Vegas Trip Report
Labels: 2009 WPBT Summer Vegas
Take the blinders off and find out what the "real" story is.
Labels: 2009 WPBT Summer Vegas
The Fed just completed their recent meeting with a statement that they are seeing signs of the economy improving, and are going to leave overnight rates at 0%-0.25% for the indefinite future. On one hand they are saying the economy is improving. On the other hand they are saying the economy is crap because they need to keep rates at historic lows for an extended period of time. Many people do not understand how fiscal policy works, but the Fed. should. When the Fed. adjusts their rates there is a 9-12 month lag before the rate change takes full effect in the economy. Because of this huge lag, the Fed. needs to stay ahead of the curve, and try to anticipate where the economy will be in a year. Keeping rates too low in a recovering economy leads to inflation, and was a big cause of the current financial crisis. Had the Fed. kept rates higher prior to 2008, it would have helped to prevent, and/or deflate the housing bubble. It would have been harder for people to qualify for even the sub-prime type loans if rates were higher, and if less sub-prime loans were made, the housing bubble would have been less severe. The Fed. was essentially enabling the housing bubble through fiscal policy. If the Fed. really thought the economy would be recovering in the next 12 months, they would need to start moving rates up now. How about just moving the rate to 0.25%, instead of a range that includes borrowing money for free? The fact is that there are no green shoots, and the Fed. is well aware that Obama's policies, if enacted, will crush the economy for many years to come. They want to be a team player so they are talking the economy up, but their interest rate policy speaks for itself. Holding rates at historic lows for an indefinite amount of time, means that in their opinion, the economy will not be improving for an indefinite amount of time plus 9 to 12 months.
It does not appear that there will be an organized blogger gathering this summer. That's no reason for me to not make a Vegas run though, is it? I got a bit of business to attend to, and the WSOP is a great place to promote Fantasy Sports Live, so I am going to pack up and head out this weekend. My only plans are to spend some time in the Amazon Room promoting FSL and meeting with some of the bloggers reporting on the event. Also, I am going to play as much live poker as possible (probably at MGM). I don't believe there are any organized blogger events Friday-Sunday, so I am going to play it by ear I guess. I don't plan on playing in the WSOP, but that could change if I go on a heater Friday night. Good luck me.
Nothing makes me cringe more than when I hear the words "too big to fail". Too big to fail is a new and horrible concept. It basically says that there are certain companies that pose systemic risk to the United States economy if they were to fail and file for bankruptcy. Obama's new regulatory plan addresses companies that are too big to fail by regulating them in new ways, while leaving out new regulations for Fannie Mae and Freddy Mack. The new regulations also fail to address the fact that the FHA has become the new sub-prime lender of choice with 3.5% down loans to people with poor credit in a crashing housing market. I guess we never learn a thing do we?
Two more FantasySportsLive.com competitors have disappeared recently. Game Day Draft which was the first site to launch under the UIGEA exemption no longer exists. They launched with a confusing web site and a strange pick from player pools structure. They were also located off-shore in Costa Rica which seems a bit shady for a "legal" fantasy sports site. They tried to reinvent themselves by copying our contest lobby, but their site continued to be a confusing mess, and they have finally thrown in the towel. RIP Game Day Draft.
The Executive Branch of the government is constitutionally required to enforce the laws of the United States. As I stated in Depression 2.0, Obama was attempting to rewrite the U.S. bankruptcy laws in the Chrysler bankruptcy as a way to payback the UAW for supporting him. While Congress refused to stop him from doing this, a small group of Indiana investors successfully appealed to the Supreme Court and the proceedings have been stopped pending a potential hearing at the highest court of the land. The UAW has no claim to anything in this bankruptcy, but were going to be gifted a large stake in the company, as well as cash and warrants. Obama played hardball with the secured investors, and softball with the UAW. Had everyone agreed to this, fine. Many did, but any objection to this would require the Bankruptcy laws to be followed and there were objections. This is great news, because it shows that Obama's unlimited power is going to get checked (as is should be), by another branch of government. I do not see anyway that they will not actually hear the case, and if they do there is no way they are going to allow bankruptcy laws to be destroyed for political reasons. This will also effectively kill the GM "prepackaged" bankruptcy as well. What should have happened is the UAW should have taken nothing, but received the opportunity to save some jobs through bankruptcy. That's how it supposed to work. Had that happened, it would have been possible for Chrysler to survive bankruptcy. You basically go the UAW, and say you will get nothing, and if you do not agree to that we will liquidate the company, and all union jobs will be lost. That is a pretty good incentive to take the deal. Unions are like parasites. They are not supposed to be able to kill the host and still survive. Finally, some much needed sanity from the government, and a chance of continued investment in U.S. companies.
I saw "The Hangover" last night, and IMO it is the best comedy ever made by miles. No other comedy comes close to this one, and I love me a good comedy. Imagine if Old School was ten time funnier. That's what you have with The Hangover. When the movie ended it got a standing ovation from the theater crowd, something that I have never seen before. I also can't wait to see it again, and I have never wanted to see a movie twice prior to release on DVD before. I have not decided yet, but it may be my new all-time favorite movie including all genres. Nuff said.
I hate to say it, but I think we are well into our second depression in the
The economy is in horrible shape right now. Forget about reports from the biased media that consumer confidence is up, and that housing is improving. The media is talking the economy up as much as they can, because that is what Obama would want them to do. He is paying for good media coverage through kickbacks to GE (parent company of NBC) including Cap and Trade preferences, Universal Health Care preferences, and unrestricted access to the White House. I was flipping channels the other day and found a special on the interworkings of the Obama White House. This was not a Fox News report, because they would never get access like that. It was obviously NBC the most biased and corrupt news organization out there, getting repaid for there biased reporting of the anointed ones election. The media is cherry picking good news about the economy. The economy is not improving, unless your definition of improvement is getting worse less fast. The economy may be getting worse less fast, but it is still getting worse day by day, month by month. Q1 home prices were down by the largest amount Y/Y on record. Home price declines are actually accelerating right now. Tough to find that in the media “housing market is improving” reports. Consumer confidence may be ticking up, but same stores in May (a measure of actual consumer sentiment) were lower across the board. In other words consumer spending continues to drop. The problem with talking the economy up is that it rarely works. Eventually people will figure out that the talk is just talk, and the economy is in truly bad shape. It’s not that hard, go to a shopping mall and see for yourself.
A shock to the banking system is not enough to take the strong American economy down for good. Normally easing interest rates and waiting the nine or so months for the changes to filter through the economy is enough to fix the problems. Rates were lowered early on in this depression. The initial TARP capital injections into the banks were probably also required to stabilize the banking sector. I would say about 300 Billion between AIG and the troubled banks would have been enough. After that, you need to wait things out. Unfortunately, along comes a new president with a wealth redistribution, socialist agenda. Being opportunistic, he sees the crisis as a means to push his agenda. His agenda though is pure anti-growth, pure punish the hard-working, and pure spoil the lazy. Basically a pure anti-American agenda that would have the founding fathers spinning in their graves. I could never really figure out the reason for the second amendment, but those genius founding fathers were looking 100s of years ahead to how our system could be corrupted by the executive branch. The 2nd amendment is a check against unlimited executive power, and it may be time to use it.
So at a time when only sound economic policy can get us out of this depression, we have a president who could care less about sound economic policy, and cares only about social engineering. We have a president that is spending about $18,000 per tax payer this year to “fix the economy”, with policies that will never work. I think if you asked the average American they would want there 18k back. The problem with spending 1.8 trillion dollars that you don’t have is that you have to pay it back some day. You better get a massive bang for your buck if you are going to put all taxpayers on the hook for that kind of money. When it does not work, it is not free. The repayment of that debt will be a headwind against the economy for the next 50 years at least.
Lets just look at a few of the ways that Obama is damaging the economy with his policies and steering us right into a depression.
TARP was never intended to be used to bail out the car companies. GM and Chrysler both have broken business models and are not savable. Every dollar that we give them is flushed down the toilet. Unless we offer to provide them unlimited funds to stay in operation they will be both be bankrupt for good in short order. Worst of all, Obama corrupted to bankrupcy process to payback the UAW for helping elect him. Unless the Chrysler bankruptcy is tossed out on appeal, our bankruptcy laws will be broken in the
Let’s face facts here; the stimulus bill has not stimulated the economy in any way. It was a welfare bill disguised as a stimulus package. If you gave me 770 billion dollars to stimulate the economy, the recession would already be over. I would have suspended income tax collection, and reduced corporate tax rates until the 770 billion was “not collected”. The key difference here is that not collecting the money is not an expansion of government, and is very easy to unwind. Every working individual and corporation would be immediately stimulated. They may not spend the extra money, but if they don’t it will get saved which is good for the banks. It also gives people an incentive to work, and businesses an incentive to hire. The stimulus package was simply a welfare package, and gives no incentive to work or for businesses to hire. Let’s break it apart a bit here. A massive portion of the stimulus was for the “Make Work Pay” tax credit. A tax credit is not a tax cut, and that is a huge difference. There were no actual tax cuts in the stimulus package despite media and Obama reports to the contrary. The tax credit is phased out for 100k+ earners, and is paid out even if you did not pay taxes. (Refund of your Social Security and Medicare withholdings). So there is no stimulus here for high income earners, and he has raised the marginal tax rate for low income earners disincentivizing hard work. Basically, a low wage earner who qualifies for the tax credit faces a phase out if they earn any more money as well as increased tax rates. The double whammy makes it not worth it to work harder and earn more money because the government will take most of it. 100s of billions of stimulus is welfare for states so they can temporarily avoid tough budget decisions. 100s of billions are to extend and raise unemployment benefits which has been shown over and over again to discourage people from seeking work, and expanded Medicare payments which don’t stimulate the economy at all. The rest is for shovel ready projects of which less than a billion has been spent so far, and for research grants to study liberal pseudo science like Global Warming. The quality of science is deteriorated by government assistance, as it politicizes science. The government will siphon off 75% of the R&D grant funds by administering them. It would have been a much better idea to expand the corporate R&D tax credit. At least corporations would research stuff that could help the economy as opposed the government standard pig flatulence studies.
Cap and Trade
The most scientifically dishonest policy from the president that said he would use sound science to make public policy. Obama’s energy policy will cost the average family $4600 a year in extra energy and related costs in a time of depression, and ship millions of manufacturing jobs overseas where energy will be much cheaper. The policy will also have no measurable effect on Global Temperatures that have been dropping for the last 7 years and are expected to continue to drop in their normal 30 year up and down cycle as determined by the Pacific Decadal Oscillation (PDO). There is no current substitution for oil, and CO2 is a harmless gas that is essential for life as we know it. If this policy is enacted, not only will a depression be guaranteed, but our national security and quality off life will take a huge hit. Keep in mind that the science of global warming per the IPCC was determined by a show of hands, and not by reproducible experiments. I was not aware that a show of hands trumps an actual scientific experiment, but this is how Obama science policy works. I would really appreciate a public debate on this matter before we head back to the energy use levels of 1905, but it is not going to happen because the liberals would not win, and they are the ones in control now.
Universal Heath Care
Here are the facts. Health care in the
Reckless Spending PlansIf you combine TARP, the stimulus package, the 2009 and proposed 2010 budgets, and the expanded balance sheet of the FED, we have more deficit spending (planned or spent) in the last 6 months, than the last 30 years combined. This reckless spending is driving up interest rates, devaluing the Dollar, and causing domestic inflation. Mortgage rates are up ¾ of a point in a week. Oil is heading back up to $80. This is all happening before the economy has started to recover. In a normal recovery, the economy starts to move and that causes interest rates and inflation to start ticking up. When it is caused by the economy this is normal and good. When it is caused by reckless government spending it is not good. The economy is already facing stiff head winds as it tries to recover. This is why I do not see the economy recovering anytime soon. Forget about a Q3 or Q4 recovery that the media likes to hype. A recovering economy has never felt headwinds like this before, and the economy is way too weak to overcome them anytime soon. Deficit spending needs to end ASAP so that the headwinds can be removed. Also, the government needs to stop intervening in the economy. You can’t fight off the bottom, only delay it. Obama may be successful in delaying the bottom for 4 years, but that means 4 years of economic decline. If you let the economy find its bottom it will grow again given some time. The only way out of this is to stop bailing out companies, and stop spending money that we do not have. The deficit last year was a historically high $450 Billion. Obama has no problem with trillion dollar deficits for the next 10 years. We will not get fiscal responsibility until he is long gone. I just wonder how much permanent damage will be caused by a 5+ year long depression.
I ended up playing in 18 of the BBT4 events and did not win a TOC seat. I went in figuring I would play around 20 and that would give me about a 50/50 shot at a seat (based on average field of 50) and that’s about what happened. I was heads up once in the riverchasers with the chip lead for my 50/50 chance, but did not convert. Overall, I played pretty well, but was bounced on bad beats just before several final tables. That was evened out to some extent by a lucksack/cardrack run to third in one. I can’t really compare myself on points to those who played most of them when I played less than 1 out of 3. I finished in 48th overall on points. Only 2 people finished higher than me with 18 or less events, and I finished higher than 22 people who played 18 or more events. I was profitable over the series, though not by a huge margin. I have now been profitable over each BBT series individually. If you look at points per event, I ended up in 20th place overall for anyone with at least 18 events. I think that’s about where I would have landed if I had played most of them. I think I would have had about a 90% chance at a seat as well if I played them all, but that is not really possible. The timing of these things is horrible for me, and it would have taken a divorce to play in more of them (I took a ton of heat as it was). It was a lot of fun though to play against everyone, and there were some very enjoyable final tables along the way. I wish the best of luck to everyone who made the TOC, and for whoever wins a seat, could you please take the M.E. down.