Blogs

Why Scott Boras Isnt As Evil As You Think He Is

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Deadspin

One reads a lot of crap analysis about sports (well, and other stuff too), but this is totally on.

It doesn’t mean that Boras isn’t a problem in the context of organized MLB baseball, but why would us fans choose to side with the owners and their uncounted stores of money, rather than the players, who make the game we like to watch with their talent?

How to Win at Rotisserie Baseball author Les Leopold’s book on Fantasy Finance

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I’ve mentioned my friend Les Leopold’s book, The Looting of America, here before. But a review at toomuchonline.com, does a better job than I can recommending the book and explaining what it has to do with fantasy baseball. I copy the whole thing here because the website doesn’t seem to offer permalinks to individual pages. Forgive me:

Can a Book on Derivatives Be Delightful?

Les Leopold, The Looting of America: How Wall Street’s Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity. Chelsea Green Publishing, 2009. 220 pp.

Great teachers love metaphors. To help learners grasp the unfamiliar, great teachers — like Les Leopold, the founder of the respected Labor Institute in New York — latch on to realities students already understand. Leopold has been using metaphors, for decades, to help working men and women understand how our economy really works.

But two years ago, amid the gathering Wall Street storms, Leopold suddenly realized that, as a teacher, he really didn’t understand the high-finance “innovations” just then beginning to crash into the headlines, the CDOs and the swaps, the tranches and the quants.

So Leopold set about to educate himself on Wall Street’s innards, and now he’s sharing what he has learned — in an energizing and remarkably entertaining new book,The Looting of America.

The book’s core, perhaps not surprisingly, revolves around a delightfully insightful metaphor. If you really want to comprehend how Wall Street has melted down our economy, Leopold suggests, give a look to fantasy baseball.

In fantasy baseball, groups of baseball fans create their own “teams” and stock them with players they pick from lists of real-life baseball players. If the players you pick for your fantasy team do well on the real-life baseball diamond — if they hit lots of homers, for instance — your fantasy team will do well.

Your fantasy team, in effect, “derives” value from real baseball. You have no actual relationship to this real baseball. But you can still make money, playing fantasy baseball, if the real-life players you pick for your fantasy team put up better numbers than the players your fantasy league competitors pick.

“In effect,” explains Leopold, “you are speculating on the stats derived from real major league players, but those players don’t know they’re playing on your team.”

This same sort of speculation, over recent years, has been driving Wall Street. We have “fantasy finance.” Bankers and traders have created a sticky global web of “derivatives” — collateralized debt obligations, credit default swaps, and more — that bear the same relationship to the “real” economy as fantasy baseball bears to real balls and strikes.

In the “old” days, bankers and traders bought and sold claims to real things. Owning a stock entitled you to a stake in a real enterprise. Holding a mortgage gave you a claim to an actual home. In fantasy finance, bankers and traders don’t have to hold a claim on anything real. They buy and sell financial products that only “derive” their value from real economic activity.

Bankers, for instance, can sell you a “derivative” that will rise in value if the price of oil goes up. They don’t have to own any oil to sell you this derivative. They can create derivatives based on anything.

But the fantasy baseball metaphor, Leopold notes, only takes us so far. Fantasy baseball players don’t claim they’re “improving” baseball. And they can’t cause any great damage either. If baseball players go out on strike, fantasy baseball leagues simply grind to a halt. No big deal.

Fantasy finance, by contrast, involves trillions of dollars. And the players of fantasy finance have spent decades insisting that these trillions help our economy by “spreading economic risk.” In fact, their derivatives ended up concentrating risk — and wrecking the economy.

At the root of all this fantasy: the concentration of America’s income and wealth that began in the 1970s. With so much money in so few pockets, our real economy couldn’t offer enough lucrative opportunities for the investor class. Wealthy investors would find those opportunities in fantasy finance.

The Looting of America traces how all this unfolded with clarity, wit, and patience. And hope. The bank bailouts and partial federal takeovers we’ve so far seen, Leopold points out, do help clarify the “fateful choices” we now face.

“We can hold onto and supervise the semi-socialized financial sector,” he notes, “or we can return the entire banking system to private investors. We can enact policies that allow workers’ real wages to rise. Or we can keep the wealth flowing upward to the super rich. We can put limits on financial engineering, or we can wait and see what the next orgy of fantasy finance does to our economy.”

Crucial choices. Thanks to Les Leopold, many more of us will understand them.

–The Council on Public and International Affairs

Fantasyland by Sam Walker

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raoulraoul

It’s interesting that someone is reviewing Sam Walker’s book years after it came out, but this is someone who doesn’t have any interest in fantasy baseball or fantasy punditry. What is interesting is that he pulls a couple of quotes from the book in which Sam describes how much money he’s spent to win the league. The first one seems like a reasonable investment, but the second, which comes near the end of the book, when it’s clear that victory isn’t in sight, is an alarmingly large figure.

My first thought, upon reading that, was that it mistake, it drained me of empathy for Sam’s efforts. Raoulraoul goes a little further and says that it makes him care not one bit (which he really didn’t anyway, but that’s not the point). But I think he’s overlooking something that Sam had to do in the book to make it work,  whether he won or not. He had to make the mountain high enough, and yet, he couldn’t just say that he opponents were geniuses.

They had to know lots more than him, but not so much that he–with his insider access to the baseball clubhouse–couldn’t overcome it by cramming. The 50k he spent trying ups the ante in the book, increases the drama, and makes it better yarn.

No, it doesn’t make him seem a more sensible person, or one you want to be like–and that may be a flaw–but it serves a purpose other than cluelessness.

Evil and Boras

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Joe Posnanski

The always excellent Posnanski looks at an incident in the A-Rod book having to do with Scott Boras, and shows how the way our mindsets predispose us to play Boras as the villain, even though author Selena Roberts (maybe inadvertantly) sprinkles the stories with clues that suggest the Mariners were behaving the way Boras claimed they were. That is badly.

At the start of the piece Posnanski says he isn’t commenting on the main aspects of the book because he’s friends with Roberts, and anyway there is plenty of discussion out there, which stirs up a hornet nest in the comments that is interesting in its own right.

And, among other things, there is also a discussion about whether rising ticket prices are the result of higher salaries. One poster suggests, though he admits he can’t prove it, that if all salaries were cut in half, surely ticket prices would be cut, too. Why?

If prices are set by supply (x number of tickets) and demand (how much people are willing to pay), you would have to prove that cutting salaries would either increase the supply of tickets or decrease the demand. I don’t see how either happens.

One factor, if the players make less maybe the owners would make so much that they would be shamed into reducing prices. Except we only know how much the players make. We don’t know how much the owners make, so how can they be shamed?

Eriq Gardner Looks at Player Raters

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THT Fantasy Focus

My April prices will finally get posted here, later today. They are like a primitive version of a player rater like those found at ESPN, Yahoo, CBS and Rototimes, the kind Eriq Gardner writes about at Hardball Times today. Primitive in the sense that the sophisticated big-media versions calculate their values automatically, plugging the stats into a formula and spitting it forth, while I cut and paste stats into a rather elaborate spreadsheet, make some adjustments because of the number of samples, and then generate a report.

Gardner’s point about what the player raters are actually measuring is a good one. Head to head values are a lot less useful to a classic Rotisserie player than straight 4×4 values. And vice versa. And, it doesn’t need to be repeated, values generated from current stats measure what has happened, not what will happen. But I think Eriq misses the main point with the raters and why they’re of value: they synthesize (or should synthesize) the fantasy categories into one score.

Looking at the stats of two players with different profiles, it can be hard to judge which is more valuable. A player rater that properly reflects the values of your league (or at least lets you know what it is measuring) let’s you assess the aggregated value of a player in all the categories. That Jason Frasor is more valuable than Felix Hernandez thus far tells us something about the teams these guys are on, and it tells us something about their stability in the standings.

The player rater also tells us which players are running ahead of pace, and which are running behind. If we know that Ian Kinsler is currently earning $52, we can judge that he is likely to earn relatively less for his team the rest of the way than he has thus far. If we know that Big Papi is earning $2 right now, we can hope that his contribution is going to increase dramatically the rest of the way (though, if we expected him to earn $20 on the year, and he’s earning $2 now, he needs to earn about $23 each of the remaining five months to get back on par). 

I don’t think you could tell the difference between a set of $20 and $23 stats, unless they were side by side.

Player Raters are overrated and underrated, too, it seems. Like most tools, it depends on what you do with them.

Catching is the Cruelest Position

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By Peter O’Neil
Fantasy Baseball Canada

What branches grow/Out of this stony rubbish?
— The Waste Land, T.S. Eliot

A lot of fantasy players who made big investments in catchers are hoping that April is indeed the cruelest month, and that things will get better, because it’s certainly been a rough one for owners of studs like the disabled trio of Brian McCann, Joe Mauer and Ryan Doumit.

There’s bad news all around. Owners of Russell Martin, Chris Iannetta, Geovany Soto, Ramon Hernandez, Kelly Shoppach, Kenji Johjima and Chris Snyder all expected more. Martin is sure to bounce back, though perhaps not as much as owners expect, and his zero-for-two record in stolen base attempts appears ominous for a player who derives so much of his fantasy value from steals.

Some of the others, like Iannetta, face playing time questions if their struggles continue.

Matt Wieters owners, meanwhile, will be unimpressed with his strikeout rate so far this April in AAA, a level he was supposed to dominate en route to a call-up many expected would come as early as next week.

For those of us replacing the injured, or demoted, the pickings have been slim and grim:  Brian Scheider was struggling before he got hurt, and veterans like Jason Kendall and Greg Zaun look like they might not be able to make it through the year without facing forced retirement.  Jesus Flores and Rod Barajas have had nice little runs but they’ll come back to earth.

Are there bright spots? Absolutely.  Victor Martinez and Jorge Posada are bouncing back strong from tough years, Benjie Molina remains an RBI machine with remarkable durability considering his body type, and Brandon Inge has been a spectacular reward with owners who had the foresight to be optimistic about what he could do while being settled in a single, non-catching position for a full year.

Yes, it’s early, but first impressions are often powerful, and I’m wondering if this experience will have an impact on next year’s drafts and auctions.

Those of us who have been at this for more than a few years remember when closers went for sky-high prices, sometimes in the first round in drafts.  But in recent years it has become more and more clear that relievers often lose their jobs, or break down, which in turn means that saves can be acquired fairly cheaply. I’ll never forget the year I decided to “punt” saves by waiting until the very end of a draft to take three relievers who were merely candidates to close coming out of spring training. All three, including Eric Gagne, turned out to be 30-plus save closers. I won the category running away, and I’m pretty sure my experience had a deflationary impact on closer prices the next year.

There are experts who already have been urging fantasy players to avoid making big investments on catchers because of the injury risk and the wear-and-tear that impacts players like Martin — even if they don’t end up on the DL. I predict that the once-burned, twice-shy sentiments of owners this year, who are now looking enviously at the gleeful Inge owner in their league, will have a deflationary impact on catchers’ prices  in 2010. For those of you in keeper leagues I would suggest you assemble your team with this in mind.