Dominion 1,944
PEPCO 29,000
as of 1/29/2011 at 9:00am
PEPCO 29,000
as of 1/29/2011 at 9:00am
Saturday, January 29, 2011
Monday, January 24, 2011
Spreads and Sports stuff
Here are my Unwritten rules for sports spreads -
1) if the underdog has a good chance to win I feel more comfortable taking the points
2) psychological element for people to be predisposed to take the favorite - with this rule i believe the favorite generally receives about 1-3 pts more than they would otherwise
3) expectations theory - some teams play better as underdogs because they are not expected to win. the converse- some teams play worse when they are expected to win - avoid the team that consistently loses when favored.
4) obvious: spread builds in 2-3 pts for home team favorite
5) the goal of vegas is to have equal betting on each side. the spread moves to engineer the 50-50 split. therefore the house makes all money on transaction basis, aka 'the juice' - just like goldman sachs.
6) first half of the nfl season is anybodys guess. things are so crazy because there is no recent history to go from. everything is based on last years performance - which may or may not hold true for the current season.
7) if you honestly don't have an intuition of what team to take, just take the points (i.e. - greenbay and pittsburgh)
8) second half of the season you have players 'checked out' when they are essentially out of it for the playoff chase. this may lead to weeks where blowouts are common.
9) always always expect the unexpected.
Online gambling ban in the U.S.
The brilliant lawmakers think that banning online gambling in the U.S. actually acts in the moral best interest of our citizens - we all know how prohibition worked out for Al Capone. Passing laws does not curb demand, it creates black markets. Markets that exist for activities the government has shunned because they do not act in the best interest of their constituents. How much tax revenue could be made from online gambling in the U.S.? Not only does legalization allow regulation, but it will bring in billions of dollars in tax revenue, that would otherwise not exist (not to mention create jobs). In England you can bet on the soccer (football) game, at the stadium!!!! Drugs are illegal, but that doesnt stop people from using. Alcohol used to be legal, but that didnt stop people from drinking. The markets exist, just not for the taxation and regulation purposes of the Federal Government. The government can refuse to allow an service or industry to be a legal operator - but the government can only deter demand on the margin - the margin that would probably not be participating if it were legal. My reasoning is that many people who choose to gamble or do drugs only do so for the thrill. Turning drugs or gambling into a legally sanctioned government regulated industry will more than likely strip away some of the glamor that exists. Just a hunch, but very obvious in certain industries that are exploited in movies, music, and media.
<http://sportsdirect.usatoday.com/odds/usatoday/odds.aspx>
Stocks I'm currently holding:
XOM Jan 2012, 60 strike Call option ( this will increase in value as pump price increases)
Stocks I like:
MO, PM, RSG, WM, TEVA, AVB, V, BAC
Economic trends:
asset price inflation
interest rates creeping up as recovery strengthens
double dip not probable until oil reaches 130+
slow and steady
pent-up demand for housing begins
house prices depend on rent, jobs, income, and demand
1) if the underdog has a good chance to win I feel more comfortable taking the points
2) psychological element for people to be predisposed to take the favorite - with this rule i believe the favorite generally receives about 1-3 pts more than they would otherwise
3) expectations theory - some teams play better as underdogs because they are not expected to win. the converse- some teams play worse when they are expected to win - avoid the team that consistently loses when favored.
4) obvious: spread builds in 2-3 pts for home team favorite
5) the goal of vegas is to have equal betting on each side. the spread moves to engineer the 50-50 split. therefore the house makes all money on transaction basis, aka 'the juice' - just like goldman sachs.
6) first half of the nfl season is anybodys guess. things are so crazy because there is no recent history to go from. everything is based on last years performance - which may or may not hold true for the current season.
7) if you honestly don't have an intuition of what team to take, just take the points (i.e. - greenbay and pittsburgh)
8) second half of the season you have players 'checked out' when they are essentially out of it for the playoff chase. this may lead to weeks where blowouts are common.
9) always always expect the unexpected.
Online gambling ban in the U.S.
The brilliant lawmakers think that banning online gambling in the U.S. actually acts in the moral best interest of our citizens - we all know how prohibition worked out for Al Capone. Passing laws does not curb demand, it creates black markets. Markets that exist for activities the government has shunned because they do not act in the best interest of their constituents. How much tax revenue could be made from online gambling in the U.S.? Not only does legalization allow regulation, but it will bring in billions of dollars in tax revenue, that would otherwise not exist (not to mention create jobs). In England you can bet on the soccer (football) game, at the stadium!!!! Drugs are illegal, but that doesnt stop people from using. Alcohol used to be legal, but that didnt stop people from drinking. The markets exist, just not for the taxation and regulation purposes of the Federal Government. The government can refuse to allow an service or industry to be a legal operator - but the government can only deter demand on the margin - the margin that would probably not be participating if it were legal. My reasoning is that many people who choose to gamble or do drugs only do so for the thrill. Turning drugs or gambling into a legally sanctioned government regulated industry will more than likely strip away some of the glamor that exists. Just a hunch, but very obvious in certain industries that are exploited in movies, music, and media.
<http://sportsdirect.usatoday.com/odds/usatoday/odds.aspx>
Stocks I'm currently holding:
XOM Jan 2012, 60 strike Call option ( this will increase in value as pump price increases)
Stocks I like:
MO, PM, RSG, WM, TEVA, AVB, V, BAC
Economic trends:
asset price inflation
interest rates creeping up as recovery strengthens
double dip not probable until oil reaches 130+
slow and steady
pent-up demand for housing begins
house prices depend on rent, jobs, income, and demand
Monday, January 10, 2011
natural and adverse selection
Why hasn't the FHA received bailout money from treasury?
During the 2005-2006 housing boom, a government loan was simply not necessary because the private markets were allocating resources to crowd out their government mortgage product. The banks provided lower cost alternatives with 100% financing, so it simply was not economical to use a government loan. There was adverse selection among banks to cream skim the 'opaque loans'.
FHA's market share increased dramatically as house prices crashed an private capital fled. The private markets were essentially acting perfectly cyclical to the economy, that I will argue is the opposite of capital flows from efficient allocators were doing. Because money was chasing the high returns creating a self fulfilling prophecy of higher and higher returns on capital, the most efficient capital with the best possible outcome is allocated at the bottom of the market.
If you had used leveraged (much like a home buyer uses leverage in obtaining a mortgage) your returns would have significantly outperformed some of the best corporations in the world, simply because your timing was right, while all corporations were teetering on the verge of bankruptcy.
If the Federal Reserve had not provided emergency liquidity measures to banks, companies, and foreign countries, the fallout would have been catastrophic. The crash of 2008 could have been (arguably) exponentially worse, and (arguably) more similar to the 'flash crash' of 2010; of course this hypothetical scenario occurs in theory only.
The rate of change in prices during the flash crash occurred over an insanely shorter time period, and buying opportunities were limited to those with super-computers and GTC orders in the system. The pyschological effect was not felt because of the speed of the flash crash. On the other-hand, the recession was analogous to the flash-crash but drawn out more slowly as banks reported flawed earnings and recognized the depreciated assets over a longer period of time.
Corporations should always behave similarly to FHA and take the most risk (FHA is always taking the riskiest traunch) at the bottom of the economic cycle. Banks and companies pulled back and caused the credit crunch because they had too much capital allocated at the top of the cycle. Psychological factors contribute to buy/sell decisions and do not always allocate capital efficiently. The government provides insurance liquidity as a last resort and arguably the most efficient capital flowing through the system is being cherry picked at the bottom.
Figure 1:
<http://economix.blogs.nytimes.com/2011/01/10/federal-reserve-worlds-most-profitable-bank/>
If you had used leveraged (much like a home buyer uses leverage in obtaining a mortgage) your returns would have significantly outperformed some of the best corporations in the world, simply because your timing was right, while all corporations were teetering on the verge of bankruptcy.
If the Federal Reserve had not provided emergency liquidity measures to banks, companies, and foreign countries, the fallout would have been catastrophic. The crash of 2008 could have been (arguably) exponentially worse, and (arguably) more similar to the 'flash crash' of 2010; of course this hypothetical scenario occurs in theory only.
The rate of change in prices during the flash crash occurred over an insanely shorter time period, and buying opportunities were limited to those with super-computers and GTC orders in the system. The pyschological effect was not felt because of the speed of the flash crash. On the other-hand, the recession was analogous to the flash-crash but drawn out more slowly as banks reported flawed earnings and recognized the depreciated assets over a longer period of time.
Corporations should always behave similarly to FHA and take the most risk (FHA is always taking the riskiest traunch) at the bottom of the economic cycle. Banks and companies pulled back and caused the credit crunch because they had too much capital allocated at the top of the cycle. Psychological factors contribute to buy/sell decisions and do not always allocate capital efficiently. The government provides insurance liquidity as a last resort and arguably the most efficient capital flowing through the system is being cherry picked at the bottom.
Figure 1:
<http://economix.blogs.nytimes.com/2011/01/10/federal-reserve-worlds-most-profitable-bank/>
Monday, December 27, 2010
china raises interest rates because..
they believe they can counteract the economic forces from their currency peg. The global economic force is simply too overwhelming. It is not a black market, it is simply THE MARKET.
The Fed (will eventually) force the government to unwind the fixed exchange rate policy by exporting inflation. In reality, we want inflation in the U.S. markets to get us out of the recession, but because China has such a strong stance on keeping their exchanged rate fixed, the inflation is bought by the Chinese government in the form of U.S. dollars.
The government can attempt to keep the exchanged rate fixed, but there is a tipping point that will result in rampant inflation of core prices, resulting in the same scenarios they were trying to avoid (political instability and protest). The authoritarian government is too stubborn to realize that they do not have unlimited access to capital.
The end game: China will eventually have to let their currency appreciate, or continue to soak up the inflation that should theoretically be occurring at home.
China keeps their currency exchange rate fixed in a narrow band because:
-they are scared of losing manufacturing jobs to other lower wage economies
- this would result in less jobs, protests and instability
By keeping the currency rate fixed at an artificial level, they are risking rampant inflation as traders and currency speculators will flock to buy the yuan in anticipation of China attempting to crack down on inflation in food/energy/real estate/core goods. Because they are so poor, a disproportionate share of income is spent on food. The 11% increase in food prices will also result in protests, riots and instability if the government allows that to continue.
The Fed (will eventually) force the government to unwind the fixed exchange rate policy by exporting inflation. In reality, we want inflation in the U.S. markets to get us out of the recession, but because China has such a strong stance on keeping their exchanged rate fixed, the inflation is bought by the Chinese government in the form of U.S. dollars.
The government can attempt to keep the exchanged rate fixed, but there is a tipping point that will result in rampant inflation of core prices, resulting in the same scenarios they were trying to avoid (political instability and protest). The authoritarian government is too stubborn to realize that they do not have unlimited access to capital.
The end game: China will eventually have to let their currency appreciate, or continue to soak up the inflation that should theoretically be occurring at home.
China keeps their currency exchange rate fixed in a narrow band because:
-they are scared of losing manufacturing jobs to other lower wage economies
- this would result in less jobs, protests and instability
By keeping the currency rate fixed at an artificial level, they are risking rampant inflation as traders and currency speculators will flock to buy the yuan in anticipation of China attempting to crack down on inflation in food/energy/real estate/core goods. Because they are so poor, a disproportionate share of income is spent on food. The 11% increase in food prices will also result in protests, riots and instability if the government allows that to continue.
black markets and the NCAA
OPEC controls supply in order to manipulate price of oil. OPEC profits off the resources of set of countries. The US created ExxonMobil and Chevron in order to compete globally.
BCS (NCAA) controls supply to manipulate and profit off of student athletes. NCAA profits off the resources of educational institutions and operates as a cartel.
The 'BCS' conferences are equivalent to the government bureaucrats who profit from their countries resources. The rest of the population (conferences) represent the bourgeoisie or the havenots. The government redistributes the profits within the system to select aristocrats.
Black Markets are created when there is a misalignment between goods and services. They are frequently derived from government intervention or in this case a poorly run monopoly. Because of the demand for services from athletes a black market is created to fill the void left in the market by the NCAA. The NCAA has determined that it is 'illegal' to pay athletes for their services, the same way a drug such as marijuana or cocaine is determined to be illegal. The black market exists because of demand within the system, in this case for the talents of high school football players.
The problem now is that there is so much demand for college football, the talent has spread so deeply and evenly within the system to division 1-AA and division II.
The BCS has turned college football into an ice skating competition in 3 out of every 4 years, because of the inability to play games that are demanded by the public.
I will argue that the BCS leaves billions of dollars on the table ever year (until they receive a new contract with a playoff system where people actually care about multiple games). I would also argue that because they are so satisfied with the current revenues, that when they do realize there are billions of dollars lying on the table, they should be donated to scholarships and families of athletes in need.
The BCS is probably the most inefficient monopoly on the planet. Can you imagine how many additional viewers would be tuned in to games in a playoff system? I am an avid fan, but once the regular season is done, there is no more than two games worth watching. Nobody wants to see a dust bowl match up between Oklahoma and Connecticut.
Keywords:
Economic Incentives
Money
Houses
Cars
Jersey Sales
Ticket Sales
Advertising Sales
Naming Rights
These are the reasons why college athletes would take money.
Monday, December 6, 2010
Tuesday, July 13, 2010
best baseball players of All-time, position by position
SP:
21. Roger Clemens, 7 CY, STEROID ERA, 2 WS, 2 TRIPLE CROWNS
19 Cy Young
Walter Johnson
Sandy Koufax
45 Bob Gibson
Randy Johnson
31 Greg Maddux
30 Nolan Ryan
Tom Seaver
RP:
42 Mariano Rivera
1B:
4. Lou Gehrig
5. Albert Pujols
Pete Rose
2B:
Roger Hornsby
42. Jackie Robinson
12 Roberto Alomar
SS:
33. Honus Wagner
2. Derek Jeter
13 Alex Rodriguez
8 Call Ripken, Jr.
3B:
13. Alex Rodriguez
Pete Rose
Mike Schmidt
Chipper Jones
OF:
Ty Cobb
3. Babe Ruth
25. Barry Bonds
24. Willie Mays
9. Ted Williams
20 Frank Robinson
21. Roberto Clemente
Shoeless Joe
7. Mickey Mantle
5 Joe DiMaggio
Hank Aaron
Ricky Henderson
Jimmy Foxx
Stan Musial
Hack Wilson
Carl Yastrzemski
C:
Johnny Bench
Mike Piazza
U
Pete Rose
21. Roger Clemens, 7 CY, STEROID ERA, 2 WS, 2 TRIPLE CROWNS
19 Cy Young
Walter Johnson
Sandy Koufax
45 Bob Gibson
Randy Johnson
31 Greg Maddux
30 Nolan Ryan
Tom Seaver
RP:
42 Mariano Rivera
1B:
4. Lou Gehrig
5. Albert Pujols
Pete Rose
2B:
Roger Hornsby
42. Jackie Robinson
12 Roberto Alomar
SS:
33. Honus Wagner
2. Derek Jeter
13 Alex Rodriguez
8 Call Ripken, Jr.
3B:
13. Alex Rodriguez
Pete Rose
Mike Schmidt
Chipper Jones
OF:
Ty Cobb
3. Babe Ruth
25. Barry Bonds
24. Willie Mays
9. Ted Williams
20 Frank Robinson
21. Roberto Clemente
Shoeless Joe
7. Mickey Mantle
5 Joe DiMaggio
Hank Aaron
Ricky Henderson
Jimmy Foxx
Stan Musial
Hack Wilson
Carl Yastrzemski
C:
Johnny Bench
Mike Piazza
U
Pete Rose
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