The Casino At The End Of The Universe

Tyler Durden's picture

Submitted by Mark J. Grant, author of Out of the Box,

"In Vegas, everybody's gotta watch everybody else. Since the players are looking to beat the casino, the dealers are watching the players. The box men are watching the dealers. The floor men are watching the box men. The pit bosses are watching the floor men. The shift bosses are watching the pit bosses. The casino manager is watching the shift bosses. I'm watching the casino manager. And the eye-in-the-sky is watching us all."
 
                            -Casino
 
I do not speak of Armageddon or Apocalypse or the ending of the world. I leave that for others trying to aggrandize their social if not financial position. I have always found such a path to be full of folly and a reckless use of one's intellectual abilities. In fact the use of this ploy may possibly grab one's imagination but rarely anyone's rational facilities. There will be enough squalor for all when the roulette ball lands on double zero.
 
Yes, I have been predicting red to come up for some time now. The odds of it have increased, the furor at the craps table has grown markedly and the connection between the worlds' economies and the market's behavior have been frayed to the point now that the chance of a roll onto red has increased to almost one hundred percent. In the end it is almost always leverage that touches off the rush to the exit door and I would say that the financial markets are now levered past what we have ever known before.
 
The central banks, in their mad campaign to keep the world afloat as the governments in America and Europe have abdicated their elected obligations, have stepped in and done the only thing that they know how to do really well which is to print money. The world is now awash with the stuff and while the end is sometimes discussed; there is no let-up in sight. Allow me to give you this historically proven postulate:
 
Liquidity leads to Leverage which inevitably leads you to the land of the inept, the insane and viciously horrible mistakes.
 
I fear we have once again entered this God forsaken territory.
 
Sixteen trillion dollars of liquidity has been provided by the worlds' central banks that we can find. My guess is double this amount in various schemes and artifices approved by no elected party but heaped upon everyone none-the-less. This, money from nothing, has multiplied though and has not been sitting idle.
 
The cash has been procreating!
 
April's margin debt in America now stands at an all-time record of $384 billion. Forget the summer of 2007, sub-prime mortgages are but a forgotten and distant memory. We are here. We made it. This is the biggest casino ever built!
 
This isn't Vegas. This is not Macau. Those are both small arcades by comparison. Open your eyes. We are in the really big show now. We have finally built the "Casino at the End of the Universe."
 
What makes it even more fascinating is the data that can be found at the Player's Club. The boys in the backroom, the NYSE to be exact, reports that investor net worth just hit an all-time low of $106 billion. This is while the big boys, the hedge funds, according to Form PF, have an exposure of $1.3 trillion which indicates another pocket of massive leverage as they continue to roll the dice.
 
Economies in recession or flat lining. Unemployment high and in some nations at record highs. Leverage at new world-beating records. Net worth's at all-time lows. The prescription has been written and it has DISASTER printed clearly on the label.
 
Let me explain this to you. Between the actions of the world's central banks and the use of leverage we have built the biggest casino ever built in the history of the world. It is no longer possible to invest. A casino does not have an investment window or an investment game and there is nothing around us but a giant building holding Games of Chance now. You have money and there is now nothing than can be done except to gamble and that is exactly what we are all doing. It will take just one or two rolls on Red when money is lost, more credit demanded and then denied by the House, to cause a seizure in this giant casino.
 
"Listen, here's the thing. If you can't spot the sucker in the first half hour at the table, then you are the sucker."
 
                      -Rounders

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Stackers's picture

Sorry no hairless monkies allowed

jcpicks's picture

In my club, I will splash the pot whenever the fuck I please.

Boris Alatovkrap's picture

Like cat, remember shave monkey before put on grill.

maxmad's picture

Is that a picture of Bernanke or KGB from Rounders?

Robert-Paulson's picture

Just......... like........ a young man

 

coming in.........for.........a quickie

BLOTTO's picture

Nicky Santoro: [to the blackjack dealer] Look at this fuckin beaut they put in now. Sherbert send you in here to rob me now? Been fucking knocking everyone's dick in all night? Huh, you been beating all the customers tonight, motherfucker? Huh? Jag-off. Hit me.

.

Nicky Santoro: Take this stiff and pound it up your fucking ass!(Throws a card at the bj dealer.lol)

.

Nicky Santoro: Take this one and stick it up your sister's ass!

.

http://www.imdb.com/title/tt0112641/quotes

Robert-Paulson's picture

How the fuck can you grin?

MillionDollarBogus_'s picture

From a WSJ article today;

"A better view of the current economy and the job markets pushed U.S. consumer confidence in May to the highest level since 2008, according to a report released Tuesday".

Consumer confidence is all important to keep this Ponzi going.  Stocks are up.  Housing is going up.  Summer is here.  Reality TV is entertaining us.  Another hangover movie to stare at.  What could go wrong..??

Boris Alatovkrap's picture

Brittany is again destabilize and shave head?

markovchainey's picture

Like cat and monkey, remember shave Brittany before put on grill. :-)

flyme's picture

Perception is everything when you're treading down a ponzi deception alley.

Ghordius's picture

the world is ending... I find myself agreeing with Mark Grant. nevertheless, real casinos are moar... honest

though I wonder if he sees any difference between what the FED and what the ECB are doing, and, more importantly: I wonder what kind of leverage Mark finds "normal" for persons, companies and banks

old naughty's picture

at the end of the universe...

fringe dweller goneth.

I thought they don't bet.

disabledvet's picture

If Mark Grant is right (only time will tell) then the long hands will be washed out thus presenting new opportunities to buy...or of course "short the insanity again." why am I long all the time? "We choose to go to the moon in this decade...and do all the other things" that's why. Of course the cynics "win." they were never committed to victory in the first place. Now watch me move market OPNION yet again because "no one ever loses money ever on Wall Street."

zuuma's picture

No worries!

I got two face cards showing.  HIT ME!

the bernack's got my back <right?>

Boris Alatovkrap's picture

If Mr. Bernanke is got back, run when hearing Bernanke trouser drop on floor.

Kreditanstalt's picture

You're only JUST realizing this NOW???  This has been the case since ZIRP began...

TheLooza's picture

I used to have a strong taste for blackjack and poker, but lost interest because the action is much better on Wall Street. For the last three years I've been referring to Vegas as "the small casino." I'm not proud of it, but today I've been long SPY twice, and short once.  Also short TSLA. Held no position for over 15 minutes. +$2,900. Now my head is on the swivel for a cocktail fucking waitress. We are all Dylan now.

Bindar Dundat's picture

We are being screwed!  It's time to do something in our interestes/////

 

http://www.larryobrien.net/stop-stimulus-start-building-a-country-again/

ATM's picture

Good luck getting a drink. Vegas has seriously cut back on free drinks for gamblers. I was at the Bellagio in February and the guy next to me t the card table almost came to blows with a pitboss because he had to walk to the bar and pay for his own drink and they charged him $20.

TheLooza's picture

I got diamond status at Caesars. 150-300+ bucks per hand. They will give me a free drink or I'll piss in the dealer's float. Of course, Maccallan 12 is the best they'll give for players of my stature, so ain't much to brag about.

TeamDepends's picture

The Casino has until Q3 at the latest until the roulette wheel jumps the tracks and mows down everything in its path.

duo's picture

in the mean time the miners have lost the red/black bet, say, 30 times in a row.

Stuck on Zero's picture

Yep.  They're left in the hole.

 

sus sapientiae's picture

...singing Jimmy Buffett's "Party at the End of the World"

dick cheneys ghost's picture

The world would be a much better place without Central Banks and neo-cons......

Ghordius's picture

...and money for nothing and the chicks for free

and yet I have to defend central banks: they are the result of the paradigm of governments that are "expected to do something" (which includes fighting wars for which the treasury has not enough gold) and fractional-reserve banks

in fact, the only way to get rid of central banks is to end war (unlikely) and to end fractional-reserve banking (also unlikely)

both cases are unlikely because even if you do it - someone else could refrain from doing it, and then you immediately have a "we can't forsake this kind of advantage" faction in your country

having central banks is like having nukes: having them does not hurt - using them... depends. on how much

orez65's picture

Another way to end central banks is to follow the US Constitution:
'Only gold and silver shall be money"
Then just close them down like President Andrew Jackson did in 1836.

fonzannoon's picture

Looks like they got enough people herded into dividend paying stocks. Now the sheep are wondering what that sound is.

Good Job CNBC!

Tinky's picture

One of several useful quotes from Rounders. The one that springs to my mind remarkably often came from Joey Knish (John Turturro). Every time someone tells me that they need something fanciful, I think of this exchange:

Turturro: I'm listening. What do you need? 500? A grand?

Damon: Huh? - I need... I need 15,000.

Turturro: Fifteen?

Damon: Yep.

Turturro: I need a blow job from Christy Turlington. Get the fuck outta here. $15,000?

Pairadimes's picture

This will be epic. With any luck, the financial district will be a hard-hat zone for months.

q99x2's picture

I closed my eyes and everything looks fine.

brucyy's picture

yawn. No shit.

i have other news : price discovery is fucked , macro structure by the fed and microstructure by hfts . precious metals are ALSO vastly manipulated.

Of course it's a fucking casino. The real question is : what are you gonna do about it except whinning on zerohedge ? 

What can you really do about it ? nothing. However :

Just find a way to make paper. Anything. buy insider information ,do legitimate work , who really cares. And buy the freaking metal. because that's the only financial wealth you'll ever have.

get paper , buy metal. wash rince repeat. 

Dr. Engali's picture

We haven't had investors for years. Investing requires capital put to use in an idea where one believes there may be an opportunity for financial returns later on down the road. With investing comes the potential for that loss of capital. Thanks to the Greenspan and now the Bernank put our " investors" have grown to expect a return not only of their capital, but also a return on their capital. With all risk take out of the market place we have had huge misallocations of capital that have allowed entities that should have been dead to linger on. The tragedy is by suppressing risk the fed has created an environment that grows more unstable every passing day.

insanelysane's picture

I remember being in college in the mid '80s when a classic pyramid scheme went through campus.  Just people passing money up the pyramid without exchanging anything of value.  The thing that amazed besides people actually participating in the scheme was how long it took to collapse.  This thing could go on for a while.

dolph9's picture

We are now pushing 5 years of BS and this has to end sometime.  I think we're getting close.  Interesting times.

Rainman's picture

Jeezus....we gotta be getting close when the puppet-idiot Orszag delivers this puke on how unemployment is good for you health.

 

http://www.bloomberg.com/news/2013-05-28/upside-of-low-employment-is-longer-life.html

 

Uncle Zuzu's picture

It's always been a casino. You were just too young and naive to notice back then.

Go Tribe's picture

Exactly. This is nothing new and if you play you are gambling. The notion of placing money in entities other than those you fully control is not investing. You might make a lot of money, but then....

brucyy's picture

I honestly think it's deeper than that. The whole keynesian mega scheme is a large gamble in itself , and we don't even have to put some money in the stock market , or in whatever instrument that may or may not yield return to bear a substancial risk of total collapse.

i actually think the risk is higher when doing nothing. the risk is thinking that all will be fine if you sit on your hands , and bet the government can't let the whole system crash on you.

They wouldnt think of using your hard earned dollar now would they ? erm...

some might argue buying physical gold is a gamble , Maybe. Who cares ? .I trade gold in the future market to make paper.is it heavy gambling , borderline immoral ? absolutely. it's insane.

Probably as insane as TPTB in charge of things. Yet , i believe that you don't -ever- want them to decide for you what's is in your best interest.

 

Floodmaster's picture

Did zh miss the Liberty Reserve story?

Theosebes Goodfellow's picture

Nope. I sent it to Tyler yesterday. Not worthy of mention, I guess. My observation at the time was that Señor Belanchuk, (arrested in Spain), had not learned from history. There was a online casino operating out of Tico-land a few years back and the Feds came down and shut their shit down. Liberty Reserve made the same mistake the casino boys did. They set up shop too close to the reach of the US Government. Pikers.

booboo's picture

"it was a helluva run kid, but where you're goin you won't need them boots, so if ya don't mind"

lower98th's picture

Ok Mark, I can't find any stats to support this: "the NYSE to be exact, reports that investor net worth just hit an all-time low of $106 billion."  Where's that from?

buzzsaw99's picture

Start it up
Love the day when we will never stop, never stop
Never stop, never stop
Tough me up
Never stop, never stop, never stop
You, you, you make a grown man cry
You, you make a dead man cum

[/rolling stones]

muleskinner's picture

I must have shit for brains to continue to invest in this economy.  

 

4 dollar gas has a huge effect on how it all gets done.  Still though, a gallon of gas gets more done in one hour than anything else, so it is still a bargain.  Without oil, it all goes to hell in a handbasket.

 

Gold buys 13 barrels of oil these days.   That's a good deal.  When oil was 2.25 per barrel and gold was worth 20 dollars, it bought about 9 barrels.  Oil is a bargain when you buy with gold, you will receive 40 percent more than in 1910. 

 

Bernanke definitely has shit for brains because he does what he does.  

buzzsaw99's picture

the bernank cares about one thing and one thing only, million dollar speaking fees after he gets done raping this country for all its worth