Empire Night on Union Station (EarthCent Ambassador Book 18) Page 5

  “I just remembered something Mom told me,” Kelly said. “Most of these corporations issue bonds and run credit lines at banks to finance their business. If they go bankrupt, the debt holders get paid first and the stockholders usually get nothing. She dabbled in buying stocks in failing companies a few times because the valuations seemed attractive, but in the end all she got was a tax loss.”

  “So you’re saying that you buy shares in these corporations, hope that the management pays dividends, and count on a greater fool coming along and buying the shares from you at a higher price if you need the money back,” the Thark summarized.

  “That sounds about right,” Joe said.

  “And you call that investing?”

  Kelly nodded.

  “So I was right—we were having translation issues,” the Thark said with a smile. “Based on your definition, every proposition on our tote board is an investment, and I would be happy to help you with handicapping.”

  “That’s not what I want at all,” the EarthCent ambassador said. “Betting on the races and things on your tote board is pure gambling, while buying shares in companies is—I don’t know. Responsible?”

  “Wait a second, Kel,” Joe said. “Does that offer to help with handicapping extend to me? I like to stop in from time to time to play the ponies. I used to bring the kids, but we never had that much luck.”

  “You bet on horse racing?” the alien ambassador asked. “Human or Vergallian?”

  “Vergallian,” Joe answered quickly. “Human horse races are all fixed.”

  “If you come back in three days the first in the Jubilee series is starting. I’m not usually a big fan of quadruped racing myself, but the recordkeeping in the Empire of a Hundred Worlds is both detailed and trustworthy. I dip my toe in during the Jubilee celebrations, because with a trillion Vergallians betting to uphold the honor of this or that queen’s stables, there are bound to be mispriced bets.”

  “How does your nephew go about setting the odds for alien horse races happening halfway across the galaxy?” Kelly found herself asking.

  “The first step for establishing any betting line is to determine the true odds,” the Thark said, his voice taking on the tone of a professor who had given this particular lecture more times than he could remember. “By that I mean we start by trying to assess the probability of any given outcome occurring, including draws in the case of competitions that can end in tie scores.”

  “So you’re going to spend the next several days watching immersives of recent Vergallian horse races?”

  “No, that’s where the reliable recordkeeping comes in. And the Vergallian veterinarians publish examination results as soon as they do them, so everybody with a Stryxnet connection has access to the same information. Of course, there are local factors like the weather that are difficult to take into account before the race, but over the aeons, we’ve established a network of sources.” The ambassador paused a moment, trying to remember where he was in the explanation. “Next we make a minor downward adjustment to the true odds, which gives us our basic profit margin. The bookmaker further adjusts the odds as needed to balance our liability.”

  “I don’t understand what that means.”

  “Let’s say you and Joe want to bet on the flip of a coin,” the Thark said. He removed a five-cred piece from his pocket, flipped it in the air, caught it, and slapped it down on the back of his other hand. “I can tell you from experience that the true odds of it coming up stations are one-in-two. If the off-world-betting parlor was a public service rather than a business, we would let you bet at those odds, but in order to make a profit, we need to change them a little. What do you say to one-point-one the coin is stations-up, Joe?”

  “I guess I can bet eleven creds to keep the math easy.”

  “What does that mean, one-point-one?” Kelly asked.

  “It’s the Thark version of moneyline odds,” her husband explained. “It means to win one cred, I have to bet one-point-one creds, or a hundred and ten percent of what I’ll make. The ten percent is the bookmaker’s vigorish.”

  “Thank you,” the Thark said. “And how much will you bet on the opposite outcome, Ambassador McAllister?”

  “I play a little poker to be sociable, but this is just gambling,” Kelly protested. “Besides, we’re married, so betting against Joe is just a guarantee that we’ll lose ten percent however the coin comes up.”

  “Think of it as an education in the risks of bookmaking,” the alien ambassador said. “How much?”

  “One cred,” Kelly offered reluctantly. “I better start writing this down if I’m going to remember anything.” She reached in her purse and drew out a paperback with blank lined pages Blythe had printed for her, and then removed a pencil from the special sleeve Dorothy had sewn on the underside of the purse’s flap. “Ready.”

  “Why are you writing in a book with a picture of a bare-chested Dollnick flexing on the cover?” the Thark asked.

  “I couldn’t find a diary for sale and I wanted lined pages in a binding. My embassy manager’s daughter runs a publishing house and she was able to have it printed for me.”

  “It looks like a rather clever security solution for a low-tech species. At your level of development, anything else you might use to take notes could be easily hacked by any number of advanced species, but as long as you maintain physical custody of your diary, the information will remain safe. Are you employing a code as well?”

  “Scribble encryption,” Joe answered for his wife. “We’ve been married for thirty years and I can’t read her writing.”

  “You were about to explain how taking a bet with a guaranteed profit is risky for you,” Kelly reminded the Thark.

  “First let me ask you a question,” the alien ambassador said. “Let’s say everybody else in here wants to bet on the coin flip. Do you think I’ll offer them the same odds?”

  “Sure. The outcome will always be fifty-fifty, and you know you’ll make a profit eventually.”

  “That’s only true if everybody is willing to keep betting on coin flips until I come out ahead,” the Thark said. “But most of the money we handle comes in on events where the true odds can only be estimated and the exact proposition never repeats, like CoSHC becoming the Human Empire.”

  “Like CoSHC becoming the Human Empire,” Kelly wrote industriously. “Go on.”

  The Thark ambassador removed the hand covering the coin, the visible face of which displayed a Stryx station. He sighed, dug in his pocket again, and handed Joe a ten-cred piece. “Now, what just happened?” he asked the EarthCent ambassador.

  “You lost ten creds,” she said. “Let’s do it again.”

  “You’re missing the point. The true odds were fifty/fifty, and I lost nine creds. That’s the bookmaker’s risk.”

  “How do you figure nine creds instead of ten?” Kelly asked.

  “You owe me the one cred you bet against your husband,” the Thark ambassador explained. “If I had allowed everybody else in here to participate in the bet, I would have adjusted the odds to reduce my risk as more money came in. In other words, even though I know the true odds of a coin flip are fifty/fifty, if ninety percent of the bets are coming in on stations and only ten percent of the bets are coming in on digits, the bookmaker will keep lowering the payout on stations and raising it on digits.”

  “The people who place bets before the odds change get to keep their original odds,” Joe added.

  “But in the end, if everybody keeps betting stations, you could still lose a lot of money,” Kelly said. “Why don’t you just stop taking bets?”

  “If we think the fix is in, we do stop taking bets, but changing the odds encourages gamblers to lay their money on the other side of the proposition to bring the book into balance,” the Thark said.

  “The fix?”

  “You know, if the game is rigged, like your Carnival election.”

  “I never knew that gambling was so complicated,” Kelly said, setting down he
r pencil. “But I really don’t want to take unnecessary risks with the cookbook money. Isn’t there something else I can do with it?”

  “Invest,” the Thark ambassador advised her.

  “But you just said there’s no difference between investing and gambling!”

  “No, I said that everything entails risk, and that the activities that you think of as investing, I think of as gambling. The way most of the advanced species approach financial management—write this down—is that the difference between investing and gambling lies in the degree of control you have over the outcome.”

  “Degree of control you have over the outcome,” Kelly repeated as she wrote. “But what does that mean?”

  “Unless I am cheating, I have no control over the outcome of a coin flip or a horse race,” the Thark ambassador explained. “The same is true for your purchases of bonds or shares in large corporations. In those cases, you are simply hoping for the best and trusting that some regulator is watching out for your interests. On the other hand, if you opened a chocolate store, the risk that you lose all of your money may be higher than if you bought stocks or bonds, but I would call the new business an investment because you have a large degree of control over the outcome.”

  “That makes sense, sort of, but I’ll have to think about it,” Kelly said. “Hypothetically speaking, would I actually have to work in the chocolate store, or could I just own it?”

  “The farther you distance yourself from day-to-day operations, the more I would consider it a gamble rather than an investment.”

  “How about if I went in twice a day and bought something?”

  “You’d regret it, Kel,” Joe said, and then addressed the Thark ambassador. “Now that you know what my wife is looking for and she knows that there’s no such thing as risk-free, do you have any recommendations for what she can do with the money short of starting a business?”

  “Advice like that will cost you,” the Thark said, eyeing the ten-cred piece which Joe had left lying on the table in front of him. The EarthCent ambassador’s husband used his forefinger to move the coin over in front of their host. “Excellent. My advice would be to speak to the other ambassadors whose commercial activities aren’t as concentrated in the financial services industry as mine are.”

  “I have another question,” Kelly said. “When you talk about having control over outcomes, how about the bets you accept on political events related to EarthCent? I’m not saying that I would try to influence CoSHC’s choice of whether or not to become an empire, but isn’t it risky for you to accept bets from humans who could be involved in the process?”

  “We take all of that into account when trying to establish the true odds, and of course, we adjust those odds based on how the money comes in,” the Thark said. “But I like the way your mind works, Ambassador. Perhaps you have a future as a gambler after all.”

  Five

  “Are we chaperoning a date for Flazint and Tzachan, or are we moving your office?” Kevin demanded, though his voice was muffled by the mound of heavy fabric samples his wife had just piled on his extended arms.

  “It doesn’t count as a date because we’re working,” Dorothy replied. “Just put those samples on the mulebot and help me with these patterns. Later we’ll all get something to eat.”

  “And then that counts for a date?”

  “No, because it’s—I forgot the legal term. Tzachan?” the ambassador’s daughter called to the Frunge attorney. “Why did you say that lunch won’t count against your dating quota?”

  “Jeeves is paying for the meal, and that makes it a regular and necessary part of Flazint’s employment at SBJ Fashions,” the alien said. “If anybody from the matchmaker’s office comes around asking, I volunteered to help with the move in order to maintain a positive relationship with a valuable client.”

  “That explains why Flazint is tying you up to keep you from running off.”

  “I am not tying him up!” the Frunge girl protested, her hair vines flushing with chlorophyll. “I’ve been meaning to straighten out this tangle of metallic yarn for years, but you always had something better to do when I asked you to sit for me and hold out your arms.”

  “I don’t remember that,” Dorothy said disingenuously. “In fact, I would have sworn that I looked under your bench last week and all of the metallic yarn was wrapped in nice, tight balls.”

  “You would have sworn falsely,” Flazint declared, rising to the bait. “My suppliers deliver the yarn in either hanks or skeins, and the only time I end up with balls of it is when I unravel something for reuse.”

  “Professional point of interest,” Kevin said over his shoulder, while Dorothy stacked patterns on his own outstretched arms. “My implant translated your words to say that Frunge suppliers deliver yarn in hanks or skeins, but I deal with a lot of twine in my chandlery business, and I thought the words meant the same thing.”

  “With us, it depends on how the yarn will be used,” Flazint explained. “If you wind yarn in a ball, you draw from the outside, but a factory-wound skein draws from the center, and a hank is a skein that’s been twisted and folded for shipping.”

  “This is why we use holographic images in court filings whenever possible,” Tzachan added. “Seemingly precise words can mean different things in different trades, not to mention cross-species misunderstandings, but it’s tough to argue with a hologram.”

  “Especially if it’s trying to sell you something,” Stick contributed from the doorway, where he was struggling to maneuver a large floating bin into the room. “I made the mistake of subscribing to the new LARPing channel under my real name, and now advertising holograms follow me all over the station trying to sell me enchanted weapons from some Verlock mage.”

  “I’m surprised they don’t give up when you never buy anything,” Dorothy said to Affie’s boyfriend. “I’ve tried to get Jeeves to run some of those interactive holographic ads for our fashions, but he says they’re too expensive.”

  “I might have bought a couple of ensorcelled throwing stars and a demon whip, but I was planning on getting those anyway. Speaking of weapons, just how many pairs of scissors do you have on that table?”

  “One less than I need, always. Are you cleaning out Affie’s workstation yourself?”

  “She’s stuck at the embassy,” Stick said.

  “But Jubilee has already started,” Dorothy pointed out. “Samuel is on loan to my mom’s embassy until the Vergallian ambassador returns.”

  “Affie isn’t at the embassy substituting for the ambassador today. She went in because there’s a large group of Alt tourists and businessmen visiting and she’s their contract-queen on Union Station. That’s your fault, if you’ve already forgotten.”

  “My fault? Your ambassador is the one who bribed Baa to hijack my Cinderella shoe campaign. She did it to manipulate Affie into accepting the contract-queen gig and you into joining SBJ Fashions as our sales manager.”

  “Whatever,” Stick grumbled, deploying one of his favorite human borrow-words. “So is your brother going to work for your mom all through Jubilee?”

  “No. Samuel still has to work at the Vergallian booth at the tradeshow,” Dorothy said, and then pivoted to her husband. “Be careful with that magnifier, Kevin. Baa enchanted it for me to show the exact location of the needle under the fabric.”

  “Where is Baa anyway?” Stick asked, and then failed to pick up on the jerking head movements of his co-workers who tried to clue him in to her presence. “I’m not moving that Terragram’s stuff unless she helps. Half of it is probably cursed.”

  “Luckily for you, I’m right here, and if you want to complain about cursed items, complain about your throwing stars and the demon whip,” Baa announced from behind the curtain where she was working.

  “You wouldn’t.”

  “I already did. You’re the sales manager for the only fashion business in the galaxy with a Terragram mage on staff. Show some brand loyalty.”

  “I was only bu
ying samples to check on the competition,” Stick protested, and this time he missed Dorothy’s attempt to use body language to tell him that their boss had just floated in. “I even put them on my company cred.”

  “You’ve only been working here a year and you’re on track to spend as much as Dorothy,” Jeeves said. “If I wasn’t related to the station management, it would have cost me a fortune to break the lease on this place just to move down the corridor into a bigger office with two bathrooms.”

  “He always leaves the seat up,” Dorothy told their Stryx employer. “And poor Flazint was losing leaves from her hair vines worrying about Stick walking in on her.”

  “That’s what locks are for,” Stick said. “Besides, it’s in the basic Vergallian employment code that facilities for male employees will include a standing urinal. I only waited a year to complain because I planned on being fired by now.”

  “You’re not getting out of your contract that easy,” Jeeves told him. “I considered your first year to be training, but this coming year I’m counting on you to double our sales.”

  “Then you have to let me fix your business model,” the Vergallian said stubbornly. “It’s been clear since my first day that none of your designers are interested in men’s fashions. If we’re going to double sales without expanding distribution beyond the tunnel network station boutiques and the LARPing shops, we need to start offering fashions for the other half of the biological population.”

  “I’m not working in the same room with male designers,” Flazint said. “It wouldn’t be proper.”

  “Ergo, the larger and more expensive office,” Jeeves said. “In addition to his and hers bathrooms, we’ll now have space for his and hers design rooms. I have no doubt that one day you’ll all force me to hire a Fillinduck trio, and then we’ll need three bathrooms and a cuddling pod.”