Gil Meche does the right thing.....gets criticized??

"The truth of the matter is that you always know the right thing to do. The hard part is doing it." -- General H. Norman Schwarzkopf

In a story that did not get much play this week, Gil Meche retired from the Royals.

It didn't get much play partly because, a) it was Gil Meche and b) the Kansas City Royals, but in retiring Meche walked away from $12 million dollars in guaranteed money that he had due to him from his contract.

Meche noted that since he might have needed shoulder surgery and would likely have been moved from his starting role into the Royals bullpen that he felt he would not have been "earning" the money the Royals would have been paying him. So he retired and went all "quality of life" on the Royals.

What is amazing is that given the drumbeat of "greedy athlete tries to extort the most money from teams driving ticket and concession prices through the roof" stories that are at the heart of many pre-season missives, the Meche story would seem to have the basic elements of a "man bites dog" angle to it.

Even more amazing is that Meche gets "rewarded" in some circles for his display of character and integrity by having his intelligence questioned. The following Business Insider screed called Meche "honorable", but "idiotic" as well. This may speak more about the culture within the business community in this country, when noble concepts like integrity and character are disparaged as "honorable, but idiotic" qualities to have.

Interestingly, the New York Times -- hardly a bastion for sports reporting -- put the story in its proper perspective:

http://www.nytimes.com/2011/01/27/sports/baseball/27meche.html

Meche retired last week, which means he will not be paid at all.

“When I signed my contract, my main goal was to earn it,” Meche said this week by phone from Lafayette, La. “Once I started to realize I wasn’t earning my money, I felt bad. I was making a crazy amount of money for not even pitching. Honestly, I didn’t feel like I deserved it. I didn’t want to have those feelings again.”

“This isn’t about being a hero — that’s not even close to what it’s about,” Meche said this week. “It’s just me getting back to a point in my life where I’m comfortable. Making that amount of money from a team that’s already given me over $40 million for my life and for my kids, it just wasn’t the right thing to do.”

Meche told the Royals’ general manager, Dayton Moore, that he did not want any of the paycheck due him. No settlement, no buyout, no strings. The Royals had been roundly criticized for signing Meche in the first place — he was 55-44 with a 4.65 earned run average in six seasons for the Mariners — and Meche believed they had already paid him enough.

“He felt the organization had been very good to him, and he felt he needed to, not repay, but in his mind do the right thing,” Moore said. “I’m not saying that if a player decides to do his best and fulfill his contract that’s the wrong thing. But Gil did what he felt was right for him.”

Kudos to Gil Meche for "doing the right thing".

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from the Business Insider:

http://www.businessinsider.com/why-did-gil-meche-throw-away-12-million-2011-1

Earlier this week, Gil Meche announced his retirement from baseball. It is not unusual for veteran players to quit the game this time of year as they begin to realize that another contract offer is not on the horizon.

But Meche is only 32, and he still had one year left on his contract with the Kansas City Royals.

And by retiring, Meche is doing the unthinkable: He is turning down the $12 million left on the five-year, $55 million contract he signed prior to the 2007 season.

But why?

Meche cited the need for surgery and said it is "not fair to me, my family or the Kansas City Royals that I attempt to pitch anymore." He later added that he would rather retire than pitch the final year of his contract as a relief pitcher.

That is certainly honorable. But it is still $12 million. And it is not like Meche injured himself riding a motorcycle blindfolded during The Running of the Bulls. He injured himself working for his employer. And when teams give large contracts to pitchers, they understand the potential for injuries. If there was no risk, pitchers would make a lot more money.

On top of that, Meche was actually a very good pitcher for a good portion of his contract. He pitched over 550 innings in the first three years of the contract and posted a respectable 4.12 ERA.

In fact, if we look at his last four years, Meche was actually worth more to the Royals than amount he was paid...

If anything, the Royals still owe Meche $4.0 million. Despite having a negative value in 2010, Meche gave the Royals $47.0 million worth of production in four years while being paid $43.0 million.

And will the Royals spend their newfound $12 million windfall? Don't count on it. Dayton Moore, the Royals General Manager said he doesn't plan to sign or trade for any expensive players in the near future.

Meche's decision to pass up $12 million is certainly honorable. But given the inherent risk of his profession, it was also idiotic.

Innings Restrictions and Pitch Counts - PLAY BALL!!

from the American Sports Medicine Institute:

USA Baseball Medical & Safety Advisory Committee Guidelines: May 2006

http://www.asmi.org/asmiweb/usabaseball.htm

Hat Tip to Dan Peterson over at the blog Sports are 80 Percent Mental for posting ASMI's newest youth pitching guidelines.

It is interesting to note that as my favorite team's coaches -- the Giants -- try to figure out if sophomore Madison Bumgarner's arm will come flying off if he pitches too much more than the 193 innings he pitched last year for the Giants -- (111 IP at the major league level plus 82 IP in AAA) -- we likely have some Sun Belt youth leaguers who have already approached the recommended 100 innings limit.

After that post, I copied a New York Post article that outlines the NYC PSAL attempt at controlling pitching activity at the HS level. You can see from that article that the coaches are already circling the wagons trying to plot strategy to wreak havoc with the rule or gain competitive advantage. It's what coaches tend to do.

Following that is a Baseball Prospectus and a Hardball Times article on pitch counts and pitching restrictions at the major league level.

The needs and the approaches are going to be very different depending on whether you are coaching a rookie major leaguer, a veteran major leaguer, a HS or college pitcher and again for younger Little League aged pitchers.

From blog Sports are 80 Percent Mental
http://blog.80percentmental.com/2011/02/youth-baseball-pitchers-need-to-stay.html

Feb 4, 2011
Youth Baseball Pitchers Need To Stay Under 100 Innings Per Year
By Dan Peterson

For years, sports medicine professionals have talked about youth pitching injuries and the stress the motion causes on developing bones and muscles. In a new, 10-year study published in the February issue of the American Journal of Sports Medicine, researchers showed that participants who pitched more than 100 innings in a year were 3.5 times more likely to be injured.

"The study proved a direct link between innings pitched in youth and adolescent baseball and serious pitching injuries. It highlights the need for parents and coaches to monitor the amount of pitching for the long-term success and health of these young athletes. We need to all work together to end the epidemic of youth sports injuries, and education through campaigns like STOP Sports Injuries is in excellent first step," said lead researcher, Glenn S. Fleisig, PhD, of the American Sports Medicine Institute in Birmingham, Alabama.

The study followed 481 pitchers for 10-years (1999-2008). All were healthy, active youth (aged 9 to 14 years) baseball pitchers at the beginning of the study. Every year each participant was asked whether he played baseball in the previous 12 months and if so what positions, how many innings pitched, what types of pitches he threw, for what teams (spring, summer, fall, winter), and if he participated in baseball showcases. Each player was also asked every year if he had an elbow or shoulder injury that led to surgery or retirement from baseball.

During the 10-year span, five percent of the pitchers suffered a serious injury resulting in surgery or retirement. Two of the boys in the study had surgery before their 13th birthday. Only 2.2 percent were still pitching by the 10th year of the study.

"It is a tough balancing act for adults to give their young athletes as much opportunity as possible to develop skills and strength without exposing them to increased risk of overuse injury. Based on this study, we recommend that pitchers in high school and younger pitch no more than 100 innings in competition in any calendar year. Some pitchers need to be limited even more, as no pitcher should continue to pitch when fatigued," said Fleisig.

The study also looked at the trend of playing pitcher and catcher in the same game, which did appear to double or triple a player's risk of injury but the trend was not statistically significant. The study also could not determine if starting curveballs before age 13 increases the risk of injury.

Source: American Orthopaedic Society for Sports Medicine and K. E. Wilk, L. C. Macrina, G. S. Fleisig, R. Porterfield, C. D. Simpson, P. Harker, N. Paparesta, J. R. Andrews. Correlation of Glenohumeral Internal Rotation Deficit and Total Rotational Motion to Shoulder Injuries in Professional Baseball Pitchers. The American Journal of Sports Medicine, 2010; DOI: 10.1177/0363546510384223

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FROM THE NEW YORK POST:

http://www.nypost.com/p/sports/high_school/baseball/safety_first_psal_announces_new_VkrFjjm6Spg1K5dFViz09M

Safety first: PSAL announces new pitch-count rules

By ZACH BRAZILLER

Last Updated: 3:31 AM, November 4, 2010

Looking to prevent injury now and in the forseeable future to its young baseball pitchers, the PSAL, with a nod to a few influential City Councilmen, announced a series of preventative pitch-count measures at a press conference Wednesday afternoon at Long Island City High School in Queens.

The strict regulations are as follows:

* Varsity pitchers will have a cap of 105 total pitches for one game and JV will be able to throw no more than 90.

* Players will be able to pitch the next day if they throw 25 or fewer pitches.

* Varsity pitchers will have to rest a day after throwing 26-53 pitches, two days after throwing 50-70 pitches, three days after throwing 70-90, and four days after throwing more than 90 pitches. JV pitchers will have to rest a day after throwing between 21-40 pitches, two days after throwing 41-60 pitches, three days after throwing 61-79, and four days for anything more than 81 pitches.

"We always want to do what's right for our kids to be safe and we felt the best way to do that is to take a proactive approach by doing this," PSAL baseball commissioner Bob Pertsas said.
Coaches will be held accountable for their respective pitchers’ counts and will be subject, PSAL director Donald Douglas said, to a one-game suspension if it's revealed they are filing inaccurate numbers or fail to comply. Further sanctions, such as forfeits, will be considered for repeat offenders.

One of the first public school leagues in the country to install strict pitch count regulations, the PSAL began the process last season when it requested coaches enter pitch counts on the league’s Web site, an action forced upon the league after councilmen Louis Fidler and Oliver Koppell pushed a bill in the Committee on Youth Services last February asking for pitch-count limits in all baseball leagues across the city.

After reviewing the data with the City’s Office of School Health, several PSAL coaches and physicians from Partners in Youth, a partnership between the PSAL, Bellevue Hospital Center and the NYU Hospital for Join Diseases Department of Orthopedics, the decision was made to install a limit for pitchers.

Koppell said he hopes the Catholic league and the city’s many private school leagues would follow the PSAL, but doesn’t plan to continue with legislation at the time being. CHSAA commissioner Wally Stampfel said his league has no plans to even discuss the matter while Poly Prep athletic director Bill McNally said the Ivy League, the largest of the private school leagues, would talk about it at an upcoming athletic directors meeting.

Many coaches across the city were outraged by the decision they say will adversely change games and limits their maneuverability. Several coaches expect others to play a more patient game to build up pitch counts; some feel very few will post accurate numbers. Douglas said it's up to each coach to monitor his own pitcher.

“What they are doing is in name only,” one coach said, speaking anonymously. “It’s not gonna be followed. You can’t control it.”

Said Francis Lewis coach Ian Millman: “Schools that aren’t as deep as their front-end arms, it will force coaches to develop more pitchers, force them to decide when they are going to use their best pitching and give other kids opportunities to come through for their teams. What it comes down to is this is a preventative measure to prevent overuse of young arms by poor coaching, or by coaches that want to win at all costs.

“When it comes to coaches who have put winning above all else including the health of young pitchers, this is a great measure. However, when then you have coaches that have an understanding of mechanics and the ability to assess a pitcher’s wear throughout the game, you’re completely hampering them and it's almost punishing them.”

DeWitt Clinton ace Joaquin DeJesus said the rules will change how he attacks hitters. The southpaw will go for location over velocity, looking to rack up quick outs rather than compile double-digit strikeouts.

“It shouldn’t be on your mind, but it's going to be in the back of your head,” he said. “It will change the baseball season.”

He added: “I think it’s a good idea. They are just trying to look out for our safety.”
Millman poked holes in the new plan. For one, he said, under the rules, a pitcher can throw every day at 25 pitches or less. Plus, there is nothing noted about re-entry; a coach can start his pitcher, build a lead, then bring him back to close, all while keeping him under a certain count.

“Do you point a finger at the coach or the PSAL when that young man has to sign up for Tommy John surgery because the coach was well within the rules and guidelines that were set forth in the rules?” Millman asked. “They haven’t covered all angles of protecting a young pitcher. There is a gray area here.”

Douglas, the PSAL director, understands the criticism and he understands why there are some coaches adverse to the move. The league will keep a close eye on how the new rules work and could make tweaks for the following season. But he also wholeheartedly feels it is the right thing to do.

"Sometimes people are resistant to change," he said. "But when change is for the better, people make adjustments."

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from Baseball Prospectus:

http://www.baseballprospectus.com/article.php?articleid=148

The injury rate of pitchers, in particular young pitchers, is astonishing. Pitchers are several times more likely to get injured than hitters, and for every prospect that becomes a successful major league pitcher, a dozen more have their careers stalled or ended by injury. This is a reality of baseball that has persisted since the game was invented; the act of throwing a ball overhand is inherently unnatural, and the repetition of throwing, even with excellent mechanics, can lead to inflammation or injury to the muscles of the rotator cuff, or in the ligaments that hold the elbow in place.

For a century this has been an accepted part of the game - pitchers got injured all the time, and nobody ever bothered to wonder why, or whether there was a way to prevent it. Pitchers who in the dead-ball era of baseball history were able to throw 300-350 innings a season without injury were subsequently marveled at as "iron men" whose exploits could not be repeated by contemporary pitchers. Later hurlers were accused of lacking the work ethic or the determination to approach previous standards of greatness; they were too weak to "tough out" the sore arms that they developed by the bushel.

We know better now. Most of us do, anyway; the perception is still there among ex-ballplayers and old-time baseball men that great pitchers somehow "know" how to stay healthy or are able to "pitch through the pain". The reality, of course, is that of the vast number of minor league pitchers every year with outstanding ability, the ones who, for whatever reason, are able to avoid the injury bug are the ones most likely to become great pitchers.

But how? How does a major league franchise protect its most valued resource - its young pitchers? The focus has, for years, centered around not overtaxing a pitcher, by limiting their number of starts (the 5-man rotation developed in the early 70's) and number of innings (no pitcher has thrown 300 innings in a season since Steve Carlton in 1980). But these developments - progressive as they were - focused on imperfect measures of a pitcher's abuse. All innings are not created alike, and to compare 260 innings thrown by Roger Clemens with 260 innings thrown by Christy Mathewson is an oversimplification: Mathewson faced fewer batters and threw fewer pitches in the dead-ball era, and in his own autobiography talked about not throwing with maximum effort on each pitch.

In Craig Wright's excellent book "The Diamond Appraised", he talked about using the numbers of batters faced per start (BFP) as a measure of how overworked a starter might be. In particular, he found that pitchers with more than 30 BFP early in their careers - before they turned 25 - were far more likely to crash and burn than those who were brought along more slowly. This brings up another point - young pitchers are far, far more susceptible to long-term injury - career-ending rotator cuff tears and the like - than older ones. David Cone was abused by the Mets in his late 20's, and while his durability has suffered, he has continued to pitch effectively. Bill Pulsipher was in his early 20's when the Mets slagged his arm, and he is still fighting to get back to the major leagues.

But still, given enough abuse, even a veteran pitcher can suffer major injuries from overuse. When Orel Hershiser led the NL in innings pitched 3 straight years from 1987-1989, and then blew out his arm in 1990, it was graphic evidence that being overworked had led to his injury. When Greg Maddux led the NL in innings from 1991-93, there was a widespread assumption that Maddux, like Hershiser, was a surgery case waiting to happen.

He wasn't. Maddux went on to lead the NL in innings the next two seasons, throwing 202 innings in just 25 starts in the strike-shortened 1994, and has continued to be the best pitcher in baseball. Maddux, more than anyone, has convinced the baseball community that, to put it bluntly: it's the pitches, stupid.

Maddux throws fewer pitches per batter, and per inning, than anyone of his generation. We've all marveled at his 79-pitch complete games, but what is more remarkable is that he never endures a 130-pitch start. Part of that is his incredible efficiency, and part of that is the Bobby Cox/Leo Mazzone tandem that still has not received enough credit for the amazing run of health by the Braves' rotation that has allowed them to build one of baseball's most enduring dynasties

That said, we still need a universal measure to compare pitchers to each other. Average pitch count per start is a useful tool, but it has a major limitation - a pitcher who throws 130 pitches one start, then gets bombed in his next start and throws 70 pitches, is indistinguishable from the pitcher that throws 100 pitches in each start. It's not the number of pitches thrown - it's the number of pitches thrown tired - when mechanics fall off, muscles are sore, and the body is unable to handle the stress of each pitch as well. And so we need a way to measure, on start-by-start basis, how much abuse a pitcher is subject to.

For this, I have created a system designed to award pitchers points - Pitcher Abuse Points, or "PAP's" for short - based on the number of pitches they throw in each start. It's not perfect, but it's a start.



Pitcher Abuse Points
Situation PAP/Pitch
Pitches 1-100 0
Pitches 101-110 1
Pitches 111-120 2
Pitches 121-130 3
Pitches 131-140 4
Pitches 141-150 5
Pitches 151+ 6


These points are cumulative: a 115-pitch outing gets you 20 PAP's - 1 for each pitch from 101-110 (10 total), and 2 for each pitch from 111-115 (10 total). A 120-pitch outing is worth 30 PAP's, while a 140-pitch outing is worth 100 PAP's - more than 3 times as much. This seems fair; a pitcher doesn't get tired all at once, but fatigue sets on gradually, and with each pitch the danger of continuing to pitch grows.

Please note that this an arbitrary system, and probably not relevant for every pitcher.Steve Ontiveros can't go more than 50 pitches without having to watch his arm come off and sail halfway to the plate, while knuckleballers like Tim Wakefield could throw 140 pitches, pop a couple of Advils, and be fine. But there's no firm way to tell how susceptible a pitcher is to injury. Rail-thin pitchers like Ramon Martinez can be abused by Tommy Lasorda and survive (although that is in question as I write this), while hefty lefty Sid Fernandez had reservations each year for his spot on the DL.

So let's see what kind of information we can gleam from the PAP system. All data is through the games of May 31st.



12 Most Abused Pitchers
Pitcher Age PAP Starts PAP/Start
Johnson, Randy 34 420 11 38.2
Clemens, Roger 35 398 11 36.2
Colon, Bartolo 23 374 11 34.0
Schilling, Curt 31 364 12 30.3
Hernandez, Livan 23 293 12 24.4
Martinez, Pedro 26 281 12 23.4
Candiotti, Tom 40 272 12 22.7
Leiter, Al 32 223 10 22.3
Moyer, Jamie 35 265 12 22.1
Sanchez, Jesus 23 175 8 21.9
Pettite, Andy 26 260 12 21.7
Finley, Chuck 35 260 12 21.7


These points are cumulative: a 115-pitch outing gets you 20 PAP's - 1 for each pitch from 101-110 (10 total), and 2 for each pitch from 111-115 (10 total).

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from Hardball Times:

http://www.hardballtimes.com/main/article/what-pitch-counts-hath-wrought/

There's been some very interesting writing recently regarding the issue of pitch counts and "safe" workloads for pitchers. In The Neyer/James Guide to Pitchers, published this spring, Bill James presents an article called "Abuse and Durability" (pp. 449-463) that reviews several studies he has performed, and essentially asserts that the nearly universal adoption of strict pitch count limits in professional baseball over the past 15 or so years has been a bad idea. The book then presents Jazayerli and Woolner's rebuttal, "A Response in Defense of PAP" (pp. 464-466), in which they conclude, "A revolution in the management of starting pitchers is underway, and the early signs suggest that the revolution may well lead to fewer injuries."

Don Malcolm then published a commentary on Baseball Think Factory in which -- in typical bombastic Malcolm style -- he wholeheartedly agrees with James' view, claiming that Jazayerli and Woolner's "research is so flawed that it is virtually useless." While I wouldn't wish to present the case with quite the ferocity that Malcolm employs, I do firmly agree with him on this issue, and with James.

Indeed the modern pitch count obsession is something I've been perplexed about for years, and I'm very glad to see such prominent voices as James and Malcolm saying what ought to be said. The extreme focus on counting pitches in the modern era has not only meaningfully reduced the proportion of pitching that is performed by every team's best pitchers -- thus increasing the proportion pitched by the worst -- it has done so while producing no noticeable reduction in pitching injuries. Indeed it may very well be the case, as James speculates, that backing off on pitchers' workloads may haveincreased their susceptibility to injury.

Several conclusions can be drawn from this data:

- The workloads handled by top pitchers in the 1970s (well over 5,000 pitches) were not typical of the second half of the 20th century. Nevertheless, there doesn't seem to have been a particularly high rate of arm trouble suffered by the very hardest-worked pitchers even of the 1970s.

- The workloads handed by top pitchers since 1989 (practically never exceeding 4,200 pitches) is also not typical. Nor does there seem to be a particularly low rate of arm trouble among modern aces.

- The norm for the entire 1950-2000 era is somewhere around 4,300-4,700 pitches, or about 10% above the limit that modern aces are held to.

The argument defending modern pitch count limits almost always emphasizes the notion that the very high-scoring style of offense in the current era places particular stress on pitchers. With a fairly high rate of walks in the game today, and with both home runs and strikeouts at unprecedented levels, it's often presumed that pitchers simply have to throw more pitches to get through a typical game than ever before.

The Pitch Count Estimator provides no basis to believe that modern pitching staffs are required to throw more than a handful more pitches per game than pitching staffs used to.

Okay, so there's another argument that one hears in support of pitch counts. Yes, starters throw fewer pitchers than their predecessors, this argument goes, but that's because the pitches they throw are far more stressful; modern pitchers have very few periods in games when they can "coast" for a few hitters.

No doubt there's some truth to this argument. But it isn't clear at all that the difference between the stress pitchers face in the current era and previous ones is nearly as great as assumed. The late 1940s and early-mid-1950s was a high-scoring era also, and top aces were routinely throwing at least 500 more pitches a year than their modern counterparts. In the 1970s, with fewer than one run per game being scored than today, aces routinely threw well over 1,000 more pitches a year than today.

One has to put a very great weight on the belief that modern pitchers face dramatically more stressful environments in order to conclude that greater workloads couldn't be sustained. Personally I don't find that belief very compelling; it sounds a lot more like rationalization than fact to me.

I suspect the truth has much more to do with this: in every era, pitchers handle the workload for which they have been conditioned. Modern pitchers haven't been trained and developed to throw as many pitches as earlier pitchers did, and so they don't. Human physiology didn't suddenly change in the late 1980s, nor has the challenge of pitching suddenly become that much more demanding than ever before.

Whatever the case, it's certain that what pitch count limits (and their first cousin, the five-man rotation) have created is a situation in which the very best pitchers of the current day ply their trade quite a bit less frequently than did their predecessors. Through 2003, here is how many estimated career pitches the greatest starters of the modern era have thrown:

Whether or not one agrees with my assertion that the limitations on the workloads of the current era's best pitchers are unnecessary, here is something that's indisputably true: one result of the fact that modern aces work less than those of all preceding eras is that inferior pitchers are working proportionally more innings. This in itself may be part of the explanation for the offensive boom of the 1990s. It's also beyond dispute that the pitch count limit orthodoxy of the modern era has resulted in no meaningful reduction in rates of injury -- if anything, injuries to pitchers have increased.

It is, in short, a policy that has delivered an extremely poor cost-benefit. Pitchers get hurt a lot; they always have, and 15 years into the era of significantly reduced workloads, they still do. If I were a major league GM, I would work on instituting a conditioning and pitcher-use program throughout my organization that would strive to develop starting pitchers capable of throwing at least 10% more pitches per season than the modern norm. I'm confident that in the long run such a program would provide a significant competitive advantage, without producing greater injury rates than are occurring now.

Please understand that I'm not saying that there is no place for pitch counting in monitoring and handling pitchers, nor am I saying that pitch count limits aren't appropriate for young pitchers (and of course for amateur pitchers). I'm saying, as are James and Malcolm, that there's a reasonable deployment of the tool, and there's an unreasonable, counterproductive fixation upon it, and over the past decade and a half we've left the former behind and driven ourselves right into the latter. As James and Malcolm put it, being overly concerned with pitch counts has steered modern baseball into a blind alley.

Bad News for Uncle Sam from Moody's - The Math (and the Gov'ts FICO Score)

If the $450 billion in interest costs we pay on the debt is accurate (and it is easy to estimate or tie back to - $14T Debt x 3.3% Ten Yr Bond Yield, which is close to the average maturity on the debt) and the last 12 Mos. of Federal Tax Receipts # from the photo below is correct (and those numbers are provided by the government) then the interest coverage is over 20% at 20.4%.

Moody's has stated in the past that when a country goes over "18 - 20%" in this metric, they should be downgraded.

The only way to change this metric short-term is to raise tax receipts, long-term you would prefer to lower the "debt", which requires lowering the deficit. They have shown no inclination to lower the debt / deficit, so it's pretty simple to do the math.

http://www.investors.com/NewsAndAnalysis/Article/559842/201101131842/Has-The-Fed-Lit-Inflation-Fuse-.htm

The U.S. now has $14 trillion in public debt. At the average rate on the 10-year Treasury over the past two years, 3.24%, that $14 trillion costs about $450 billion to service. But if interest rates should rise to, say, their 20-year average of 5.5%, the cost of carrying that debt surges to about $760 billion a year — bigger than the U.S. defense budget.

Another warning from Moody's - they likely will never actually downgrade until the day after the bond vigilantes grow a spine and strike first. When rates shoot up literally overnight, Moody's will "downgrade" in a "no duh" moment.


Moody's Investors Service and Standard & Poor's are both considering downgrading their ratings on U.S. debt because of rising interest-to-revenue ratios, the nation's jobless recovery, and rising Social Security and health care costs, among other factors, The Wall Street Journal reported Thursday.

http://www.dailyfinance.com/story/moodys-sandp-may-downgrade-u-s-debt-rating/19800413/

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THERE ARE TWO BASIC MEASURES OF THE GOVT'S "CREDIT SCORE":
- Defict / GDP
- Debt / GDP

Countries can improve their "credit scores" via one of two approaches:

1) Increase the Denominator (GDP) via:
GROWTH (Real)
or INFLATION

Increasing nominal GDP occurs when economies grow in real terms, but also when prices rise.

The ratio of Deficit / GDP is the common measure of a government's fiscal position.

2) Decrease the Numerator via spending cuts and other austerity programs.

EURO's are working on the Numerator (via austerity) - U.S. is working on the Denominator via QEII.

Two of the historical tools used to grow economies are no longer available
- Interest Rate reductions - since interest rates are effectively ZERO.
- Countries cannot all devalue their currencies (to encourage exports) at the same time

BIS study concluded that
- debt reduction (austerity),
- real GDP growth
- inflation
contributed equally to reducing debt ratios (results varied by country)

IMF has concluded that too much fiscal austerity could be counterproductive in certain circumstances.

PAST HISTORY:
Japan example of QE has not produced the aim of avoiding deflation.
Japan from 1995 - 2010 has averaged 0.1% inflation annually.
This is more a sign of price stability (a Fed mandate) than either inflation or deflation.

CONCLUSIONS:

- Governments and / or Central Banks will likely continue stimulative measures until private credit demand (consumer) revives.
- This de-leveraging process (by consumers) will likely take years to play out.
- Continued growth in government credit will continue at rates that will be considered excessive by historical standards.
- This increase in money creation will be prone to reviving inflation to higher levels.


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Interesting story from Yahoo Finance describing what the governments FICO score would be if they were scored similar to a consumer.

http://finance.yahoo.com/banking-budgeting/article/112029/what-is-the-us-governments-credit-score?mod=bb-creditreports

What Is the U.S. Government's Credit Score?
by Stephen Simpson
Tuesday, February 8, 2011

Although the U.S. government has the luxury that the market for its debt is the single largest securities market in the world, there is growing concern about the creditworthiness of the government and its ongoing ability to borrow. What would happen if the federal government were subjected to the same standards as its citizens and assigned a credit score?

More from Investopedia:

• Obtaining Credit in a Bad Economy

• 5 Jobs That Aren't Legal in All States

• What Fuels the National Debt?
While the credit rating agencies jealously guard the formulas by which they calculate credit scores, a few general concepts are widely acknowledged as major factors. Let's look at how the United States would stack up for each element that goes into a credit score.

Are Bills Paid on Time?

Paying on time is good, paying late is bad. Having a debt go to collection or discharging debts through bankruptcy is very bad.

Generally speaking, the United States has a very good record of paying its bills on time. The national government has defaulted on its debts just twice -- back in 1790 (under the huge burden of debts incurred in the war for independence) and again in 1933 when the government explicitly changed the rules and unilaterally decided it did not have to honor the obligation to repay its debts in gold.

Along the way, the federal government has faced a few moments where creative accounting had to be employed. Nevertheless, for all of its faults and flaws, the United States scores well in terms of paying what it owes in interest and principal and doing so on time.

How Much is Owed?

The larger the amount of outstanding debt, the worse the score, though this is mitigated by a borrower's ability to pay.

By absolute standards, the United States has a huge amount of debt (over $14 trillion at the national level). However, looking at public debt as a percentage of GDP, the U.S. clocks in at about 59% -- in the upper third of countries, but much better off than the likes of Japan, France, Singapore, Canada and even Germany. It should be noted, though, that this figure refers to debt held by the public, and does not include external debt.

How Much Can Be Borrowed?

Lenders are hesitant to loan money to applicants with a large percentage of their credit capacity being used, such as someone who has several maxed out credit cards.

Debt capacity is an area where the U.S. government likely cannot score well. Although it is true that there are legal debt limits imposed by Congress, a simple vote can increase them. To that end, the U.S. debt ceiling has ballooned from $6.4 trillion in 2002 to over $14 trillion in 2010.

In other words, there really are only minimal limits on how much the government can borrow -- it would take an almost unthinkable amount of borrowing for the United States to truly max out its borrowing ability.

The Length of Credit History and Mix of Credit

The longer someone borrows and repays money, the better. Successfully managing multiple kinds of debt (installment debt like a mortgage or student loan, or revolving credit like a credit card) adds to a lender's confidence and will improve a credit score.

The U.S. government seldom borrowed from its own citizens on a regular basis until the First World War made it impractical to borrow from foreign governments. However, the U.S. government has used debt to fund projects and wars since the very founding of the republic. Consequently, while it does not have the credit history of a nation like France or the United Kingdom, the United States would score well on this metric.

New Applications for Credit

If a potential borrower is actively seeking credit, it could be a sign of financial distress that does not yet appear.

Given the creativity of the federal government, and its willingness to try new products like the inflation-protected TIPS, it is probably fair to assign a reasonably high score to this metric. One potential problem, though -- and one that the credit rating agencies do not openly discuss in terms of its significance -- is that the United States has rarely paid its debts in full. Instead, the government expands its borrowing capacity and rolls over old debt with new debt offerings.

The Treasury holds regular and routine debt auctions, so an outside observer could credibly argue that the U.S. is effectively always taking new applications for credit.

And the Final Score Is ...

Using some of the online credit score estimators, and making some assumptions about how to translate government performance into numbers that make sense for applications designed for regular people, it is possible to at least estimate a score. In particular, it was assumed that the United States would have a tremendously large amount of outstanding debt and debt instruments, but a long history of paying on time.

Perhaps shockingly, most of these estimators come up with a score of around 650 (with a range of 625 to 720). That is basically in the middle of the range, and consistent with the recent rating on U.S. debt of A+ by China's Dagong Global, the only non-U.S. credit rating agency that seems to draw much interest or credibility. By comparison, countries like Norway, Switzerland and Singapore score an AAA from Dagong, and the United States is largely on par with Japan, France and Britain in Dagong's scoring.

The Bottom Line

To some extent, notions of credit scores just do not apply to countries. The U.S. government has an advantage that most debtors do not - if the U.S. government needs to pay its debts, it can simply print the money to do so. If you or I tried that, we would soon get a visit from the Secret Service and our credit scores would no longer be of much concern.

By the same token, nothing lasts forever. There was a time when Britain was the unassailable global financial titan and those days are long past. If the United States does not begin to tackle its debt load, its persistent deficits and its ongoing expansion of services and obligations, there will be a time when debt ratings do matter and the United States may find it cannot get all the debt it wants on easy terms.

SPEAKING WORDS OF WISDOM

"Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice." -- George Washington

"You assist an evil system most effectively by obeying its orders and decrees. An evil system never deserves such allegiance. Allegiance to it means partaking of the evil. A good person will resist an evil system with his or her whole soul." -- Mahatma Gandhi

"When playing Russian roulette the fact that the first shot got off safely is little comfort for the next." -- Richard Feynman

FROM THE PRESIDENT'S PUPPETEER:

"Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited." -- George Soros

"The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest are the traits of success. And while men admire the quality of the first they love the produce of the second." -- John Steinbeck

"Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. In war, too, the discretionary power of the Executive is extended; its influence in dealing out offices, honors, and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force, of the people…. [There is also an] inequality of fortunes, and the opportunities of fraud, growing out of a state of war, and … degeneracy of manners and of morals…. No nation could preserve its freedom in the midst of continual warfare." -- James Madison

"A great deal more is known than has been proved." -- Richard Feynman

“We are spending more money than we have ever spent before, and it does not work... After eight years of this administration, we have just as much unemployment as when we started... and an enormous debt, to boot.” -- Treasury Secretary Henry Morgenthau to Congress in the aftermath of FDR's New Deal spending spree

"History doesn't repeat itself, but it does rhyme." -- Mark Twain

Giants pitchers, catchers report for spring - as World Champions!!!!

from the A.P.:

Giants pitchers, catchers report for spring

http://sports.yahoo.com/mlb/news?slug=ap-giantsreport

SCOTTSDALE, Ariz. (AP)—San Francisco’s pitchers and catchers have reported to spring training, the Giants’ first as defending World Series champions since moving West.

Spring Training - CAN'T WAIT!!!

The Giants have signed all of their significant arbitration eligible players.

These seven players will make a combined $18+M.

The team payroll for next year should be around $115 million.

Cody Ross – $6.3 Million
Andres Torres – $2.1 Million
Jonathan Sanchez – $3.7 Million
Ramon Ramirez – $1.65 Million
Santiago Casilla – $1.3 Million
Javier Lopez – $2.38 Million
Mike Fontenot – $1.05 Million

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The Giants have invited Marc Kroon to Spring Training. It appears he is signed to a minor-league or make-good deal. An interesting signing, Kroon was clocked at 101 miles per hour three years ago. Kroon has had 177 saves and a 2.68 ERA in Japan the last six years. From his prior stats in the golld old USA he sounds like a bit of an older version of Nuke LaLoush.

The Giants also added depth and insurance to the starting rotation by adding veteran pitcher Jeff Suppan. San Francisco has agreed to a minor league contract with the 36-year-old right-hander and invited him to big league camp. Suppan went 3-8 with a 5.06 ERA in 15 starts last season with Milwaukee and St. Louis. He should fill the role Todd Wellemeyer filled last year.

If one of the starters goes down, Suppan can eat up some innings and give the Giants a chance to win against most other teams fifth starters.

The reports on both Pablo Sandoval's off-season conditioning and Mark DeRosa's rehab from wrist injury continue to be good.

A return by one or both of these guys to form should mitigate the need to go too far out on a limb to acquire a bat. Both returning to peak form would be icing on the cake.

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2011 GIANTS PROJECTED 25-MAN ROSTER

Projected Starting Lineup

1 CF Andres Torres
2 2B Freddy Sanchez
3 1B Aubrey Huff
4 C Buster Posey
5 RF Cody Ross
6 LF Pat Burrell
7 SS Miguel Tejada
8 3B Pablo Sandoval

Projected Bench
C Eli Whiteside
1B Travis Ishikawa
IF Mike Fontenot
IF/OF Mark DeRosa
OF Aaron Rowand

Projected Starting Rotation
1 RHP Tim Lincecum
2 RHP Matt Cain
3 LHP Jonathan Sanchez
4 LHP Madison Bumgarner
5 LHP Barry Zito

Projected Bullpen
CL RHP Brian Wilson
SU RHP Sergio Romo
SU LHP Jeremy Affeldt
MID LHP Javier Lopez
MID RHP Santiago Casilla
MID LHP Dan Runzler
LR RHP Ramon Ramirez

Spring Training Invitees and Minor Leaguers of note:

Position Players:

OF Nate Schierholtz
1B Brandon Belt
IF Emmanuel Burriss
IF Ryan Rohlinger
OF Darren Ford
1B/OF Brad Eldred
OF Terry Evans
C Chris Stewart

Pitchers:

RHP Casey Daigle
RHP Steve Edlefsen
RHP Waldis Joaquin
RHP Marc Kroon
RHP Shane Loux
RHP Guillermo Mota
RHP Jeff Suppan
RHP Ryan Vogelsong
LHP Alex Hinshaw

On the prospect front, it is interesting to go through the various prospect lists from publications such as Baseball America, John Sickels and other noted prospect followers.

Some publish a Top Ten List, others go twenty deep. Some list seem to favor and reward high-ceiling players, others look at statistical measures of productivity. I looked at four such lists and the results showed a wide, diverse opinion on some of the Giants prospects.

The following players appeared on all four lists, revealing a consensus opinion regarding their abilities:

Brandon Belt
Zack Wheeler
Gary Brown
Francisco Pegeuro
Thomas Neal
Ehire Adrianza
Charlie Culberson

No real surprises here, some might quibble about Adrianza's bat, but his bat won't get him to the bigs.

The next group appeared on three lists:

Brandon Crawford
Jorge Burcardo
Eric Surkamp
Thomas Joseph

Here, I think Joseph stands out as the surprise, given he displays the one big tool -- a power bat -- strikes out a lot, not unusual for a young player and may have to move out from behind the dish, especially if he remains in SF.

The guys that made only two lists are longer reaches. Some lists like to be the "first to identify" a guy as a legit prospect. It probably helps future magazine or newletter sales.

The two-fers:

Jarret Parker
Mike Kickham
Richard Hembree
Kendry Flores
Jake Dunning
Michael Main

The solo-artists were:

Jose Casilla
Chuckie Jones
Hector Sanchez
Jason Stoffel
Rafael Rodriguez
Chris Dominguez
Roger Kieschnick

I like Casilla, I think he is solid if unspectacular. Stoffel seems like he has more upside than noted here. Kieschnick's star has fallen, perhaps due more to injuries than anything else.

The surprises were the no-votes. The also-rans.

Conor Gillaspie, Seth Rosin head the list. I like them both.

Stephen Harrold, Ryan Verdugo, Clayton Tanner and Nick Noonan are all solid prospects, I'm surprised how far Noonan has fallen as well.

Luke Anders, Aaron King, Edwin Concepcion, Wendell Fairley, Matthew Graham seem to be struggling to get positive attention. Each draft class increases the odds of release for all of these guys.

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Interesting list published recently were the "20 Most Hated Players in MLB. The list included in order:

Alex Rodriguez
Milton Bradely
A.J. Piercynzki
Carlos Zambrano
Manny Ramirez
Kevin Youkilis
Pedro Martinez
Brandon Phillips
Cecil Fielder
Jonathan Papelbon

The list was heavy on former Sawks and Yankees (Burnett, Pavano, Pettitte, Ortiz appeared later) so the voters must have come primarily from the ESPN, NESN, YES Network axis of evil. Jose Reyes and Frankie Rodriguez of the Mets also made the list later.

I guess the lesson learned from this list is that with the big-contract, the bright lights and the big-city comes a healthy dose of animosity.