Wednesday, April 1, 2009

Why T.E. Scott Believes Wall Street is The Losing Game

We start off the month of April with a thought-provoking book by T.E. Scott. In The Losing Game: Why You Can't Beat Wall Street, Scott exposes the stock market and commodity markets for what he believes they really are --- brilliantly marketed rip-offs. He says, "Wall Street is fleecing millions of Americans every day with brokerage houses, Congress and the media as willing accomplices. With their help, the American public is fooled into thinking that investing is safe and convinced that, if they’re smart and listen to the right people, they can accumulate wealth quickly. And when we fail, our tax money bails them out."

For today's guest article, I asked the author the follwing question: I am an investor who has seen both profits and losses while investing in Wall Street, but who still believes in the system. What will I find in your book that will change my mind?

Here is what Scott had to say:

What you will find in The Losing Game is that you are looking at Wall Street with what we refer to as an “Eagle’s Eye” view of the markets. You are focused on your specific outcome in the market, and that prevents you (and others) from looking at the system as a whole. This is part of the overall marketing plan of Wall Street, to distract you from the real functions of their business plan.

The Losing Game makes a strong correlation between investing in Wall Street and gambling. If you look at Wall Street as a casino, and your friend won money at a slot machine, would you logically pour all of your money in that same machine expecting the same results? Ultimately, when you are involved in the market, you are trying to predict an unpredictable. If you think you can predict a non-predictable, our advice is to go to Vegas, you’ll have more fun.

The Losing Game points out that the negative cash flow of investors’ money is far greater than the positive cash flow of investors’ money. Investors as a whole are losing billions of dollars a day, and this was before the financial crisis started. No matter how you look at it, the losers in the market support the winners on Wall Street. If you make any money, it comes from one or more investors, which makes it a zero-sum game. And when you add in expenses and fees, it becomes a minus-sum game.

Our question to readers of The Losing Game is this: How can you trust a system that has no real accountability or transparency? The book lays out the argument that the regulatory agencies like the Securities and Exchange Commission are not designed to protect the investor from Wall Street, they are designed to protect Wall Street from the investors. That’s why Bernie Madoff was investigated eight times in 16 years by the SEC with no action taken. As long as Madoff was paying his investors, there was no reason for the SEC to intervene, even if they had reports that Madoff was running a ponzi scheme.

You have to have blind-faith to believe in the system, because Congress or the SEC does not require financial reports tracking investor money. Seriously. If you were to ask your broker or financial advisor for a report detailing how many of his clients have made money, and how many have lost money, and how much, he would tell you that this information is not kept, and not required to report.

That’s why you have to be extremely skeptical about any statistics. Experts will tell you that the market has grown 10% a year over the past 50 years, but what they don't tell you is that those are "listed" companies on the NYSE. If you were to factor the companies that have gone out of business and have been delisted, that number would be lower, and possibly a negative number. It's all part of the marketing plan.

Remember this, Wall Street does not care whether you make money or lose money in the market, only that you keep your money in circulation in the market. That way, the brokers and exchanges make their cut with every transaction.

Visit for more information about The Losing Game and to read an excerpt.


THE LOSING GAME VIRTUAL BLOG TOUR '09 will officially begin on April 1 and end on April 30. You can visit the authors' blog stops at in April to find out more about these talented authora!

As a special promotion for all our authors, Pump Up Your Book Promotion is giving away a FREE virtual book tour to a published author or a $50 Amazon gift certificate to those not published who comments on our authors' blog stops. More prizes will be announced as they become available.


Freddy said...

This book was good, and I think if you want to be a good investor, you must be dicipline and have a good money management..

Tracee said...

I don't know much about the stock market, but think this book sounds very good, especially with the economy in the state it is currently in.

Stephen Edds said...

This is Stephen Edds, contributing author of "The Losing Game" along with TE Scott. I'll be checking in all through the day to answer questions and encourage you to pick up a copy of the book if you haven't already.

Cheryl said...

Thanks for stopping by. My hubby handles all the investment stuff, but I really want to read this book and hear what the author has to say.


Cheryl said...

Thanks for coming by Stephen. I have to ask, what do you think Congress will do, if anything to get us out of this financial mess? Do you see Wall Street playing a part in it?


Stephen Edds said...

Cheryl, unfortunately, if you study the relationshipe b/t Congress and Wall Street, you'll find that there are no red states or blue states, it's all about the GREEN.

As an example, Chris Dodd is the head of the Finance Committee, and his name keeps coming up with dealings with AIG, Countrywide, Fannie and Freddie, etc. He's not the only one, just one example.

Congress has no interest in solving the real issues that got us into that mess. They'll pass a couple of laws, pat themselves on the back, the free market will correct themselves enough to restore consumer confidence, and the cycle will begin again.

I'm honestly not trying to be gloom-and-doom. Our goal is to change the mindset of the American people to take an active interest in their finances and know there are alternatives to Wall Street.

Dorothy Thompson said...

This is so interesting. T.E., what do you think about the current administration? Is there hope?

Stephen Edds said...

Dorothy, thanks for your question. Of course there is hope because there are good people out there trying to do good things. And the best part is that we can help. Our mission is to educate the American people so they can take action, both on a personal and civic level to break the cycle of scandal and deception that Wall Street has gotten away with for 100 years.

JM said...

Excellent article. :) I'm wondering if T.E. Scott is aware that Michael Moore's next target is Wall Street...

Stephen Edds said...

Yes, TE Scott and I are very aware of Michael Moore's movie about Wall Street and are trying to get in contact with his camp to be included.

If anyone wants to go to his website and suggest that he speak with us, that would be great!