GM Goes All-in (With 2-7 Off-Suit in the Hole)

HT to Paul Kedrosky via twitter

Comments

[VOL is KING]

How to crush your enemies using 7-2 off suit:

1)First raise before the flop (massive leverage)
this forces out any one with moderate hands (or in this case any reasonable manager or uaw chief. The only ones who will stay in this hand are the guys holding all the good cards, the modern day kings and queens in congress)

2)You see the flop
Credit Crunch (7), Pelosi (2), Reid (2)

The guys still in the hand figure you couldn't have hit anything. You wouldn't have raised before flop (put on all that leverage) if you excepted a credit crunch. Credit crunch can't possibly be what you wanted to see on the flop.

3)The Turn
Obama 7
a)You (ask for a) Check
You make a trip to congress and say you might need a little help. Congress says "Fuck off" we Raise you a Bankruptcy

b) You see Congress' Bankruptcy and Raise them DOUBLE Bankruptcy
You announce your plans to merge with Chrysler

c)Chrysler? GM Can't possibly be serious, GM must be bluffing. "We've got the suited cards" Congress says, "we're all in and calling GM's bluff. GM must be allowed to fail!"

5) And the River card is....
Global Recession 2

Time to show your hands

GM:
Obama 7, Pelosi 2, Reid 2
7 Credit Crunch, 2 Global Recession

Congress:
Jack, 10

Full house for GM. Congress goes broke and has to get bailed out by the TARP.

This is why the 7-2 off suit is the best hand in poker... No one ever sees you coming.

[Talufa]

Technically, wouldn't that be a four of a kind for GM? (7-2 in the pocket, Credit Crunch 7 + Pelosi 2 + Reid 2 on the flop is the full house, Obama 7 on the turn is still a full house and Global Recession 2 is a four of a kind.

[Pauly]

Just like online poker, politics is rigged.

[Anal_yst]

Good Analogy VOL until what I'll write off as a brain fart @ the end, Talufa is right (unless we're playing by Paulson Rules, but I digress).

And Pauly, politics is rigged, I'm just not sure who's doing the rigging and who's getting it...

[VOL is KING]

yeah and technically GM and congress would flip their cards once they were all in. Congress knows it can't possibly win after the turn once they see GMs cards, so showing the River card was just for the TV cameras.... hmmmm poker really is like life.

[1-2]

No one expects the Spanish inquisition either...

[VOL is KING]

1-2:

You can learn a lot about randomness and volatility from the Monty Python boys, as Mr. Taleb has pointed out. Every time someone claims that they have sufficient liquidity I think of the Black Knight, arms and legs lopped off, still thinking the fundamentals of its combat strategy are sound.

Indeed I know a well known financial engineer, who's hedge fund has suffered losses due to a minor technicality in a collateral agreement. Of course he said he would never make that mistake again. I thought to myself, no you won't make that particular mistake, it will be a new mistake next time.... No one expects the Spanish Inquisition. People should say that to themselves every time they put on a turn of leverage.

(in all honesty, I had a similar issue with one of my brokers myself. as we've learned, counterparty risk is the mother of them all)