Tuesday, May 6, 2008

Breeding Bubbles

It’s the economy, stupid.
In the first few hours after Eight Belles’s breakdown in the Derby, just as in the first few hours after Barbaro’s collapse two years ago in the Preakness, we’ve seen dozens of explanations, from the well- and not-so-well-informed. The track was too hard. The horses had been raced too much too young. Fillies shouldn’t be running against the boys. It’s the drugs. Oh, we’re breeding unsound horses.
Yes, it’s probably all of those. But especially the last. There’s no question that racehorses today are less sound, more prone to injury, than those of the 1950s and ’60s, or even of a decade or two ago. Horses today race only half as many times as they did 30 years ago. And the reason is the market. Like other unregulated markets — remember the mortgage-securities collapse, anyone? — the thoroughbred breeding market is subject to that old economics chestnut,
Gresham’s Law. Bad money (or in this case, bad breeding) drives out good.
Although thoroughbreds have always been bought and sold, the real explosion in the auction market, and the bubble(s) in prices, date from the late 1970s and early 1980s. Fueled by money from Europe and the Middle East, auction prices for the best Kentucky-bred yearlings rose faster in the early ’80s even than U.S. home prices did earlier in this decade. The frenzy reached its first peak with the 1985 purchase of Seattle Dancer for $13.1 million. Seattle Dancer ran five times, winning twice, and earning $150,000, and then failed as a stallion.
Excesses like these led to a market collapse in the late 1980s, but the whole cycle started up again the next decade, and continues today. The Green Monkey is, so far, the top of this price bubble, fetching $16 million at the 2006 2-year-old sale, then running three times without a win before being retired.
What made the market develop as it did was the influx of new money. That money came both from those who wanted to win races — the Maktoum family of Dubai being the prime example — and, more importantly, from those who were looking to make a profit not from racing, but from breeding and selling.
* continued at Breakdowns and Dollars

In other greed-fueled news, check out where your oil dollars are going (via Wagga)...

19 comments:

Edgar Alpo said...

Murst to burst!

wagga said...

Right now, it seems that Ms. Shrill has broken a leg in NC. If she breaks another leg in IN, do we euthanise?

Akubi said...

Right now, it seems that Ms. Shrill has broken a leg in NC. If she breaks another leg in IN, do we euthanise?
I didn't expect such a landslide in NC so I sure hope someone puts the odious campaign to rest and Hillary "gets the hell off of the internet" with her BS.
At this point, I feel that she is as bad as George W. so I sure hope Obama isn't pressured to offer her the VP ticket for the sake of "party unity".
BTW if it wasn't for the Limbaugh's Op Chaos, I think Obama would win Indiana. Still, it's not a completely lost cause yet.

Akubi said...

There are some key precincts that still haven't been reported.

Akubi said...

Whatever the case might be with Indiana, I'm reassured that the electorate isn't buying BS politics like the gas tax, etc.
Watching his speech now. Woohoo! Maybe there is some hope for this country.

Ogg the Caveman said...

Breading bubbles? Does that mean that people will be flipping horses?

wagga said...

GND just came over to visit. She's gone a week tobacco-free. She said she has a patch. So I asked if I could see it. She said it was on her bum. I said I still wanted to see it.
Answer was toward the negative end of the spectrum. Props anyway, GND!.

Yes, She is hot.

Edgar Alpo said...

Obama obliterated Clinton with that gracious speech in NC. It has been a gas, and a taxing campaign, but Ms. Clinton should take a holiday.

I keep hearing the old saw that Clinton can beat McSame, but Obama can't. That is a lie, and backwards. Clinton won't get a single Republican vote in the general election the way she did in the primary. I am a Reagan repug and I would vote for Bam Bam, but never in a million years vote for Billary. Did you see all the white folks in NC? They love him out there. I say the Bamster wins by a landslide if he is the dem.

Akubi said...

*banging head against keyboard and screaming at TV*
I thought Billary's speech would be a concession, but nope she'll keep on going. GO AWAY HILLARY! YOU SUCK!
Bill is looking rather red and befuddled - too much to drink or side effects of strokes?
Game over Clintons. Go away.

Akubi said...

Blogger ate my long and astute comment!

Akubi said...

Blogger seems to timeout when I write to much so I'll break it down for now.
Murst,
Ogg,
You picked up on the koi breading pool on Avocado St reference I had in mind. Whatever happened to that horrid, overpriced property anyway?
Is Rob Dawg in a coma or something?

Akubi said...

@wagga,
Doesn't GND have a wild salmon connection too? That's a sweet deal! Perhaps you could monetize it ;). Pictures for ZB?
BTW I've been cig-free since 1999, but I'm still addicted to nicotine gum.
I tried the patch, but it wasn't hitting the blood level systems at the right time. I never smoked until I got home from work so the patch seemed to hit too much at the wrong time.

Akubi said...

@Edgar,
Obama obliterated Clinton with that gracious speech in NC. It has been a gas, and a taxing campaign, but Ms. Clinton should take a holiday.
I completely agree. I was quite impressed. There's no way in hell we can do anything to address the problems in this country without facing reality and ending politics as usual. No more kitchen sink and toilet throwing!

Akubi said...

I have faith in the American people for a brief moment!

Edgar Alpo said...

HC's speech was entirely too long. She has taken all this debt and now she will try to get Obama to pay for it after the way she ran her campaign? Billary loves only money. I don't care if he pays her debt, but she doesn't belong anywhere on the ticket. She might be okay on the Supreme Court though...

wagga said...

Kubes, maybe we just need a picture of your bum.

In any case, my dinner consisted of some Alaskan king crab bits & pieces whilst watching "Deadliest Catch". Note - not Canadian.

Akubi said...

@Edgar,
Huh, why the hell should he pay her debt? I don't want my money going anywhere near that monster.
She should be in some office that has no effect on anything - and that isn't the Supreme Court. Maybe Obama could appoint Chelsea for that role instead?
@Wagga,
Where did you find Alaskan salmon? It must have cost a fortune. I'm sticking with tofu and beans these days. My bum has already been featured on Zillow Book, but I've posted some happy Luba goddess.

Edgar Alpo said...

akubi, It was meant as a cynical bribe for her witch-ass to go away. Money well spent, IMO. The only reason she wants to be prez is for everyone to kiss her ass and give her another $109 million. Just give that bitch her money up front and tell her fat ass to hit the bricks.

Edgar Alpo said...

BTW, that is an idea that I heard mentioned on MSM, which I should not watch.