You Came Into My Life Too Late

The Luck of Bad Timings

It's like you're at the European roulette table. '0' hasn't come up for like 50 spins. So it's time to place bets on '0'. And it doesn't come up for another 40 spins. What do you do? You double up and keep putting on '0' of course. And you eventually make your money back and come out ahead just a little bit. 2 spins later '0' hits again but you didn't have anything on it because you were looking to see how the luck was going to pan out for 3 spins. At that point you should walk away.  

Sometimes you run into people at the wrong point of your life. That's just the way it goes sometimes. They might have been the love of your life but you're already with somebody going down a different path. What are you going to do?Throw away something perfectly good just to see if the new thing is more exciting? Or you might meet somebody as they're leaving a company as you walk in, or you're leaving university as they come in. These things happen. If you believe in fate, you'd better believe that fate has a cruel sense of humour. Personally, I find it better not to believe in fate at all. 

Whatever the situation, you will always hear that nagging voice in your head asking "what if...?" Considering the kinds of punts one is willing to take at the gambling table, it doesn't seem far-fetched that one might want to bet one's life on the next piece of ass that comes along. Frankly, that kind of lightness of character - that's kind of how you fuck up your own life. If you want to be lucky you've got to know when you're already being lucky. 

Come Join The Fun!

China Versus Crown Resorts

The Business End Of The Stick Meets The Sticky End Of The Business

I've been wondering for sometime just what on earth is going with Crown Resorts. First of all, they don't perform well for shareholders. Generally speaking, in a two horse race kind of way, had you held shares in Echo Entertainment/Star City over the last few years, you would've made more money than with Crown. The other thing that makes you wonder is that James Packer's gone and put all of Crown's eggs in to a basket that targets Chinese high-rollers. Which, of course when you think about it can only lead you to the conclusion that Crown intends to be the money launderer of choice for corrupt Chinese officials on the mainland. Which is pretty extraordinary. Imagine another business model based on targeting criminals and helping them launder money somehow and see if you think that is sustainable. Unless you're big corporations doing the elaborate international tax dodging, it's pretty hard to spot the opportunities, let alone the sustainability of such a venture.

It's a bit like parking a cruise ship casino off the shores of say, Columbia, in the hopes that the big drug lords come and gamble away millions in your casino using it as money laundering service. There's something fundamentally crooked and wrong about the arrangement. Yet, there was Mr. Packer the Junior, right at the door step of mainland China with his casino on Macau, and a sales team targeting 'whales'. How long could that have lasted? It assumes the Chinese authorities don't care when they say they do care. I presumes that corruption and its ill-gotten gains are monies that can be taken away and out of China, and really, how can that be a sustainable business model?

Turns out the communist Chinese weren't going to sit around and play patty cake when they could reach for the bat and play hardball.

Crown Resorts employees including three top Australian executives have been held incommunicado since Chinese police executed a series of late-night raids at their homes across several mainland cities on Thursday. 

The company, consular officials and distraught families have been unable to establish contact with the group.

Shanghai-based Crown employee Jiang Ling answered her door at midnight on Thursday to find five plain-clothed police officers outside her apartment. 

"I kept saying ... 'Why are you here?'. They kept repeating 'Oh, your wife knows' and she didn't obviously… they finally said 'gambling'," Ms Jiang's husband, American expatriate Jeff Sikkema told Fairfax Media. 

"The main thing that I understood ... they wanted to know was who her boss was and some of her other colleagues, just looking for names."

That sounds like they mean business, doesn't it? It impacted share prices on casino operators.

The Chinese foreign ministry confirmed over the weekend the Australians detained on suspicion of committing "gambling crimes", without specifying how many. It said the case remained under investigation. 

Shares in other casino operators in the region fell in response to the arrests
Crown's largest Australian competitor, The Star, did not escape the fallout - its share price fell more than 5 per cent but closed down 3.66 per cent. 

Hong Kong-listed Sands China fell as much as 5.4 per cent, while Galaxy Entertainment Group Ltd. lost as much as 4.7 per cent on Monday. 

South Korea's largest operator of casinos for foreigners Paradise fell as much as 0.7 per cent in Seoul trading, while fellow Korean casino operator Grand Korea Leisure Co. declined as much as 0.9 percent. Melco Crown Philippines Resorts
Corp lost as much as 1.6 percent in Manila. 

"This is a clearer signal to all casino operators and junkets in the region, that the Chinese government doesn't like gambling and will continue the crackdown on the industry and capital outflow," said Tony Tong, founder of Hong Kong-based risk management consulting firm Pacific Financial Services Ltd.

Ouch. Crown itself lost 13.9%, down to $11.15 per share. Apparently that is half a billion dollars of Mr Packer the Minor's worth down the gurgler; that'd suck quite a bit. 

It's arguable whether it is the gambling the communist Chinese brass dislike so much, or the very real  ease with which money floods out of China through the casinos. As I said above, if you're on their doorstep and your business plan is to hoover up the escaping money from the mainland, it's no surprise the Chinese government is going to pick a fight with you. 

I understood the reasoning when Mr. Packer the Junior, sold out of Channel Nine and the TV business in order to get into the gambling business, but even allowing for the decline in the free-to-air TV business, it seemed a little drastic to want to go all in on Casinos, and ones with Chinese VIPs as the main targets at that. He's ignored all the noises from China that they're trying to stem the flow of money outwards since the GFC. It's not like this is a surprising development. I won't slam Packer on the morality stakes of wanting to be in the gambling business, but it does seem incredibly blinkered to not have seen this sort of development coming. 

The things is, if there's one thing it brings to mind, it is the One.Tel debacle over which Mr. Packer the Diminutive and his pal Wee Lockie Murdoch presided. In that instance they were proceeding with a business model that was hardly sustainable (nor made any sense) in a bid for more customers, only to find the gravity of their situation was enough to suck the entire venture down. As with that instance, Mr. Packer the Lesser, has found an unsustainable business model and stuck with it in the face of reality. He may have inherited a fortune but it seems abundantly clear that he doesn't know what he's doing with it. He is beginning to look like that joke where a man puts out a book "How I Came to be Worth $1million" You open the book and it tells you how the man inherited $1billion and squandered most of it. 

Talking About My Generalisation

Generalising Generations

I was on the phone to Pleiades today and he sort of laughed and said I was a bit heavy on the Baby Boomers yesterday, and being one of them he wanted to appeal to me that not all Baby Boomers were bad. Which, of course they're not; and most certainly not even half of Gen-X is particularly good. They're really rough demographic handles to talk about a large chunk of the population, and any generalising is bound to contain gross, boundless, indefensible inaccuracies.

Still, my problem is that years ago when I started blogging, I put up the stupid line "Gen-X View of The Universe" like it mattered and have been somewhat bound by that less-than-stellar choice. Had I hoisted "Dissenting Voice In The Universe", I might have had some more leeway to be just as general (and generalising), but without putting myself in one corner of the universe all the time.

Yes, Justin Trudeau is a Gen-Xer, as is David Cameron, but they have hardly anything common with each other politics-wise, and as a commentator, I can assure you I have even less in common with both men. Waving around the banner phrase is simply a kind overstatement of something that is probably a lot more subtle and fleeting.

The moment the demographic question comes to the fore the most, at least in Australia is that policy-makers have drawn lines in the past and into the future whereby things like HECS and HELP have landed firmly on Generation X while the Baby Boomers hardly got touched by it, and even the extension of the retirement age out to 67 applies from Generation X. The different laws covering superannuation contributions and taxation are likewise demarcated on the line - and the only reason I could think of was that the people who have drawn the line there were not Generation X.

Thus, it's not about what we are like, or what they are like; it's that demographically speaking, different rules and regulations have applied to the different generations, and this has resulted in different outcomes for people in different demographics. As a long time observer, it has been clear that a lot of rules had to be rewritten for Generation X because the money that used to be there is somehow no longer there. And so compared to the Baby Boomer generation, higher education cost more for Gen X (and even more for Gen Y), public primary and secondary education was poorer for Gen X (and even poorer still for Gen-Y), and access to jobs and finance was harder and took longer for Gen-X (and is even worse for Gen-Y), and so on.

Is all this the Baby Boomers' fault? No. It's just the way things went, out of over-arching necessities. Yet I think the ramification of all this, is that when Generation X will hold high public offices, it will result in a realignment of the old social compact. This includes things like gay marriage and addressing climate change as the challenge it really is. Generation X won't be progressive because they were born progressive; on the contrary they're likely even more apolitical than previous generations but for the fact that they will be forced to be political on a bunch of issues, and the viable answers are going to lean towards progressive ones because the conservative ones sure haven't helped.

This is why there is a gulf of difference in understanding by the likes of say, Eric Abetz, who is fighting a furious rearguard action, and the future progressive government which will manifest itself at some point eventually. It may well be a sea change of the kind we haven't seen since Whitlam came to power the back of the Baby Boomer vote.

The Awfulness Of Pokies

Mrs. Pleiades put me on to this one. This is an honest-to-goodness scary doco about how Pokies work and what they do to you. It goes through the history of their development, and the behavioural science of rewards, running the gamut from Pavlov, to BF Skinner to the latest MRI scans the brain and how they respond to pleasurable stimulus and how dopamine is released in the brain to stimulate the pleasure centre. Really, it's all about the dopamine and the pleasure centre and conditioned reflex.

It's one thing to be a gambling addict. I could be accused of being one, seeing how much time I do spend poring over the equities market and its gyrations. I hate it, but I like it and as my accountant said, "it's not like you can stop, now that you've started". It's a bit embarrassing but it's true. Even when I sell up the losing dogs at the end of the financial year, I'm still somehow in the market. I must be in it because I like it. It is pretty much gambling in the sense that I like the days where my shares go up.

Yet there is a crucial difference with Pokies in that the Pokies offer endless stimulus and reinforcement to keep you playing until you lose all your money. I've never liked pokies because I can't even begin to calculate what the odds are, just from looking at the machine. This is totally against the spirit of proper gambling to begin with. Then, I can't stand the endless music cues and sound effects because they're not truly musical if we're being specific about music - they're more like walls of sound to fill the air. I hate the nonsensical graphics that purport to tell a story when of course the only story going on is you sticking money into the machine and losing it chunk by chunk. I say, if you're going to a casino, play a real game with the real croupiers - but that's just me being a minority-report sort of guy. The majority of gamblers in Australia go to the local club and start inserting money into these terrifying things.

The doco tells you just exactly how much they tune these machines to fleece you of your money. They call it "gambling to extinction". They're fine tuned to get you hooked in, and suck you dry.

Peter Garrett makes an appearance to explain his little story about the gambling lobby and how powerful it has become and how it stopped the Gillard Government dead in its tracks from regulating the most vicious machines. We know the story, and how it went down with Andrew Wilkie wanting the regulations and pretty much holding the government hostage, only for everybody in government to back down in the face of intense lobbying from the gaming industry and clubs. With a hung Parliament, there simply wren't the numbers to do the right thing. It's a shame, but the real shame is that these horrible machines are still out there, chewing through the vulnerable wallets.

Just as a side observation, Peter Garrett makes a small mention of how the pokies came in and displaced bands in pubs. As one of the musicians that found pokies displacing bands in the late 80s, I can tell you Peter Garrett's nonchalant commentary was annoying as all hell. He got the good bit where pubs were venues, and his band got to play them. My generation got shafted and turfed out by Pokies. So, you know, tell me about it..

'The Gambler'

Money For Nothing Always Beats Working

Once upon a time I was down in Adelaide and got hooked on Two-Up at the Adelaide Casino. Back then it was fresh and new. I was captivated by the Gamblers' Paradox and spent a goodly number of days chasing odd and even throws of the coin. I won some, lost some, I won some back and even went up high but lost it all at the end of the stay. The life lesson there was "you don't bet against the streak'. I'd spent the week betting for people's streaks to end. I saw 17 events in a row. There's no protection against that.

Anyway, this is partially a movie about the fevered state of staying at the table until you lose everything; but it's also a movie about a profound existential angst about winning and losing.

What's Good About It

It's the kind of anti-hero topic that was prevalent in the 1970s, but has gone away lately. When you consider the polished Marvel studio line of product, it seems highly unlikely that a film this languid and misshapen gets made, but that's part of its charm. A hand can be played in seconds, but the thought that goes into a hand might be eternal. The film goes a good way towards capturing that contrast.

Being a movie about gambling, it does make you think a lot about the many aspects to the phenomenon. I'm one of those people who at once love and hate the gambling experience so it's a film that presents with very mixed emotions for me, and that is probably good.

What's Bad About It

There's a general sense of un-believability about the main character. I guess they were trying to make the point that once somebody is addicted to gambling, they lose sight of things completely; but this main character Jimmy is just a bad gambler. He gets the money that should bail him out, but he blows it playing blackjack in the most self-destructive way.

It's hard watching somebody gamble away their war chest in 3 hands. Repeatedly, Jimmy just doubles down and eventually loses. It's like he's waiting for the miraculous streak of 17 and loses on the 16th hand.

Worse still, the film sets a tall task for the main character, but it also gifts him with a good background that enables him to pay off debts. But he squibs that as well. At some point in the middle, you stop believing in the world the character inhabits.

What's Interesting About It

There's a lot of moralising about gamblers being scumbags, but ultimately the film doesn't work if gambling wasn't so interesting. You can't make a film like this about being a baker or a carpenter. It also gives a slice of just what illegal gambling looks like, as opposed state sanctioned gambling we see in Casinos.

Gambling is an interesting social institution. We demonise it and glamorise it and expect nothing to go wrong. The Packer Casino going up in Barangaroo in Sydney is a case in point - it's allegedly going to target high rollers and won't have many pokies because pokies target the lower socio-economic demographic. In other words it's an establishment that's going to target people with money to lose and that was its selling point to the NSW Government which, acquiesced and handed out the licence without much review or discussion. This was despite the fact that NSW is the most gambling-heavy state in Australia and does substantially more through pokie licences than Nevada does with Las Vegas. But what Sydney really needed on its beautiful foreshore was a dirty big casino aimed at ripping off rich and corrupt Chinese people.
And that's just one place.

Society in general tends to ban gambling in the hopes that it stops people from losing their houses and livelihoods, but it also benefits from the proceeds of gaming enough to keep allowing it to happen. In this film, it is abundantly clear that gambling is a social evil that draws the worst, most violent people into its ecosystem, and then smashes the players who gather like moths to a flame. But if you make it illegal, society would have a river of money flowing through illegal gambling that governments cannot access.

The House Always Wins

Gambling in this film is a lot more deterministic than how it plays out in real life. The House wins in real life, but not so convincingly every two minutes. This is because there is a lot of plot to get through, so the wins and losses have to be played out quickly. By motoring through the actual gambling scenes, the film gives you a strong impression of just how much the odds stack up in favour of the House and how probability theory and odds are two totally different sets of mathematics.

If you play long enough in a casino, you lose. The trick - as they say - is knowing when to quit and this usually means, when you're ahead, or before you've spent it all on mounting losses. The only way you get ahead is by good luck, so you should walk away the moment you've doubled your money. Personally, I'd walk away if I were up 20% because frankly a 20% return in an hour of flipping cards or rolling dice is better than any bank would give you. So watching Jimmy play on and on and on until he lost everything time and time again, just looks insane. However that sense of hopelessness, I guess, is the point of the film. Obsessive gamblers are really sick and have no objectivity about their playing.

This film isn't s good as 'Casino' in terms of dissecting the nature of gambling, but it does show how the afflicted are compelled to gamble. Especially how they are aware of the resplendent sublime experience and are going for the promise of the resplendent, sublime win. Jimmy says what he wants is a complete and utter victory or nothing else.

What could that complete victory look like? What we see on the screen is a bit like playing poker eternally to see a Royal Straight Flush come up in your hand, or to keep playing Black Jack for the validation being right when your hand adds up to 21. These unicorns of the game are out there and the afflicted gambling addict is out there hunting for the decisive victory that comes from having such a hand.

The Geometric Progression

Jimmy comes from a wealthy family, is talented enough to have published an acclaimed novel, has a nice job in the tertiary education sector and a flash car. What more could he possibly want? What is the allure of gambling to throw all of that away and chase wins and losses on the green velvet?

Most people in life with regular jobs or vocations earn money in n arithmetic progression. We keep turning up to work, there's a set amount money that is paid towards that work, and we plan and budget around the constant flow of essentially linear arithmetic money. There are very few options for getting your money on a geometric progression. You could earn interest in a bank (I know, laughable in this day and age of ZIRP and TwIRP), and you get a tiny taste of the geometric progression. You could purchase shares into an ETF, and keep reinvesting dividends.

Or you could gamble. Buying lottery tickets and hope for the big win, but if that's too long an odds for you, you can head down to the casino and gamble.

Because the promise of gambling - for gamblers at least - is that you could geometrically multiply the money in your hand. And so, Jimmy in this movie tries on many occasions to double or nothing repeatedly, trying to multiply his money. The logic is unsound even from the point of probability, let alone the odds given to you by the House. It's hard to figure out why then Jimmy goes all in, double or nothing, hand after hand except there is a clue.

The Gambler's Paradox is that if you lose a bet for 'x', then you should come back with '2x+y' where 'y' is little extra the next hand and go again. If you lose again, go '4x +2y' and try again. Eventually on 50-50/Even-Odds games you will win a hand and therefore win back all the money with a little extra interest. (In fact I believe this is how Kerry Packer gambled) To run this strategy there are two obstacles: most casinos put a limit on the table to stop the number of times you can run this trick. The other, of course is your budget (this is why Kerry Packer gambled this way).

Having tried the Gambler's Paradox stratagem quite a bit across several games, I can report that it is a gruelling, boring, tedious, mind-numbingly anal exercise and it requires as much discipline as work itself (if not more), thus taking all the fun out of the actual gambling. I guess to your professional gambler, gambling ain't 'fun'. However, the reductio ad absurdum of the Gambler's Paradox play is that you only need one hand to win it back. So why not play that one hand by putting all your money on black, double it and walk out? And what do you do when you win that one hand?
Go again.

The Unreal Money

The point of the gambling establishment is actually to take you out of the normal life experience as much as possible. This is why the lights flash and move, the music cues pump out of slot machines and if you'e a regular, they serve up free drinks. What they want you to do is lose your rational judgment, and end up in a mathematical abstraction.

What happens when you lose rational decision making and go with the abstraction is that hundreds, thousands and tens of thousands of dollars stop meaning what they mean to you outside of the casino.   To keep a grip on the numbers under my thumb, I used to count up the hundreds in guitars. That way I could recall what it felt like to plonk that sum of money down to buy that electric guitar as a teen, and it prodded me towards a greater restraint in how deeply I went. It's subjective, and I'm sure professional gamblers are much better at this, but the point is, if you don't anchor yourself back in the real world, the money gets unreal pretty quickly. The professionals never lose their heads to the flow of numbers and money, and they know exactly when they're going to pull up stumps and walk out of the casino. If there's a lesson in gambling I can relay, that would be it.

The worst thing you can do is think you're going to win back losses with one big hand in a card game. You can run the Gambler's Paradox on a dice or roulette game and get lucky in a day, but a great hand in cards is never going to dig you out of your hole. It's telling then that Jimmy gets out of his hole with one of his creditors through a rigged game of basketball. You don't win things playing by the rules, which tells you the rules are crooked as the leg of a dog.