Sunday, May 24, 2015

The Poker Room

Life has a perfect economy.

I watched Dick carefully as he walked into the room. He was hunched over and listing to the right. His glasses, always a little crooked, tilted down and to the left. His ball cap bill was straight and unfolded. His face was a little wrinkled but not too bad for a guy I figured to be in his early 80's. He gripped a cane in his right hand and he had a very tight hold on it. Just as soon as he sat down, he hunched over in his seat and barely peered around. I will always remember him looking over the top of his glasses. I wondered if his eyes were so bad that looking around the room just wasn't worth the effort anymore.

These are the kinds of things you wonder when you know you are next. On deck, I call it.

I first met Dick when I was 21. That was 33 years ago. I figured Dick was in his late 40's back then. He stood pretty tall, around 6' or so, and still had enough hair that wearing a ball cap wasn't part of his daily apparel. Dick often just kept to himself, playing far more hands than he should have. Once in awhile, he would have one of those divine days where he would get extraordinarily lucky- hitting every draw. I remember a few of those days. Dick could also lay into opponents that criticized his style of play at the poker table when he was having one of those good days. But mostly Dick was quiet and un remarkable. One of those guys who fills a seat in a poker game but rarely gets noticed.

Unless you played cards with him every weekend for 25 years.

I quit playing poker, more or less, about the same time I was getting divorced and being "retired." That was 8 years ago. On rare occasions, I still play a little. Mostly though, I have been beaten into submission by time and the cruel vagaries of luck. When it comes to cards, I just don't have that much luck.

I think Dick is one of those guys too.

The old guys remember our time in the poker room. We laugh and joke about the old days- the night we drank pussy drinks- which was kicked off when one of the guys at our table ordered a green grasshopper. I must have drank 30 drinks that night, green ones, pink ones, copper camels, white russians, sex on the beach, gawd did we get drunk- the entire table. We laughed until 6 am that morning drinking with our pinkies extended and talking like chicks. People talked about that game for years.

I remember the absolute worst beat I have ever delivered to another human being. He was a loudmouth and an arrogant guy, not unlike myself, although I must say Jim S. probably deserved the lifetime achievement award for ego. The hand, the beat, should have never been played. In fact, my hand- held by a rational human being using just a smidgen of sound judgment- would have been discarded. But big egos make for giant stories and this is one of those.

We were playing 10-20 limit Hold'em with a full table. Jim S. had raised, been re-raised by me, and subsequently took the last raise before the flop. There were five players in the hand and we had each invested 40 bucks before the flop. I had an A-10 suited. I was sitting chilly behind my loudmouth friend who came out firing just as soon as the flop showed up. The other players folded, leaving only Jim and I in the hand. The flop was K-9-9. I had nothing. Hoping he was bluffing, I raised him to find out. He raised me back. That's when I knew he had something. I don't know why- but I made a bad play. I called. The turn card was another 9. Now the board showed K-9-9-9. This time he checked. I began to think he had nothing so I bet 20- he check raised me and made it 40. I made another bad call just before the miracle happened. The 4th nine came on board. The board was K-9-9-9-9. He bet, I raised him and he was suddenly reduced to a caller and loser while simultaneously delivering the most ungodly howl of disgust and profanity I have ever heard in a poker room. It continued for the next 30 minutes.

In Texas Hold 'em, the best 5 cards play. In this case, no matter what he had- I had four 9's with an ace kicker or the best hand possible. When he rolled over pocket kings- I realized I had caught the only two cards I could possibly win with other than ace, ace.

And for just one moment, in the 33 years that I have been playing poker, I considered the possibility that there might be one guy on the planet more unlucky than I was. In fact, I have never seen Jim S. in the poker room since that time- although I have heard various rumors regarding his disappearance that had nothing to do with that hand..

There were plenty of bad moments in that room as well. Heart attacks and deaths at the table, cheaters, big losses, fist fights, a confrontation with my father once, thrown drinks, I even think poker played a large role in my divorce although at the time- I was in denial. Other couples played. My ex and I both played. Once the divorce was final- my ex never played again.

Last night, I recalled some of those memories with the old guys. We laughed a lot only because I skipped the re-telling of the bad stories. Nobody wants to hear those. I missed every draw for 10 hours straight but I did manage to win the biggest hand of the night with three 5's.

I kept glancing over at Dick from time to time. Broken down by life, hunched over and clutching his cane as he sat quiet- I couldn't help wondering if that's how it's gonna be for me. If that's how it is for all of us. Little caricatures of once mighty men. As I sat there- Dick who was seated across the room, glanced up, saw me, and smiled. I walked over, shook his hand, and told him it was good to see him. That might be the last time that I will ever have that chance.

Every once in awhile, somebody will remark to me what a waste of time all of those years in the poker room were. That of course is nonsense. No time is wasted, there is simply no such thing.

I spent thousands of hours in this room. Nearly a lifetime. I used to look at old people in the room and feel so detached from their reality- like that will never happen to me. Maybe I didn't want to think about it. I realize now, after spending thousands of hours with guys like Dick, that my time is coming. I wish that I had taken more time to get to know my opponents over the years.That's a shame. Not because I wasted so many years in the poker room- but because I failed to spend more time talking with these people for the countless hours I spent seated next to them at a table. People and their lives are infinitely more interesting than a deck of cards. Mostly, I think, I missed an opportunity. I could have nurtured so many friendships. Maybe I was there to learn that. Maybe, guys like Dick are there to help me with my old age apprenticeship.

In a poker game in New Orleans, I had a gal tell me about a book that changed my life.

In life's economy, nothing is wasted. People are living and learning- sharing knowledge, hope, and time in any number of venues like a poker room. I realize now that I spent those years in that room because I was supposed to be there. And when I learned what I came to learn, either via the soft way or the hard way, I moved on. I can't really quantify what I learned in that place. But if you insisted on having me answer the question, "Brian, what did you learn in that poker room?"

I might tell them, "I learned something invaluable. I learned to be a better human being in that room."

Today, I am not sorry for one moment I spent in that room. Life offers a perfect economy and I am very grateful for the lessons I learned in that place. If I see Dick again, I think I'm going to ask him out to dinner.

**Here's a link to an older piece I wrote along the same lines.


Sunday, May 17, 2015

We Got Out At Just the Right Time- A Boomer Story

I began my career in Jan. of 1983. As luck would have it, I would spend nearly all of my law enforcement years in small town America. I didn't really plan it that way nor did I particularly like it at first- that's just the way it worked out for me. There were a few bumps, I tried to get out once, but as fate would have it- I would spend the better part of 25 years in small town America. They were good years mostly- until the end.

My generation, the boomers, had one foot in the lives of the Greatest Generation and the other foot in the lives of Gen Y and the Millennials. When I contrast those three generations, I am struck with awe. Only about 75 years separates those generations and yet they seemingly have very little in common. The Greatest Generation in a way- sold Gen X, Gen Y, and the Millennials out. I'm not sure the new kids have figured that out yet.

You see, old rich people run this place. That's how it has always been. People like Warren Buffet are the new plantation owners. And their job, indeed their self worth, is measured by how much they can exploit others and make even more wealth while pretending simultaneously- that they are great humanitarians.

The Greatest Generation were my teachers, people older than me, who had lived through or been influenced by the Great Depression. Most had very little, so they were frugal. I do not use the word cheap because they understood the cost and value of buying quality merchandise. Quality goods were made in America. We made the best houses, the best cars, the best motorcycles, the best guns, the best can openers. Americans made them. When we saw "Made in Japan" on a product we put it back on the shelf. Back then the government tended to side with the working stiffs and they told the truth about most things I think and if they didn't- our citizens were quick to forgive them because everyone knew they were on our side. The Greatest Generation supported government- not because they were stupid or gullible but because they believed our government was the best there was and it represented our values.

The children of the Greatest Generation were the Boomers. We were taught our work ethic from the Great Generation. We showed up on time, we fought for unions and benefits and got them, and we worked hard. What changed in our lifetimes was government. Government became crooked and unresponsive. With the death of JFK, the Vietnam War ratcheted up, and we found ourselves fighting some war that nobody really cared about. By 1971, Nixon had closed the gold window and forever ruined our currency's gold standard. By 1973, Nixon was caught in a bungled burglary of Democratic Headquarters during the 1972 elections. We were held hostage, watching Watergate proceedings on television like the Watergate burglary was the crime of the century. People lied under oath, Nixon failed to produce a segment of tape, and the whole thing seemed like some shameful charade. Eventually Nixon resigned and went away. The boomers were entering the workforce enmasse' and were starting to work through the ranks.

We had a number of other shocks, mostly economic, and the failed Presidency of Jimmy Carter which ended in 1980. I have always thought Jimmy Carter was just too nice of a man to be President.

The 80's brought about Ronald Reagan and Reaganomics, the best music ever, and a stock market bull which arguably lasted more or less through 2007. That bull market spanned 25 years- the start and the end of my working life- almost to the very month.

At the end of my career, I was hiring the members of Gen Y. They were latch key kids. Kids from broken households- the kind Reagan warned us about. Their education, their knowledge of our history and of our government was poor. They were apathetic. They didn't just distrust government, they avoided the subject altogether. They seemed to care more about computers, video games, and cell phones than actually doing something physically constructive. Like every generation, they were self absorbed and thought they were smarter than those who preceded them. I think that is a thread of commonality that we all share.

I got out of the workforce in 2007 at the ripe old age of 46. I knew the markets were about to crater at that time so I adjusted everything I had- pulled it out of equities and beat the rush into bonds that occurred in 2008. I had just enough dough set aside to make it to age 50- when I would start getting retirement checks.

I was able to do that because I paid attention to history. That's it. I have always relied on history to tell me what to do next.

After the crash of '08, worker salaries and benefits were destroyed. Production and manufacturing jobs were lost to NAFTA, Mexico, and the Pacific Rim. Government has never been worse- our leaders are nothing but pathological liars- following some unwritten historical script that must take place before the fall of our Republic. Wall Street bankers own our government now- they are part of the script. They most certainly will bring about the final collapse.

Indeed, in my short life, I have seen the Greatest Generation and I just don't think they were that great. One day there will be a calamity of such magnitude and duration that it will most certainly spawn a new sense of what is important and what is not. That's how I think these things reset.

Gen X, Gen Y, and the Millennials have inherited a mess. It will not matter who was responsible for it. The only thing that will matter will be whether or not these generations are capable of diagnosing all of the problems that this country has contracted and whether or not they can plot a course for recovery. Unfortunately, they do not have history on their side. I cannot think of one time in history, when a deeply diminished and bankrupt society realized what was happening to them, stopped it, and plotted a course for recovery that didn't involve war.

Our entire culture has changed. I look at the the young kids now days and I can't believe they are still working for the same shitty wages we have always seen without benefits. Wages haven't really moved up in 30 years. Those that do manage to get a leg up are increasingly exploited. My gal has made the leap to restaurant manager only to find herself working 60-70 hour weeks with non stop texts and phone calls during her "non working" hours. All that for a measly 50k and benefits. It all works out to about 18 bucks an hour because if a company wants to avoid paying overtime, they simply make you a manager and get around it.

I often watch her race off to work for another 12 hour day, every day, 5 or 6 days a week. This upcoming week, she has no days off. Work is like a war zone for her and she returns home exhausted. How long can people endure this? I don't know. Left with no other choices, human beings can tolerate a lot of misery.

We had it pretty good. All I  had to do was 25 years and out. Just a few eternal days, health and dental insurance,40 hour weeks with overtime and an employer/employee retirement program.

Boomers didn't sign NAFTA or get rid of Glass Steagall. We didn't lever up and exploit every would be homeowner with pick a pay loans that issuers knew would never be repaid and didn't care- because they were going to sell them off anyway while greasing an entire industry to lie about their triple A rating. We didn't steal a few trillion from the treasury either- to keep our hordes of wealth intact.

You see, old rich people run this place. The old, rich people were still in charge 10 years ago. They were in charge of protecting all the wealth they had accumulated, privatizing profits for themselves and socializing losses. They were not ashamed to steal a few trillion from the Treasury in 2008 in order to keep their estates intact- they just had to find the right people to let them get away with it- which they did.

A lot of us, a few of my older boomer friends, we got out at just the right time. I see that all very clearly now.

The Greatest Generation- Tom Brokaw called them that. Surely, it must be true if Tom Brokaw said it. Old, rich people using whatever means they can muster to hang onto their fortunes. People like Warren Buffet, the Koch brothers, Kerkorian. Come to think of it, Brokaw at age 75, is exactly the kind of old, rich guy that runs this place. Why wouldn't you label yourself a member of the Greatest Generation? In the end, it always seems to make sense.

Saturday, May 16, 2015

Silver Update, Explaining Bit Gold

After writing my blog on whether or not JP Morgan was trying to corner the silver market, silver rose from 16.40 (May 8) to 17.51 during the week. For the first time in at least a year, silver was actually up yesterday. (Friday) I went ahead and bought some anyway.

Buying silver here is a no brainer for me. Get zero interest on deposits or buy precious metals at rock bottom prices.

Last year, I bought a new, larger safety deposit box. I hate keeping my pm's in a credit union. I don't trust any kind of bankers- period. But the thought of pushing a 700 lb safe into my house and bolting it to the floor has me less than excited.

A few days ago, my uncle referred me to an article at 321 gold on "Bit gold." I read what I could about bit gold there and a few other places- and I love the idea. It is simply banking, with worldwide capabilities in any currency, using gold. I would have signed up for an account this week but alas, US government regulations prohibit it. Imagine that. Here is the link.

Here is BitGold's site, company just a few days old!

Going to try and put up a new piece on Sunday. Have a great weekend everyone!

Wednesday, May 13, 2015

Is Too Big To Fail Bank, JP Morgan, Trying to Corner the Silver Market?

For several months and probably years, I have been following the silver market. I buy silver, small quantities, on a fairly regular basis. I always buy on Fridays because the price is always under attack on Fridays. I wish I had a chart of the silver price limited just to Fridays- because that is when precious metals are consistently sold off. It's almost automatic.

At any rate, several weeks ago, I caught an article about JP Morgan buying silver hand over fist. We're talking 9 million ounces in the space of two weeks.

The silver market, in relative dollar terms, is very small. The Hunt brothers tried to corner it in the late 70's but failed- driving the price of silver to 50 bucks an oz in the process. Interestingly enough, the Hunt brothers telegraphed their intentions which allowed a lot of folks to hop onto the bandwagon and drive the price up in the process. I was one of them. The Hunts helped pay for my college and a car.

So what about a giant TBTF banker- with access to billions of relatively cheap FED dollars and leverage to trillions more- what's stopping them from succeeding where the Hunt brothers failed? Especially if they have the means to take delivery of the actual physical metal rather than simply trading paper?

Not much. In fact, with nothing left to invest in- having driven the equity markets to 200% of probable fair value from the lows of Mar. 09- cornering the silver market seems like a no brainer. The price of silver has been so decimated that I doubt silver miners can even turn a profit. I think based on years and years of research- that fair value or break even costs of silver producers has to be around 21.00 dollars an oz.- in a very general sense because silver is often the by-product of other mining operations. Today the price of silver stands just a shade over 17 bucks an oz.

And oddly, in a deflating environment, with silver sales declining and demand at a lull- somebody is buying an absolute mountain of the stuff.

I like this website mainly because the author does not speculate where this vast demand is coming from nor does he speculate where it is going. He sticks pretty much with the data points.

But if I were actively trying to corner the silver market- I'd sure want to try it with very deep pockets at a time when nobody was watching with a very subdued price. Like now.

Here is Ted Butler's take on the situation. This is a fascinating piece. It's a year old but giant positions aren't built overnight without people noticing.

or this- today at the Silver Doctors...

Here's something far more recent (May of 2015) I stole from somewhere: (I apologize if it is redundant)

At the time the Hunt brothers were believed to have acquired futures contracts worth one third of total annual global mine supply on leverage. Had they been in a position to meet the margin call if the outcome may have been quite different.

Had they accumulated physical silver rather than paper silver in the form of futures contracts, as JP Morgan are doing, the Hunts would likely have made an absolute fortune.

So, it is interesting to note that legendary silver market analyst Ted Butler has estimated that JP Morgan may currently hold far more than their official figure of 55 million ounces.

Butler believes the true figure to be closer to 350 million ounces. Annual global silver production is 820 million ounces which, if Butler is correct, puts JP Morgan in a position to corner the physical silver market today, unlike the Hunt brothers back in 1980. As this would equate to a holding 42.7% of total annual supply.

JP Morgan has been acquiring this vast hoard of physical silver while holding the largest short position in the silver futures market, i.e. while suppressing the silver price with its unlimited access to free money, according to Butler.

It's hard to escape the fact that if JP Morgan isn't trying to actively corner the silver market- it sure looks like it can. All that might stand in JP Morgan's path are laws which as we have learned- don't really apply to the TBTF banks anyway. They probably have a legal department which has far more savvy and acumen than anything our government can muster.

At any rate, it's kind of nice to be on the right side of a trade for a change. I am just going to go about my business of accumulating silver just like JP Morgan does. Very quietly and mostly on Fridays.

Monday, May 4, 2015

73 Months of Economic Bullshit- I Got You Babe Edition

Every day, since the March lows of '09, I feel trapped in some alternative "Groundhog Day" universe where Cher serenades me each morning with "I Got You Babe."

This is how it goes. I snap on CNBC to check the stock market indices. They are always up. If markets, heaven forbid, fall a little bit- parties unknown rescue them and drive them back up. Indeed, markets haven't doubled since '09, they have tripled.

Have we entered a new gilded age? An industrial renaissance?

Day after day, week after week, month after month, I hear that song. Going on 73 months in a row. I wake up, snap on the television and watch the gum flapping, never ending, equity cheerleaders on CNBC.

The latest installment came this morning.

The BLS reported an increase of 223,000 jobs for the month of April. The market reaction went straight up- 250 DJIA points.

What nobody (MSM) mentioned was the further downward revision to March jobs- another minus 41,000. The jobs added in April were all part time jobs, nearly all were in the 55 years and over segment. In fact, all other age segments declined- as well as full time jobs. When you shred 20,000 full time jobs and parse them into 40,000 part time and benefit-less jobs...VOILA!...the new economy!

or this,

or my very best proof that the BLS numbers are complete bullshit is that 93 million working age adults are not employed. A whopping 93.1 million or about 30% of Americans don't have a job!

The problem of course with all that bullshit flying around is- the lack of corroboration. The fundamentals, things like tax receipts, housing and new loans, consumer loans, inflation or rising lumber prices- none of those things are happening because....

The political narrative is complete and utter bullshit. This economy, stripped of the trillions added by quantitative (QE) easing, treasury buying, and the years of Zero Interest Rates (ZIRP) can't get going. All that excess fluidity flowed straight into the stock market looking for returns. Working stiffs, the middle class, have been getting sodomized first by bankers who created the housing bubble and destroyed home owner equity, then by politicians sticking Obamacare up our tail pipes.

Obamacare is a tax. It is not health insurance. I lost an additional 400 bucks this year (my "shared responsibility" penalty) because I simply refuse to spend 8 thousand dollars a year for nothing. (500 a mo., and a 2k deductible) Between Obamacare, my federal, state, and local taxes- I would lose 16 thousand or 40% of my income!

I worked 7 hours this week. I worked 12 hours last week. Thank gawd for my retirement. My office created 3 "jobs" after getting rid of one full time worker with benefits. Jobs like mine. My company kept all of the benefit costs- and created 3 jobs to replace the fired full time guy. That is a very small but accurate representative picture of the new American workplace.

Our way of life is not coming back either. Structurally we're screwed. There is simply no way of bringing back those millions of jobs that our politicians allowed corporate America to offshore. This is as good as it gets.

I think all of this economic bullshit can go on for awhile longer too. I keep reading and hearing from people that think this charade will end soon- the latest call is for sometime during the fall of this year. I think a lot of that is wishful thinking and historically based- in part anyway- on the last year of a Presidents's term.

So there's that. And there is hundreds if not thousands of days worth of- "I Got You Babe." I'm beginning to get used to it.

Sunday, May 3, 2015

Cornered? Try This Winning Move

Many years ago as a mid level police manager in a small police agency, we had an employee become disgruntled over a promotion and subsequent to that- he turned into a general pain in the ass. He started to act outside of policy, refusing to wear assigned attire, refusing to park in assigned areas, re-arranging the schedule to suit himself- all of those little things that angry employees do when they don't get what they want.

Each of those things in and of themselves were small potatoes. However in the policing business, particularly at the mid management level and above, you have to hold employees to some sort of standard. In other words, if you allow one employee to break the rules- you are probably going to have other employees break those same rules. You also face the risk of not being able to enforce those rules later on when you have failed to enforce them initially. So you enforce the rules of conduct or face varying levels of employee anarchy.

It was the enforcement of those policies with that individual that caused me to observe something that I have never forgotten.

I found myself confronting this individual about his behavior on several occasions. Rather than comply with my requests- he became even more hostile and argumentative each time we spoke. Thus began the long and arduous process of verbal warnings, written warnings, confrontations, and our first meeting with the Chief. It was during that meeting when this employee presented a defense which I have now noted has become the national defense whenever anyone, particularly high ranking members of society, are accused of poor behavior or misconduct.

Blame your accusers. It works.

During our initial meeting with the Chief, our disgruntled employee was quite successful in convincing the Chief that his misconduct was not only a result of my poor management skills but that I was making things up and exaggerating. I remember sitting in that meeting, aghast at what I was hearing. The Chief was nodding his head in agreement and our disgruntled employee was blaming everything, but mostly me, for all of his problems. Our disgruntled employee left that meeting mostly unscathed that day. I didn't really try to defend myself because I knew virtually all of what he said was untrue. Unfortunately, I hadn't fully documented his poor performance issues as well as I should have. After dissecting what happened in that meeting that day- I learned a valuable lesson.

People, when cornered by poor performance, are capable of putting together any number of defenses. Depending on what they have done and what the stakes or punishment might be (the eventual outcome) people will take what ever action they feel is necessary to protect themselves or their careers. This is hardly earth shattering news.

Which brings me to the modus operandi of the day tuned to perfection by one...

Hillary Clinton.

Hillary Clinton is the embodiment of a sociopath. Hell bent on becoming this nation's first female President- Hillary Clinton knows no shame. Every scandal from Whitewater, the cattle futures bribe, Travelgate and Vince Foster, Benghazi, multi- million dollar bribes (the Clinton Foundation) from foreign sources, wiped email servers and obstruction of justice, tax evasion- Hillary Clinton is the embodiment of everything that is wrong in America. Instead of feeling some small amount of shame, she simply soldiers on acting as though she is as pure as the driven snow.

What method does Hillary Clinton and her supporters use to escape judgement? You guessed it. They blame their accusers. It's always a witch hunt by opposing politicos. The real sinister people are actually the ones that are accusing Hillary of all of that unsubstantiated misconduct and criminal activity. Hillary is either guilty of a tremendous amount of misconduct or she just has some of the worst luck in the annals of history.

Innocent people do not make up stories about anti Muslim videographers, wipe servers clean, they do not commit tax evasion or accept bribes from foreign sources in return for gawd knows what, but mostly innocent people do not blame their accusers. You know why?

Because innocent people are innocent. They turn over the evidence which proves they are innocent. That's what truth telling people do. They don't make excuses or blame people making an inquiry into their conduct.

It's funny how simple things really are. Human conduct never changes all that much. It's an old trick, this idea that we will just blame our accusers every time we get challenged about our poor performance. I've seen it in action- I am not the least bit surprised to see Hillary and her supporters use this tactic every time her feet get held to the fire. It seems to work.

Next time you get caught doing something wrong- just blame your accusers. Never accept responsibility for anything. It's a winning move.