Betting money on a dead horse: Seriously

There’s another lengthy filibuster going on. This one is in Nebraska over a horse racing initiative that could bring in as much as $ 18 million a year in additional wagering, which the state collects taxes on. The problem is, some of the horses in these races might not even be alive anymore.

Nebraska lawmakers want to install video screens that would play old races to boost the state’s gambling revenue. So the way it works is bettors know the horses’ odds, but that’s about it.

“When you go the machine you don’t know when or where it was run, you don’t know the names of the horses or anything like that, but you do have a form that you can look at,” says Nebraska Senator Russ Karpisek, a supporter of the bill. “As soon as you bet, you can start it and watch the race.

Opponents say betting on old races on a video screen seems pretty random — slot machine random. And Nebraska law prohibits slot machines.

Mark Nichols, economics professor at the University of Nevada in Reno, wonders how all that missing info about the race affects the odds.

“It is a little bit more guesswork, because to the extent that jockeys can have an influence on the outcome, which presumably they can, you don’t know that information,” Nichols says.

Why couldn’t the state just introduce off-track betting, where gamblers can watch televised live races? Well, the Nebraska legislature killed that bill three years ago.

But could you drink your mint julep at one of these video screens? Senator Karpisek says why not?

“Well I think you could,” he says,  “and I would. Or at least beer.”

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Betting money on a dead horse: Seriously

And the horse meat debate gallops on

Horse meat has now turned up in grocery stores in the U.K. and in meatballs from Ikea. And now, the U.S. Department of Agriculture is talking about approving a horse slaughterhouse in New Mexico — the first in the country in more than five years.

The unease many feel about horses as food is not new, as Colin Schultz recently wrote about for Smithsonian Magazine.

He takes a look back to Paris, circa 1870. The city was sieged by the Prussian army, who promptly cut off supply lines to the city. Parisians hesitantly, but out of desperation, turned to eating whatever they could find — dogs, cats and yes, horse. But as it turns out, some developed a taste for the equine option.

And that created a bit of a stir in the international community. Some countries wondered if horse meat was something they should try. In 1875, the magazine Scientific American made the economic case for eating horses. They calculated that eating horses at the end of their life would add an estimated $ 30 million to the economy, in 1875 dollars.

But, Schultz says, it’s not surprising Americans didn’t take to the idea. “There’s a real strong American ethos against it. You sort of see horses as companions, you see horses as pets. Even at the time, horses as tools but there was still that sort of iconic old-west imagery of the horse. You don’t want to then eat that horse.”

By now, American culture is pretty firmly against eating horses. And Schultz says that economic argument for eating horses in 2012 is kind of moot because horses don’t serve the same purpose in the American economy. “Like if we could start eating cars, that would be the same argument.”

And, of course, a Prussian siege is unlikely.

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And the horse meat debate gallops on

Germany Warns Against "Silvio the Savior" (And That May Backfire); Fake Horse Race Odds Get Around Blackouts

Italians head to the polls on February 24-25 to replace the technocrat government of prime minister Mario Monti.

Pier Luigi Bersani, who heads the centre-left Bene Commune (Common Good) coalition was considered a shoo-in a few short weeks ago, at least in the Chamber (the lower house of parliament).

It’s all up in the air now as Silvio Berlusconi, head of the centre-right Il Popolo della Libertà (the People of Freedom) has staged a massive rally in the polls (now blacked out). Berlusconi has been on a rampage lately blaming Germany and Chancellor Angela Merkel for the unemployment problems in Italy. It’s a populist message that is resonating well with voters.

Beppe Grillo’s Movimento 5 Stelle (Five Star Movement) has been largely ignored in the Italian press, yet Grillo has been wildly popular at rallies. Grillo has a chance to come in second, and I would not be surprised by a first place finish.

Mario Monti, who heads the centrist Con Monti per l’Italia (With Monti for Italy) coalition, is running a very distant 4th.

“Fare per Fermare il Declino” (literally “Act to Stop the Decline”, acronym FiD), is a primarily Libertarian party founded less than a year ago but until a recent stumble had been gaining enough steam to possibly overtake Monti.

For further analysis of FiD and the other parties, please see European Reader Offers Insights on Upcoming Italian Election

Poll Blackouts

Officially, pollsters cannot post poll results in a blackout period before the election. That blackout period started February 9. Here is a snapshot of the polls on February 8.

Those results are misleading because they do not include undecided voters, and the undecided vote is a whopping 20-25 percent!

With such little difference between Berlusconi and Bersani, and with huge rallies for Beppe Grillo and Berlusconi, any outcome is possible. Will Grillo take votes from Berlusconi or Bersani (or both). If enough of both I could even envision a win. If he takes more votes from Bersani, then Berlusconi is likely to win.

From my experience, late deciders break in a massive way for one candidate or the other (and in the US election I predicted for Obama). Here, it appears against Bersani (to who is more uncertain).

Fake Horse Race Odds Get Around Blackouts

Adding more confusion rather than clarity, Yahoo!News reports Fake horse racing blog dodges Italy’s election polls blackout

A blog appears to have found a way around a publishing ban on polls in the two weeks before the vote by writing up the results of pretend “underground horse races”, which appear to reflect each party’s standing.

On the final day polls could be published before the blackout fell, bloggers Andrea Mancia and Simone Bressan posted “The illegal races return!” on their site Notapolitica.it setting out the main “stables” and “jockeys” competing.

In line with the last published official polls, the winning horses of Tuesday’s “San Nicola Racetrack” came from the “Bien Comun” stables, a thinly disguised name for the centre-left “Italia Bene Comune” coalition.

The centre right of former Prime Minister Silvio Berlusconi was shown coming in just 3.5 “seconds” behind.  Using a mix of puns and French, Notapolitica.it renders centre-left leader Pier Luigi Bersani as jockey “Pier le Smacchiateur” and Mario Monti as “Mario de la Montaigne”. Berlusconi is dubbed “Burlesque”.

Horses representing Beppe Grillo’s 5-Star Movement are referred to as “stellar”, while the names of races allude to different pollsters. “San Walter Giuliano Racecourse”, for example, appears to refer to research group SWG.

It is difficult to say if those are official polling results or fictional. Assuming the polls are accurate (not an assumption I am ready to make), it is still difficult to know how undecided voters were handled.

Germany Warns Against Berlusconi

Of potentially more importance, Berlin Warns Italians against Berlusconi

Here are a few examples from the story.

German Finance Minister Wolfgang Schäuble reportedly said (but later denied) “Silvio Berlusconi may be an effective campaign strategist, but my advice to the Italians is not to make the same mistake again by re-electing him.”

Polenz, a senior member of Chancellor Angela Merkel’s Christian Democrats, said: “Italy needs political leaders who stand for the future. Berlusconi is certainly not one of them.”

One Italian bank even went so far this week as to issue a report arguing that a Berlusconi election would almost certainly force the country to apply for emergency bailout aid from the EU. Mediobanca, Italy’s largest investment bank, wrote that “a last-minute Berlusconi victory would scare the market sufficiently to put pressure on the spread.”

“Silvio the Savior”

In Italy, the opposite is happening. Spiegel reports Berlusconi’s Faithful: ‘Only Silvio Can Save Italy’

Adoration of Berlusconi in Italy remains widespread. In the parallel universe occupied by his followers, there is no room for doubt about Berlusconi and lines are clearly drawn. Silvio is good and the others are bad.

These fans gather at his speeches, like the Saturday rally in Palermo, where thousands crowded into the venerable Teatro Politeama. There were women in long fur coats and fine gentlemen in three-piece suits. Dock workers like Ferrante squeezed with them through the entrance, everyone pushing and shoving each other like adolescents at a rock concert. The hundreds who didn’t make it in must stand outside.

Silvio the Savior

Fans of the 76-year-old ex-premier see him as more than just a beacon of hope. “Berlusconi will now start a revolution,” says teacher Marinella Romano. She confesses “I have always loved Silvio.” Donatella Catalano, a friendly retiree, gushes, “He stands for everything that is good in the world.” The unemployed Ferrante says that “only Silvio can save Italy, he will bring us much good.”

Fully a quarter of Italians are prepared to vote for Berlusconi again. It is an astounding degree of homage paid to man who faces allegations of abuse of power and bribery; who faces the scandal surrounding the underage escort Karima el-Marough, alias Ruby Rubacuori; who has been blasted for blatantly misogynistic comments; and who broke many promises as prime minister. Instead, the opposition, left-leaning judges and even the Germans are blamed for all that is not right with Italy.

“It was Merkel who toppled him,” says retiree Catalano, referring to the German chancellor. She then turns to her neighbor and says: “It’s better not to tell the man anything, because the Germans always write negatively about Berlusconi.” Another voice yells: “First World War II and now attacks against Berlusconi!”

The comments are not surprising. In almost every campaign speech, Berlusconi rails against Germany. “Should we continue to allow Germany to dictate policies that ruin Italy?” he calls out. “Nooooo!” scream his followers.

Election Predictions

It’s difficult to judge from this side of the Atlantic, but things do not look good for a viable center-left coalition. At best, Bersani will win the Chamber and lose the Senate. That would likely result in a hung parliament.

Anti-German sentiment in Italy is high already. The entrance of German politicians into the battle may fuel that sentiment in a major way.

It is conceivable “Silvio the Savior” pulls off a stunning upset win in both the Chamber and Senate, but a Senate victory would still require a coalition (no party will come close to a majority).

In theory, Movimento 5 Stelle and Silvio Berlusconi could form a nice anti-Euro coalition and put the Euro to a vote, but given the anti-political party platform of Movimento 5 Stelle it’s hard to see that coalition forming.

Indeed it may be difficult if not impossible for any party to form a Senate coalition if Monti’s party does poorly enough (as I expect it will).

The most likely outcome once again is a hung parliament, and the next most likely outcome may very well be a return of Silvio Berlusconi (rather than a weak center left coalition of some sort that most seem to expect).

Regardless, Berlusconi is no savior (nor is there one to be found in the entire group). There are no good outcomes for Italy.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Germany Warns Against "Silvio the Savior" (And That May Backfire); Fake Horse Race Odds Get Around Blackouts

Look past the headlines: Horse meat is cheaper, healthier

A major scandal in Europe over horsemeat is having an unexpected consequence in Britain: A surge in sales of horseburgers.

The scandal is over the mis-labelling of ready-to-eat meals that were said to contain beef but were discovered to be mostly horsemeat. Tens of thousands of products have been removed from supermarket shelves, multi-million dollar lawsuits are looming and criminal prosecutions pending.

But one corner of the British food industry is benefiting from the crisis: Speciality meat suppliers are reporting a roaring trade in horse.

Julia Toomey of Kezie Foods in Scotland says she is selling more horseburgers than ever:

“Because of this scandal that’s broken out, people are quite curious to taste it. So sales have increased at least 100 percent in the last few weeks. People are wanting to try it.”

As in the U.S., there is still a powerful taboo in Britain about eating horse. But the scandal has cast an accidental light on the potential benefits: Horsemeat is said to be healthier than beef, with half the fat and more protein — and it’s up to five-times cheaper.

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Look past the headlines: Horse meat is cheaper, healthier