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Thursday, April 21, 2011

 

Poker Blues, Trump, and other Outrages

For those who think the big news of the week was the S&P downgrade of the outlook for Treasury debt or the plummeting of Obama's and Trump's poll numbers, or the royal wedding preparations or the latest collapse by the Knicks, Mets, Rangers, etc. the answer is no, those are only the second tier stories. The real outrage was the closing of on-line poker's most popular websites. In a fit of Puritanical cleansing, the Justice Department determined that the off-shore headquarters of on-line poker vendors should not prevent them from being closed to U.S. customers, nor did it prevent legal action against their U.S. based owners and promoters. Previously, Justice had settled for making it as difficult as possible for U.S. customers to deposit funds to their on-line accounts, a mere inconvenience for the truly dedicated gamesman.

I understand there are lots of downsides to on-line poker. How do you prevent cheating, how can minors be prevented from playing, what about gambling addiction, etc.? I get all that. And I also get that anti-poker policy has been conducted by both of the last two administrations. But this administration has a uniquely paternal aspect to it, they just think they know better all the time and it's particularly irritating. Worst, they seem to have a bias against anything that has to do with business or the economy. ESPN is going to have a lot of commercial time to sell for its World Series of Poker telecasts this summer.

On the other hand maybe the casinos will benefit if players actually have to appear in person in order to pursue their (a)vocation.

On that note, we should consider that the quasi public leach on the New York horse racing industry, OTB, has closed shop in New York City and is nearing the end in Nassau County as well based on recent reports. Good riddance. Have you ever been near one that didn't have you looking for a place to wash your hands, and maybe your feet? But the real problem with OTB was that it took bettors away from the tracks. OTB advocates naively believed their customers were taken from illegal bookies, but the bookies survive on sports betting, not racing. Meanwhile, the combination of OTB and high takeouts (17% for straight wagering and up to 25% for exotic bets) killed bettors and with them the sport. OTB made the takeouts worse, adding a 5% surcharge to the takeout, plus breakage.

Next to that, the poker rake is all but insignificant.

So New York killed the golden goose that was thoroughbred and harness racing. Today, a track is lucky to attract 10,000 people to even a good card, even with slot machines, bets on out of town races, and all the other "attractions" they've added. There was a time when every broadcast sports report included the results from the tracks, but no more. To revive racing, give OTB a decent burial and reduce all takeouts to 11%. The dumb politicians will never do that though.
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As to the other stories, let's establish right away that Donald Trump is about as serious a candidate for President as Sarah Palin, which is to say he's not serious at all. I even question whether he's really a Republican. He is however, a tireless self promoter and his "candidacy" is just another chapter. By the way, since when is wealth an attribute for a would-be Presidential candidate? And is Mr. Trump even wealthy? Sure, he controls lots of assets, but he also owes lots of money. His companies have made excellent use of the bankruptcy statutes, and the one intelligent thing The Donald does is insist that his contracts omit a personal responsibility clause. He may be the biggest blowhard in the Western World. Which is a shame since by all reports, his father was an outstanding businessman and a gentleman.
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Then there's our President, who seems to feel it's ethically OK to spend the next 20 months of his term campaigning, travelling largely at taxpayer expense while he does his fundraising and speaking. Meanwhile, the rigors of campaigning seem to be more wearing than the job of being President, judging by Obama's surliness recently toward reporters, opponents, even voters. No wonder his popularity is plummeting and 44% of voters already are determined to vote against him (versus 37% inclined to vote for him). In other words, against "none of the above," Obama is behind.

Of course, another reason for his lagging numbers could have something to do with the overall cruddy job he's doing.

Obama's speech presenting his budget deficit ideas was a real joke and went over like a lead balloon with everyone except the hopelessly leftist progressives. First of all, in contrast to the Ryan Plan, there was not a single new idea, his main brainstorm being that we should let the Bush tax cuts for the wealthy expire. That refrain is getting a bit tiresome and as loyal musings readers know, it would make little difference since we're all subject to the AMT anyway.

So it amounted to yet another campaign speech, and a distasteful one at that. Also stupid timing since Obama will need GOP help to raise the debt limit. Too bad there is so little adult supervision in this administration.

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On 4/13, we bought 100 shares of our little conglomerate, Kaydon Corp. (KDN) for 38.09, a value buy. On 4/15, our limit order to sell our last 120 shares of Lubrizoil (LZ) at 134.25 executed, as we knew it would in due time. We had bought 100 shares on 4/5/04 for 32.18 and 20 shares on 12/13/10 for 106.22. Also on 4/15, we bought 100 shares of IDT Corp. (IDT), a new name for 27.59. This was always a telecommunications company, but they now have become an energy play as well. Its subsidiary Genie Energy is developing a huge shale oil project in Israel of all places. You think they're going to have any problem with regulators over there?
Too bad we didn't discover this little tidbit a year ago when IDT was bottoming in single digits. On 4/18, we bought 15 shares of the SPDR Gold ETF (GLD) at 145.22. Yesterday, we bought 100 shares of Thermo Electron (TMO) at 55.41, a value buy. Today, we sold 100 shares of our railroad stock, GWR at 59.58. We'll have the profit numbers on that transaction in the next post.

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