Juggling Dynamite

This is an encouraging story:  having watched the repeated boom/bust of increasingly rigged financial markets the past 15 years, recent research finds that 20 and 30 somethings today want little to do with equities, and trust no one when it comes to money.  4 in 10, said that they prefer building up savings in cash.

This is how generational cycles move full circle.  Having seen their parents repeatedly burned by bubble pricing and financial sales firms, millennials have developed a very healthy loathing and aversion to scams and “investment” brokers.  Risk aversion is the perfectly logical response to present high risk-low return conditions, and a focus on saving more and risking less will serve well in developing fiscal strength and disciplined habits which can serve over a lifetime.  It also will help spur a much needed consolidation in today’s cesspool of financial services. Finally a true road to recovery: stuffing the vampire squid back in the bottle for another generation.

“According to a survey from brokerage UBS, …the typical millennial investor holds more than half of his or her portfolio’s assets in cash, a stance more appropriate to retirees. In fact, the millennials’ fear of stocks more closely mirrors that of the World War II generation than it does either Generation X or baby boomers.”  Here is a direct video link.

The madness continues to roll out in the latest brilliant initiative from the Ontario Lottery Gaming Corporation. You can read all about it on their site here. Here’s an excerpt on their new expansion plans (my comments in brackets):

“Since lottery games were introduced over 35 years ago, customer interests have evolved and technology has advanced considerably. Although about half the adult population of Ontario now plays the lottery on a regular basis, [only half? let’s get everyone hooked!] OLG’s current technology and its sales model could be improved to better meet the needs of its changing customer base.

At present, there are about 10,000 terminals across the province, but OLG’s current distribution and availability does not fully reflect the shopping patterns of most adults in Ontario. The current terminal technology limits where and how lottery tickets can be sold. [yes, limited for good reason!!]

OLG’s overall objective is to grow its business by continuing to innovate and focus on current lottery retailers, as well as expanding new lottery sales options. Expansion could include multi-lane solutions for supermarket, drug stores.”[“innovate” focus and “solutions”, it all sounds so intelligent and great.  Why don’t we add crack dispensers too?!]

When I was a kid, public gambling was something done mostly in Vegas and Atlantic City. Today it is available everywhere from local convenience stores, to state run casinos and unlimited on line gaming sites. Gambling can be highly addictive of course, and like most addictions, is often socially and financially devastating for participants and their families. (Next time you approach the cash in a convenience store or gas station, take note of the people around you who are scratching and playing different lottery tickets. It is not a pretty sight.) But in present times, the officially sanctioned message is that gambling is ‘fun’ and a way to ‘give back’ to the community. What a mess.

State lotteries claim to be good for education and the general wellbeing of citizens. But are they? Here is a direct video link.

There is a connection between today’s gambling obsession as social pastime and the gambling mentality that also dominates financial market participants. Computers have enabled self-destructive financial bets on a scale never before possible in human history. I believe these trends will eventually be recognized as highly counter-productive and destabilizing for civil society and necessarily curtailed again.