Free Book Excerpts

The Losing Game is a powerful and provocative expose’ on the true nature of Wall Street as a legalized gambling operation in which the games are rigged against average Americans.

Excerpt

From Chapter 2: The Hidden Truth: It’s All Gambling

Why do you gamble?
- You like predicting the unpredictable.
- You like to make a lot of money with a little money
with no effort.
- You like to win.
- You think it’s your only hope to ever accumulate
financial security.
- It proves to others that you are willing to take a risk.
- It proves you are right, know what you are talking
about, and are willing to put something of value at risk to prove it.
- You like to beat the odds.
- You like bragging rights, superiority,self-esteem.
- You gamble to lose to increase the euphoria of winning.
- You, unfortunately, need to feed an addiction.
- The psychology makes it harder to walk away.

Here’s the thing: Casinos are promoted as pure entertainment, with no reason to promote themselves as something other than what they are. The markets, however, are promoted as performing an important business function with a vital economic value. In a casino, you are playing games marketed as a fun activity. No value attaches to the games themselves. You know that you are gambling, and the name of the game is insignificant. A poker game is a poker game. Roulette, craps, blackjack . . . they’re just games. They have no vital economic importance to society.

Las Vegas never denies that the casinos are primarily gambling facilities. Even with the best restaurants, star-studded shows, and luxurious amenities, you know upfront these are available to enhance the gambling environment to bring your money into the specific casino. You may enjoy these activities, but try as you might, you can’t hide the fact that you are at a casino to gamble.

To camouflage the market’s reality (that it’s a huge gambling casino) Wall Street managers needed to convince the public that people were actually investing to enhance their savings and promote the economy of the United States. This is a formidable task. Wall Street had to circumvent all of the entertainment and amenities that casinos offer and change your mindset to get you to believe that the stock market and commodity markets are a business function vital to everyone’s well being. You trust that you’re investing because you’ve been convinced the games are actually a legitimate financial venture.

To get you to believe you’re investing, the exchanges had to attach something of value to the names of the games. They took symbols that we believed were vital to our economy and used them as titles on their games (stock names, commodities,etc.). This allowed them to seduce the public into thinking they were investing in something of substance. In reality, they’d merely changed the title of the games, but it’s still the same gambling games that you find in Las Vegas. Either way, the key thing to remember is that the main element of all the games is that players or investors are trying to predict an unpredictable. And the odds are stacked in favor of the house.

A major difference between gambling at a casino and gambling in the markets is that the markets present advantagesto an elite few that the average investor doesn’t have.

In a casino, you may be treated as a high roller, with VIP treatment and access to parts of the casino that average people will never see. But at the end of the day, the games you choose to play for a high buy-in are the same games average people are playing on the main floor. On Wall Street, an elite few have access to inside information, a seat on the exchange, the ability to act on information instantly as opposed to when it hits the public, and access to information that the public doesn’t receive. Some of this is legal, some not. All of these advantages result in an increase in the odds in favor of a select few, to the detriment of average investors.

There is a strong natural tendency for you as an investor to ignore your losses and focus on your winnings. Casinos encourage this tendency by making sure that every quarter won in a slot machine causes lights to flash and makes its own little jingle in the metal tray. Seeing all the lights and hearing all the clinking, it’s not hard to get the impression that everyone’s winning. If you watch the floor of the New York Stock Exchange, with all of the yelling and running around and the flashing lights and the stock ticker, one cannot help but be caught up in the excitement thinking that fortunes are being made on the floor.

But losses are mostly silent.

Copyright 2008 T.E. Scott. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written permission of the author.