The World’s Biggest Casino

by | Feb 8, 2018


The World’s Biggest CasinoThe stock market is again showing why many consider it to be the world’s biggest casino.

This past week investors found what goes up can go down, sometimes dramatically. By example, the Standard and Poor’s 500 index dropped a hundred points in just a half an hour. Volatility was back with a vengeance, sending the Dow into correction mode.

It started when the Fed indicated it was raising interest rates to make sure inflation does not creep in to the economy. Higher rates make it more expensive for consumers and businesses to borrow, thus cooling down an overheated economy.

And the stock market has indeed been on a tear over the past year. Helping drive the market lower this past week, an esoteric leveraged ETN product tied to the volatility index. It lost ninety points in a few days, wiping out millions of investor dollars.

Now some are calling on the SEC to further regulate these products, complaining that retail investors—so called mom and pop investors—do not understand what they are buying. Unfortunately, there is no way to regulate against greed.

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Brian Banmiller

About Brian

CBS News Radio national business journalist Brian Banmiller has spent more than 40 years in the news industry, covering business, politics and the economy on television, radio and in print. Currently, his “Banmiller on Business” reports are delivered to an audience of millions nationwide.

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