Tuesday, May 15, 2007
Mortgage Default Crisis Just Starting
Market Oracle: Credit Collapse
Great article comparing events of 2007 with 1837.
Investors should remove investment risk from their portfolio by holding cash. But they should also be moving accounts to financially healthy institutions. Sometime in the near future, as in 1837, there will be a realization point that preservation of funds is paramount in a deleveraging economy.
Anybody know which banks are the safest?
Posted by sold 2 rent 1 @ 03:07 PM (343 views) Add Comment
7 Comments
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1. Me Me Me said...
Jordan Islamic Bank sounds 'safe'
ARM's, not so bionic now!
2. lvmreader said...
@sold2Rent1
Fantastic point again
3. Rocket Robbie Mtt45 said...
is it wise to move money out of your pension?
4. uncle chris said...
We actually sold the last of our shares two weeks ago and are buying up premium bonds. The rest of our cash is spread around a number of banks and just below the £32k safety threshold. I've thought for some time that there will be an global crash of enron-esk proportions. With all the this liquidity sloshing around the world, I just worry what "holes" will emerge when the music stops. Stick close to a chair people!
5. paolo88888 said...
"By the fall of 1837 ... At the same time, prices for food and clothing soared."
Many of the posts have suggested that the coming crash will be deflationary. Is this really believable? Will food, clothes, TV licence, motoring (repairs, insurance, petrol) really fall in value? Yet these things are in the RPI. I therefore went for indexed-linked saving certificates for my kondratief-proof money. You get safety, plus a good yield at present (over 6% tax free).
I looked at Premium bonds but although the yield represented by the prize fund looks good, if you strip away the 10% of that which is used to provide the very high prizes (which you probably won't get, and represent speculation which is not right for important money), the yield starts to look poor. And the next 10% of the prize fund is used for £500 prizes which I worked out will not come often, and so are still somewhat speculative.
6. sold 2 rent 1 said...
RR,
I've got a flexible pension that allows switching between funds.
One of the funds available is Fixed Income Treasury gilts.
In it all goes.
7. sold 2 rent 1 said...
Glad to see people are taking k-theory seriously.
Remember in a liquidity crisis the aim is to stay liquid.
Gold, paper money, and treasury bills (in that order) are the most liquid assets you can hold.