Thursday, December 23, 2010

SIZ10, the Corner Trey, and George Peppard

By Pauly
New York City

Ash Wednesday 2010. A friend at the Sack (Goldman Sachs) floated a tip/rumor that JP Morgan was sitting on a naked short position in silver futures for $3 billion. Kid Dynamite recently debunked JPM's $3 billion short silver myth, but something was amiss, and in Shakespeare's parlance -- something was rotten in Denmark. I heard/read rumors about JPM's manipulation of the silver market including one theory that suggested that the Fed was using JPM to keep the price of silver low in order to attract investors to the fledgling U.S. greenback. A few friends went long in silver and I piggybacked their bets taking a plunge into silver futures picking up a mini-contract. I bought a few more and by the time the 2010 WSOP began, I was sitting on a 5,000 ounces.

Shortly after Turkey Day, a viral campaign led by Max Keiser lit up the intertubes. I still can't put my finger on his exact angle -- at best, Max was acting self-righteous and altruistic in his attempt to battle one of the oldest and most prestigious institutions in the financial world, bu at the worst, Max concocted a sinister plot to hype up the JPM $3 billion short myth and persuade the public to buy as much silver as possible. It sounded like a classic "pump and dump" scheme so he could sell off his silver positions and walk away with a nifty profit. Perhaps Max's intentions were a hybrid of both? At any rate, shortly after Max's "Crash JP Morgan, By Silver!" videos went viral, and coincidentally, the price of silver shot up and raced past $30.

Sometimes it feels fucking good to be on the right side of the fix. In the last few weeks, I embarked on paranoid-induced dystopian view of the financial world. I converted a small portion of fiat money to actual hard currency. With gold prices rocketing into the heavens, I found myself seeking out South African Krugerrands. Heck, just last week, Flipchip and I went smurfing for pre-1965 dimes and WWII-era nickels at various pawn shops in Las Vegas. If the U.S. dollar tanks and the system collapses, my allotment of precious metals will allow me to barter in the post-apocalypse world.

Sure, I'd love to profit from the public putting all of their cash back into the stock market by Buying the Fucking Dip, but these recent commodities conversions (a fancy was of saying 'hoarding') are an emotional hedge against rumblings that a monster storm is coming in 2011 that's going to be ten times worse than sub-prime mortgage crisis of 2008.

I got a stern warning from my former mentor on Wall Street shortly before Bear Sterns went under in March 2008. I pulled a Hamlet, and my indecision to moved some of my money out of the market cost me a chunk of my portfolio. At the same time, I'm kicking myself in the nuts for not shorting financial stocks in early 2008. So now, when I'm getting forecasts about a tumultuous storm looming on the horizon, I don't want to have a repeat of two years ago.

If things really get out of control, the masses might begin rioting in the streets of America when extended unemployment benefits dry up. Without any new jobs being created, combined with evaporating civil liberties and clampdowns on personal freedoms (the TSA cock check was a jarring line in the sand from the public who finally got fed up with the latest procedures set in place by the Nanny State), that's a recipe for a system collapse and potential civil war. Sure, that's the worst case scenario, but don't forget Nero stood around like an oaf as Rome burned. And if you haven't watched any international news recently, Rome is currently burning after anarchists went on a bombing spree earlier today.

If I see any indications of a system breakdown, I'll be moving to my TEOTWAWKI cabin in Colorado with weapons, bullets, bear spray, Krugerrands, cans of beans, water filtration devices, and a collapsible fishing rod.

* * * *

With a slew of grave ('sobering' and 'depressing' are better adjectives, but I'm trying not to freak too many of you out...that's what Tao of Fear is for) decisions bogging me down the last few weeks and logging double digit hours every day reading about financial matters and keeping an eye on the European sovereign debt crisis, I found a ton of enjoyment letting off steam by betting on a random game. I limit my TV time and only zone out to the boob tube on Sundays because a heavy diet of sports betting and fantasy football (like Sunday's with Dr. Pauly on Fantasy Sports Live). But in the last two weeks, every night I've been looking for something light and fluffy to to help me unwind. A small wager on a late college hoops game or west coast NBA match up often does the trick as a perfect distraction. When I bet on a game, I have a built-in excuse why I'm wasting my time (on a non-Sunday) watching what would be a meaningless event.

The Tim Donaghy scandal turned me away from betting the NBA, especially after I saw some of the investigative research done by Haralabos Voulgaris, a major sportsbettor, who accurately broke down one of Donaghy's games, which included videos of some atrocious calls. I occasionally bet on an NBA playoff game, but most of my hoops action went on college games. Alas, in the last few weeks, I found myself betting more than ever on the NBA. My buddy Chicago Bob crunched numbers about obscure stats like the charting the corner three-point shot, which is the closest three-pointer that a player can hit. There was value in exploiting teams that poorly defended three-pointers and especially the corner trey. Depending on the situation, you bet on the total over or bet the better three-point shooting team against the spread.

I hammered the Knicks heavily during their big 8-game streak (betting them either straight up or betting the overs). The Knicks strung together a winning streak and outgunned their opponents with strong perimeter shooting from Raymond Felton and Danilo Gallinari (aka the Italian knockoff version of Tony Kukoc). Everyone knows that the Knicks are putting up plenty of points courtesy of Mike D'Antoni's high-octane offensive philosophy. Gone are the days of the brute Knicks when Charles Oakley and Antony Mason beat the shit out of their opponents in contests where the winner struggled to score 88 points. I watched the Knicks-Cavs game online and the Cavs announcer straight up said, "The Cavs have a shot tonight (because) the Knicks don't play defense."

The Knicks almost beat the Celtics at the Garden. They proved that on any given night, they could hang with the top dogs in the East and could potentially be a #4 seed once the playoffs roll around next spring. The Knicks didn't win, but Celtics failed to cover. That was a close one for sure, but the Kicks as a home dog paid off.

I have no idea what I was thinking when the Knicks took on the Heat. Call it simply: clouded by greed. My theory was that the Knicks would bounce back, alas, the Heat were en feugo entering the game with their own winning streak. After a rough start to the season, the Heat got their shit together. The turning point was LeBron James' controversial return to Cleveland (and subsequent thrashing of the Cavs). Then they went on a heater. As my buddy Chicago Bob said it best, "Finally! This is the unstoppable Heat that everyone expected to see."

LeBron dropped a triple-double against the hapless Knicks, who were embarrassed at the Garden. I was pissed with a bad bet on the Knicks and the OVER because I let my emotions get the best of me. I really liked the Dallas-Utah game but bet the Knicks instead. Once I knew that the Knicks OVER was toast, I doubled up with the Mavs. Thank God for time zones! The late game gave me a chance to chase my losses. Once again, I was relying on a German to bail me out of the day's financial trouble. The Mavs won a I turned a profit for the day. But I knew it was dirty money because I forgot a crucial principle for investing/gambling: you cannot win over the long run if you have to rely on a "get even" bet to bail you out. When will I learn?

Once the Knicks cooled off, I avoided betting them. In the meantime, Chicago Bob and I have been looking for better opportunities with teams who can't defend the corner trey.

Moving the line at the Imperial Palace was definitely the highlight of my December NBA betting binge. That was always a dream of mine -- betting so much action that a Vegas sportsbook adjusted the point spread. I never thought it would be the Imperial Palace for a Knicks game. In reality, I didn't even bet that much on the Knicks compared to the nauseating sums I previously wagered during the height of my addiction in the Spring 2007. However, despite the heavy action back then, I never once moved the line because I was betting at big books like Caesar's and the Bellagio. Without a doubt, my brother and I were big fish in a small pond when we moved the line at the IP. But being a big fish at the IP, is like being a dead fish floating in the toilet at the Bellagio.

* * * *

With hoops on the back burner, I welcomed the college football Bowl Season which kicked off with the New Mexico Bowl. I couldn't resist the urge to wager something on the game because I'm a friggin' junkie and wanted to justify why I wasted three hours sweating two 6-6 teams on a perfectly good writing day (rainy afternoons in SoCal are rare but make for optimal writing conditions because of lack of distractions). UTEP's QB had a bum ankle, meanwhile BYU's corn-fed magic-underwear wearing Mormons were lead by a super-frosh who was highly touted as their best QB recruit ever, which is a lot of shit-talking considering some of the talent they had over the last few decades. A bet on BYU seemed easy, even though I was giving up almost 10 points. That game seemed more enticing than the other two games where the spreads were -1 or -2. If I want to flip coins, I'll bet on hockey. So yeah, I was betting on a bunch of Mormons on Saturday. Just another reason why I'm going to hell.

In NFL betting news... the Chargers of San Diego are a tough team to beat in December. My biggest fuck up from the Vegas WPBT trip was not betting the San Diego/Kansas City game. Talk about a complete brain fart. I overlooked that game in favor of the New England-Chicago game. I made sure that didn't happen last week, even though San Diego had to play on short rest with a Thursday night game. The Niners were struggling offensively and I didn't think twice about making the Chargers my big bet of the week.

As Hannibal from the A-Team said it best: "I love it when a plan comes together."

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