As I have alluded to earlier I am a libertarian… NOT to be confused with a liberal. I believe that the burden of proof falls on the Government to show that society needs its interaction. So long as I harm no one other then myself I feel I have the right to do it. I believe that personal liberties should be strongly protected and I also believe that the closest thing to a national religion (our founding fathers) also agreed with these ideals. That is one reason why I feel so strongly against the gambling bill.
If you are reading this and you truly believe in the rights of the individual to gamble over the internet on sporting events then we are at a point when we need to decide if we are going to do anything about it. Personally I have contacted both of my Senators and my Congressman, and encouraged (successfully) for my sister, mother, and two friends of mine to do the same. Not one response as my Congressman voted for the bill, and I can only assume that my Senators will do the same if given the opportunity. So if in fact we want to make a difference what should we do? It occurred to me that perhaps the answers were to find an organization that would have sympathy for us and contact them on our behalf and encourage them to fight the just fight.
This brought me to looking into the ACLU. After all, their stated mission:
"to defend and preserve the individual rights and liberties guaranteed to every person in this country by the Constitution and laws of the United States”.
So I reached out to them via email. More on that later.
Thursday, August 31, 2006
Tuesday, August 29, 2006
Box Office Blog
I do not trade futures on box office returns. I have never taken the time and energy to research the mechanics of the market. All I know is that “Aquaman” from Entourage broke Spiderman’s record. But for anyone who does trade futures on movie box office returns may find this Freakonomics blog interesting.
In other news:
As many traders know greed isn’t always a bad thing, but when you’re a PR machine like MLB this is certainly a black eye. Its not enough that they bribe economists to lie about the benefits of publicly subsidized stadiums, then bribe the politicians to ignore the truth. Now their doing everything they can to suck every ounce of money from us. This time from our fantasy leagues.
For anyone who is intersted this seems to be the deal (and I must admit I do not have the time and energy to research this to speak with 100% confidence). Baseball statistics are within the public domain. If Barry Bonds hits a home run people are allowed to collect that information and process for fantasy purposes. But for some reason, if we want to use his likeness, or the team names and logos we still need their permission. For those interested the Leagues negotiate with the players unions for an agreement to use their images for video games (some leagues restrict this to one supplier). In addition any individual player has the right to refuse to sign the rights to negotiate on their behalf away to the players union. This is why we never got to see Michael Jordan in the old video games (NBA Jam), and why we see no Barry Bonds (this adds to the long list of reasons the players dislike Bonds). Like I said, I’m not 100% sure I’m dead on with the terms of this deal. I am still trying to figure out the difference between allowing a venue to do fantasy sports without anyone’s permission, and produce video games without anyone’s permission. In addition this is all pending an appeal filed by MLB. God forbid they lose out on their chunk of my $15 league fee that is allocated toward the site managment. When you think of all the benefit fantasy sports brings you would think they would subsidize its use, not try to restrict it.
Lieberman's contract is in the low 60's. This could start to get interesting...
In other news:
As many traders know greed isn’t always a bad thing, but when you’re a PR machine like MLB this is certainly a black eye. Its not enough that they bribe economists to lie about the benefits of publicly subsidized stadiums, then bribe the politicians to ignore the truth. Now their doing everything they can to suck every ounce of money from us. This time from our fantasy leagues.
For anyone who is intersted this seems to be the deal (and I must admit I do not have the time and energy to research this to speak with 100% confidence). Baseball statistics are within the public domain. If Barry Bonds hits a home run people are allowed to collect that information and process for fantasy purposes. But for some reason, if we want to use his likeness, or the team names and logos we still need their permission. For those interested the Leagues negotiate with the players unions for an agreement to use their images for video games (some leagues restrict this to one supplier). In addition any individual player has the right to refuse to sign the rights to negotiate on their behalf away to the players union. This is why we never got to see Michael Jordan in the old video games (NBA Jam), and why we see no Barry Bonds (this adds to the long list of reasons the players dislike Bonds). Like I said, I’m not 100% sure I’m dead on with the terms of this deal. I am still trying to figure out the difference between allowing a venue to do fantasy sports without anyone’s permission, and produce video games without anyone’s permission. In addition this is all pending an appeal filed by MLB. God forbid they lose out on their chunk of my $15 league fee that is allocated toward the site managment. When you think of all the benefit fantasy sports brings you would think they would subsidize its use, not try to restrict it.
Lieberman's contract is in the low 60's. This could start to get interesting...
Sunday, August 27, 2006
Liquidity
One of my favorite change of pace writers is P.J. O’Rourke. He is a fellow libertarian who happens to be a great writer and humorist. In his book titled “Eat the Rich” he travels around the world examining different economic systems with the goal to figuring out why some work while some others fail. He goes to areas where socialism works, where it doesn’t work, where capitalism does not work, and naturally where it does work. Where better to go where capitalism works then to Wall Street? And so after experiencing the hectic lives and opposing points of views of traders he comes to this great epiphany:
“”What,” I asked all the Wall Street people I interviewed, “does the investment industry give to society?”
But this time they had an answer.
“Liquidity,” said the $2 billion money manager.
“Liquidity,” said the investment banker who’d described how men’s thoughts were on pecuniary B-girls.
“Liquidity,” said the other investment banker who’d told me things could move stupidly.
“Liquidity,” said the Irish specialist broker.
“It provides liquidity,” said David
Liquidity is the Wall Street word for having things you can do with your money and being able to do them. Liquidity is the essence of the free market…”
I follow economics so I understood what he was talking about but I did not appreciate it until I began to trade on tradesports. As far as gamblers go until now a liquidity problem was when you ran out of credit on all your local bookies. This is the key understanding gap that would bring in more people ot tradesports. More liquidity is good for all tradesports traders. Liquidity in tradesports provides information on future outcome of events, it provides more opportunities to trade, and most importantly it provides a convergence toward efficiency. If you are a gambler with limited experience in tradesports it is liquidity you want to focus on as it is the key to understanding how to make tradesports work in your advantage.
Had my fantasy football draft today, so I'm out of steam. Trying to win it for the 3rd straight year. In case your into Baseball Prospectus you should check out the web site by the guys who wrote Football Prospectus. It give a very interesting point of view into the sport of football.
“”What,” I asked all the Wall Street people I interviewed, “does the investment industry give to society?”
But this time they had an answer.
“Liquidity,” said the $2 billion money manager.
“Liquidity,” said the investment banker who’d described how men’s thoughts were on pecuniary B-girls.
“Liquidity,” said the other investment banker who’d told me things could move stupidly.
“Liquidity,” said the Irish specialist broker.
“It provides liquidity,” said David
Liquidity is the Wall Street word for having things you can do with your money and being able to do them. Liquidity is the essence of the free market…”
I follow economics so I understood what he was talking about but I did not appreciate it until I began to trade on tradesports. As far as gamblers go until now a liquidity problem was when you ran out of credit on all your local bookies. This is the key understanding gap that would bring in more people ot tradesports. More liquidity is good for all tradesports traders. Liquidity in tradesports provides information on future outcome of events, it provides more opportunities to trade, and most importantly it provides a convergence toward efficiency. If you are a gambler with limited experience in tradesports it is liquidity you want to focus on as it is the key to understanding how to make tradesports work in your advantage.
Had my fantasy football draft today, so I'm out of steam. Trying to win it for the 3rd straight year. In case your into Baseball Prospectus you should check out the web site by the guys who wrote Football Prospectus. It give a very interesting point of view into the sport of football.
Friday, August 25, 2006
Winner’s Curse
For those familiar with this site should know quite well about the recent gambling bill that was passed by the US House of Representatives. Now it goes to the Senate which leads us to the '>gambling bill contract in tradesports. The contract is currently trading in the $15-$25 range. My question is does this price reflect the true probability of the outcome of this event? I feel there is a winner’s curse at play here, when the winner of the contract is left with something less valuable then they anticipated. The recent developments of the Betonsports website are a startling one. To quote from the article:
“In a statement issued to the London Stock Exchange, BetonSports said it hoped to refund balances to U.S. gamblers and to pay some salaries of employees in Costa Rica and Antigua, where the company's offshore operations are located.
Those payments, however, "will depend upon the company's ability to persuade banks and cash processors to release its funds."
Granted this is a different situation then if the gambling act was approved by the Senate. In that case tradesports’ assets presumably would not be frozen as it appears as though betonsports has. None the less this creates uncertainly. A quick quote from the pit many weeks ago when this was a hot topic (I saved it and changed the names since I never asked for their permission)
Person 1: I doubt it will pass, yet it has an effect, I have far less in here than times past
Person 2: true..whatever i have here...if it's gone so be it...
Person 2: of course my far less is prob a lot less than yours...lol...
Person 1: at one point had some decent change in here, a bit hesitant right now
Person 1: it's all relaitve 2, to each his own
So not only is the prospect of this contract driving some liquidity away from tradesports, it distorts the gambling contract price. Who wants to “win” a contract that brings assets that may or may not be usable? Just to set the record straight, if this bill does in fact pass we should get a check in the mail for the reminder of our balance. But anyone who tells you it does not create perceived uncertainty has not examined the issue.
“In a statement issued to the London Stock Exchange, BetonSports said it hoped to refund balances to U.S. gamblers and to pay some salaries of employees in Costa Rica and Antigua, where the company's offshore operations are located.
Those payments, however, "will depend upon the company's ability to persuade banks and cash processors to release its funds."
Granted this is a different situation then if the gambling act was approved by the Senate. In that case tradesports’ assets presumably would not be frozen as it appears as though betonsports has. None the less this creates uncertainly. A quick quote from the pit many weeks ago when this was a hot topic (I saved it and changed the names since I never asked for their permission)
Person 1: I doubt it will pass, yet it has an effect, I have far less in here than times past
Person 2: true..whatever i have here...if it's gone so be it...
Person 2: of course my far less is prob a lot less than yours...lol...
Person 1: at one point had some decent change in here, a bit hesitant right now
Person 1: it's all relaitve 2, to each his own
So not only is the prospect of this contract driving some liquidity away from tradesports, it distorts the gambling contract price. Who wants to “win” a contract that brings assets that may or may not be usable? Just to set the record straight, if this bill does in fact pass we should get a check in the mail for the reminder of our balance. But anyone who tells you it does not create perceived uncertainty has not examined the issue.
Tuesday, August 22, 2006
Inefficiency vs. Personal Bias
Looking past BannedChatter’s selfish promotion for his new site in the latest comment (at least comment on my article!) I decided to take quick look at his site. Aside from the appealing photos (adults only) there wasn’t much other then personal opinions. It got me thinking of the key to successful sports gambling. In my opinion the key is the recognition between market inefficiencies and any personal bias we carry over every time we watch a game. Run differentials are about as sophisticated as BCLI gets. So why should we take this into consideration, and how much confidence do we have in it as a parameter? What kind of betting strategy is there for us with this information? How do we process it?
On to other items:
The Ted Lilly confrontation is interesting for alot of reasons. If this is in fact the “sinking ship” that Shea Hillenbrand subtly suggested on the Jay’s chalk board it appears as though the captain just bailed (or at least got cabin fever and lost it). Maybe there’s value in the under for the total wins contract.
There was a lot of activity yesterday in the Democratic Primary contracts. I wonder if anything happened that slipped under my radar. Our favorite '>Ex-first lady seems to be taking the worst of it as her contract to win the primary has fallen about 10 points over the last month or so. Is there a connection to Lieberman (and his similar pro-war vote)? If this is the case, why all the activity yesterday? (I tried again to post this chart and this link was the best I could do. If anyone knows how to do this please give me a heads up)
On the Jacqueline Mackie Paisley Passey front, here is some harsh criticism. Now, I normally don’t take these things personally, but as my wife and I have been trying to have kids for quite some time this type of thing is disturbing.
Glad to see Verlander is back, a healthy Verlander is all Detroit need (in addition to what they already have) to carry the AL Central division (and win that contract). Now the big question is what to do when Maroth comes back?
Thats all for now. Take care all.
On to other items:
The Ted Lilly confrontation is interesting for alot of reasons. If this is in fact the “sinking ship” that Shea Hillenbrand subtly suggested on the Jay’s chalk board it appears as though the captain just bailed (or at least got cabin fever and lost it). Maybe there’s value in the under for the total wins contract.
There was a lot of activity yesterday in the Democratic Primary contracts. I wonder if anything happened that slipped under my radar. Our favorite '>Ex-first lady seems to be taking the worst of it as her contract to win the primary has fallen about 10 points over the last month or so. Is there a connection to Lieberman (and his similar pro-war vote)? If this is the case, why all the activity yesterday? (I tried again to post this chart and this link was the best I could do. If anyone knows how to do this please give me a heads up)
On the Jacqueline Mackie Paisley Passey front, here is some harsh criticism. Now, I normally don’t take these things personally, but as my wife and I have been trying to have kids for quite some time this type of thing is disturbing.
Glad to see Verlander is back, a healthy Verlander is all Detroit need (in addition to what they already have) to carry the AL Central division (and win that contract). Now the big question is what to do when Maroth comes back?
Thats all for now. Take care all.
Monday, August 21, 2006
Polls vs. Information Markets
Back to the Lieberman issue, with some more from my enlightening conversation with AlanBStard I mentioned a few posts below:
AlanBStard: It is interesting that it's trading much closer than the PA Senate race, which polls indicate is getting very close. 6 point difference as of yesterday, and polls tend to skew toward Dems.
AlanBStard: Market didn't respond at all. I picked up a Santorum at 21.5 just for kicks.
Diem: poll bias?
AlanBStard: At times. Even if not, the difference is still approaching the margin of error, and Casey hasn't done much of note recently. Quinnipac's analysis that he was merely losing votes to the Greens doesn't make any sense whatsoever.
This got me thinking about the correlation between polls and zero sum contracts such as the ones offered at tradesports. Imagine two campaigns taking place, both with two candidates. In each the lead candidate is ahead by 55%. The difference between the two campaigns is that the election in the first is a day away, while the election in the second is six months away. Would they trade at the same price? No, we would be more confident in the first campaign’s expected outcome, and I would expect the price to trade at closer to $99 then $55, while in the first I would not be surprised if the contract traded closer to $55. A new confidence interval would be useful (aside from the typical +/- a small percentage). Purhaps that is what makes this style of information markets so attractive. Maybe this is very obvious to those who follow polls, it is new to me so I bring it up. An update on the race.
On to less important matters. More proof the Cards are going down. This from the most respected name in journalism (outside the daily show). If this doesnt move that contract nothing will.
If you’re looking for a good laugh check out Ozzie Guillen’s comments at Baseball Prospectus (this link does not require a subscription). This guy’s act is going to wear thin if they start losing.
AlanBStard: It is interesting that it's trading much closer than the PA Senate race, which polls indicate is getting very close. 6 point difference as of yesterday, and polls tend to skew toward Dems.
AlanBStard: Market didn't respond at all. I picked up a Santorum at 21.5 just for kicks.
Diem: poll bias?
AlanBStard: At times. Even if not, the difference is still approaching the margin of error, and Casey hasn't done much of note recently. Quinnipac's analysis that he was merely losing votes to the Greens doesn't make any sense whatsoever.
This got me thinking about the correlation between polls and zero sum contracts such as the ones offered at tradesports. Imagine two campaigns taking place, both with two candidates. In each the lead candidate is ahead by 55%. The difference between the two campaigns is that the election in the first is a day away, while the election in the second is six months away. Would they trade at the same price? No, we would be more confident in the first campaign’s expected outcome, and I would expect the price to trade at closer to $99 then $55, while in the first I would not be surprised if the contract traded closer to $55. A new confidence interval would be useful (aside from the typical +/- a small percentage). Purhaps that is what makes this style of information markets so attractive. Maybe this is very obvious to those who follow polls, it is new to me so I bring it up. An update on the race.
On to less important matters. More proof the Cards are going down. This from the most respected name in journalism (outside the daily show). If this doesnt move that contract nothing will.
If you’re looking for a good laugh check out Ozzie Guillen’s comments at Baseball Prospectus (this link does not require a subscription). This guy’s act is going to wear thin if they start losing.
Saturday, August 19, 2006
Another A-Rod Point of View (with the same conclusion)
So, Torre decides to bat “E”-Rod (22 errors to date, tied for the ML lead… but that’s a different story) in the five hole in yesterday’s first game of a double header. I saw this and took the opportunity to do some analysis of every five hole hitter in the big leagues. Keep in mind I began the data collection once I noticed his hitting slot (game 1) so some of the info comes from games two days ago (blogging doesn’t pay what it seems, so time constraints limit the analysis). Salaries were collected from CBS Sportsline, and some players had missing values (Choo, LaRoche, Luke Scott, Bill Hall) so I inputed the league minimum.
Some quick number crunching says that Arod has batted 16% of his AB’s in the five hole playing 19 games there.
Some interesting Arod info:
Arod makes $25,680,727
Next highest (almost half) is Sexson at $13,000,000
Total 5 hole hitters salaries at $107,766,442
Average 5 hole hitters (with Arod) is $3,592,214
Average 5 hole hitters (with out Arod) is $2,830,541
Arod makes 9.07 times as much as the average 5 hole hitter (with out Arod)
Though Arod consists of about 3% of the 5 hole hitters he makes about 24% of their salaries.
Other observations:
Overpaid is Sexson (see above) and Burrell at $9,750,000
Some best values: Wright ($374,000), and Morneau ($385,000)
This once again reinforces the Moneyball philosophy of not being afraid to play the young guys, and doesn’t even take into consideration Arod’s defense (or lack there of).
Friday, August 18, 2006
Wisdom in a bronze star
Had a little chat with AlanBStard (a lowly bronze star status like myself so I have no inferiority complex when approaching him about a subject). We were in the pit and I asked him what he thought of the Lieberman contract. This was his response:
AlanBStard: Diem: Assuming the Democratic endorsements don't mean anything (and they probably won't) and the DNC is smart enough not to get involved (judging by Dean's statements, it isn't), I think Lieberman takes it and stays in the Democratic caucus.
AlanBStard: Lamont is doing a respectable job of repositioning himself, though.
I have to agree. Short of Lieberman taking one for the team that just stabbed him in the back and exiting the race I think he’s a sure thing. I am neither a Democrat nor a Republican, but I do find a sick fascination with following this race (aside from my account balance… which isn’t sick, but a fascination of mine). I cant figure out the Democrats. Ever have the unfortunate task of explaining what a Democrat is to a foreigner? I have on multiple occasions and it doesn’t get any easier. But as far as the contract goes I only see it going toward Lieberman. Lamont spent all his resources just getting to this point, Lieberman knew he was in it till November. If I can figure out how to post this chart on this blog I will, but its trading in the mid 60’s now, only gonna go up.
As for baseball maybe Jake Peavy is the only guy in the world who pitches worse when he can’t see. Maybe he should start pitching like Uggy Urbina. For those of you unfamiliar with the machete yielding middle man’s mechanics (say that ten times) he would stare at third base until he released the ball. I try to imagine what it would be like to be a right hander facing a guy that’s about to throw a mid 90’s fast ball without even looking at his target before he throws it and I crawl up in the fetal position. Apparently that’s what Peavy needs, he should wear one of those blast shields in Star Wars and trust the force every time he takes the mound.The point? There is something wrong with Peavy, and it is not his eyes. But I still stand by my Card’s comments. Play the over in the Red Sox double header, both bull pens are gonna be depleted and someone is gonna be left to take one for the team.
Have a nice weekend everyone.
AlanBStard: Diem: Assuming the Democratic endorsements don't mean anything (and they probably won't) and the DNC is smart enough not to get involved (judging by Dean's statements, it isn't), I think Lieberman takes it and stays in the Democratic caucus.
AlanBStard: Lamont is doing a respectable job of repositioning himself, though.
I have to agree. Short of Lieberman taking one for the team that just stabbed him in the back and exiting the race I think he’s a sure thing. I am neither a Democrat nor a Republican, but I do find a sick fascination with following this race (aside from my account balance… which isn’t sick, but a fascination of mine). I cant figure out the Democrats. Ever have the unfortunate task of explaining what a Democrat is to a foreigner? I have on multiple occasions and it doesn’t get any easier. But as far as the contract goes I only see it going toward Lieberman. Lamont spent all his resources just getting to this point, Lieberman knew he was in it till November. If I can figure out how to post this chart on this blog I will, but its trading in the mid 60’s now, only gonna go up.
As for baseball maybe Jake Peavy is the only guy in the world who pitches worse when he can’t see. Maybe he should start pitching like Uggy Urbina. For those of you unfamiliar with the machete yielding middle man’s mechanics (say that ten times) he would stare at third base until he released the ball. I try to imagine what it would be like to be a right hander facing a guy that’s about to throw a mid 90’s fast ball without even looking at his target before he throws it and I crawl up in the fetal position. Apparently that’s what Peavy needs, he should wear one of those blast shields in Star Wars and trust the force every time he takes the mound.The point? There is something wrong with Peavy, and it is not his eyes. But I still stand by my Card’s comments. Play the over in the Red Sox double header, both bull pens are gonna be depleted and someone is gonna be left to take one for the team.
Have a nice weekend everyone.
Thursday, August 17, 2006
Have a safe trip Caveat
Cav, as you read this in your Starbucks Cafe, we can tell you that we miss you already. But your mission of doing research on the strange poeple of Canada is a noble one, for as the famous P.J. O'Rourke once said, “Very little is known of the Canadian country since it is rarely visited by anyone but the Queen and illiterate sport fishermen.” (no offence to illiterate sport fishermen… why I would be apologizing to an illiterate on a blog I don’t know) Enough about Cav’s travel plans, on to some potential inefficiencies.
It turns out Jake Peavy is legally blind without his contact lenses, which he has been without this year until today. Could there be something here? Then again I remember saying the same thing after reading a Peter Gammons article (hope he is doing better) where he talked about how Peavy had a detached retina in his eye that was fixed right before the season began. Is there value in the SD game? I hope not, I have Cain on my fantasy team (and I need wins... then again who doesnt at this time of year in fantasyland).
The St. Louis Cardinals are having big problems. It blows my mind how the contract to win the division remains so high. Granted the Reds who trail them are only 1 ½ games are not a good team. But the Cards don’t impress me. Take away Carpender and Pujols and they are a bad team. It is scary to think that if the Cards were in the AL they would have the SEVENTH best record (behind the Blue Jays). In fact they would be worse then that since they would have to play stiffer competition. But they are not in the AL, they are in the minor leagues of the major leagues… the NL Central. Bad divisions = uncertainly = high variance. There is no way they should be trading in the 70’s. (I would post the chart and compare it to some of the NL West teams to compare but I am relatively new to this… in due time) I am not saying they are not going to win the division, I am saying that their odds are less then 70% to win it.
Take care all
It turns out Jake Peavy is legally blind without his contact lenses, which he has been without this year until today. Could there be something here? Then again I remember saying the same thing after reading a Peter Gammons article (hope he is doing better) where he talked about how Peavy had a detached retina in his eye that was fixed right before the season began. Is there value in the SD game? I hope not, I have Cain on my fantasy team (and I need wins... then again who doesnt at this time of year in fantasyland).
The St. Louis Cardinals are having big problems. It blows my mind how the contract to win the division remains so high. Granted the Reds who trail them are only 1 ½ games are not a good team. But the Cards don’t impress me. Take away Carpender and Pujols and they are a bad team. It is scary to think that if the Cards were in the AL they would have the SEVENTH best record (behind the Blue Jays). In fact they would be worse then that since they would have to play stiffer competition. But they are not in the AL, they are in the minor leagues of the major leagues… the NL Central. Bad divisions = uncertainly = high variance. There is no way they should be trading in the 70’s. (I would post the chart and compare it to some of the NL West teams to compare but I am relatively new to this… in due time) I am not saying they are not going to win the division, I am saying that their odds are less then 70% to win it.
Take care all
Wednesday, August 16, 2006
Four Days, and a fortnight
For those of you suffering from NFL countdown (like me), check out the PGA Championship this weekend. I'm long a little Mick, Vijay, and Furyk.
I will be off on vacation for 2 weeks. During this time, the blog will be powered Per Diem. And of course, those who are generous with their comments. See you on the other side.
I will be off on vacation for 2 weeks. During this time, the blog will be powered Per Diem. And of course, those who are generous with their comments. See you on the other side.
Tuesday, August 15, 2006
PPI data kills more bears today
PPI (MoM) 0.1%; Ex-Food & Energy (MoM) -0.3%
I begged, begged you bears to reconsider. SPX futures trading up 9 handles at 8:33am EST.
UPDATE: CPI data also indicates benign inflation (MoM) 0.4%; Ex-Food & Energy (MoM) 0.2%. SPX futures trading up another 6 handles at 8:31am EST. The market is pricing in a 30% chance of one more 25 basis point FOMC hike in 2006. From the WSJ today (subscription required):
I begged, begged you bears to reconsider. SPX futures trading up 9 handles at 8:33am EST.
UPDATE: CPI data also indicates benign inflation (MoM) 0.4%; Ex-Food & Energy (MoM) 0.2%. SPX futures trading up another 6 handles at 8:31am EST. The market is pricing in a 30% chance of one more 25 basis point FOMC hike in 2006. From the WSJ today (subscription required):
WASHINGTON -- Higher energy prices pushed U.S. consumer prices higher in July but underlying inflation came in below expectations, breaking a string of four-straight elevated readings due to a steep slide in clothing prices.
MORE ON INFLATION
Meanwhile, home construction retreated for the fifth time in six months during July as sliding sales and rising inventories turn builders more conservative.
Coming on the heels of a surprisingly restrained report on July producer prices, the consumer price data should provide some comfort to Federal Reserve officials that inflationary pressures aren't taking a significant hold in the economy, though they remain a risk.
Monday, August 14, 2006
Lieberman 46%, Lamont 41%
Update, here. (via Drudge)
I think that there is a slim chance that Lieberman loses to Lamont. If all the big name Dems make good on their promise to campaign for Lamont, if a few take shots at Lieberman and Lamont lands a few blows himself in the general election, some of the marginal voters could be swayed into projecting a black sheep perspective on Joe.
Bet with your head, not your fantasy team
It was a tough day on the gambling front for me yesterday. Prompted by my emotions of running a close 2nd place in both my fantasy baseball leagues I decided to put my money where my optimism was. With Maddux and Schmidt on the mound (and neither on either of my teams) I took the over for a couple lots. It took them ten innings to get one run in. The other big news of the day is that the Tigers got swept by apparent pitch stealing White Sox (I have the Tigers to win the division).
So why should you care about my fantasy team, or my portfolio? It got me thinking about the different types of bets out there. What is the optimal type of bet? In the SF contract I lost my entire investment. In the Tigers contract I only lost a small portion (if you want to think of it as “lost” considering I bought it at around 20). Assuming we do not like a high variance with our investments (maybe not the best assumption considering we are talking about sports gambling here, but one I still think holds true) then it would appear that the latter has an added positive characteristic to it. Maybe the traders have experience with this type of decision making going on. It’s a dynamic that’s relatively new to the gamblers since we can actually go short on some of these contracts for the first time.
In NFL news, after losing Portis in a run happy Gibbs offense I would have thought the Washington futures would fall. If it is long lasting then they are in trouble.
In closing, always go with the home team that is opening up a new stadium in pre season games. They are the only ones with an incentive to win.
So why should you care about my fantasy team, or my portfolio? It got me thinking about the different types of bets out there. What is the optimal type of bet? In the SF contract I lost my entire investment. In the Tigers contract I only lost a small portion (if you want to think of it as “lost” considering I bought it at around 20). Assuming we do not like a high variance with our investments (maybe not the best assumption considering we are talking about sports gambling here, but one I still think holds true) then it would appear that the latter has an added positive characteristic to it. Maybe the traders have experience with this type of decision making going on. It’s a dynamic that’s relatively new to the gamblers since we can actually go short on some of these contracts for the first time.
In NFL news, after losing Portis in a run happy Gibbs offense I would have thought the Washington futures would fall. If it is long lasting then they are in trouble.
In closing, always go with the home team that is opening up a new stadium in pre season games. They are the only ones with an incentive to win.
We are shaking the tree
Jacqueline Passey is back in the market, after breaking up with her professional poker playing boyfriend recently. I am not sure whether to add her to Friends of TS, but she had a great debate with Greg Mankiw on how poker playing is not as bad as he thinks. (via Marginal Revolution).
I think she is worthy of some dating investment from TS members, although few of us might actually be worthy or single. Or both. Personally, her expressed desire for a man who is an athiest disqualfies me. And turns me off, even with that disarming smile.
Here is an initial litmus test: if you didn't read through the first link in its entirety, you probably won't be able to get on the basepath, nevermind getting to first base.
P.S. Here is this blog's first post on Mankiw's anti-gambling sentiment. Mankiw was nice enough to explain to us in email that he is not in favor of prohibiting internet gambling; he is just trying to shame people out of doing it.
Friday, August 11, 2006
Newbie Scum
I will be blogging on occasion when Caveat Bettor is away doing things more important then… promoting maximizing liquidity into TradeSports (what nobler activity can there be?).
For those of you not familiar with Tradesports I should mention the forum. It in essence allows gamblers to gamble (trading?) like traders, and traders to use their tools to trade on sporting events (gambling?). Alright, lets not get caught up in the semantics; it provides a market similar to the stock market on a variety of events, including sporting events.
What we are left with are two types of people. One is the traders. You can find them in the pit talking about oil prices, Dow Jones fluctuations, and bear vs. bull debates. Then there are the gamblers who shuffle into the pit after the Dow closes, talking about why there is a delay in the lines for the Cub’s home games (wind reports not out yet), the optimal time to trade a division contract (apparently right after the games are done), and the typical Yankees vs. Red Sox debates. I fall into the latter category. So while Caveat Bettor wears three hats (a trader hat, a sports hat, and a promoter of free markets and minimal Government intervention) I am simply a degenerate libertarian gambler.
Enough about me. Thanks to BUCWILD for posting this link in the pit today. I will have a detailed post next week on the ramification of this action, and how BETonSPORTS’ fallout may be an indication of not just future events, but also a signal of inefficiency in current contracts at TradeSports. (And if you think about it, there is no better way to increase liquidity then to talk about inefficency).
Thats it for now, hope I didn't mess anything up.
For those of you not familiar with Tradesports I should mention the forum. It in essence allows gamblers to gamble (trading?) like traders, and traders to use their tools to trade on sporting events (gambling?). Alright, lets not get caught up in the semantics; it provides a market similar to the stock market on a variety of events, including sporting events.
What we are left with are two types of people. One is the traders. You can find them in the pit talking about oil prices, Dow Jones fluctuations, and bear vs. bull debates. Then there are the gamblers who shuffle into the pit after the Dow closes, talking about why there is a delay in the lines for the Cub’s home games (wind reports not out yet), the optimal time to trade a division contract (apparently right after the games are done), and the typical Yankees vs. Red Sox debates. I fall into the latter category. So while Caveat Bettor wears three hats (a trader hat, a sports hat, and a promoter of free markets and minimal Government intervention) I am simply a degenerate libertarian gambler.
Enough about me. Thanks to BUCWILD for posting this link in the pit today. I will have a detailed post next week on the ramification of this action, and how BETonSPORTS’ fallout may be an indication of not just future events, but also a signal of inefficiency in current contracts at TradeSports. (And if you think about it, there is no better way to increase liquidity then to talk about inefficency).
Thats it for now, hope I didn't mess anything up.
Honesty, it's such a lonely word
Two of the most honest constructs in my experience: emotions and markets.
Emotions are, of course, personal. Without being led by the intellect and followed up by consistent discipline, unconstrained emotions will lead to certain destruction. Fear will do that. So will greed, as many a TS member who's deposit quickly plummets to $0.00 has proven. But you can't fake an emotion. Joy, anger, peace ... it is what it is when you feel it.
Markets are interpersonal. Not so much relational, they are the transactional potential and realization of agreements over time. And unlike the individualism of emotion, more than one person must agree on a price to make it real, which is why the market mechanism and the price information it yields can be so valuable in informing public policy.
My good friend Chris Masse, the hardworking and pioneering predictive information markets blogger, had his response to the Freakonomics North Korean missile test blog post removed. Steve Levitt is perhaps the leading academic advocate of Tradesports. Here is Masse's censored comment, and here is a brief excerpt:
But before I am able to accuse Levitt of censorship, I'd like to know what his comments policy is. I had one of my comments there removed as well, and that contained 3 links to AEI-Brookings.
UPDATE: Masse's comment is back. So is mine. I am glad I stopped short of accusation. One love, one heart, let's get together and feel alright.
Emotions are, of course, personal. Without being led by the intellect and followed up by consistent discipline, unconstrained emotions will lead to certain destruction. Fear will do that. So will greed, as many a TS member who's deposit quickly plummets to $0.00 has proven. But you can't fake an emotion. Joy, anger, peace ... it is what it is when you feel it.
Markets are interpersonal. Not so much relational, they are the transactional potential and realization of agreements over time. And unlike the individualism of emotion, more than one person must agree on a price to make it real, which is why the market mechanism and the price information it yields can be so valuable in informing public policy.
My good friend Chris Masse, the hardworking and pioneering predictive information markets blogger, had his response to the Freakonomics North Korean missile test blog post removed. Steve Levitt is perhaps the leading academic advocate of Tradesports. Here is Masse's censored comment, and here is a brief excerpt:
Thanks for airing this controversy. You’re brave.Conflict is inevitable, even between people in whom I hold such high esteem. What strikes me as weird about this particular incident, is how Steve Sailer gets away with so much blood with his comments on the Freakonomics blog, and Masse doesn't get the same consideration. Perhaps Sailer's rants fuel a profitable controversy, while Masse's line of thought is unprofitable for the Freakonomics franchise. Just as Claudia Rosett is certainly not helping the UN with their fundraising. Basically a situation where the profit motives cannot be settled by a market, and people must resort to swords or words.
I’d like to say to your readers that very few scholars have dared expressing their viewpoint publicly, because scholars need the data coming from TradeSports (and BetFair) to feed their research and publications. They fear retaliation from TradeSports (which has already retaliated against me for airing this dispute).
As you said perfectly, this issue is complex and there’s no clear cut. As I wrote, all opinions are respectable (expire to 0; expire to 100; unwind all trades and void all bets; or pay both sides).
But before I am able to accuse Levitt of censorship, I'd like to know what his comments policy is. I had one of my comments there removed as well, and that contained 3 links to AEI-Brookings.
UPDATE: Masse's comment is back. So is mine. I am glad I stopped short of accusation. One love, one heart, let's get together and feel alright.
Thursday, August 10, 2006
Limited blogging Thursday and Friday
I am away at a conference with business guru Jim Collins, author of Good To Great, and Ashish Nanda, Harvard Business School prof and author of The Risky Business Of Hiring Stars. Oh, and this other "expert", Paul David Hewson.
Will try to post as I am able.
Will try to post as I am able.
Wednesday, August 09, 2006
Richard Posner & Gary Becker, on internet gambling
Federal Court Of Appeals Justice Posner says:
Economics Nobel Laureate Becker follows, with:
I have updated my Friends of Tradesports list, accordingly.
Internet gambling establishments have very low expenses, enabling them to offer an approximation to fair odds, and do not require any travel by the gambler. One would think fair odds an enormously attractive feature of Internet gambling to gamblers. At fair odds, which is to say with no loading expense (a gamblers' nirvana that Internet gambling, if allowed to operate without threat of criminal prosecution--which obviously drives up its costs--might approximate), the net utility of gambling soars because there is no longer a net expected financial loss.
Economics Nobel Laureate Becker follows, with:
Governments are concerned about online gambling primarily, I believe, because it threatens the revenue and other political advantages they get from taxing and tightly regulating various forms of gambling.
Supporters of this [gambling prohibition] bill argue that easy access to online gambling is dangerous because it encourages and strengthens gambling addictions. The fact is, however, that gambling is even less addicted than drinking, and is not nearly as addicted as smoking. Moreover, gambling addicts can already find many ways to gamble.
I favor allowing online gambling, given the weak arguments against it, the common human desire to gamble, and also that addictive aspects of gambling are greatly exaggerated. Indeed, I also believe it should remain tax free, along with purchases of other services through the Internet. For tax-free online gambling would put pressure on governments to reduce taxes and various restrictions on lotteries and other forms of gambling. Lower taxes and fewer regulations would give individuals cheaper access to ways to satisfy the mainly harmless desire to play games for money, and to bet on sporting and other events, including lotteries.
I have updated my Friends of Tradesports list, accordingly.
Another note of doubt for Da Bears to heed
Two Bryan Caplan posts in one TS day! Here is the latest.
A quick Pit conversation on legal outlook for TS
edwillers: i see the internet gambling contract is trading around 20; what's the consensus on tradesports legality currently and if that law passes?
caveatBettor: TS legality is a state issue caveatBettor: states loathe to prosecute citizens [doing their own victimless thing] in their own homes caveatBettor: TS is bound to return any monies to customers upon request of customer, or by regulatory requirement of US law caveatBettor: but impulsive deposits via credit card would be eliminated caveatBettor: only snail mail bank checksUPDATE: I am not a lawyer. Speak to your own attorney for advice on legal matters.
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