The worry is that even when the economy rebounds, many people will be hesitant to spend the way they once did. Now that they see what can happen they will be quite a bit more frugal and save for a rainy day. Some of that is good but not if it is taken too far.

But I think that this will in fact happen to even a greater degree than most people do. Because few people have taken into account something else that has been going on the last few years that may not have been noticed under ordinary circumstances. I am speaking of the fact that fairly cheap stuff has gotten much better.

Because of new technology and other reasons, inexpensive items now have quite good quality. Which means that it is harder to justify paying two or three times as much for the relatively small degree of improvement that you would get when buying the more expensive item. I mean there is no way that a Mercedes E class is “worth” three Toyota Camrys unless you are filthy rich. Ditto the Vizio flatscreen versus the Sony. And I am sure you could probably say similar things about vacuum cleaners and the like.

It is probable that during this economic crisis many semi wealthy people did serious shopping in Wal Mart etc. for the first time in their lives. And they were probably surprised that they didn’t have to give up as much quality as they thought. If I am right about that it could be a bigger problem for certain segments of the economy, even if there is a recovery, than many have anticipated. People may be reluctant to return to Macys or Cadillac not so much because they are scared but rather because they have learned not to be a sucker.

Aside from a few comedies, I cannot enjoy a movie if the story has unbelievable parts in it. That can occur if it is a movie like Spiderman but it also occurs in serious movies as well. Ridiculous coincidences, people acting in a way that defies belief or whatever. Sometimes though I come upon a movie that doesn’t have this problem.

Slumdog Millionare, The Reader, and The Wrestler all started out fine for me in this regard but then all blew it. (Don’t read further if you haven’t seen them and plan to).

In Slumdog Millionaire, the kid has 10 mil locked up AFTER he gets the girl. There is no way he would risk it for that final question in real life.

In The Reader, Kate Winslet is given a much longer sentence than her co defendents because the prosecutor claims she wrote a letter that proved she was the ringleader. So all she had to do was divulge the fact that she was illiterate to avoid many extra years in jail. The movie would have us believe that she was more interested in avoiding the embarrassment of admitting her illiteracy. Like that would ever happen.

In The Wrestler, which I just saw today we have a similar unbelievable situation as in Slumdog Millionare. He only went back to wrestling after his bypass because he was rejected by the stripper. But before the match she shows up to proclaim her feelings and stop him. I suppose his going on with the show in spite of the danger is not quite as farfetched as the incidents in the other two movies but it still ruined things for me. They could have made the ending different, perhaps by having her show up in the middle of the match.

I think most of you have had the experience of realizing that you might be dreaming when in fact you were. And if it was a bad dream you might struggle to wake up.

I took this one step further a few days ago and found the experience interesting enough to share it with you.

I was dreaming that I was driving from the Reno airport to downtown Reno. At the airport someone who was vaguely familiar to me had asked for a lift so I gave it to him. But he turned out not to be a friend and once in the car was acting threatening to me. I was in a dangerous situation and didn’t know what to do.

But as I am contemplating my actions I notice as I am looking down from an elevated freeway ramp, that the city of Reno looks very odd. Far too many brightly lit casinos. Nothing like the way I remembered it. At that point the thought crossed my mind that I was probably  dreaming. I was 99% sure of it.

Meanwhile the guy had pulled out a gun. And I clearly remember thinking that my only hope was to drive off the ramp, in spite of the forty foot drop, and count on being right about being in a dream.

I jerked the steering wheel and listened to the screams of my passenger. When we hit the ground I woke up to one of the most exhilerating feelings I have ever had. Another foe vanquished.

I’m doing pretty well in them. Including a 420 K third place. Just finished in the money in the Bellagio 15K event. But their structure sure makes it hard to ignore all that EV in a blind quest for first. The stacks are large, the blinds go up very slowly, and some of the tournaments pay 20% of the field.  After two days of play you are not out of it if you have only your original buy in in front of you! If your stack happens to be of that size though,  bubble play gets pretty silly if you are playing right. Here is a simplified illustration:

Say there are 500 entrants for 10K. 100 players get into the money which is 15K. To make the calculation simpler we will say that the only other prize is $3,515,000 for first.

If you sneak into the money with your original buy in you make 15 K guaranteed plus have a one in 500 chance of 3.5 million more. So your EV is 22K.

Say there are several tiny stacks out with 101 or 102 players left. That 22K is essentially yours if you don’t play a hand. Now someone moves in on you. Or you have a hand where you would normally move in while expecting to be called.

If you lose that hand you go down to zero. If you win you double up and have about a one in 250 chance of winning the tournament. Which is an EV of 15K plus 14K more= 29K. So the move in risks 22K to win 7K. Anything short of aces is debatable.

The math above is not the exact situation in a real tournament but it is close enough. And most people pretty much ignore it. No wonder I like those tournaments.

In my continuing quest to convince you that I’m just as normal as everybody else here’s a few pictures of my family life. I will admit that Frenchie, my parrot, needs to be taught that chairs are not edible and that women are not objects. But, aside from that, it’s just a typical home.

Two of them are good.

I believe that the mere fact that we elected a black man will help this country, even if his presidential skills and policies are nothing special. One reason is that fewer people will shoot at us. It is a lot harder to shoot at, or support those who shoot at, nice people. And to foreigners, it has now become harder to deny that that is who we are. I could have phrased my thoughts about this in a way that would be harder for a six your old to understand. But I see no reason to do that.

Six year olds should also understand that black people and other goups are especially anxious to prove that the American people did not make a mistake in electing who they did. So they will work harder, become smarter, and be nicer than they might otherwise have.That will eventually help all of us.

The bad prediction is the other side of the coin to my previous blog entry “It Ain’t That Bad”. The economy has an odd problem that I don’t think will go away. Which is that less expensive stuff has become awfully good. The four year old Honda. The seven dollar bath towel. The hundred dollar TV or Ipod. When you spend twice as much, you get perhaps ten percent better quality. In the old days people spent this extra money partially because they could afford it and partially because they had not used the cheaper stuff in years and didn’t know of their improvements. But now that they do, many will feel foolish wasting all that money for such small incremental benefits. In other word even after the economy stabilizes, I don’t think the upper middle class will go back to their old spending ways. Tiffanys and Wynn might still be OK. Along with Walmart. But I don’t hold out too much hope for Dilliards and the Riviera.

This doesn’t apply to you if you are losing your house or your job. But for everybody else I just thought I would remind you that any sacrifices you may be making because of the economy, are probably pretty trivial in the overall scheme of things. Because you live in the US or similar country in 2008. Maybe you have to switch from a Chrysler to a Ford. Shop at Walmart rather than Dilliards. Get a Vizio TV rather than a Sony. So what? You still have your ipod, your cellphone, your computer and your Play Station. There are still antibiotics to cure you. Your home and your car is air conditioned. You live in a way that a multi millionaire from 1949 would gladly trade places with . This will never be like the depression of 1930. There is simply too much technology. You might not be able to eat out as often but that’s probably good for you.

All because of science and technology that most of you have had nothing to do with and probably have no clue about. So the next time you see one of those geeks walking down the street who in fact is part of the reason your suffering is minor, tell your sister to give him a hug.

Until recently the average middle class American had no problem with, and even sometimes liked, the very wealthy. There was surprisingly little jealousy or resentment. As long as they were reasonably satisfied with their lifestyle, they didn’t begrudge the super rich their decadence. It had little to do with them. In fact many people were glad such people existed. It gave them a glimmer of hope that they might somehow, one day, join their ranks. More practically, they realized that those wealthy people were sometimes indirectly responsible for their own nice standard of living.

But I think things may be changing. Perhaps dramatically. Maybe even dangerously. Especially as regards a subset of rich people. Because people are no longer living so nicely. Worse yet, it looks to them like many of the rich are to blame for that.

The Bill Gates, Steve Jobs, type will still probably escape their wrath. Entrpreneurs and inventors do so much obvious good,  their wealth can be considered deserved. Likewise the diligent neurosurgeon or even the great entertainer or athlete. They may be a bit overpaid, but they clearly work hard and make a lot of people happy.

But what about those mega rich who have simply taken advantage of technicalities of the capitalist system? The derivatives trader? The corporate raider? The class action suit defense attorney? The CEO of a failing company? The guy who comes up with the most effective, slightly deceptive, commercials? All middlemen who, at least in the eyes of the average Joe, is totally undeserving of great wealth, and is very selfish if he doesn’t bend over backwards to help the country get out of this mess.

I’m not really going anywhere with this observation. Except perhaps to suggest you don’t park your Ferrari in the mall parking lot.

It amazes me that most people don’t think that it would be helpful if the president was highly intelligent. I understand that many of the president’s duties include things where other attributes besides great intelligence are required. And I also realize that most of the super brilliant people have concentrated on one field of expertise, usually math, science, finance or games, to the point that they are not well rounded enough to make a good president.

The thing is though that there is a lot of room between Richard Nixon and Stephen Hawking.  There are hundreds of thousands of Americans who are very very smart without being obviously geeky. Warren Buffet for instance. Do you doubt that in his younger days he would have made a better president, if he set his mind to it, than almost all our politicians?

When I talk about being “very smart” I do not necessarily mean that the person has to have expertise in difficult subjects. Rather I mean he should have the talent to learn them. A president should be capable of learning differential equations, beating the options market, becoming a life master at bridge, attaining a 2000 chess rating and doing well at Jeapardy. And I think a few of our past presidents were in fact this intelligent. I admit that it is possible that someone can become a great president without this much mental ability, and that having this ability does not guarantee a good president. But if you stay away from the absent minded professor types there is little doubt that the smarter guy has the edge.

Some might claim that high intelligence isn’t neccesary because the president has experts to give him advice about technical questions. But if he isn’t smart he won’t know whether to take the advice. It can be especially tricky when an expert is giving his narrow view but the president must take things into account that the expert isn’t. He must be able to look at the big picture. Sort of like a spreadsheet where when you change one parameter you change everything. Doing that well takes high intelligence. Period.

To be blunt, the reason why so many people think it is “elitist” and wrong to choose a president who is very intelligent and very highly educated is because to think otherwise forces average people to lower their opinion about themselves. They reluctantly admit that the brightest people should be building our weapons and developing our antibiotics because to think otherwise is ridiculous. But once the endeavor requires multiple talents they are quick to dismiss how much of a role high, non geeky intelligence plays. Interestingly the economic crisis we are having is finally making more people reluctantly come over to my point of view as it becomes more and more obvious that the candidates seem inept. A silver lining as far as I am concerned.

Went to visit my mom for five days. She is almost 86 and still lives in her second floor apartment. She is doing fine and much better than a few years ago. Why, because a smart doctor took her OFF most of her medications. The worst ones were percosett, and ambien. Keep that in mind if you have an elderly family member. I don’t subscribe to the anti doctor conspiracy theories of some alternative medicine nuts. But there is no doubt that 90% of doctors are merely glorified registered nurses, susceptible to pharmaceutical company advertisements, and at least somewhat worried that more natural therapies, that don’t help their pocketbook, work better than they want to admit.