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overtheedge
Member since May 2012
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This is a Recipe For a Crash - Graham Summer - Gains Pains & Capital

"... and things are fundamentally no better than they were before: most major banks are insolvent, one in five US mortgages is underwater, and the stock market is being largely propped up by in-house trading from a few key players ..."

"... if your portfolio is heavily invested in stocks, now is a time to be taking some profits. If you can, consider moving a sizable chunk into cash."

According to the first quote, "most major banks are insolvent".
It is awful hard to argue against locking in profits.
But if you are a moderate to high net worth investor, just where are you gonna stash the cash from, "If you can, consider moving a sizable chunk into cash."?

First, last and always, if you don't hold it, you don't own it.
All you have is a "coat and hat" claim check.
Won't do you a bit of good when the place burns down.

Now think about the capital controls already in place.
Civil forfeiture laws are still being applied for police seizures of stashes of cash.

And don't forget, there is a lot more money and money substitutes on the books than there is cash.
Obviously someone ain't gonna get cashed out.
But you will own stock in a bank, ... an insolvent bank!!!
My, my, my, weren't you clever holding out for the bigger fool?

Commented 3481 days ago

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Beginning of the headline :Over the last 30 years, the US has built up record debts on a personal, state, and national level. Consumers thought they were financially stable so long as they could cover the interest payments on their credit cards, states created program after program few if any of which they could afford, and the Federal Government issued $30-50 trillion in debt and liabilities (counting Social Security and Medicare). This all came to a screeching halt when the housing bubble (arguably the biggest debt bub... Read More

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