Loading ...what the NET Capital requirement is…then ask by what % do they exceed the required mininum NET Capital Requirement..that tells you how safe your Bank or Broker is relative to the others. If your broker exceeds the minimum by a factor of more than 2 or 3 or 4
they might become a takeover target.I was once with an Alex Brown Broker who exceeded the minimum by a Factor of TEN which was more than excellent but they were taken over by another Bank (Bankers Trust) that needed their cash and they were taken over by UBS (If I recall correctly,its been a long time )..The Holding companies were not subject to the NET Capital Requirements of subsidiaries..Thats how Conglomerates get their Cash requirements down to ZERO leaving them with 100 per cent to gamble with and zero cash on hand to meet any run on deposits or margin demands.That makes all of them (TOO BIG TO FAIL),at least the BIG ones… Is that any way to run a Financial System ?Who would lend to such a Country ? Banks and Brokers with no cash on hand to meet a run or margin demands….One customer defaults bringing down the Broker and the Domino starts……
How SAFE is your Bank ?,Broker? What are their reserves composed of CASH ?,IOU’s, Liquid assets ,Treasuries,Bonds?
Only Cash and Short term Treasuries are Safe ! as was recently demonstrated in Greece when Bonds collapsed Banks had no Cash and short term treasuries was the only thing left and the demand for them drove interest RATES back to ZERO !
There is NO Chance Rates will rise because every CRISIS kills Bonds and creates the only safe HAVEN …SHORT TERM TREASURIES ..(As Long as Gold is Kept in its CAGE ),If not Gold becomes competition for Short Term Treasuries and its a very SMALL Alternative relative to the money supply, making it an Explosive Venture ! …
That my Rant from TEXAS..be back in Virginia in Two Weeks ..My two weeks in San Diego was the Best .I have Family in Both Places..