Is Wall St. Now Just A Form Of Legal Gambling?

It’s really hard to tell the difference when one looks at the markets today to see any real difference from that of the floor of any casino.

For all intents and purposes financial shows seem to be more concerned with showing great legs on-screen as much as some sports broadcasts are pushing to have their female equivalent commentating from the side lines. What’s next – a cheer-leading squad of scantily dressed talking heads waving pom-poms every-time the camera pans? Sorry, I forgot…That’s CNBC™.

I find it almost uncanny in just how the once bastions of free market capitalism are morphing into both the look and feel of today’s casino. If you look at the myriad of assorted slot machines on a casino floor one can’t help but notice that all the lights and sounds with their inner entangled games within games seem to have all the color pallets and changing graphics of most trading screens.

“Look! You got three gold bars, Oh so close to the winning combination, but wait – here comes the free bonus round where you can win a great second chance. Just watch the screen above to see if you get that winning combo!”

Is it really all that dissimilar from today’s day-trader locked in their basement or “trading room” in the dark with screens flashing multicolored candlesticks with “alerts” ringing and buzzing to alert one “the three gold bars” have just been hit. So look to your other screen and see if the 50 MA crosses the 100 MA and claim another prize!”

Whether it’s on the trading floor or in one’s own trading room there will be at any time from one to multiple television screens showing the “box scores” ticketing across the screens from multiple sources with pre/post game analysis, game players, handicappers, et al touting exactly when, where, and how the next big game is about to unfold or has ended.

Who needs football, or basketball and all the others when the stakes for handicapping the Federal Reserve Bowl is about to take center stage at any given time?

Whether you sit directly at a casino table, or you sit at your own virtual one. The same sort of rules apply: Sure your playing against other players, but you’re all playing against the house.  And today that house is Wall Street where the actual bank is now solidly owned by Central Banks.

The equivalent of floor managers are the direct dealers of Treasuries with the keys to the “discount window.” Pit bosses are the regulatory agencies. And the croupier? Fill in you favorite discount brokerage firm ___________ here.

Nowadays more and more it seems everyone is only truly betting on one outcome or the other: Will the Fed. do this? Or will the Fed. do that?

Who cares about what it means to things like the economy, and more. All that’s cared about now is the “win.” i.e., Do they keep interest rates at near zero for another month or not?

Who needs to wait for a Super Duper Bowl-arama type event once a year when you have one you can bet on every month in the form of some kind of Fed. announcement.

Odds makers layout the spreads and more in detail via most option platforms that are available from near any discount brokerage house. These platforms now move with such swiftness as well as up to the near millisecond speed it brings a tear to the eye of book runners of yesteryear.

Banks themselves act as the “booking agents” where one can place their bet right directly into their own bookmaking brokerage platform. Just deduct it from the 401K account.  Don’t worry about the vig – “you’re a valued customer when you use XYZ’s custom platform with low, low commission rates.”

Tongue in cheek? Sure, but in reality – just how far off is it really?

Nowadays the markets have far less to do with capital formation than they do with the A or B choice of what the Federal Reserve is going to do today vs tomorrow. All one needs to do is figure if, or how, they’ll play the alpha of the move, or the beta. Can, and will, the carry trade cover the spread if it all goes against one? Will the counter-party be there to pay up? (Remember the MFS™ debacle of not that long ago?)

The only discernible difference I see from the Wall Street version of a casino it’s now so prominently become, and the one we find on some island or strip is this:

At the least, when I have a great winning bet placed on Red or Black…

The odds that someone from the house bank coming down to floor and yelling “Fire” as the wheel is about to stop right on my stop is far, far less than a Central Banker coming out touting “Well maybe we should or shouldn’t do…..” the moment the true free hand of market is about to expose itself.

At least at a true casino – they do have some level of integrity.

© 2014 Mark St.Cyr