I have accumulated cash and it is sitting in a money market account at Schwab over the $250 fdic or 500 limit for couples. I am starting to read that the eu is discussing bail-ins and I am getting worried.

Too soon, never gunna happen, what to do to protect against it?

House paid off
Don't like the technicals in the market that I see

whoop1995 said:

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I have accumulated cash and it is sitting in a money market account at Schwab over the $250 fdic or 500 limit for couples. I am starting to read that the eu is discussing bail-ins and I am getting worried.

Too soon, never gunna happen, what to do to protect against it?

House paid off
Don't like the technicals in the market that I see

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Too soon, probably. Never gonna happen? I'd put odds at 50/50, but probably not until back half of the decade.

To go that route, bail outs would have had to fail first. Remember that a bail out is nothing more than the FED expanding the "availability" of money supply. It requires demand from the consumer of bank loans for it to work. If the FED tries a bail out and there is no demand, its like throwing gasoline on a fire. That would be the point (no demand for loans after a bail out) that they would pivot to the very few options left on the table to attempt to save their ass. Bail In would be one of those options.

If I understand how bail-ins work, put that money in a Schwab Brokerage account and put it into SWPPX.

Schwab has secondary insurance in addition to the SPIC insurance. But if you're really worried why not just transfer some of the cash to another brokerage?
If it were me (that's not happening) I'd find a blue chip stock with a decent dividend and stash some. Reinvest the dividends. Or buy a Treasury. This ain't rocket science.

OldArmyCT said:

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Schwab has secondary insurance in addition to the SPIC insurance. But if you're really worried why not just transfer some of the cash to another brokerage?
If it were me (that's not happening) I'd find a blue chip stock with a decent dividend and stash some. Reinvest the dividends. Or buy a Treasury. This ain't rocket science.

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If we're in a situation where bail ins are attempted, the last thing you want to be involved in is assets or bonds.

Do yall even truly understand what a bail in is? Go look up what happened to Cyprus.

Heineken-Ashi said:

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OldArmyCT said:

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Schwab has secondary insurance in addition to the SPIC insurance. But if you're really worried why not just transfer some of the cash to another brokerage?
If it were me (that's not happening) I'd find a blue chip stock with a decent dividend and stash some. Reinvest the dividends. Or buy a Treasury. This ain't rocket science.

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If we're in a situation where bail ins are attempted, the last thing you want to be involved in is assets or bonds.

Do yall even truly understand what a bail in is? Go look up what happened to Cyprus.

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Owning a Treasury is no different from owning shares of stock. Neither factor into a bankruptcy unless there's fraud.

OldArmyCT said:

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Heineken-Ashi said:

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OldArmyCT said:

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Schwab has secondary insurance in addition to the SPIC insurance. But if you're really worried why not just transfer some of the cash to another brokerage?
If it were me (that's not happening) I'd find a blue chip stock with a decent dividend and stash some. Reinvest the dividends. Or buy a Treasury. This ain't rocket science.

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If we're in a situation where bail ins are attempted, the last thing you want to be involved in is assets or bonds.

Do yall even truly understand what a bail in is? Go look up what happened to Cyprus.

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Owning a Treasury is no different from owning shares of stock. Neither factor into a bankruptcy unless there's fraud.

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I'm not sure what point you are making.

Get out of the weeds.

If we are in a country that is attempting bails ins, it's because bail outs have failed and we are likely facing a sovereign debt crisis and can't afford any other measures as the cost of them would never be recouped. Like in Cypress, when bailing out their banking sector in 2013 would have cost 50% of GDP. There is no liquidity in this situation nor is there the ability to expand money supply and snap away the problems. The market is tanking as is the bond market. And as you can see from the chart above, without the ability to expand the money supply to flood the system with liquidity by devaluing the purchasing power of the currency, there is no rebound. 10 years later your assets are 50% of where they were when you bought. 20 years later you are lucky to be back to breakeven. And if you are a member of a lucky bank that is the subject of the bail in, your deposits are confiscated and turned into shares of the bank. Thank you for your contribution and for paying your fair share toward the attempted stabilization of a bank that over levered itself and blew up.

Bail ins dont happen in a situation where you are sitting on rising or stable asset values. They don't happen when one bank like SVB over levers. They happen when an entire system is over levered and on the brink of collapse. All assets are crushed. The only safety is cash in a safe bank or gold.

You only think you own them. The institution you bank/invest with does. You own an IOU that they don't necessarily have to repay.

Are the people at the top, the ones that would temporarily benefit from this sort of catastrophic financial collapse, really all that interested in seeing the world burn?

TTUArmy said:

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Are the people at the top, the ones that would temporarily benefit from this sort of catastrophic financial collapse, really all that interested in seeing the world burn?

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People at the top would be hurt the most, as it would come with deleveraging which punishes risk assets of all types and rewards safe cash and hard assets (not necessarily that gold goes up, but maintains its value).

Buffet might be the least affected, because he's moved to a massive cash position and is exiting real estate. Ever wonder why?

Heineken-Ashi said:

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TTUArmy said:

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Are the people at the top, the ones that would temporarily benefit from this sort of catastrophic financial collapse, really all that interested in seeing the world burn?

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People at the top would be hurt the most, as it would come with deleveraging which punishes risk assets of all types and rewards safe cash and hard assets (not necessarily that gold goes up, but maintains its value).

Buffet might be the least affected, because he's moved to a massive cash position and is exiting real estate. Ever wonder why?

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Because statistically he'll die within a year and having some liquidity within Berkshire would help ease into his estate plan rather than a fire sale when some 40% of their portfolio is illiquid?