I am not sure if Vegas learned from Wall Street or if it was the other way around. Regardless, both are skilled in the art of keeping you in the game, at the tables, for as long as it takes for you to lose all your money. The casinos used to keep you playing by giving you free booze, food and show tickets. That was until the bean counters saw profits to be made there also. Glitz, glamour and fantasy are now the attraction. A player, who came to the house, made a quick profit and then left did nothing for Steve Wynn’s bottom line. Play, play, play. Be in it for the long term. Stay the course. Double down when things are going against you. Regardless if the mortgage payments are evaporating just keep playing. Sound like your broker?

Unfortunately, Wall Street doesn’t give you, the average Joe, free tickets, rooms, food or booze (to the 1% that’s a different story). Wall Street also has a vested interest in keeping you at the tables. So how do they keep you in the game?

Simply put, they brainwash. Any decision that is made to walk away from the table, cash in your chips and leave the casino altogether, in other words sell all stocks and go to cash, is considered PANIC.

Wall Street has learned that most people consider themselves of sound judgment. They believe that they would be cool under fire. That they would never panic. Therefore, if cashing out is considered panic, then most people want nothing to do with it. That’s why Wall Street beats the panic drum. However, ask someone if heading to the storm cellars in Kansas at a cyclone warning was panic their response would be of course not. Ask if heading inland from the shore when a tsunami has been proclaimed was panic a quizzical look would come over their face. Ask if a commercial airliner returning to the airport after various cockpit warning lights came on was panic. They would say it was simply prudent.

Now that the average Joe has slowly become aware that the happenings of the world are detrimental to his financial health he is heading for the storm cellars, going inland and returning to the airport. He’s leaving the casino. That starts the Wall Street panic drum beating.

“It is foolish” the economists from Schwab said. “It is shortsighted” the Vanguard veteran reiterated. “It’s not in their best interest” the guy on CNBC echoed.

COMMON SENSE is called panic all for the benefit of Wall Street.

Wall Street and Vegas, have learned much from each other.

Written by
With his passion for economics Bill Tatro has been entertaining audiences on the radio and in seminars for decades. Bill is an economist that provides weekly paid content to subscribers, and offers a free daily "lite" version as well.