%.  It’s tough to save in a recession, and to overcome negative savings rates in the past, the consumer will need to over save for a while as well.  That’s why I would guess a 12% contraction in the U.S. Economy is required.  So if we let the economy naturally contract by 3% a year for about 3 more years we should hit bottom.

Recessions serve a purpose and this is one of them.  Bringing companies and individuals back to economic reality.  However, if we decide to “stimulate” the economy to prevent this from happening, it will just delay the pain.  Let’s say that a stimulus package could half the current rate of economic decline to -1.5% per year.  Then it would take 6 years of decline to get the economy to bottom out.  When consumers start saving more it hurts the economy, but the spending rates have been unsustainable for a long time.  Trying to sustain those spending rates is a huge mistake.  Unfortunately, the right thing to do now is to encourage savings.  This will actually help out the banking system as well.  The banks will be able to recapitalize themselves by taking in more savings than they lend out to consumers.

The credit markets being frozen is a huge lie.  Does your credit card still work?  Mine did last time I checked.  Do you think someone with good credit, and a good job would be turned down for credit at Home Depot, Best Buy, or a car dealership? Think again.  Credit is only frozen to those who are not worthy.  Those who should be saving should not be borrowing.  Denying these people credit is a good thing, because if we can’t force them to save, at least we can force them to spend less.  Forcing banks to lend money is what caused the housing bubble.  Banks will continue to lend where it makes sense to do so.  They will continue to lend to people who can pay back the loan no matter how bad things get in the economy.

It would be hugely irresponsible for the government, who is incapable of paying their own bills, to borrow a ton of money to encourage others to spend.  Not only will it just delay the pain of the current recession, it will make it even harder to recover from it, because the consumers (i.e. U.S Tax Payers) will be stuck not only paying the price for their own excess, but will then have to pay the price for the government’s excess.  This could further extend this recession out unnecessarily.  Let’s all just step up and live within our means for a while.  We have been living above our means for way to long, and this is the only way to resolve our problems.  Propping up an economy that simply must contract will never work.

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Wednesday, January 14, 2009

Automatic NL Holdem Decisions Part 2

I played just over an hour of .25/.50 NL Holdem Cash the other day at Lock Poker, and tallied every decision that was made as either automatic or requiring some level of thought. During the session I made 332 decisions, of which 329 were completely automatic, and just three required any level of thought process. The auto decisions fall into two categories. One is where just looking at your own cards is enough. For example if I was dealt T3o outside of a blind, I simply hit the fold button without any additional thought. The other is where you gather some readily available information that takes less than one second to get. This is basically examining your position at the table, and the action before you. For example if I picked up 22 preflop, I need to see my position, and the action before me to make the decision, but once that info is obtained the decision is still automatic and without any thought. I still consider that type of decision as automatic. So during the entire session only three times (about 1% of decisions) did I need to go to any additional level of thought process. If you are a cash game player, I highly recommend that you go through the same exercise that I did, just to understand how much of your NL Holdem cash game is on auto-pilot. Now I am a little bit rusty on my cash game, so I am not in total command. If we look in detail at the three decisions that I thought through, you may be able to argue that 2 of them should have been automatic. Let’s take a look at the three decisions that required some additional thought.

Decision #1.

I am dealt QJo from two off of the button, and it folds to me. I thought it through, and there was a case for folding, limping, and raising here. I ruled out raising with it, because there were 4 players behind me, and QJo is not that strong. I elected to limp, but the correct move was probably auto-fold. I think I limped because this is low stakes where I feel I have a decent post flop advantage, but I was questioning the move internally right after I made it. In this case, only the blinds called, and I missed the flop completely. The blinds checked to me, and I bluffed at the pot and took it down. That result is unimportant. I think if I was not so rusty, this one would have been an automatic decision.

Decision #2.

I am dealt AQs in middle position and open raised it 4x. I always raise 4x preflop in cash games when opening which helps make your decisions automatic, while also disguising your hand. A blind, and a player behind me called. The flop came out all low with one of my suit. The blind led out for 3/4th of the pot. I am looking at two overs, and a runner runner flush draw, for about 8 outs total, assuming an A or Q would be good. Running through the math, it became clear that this was a borderline decision. Because I was unsure the A or Q would actually be good, and there was still a player behind, I elected to fold. I think that it will usually take a bit of thought to see the decision is borderline, and some more thought to decide what to do in a borderline decision. Again, I am a bit rusty here. If I was on top of my game, I think I could have determined instantly that this was a borderline decision. If you have a line in mind for borderline decisions, you can then automatically act. Since I was rusty, I did not have a line in mind for this type of decision, and had to think it through. This one was close, but it was possible the decision could have been automatic.

Decision #3.

This was a hand where I called a small raise preflop with AQo. I hit my Ace on the flop, but it was a high flush flop. I was in position against one other, and after he checked, I bet out 2/3s of the pot which was called. The board was also high, with some straight potential. The turn was a low offsuit card, and it got checked to me again, and I elected to check behind to manage the pot size against a scary board. All three decisions were automatic so far. The river was another blank, and this time I was bet into for close to the pot size. I was basically put to the test here, and when this happens you need to think. This was definitely no automatic decision. After a bunch of thought, I elected to call, based on the two blanks that came on the turn and river. Other guy flipped over AK for the win.

I think in general the decisions get tougher post flop. If you are playing a tight/aggressive style, you usually end the hand before a tough decision ever needs to be made. I rarely get to the river, so I am rarely put to the test, where a thoughtful decision is required. If you are going to 4+ multitable, a tight aggressive style is almost required. A loose aggressive player needs to take much more into consideration before acting, and you just do not have that kind of time when multitabling. The other thing that I noticed is that a much higher percentage of players are playing tight aggressive now versus before the UIGEA was passed. This would tell me that the tight aggressive line should not be as successful as it was before. You are probably better off playing loose aggressive now to go against the grain of the table. So there is this tradeoff that must be made. Can I make more money per hour by playing less tables in a loose aggressive way, or by playing say 2x as many tables tight aggressive? I am not sure what the answer is at this point. It may be time to test the loose aggressive style out and compare win rates per table.

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Wednesday, January 07, 2009

Will Obama Bankrupt The United States?

President Elect Obama has recently stated that the US will need to run Trillion Dollar deficits for many years to come to get us out of the current financial mess. Does anyone actually realize what this means? We are mortgaging away our future to make the current times better. Is it really fair to make our children and grandchildren pay the price for years and years for our problems in 2008 & 2009? Can we really solve a problem that was caused by irresponsible lending and borrowing by doing exactly what caused the problem (being an irresponsible borrower). Let’s look at the U.S. Government track record. The government has spent more money than it has collected in taxes every single year since 1969. Forget about the surpluses that were claimed during the Clinton years. That surplus used the Social Security surplus in the calculation, and Social Security is a trust fund and not a tax. The U.S. can’t count that as income, because it is money to be set aside for future retirement payments. So the U.S. is by definition an irresponsible borrower. We have shown absolutely no means to pay off the debt we are accumulating. We have not made a principle payment on the debt in over 40 years. We are living on an interest only type loan with no ability to pay it down. The world has been more than willing to finance our debt up to this point, but eventually they will get wise that the U.S. is spiraling into bankruptsy.

Lets look at how bleak the current situation is, and what things will look like if Obama is allowed to run a one trillion dollar deficit in each of his first four years in an attempt to “fix” the economy. The 2009 deficit is already projected to exceed 1.2 trillion. Below are some interesting numbers:

Current National Debt (Jan 1st 2009): $10.7 Trillion
2008 Interest on National Debt: $470 Billion
2008 Effective Interest Rate: 4.39%
2006 Number of Tax Returns that Paid Tax: 93 Million

So if we decided today we wanted to pay off the national debt in a 30 year type mortgage the average taxpayer would owe $6,681 per year for the next 30 years. This assumes that we could somehow immediately balance the budget, and not pile on additional debt.

Now let’s assume that Obama is allowed to run a Trillion dollar deficit for each of his first four years. I will assume that as we get further into debt, and our ability to repay is reduced, that lenders will demand higher interest than we are currently paying. Let’s say the effective rate becomes 5.0%. We also have Obama’s tax policies that will dramatically reduce the number of people who actually pay taxes. I have heard estimates that this number will be reduced to about 50 million people, but I will use a more conservative number of 70 million. So after 4 years of Obama the national debt payoff situation will look like this.

Estimated National Debt (Jan 1st 2013): $14.7 Trillion
Estimated Interest on National Debt: $735 Million
Estimated Effective Interest Rate: 5.0%
2013 Estimated Number of Tax Payers: 70 Million
30 Year annual payment per tax payer to pay off: $13,010

So in just four years time to fix the current problems, the average tax payer will be stuck with an additional $6,340 bill per year for the next 30 years, based on Obama’s deficit spending. Some of you out there are young, and will be stuck with all 30 years of these payments (assuming we become a responsible borrower with the intention of paying back our loans). Others who have children or grand children, will not be paying taxes for the next 30 years, and will just shove this expense off on their kids and grand kids. When Obama talks of a $700 Billion stimulus package, you need to think about what that actually costs. The cost is on the order of $1000 per year, per taxpayer for the next 30 years. I like nice roads and bridges and everything, but that is way more than I want to pay for them.

Unfortunately we are an irresponsible borrower, and that will not change anytime soon. Eventually our interest payments on our debt will exceed what we take in taxes, and the United States will be Bankrupt. Looks like this will be happening sooner rather than later. Is there anything that can be done now? Sure. Write your representatives in congress, and tell them you do not want anymore stimulus without a plan to pay for it. Since we really have no plan on ever paying for this, we would be better off dealing with hard times now, than destroying our country’s and our children’s future to make 2009 better. Let the economy find its own natural bottom, and it will start to grow again.

The US economy has been bubble driven for almost 15 years now. First it was the stock market bubble that made everyone flush with cash, and drove consumer spending. Then it was the housing bubble, where refinancing drove consumer spending. Sure, we can create a government spending bubble, and extend the good times out for a few more years, but this is yet again an unsustainable bubble. Will we ever learn a lesson from all these bubbles? What happens when we stop running Trillion Dollar deficits? How about letting the U.S. economy find some new footing without being sustained by a bubble? We are just delaying the pain, and mortgaging our future to do it, and this need to stop now.

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