The Banks and Their Bonuses

For a guy who has been so outspoken about the unfairly positive treatment the banks are receiving over the past year, I am really torn about this whole bonus thing. For those of you who don't know, millions of Americans, including prominently newly sworn-in president Barack Obama, were disgusted and outraged to learn on Thursday that Wall Street paid out $18.4 billion in cash bonuses to its New York City-based employees at the end of 2008 / beginning in 2009 for fiscal year 2008. Many of these banks are the very institutions that received between $10 and $50 billion of taxpayer funds from the TARP program to help stabilize their capital bases and keep them in business as we suffer through the most trying financial crisis since the Great Depression. News that these firms that needed billions and billions of dollars of our money to survive the over-risky positions they got themselves into are now paying out billions and billions of dollars in bonuses to their employees cannot be expected to be taken well.

That said, this isn't nearly as cut and dried as many, including the new president, seem to think it is. In the banks' defense, what they call "bonuses" are not really bonuses in the sense that most non-bank employees think of that word. Having come from that industry myself, I can say with total positivity that this isn't like some other jobs I have had, where you get paid whatever your salary is, and then in a good year maybe they kick you 5 or 10% on top as a year-end bonus. Maybe you get it, maybe you don't, but either way you make your salary and that's what your real pay is. At the banks, the compensation model is completely different. The base salaries at many of the banks, even for those investment bankers making $5 and $10 million a year, generally top out well under a million dollars. It is not uncommon for even the highest-paid bankers in the industry to receive a salary close to $250,000, and then receive their millions all in a bonus at the end of the year, making upwards of 80% or more of their total annual compensation in that year-end bonus.

Now, you may not feel bad for the guy making 250k base salary if he doesn't get his $3 million bonus this year. And I'm not necessarily disagreeing with you on that one. But that example was just to give an example of how the bank compensation model works, to show how totally different it is from essentially all other industries where the bonus is merely a nominal amount of extra cash on top of the base salary already received. It's important to understand that these $5 million bankers aren't taking home $4.5 million in salary, and then also expecting a 500k bonus at year's end. The vast, vast majority of the highest-paid bank employees' compensation comes in that year-end bonus.

The issue is more pressing once you step down the ladder a bit from the highest-paid bank employees. It would not be uncommon for a senior vice president-type at a bank, let's say a non-banker and non-trader, to make maybe 6, 700 thousand dollars a year, but again more than half of that money coming in a year-end bonus. I believe I have said here myself that my own compensation at the bank was more than half in a year-end bonus. The fact of the matter is -- and most people, including the president, don't seem to quite grasp this -- is that it's not nearly as simple as just paying no bonus to all the bank employees in 2008. Not only was more than half of my total compensation coming out of my bonus at year's end, but the base salary I was paid was below average for my field in this area. Far below. Now with the bonus, that more than makes up for any shortfall, but the whole compensation model in the banks is set up like this. Mostly everyone gets paid well below average on the base salary, and then gets bonuses that make them whole (and then some, in many cases) at year's end. Think of waiters and waitresses, who are not even required to be paid minimum wage in salary because it is understood that their tips will get them where they need to be. With bank employees, that's the same function that the bonus serves.

So my point in all this is just to show the folly of simply saying that no banks should pay any bonuses this year because of the problems they have had. All of the good employees would leave in a heartbeat (as well they should) if they got no bonuses, because the entire industry would be grossly undercompensated then, compared to market averages, and even compared in many cases simply to the amount those employees would need to meet their expenses for the year. Forcing all of the best talent to leave the banks by deliberately keeping them from being able to support their families would be a foolish strategy that no one could really support with logic. And yet so many people this week seem to be saying just that. Even President Obama seemed to suggest that the banks who have received federal help this year should not be paying out any bonuses. That is a ridiculous assertion and it is something which should not be done in the middle of a year like this. If you want to tell the banks that they can't pay bonuses in future years, then fine, this gives the banks the chance to determine who their best people are and to raise the base salaries of those employees so that, starting next year, their need to receive a bonus just to be able to meet their expenses is alleviated. But saying that the banks shouldn't be allowed to pay any bonuses this year because of their current troubles is something that only someone with no understanding of how not-truly-discretionary those bonuses really are. I know plenty of people at the banks making 70k in salary with 70k or more in bonus, working a job that any non-bank would pay that same person 120k base and little to no bonus for. I don't see how the answer to this year's financial crisis is to make that guy get by for a year with just 70k in salary.

All that being said, the banks might have really just screwed themselves royally here with these bonus payments. As much as everything I've just said above is undoubtedly true, the bottom line is that the $18.4 billion in bonus payments coming out of Wall Street for 2008 is the sixth largest aggregate bonus pool on record for the banking industry. In fact, $18.6 billion in bonuses basically just takes the banks back down to the bonus levels they paid out in 2004, when the market and the economy were chugging along just fine:



Paying out the sixth-largest bonus pool in history in a year that has seen this kind of carnage and that saw many of the banks needing billions of dollars of taxpayer funds to stay afloat certainly does not sound right to me. All these effers had to do was tell their employees what I solemnly guarantee you they were mostly expecting anyways, which is that bonuses, while still coming, would only be roughly 20% of last year's record levels due to the current calamity in the industry. Yes, some people would have left their jobs as a result as I mentioned above, but not nearly in the numbers that would be more or less forced to go if you paid them no bonus at all. While you can't really pay someone 60% of market salary and then give them no bonus and expect them to stay, it is much more palatable to pay them 60% of market salary and then give them only enough of a bonus to be making around the average level of compensation for their positions, or maybe even a bit under average, given the year we have just been through in the financial sector.

If the banks were smarter, they would have paid out 20 or 25% of last year's bonus levels instead of 40-50%, and gotten the aggregate number down below $10 billion. Again, paying no bonuses is simply not reality given the sub-market base salaries all the banks pay their employees, but somewhere in the $9-10 billion range in total bonuses would make all the difference to me. Then the banks would have been able to claim that they are paying bonus levels that were paid out in the mid 1990s, which is right in line with where the stock prices are now for the most part. And this frankly makes sense to me since I know the banks have to pay out some bonuses to enable their employees to get up to at least close to market compensation. Why they had to go and pay out the 6th highest aggregate bonuses in history just boggles the mind, doesn't it? Clearly, Wall Street is out of whack with what is fair and what is right in this environment. And to think that it is their sector which not only is most directly feeling the brunt of the troubles but also is essentially the cause of the whole crisis, that just makes this $18.4 billion figure stink to high heaven all the more.

I say that the banks might really have screwed themselves here, because even though President Obama has been outspoken in his understanding of the necessity to save our banking system as quickly as possible, it's not like this guy is a friend to the rich bankers like many of our recent executives could fairly be called. Obama is not looking to help the super-rich by any means, and regardless of his stated desire to save the banks in general, the guy will still have plenty of discretion when it comes to exactly how that is executed. Obama could do a lot of things to hurt the individuals employed at these banks who paid out such ridiculous bonuses that Obama on Thursday referred to as "outrageous" and "shameful". The solution to the banking crisis could include clawbacks of executive and other compensation paid to employees over the past year or more. It could include requirements that executives involved in these bonus payout decisions step down from their posts, all of them. Given the shameful, outrageously greedy and out-of-touch behavior these banks have just shown the new president, he might be far more willing to endorse a solution to the banking crisis that involves a total wipeout of these banks' existing equity, or one that requires the banks to feel the pain of fully writing down all their troubled assets before his new proposed "bad bank" will buy their assets.

The 2008 Wall Street bonuses were a great chance for the country's largest banks to show the new administration how contrite they are, how much they are tightening their own purse strings, and just generally how clearly they recognize and accept their own role in the financial crisis and the economic tumble that has overtaken the United States and the rest of the world over the past year or so. Instead, those mf'ers showed Obama and his team just how entitled they really are, and just how out of touch they are with the rest of the free world. When you've got the guy who's about to make major decisions regarding your entire company's and entire industry's future calling you "outrageous" and "shameful" at the very same time he is engaged in discussions about saving your industry, you know you fawked up. Big time. And now, let's all hope they have to pay the price when the latest "solution" is finally crafted by the Obama team.

The 2009 World Series of Poker

Wow. I got nailed out of nowhere there with basically a 36-hour bug of some kind this week. I woke up a couple of mornings ago after having felt a little off my game the night before, only I was so gross in the morning I couldn't even consider trying to pretend like I was presentable for public consumption. Not a chance. So I went back to sleep, and I ended up "working from home" for the past couple of days while I marked up contracts and responded to emails in a haze of semiconsciousness.

Anyways, sorry for the disappearance, but you know what they say. Sometimes life just intervenes. And btw when I do decide to hang em up here at hammerplayer, I don't think I'll do it by just disappearing one day. Nah, that's far too tame. I've written my resignation post about 15 or 20 times in draft form over the past three years or so. They're all different in their own way, but each one of them is ultimately about me having fun with the whole thing. I'll figure something out, but I strongly suspect when time arrives that I will far prefer the "burn out" option of some massive rant post or series of posts to the lesser "fade away" option more akin to simply stopping posting.

So, back to my topic from the other day, a post I had already half-written before I conked out there. Here it's 2009 already, and I'm already starting to form plans for my WSOP trip this summer. Things may be a bit tricky on that front, but I have the suspicion that I may be able to combine some things together - including upcoming nuptials for my other brother in the fall -- to muster up an excuse to head out to the desert in the summer of 2009 to meet up with some old friends and sling some chips.

I started my plans the same way I've started them each of the past few years. The first stop is always the upcoming WSOP schedule. So I took a look, and when I did, I noticed some really very interesting things.

The first thing I noticed was actually not a change from last year, and that was that the delay and the "November 9" WSOP Main Event final table are back for Round Two with the 2009 WSOP main event. I didn't like this thing the first time around -- the very fact that it allows people to get coaching and potentially completely change their game prior to a final table of the biggest tournament of their lives is still such a joke to anyone who relly understands tournament poker -- and I'm bummed to see it back since it obviously was a total bomb in its first year. The delay combined with a total lack of marketing effort to kill any possible excitement once the second week of November rolled around, and then to top it off the coverage on ESPN straight up sucked out loud. But once again we will play down to 9 final tabllists in the main event, and then wait until November 10, 2009 to run the final table. Oh joy.

But the much bigger change in my view has to do with what will even be considered the "main event" going forward, due to a number of changes with the tournaments themselves. For starters, for whatever reason the powers that be have decided to eliminate all rebuy tournaments from the 2009 WSOP. I think there were four bracelets awarded last year in rebuy events, and those are all gone now. Completely out of the Series. As I said, I'm not sure why this is being done, but I should point out that rebuy events were only added to the WSOP some time ago, and were not played as part of the Series for some time after it first started. So this isn't exactly a break with tradition per se, but the four rebuy events from the 2008 WSOP are no longer part of the Series as of 2009.

The total number of bracelets that will be awarded in the 2009 World Series of Poker will be 57, a new record. So how are they offering a record number of bracelets this year if they've done away with the four rebuy events from last year's Series? And that's where the changes start to get really interesting.

The powers that be at the WSOP are finally putting in motion the very thing I had been expecting them to do for the past couple of years as satellite donkeys and other internet whipper snappers have starting swelling the fields of the world's best and brightest poker tournaments and making it more or less impossible for the pros to consistently win out. Starting in 2009, there are now a number of WSOP events that are called "World Championship Events", and for the most part these are all a larger buyin than all the other tournaments of that particular game elsewhere in the World Series. So, for example, there may be several flavors of O8 tournaments in the WSOP this year, but there is one event which itself carries a $10,000 buyin, that is called the "World Championship of O8". Larger buyin means a smaller field and also means more pros duking it out amongst themselves, for the first time able to claim that you are the undispited "World Champion of O8" if you take down this particular event. Before this year, there was just a $1500 O8 WSOP tournament, maybe a $2500 buyin event and a 5k event in this particular game, with three different winners all winning O8 bracelets in the 2008 Series. Now, only one player will win the "World Championship" of O8, and that player will win a 10k buyin O8 tournament to do it.

Here is the entire 2009 WSOP schedule, so you can see what I'm talking about for yourselves without having to link to anywhere else:

2009 40TH ANNUAL WORLD SERIES OF POKER
05-26-2009 to 07-15-2009
Rio Suite Hotel & Casino
3700 W. Flamingo Road - Las Vegas, NV

COMPLETE TOURNAMENT SCHEDULE
EVENT DATE & GAME TYPEBUY-IN + ENTRYDAY 1 START TIME
Tue, May. 26 - Wed, May. 27
No-Limit Hold'em Casino Employees - Event 1 $500 + $0
12:00 PM PDT
COVERAGE: SCHEDULE

Thu, May. 28 - Sun, May. 31
40th Annual No-Limit Hold'em - Event 2 $40,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Fri, May. 29 - Sun, May. 31
Omaha 8 or Better - Event 3 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sat, May. 30 - Tue, Jun. 02
No-Limit Hold'em - Event 4 $1,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 01 - Wed, Jun. 03
Pot-Limit Omaha - Event 5 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 01 - Wed, Jun. 03
World Championship Seven Card Stud - Event 6 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 02 - Thu, Jun. 04
No-Limit Hold'em - Event 7 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 02 - Thu, Jun. 04
No-Limit 2-7 Draw Lowball - Event 8 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Wed, Jun. 03 - Fri, Jun. 05
No-Limit Hold'em 6 Handed - Event 9 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Wed, Jun. 03 - Fri, Jun. 05
Pot-Limit Hold'em/ Pot-Limit Omaha - Event 10 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 04 - Sat, Jun. 06
No-Limit Hold'em - Event 11 $2,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 04 - Sat, Jun. 06
World Championship Mixed Event - Event 12 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 05 - Sun, Jun. 07
No-Limit Hold'em - Event 13 $2,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 05 - Sun, Jun. 07
Limit Hold'em Six Handed - Event 14 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 06 - Mon, Jun. 08
No-Limit Hold'em - Event 15 $5,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 06 - Mon, Jun. 08
Seven Card Stud - Event 16 $1,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 07 - Tue, Jun. 09
Ladies No-Limit Hold'em World Championship - Event 17 $1,000 + $0
12:00 PM PDT
COVERAGE: SCHEDULE

Sun, Jun. 07 - Tue, Jun. 09
World Championship Omaha 8 or Better - Event 18 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 08 - Wed, Jun. 10
No-Limit Hold'em Six Handed - Event 19 $2,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 09 - Thu, Jun. 11
Pot-Limit Hold'em - Event 20 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 09 - Thu, Jun. 11
H.O.R.S.E. - Event 21 $3,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Wed, Jun. 10 - Fri, Jun. 12
No-Limit Hold'em Shootout - Event 22 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Wed, Jun. 10 - Fri, Jun. 12
World Championship No-Limit 2-7 Draw Lowball - Event 23 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 11 - Sat, Jun. 13
No-Limit Hold'em - Event 24 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 11 - Sat, Jun. 13
Omaha 8 or Better/ Seven Card Stud 8 or Better - Event 25 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 12 - Sun, Jun. 14
Limit Hold'em - Event 26 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 12 - Sun, Jun. 14
Pot-Limit Omaha 8 or Better - Event 27 $5,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 13 - Mon, Jun. 15
No-Limit Hold'em - Event 28 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 13 - Mon, Jun. 15
World Championship Heads Up No-Limit Hold'em - Event 29 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 14 - Tue, Jun. 16
Pot-Limit Omaha - Event 30 $2,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 14 - Tue, Jun. 16
H.O.R.S.E. - Event 31 $1,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 15 - Wed, Jun. 17
No-Limit Hold'em - Event 32 $2,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 15 - Wed, Jun. 17
World Championship Limit Hold'em - Event 33 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 16 - Thu, Jun. 18
No-Limit Hold'em - Event 34 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Wed, Jun. 17 - Fri, Jun. 19
Pot-Limit Omaha - Event 35 $5,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 18 - Sat, Jun. 20
No-Limit Hold'em - Event 36 $2,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 18 - Sat, Jun. 20
World Championship Seven Card Stud 8 or Better - Event 37 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 19 - Sun, Jun. 21
Limit Hold'em - Event 38 $2,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 20 - Mon, Jun. 22
No-Limit Hold'em - Event 39 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 20 - Mon, Jun. 22
World Championship Pot-Limit Omaha - Event 40 $10,000 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 21 - Tue, Jun. 23
No-Limit Hold'em Shootout - Event 41 $5,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 21 - Tue, Jun. 23
Mixed Event - Event 42 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 22 - Wed, Jun. 24
Seniors No-Limit Hold'em World Championship - Event 43 $1,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 22 - Wed, Jun. 24
Seven Card Razz - Event 44 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 23 - Thu, Jun. 25
World Championship Pot-Limit Hold'em - Event 45 $10,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 23 - Thu, Jun. 25
Omaha 8 or Better - Event 46 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Wed, Jun. 24 - Fri, Jun. 26
Mixed Hold'em - Event 47 $2,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jun. 25 - Sat, Jun. 27
Pot-Limit Omaha 8 or Better - Event 48 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 26 - Tue, Jun. 30
World Championship H.O.R.S.E. - Event 49 $50,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Fri, Jun. 26 - Sun, Jun. 28
Limit Hold'em Shootout - Event 50 $1,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Sat, Jun. 27 - Mon, Jun. 29
No-Limit Hold'em - Event 51 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 28 - Tue, Jun. 30
Triple Chance No-Limit Hold'em - Event 52 $3,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Sun, Jun. 28 - Tue, Jun. 30
Seven Card Stud 8 or Better - Event 53 $1,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 29 - Wed, Jul. 01
No-Limit Hold'em - Event 54 $1,500 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Mon, Jun. 29 - Wed, Jul. 01
Limit 2-7 Triple Draw Lowball - Event 55 $2,500 + $0
05:00 PM PDT

COVERAGE: SCHEDULE

Tue, Jun. 30 - Thu, Jul. 02
No-Limit Hold'em Six Handed - Event 56 $5,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

Thu, Jul. 02
Ante Up For Africa Charity Event $5,000 + $0
02:00 PM PDT
COVERAGE: SCHEDULE

Fri, Jul. 03 - Tue, Nov. 10
World Championship No-Limit Hold'em - Event 57 $10,000 + $0
12:00 PM PDT

COVERAGE: SCHEDULE

See that Event #2 up there on May 28? That is a brand new $40,000 no-limit holdem tournament, being played for the first time at the WSOP this year. And you know what? I guarantee you every poker pro at the Rio this summer loves the existence of that new tournament. Keep some of the "internet donkeys" out, some of those 10k satellite winners out, and try to narrow the field by quadrupling the buyin of the previously largest nlh tournament in the entire series. I predict it won't be another year or two before the pros start calling the winner of that even the real "World Champion of no-limit holdem", not the Main Event winner. You just watch.

And then you've got Event #6, the $10,000 buyin "World Champion" 7-Card Stud tournament, and Event #12, the 10k buyin World Championship of Mixed Games. Event #18 is that 10k World Championship of O8 event, and there's even a new 10k buyin 2-7 Lowball no-limit World Championship tournament in Event 23 with also a 10k buyin. Event #29 is another "World Championship" event, this one a heads-up no-limit tournament, also sporting a lofty 10k buyin, and then Event #33 is yet another 10k World Championship holdem event, this one in limit holdem. Event #37 continues the trend with another 10k buyin World Championship of Stud Hi-Lo tournament, and then Event #40 is the Eurodonkfest to lead all Eurodonkfests, the new 10k World Championship PLO event. Event #45 continues with the 10k buyin World Championship Pot-Limit Holdem tournament, and then Event #49 rounds out these "World Championship" tournaments with the 50k buyin HORSE event that was started a couple of years ago.

So what we're seeing here is that the people in charge at the World Series of Poker have made the deliberate decision this year to create a "second class" of WSOP tournament. Previously, every tournament in the Series was more or less worth the same in terms of prestige or whatever you want to call it. I mean, you could always differentiate among bracelet winners by the size of the buyin, but I doubt anyone was really trying to suggest that the guy who won the $2500 buyin nlh bracelet is a "better player" than the guy who won the $1500 nlh bracelet just because the buyin is a little bigger. Of course the Main Event always carries quite a bit of cachet, but other than that, all of those other tournaments could basically be viewed as more or less equal. Other than in recent years that 50k HORSE event, which because of the huge buyin and the "World Championship" in the title, have given it, too, some extra cachet over basically all the other tournaments in the Series.

Well, now starting in 2009, there will be nine new events with 10k buyins or higher, all called "World Championship" events unlike the other 45 events in the WSOP, plus the 50k HORSE World Championship that is new from two years ago, and plus as well this brand new 40k nlh tournament at the beginning of the series that they have sneakily not called a "World Championship" event (not wanting to steal any fire from the Main Event), but which you can easily see within a year or two becoming the no-limit holdem event all the pros really try to win, not the Main Event luckfest with its 6000 entrants each year.

I'm not sure what I think of this change, I'm really not. I guess I will need some time to think it over. But given what they've done with the delayed main event final table, which clearly goes against the nature of poker tournaments but yet is still done as a pure money and marketing grab, I can't exactly say that I trust Harrah's intentions here. What do you guys think?

Gambling With State Budgets

As an online poker guy, I am liking the sound of this article this morning. on Yahoo! News.

It seems that several states in the U.S., many of which are facing significant budget shortfalls, are increasingly turning to state-sponsored gambling as a way of making up some of those lost revenues in these increasingly tough times. This works for me in two ways.

One, I have been an investor in a few gambling-related stocks for several years now, due to my belief that the industry as a whole is a growth story, one which is likely to outlast any secular trends in the economy, the baby boomers, you name it. I just see gambling as an industry, as an activity, that is on the rise overall in this country and around the world, and as such I made the decision years ago to invest some money in stocks which play directly in that field. That said, I have tended to avoid the casino operators themselves, because those businesses can suffer more directly from downtrends in the economy, in travel, and in other sectors like the real estate market, etc. Indeed, most of the casino operator stocks have been utterly crushed over the past year or two, and it's an area I am very glad to have avoided over time.

I have found that a much more lucrative -- and stable -- area to invest in the gaming industry is the casino equipment makers. That is, the companies that make the slot machines, the video poker machines, card shufflers and other hardware used (and purchased) by those casino operators that I prefer not to invest in directly. The casino equipment makers present in my view a nice opportunity to get in to a growing industry that is often thought to be at least somewhat recession-proof, and to do so without having to take on the concurrent exposure to the real estate industry, broader trends in travel and vacationing, etc. that a company like Las Vegas Sands, MGM Mirage, etc. is wide open to. For the most part, the casino equipment companies have been growing, even on into 2008 with the economy doing what it's doing, and although the stocks have all suffered along with the broader market over the past year or so, I have been really glad to have some money in this sector as much of the rest of the sectors in the broader economy have been way down in the dumps as consumers reign in their spending. People are surely gambling less as well than they were a year ago, but the fact is that its not as much less as the dropoff in most of the other things people and companies tend to spend their money on. So today's AP article about states looking to slot machines and video poker as a way of defraying some of their state treasury shortfalls is a big boon to some of the companies I invest in.

The other reason I dig this story is a little less direct -- the effect of this on the online poker industry. Now, there's nothing in that story I linked that even mentions or refers in any way to online poker. But, I can't help but be enthused by a story of a bunch of State Treasurers all thinking at the same time about gambling when it comes to capturing a whole new pool of revenues for their respective local governments. That simply has to be all good to us online poker guys. Because if the states seeing revenue shortfalls are turning to gambling to make up the difference, then it has got to be only a matter of time before someone at the federal level starts figuring out this same thing, if it hasn't begun already. And while allowing gambling or expanding its presence has been left to the local governments of the individual states, the UIGEA and the general prohibition on online games of chance in America is more of a national issue, one that could easily be changed by the federal government, our friends who represent us so well in the House and the Senate, and/or President Obama himself.

Again, to be clear, there isn't even one whit of mention of anything related to online poker yet in the stories I am reading just lately. But the fact that state governments are turning to gambling to help make up budget shortfalls is all goodness to anyone who is into online poker. Ironically, it could end up being the severe global recession that helps turn the tide towards the U.S. considering allow some form of online gambling, agreeing to federal regulation of the industry in exchange for taking a cut of the massive revenues that could flow to the federal government from getting directly involved in permitting such activities in this country.

How the Mighty Have Fallen

Remember back a few months ago -- late in September, 2008 to be more precise -- when billionaire investor Warren Buffett made those two big investments ($5 billion and $3 billion, respectively) apiece of preferred stock in Goldman Sachs and General Electric? Remember how everyone (myself included) was saying what a genius he was, how the Oracle of Omaha got "incredible value" out of the two companies with his interest-bearing preferred shares in addition to warrants to purchase an equal additional amount on top of the companies' common stock at their then-current market values? I recall Goldman shares jumping about $15 on the news the following day, giving Buffett a paper gain of nearly $450 million on day one after that deal, swelling to over $800 million another day or two later at GS shares continued to rise following Buffett's bullish bet and seemingly reliable statement about the value in the stocks with Goldman at $115 and GE at $22 a share. Given all the positivity about these purchases, within a few days after the GE purchase, the later of the two big preferred stock buys out of Berkshire Hathaway (Buffett's investment vehicle), Berkshire shares were trading at $138,500, just a stone's throw away from his company's all-time high of $149,000 and change.

My how the mighty have fallen.

On Friday morning, BRK-A shares are trading under $86,000 for the first time since the late November lows in the market. From $138,500 to $86,000, that marks a loss of 39% in just three and a half months for the investment vehicle of the man many consider to be the greatest living investor in the world today. But that 39% figure doesn't tell the whole story until you can assign some real dollars to those amounts. On October 3, 2008, BRK-A was worth $220 billion in the market, and today that value has plummeted to $134 billion. How's an $86 billion haircut sounding to you these days? Even to a guy with Warren Buffett's bank accounts, that's a fuckload of dough, no two ways about it.

Let's look at just what we know Buffett has lost recently in his investment portfolio:

Goldman Sachs shares have plunged 38% since Buffett bought in to his preferred share investment at $115 a share. Although his up-front investment was in preferred and not common stock, it's reasonable to assign a similar drop in value to those preferred shares, which means his $5 billion investment in DS has deteriorated to about $3.1 billion, for a nearly $2 billion loss. Plus, those warrants to buy an additional $5 billion worth of GS common stock at $115 a share aren't looking so hot right now either, although with a five-year time horizon stipulated in the deal, it is likely that those will be exercised for some value before those warrants expire. Looking at the $3 billion of GE preferred stock that Buffett bought at $22 a share, GE common stock has now dropped 44% since that investment was made, leaving Berkshire's $3 billion now worth roughly $1.7 billion, plus again warrants to buy additional common shares anytime in the next five years at $22 a share (GE currently trades at $12 and change). That means Berkshire's holdings in just Goldman and GE are down nearly $3.7 billion on an $8 billion investment, not even counting the loss of value in the warrants that came as part of both purchases.

These are the most prominent of Buffett's recent purchases in his Berkshire Hathaway investment vehicle, but they are far from his only (or even his largest) losses. Berkshire owns over 300 million shares in Wells-Fargo, a position which alone has plunged nearly $4.5 billion just in the past seven weeks. His stake in fellow American bank US Bancorp has declined by over a billion dollars in that same timeframe as the banking sector has been trashed on Wall Street. Berkshire also has a roughly $2.5 billion position in Burlington Northern Santa Fe, a railroad company, whose shares have been nearly cut in half since last summer, equating to another $2 billion + loss.

One other area of Buffett's investments over the past year or so that deserves mention but has gotten very little focus in the media is the index derivatives position he has taken with Berkshire Hathaway. From late 2007 to early 2008, Buffett has disclosed that Berkshite Hathaway sold put options on the S&P 500 and three foreign indices to various financial institutions looking to hedge bullish bets on the global long-term economy. According to Buffett's disclosures, expiration of these puts range from 12 to 20 years out, and Berkshire collected $4.5 billion in premiumsin exchange for the sales. Using the 2007 closing level of the S&P 500, selling these puts is essentially Warren Buffett saying to the parties to whom he sold these index derivatives, "In 15 years, I promise to buy the S&P 500 from you at a price of 1468, if it trades below that price. In exchange, you give me $4.5 billion cash right now." Mind you, the S&P 500 currently trades at just over 800, having reached as low as 752 in late November.

Given the 12-20 year time horizon, it is still far too early to conclude that Berkshire will actually have to pay out on these puts (and we have no idea how large they are in any event -- we only know that the premium payment is $4.5 billion, so it is clear that we are talking about many, many, many billions of dollars here). The S&P 500 would essentially have to be lower than 1468 in the year 2019 in order for Buffett to have to pay out those huge amounts on these derivatives, but let's be honest: that possibility seems a whole lot more realistic today than it could ever have looked back 12 or 18 months ago. A whole lot more realistic. As a result of the market's declines since Berkshire sold these large index put options, Berkshire is surely sitting on a massive paper loss on this position, of an unspecified amount that must be at least 11 figures. That's right -- I said eleven figures. Don't bother counting that one out, I'll just let you know how much that is since this isn't a number of figures we ever hear anyone talking about. Berkshire's unrealized losses just in those index puts sold last year amount to somewhere in the tens of billions of dollars.

So so far, this incredible market correction we have seen over the past year and a half or so has spared no one, not even the greatest investors the world has ever seen. With Warren Buffett's investment vehicle having lost nearly $90 billion of its $220 billion market value just since October 2008, it is clear that anybody and everybody is taking it on the chin with this thing. When stocks decline like they have, I like to take the approach that Buffett himself espouses, which is to look for values and buy in cheap while the gettin is good, and I've been doing that selectively over the past several months. But the carnage Buffett has suffered while attempting to catch the bottom over the past few months serves as a great example of just how difficult it can be trying to pick a bottom in a bear market. There's a reason this is known as "trying to catch a falling sword". Buyer beware.

Say It Ain't So, Barack

Can someone please tell me how we are still even talking about nominating Barack Obama's choice for Treasury Secretary Tim Geithner, the current head of the New York Fed, and a key player in the financial bailouts in this country? Let's review.

First, despite what you will hear from the Obama camp, Geithner is the man who is widely blamed as the biggest proponent of the decision to let Lehman Brothers fail last fall, setting off a chain of events that very quickly turned 2008 into the worst bloodbath for the U.S. stock markets since the Great Depression, and leading directly to the failure (or essential failure) of several other key U.S. banks, including Washington Mutual, Wachovia, Citigroup and Bank of America. It was Geithner who is said to have been vocal in letting Lehman go, and instead working with Treasury Secretary Hank Paulson to arrange the hasty marriage between Bank of America and Lehman rival Merrill Lynch in mid-September, which now is blamed by Bank of America for nearly $20 billion in then-unknown losses and ultimately led that bank needing an additional $25 billion from the federal government this month in addition to over $180 billion in loan loss guarantees. Geithner arranged the meetings among the largest investment banks in New York, he led many of the talks along with Treasury Secretary Hank Paulson, and overall he took a leadership role in the discussions regarding the future of Lehman Brothers, and again, it is he who is said to have been the one man in the room supporting most strongly allowing Lehman to go under.

Moreover, this whole bank bailout bill has been pretty much an unmitigated disaster since the moment it was first (ill-) conceived. People do not argue this. Why then do I keep hearing President Obama proclaim the importance of having someone like Geithner, who has been heavily involved in TARP from the beginning, stay on as the new Treasury Secretary? If this were up to me, I would sure as hell want to see an outsider come in who is without ties to the bailout and to anyone who was involved with its inception, to oversee Treasury heading into the new administration. Frankly, bringing in someone intimately involved with TARP sounds like just about the worst possible idea to me. And don't get me wrong, I'm not advocating bringing in some nobody with no experience in banking or finance to run Treasury going forward. But there are literally hundreds of well-qualified candidates out there, even friends of the Obama camp like Larry Summers, Warren Buffett, etc. who are not already tied emotionally and personally to the TARP plan. Bringing in Timothy Geithner to lead Treasury for the next four years at least does not at all give me the confidence that the bailout will be handled or addressed properly from here, or that the many, many problems with the implementation of TARP will be adequately fixed.

But all this is just the appetizer when it comes to the problem with Tim Geithner serving as Treasury Secretary. One of the many duties of the Treasury Secretary is to function as the main oversight for the Internal Revenue Service, the organization we all know and love for administering the federal tax program in this country. Tim Geithner, meanwhile, failed to pay his fucking Social Security and Medicaid taxes, for four years from 2001-2005 while he was working for the IMF! Geithner for his part claims he "did not know" that the IMF was not withholding Social Security and Medicaid from the checks they sent him during those four years of his employment there, and to that let me ask you this: how many of you out there do not know whether Social Security and Medicaid taxes are being deducted from your paycheck at work? Seriously now. The two biggest slices of non-income tax that there are, and this guy, a finance professional working for the IMF, just never realized that these major deductions were absent from his checks for four years?

Come the fuck on! The guy lied on his taxes and failed to pay amounts he knew he was obligated by law to pay, and he did so for four fucking years, until just very recently. Although Geithner had previously paid the back taxes for two of those four years, anybody wanna guess when he paid the last two years' worth of unpaid back taxes to the IRS? Try just days before Barack Obama nominated Geithner for Treasury Secretary late in 2008.

This is the guy we want overseeing the IRS? This is the best fucking candidate Mr. Obama can come up with for Treasury Secretary? A guy who is known within finance circles in New York for being one of the primary butchers of the extreme situation facing the investment banks last September, and a guy who elected not to pay Social Security and Medicaid taxes for four of the last seven years, only paid some of them once he got caught, and only paid the rest when he knew that the incoming president wanted him to serve on his Cabinet.

Either Timothy Geithner is so stupid that he does not understand the way the most basic of taxes work in this country, or he knew he owed those taxes but simply refused to pay them. You can choose. Either way, by continuing to push for the nomination of this man for Treasury Secretary, Barack Obama is setting a damn sad example of a continuation of the hypocrisy and sleaziness of the prior administration in this country. For a man who spent his inauguration arguing for a new era of "personal responsibility", putting Geithner in charge of the IRS is just about the greatest abomination imaginable.

What's next? Bernie Madoff in charge of overhauling hedge fund accounting?

The New Era of Hope

One guilty pleasure of mine that I've written about here often is my penchant for listening to sports talk radio. I love it. Especially here in New York. The New York sports fan is a special breed, feeling utterly deserving of winning every single championship in every single sport every single year, accustomed to always having the very best talent in whatever league is under discussion, and yet at the same time tending towards the whiny and blinded type of fan that is so prevalent in the Northeast. It makes for a great mix of callers and topics for any sports station in New York City.

That said, as I got in my daily dose on the way back from the gym on Tuesday night, it was very interesting to hear the topics being discussed, which centered primarily, surprisingly enough, on Barack Obama and the state of the country, highly unusual for sports talk radio. Probably about 75% of the callers were optimistic, talking about the plane crash last week that many of us saw right from our offices here in Midtown and how it was a turning point for the country, with one guy even claiming that the Cardinals making the Superbowl was something we could all rally around as a country along with the presidential changeover and the miraculous plane crash a few days ago. The other 25% of callers were more pessimistic, expressing hope for the incoming administration but pointing out that of course the problems our country currently faces cannot possibly be cured overnight, and that when Obama wakes up on Wednesday morning, he will still be facing a horrible stock market, a completely destroyed banking system, a sagging economy and a very uncertain global outlook.

At this point, one caller said something I found very interesting. At the end of whatever point he was making, this caller says that it seems like right now Barack Obama could get 70% of the country to do pretty much whatever he says. Whatever he wants, anything, 70% of the American people would do right now, given the fragile state of things we have been left with from the Bush administration. Anyways he says that it reminds him of just after 9-11, when this caller estimates that 90% of Americans would have done whatever George Bush wanted, also due to uncertainty and the extreme fragility of the situation at that time.

That shit's fucked up isn't it?

Because I think he is right. 90% of us, myself very much included, were so dam scared, and I mean seriously fucked up immediately following 9-11 that we were basically willing to go along with whatever George Bush said. We allowed ourselves to buy in to his thing, to go along with what he said we needed to do to protect ourselves as a country. We trusted him, more or less blindly, to always serve our best interests as a country and as a planet, and in a nutshell, President Bush betrayed that trust. Bush's policies strained the bounds of human rights in many areas, most notably in wiretaps and other invasions of our personal freedoms, and in the torturing of POWs that went on as a rule in our terror detainee facility at Guantanamo. 90% of us put our trust in George W. Bush 7 1/2 years ago, and Bush told us he would take care of everything. He told us to put 9-11 behind us, and to party hard, economically speaking. Interest rates were literally at historic lows, banks were running amok handing out money to anybody, some of that actually mandated by Barney Frank in the House and Chris Dodd in the Senate's respective finance committees, but otherwise nobody was watching over interest rates, or over the quality of loans being made by banks in the U.S. and all around the world, in particular loans to purchase houses. Regulation on the Private Client businesses of the major investment banks, serving hedge funds and super-rich clients, had been decreased to long-time lows by the repeal of the Depression-era Glass-Steagall Act by the Clinton administration a few years earlier. As the Bush term wore on, those investment bank business came under increasing pressure to divert their wealthy clients' money into complex financial instruments, created by the investment banks themselves, and often backed by various types and ranges of mortgages and other loans. More client funds were diverted into hedge funds, which were also not being regulated by anyone even as they too exploded under the Bush administration (Bernie Madoff, anyone?). Many hedge funds actively invested in various types of public and private debt, including mortgages, student loans and other bank assets, in addition to other complex financial instruments like credit default swaps, another creation of the finance wizards on Wall Street that proliferated over just the past ten years or so, yet another entire part of the finance markets -- estimated to be a $4 trillion industry -- that was more or less entirely unregulated under the Bush Administration (AIG, anyone?).

President Bush told us to trust him after 9-11, while he ultimately oversaw the relaxation of regulation on the entire supply of money in this country, and the 90% of us that were willing to do whatever our leader told us to do in a time of historical national crisis partied hard at his behest. And now, we have a hangover. It's that simple, really. You can't party like we did with money over the past ten years or so, and not eventually run out of steam in a big way. It's like its own giant Ponzi scheme, where as a country we continued to "get" more and more money, taking out massive mortgages that many of us as a nation really could not afford, taking loans for more than we needed, refinancing again and again as interest rates dropped to multigenerational lows, taking out home equity lines of credit, borrowing directly against the equity we did have in our homes, and running up ever-increasingly historic credit card debt along the way. Eventually, when one part of the system finally caves in -- in this case it started as the sudden inability to continue accessing money in general at the rate we had been for the past few years, and that quickly turned into increasing defaults on the riskier side of the borrower spectrum where the supply of additional money was always going to be needed to pay off current debt levels -- that becomes the hangover that inevitably must follow since a hard session of partying down. That's just the way of the world, even with respect to the economy.

So there it is. Right now 70% of us would do whatever Barack Obama tells us to do. The last time we put our faith in our leader in a time of extreme crisis, we were taken advantage of, repeatedly lied to, and ultimately led down the path that directly created the economic and financial disaster of the past 18 months or so. Let's hope that Mr. Obama will act with more integrity with respect to the trust he has in his corner from an emotionally fragile base of citizens in our country today.

A Week of Change

Well, it's finally here. This is the week that everything begins anew. After what seems like decades, change is finally here. We finally get to move on to the next phase of our lives, to a series of new decisions that will take our story to new and surely uncharted paths.

That's right folks. Lost returns with new episodes this Wednesday evening.

It's been a long time coming, and to mark the occasion ABC will be taking over all of our television programming with three grueling hours of Lost from 8-11pm ET. First is a one-hour recap of what has happened in the first four seasons, for those who are fool enough to never have watched the greatest show of this millennium, and in particular to remind all of us what happened at the end of Season 4, which I believe was originally aired some time in the early 1970s. I got lucky and channel-surfed my way right into a four-hour Lost marathon on SciFi on Monday evening, and they were smart enough to be showing the final four episodes of Season 4, so I got myself all caught up, but I still will be watching that first hour of Lost programming on Wednesday just to catch any new tidbits they are sure to throw our way, based on previous years' recap episodes. Following that are the first two episodes of Season 5, billed as a two-hour season premiere, running from 9 to 11pm ET. Personally, I can't wait. Even though from interviews done by the show's co-producers during the offseason it does seem like Season 5 is likely to bring more questions than answers, and we will have to wait until the final season to really find out what the hike is really going on with the island, I am still looking forward to finding out the answers to some of our less central and more immediate questions. Questions like Why is it so important that everyone go back to the island? and Who are these people from the freighter, Dr. Faraday, Charlotte, Miles, etc.? Of course another season of Lost will mean another few months of weekly frustration and total confusion. But along with it will be without a doubt the most entertaining hour of every week, the most talked-about show at the virtual water cooler, and, of course, a weekly dose of Goat's fabulous Lost recaps. How's that for pressuring the guy to bring back one of my favorite parts of Lost every week?

Moving on to the other, lesser story of this week, Barack Obama takes office midday Tuesday, putting an end to the tenure of George W. Bush as the leader of the United States of America. As with most inauguration days since I have grown up, I find myself looking back today on the man's legacy after eight years at the helm of our country.

First and foremost, no review of the Bush presidency can be started or finished without talking about 9-11. The worst terrorist attack on our nation's soil went down just nine months into Bush's first term in office, and it really ended up defining the first several years of his presidency, until the economic turmoil of the past couple of years found a way to even supplant that. To be honest, the Bush response to 9-11 has got to be the highlight of his time in office in my view. Maybe some of this has to do with being a New Yorker at the time that 9-11 happened (though I doubt that), but I don't know how one can not give Bush tremendous props for managing to help the country recover from those devastating attacks, and for preventing further violence within our borders. Honestly, if you had told me a few weeks after 9-11 that there would not be another terror attack on our soil for the next eight years, I am positive I would have signed up for that right then and there, regardless of whatever else happened. That was far and away the biggest and most pressing goal of the Bush presidency less than a year after it began, and it turns out that our president delivered on that goal with flying colors. Although there have been some alleged threats, they have all been thwarted and the result has been a totally terrorism-free America ever since the day the towers fell. Bush and his team deserve a massive amount of credit for that, and they surely get it from me. As much of an abject failure as the whole Iraq debacle has been, the mere presence of the war in that country has so successfully diverted the attention of Al-Qaeda and those who wish harm on the U.S. that there has been nary a mention of a serious threat to our security here at home. I'll never know if this was the actual planned strategy all along, but Al-Qaeda has spent their time over the past several years planning attacks on U.S. and U.S.-led forces over there, while having no time or inclination to plan more missives on U.S. soil. A tradeoff which has proven to be brilliant in its simplicity and in its results. As the new president looks to shrink our presence in Iraq, we may come back to this thought time and again as the years go by.

Unfortunately, Bush's stunning success in preventing further attacks in the U.S. stands alone in my eyes among his positive achievements over eight years in office. And things ended up getting so bad on the finance and economic front that it's enough to make me second-guess my feeling eight years ago that I would have signed up for no further terror attacks regardless of what else happened during these eight years. Iraq, other than its general effect of diverting the attention and violent efforts of terrorists away from the United States, has of course been a failure. Attacking a country surrounded by our bitter enemies and full of subversive, violent sects which hate us as well, with absolutely no exit plan or no way of even knowing if we've won or lost at all, was a disaster from the moment of its inception. Thousands of Americans and others have died in Iraq for, in my opinion, no good reason at all while we have insisted on remaining there to "keep the peace" and "promote democracy" in a country whose people seem to have little interest in either.

The worst part about the whole Iraq thing to me is not even the execution so much but how we got there to begin with. In what would prove to be just the beginning of a disturbing trend with George W. Bush, the man went before Congress and before the American people on prime time television and lied to us all. Lied through his fucking teeth about weapons of mass destruction being rampant all through Iraq, and how dire of an emergency it therefore was for us to send troops over there to die in the name of saving America from imminent disaster. In doing so, Bush lost much of his effectiveness with the Congress, while winning a feeling of betrayal from mostly every American. It's always hard to me, and I think for millions of my fellow Americans, to have our own president bald-faced lie to us, making things sound worse than they are just to advance his own personal agenda. I think back to that scumbag Bill Clinton looking right in the camera, proclaiming "I did not have sexual relations with that woman" and then having the audacity to explain during his deposition that "it depends on what the meaning of the word "is" is". What a bunch of lowlifes. And these presidents will never seem to realize how damaging it is when they tell bald-faced lies in front of 250 million Americans, 100 million or so of which are young, impressionable children and teenagers. How the F am I supposed to teach my children to tell the truth when our own president blatantly lies to everyone in the world just to get what he wants? How can people raise their sons not to be womanizing scumbags when our own president ten years ago was more concerned with chasing blowjobs than stamping out a rising Osama Bin Laden in the Sudan? From this perspective alone, I find George Bush's actions to be as unforgivable as those of his predecessor, and surely not befitting of someone worthy of leading this great country.

Although I am a big fan of Bush's sticking to his promise (unlike his daddy) not to raise taxes during his time in office, and I especially favor his support in passing a bill to phase out the baseless and (in my view) unfair estate tax -- a phase-out which Mr. Obama is set to reverse as one of his first steps in office -- Bush also spent the next several years of his time as president focusing far too much on Iraq and far too little on issues threatening to wreak havoc right here in the U.S. When Hurricane Katrina devastated New Orleans and the Gulf Coast area, the response by federal emergency management personnel was far too slow and led to significant unnecessary damage, death and destruction, all while Bush refused to do the right thing and personally visit the area. When we took prisoners in our war against terror, America's historic focus on human rights went right out the window, along with the dignity of our leader, as we tortured our prisoners of war just like any other indecent, lowlife country would (and Bush lied about it, of course). When the last of the major oil companies wanted to merge, where was the Bush administration to stop it in the name of protection of U.S. consumers? What about releasing our strategic oil reserves as necessary in times of big crude shortages in the U.S.? Cue the record-high energy, oil and gasoline prices that occurred during Bush's second term, and which are sure to return as soon as the global economy rebounds. What about the fiscal responsibility that used to be such a lynchpin of the American Republican party platform? Even Ronald Reagan would be rolling over in his grave at the way the Bush administration has nearly tripled our national debt to over $ 8 trillion at last count. And when Bill Clinton's grand strategy to de-regulate the entire banking industry combined with the House and Senate finance committees' blind insistence on banks loaning far too much money to people unable to pay those debts to slowly but surely create a massive bubble in the finance and credit sector at large, where was our current president to step in, recognize the problem and start solving it before the whole house of cards came crashing down? Who knows.

And as I mentioned, this business about lying to the Congress and the public to get whatever he wants proved to be the norm, not an aberration, for Mr. Bush. As the economy worsened all through 2007, Bush was repeatedly one of those clowns who publicly stated that the economy was fine, its fundamentals were sound, and that it was just people talking about a recession all the time that actually created a recession. In reality, this is an abominably stupid position for anyone to take, as recessions are 100% real and 100% regular and in fact as American as apple pie, and yet the Bush camp spent the all of 2007 and the better part of early 2008 making just this argument, even as credit markets around the world seized up in the summer of 2007 amid what has now officially been defined as a recession starting more than 14 months ago. And it all came to a head for me when Bush went on tv last September, in the wake of the failure of Lehman Brothers and the near collapse of insurance giant AIG, and told Americans that we needed to pass the TARP bill to bail out the banks of this country immediately, that the bailout would work to solve the banks' problems, and that if we didn't immediately pass this bill, our country would slip into an economic abyss. Well I got news for ya buddy, we did pass TARP, it ain't done shit for any bank, all of which are once again making new multi-year lows as I type this, and even despite TARP's passage and the expenditure of $750 billion of taxpayer funds to "save the economy", we are still totally, utterly and completely in the tank, economically speaking.

George Bush's legacy as president of the United States is I think very clear at this point. Despite his efforts late in his term to redefine his legacy through silly speeches and disingenuous claims, Bush will go down in history not only as an ineffective leader, but as a dishonest, untrustworthy man who allowed his one-track mind to focus too hard to his own personal agendas and could not see the forest for the trees, someone whose blatant and public dishonesty won him the disrespect of not only the American people at large, but of his partners in the legislative branch of government as well, including even his own party who by the end of his term could barely stand to listen to a word he had to say. As Bush leaves office with a record-low 22% approval rating (and who the F are those 22% btw?!), I find myself hoping that if nothing else, Barack Obama will prove to be true to his word as president. The sad truth is, it's been a looooong time since we've had anyone as president who anybody could call honest without a little bit of a chuckle. I know all politicians are scum when it comes right down to it, but let's get someone in here who can be trusted generally to do what he says he will do, and to always be on the lookout for the American people in all facets of our lives, instead of someone whose primary agenda is getting laid, or getting revenge on the people who tried to kill their daddy a generation earlier. It's time America got someone into office who really is governing "for the people" in every sense of the word.

NFL Conference Championships Recap

Yet another fabulous weekend of playoff football for the men chasing the pigskin ball all around the field in helmets and pads.

The first game was my Eagles playing at the Cardinals in the battle of seemingly cursed franchises. The Eagles were making their 5th appearance in the NFC Championship game in the past 8 years, while the Cardinals were playing in their franchise's first-ever conference championship behind the capable arm of Kurt Warner. Despite the Eagles' significant edge in experience, the Cardinals did not surprise me in the least by showing up to play some ball. Before the Eagles could really even blink, the Cards' Larry Fitzgerald had scored three touchdowns en route to an 18-point halftime lead for the Cardinals who absolutely destroyed the Eagles in the first half on both sides of the ball. Fitz is awesome of course, but the real blow of the half was a 70-something-yard touchdown catch by Fitz where Kurt Warner just lofted a ball up well short of the receiver, and Fitz readjusted a la Randy Moss while the Eagles' defender slipped and fell flat on his ass. Otherwise, the Eagles couldn't do shit in the first 30 minutes of play, while Warner moved the ball at will as the Eagles' overmatched defense finally came back down to earth against the best passing offense in the NFL this year.

The second half was a different story as the Eagles finally started getting to Warner with the blitz, after a first half that saw Warner completely crush the Eagles every time they ran extra players at him on the line. After 17 straight points shocked the world by giving the Eagles a one-point lead with just under 10 minutes to play in the game, that seemed to jolt the Cardinals back to reality as Warner promptly led his team down the field for the crucial go-ahead touchdown drive and the Eagles were once again unable to stop the Cardinals' offensive machine. With three minutes to drive for the game-tying touchdown, the refs declined to call the worst pass interference call in the history of the game as the Cardinals' defender held Eagles receiver DeSean Jackson before, during and after Donovan McNabb's 4th-and-10 throw, and the game was over with the Cardinals advancing 32-25.

In all, it was a good game thanks to a strong second-half comeback, but Eagles fans will recognize this as a continuation of the Donovan McNabb - Andy Reid regime that has seen this time perform well enough to make some big games but then consistently get utterly outcoached and outplayed in nearly every big game in the two men's careers. It is unfortunate for Eagles fans that this surprising late-season run will likely keep the quarterback and the head coach around for yet another year of winning nothing, but such is the way things go with the fickle fans and owernship in Philadelphia. Most interesting to me about this game was the way that the public allowed themselves to be so readily fooled by the Eagles. This was a mediocre team all throughout the regular season, a team that couldn't beat the shitkicking Bengals in a game that at the time was considered a crucial game for Philly's playoff chances, and one that also failed to score even a touchdown against the Redskins in a must-win Week 16 loss to a team that most believed had thrown in the towel for the year. This was a team that literally needed the Bucaneers to somehow lose at home to the Raiders in Week 17 and the Bears to lose at the Texans, and to beat the Cowboys on Sunday night just to back into the playoffs as it was. The Eagles went on a roll for all of three games starting with that Cowboys win on the last night of the season, and the public jumped on the bandwagon as if the Eagles' performance over these three games was how they would play against every team the rest of the way through the season. I wrote about this last week in advance of this game already -- the Cardinals were the better team all through the regular season this year, they won their division, they have a proven winner at quarterback, and they were at home against the Eagles. And they were getting 4.5 points. Easy money, and gg to the Eagles. Decent season for my boys in green, but in the end as I mentioned it's kind of a downer for the real Philly fans because the few true lovers of the team out there have known for certain for a few years now how the tandem of McNabb and Reid are the ultimate step-down guys in the big games, and now we'll surely be stuck with these two losers for yet another year of guaranteed mediocrity.

In the other game, the Ravens traveled to the Steelers in a battle between the two best defenses in the NFL in 2008. This one was all set to be a serious defensive battle, and it definitely delivered on those expectations. In the end this game too went pretty much according to plan, as the Steelers' #1 defense, led by best player on the field Troy Polamalu, outplayed their #2 defense counterparts on the Ravens, including a huge pick-6 interception by Polamalu late in the game to seal the deal for the Steelers. And as I discussed last week, the Steelers' offense far outpaced Joe Flacco and the Ravens' offense, helping the Steelers to a 23-14 victory and their second superbowl appearance in the past few years. Ben Roethlisberger did what he does best, leading his team on several scoring drives with his excellent ability to throw on the run and to improvise along with all of the best quarterbacks in the game today. The Ravens' rookie quarterback simply could not keep up against an even better defense for the Steelers, ending eventually in the interception by Polamalu that sealed the deal and ended the Ravens' season.

Despite my team losing in the conference championships for the fourth time in five tries this decade, on the good side I am winning a ton of money on the NFL playoffs this year. I am now 8 for 10 against the spread in the playoffs, and for the first time in many years, I have bet on every single game along the way and it's actually paid off. I have basically tripled my roll on Bodog without even having to load up that so-called poker client onto my pc, and for whatever reason I have just been really tuned in to the teams in the playoffs this year, moreso than in past years. I've been betting around $75 a game, and the only two double-bets I made in this entire run were (1) the Panthers to beat the Cardinals a week ago by more than 10 points, which crashed and burned, and (2) the Cardinals +4 over the Eagles this past weekend, where I won back the double-bet I lost on the Cardinals last week. This all has helped to offset what has been a poor beginning to 2009 on the mtt front, where I have suffered every kind of suckout imaginable on all poker sites, from the standard dominating loss on the river to the more exotic losing in the final 70 or so players in a big-field mtt allin preflop with my AKs to their AKo.

Looking forward to the superbowl, I will take some time to ponder the right spread on the game, although I note that it has opened at 6.5 or 7 points in favor of the Steelers. As wrong as Vegas was about the Cardinals-Eagles game from the moment the spread was initially set at Eagles by 4, this time I think they've done a very good job at least of picking the winner who I feel strongly will be the Steelers by the time the smoke has cleared. I will check out all the superbowl prop bets that are available over the next couple of weeks and will post everything I end up betting on as I try to close out a very successful NFL playoffs season with a big bang.

NFL Conference Championships

OK so after going 6 for 8 so far in the NFL playoffs, I'm back today with my predictions on the two conference champsionship games this weekend, plus a thought about one of the most talented players in the league who is now entering the down side of his career.

In the AFC, the NFL's #2 defense in the Baltimore Ravens travel to the NFL's #1 defense with the Pittsburgh Steelers in what should be a classic battle that has already played out three times in the playoffs this decade. Both teams' defenses are absolutely stellar and this should make for a truly great game. 6 points is a large line for a game between two defensive teams, so big in fact that I don't see how anyone can feel particularly good about picking either side in this one -- and I would be wary of anyone who says he does. In the end, the Steelers have been the best defense in the league all season long -- even better than the Ravens this year -- and as great as Ed Reed and Ray Lewis are, I still think the Steelers' Troy Polamalu remains the best defensive player in the game. So the nod on defense goes to Pittsburgh by a nose. And on offense, there is no question the Steelers are much stronger. Ravens rookie quarterback Joe Flacco has performed excellently in becoming the first rookie to ever win his first two playoff games on the road, but Ben Roethlisberger is not only better in general, but he's played in many big games in his young career and has proven himself to be a step-up kind of a guy. The nod on offense also goes to the Steelers for sure. And to top it off the game is also in Pittsburgh which is a tough place for any road team to play. As I said, I like the line right where it is in this one, but my money goes (and will do) on the Steelers to cover in a tight one.

In the early game on Sunday, the fans of Philadelphia wait with baited breath as their second major sports franchise looks to make the finals of the league this season when the Eagles travel to Arizona to face off in the most unlikely NFC Championship game in memory. It's the first time a #4 and a #6 seed have ever played in the conference finals, and in fact it's the first time a #4 seed has ever hosted a conference championship game. When you think back a couple of months to when the Eagles had just tied the lowly Cincinatti Bungles and then gotten smushed by the Ravens while Eagles quarterback Donovan McNabb got benched for the first time in his ten-year career, it is hard to believe that this team is where it is one win away from the superbowl this weekend. Even crazier to think is that the Bucs had to lose to the crappy Raiders, the Bears to the crappy Texans, and the Eagles had to beat the Cowboys all on the last day of the season for the Eagles to even sneak into the playoffs at all as the final seed in the NFC. And meanwhile, the Cardinals are playing in their first NFC Championship game since integration of the NFC and AFC more than thirty years ago, having ended the season 9-7 after clinching the NFL-worst NFC West shortly after the halfway mark in 2008.

So who's going to win this game? The Eagles are favored, as the #6 seed, on the road, by 4 points. That is patently ridiculous against the most high-powered passing offense in the NFL, with literally the two best receivers in the game along with Hall of Fame deserving Kurt Warner at quarterback. A lot of people will tell you the Eagles are going to kill the Cardinals like we did back on Thanksgiving night, but those people are bozos. This is going to be a good game, I just have that feeling. The Cardinals' running game and defense have both stepped it up in the playoffs, but after a season of not playing this way, I'm not expecting the Cardinals to generate 4 or 5 turnovers like they have averaged in their past couple of playoff games, including six last week at Carolina. In two playoff games the Cards have come up with five sacks, seven interceptions and two fumbles recovered on their way to running up the score against both the Falcons at home and then the Panthers on the road. My prediction is that the experience of the Eagles and their superior team defense all season long will eventually allow them to come out ahead in this one. But, there is a good chance that the Cardinals hold on to win the game outright at home against a lower-seeded opponent, and an even better chance that they lose by four points or less. My pick is the Cardinals plus the 4, which I rate at slightly over 50% chance of covering this Sunday at 3pm ET.

Lastly, I was listening to New York sports talk radio on Thursday night and the host of the show asked a very good NFL question: Is there any team that Terrell Owens has played for that he hasn't hurt? And come to think of it, there really isn't. It's sick, really. I mean, TO started off on the 49ers in 1996, just a year or two removed from those great San Fran teams of the early 90s, and the team quickly went down the tubes as TO got better, culminating in 2002 and 2003 with those videos we've all seen of TO bitching out the SF offensive coordinator Jim Mora Jr. and the public spat between TO and then SF quarterback Jeff Garcia, where TO suggested that Garcia, who recently married a playboy model, is gay. Truth be told, the Niners haven't really been consistently good again since Terrell was there. All we ever heard out of TO in San Francisco was "Give me the ball" and "Let me play for a winner."

Then came the move to Philly, which has been well publicized as well, and which was TO's first chance to play for a team that was at the time a consistent winner. TO played great for a season in Philly, helping the team make its first Superbowl in more than 20 years in 2004, coming back from injury to play a great game against the Cheatriots but eventually falling short. Then TO was out there, openly questioning McNabb's play in the biggest game of either of their careers, and by the next season, TO had succeeded in ripping the team apart, so badly that coach and GM Andy Reid simply benched his ass for the entire season the following year.

And finally, TO's stop in Dallas. Like Philadelphia, this was TO's second shot at going to an already winning team with high expectations, and once again TO has failed to bring the team to the promised land. Despite things starting off smoothly just as in Philly, after three years in Dallas, with TO's skills clearly on the wane after a very strong career stat-wise, here once again is TO bitching about not getting the ball enough, questioning his quarterback at every turn, complaining that the quarterback and the tight end, who are roommates on the road, plan "secret plays" together that don't involve Owens, etc. He has consistently questioned his offensive coordinator Jason Garrett to the media as well over the past couple of failed seasons in Dallas, and generally speaking, much as he did with the Eagles, he has essentially led to a divided locker room and once again ripped that team apart.

TO. The man has had mad skillz during the entirety of his NFL playing career. But he has hurt every team he's ever played for more than he's helped them in the end. And he's never won shit along the way.

GOOOoooo E-A-G-L-E-S EAGLES!!!!!!!!!!!!

TARP Sucks

TARP. The Troubled Asset Relief Program. I have made no secret of my feelings for how crappy this program was, but right now a quick look at the market -- and the financial sector in particular -- make it I think very obvious why TARP has been an abject and utter failure.

The TARP plan -- originally named as such because it was supposed to be used to buy up U.S. banks' troubled mortgage assets, before that idea was completely scrapped in favor of making equity investments in those banks instead -- cost $750 billion, not counting the extra $100 billion in bullshit porky tax cuts that had to be included to get the House to approve the revised bill after they initially rejected it. Seven hundred fifty billion dollars. 750 Billion!! That 750 billion dollars has to come from somewhere, most notably from ourselves and our children, either in the form of higher taxes, decreased services, or most likely, both, for years and years to come. Bush demanded it, Paulson demanded it, Bernanke demanded it. McCain voted for it, Obama voted for it, my representative and both of my state's senators voted for it as well.

Why did all these people vote in favor of the TARP plan? Because the $750 billion was supposed to be money well spent. The idea was that spending $750 billion to directly bail out the banks of this country now was going to make us far more than that in helping to save these troubled banks and our troubled banking system, help our economy avoid spiralling into the abyss as our esteemed president panickedly told us on tv that one night. Somehow, the problems facing our country a few months back were so severe that throwing $750 billion at it up front was going to be less costly than the fallout if we didn't help those banks with the TARP plan right away.

And look at what has happened. At current levels, the S&P 500 index alone, representing the 500 largest companies trading in America, has shed about $1 trillion in market capitalization just since the passage of TARP in early October. And that doesn't even include the approximately 10% losses from September while TARP was being hammered out. One trillion dollars -- that is a thousand billion, or already a good 33% more than the entire cost of TARP. And of that 1 trillion in market value lost in the stock market, north of $600 billion of the losses come straight out of the financial sector. So we spent $750 billion to pump money directly into banks, the very same banks which have now lost close to $620 billion of market capitalization alone just since early October, and more like $700 billion since September when TARP was first envisioned.

What's more, the $25 billion investment given to Citigroup as part of TARP, formerly the largest financial institution in the world as recently as mid-2006, obviously didn't do shiat to stabilize things at the bank. Citi execs simply took too many risks, were too reckless and imprudent, and eventually by late 2008 there was nothing that could be done to save the bank, which spiralled into oblivion late in the year, seeing its stock plunge to around $3 a share -- losing more than $250 billion in market value alone from its peak -- until the government had to step in with another $30 billion or so of cash, plus a government guarantee to assume the risk on upwards of $270 billion of toxic assets on Citi's books. Citi shares of course jumped bigtime on the news of their own personal $300 billion extra-TARP bailout, but now on Thursday here is Citi sitting right back down in the mid $3s. Nice bailout. Twice.

And now the latest victim is troubled Bank of America, another one of these "financial supermarkets" whose leadership saw fit to purchase mortgage lender Countrywide Financial about 18 months ago right at the peak of the credit market bubble, and then bought troubled brokerage Merrill Lynch back in September at a firesale just hours before Merrill itself would have had to declare bankruptcy. Bank of America management has been on a shopping spree for a long time for risky, troubled assets that it simply had no business taking on, and no plan or ability whatsoever to manage once they became part of the Bank of America fold. The result, even with $25 billion in TARP money they received over the past couple of months? On Thursday comes word that the government is preparing an additional Citi-style personal bailout for Bank of America, involving once again hundreds of billions of extra dollars in asset guarantees to help it be able to continue to survive, news that is sending its shares plunging more than 25% today alone to its lowest level in 18 years.

It is obvious -- and let's focus on that word for a minute -- it is obvious, that TARP has been a complete and utter failure. Sure, the very existence of the TARP bill might have helped to stabilize the markets in the near-term back in Black October. But any even cursory study of history shows that the market would have stabilized itself, given enough time. Maybe lower than it did in October / November, maybe not, who knows. But either way, prices would have eventually gotten low enough, or the situation with the world and the national economy would have gotten clear enough, that sooner or later investors would have realized stocks were cheap enough to start buying them again. It's worked this way for more than a hundred years, and it never fails. Ever. Not even through the Great Depression did that endless and inevitable cycle of pushing stocks lower until they eventually find their own bottom fail to work. So we gave about $50 billion of our own money to infuse the two largest banks of this country directly with cash as part of the TARP program, and the result has been the failure or near-failure of each of those banks up until just recently even despite the TARP funds given to them, showing how little effectiveness the TARP plan really has on an individual company level. And on a macro level, we spent $750 billion to prop up the financial services sector as a whole, which has now lost around $700 billion in market cap alone just since TARP was first thought up in that brilliant mind of investment banker and former Goldman Sachs CEO Henry Paulson. And this isn't even counting the financial effects of the huge slide in the economy that has resulted since the TARP plan was put into place, because TARP in the end did absolutely nothing to stem the economic slowdown in this country either. Who knows how many hundreds of billions of dollars the total economy has lost in the past few months to go on top of the $1 trillion + already lost in just the stock market alone.

Spend $750 billion to "save our banks and save our economy", and then lose a trillion dollars in market value plus probably another trillion in economic value within just months of that expenditure, while our nation's two largest banks still need additional massive cash infusions and hundreds of billions of dollars of risk taken off of their balance sheets in order to avoid complete failure even despite the $750 billion TARP plan. Does that sound like a good investment to you?

Preflop Raising Hands

This was prompted by an email I got from another blogger last week about how I would play a certain hand at a certain point in an mtt. Actually it was the same hand, dealt to Hero twice at two different spots in a large mtt, one getting kinda late in the tournament and then one well into the money positions. And in giving my response, I started thinking about how I tend to play certain hands differently at different times in a tournament, or from different positions at the table, or depending on the different actions in front of me in the hand.

For example, say it's early in a tournament and I am dealt A9o in middle position. I am probably going to raise 3x the big blind if the action folds to me before the flop. But if there is a raise ahead of me, I typically won't even consider reraising and instead will sail that shit into the muck as fast as you can say "shazam!" And even if there is a limper ahead of me, I will usually fold the A9o from middle position unless a whole bunch of other limpers come in along with me.

Similarly, say I am dealt a hand like 99 and I am in the cutoff seat. If the action folds to me, surely I will again raise a standard amount with the hand. If there is a preflop raise in front of me, I will typically not fold as I would the A9o hand above, but rather I am likely to call if the stacks are any kind of good size so as to make set mining (or potentially flopping an overpair) profitable. I might even fold the 99 to a preflop raise if we are on the final table bubble of a tournament and I put a lot of value on the jump in the cash payouts for the final tablists of that particular tournament. At other times on the tournament bubble, I might be very apt to reraise allin with the 99, figuring I am likely racing or dominating if I do get called, and most likely that my opponent will fold his two high cards and avoid taking a large beat with the cash payout positions so close to being reached.

There are countless examples of starting hands which I may fold, call or raise in a tournament depending on the circumstances -- again, usually the chip stacks involved, my position, and where in the tournamentwe currently are. And this got me wondering if there are any hands which I basically always raise with preflop, including reraising if the action comes back around to me. And the answer is, pretty much, yes. I think there are three hands that I nearly always raise or reraise with before the flop in nlh tournaments. Of course there are always exceptions to everything, which I will discuss in a minute, but for the most part with the following three hands I will be putting in a raise of whatever the current bet is before the flop, pretty much regardless of my position, and pretty much regardless of where in the tournament we're at.

The first hand I basically always raise with is KK. Pocket Kings is obviously a great hand, but we all know how magnetically these things tend to attract the killer Ace on the flop. The last thing I ever want to do is take an action preflop that permits or encourages one or more players holding the A9 or AJ hands I mentioned above from sticking around in the hand and seeing a flop. On very rare occasions I may limp from utg with KK, but even that is a move I don't like very much, because invariably some donkey with Ax limps as well around back and suddenly when the Ace flops I have no clue where I'm at. Whereas, I love limping utg preflop with pocket Aces, because in that situation even if no one raises behind me there is no hand out there I am particularly concerned about allowing to see a cheap flop. But with KK, I don't like to limp generally, even under the gun, and if anyone raises in front of me -- even a pretty rockish player -- I am generally going to reraise. KK is ahead of all but one starting hand, and it is in good shape against anyone without an Ace, so I want to get more money into the pot even against a preflop raiser, a typical one of which is likely to have what, AK-A7 or any pocket pair? KK crushes that range, and to the extent that I can maybe get the A7 guy to fold, that is all goodness for me and my pocket Kings. More than that, sometimes the other guy has JJ or QQ or AK and is more than happy to reraise and get it allin preflop, which again is a great outcome for me. So with KK, I basically always raise the current bet, even if it's been raised already in front of me, and that really doesn't change at any point in a tournament. On occasion late in a large mtt I might slow-play KK to try to double-up with it if I have been folding a lot and am afraid that a bet or raise might scare everyone else off, but generally speaking I don't even do that nearly as much as some other people might. It's almost 100% accurate to say that I always raise or reraise with KK before the flop. And as I've discussed before, I do not fold KK preflop. I never have and I don't know that I ever will. Maybe if Beth Shak is already allin and is dancing around yelling "I got it!" to her husband. But that's about it.

The next hand I pretty much always tend to raise or reraise with preflop is AK. A lot of people play AK a lot of different ways, and I'm not here to say which way is "right", or which way is the most profitable. Probably, like most things, the most profitable way to play AK is going to be different for each individual, depending on how strong they are at reading their opponents, what their image is, and how good they are at extracting chips from their opponents when they do flop a TPTK or better hand. But for me, I am hugely profitable over time with AK in tournaments, and the way I tend to play it preflop is to raise, or to reraise around the size of the pot if it's already been raised ahead of me. Now, are there exceptions to this? Unlike KK, sure there are. I have folded AK before the flop several times in the thousands of mtt's I have played in my day, but never without a raise in front of me, and never with only one raise in front of me either. I will pretty much always raise into an unopened pot from any position at any point in a tournament with AK, unless I am trying to trap an aggressive short stack behind me who I just know is going to push allin over the top of me with any Ace or any two high cards if I just limp. If the pot has been raised in front of me, or if there are one or more limpers, again I am pretty much always going to reraise it up, as I mentioned usually around the full size of the pot. The bottom line is, AK is a very strong hand, and the way I play I figure I am just about always getting the best of it if I put in more money before the flop when I hold Big Slick. Of course if the other guy has KK or especially AA, I'm in trouble there (and that happens to me more than you could believe), but other than those two hands, I believe with my post-flop skill I am getting the best of putting any additional money into the pot with AK even when it's been raised up in front of me.

So when do I fold AK before the flop? Basically, only when I know someone has AA or KK. Even if I knew the other guy had QQ or JJ I would not fold AK before the flop if there is any significant amount of chips already in the pot, because I figure that I will get away from it with a minimal loss if I miss the flop given the way I play AK after the first three board cards are out, and if I hit the flop I will do whatever it takes to convince the guy with QQ that I might have missed and I'll be able to extract from him to a nice degree. No, the only time generally speaking that I fold AK before the flop is if I am sure someone else has AA or KK in the hand. And in order to be sure of that, I either have to be playing against the tightest rock in the world -- for some guys, any preflop reraise pretty much always means Aces or Kings -- or I'm going to need to see some sickass action in front of me, from stacks that are large enough not to be pushing to try to double with some less than premium holding. So, for example, I recently folded AK preflop when I raised it up from utg, then the guy in 3rd position reraised me the size of the pot, and then someone in middle position pushed allin on a huge re-reraise of about 60 big blinds maybe 15 minutes in to a large mtt. I figured, I'm here raising under the gun, about as strong as I can look at this point in the tournament, and someone just to my left reraised me. He's got to have a big pair, or maybe another AK, or I suppose AQs if he's a massive donkey. But once the third guy pushes allin on the massive overbet re-reraise, what am I gonna put that guy on that is behind AK? AJ? No -- I didn't say this was a blonkament. KQ? Not. He could have QQ there, but in practice in my experience about 9 times out of 10 that guy flips up Kings or Aces. He might not have pocket Aces, but when he doesn't, he's usually going to show me pocket Kings. And this early in an mtt, with me only in there for one raise of three times the big blind, why risk my tournament life? But that's the kind of action it takes for me to lay down AK preflop -- like I've said, I need to be pretty much sure that someone else at the table has Aces or Kings.

The last hand that I like to nearly always raise or reraise with preflop is pocket Queens. Once you get to JJ and the lower pocket pairs, they are just too beatable by the bigger pairs, and too vulnerable to the two-high-card hands for me to treat them like I have to raise with them. But with QQ, in most situations in a tournament, I am going to raise or reraise with it. Now this one comes with all the same caveats as the AK discussion above -- show me someone who obviously has AA, KK or AK at the table, and I am likely to fold. I've probably folded QQ preflop a hundred times in my life, and it's not something I find particularly difficult to do if there is huge action up front. As easy as it is to be sure that someone has AA or KK if they're going crazy before the flop, throw AK into their range and you can sometimes be more or less absolutely sure they've got one of those three hands. Anyone putting in a third or fourth raise before the flop in no-limit holdem, me and my QQ are gone. But against anybody who has just put in one raise, I am going to reraise them the size of the pot with the Ladies pretty much every time. Sure, sometimes they reraise me and I am forced to fold, or worse yet, to call and then be racing against AK or run into Aces or Kings. But the bottom line is that, in most of the mtt's I play online, an initial raiser's range before the flop at any point early in a tournament has many hands that QQ is ahead of, many of them far ahead of, and as I've said there's only three hands I have any fear of when reraising with QQ. And as the tournaments progress, the tables get shorter, the Ms generally get shorter, and the end result is that preflop raiser's hand ranges are widening, not shrinking, meaning that my QQ is more likely to be ahead of a preflop raiser's range late in an mtt than it is at the beginning. And I almost never limp preflop with QQ. The only person you're trapping when you limp up front with pocket Queens is yourself, of that I am sure. Now you're letting KJ and K8s come in in addition to AJ and A8s. That is in my experience a bad mistake, and when you lose a big pot after limping in early with QQ, you have no one to blame but yourself.