The Blinders Bailout Plan

I posted last week about the bailout package for Wall Street, and came out in favor of it. The basic thinking was that you can’t just blame the banks, because it was a combination of them making stupid loans, and consumers taking advantage by signing up for loans they could not afford, and would only pay back if house prices went up. Ultimately, there is an absolute ton of money that was loaned against assets at inflated prices. Since those assets will never see those prices anytime soon, the U.S. Financial system is about to collapse. We can sit back and watch it collapse, or we can take some kind of steps to prevent it. I was for the Paulson plan in general, because it was the only plan on the table, and it could possibly work. I realized if the we did nothing we will head into a deep recession, and I think with today’s stock market reaction to the lack of leadership from congress we are well on our way there.

I am not for bailouts in principle, as I believe in free markets. Our market may stay free if we do nothing, but it will stop functioning. With banks going under left and right, and with the stock market crashing, there are no longer any safe places to put your money. Banks, Bonds, Stocks, and Real Estate are all currently out of the question. It is time to stuff your cash into the mattress. I have already increased my cash position ten-fold. The other option out there I guess is gold. So we will have more flights to the safety of cash, and more runs on banks, stocks and bonds. Rinse, repeat, and we may be heading for a depression sooner rather than later.

Bailing out Wall Street sucks though, and the plan is fatally flawed. The biggest problem is that it does nothing to address the problems that got us here. No reforms or new regulations on lending. No reforms or regulation on the packaging of mortgage backed securities. I would hate to see the banks get bailed out, and go right back to business as usual with option payment and liar loans. The Republican balked at the proposal, because it violates their basic principles. The Democrats love the plan, as long as some sort of welfare for Main Street is included. No way the Democrats vote against a spending bill in an election cycle, unless it looks risky like this one. So the prospects are not currently looking good as nether side is fully behind the plan.

So rather than accept the Paulson plan as is, I will offer up the Blinders plan. My perfect version of the bill is closer to what what the Republicans in the house have proposed. Forget about the U.S. buying up any of the troubled securities though. Offer up low interest loans against the troubled assets. Come up with a fee for the entire banking system that will fund an insurance pool against the assets. Any company taking the loan must offer up warrants on their stock, so that if they get too good of a deal on the loan and their stock price goes up the U.S. profits. Throw in some caps on executive pay, and remove all help for foreclosures. Why would we bail out dead beats that do not pay their loans back? It is one thing that the banks got out of control, made some real bad investments, and paid a massive price. It is another thing to take out a loan, and then refuse to pay it back. I would rather the investor get some form of bailout, then the dead beat. If these dead beats are really in a position to buy a house, then let them buy one on the free market, after they lose the one they could not afford. What is great about this version of the plan, is the only way we don’t get paid back is if the company we loan money to fails, and if we get taken advantage of in the process we profit from the stock warrants. We want to make it a poor option for a company to take the bailout, so that only those who truly need it will.

In a perfect world, I would add the following provisions, but these will probably not be added due to time constraints.

1) Make it illegal to borrow money to put down on a house, or to lend money to someone for the same purpose. A massive part of the problem was the lending of money for down payments to avoid PMI (Primary Mortgage Insurance). Without 20% down on a house you have to pay mortgage insurance to cover your elevated risk of default. When you lend somebody the money to cover the down payment, no PMI is taken out, and the primary loan takes on more risk than it should. If all people who put down less than 20% had PMI we would not have this problem as the lenders would have been protected by the PMI.

2) Go after people who defaulted on liar loans for fraud and throw their asses in jail. Just because it is called a liar loan, does not mean you are allowed to lie on it. If you lied about your income to get a liar loan, and then defaulted you committed fraud and should be punished to the fullest extent of the law. If we actually throw some of these guys in jail, and make examples of them, people will be less likely to commit fraud in the future.

3) Make teaser rates on mortgages illegal. Everyone must qualify at the fully indexed payment, and must start making fully indexed payments immediately. Houses are not car stereos. Whoever came up with the idea of teaser rates on home loans should be shot.

4) Raise the minimum required down payment to qualify for a loan. Fixed rate loans require at least 5% cash down +PMI or 20% cash down no PMI. Adjustable rate loans require at least 10% down + PMI + excellent credit or 20% cash down + excellent credit. Payment option and liar loans require 20% cash down period and excellent credit.

5) Remove the regulations that require banks to lend to unqualified borrowers. This whole problem can be traced back the Democrats requiring banks to make a certain portion of their home loans to those that are not qualified. This was done as a way to expand homeownership to the lower classes, but I guarantee that most of these loans went bad, and are the ones we are paying for now. The government can’t make these types of demands on banks, and expect them to remain solvent. Shame on the banks for not fighting this more, but these types of regulations need to be removed. Freddy Mac and Fannie Maes main purpose was to get these bad loans off of the banks books, so that the banks could continue to make bad loans. Fannie and Freddy in return contributed huge amounts to the congress members who supported them.

6) Cash out refinancing should only be allowed when 20% equity is retained in the house. You actually used to be able to cash out more than all of your equity which was a joke, but is still legal to this day.

Throw in some fixes like that and we have a very workable plan, or go buy a king sized mattress to store all of your cash.

BFFB and Sundays with Dr. Pauly Results

This week we had 20 runners for the second annual BFFB. Kaiseroll13 put up the top score this week. bonds finished second and has moved into the over all lead through 4 weeks. We are missing some of the regular bloggers from last year in this year's BFFB. I guess you guys hate free money. With only a handful of linked bloggers on the leaderboard, the $500 in bonus cash is even easier to win than ever. There was a small error in third place battle points from last week that has now been corrected. Sunday's with Dr. Pauly results are now up at the FSL Blog.




Quailfied for Tournament of Champions ($150 Min. Added)
Rtrizzle, AlCan'tHang, bonds, Kaiseroll13

Top Scores of the Season ($100/$50/$25 Added)
RTrizzle 142.3 (Week 1)
AlCantHang 139.7 (Week 2)
Kaiseroll13 138.5 (Week 4)

Blinders Dead Money in TOC Pool
$40 so far.

Points Leaders ($100/$50/$25 Added)

bonds 201.18
AlCantHang 192.50
Buffalo66 185.39
RTrizzle 179.76
Kaiseroll13 161.01
Joe Speaker 138.73
Big Pirate 118.22
Schaubs 114.17
Blinders 113.30
Resino 102.73
Miami Don 101.93
I Am Legion 88.68
carmine316 87.65
Capybara Carnival 86.70
Canable 82.90
D-Train 71.56
pokernut0826 67.15
kinnehboo 61.97
bayne_s 61.56
Madden 48.42
only1calvary 46.85
cyandle 44.31
DARTHraider 44.21
Turf Toes 43.82
PachucaSunrise 41.32
JayP 37.37
Kev 36.71
SHaMRoCKeD 35.78
tw 35.35
jbvolfan 33.99
Stop Sign 32.65
Bobby262626 32.52
love_elf 31.33
jek187 30.03
Muffins 29.22
Zeem 28.44
lakewoods 28.44

Bodog Roll Growing - Beginner S&Gs Still Easy Money

A few weeks ago, I posted about what to do about Bodog. In a panic, I had removed all but $200 of my funds from Bodog. With an eight week lead-time on a withdrawl check, I figured the funds are not very safe there. The problem is that I love to bet Football, but $200 is not nearly enough to cover the variance of football betting. So I have made a small effort to rebuild the roll at Bodog over the last few weeks, and have played about 6 hours worth of Beginner S&Gs. The roll is now north of $600. I even made may first football bets last weekend earning a small profit overall. I know I sound like a broken record when I talk about the Bodog beginner S&Gs but theses things are like a printing press for free money. With just $200 in my account, I had no problem running the $32+3 Beginner S&Gs even though the buy in was more than 1/6th of my roll. These things simply have almost no variance and no risk. I cash in over 75% of them that I run, though lately it feels more like 100%. The $32+3s play super easy too. I played my first $8+.80 beginner, and it was tougher early on than the 16s or 32s. At the lower limits the players are looking to fold into the cash. At the higher levels players like to show-off their abilities. You end up seeing one or two early eliminations in the 32s way more often than in the 16s or 8s. If two people get knocked out in the first level or two, you can just fold to the cash. With 8 people left you just need three more eliminations in the next hour to cash, which is a given in a S&G format. So more often than not in the 32s, people get out of line early, and basically hand you a cash if you are willing to fold to it. The crazy thing is that I take this super tight and super conservative approach, and still end up accumulating chips. I wish I could say this is all skill, but the play at Bodog is just so bad. I wait around for massive starting hands, and you will see one or two of these in an hour. When I get one, I get paid off and that is all that I need. Boring poker, yes. Profitable poker, oh yeah. If you don’t like free money, stay away from Bodog. If you still have some funds there, play the beginners and build your roll. If, I can free up a decent amount of time I would challenge myself to build a roll from $20 to $1000 in less than a month on Bodog. I figure 20-30 hours of work is all it would take, with zero risk of going busto.

This Sunday is Week 4 of the second annual Blogger Fantasy Football Battle. Get in the game at FantasySportsLive.com, and compete for the $500+ in added bonus cash. AlCan'tHang is our current overall leader and he knows his SoCo better than his football. Also, Sunday's with Dr. Pauly continues. $500 in added bonus cash for that series as well.

Why We Need the Bailout & Regulations Would Not Have Worked

I wrote about the housing crisis a while back. My opinion then is the same as it is now. The banks and borrowers were the ones to blame, and they are the ones who are now paying the price. This is how capitalism works. There seems to be this opinion in the media that the overall economy is in the tank, that regulations would have prevented this, and that the bailout is not a good idea or will not work. There is also Obama saying over and over that the economic policies of the Republicans are “failed”, and that some new economic paradigm is required to get us out of this massive mess. Well, I am sorry, but the media has it wrong, and so does Obama. Let me address each issue.

Why Regulations Would Not Have Worked

I actually think regulations could have worked, and will be required going forward. The problem is the regulations that would have been required would have never been passed with the economy booming and real estate prices going up. A regulation that would have prevented this mess would have been to require a 20% cash down payment on ALL housing purchases, and ALL home refinancing. Assets could be put up instead of cash, but bottom line is the home buyer needs to be on the hook for the first 20% of value lost on a house. That’s the way things worked in the not so distant past, but things changed with this bubble. In rapidly appreciating markets the down payment requirement should be even higher (20% + ½ of gains in the last three years). There is no way in hell a regulation like the would have been passed though. That type of regulation discourages home ownership, and puts a cap on house price appreciation. It basically kills demand, which would have prevented both the rise and fall of real estate prices, averting the meltdown that we have now. At the time though, a regulation like that does not go through. It would have been fought tooth and nail. Now after getting burned bad, we may be able to put a regulation like that in place to discourage demand for housing.

In the absence of a regulation like that, and with a bubble in housing rapidly forming, the free market economy for housing in the U.S. broke down. Housing has a limited supply, and demand was very high while the bubble was forming. With high demand for housing, lending standards should have tightened. Lender fees should have increased, interest spreads should have increased. It should have become more and more difficult to qualify for a loan and buy a house, and those supplying the loans should have made a huge risk premium for funding a risky market. The opposite ended up happening. Lending standards dropped. Zero down and option payment mortgages were pushed. Liar loads were made. Basically the banks screwed up royally here in their search for profits. And the banks are now paying for this. Many banks will go under based on these mistakes and the ones that survive will lose most of their stock value. So the stock holders and employees of theses banks that screwed up will pay a huge price. This huge price should force them to not make these same massive mistakes again. Another housing bubble like this will probably not be seen far a long time (30+ years), as we will learn from these mistakes, and hopefully not repeat them in the near future.

Who Is To Blame For All This?

The blame falls equally here between the lenders who pushed risky loans without receiving an appropriate risk premium, and the borrowers who took out loans that they could not afford to pay back, and who had no problem walking away from their signed commitments when prices went south. When you factor in that the economy has been growing throughout this crisis and interest rates have remained flat as well, borrowers have no excuses for missing payments. They are not facing higher payments because interest rates shot up. They are not in general facing a horrible economy where they can’t find a job. They are simply skipping out of their obligation to repay a loan because the underlying asset value is depreciating, and they do not hold enough equity to stay in the loan. It’s the banks fault the borrowers do not have enough equity to commit to the loan, but the borrowers are the ones in default for very selfish reasons. What ever happened to personal responsibility? Since when is it OK to make a 30 year commitment to pay a loan off, and then walk away 2 years later for no real reason.

Who Really Profited From All Of This?

The media loves to beat-up the banks here, as if making a bunch of crap loans is a long term profit driver. It is not. Two classes of people profited the most from this mess.

1) Existing Home Owners Who Sold During The Bubble
Let’s face the facts here. The housing bubble artificially inflated house prices to way above what they should have been. House prices have a lot further to fall to get back down to fair value. If you owned a house and sold it at an inflated price you profited from this. I see nothing wrong with this and you simply can’t blame the home owners for booking a profit when prices were high.

2) Employees Who Made Abnormally High Pay During The Bubble
Employees of banks made a ton of money during the bubble, and were probably overpaid in most cases for this work. The extra cash they made over market rates is a bit of a windfall. I don’t have problems with the employees profiting here, as this is capitalism at work. I do have a problem with management using the bubble to pump up the stock and then cash out. Any company taking a bailout needs to void all pay and stock options promised to executives as a condition of the bailout. Ultimately these same employees and management will pay a high price. Those that held stock in their companies found there portfolios devastated. Also, many will lose their jobs over this.

Why the Bailout Is Required

I am a free market guy, so I hate the idea of bailouts in principle. This one is different. The banks and borrowers share equal blame here. If you cash out refinanced in the last 5 years you are part of the problem. If you walked away from a home loan, because the value of your house went down you are to blame. Lots of people are to blame here. It serves no purpose calling this a bank bailout, when it is an economic bailout. The simple fact is that tons of loans were made on assets with inflated values. A huge portion of those loads are bad. Housing prices have further to go down and will not see those high prices anytime soon. If something is not done, our entire financial foundation for the economy could be destroyed. The banks screwed up, the government screwed up, and the borrowers screwed up. It is time to pay the piper. We need to act fast here. We can go round and round about who is to blame, but that will not stop the collapse of our economy. The democrats do not want the bailout to go through because they require a bad economy to get elected. Obama’s platform is basically that he can get us out of the current bad economy. If the economy gets fixed do we still need Obama? So the democrats will fight the bailout, stall, and add ridiculous provisions to it to keep it from passing. The Democrats will destroy our economy so that the voters will give them a chance to fix it. That’s pretty messed up IMO.

How Bad is the Economy? Have Republican Policies Failed?

The U.S. economy is doing just fine. We are not in a recession. Q2 GDP growth was a solid 3.3%. Unemployment is at historical lows. Inflation is still pretty low. The dollar has been strengthening in a big way this year. All of this is signs of a solid economy. When Bush took over in 2000 the economy was strong as a result of the stock market bubble. The bursting of the bubble and that attacks of 9/11 destroyed our economy, but tax cuts and stimulus checks got the economy going again. Then worldwide demand caused oil to spike to $147 a barrel, causing inflation to become an issue. The fed lowered rates, a second round of stimulus checks went out, and the economy is still fine. Bush faced huge economic issues, and has navigated us through them about as well as possible. Lower taxes help the economy. Higher taxes hurt. This has been proven over and over again. Obama wants to raise taxes to fix the economy. The biggest issue with Bush is that he is a spender. He is a tax cut and spend Republican which is not good for our deficit. We need somebody to come in and cut government spending while keeping taxes where they are. So we have a president who has faced huge economic issues three times, and navigated through them with success every single time, yet the spin is that his economic policies did not work. The spin is that we need bottom up socialism in America. Give me a break.

Why The Bailout Will Work

We can either sit on our hands while Rome burns or we can try to do something about it. It seems to me that the Paulson has a plan that could work, and nobody else has a plan. The democrats will debate this to death vs. acting on anything. Obama, the thinking man, will need to carefully consider his response while the economy goes under. I trust the republicans on economic issues. Doing nothing would be a huge mistake. So if the bailout gets approved the government will buy up mortgage backed securities for pennies on the dollar. There is no market for these things right now, so as the only buyer we will have significant power. This will not cost the tax payers $700 Billion dollars. We will probably end up profiting form this just like the last time something similar was done during the S&L crisis. Mortgage backed securities are not worthless. There are actual housing assets that underlie them. Unless the value of housing in the U.S. goes to zero, the houses underlying the securities are worth something. So we jump in and pay 50c on the dollar for assets that are worth 60c on the dollar, but are only currently getting 5c on the dollar due to a lack of buyers. The government then rides out the crisis, rents out foreclosed houses, and then liquidates the assets when the housing market recovers. As a result many banks like WaMu get to stay in business, and the credit markets start to function again. Worst case, we take a bath on the assets, and the bailout costs us 100-200 Billion. When you look at the AIG bailout it is a 2 year loan with an interest rate of 11.5%. We also get 85% of the equity. AIG was not bailed out, it will be liquidated and not exist in its present form. The U.S will also profit from this bailout. Again this is not a bailout for those who profited the most (Home Owners Who Sold) from this mess. It is a bailout of our financial system so it can function properly. Many bankers will lose their jobs. and have their portfolios crumble. A few high paid CEOs profited sure, but that is a whole different issue. So the bailout will get problem assets off of the books of banks and improve their financial health enough that they can lend again. Doing nothing will just let this cancer on financial institutions fester until it is too late.

So what does the market/world think about the bailout?

As usual the U.S. is ahead of the curve on the economy. While we take action, the rest of the world watches. As a result our economy will stay strong while the world economy heads into a recession. This will cause more flights to safety in the U.S. Dollar and U.S. assets that will keep the dollar strong, even as we print dollars at a record pace. The U.S. stock market and world markets rallied on the news that we would address our financial issues. When Monday rolled around and the reality set in the democrats don’t want the economy to be good, things went south. Let’s do what we need to do to fix this problem now, that was caused by the banks and the borrowers before it is too late. I trust Secretary Paulson to do what is best.

Sundays with Dr. Pauly Results

Kev put up the high fantasy score this week of 140.1 in Sundays with Dr. Pauly on Fantasy Sports Live. Pauly scored a 104.8, and I will be putting up complete results at the FSL Blog.

The following players beat Pauly's score in the first three weeks and are in the TOC.
Jag, Expensive Wino, AlCantHang

The following players will earn a TOC seat if they beat Pauly next week.
Bonds, only1calvary, eddieleb

The Top 20 in the Week 1-5 Series are below. Winner gains entry in the Super-TOC

Jag 375
Expensive Wino 362.5
AlCantHang 350.9
Buffalo66 350.7
bonds 348.5
Brian 342.5
Chuckdnb 328.4
TaoPauly 318.8
greengoddess 317.3
Mattazuma 316.8
repete oiffenders 312.7
Chewbot 309.6
bayne_s 295.6
Humperdink 292.6
jek187 292.6
Big Pirate 283.6
Joe Speaker 282.7
ebk03001 276.8
HermWarfare 273.6
BigHeeb91 266.7

Bonds Wins Week 3 of the Blogger Fantasy Football Battle

This week we had 29 runners in the BFFB2 at Fantasy Sports Live. bonds who was a top competitor last year continued his winning ways with the top score. That will earn him a seat in the end of season TOC as well as move him up in the season standings. Results are shown below. The added prizes are for bloggers only. If your FSL nickname is linked to your blog you are good to go. If your name is not linked, but you have a blog drop an email to support or a comment here, and I will get you linked up.

Quailfied for Tournament of Champions ($150 Min. Added)

Rtrizzle, AlCan'tHang, bonds

Top Scores of the Season ($175 Added)

RTrizzle 142.3 (Week 1)

AlCantHang 139.7 (Week 2)

Carmine316 135.4 (Week 2)

Blinders Dead Money in TOC Pool

$20 so far.

Points Leaders ($175 Added)

AlCantHang 192.50
RTrizzle 171.38
Buffalo66 155.42
bonds 137.59
Big Pirate 118.22
Miami Don 101.93
I Am Legion 88.68
carmine316 87.65
Joe Speaker 86.81
Capybara Carnival 86.70
Canable 82.90
Schaubs 82.38
D-Train 71.56
Kaiseroll13 71.09
Blinders 68.33
pokernut0826 67.15
Resino 62.52
kinnehboo 61.97
Madden 48.42
only1calvary 46.85
cyandle 44.31
DARTHraider 44.21
Turf Toes 43.82
PachucaSunrise 41.32
JayP 37.37
SHaMRoCKeD 35.78
tw 35.35
bayne_s 33.13
Stop Sign 32.65
Bobby262626 32.52
love_elf 31.33
jek187 30.03
Muffins 29.22
Zeem 28.44
lakewoods 28.44

Harringbots vs. Snyderbots

It’s about time that I jump in and put my actual thoughts down on “Chip Utility”. I have always used chip utility considerations when playing poker, but not in the way that Snyder suggests according to Hoy (I have not read Snyder’s book). Your chip utility tells you what types of moves you can still make based on your starting stack. If you are not deep enough, set mining no longer works and you need to push/fold small pairs preflop. If you get real short post flop play no longer works, and you push/fold preflop. Unless you are very, very deep small to medium suited connectors are not playable preflop. As I progress through an MTT I keep track of these things and adjust my play accordingly. Not all players do this. Most probably do not do it well, and they get burned late in MTTs taking the same lines they used when they had more chip utility. Once in a while when it is very late in an MTT, and somehow I have managed to get most of my stack in the pot, I may call for chip utility purposes alone. You may not be priced in for the call, but your stack will be so low if you do not win this pot that you will be eliminated in short order anyway. In that rare case, I will make a call getting bad odds, because I really have no choice.

Now while I am sure Snyder covers these aspects of chip utility in the book, the example Hoy makes is getting it in behind in the very early stages of an MTT when you have no implied or pot odds, just for the chance to improve your chip utility through a double up. Snyder thinks taking a coin flip (or worse than a flip) for all your chips in the first level of an MTT as a way to be successful. He is not the first to make this claim, but this claim has been pretty thoroughly debunked over and over again. The math for MTTs get pretty tough, but it can be proven mathematically that taking a pure coin flip early in a 1 or 2 table S&G is –EV (see Chad’s work on the subject). My thought is that doing this early in an MTT is even more –EV because you are much further away from a cash. An early double up goes a long way in a 9 player S&G, but how far does it get you in a 1000 player MTT? So the math says that early chip utility flips are –EV. Making a –EV move early in an MTT helps me win it???

So now let’s look at the difference between Snyder and Harrington, and the Snyderbots and Harringbots out there, who try to use their strategy in MTTs. First off, I had to look up Snyder’s MTT results. He has no major MTT FT’s ever according to Card Player. He is not even in their Database. Harrington has over Six Million in major live MTT winnings. Hoy does not believe this is relevant, but give me a break. It is important that the people you take advice from have shown some success in the past. Harrington describes in his masterwork the strategy that he has successfully employed in major live MTTs. Snyder’s strategy has never worked for him in a major live MTT as he has never final tabled one. I don’t know much about this guy. Maybe he is not good enough to even play the majors. Maybe he is an online pro who never plays live. If either of these is the case, I have no use for his advice on what to do in level one of a WSOP $1500 donkfest. Unless you have final tabled one of those donkfests, keep the advice to yourself please. Harrington’s credibility when he gives advice on strategy is earned though 3 WSOP ME FT appearances, and a WSOP Main Event title.

So now let’s compare the Snyderbots and Harringbots out there and see who you would rather play against in a WSOP $1500 donkfest MTT. A Snyderbot sits down and sees that they have $3000 in front of them and blinds of $25/50. They realize immediately that they do not have “Full Chip Utility” so they start out desperate. They are looking to call off their entire stack as soon as they can take anything close to a coin flip. Calling off your entire stack in the first level with a flush draw or three overs are examples Hoy uses of what Snyder would do. So the Snyderbot finds a way to flip for his stack in level one, and is eliminated right there, or doubles up to T6000. At level two when the blinds are $50/$100 even with the double up the Snyderbot is still just as desperate as he was in Level 1. His chip utility is no better than before now that the level has changed. So he takes another flip (or worse) as soon as possible to get the chip utility back. So what’s the third level of the WSOP? It is $100/$200. So even if the Snyderbot wins the coin flips in level 1 and level 2, when level 3 rolls around, he will still need to take another flip in level 3 to get his chip utility back. What the Snyderbot is doing is playing wreckless and taking coin flip after coin flip early, just to maintain some magical level of “Full Utility”, that the Snyderbot can’t even proceed without.

Now for the Harringbot’s approach. Harringbot starts the MTT with T3000 and an M=50. Harringbot is in the green zone, so no need for any major moves, and no need to jam yet for first in vig. So while 7+/8 Snyderbots will be gone by the end of level three, nearly all of the Harringbots will still be alive. Many of the Harringbots will have caught double ups off of the Snyderbots, because even though Harringbots play tight, they also play aggressive when they have the best of it. Harringbots will end up getting it in against the Snyderbots with much better than a coin flip. For example, when a Harringbot flops a set and a Snyderbot flops a flush draw, both will play the hand to get all the chips in the middle. The Harringbot has redraws which gives him much better than coin flip odds on this hand. The Snyderbots biggest issue is getting it in on what looks like a coin flip, when it really is not. When you are desperate for a coin flip on the first hand of an MTT you can’t really discriminate well what is and what is not a coin flip.

So by level 4 nearly all of the Harringbots are still alive, and nearly all of the Snyderbots are eliminated. This is where the Harringbots strategy becomes a huge advantage. If you read Harrington closely when he talks about jamming with a low M for “first-in vig.” Late in MTTs he is talking about a solidly +EV move. When the blinds and antes are big relative to your stack, and you have the opportunity to be the first one to jam, you are actually +EV even when jamming ATC. So while a Harringbot may not obtain the same size stack as the surviving Snyderbot has, when the Harringbot starts ramming and jamming late these are +EV moves, while the Snyderbots jams early were –EV moves. Jamming ATC becomes profitable late in MTTs and if you are not alive late because you donked out in the first round, you simply can’t take advantage of this. Jamming ATC late can be +EV even if you are called by a better hand because of the dead money involved. First in jamming with the folding equity that comes with it, makes it an even better play. Its these late hands that matter, and it is very easy for a Harringbot to overtake a snyderbots stack size late. It will take a Million+ chips to make a solid run at an WSOP $1500 donkfest, and I am not sure how getting eliminated 7+/8 times early and when not eliminated having a stack of 24k, actually gets you there. At least the Harringbots are still alive when the blinds matter, and +EV moves get easier to make.

There is also this huge distortion by Hoy on what M means. M is the number of orbits you can go at the CURRENT blind level. When you have 20+ orbits of ten handed you have about 6 hours of play live left. This is no time to get desperate. When the blind level goes up you recalculate your M. You may now be in the danger zone and need to make some adjustments, but you were not in that zone until the blinds actually went up. Looking ahead to what the blinds are going to do, and figuring that with an M of 20 you are more desperate that you actually are is not what Harrington recommends. He wants to survive to where he can get his money in good with a low stack, and that is when your M is below 20. When you M is above 20 there is not enough dead money to make jamming preflop profitable enough. In summary, a Harringbot plays safe early, makes it late into the MTT, and then gets his money in good when the blinds matter, and tries to rally back late. The Snyderbot gets his money in bad as early as possible. Less than 1/8 Snyderbots even makes it to level 4 because you need a double up in each of the first three levels to maintain chip utility. The Snyderbot left after level 4 still needs to 40x his stack to have a good chance at winning the MTT, so he is still miles away. The Harringbots have smaller stacks but there are more of them. Probably still 6 or 7 out of 8 still alive after level 4. There strength is in their numbers, and MTTs are nothing but a numbers game. Lastly when the Haringbots start pushing they will be respected more than a Snyderbot. They have been playing tighter preflop the whole MTT so their range is compressed. The Snyderbot does not have this same luxury. He will be put on a wider range, and called down more often late. The Harringbots image late improves his EV, while a Snyderbot’s EV is reduced.

So what about the pro poker players who actually take flips early on? Are they really doing this for chip utility? In most cases no, though Snyder would argue otherwise. Jamming your flush draw on the flop early on in am MTT is simply a profitable move; it is not a chip utility move. Taking a flip is also more of an ROI play for a big pro in a WSOP donkfest. Let’s say that you are a solid pro with a 50% ROI in major MTTs. If on average you will play 10 hours into a WSOP $1500 event, you stand to make $75 an hour for your efforts on average. That isn’t much for a big-time pro. They are better off taking a flip to get eliminated early and move to the cash games. If they win the flip, then they can “commit” the time to the MTT. It’s a pure ROI play. Lastly, let’s take a look at Phil Helmuth, the winningest WSOP player of all time. Is he concerned with chip utility early in MTTs? He obviously is not, because he always shows up late, and starts with a low amount of chip utility. If he thought it was important, he would have his ass in the seat when the MTT started. Also, look at pros like Allen Cunningham. He also, tends to show up late for WSOP events. There is just not much to be gained in level one, so he skips it, and saves the ROI by lowering the number of hours he plays MTTs. Then there are all of the pros who register for multiple WSOP events, and blind off while they are in a conflicting event. These guys don’t give a crap about chip utility, or they would not waste money signing up for conflicting events.

So Harrington, Helmuth, Cunningham, … any pro who starts MTTs late, any pro who signs up for conflicting WSOP MTTs, all do not take Snyder’s approach seriously. Then we have Snyder with no major results, no major pros using his system that I am aware of, acting like Harrington’s system is a joke and even coining a ridiculous term like “Harringbots”. You also have numerous big-time pros who all say Harrington’s work is the ultimate MTT strategy guide. Don’t get me wrong, Harrington’s approach is not for all players, but if you have a tight aggressive style, his approach will improve your MTT results. If you have a loose MTT style you are probably ramming and jamming early because that is your style, not because you gain chip utility. I honestly hope that many people read Snyder and become Snyderbots. The more snyderbots in an MTT the better the chances for a Harringbot like me.

It's not too late to get involved in the Blogger Fantasy Football Battle at Fantasy Sports Live. You can earn a TOC seat, or get the high score bonus cash in any week. Also, it is not too late to compete for the overall title with 15/17 weeks left in the series. Get in the game at FantasySportsLive.com

Growing Pains and Unfiltered Chat

When you run a website with rapidly increasing traffic, one of your most important tasks is to make sure you stay ahead of the curve on site performance. You never really know when performance will become an issue, but if your site is growing fast it will become an issue sooner or later. When we launched our second season of fantasy baseball at fantasysportslive.com last spring, website performance became an issue due to a stack-up of issues that was tough to anticipate. The time to draft a team shot up, and overall the site was lagging way too much. So we jumped in and made some huge efficiency improvements to the code, cleaned up some database issues, and got the site performing well again. Now that season two of fantasy football has launched our traffic has shot through the roof causing some issues with site performance on Sundays. Traffic is up this year on fantasy football for a number of reasons. Our user base is up dramatically over what it was last year. Our search engine optimization improvements are driving thousands of new users to the site each week. A highly efficient ad campaign, and a ton of motivated affiliates is also driving record traffic to the site. I guess it is a good problem to have, but the timing is not so good. We were getting ready to roll out 50 player contests, and contest chat. Both will cause the load on the servers to increase a bunch, at a time when they are already getting taxed on Sundays. I decided to postpone the launch of these two new features until we can make some further big improvements to website performance. So we will be sticking with the ten player contests for the Blogger Fantasy Football Battle, and Sundays with Dr. Pauly for the near future. And that leads us to chat.

I have always wanted to add chat functionality to the contests. When I found out that it could be done relatively easy and inexpensively we jumped on it. We were going to launch a very basic unfiltered chat. Yes, you heard me right, unfiltered chat. I figured that our users are all 18+, our Ts&Cs were written with chat in mind, and this is America with free speech laws, right? As launch time for chat got closer, I started to get a bit concerned about the legal aspects of unfiltered chat. The major poker sites must filter chat for a reason. It is either for customer satisfaction, legal protection or both. I would hate to see FSL taken down over a chat issue, that's for sure. So what do you guys think? Is unfiltered chat too risky? Should we wait for a full featured version with filtering, chat disabling and blocking...? Fantasy Sports is all about smack talk, and unfiltered smack talk could get a bit out of hand me thinks.

Jag wins Sunday With Dr. Pauly Week 2, Takes Series Lead

Jag bested 42 runners this week in Sundays with Dr. Pauly at FSL. He also moves into the overall series 1 lead with everyone's favorite Soco fanatic, Al Can't Hang, a close second. Unfortunately for Al, he registered late, and was paired with Jag in a heads-up match, and did not cash even with the second highest score for the week. The following players have beaten Pauly's score for two straight weeks, and can earn an early entry in the TOC by beating his score next week.

Two-Week Streaks against Pauly
Jag
AlCantHang
Expensive Wino
Chuckdnb
Olliewood
Greengoddess

Week 2 SWDP Results

Series 1 (Weeks 1-5) Leaderboard

Jag 252.7
AlCantHang 241.4
Expensive Wino 237.6
Chuckdnb 235.8
Olliewood 234.5
bonds 228.3
greengoddess 227.4
DonkeyPuncher 227.2
Buffalo66 225.6
Mattazuma 215.3
TaoPauly 214
bayne_s 212.9
Brian 211.5
HermWarfare 207.7
belly2bar 197.2
Humperdink 193
jek187 193
repete oiffenders 190.3
FSLFSF 186
Chewbot 185.3
Big Pirate 180.3
Joe Speaker 176.5
Mr. Decker 174.7
ebk03001 172.2
BigHeeb91 170.4
Pokerpeaker 154.2
kinnehboo 139.7
DARTHraider 131.7
SHaMRoCKeD 130.8
Capybara Carnival 130.5
only1calvary 123.4
lexx575 122.8
Snickers 119.5
eddieleb 118.8
wxmanko 117.5
DirrtyDirrty 117.4
Kaiseroll13 116
Letitride 114.2
terrytateofficelb 113.1
cjcito 111.2
Sashka25 110.8
tw 110.3
Kev 104.5
23skidoo 102.5
Mark 96.9
CardiacKid 95.3
BallPark Legend 94.9
BobbyBracelet 93.8
RTrizzle 93
Toddlers 92.8
unbreakable 89.7
BLITZED 83.8
Surf-n-Turf 80.2
Kevman 77.5
JD 75.2
jdhooker 62.6

Al Can't Hang Wins Week 2 of the BFFB2

Al was one of the last entries into the BFFB2 this week. All that studying paid off as he won Week 2 of the BFFB and joins RTrizzle in the season ending TOC. Week 2 results are shown below, and I will be adding a complete leaderboard later today. It is never too late to join in on the BFFB action at FantasySportsLive.com and compete for the added cash.

Quailfied for Tournament of Champions ($150 Min. Added)

Rtrizzle, AlCan'tHang

Top Scores of the Season ($175 Added)

RTrizzle 142.3 (Week 1)
AlCantHang 139.7 (Week 2)
Carmine316 135.4 (Week 2)

Blinders Dead Money in TOC Pool

$20 so far.

Points Leaders ($175 Added)

AlCantHang 154.22
RTrizzle 117.24
Big Pirate 89.28
I Am Legion 88.68
carmine316 87.65
Joe Speaker 86.81
Canable 82.90
Buffalo66 78.85
D-Train 71.56
Kaiseroll13 71.09
Miami Don 67.69
kinnehboo 61.97
Capybara Carnival 50.60
only1calvary 46.85
cyandle 44.31
Turf Toes 43.82
Schaubs 41.45
PachucaSunrise 41.32
pokernut0826 39.20
JayP 37.37
Blinders 37.08
SHaMRoCKeD 35.78
tw 35.35
bayne_s 33.13
Bobby262626 32.52
love_elf 31.33
bonds 29.31
Muffins 29.22
Zeem 28.44
lakewoods 28.44

Nine Eight Sooted

I thought I would continue with my theme this week, and discuss a questionable fold in a live MTT with a sooted connector. This hand is from the same OCPT tournament as the AKs hand, but was during level 4 (5/10 Blinds) when rebuys were still available. This was after my mini-run, and I had just north of T600 in front (T300 to start), when I picked up 9d8d in the BB. There were a bunch of limpers, and I checked behind for a 5-way flop.

Flop

9s8s7d

So I flop top 2-pair with a runner-runner flush possible as well. That is a highly coordinated flop though, so I need to be careful here. The SB opens for T25. I figured I had him for sure, so I popped it up to T100 to chase the probable draws away. Behind me there is a call, a push for about T800, a call for T550, and a fold from the SB who had opened. Holy Fawk! Again I am in the tank. It would be pretty sick to fold top 2-pair on the flop, but this is some pretty crazy action and this was a 5-way limped pot, so any holdings are possible. The shove for T800, and the call for T550 were from players that I respected. I was not concerned by the T100 caller. Had I been at or near my starting stack, I insta-push here, but since I had doubled up already, I needed to consider protecting my stack for later in the tournament. My thought was that there was a huge chance that I was already beat. JT, or 56 was probably out there. A set was possible. Even if somehow I was still ahead here, I had to be up against some fat flush and straight draws. Throw in some A9 and K9 type hands, and just about any cards that come on the turn/river will beat me. If I am already beat, I will need to hit a four outer for the boat. There is also a decent chance that one of my 9s is already gone (in one of the four other hands) leaving me three or less outs. I agonized and agonized about this. This is a rebuy so you pretty much can’t fold top two on the flop, right? I am getting some pretty sick pot odds here as well, though not enough if I am already behind.

I folded

So was it a good decision???

The results were pretty interesting, but they should not matter right? The important result I guess is what everyone else had. If I was right about being behind it was a great fold, even if I would have caught a boat. If I was wrong and was actually ahead of all 4 of them it was a bad fold even if they hit a draw? I will call this a bad fold for now.

The T100 guy called as well leaving three hands still active and all-in. Initial pusher had As4s for the nut flush draw. Initial caller of the push had QTo. Guy who called T100 and then both pushes had Js6s. So I was up against two flush draws, a double gutter, and an outside straight draw, but was somehow ahead of three others who pushed the flop.

Turn – Blank
River – Jd

QTo wins massive pot with a straight. I would have been nearly stacked. I was wrong about being behind, but right about facing a ton of fat draws. I was priced in for a call based on their actual holdings, but would have lost my double stack in the process. So was it a good fold?

Ace King Sooted

Ace King is one of those hands that can make or break your tournament run when you get it in the mid to late stages of an MTT. If your M is in the low to mid range at that point, it is a difficult hand to get away from preflop, no matter what action you are facing. This topic has been discussed at length by some of the better poker authors out there, but I wanted to bring my spin to the situation, and talk about a specific hand in the Orange County Poker Tour event last Saturday night. The situation will explore nearly all the depths of tournament play including chip equity, tournament equity, chip utility, stack size considerations, your reads on the other players, and their reads on you.

So last Saturday was a $20+ rebuy OCPT event. There was a good mix of regulars and newbies, and in general the play was pretty aggressive. Average buy in was over $81 for the tournament. Although I am the all-time cash leader on tour with about $3,200 in winnings, I tend to play the OCPT more for fun, and don’t really bring my full A-Game. This basically means that I go ahead and drink more than I probably should, and don’t really focus on reading the table until well after the rebuy period ends. This is not all bad, because people tend to play differently pre and post rebuy, and I also don’t mind getting a little out of line during the rebuy period. In this specific MTT I was drinking it up as usual, and having a good time. I caught nothing for the first hour, but doubled my stack after catching JJ and AQo in back to back hands. I then bled away chips, and after taking the add-on had about T600 in chips (double buy-in + add-on = T500) with the blinds at 10/20. The play at the table seemed pretty poor, but this was the rebuy period, so who knows.

Shortly after the rebuy period ended with the blinds at 15/30, I picked up Ace King Sooted in the Big Blind with a T600 stack size. It folded to the button, who paused, and inspected the stack sizes of the SB and myself. He then went ahead and opened to T200, which was about 6.5x the blinds. The SB folded and the action was on me. I did not have a good read on this player yet, but really should have had one by this point. I tanked. Calling would be for 1/3 of my stack which would make post flop play difficult. I figured I either needed to push or fold. Pushing seemed like the easy answer, but this guy had me covered. If I push, there is a good chance that I am coin flipping for my tournament life here. I really felt that my skill level was high enough compared to the others that I did not really want to take a coin flip at this point. I figured if I fold, I have plenty of time left to get things going later. So I went round and round on this one, and eventually folded Ace King Sooted preflop. Afterwards, I really hated that play and not just because the guy flipped up QJo. It was more because, you probably just can’t fold it in that situation, if you want to win the MTT. So folding right there was a mistake based on his range. Let me try to explain what thought process you should got through, and why I really needed to call there.

When you should go ahead and jam or call all-in with AKs in an MTT.

1) Is the player loose or tight preflop? A loose player has a wider range that will include more hands that you will be better than a coinflip against. I did not have a good read on this player, but if I did, I would have put him on the loose end of the spectrum.

2) Can you eliminate AA or KK from your opponent’s holdings? The last hand you want to go to war with is AA or KK when you have AK. In this case the 6.5x raise from the button is enough to eliminate AA-KK at least from his holdings. Who over bets from the button preflop with AA?

3) How deep is your stack? If your stack is deep you have more flexibility if you fold. If your stack is short, I am not sure what you are waiting for. In this case I started the hand with T600 so my M was about 13. With an M below 20 you probably should be leaning hard towards going to war with AK.

4) How deep is your opponents stack? If your opponents stack does not have you covered, the argument for going to war makes more sense. In this case he had me covered.

5) What will doubling up do for your chip utility? With an M of about 13 my options are limited. With an M of about 26 my options improve dramatically. I skimmed Hoy’s post on chip utility and nearly vomited, but there is some substance there. I just disagree with taking coin flips during the first level of an MTT for chip utility purposes. If the structure is that bad, and you are a real believer in chip utility, you need to avoid the MTT instead of flipping for your whole stack 15 minute in.

6) What does doubling up do for your tournament equity? Basically, will doubling up improve your average cash amount enough to offset getting eliminated on this hand. In this case, I think my tournament equity goes up. At T600, I am nowhere near cashing with the top 4 paid. Doubling through to T1200, and I can probably cruise into the money. Since I was in for $60, and would win $140 for 4th place, you can argue that even if it is a flip, I am betting $60 to win $140+ which is +EV.

7) What is your skill level compared to the other players still left in the MTT? In this case I felt I had a skill advantage which is an argument against going to war with AK

8) Do you have any fold equity? In this case, I would be jamming T600 over a T200 open. I get a bit of fold equity there, and considering my opponent actually had QJo, I may have actually got the fold.

9) What is your opponent's read on you? Are they stealing because you appear weak-tight (the new tight aggressive)? If you jam can you get them to fold based on your image? My image was a bit mixed at this point. I played very weak tight in the first hour, but was mixing it up quite a bit since then.

10) Any unusual betting patterns? When people over bet preflop, they are either doing it to protect a weak hand or disguise a strong hand. This is one of the reasons that I don’t vary preflop raise amounts. This was definitely an over bet preflop, which indicates a wider range than normal for a bad player, and a tighter range than normal for a good player. The over bet here should have made calling easier for me.

11) What are the player positions in the hand? Since I was the BB in the hand, and he was the button, this looks a bit “stealy”. Same goes for an open from the cutoff position. Since this guy was opening up late, I need to widen his range and call/jam more often. An open from UTG or early should get more respect.

So if you go over the 11 factors I listed above for making the decision, only two of them (my comparative skill level, and my opponents stack size) would lead you to folding AK sooted preflop, with 9 leading you to jam the same hand. I folded so I screwed up here. I ended up going pretty card dead after the hand, and went out in 7th on the triple bubble. Next time, I might be ready to consider everything and make the right play. I was also kicking myself for not having a better read on the player. It was obvious he was way loose preflop, based on his play after the hand, and if I was paying better attention earlier, I would have had that read. To his credit, he went on to win the MTT and the $620 first place prize. Anyone want to defend my fold there?

RTrizzle Wins BFFB Week 1, Kinnehboo Takes Early Sundays Lead

RTrizzle put up the best score in Week 1 out of 34 runners in the second annual Blogger Fantasy Football Battle. The win puts Rtrizzle in the season ending TOC, and in the early lead for the series and best weekly score of the season. I won $20 in my contest, so the TOC pool is already off to a good start. Results are shown below. We are working on bumping the maximum size contests up to 50. So next week or the following week at the latest, we can get everyone in the same contest. I will post a leaderboard with blog links starting next week.

We had 40 runners in Week 1's Sundays with Dr. Pauly. Kinnehboo takes the early lead in the first 5 week series with the week 1 win. Pauly posted a score of 101.6 which was beaten by 17 competitors. If any of those 17 can beat his score for two more weeks, they will be in the TOC. Results are shown below:

Sundays with Dr. Pauly - Win Pauly's Cash

FantasySportsLive.com is proud to announce our second annual Sundays with Dr. Pauly promotion. Compete against Dr. Pauly in weekly fantasy football contests on FSL and earn bonus cash for your efforts. $500 total in bonus cash will be added by FSL over the season long promotion. There will be four ways to earn bonus cash, and each $11 weekly 10 player contest will also pay out $50 for 1st, $30 for second, and $20 for third. Anyone can enter the Sunday's with Dr. Pauly contests, but only your first entry each week will count towards the added bonuses.

Four ways to win bonus cash

1) Beat Dr. Pauly's fantasy score for three straight weeks and get a free entry in the season ending Tournament of Champions. Beat Pauly's score in the tournament of champions and take home some bonus cash. All TOC entries who beat Pauly's score in the TOC will split $200 in added cash equally.

2) Score the highest weekly fantasy score in any Sundays with Dr. Pauly contest all season and win a $75 bonus. Second highest for the season gets a $25 bonus.

3) Win a 5 week series and get $25 plus an entry in the 4-way Super TOC. 5 week series run Weeks 1-5, Weeks 6-10, and Weeks 11-15. Super TOC week 16. Highest total points scored over the 5 weeks wins the series.

4) Beat Pauly's score in the 4-way Super TOC. Players who beat Pauly's score in the super TOC will split $125 in added prizes. Dr. Pauly will add a personal prize to the winner of the super TOC.

Note: Dr. Pauly gains free entry into both TOC and super TOC and can win the added prizes if he wins either TOC outright. Don't let him do this. Win Dr. Pauly's money!

What to do about Bodog?

After reading up on all that has happened at Bodog, I guess things are not looking so great. Since I have been burned in the past, I reacted similar to Smokkee and requested to cash out most of my funds. Eight freekin weeks by courier for the check. That is not a good sign at all. I left $200 in my account figuring the beginner S&Gs are such ultra low variance that I can just build my roll back up playing them without much risk of going broke. What I forgot about is that Bodog is also my only sports book with funds, and football season starts this weekend. I did not leave close to enough in the account to cover the variance associated with football betting. I could go busto! Since I have not had a deposit method for getting close to two years now this is a problem. I need to build the roll up quick to get some padding in place for my balla like football betting. I don’t like betting too much for the first couple of weeks, so this gives me a bit of time to hit the beginner S&Gs and rebuild the roll.

The 8 week cash out delay is pretty scary. I am actually hoping that this is simply an issue with them staying a step ahead of the feds. They had a ton of funds seized recently. They may need to play a shell game of sorts with bank accounts to get the checks to go through unsiezed. At least this is my hope. I am not ready to give up sports betting just yet so hang in the Bodog! Anyone out there use a U.S. friendly sportsbook?

The Blogger Fantasy Football Battle starts this Sunday. $500 minimum in bonus cash will be added by FSL. $100 in prizes will also be won each week in each 10 player blogger battle contest. Head on over to FantasySportsLive.com, and complete for the blogger bragging rights and free cash that is the Blogger Fantasy Football Battle.

Blogger Fantasy Football Battle 2

It's that time of year again! Dig out the fantasy football guide books, or pull out the old dart board. Whatever it takes to prove you are the best blogger at fantasy football. Once again FantasySportsLive.com will be adding $500 minimum to the largest blogger fantasy football contest on the interwebs. Just like last year there will be four ways to win cash. Just like last year this is going to be big. Details are listed below:

Blogger Fantasy Football Battle

Each week there will be contests called "Blogger Battle" in the FSL lobby. These contests will typically be 10-player contests with an $11 entry fee and $100 in prizes paid (50/30/20). There is no password required, but you must have a sports or gaming blog with regular entries that is at least three months old to be eligible for the bonus prizes. In addition to the $100 that will be won each week in each of these contests FSL will add the following cash prizes.

1) The highest score each week will earn a seat in the "Tournament of Champions" The TOC will have $150 minimum added to the prize pool. I will enter each week like last year, and forfeit all prizes won into the TOC prize pool. Last year this was in excess of $200.

2) Points will be awarded to the top 50% of finishers each week, and accumulated throughout the season. The top three overall finishers will win an extra $100/$50/$25 for their efforts.

3) The highest individual point scores in any week of the season will be recorded. The top three individual fantasy scores of the season will receive an extra $100/$50/$25.

So as you can see there are tons of ways to win bonus cash in addition to the $100 per contest being awarded. Also, the TOC seat and top scores can be won in any single week, so you do not need to play them all to take some bonus cash off the table, and secure the associated bragging rights.

Thanks to everyone who made the first annual BFFB a success, and lets try to make this one bigger and better than the last!