In case of DEFAULT @dtconroe what makes a banking account (checking and savings) more liquid than a money market fund at the likes of Schwab?
Hi Mona, I have a brick and mortar branch of my bank
10 minutes away. I literally can get whatever cash I need out of that bank within just a few minutes. If the bank is closed, I have a drive through ATM 5 minutes away where I can get cash. I can move money between my checking account and savings accout online, instantly. I have FDIC protections and I have tremendous trust in my bank as a result of many years of membership. I also have a large number of bills linked to my bank account online, for monthly drafting to pay the expenses. I also have a large number of ongoing deposits from social security, spouse pensions, etc. and if any of those are disrupted by Default problems, then I have other cash available in my bank savings account that I can quickly shift to my checking account for bill drafting coverage.
With my Schwab brokerage MM account, I have to put in a trade to sell a certain amount of the MM fund, and it goes to brokerage cash the next day. Then I have to transfer the brokerage cash electronically to my bank, and it takes a couple of days for the trade to settle and the transfer to be completed. Sometimes the weekend delays the process for a few more days. When the money finally arrives at my bank, then I can go through the withdrawal, bill paying process, that I already described.
From my perspective, everything is faster and more dependable by have adequate assets in my banking account, and quite frankly I trust my bank more than my Schwab brokerage to protect my cash.
In case of DEFAULT +1
In case of DEFAULT
In case of DEFAULT I just can't believe all of the panic going on with the investors posting on this forum. First, IMO the 14th was not meant for this kind of situation. Second, this mess will be worked out. Even if it is not, there are worse things that can happen. If the national debt is allowed to keep going up and going up, you are going to see much worse. Your portfolio will not only go down, it will no longer exist. The FIDC insurance for banks will disappear. Your cash with be worthless. The increase in the national debt must be stopped to save the country. We must stop thinking of ourselves and think of the country. That goes for both parties. So stop the blame game, (that includes me), and lets get our country out of debt.
In case of DEFAULT @Riskless10%+ can be easily chopped from discretionary defense spend with no impact at all to our military capabilities. But then how would the GOP pay for their masters in the MIC. Kissing the ring isn't sufficient payback ya know, it's just cherry on the top.
There's something rotten in Denmark when Congress provides MORE defense money than asked for (as happened a few years back)
Anybody Investing in bond funds?
In case of DEFAULT At this time, and for lack of any better alternatives that meet my comfort level, I am keeping 100% of my portfolio in a Treasury Only MM fund and in FDIC insured CDs issued by the largest national banks until the proverbial dust settles.
Good luck,
Fred
Hi Fred, I am not sure what kind of portfolio you have. I have both a traditional taxable account, along with an IRA account. I am keeping my Brokerage IRA portion in MMs and CDs, but I am transferring "part" of my traditional brokerage taxable account to my Banking Account (checking and Savings) for liquidity reasons. Do you count your Banking Account as part of your portfolio?
In case of DEFAULT The pieces are now falling into place. Biden has given a heads up that invoking the 14th(eventually) is on the table. This is basically a dare which will further harden the GOP stance making a technical default almost certain now.
The debt ceiling law cannot over-ride a Constitutional Amendment and one would expect SC to go along with that but as someone else commented in this thread, the current band of suave and coarse GOP thugs on the SC have shown that anything can be twisted and shaped to fit into a political agenda judicial restraint, precedent and common sense be damned. So SC ruling is a toss up but my bet is still on SC agreeing with Biden.
Cuts only to non-military spending with no new revenue is a red line that has almost no chance of clearing the Senate. Any compromise agreement coming from the current negotiations will need to go through multiple rounds of revisions before the House and Senate both pass it. A redux of McCarthy's path to House Speaker!
In case of DEFAULT @fred495...question if you are comfortable answering...how much of a change meaning your
100% Treasury MMKT and FDIC CD portfolio from your past portfolio...were you very heavy in those investments prior and if so what % of your portfolio?
FWIW...I've been 85-90% for many years in those types of investments....now ~ 95%...."stop playing the game if you feel you've got enough...don't get greedy...get your portfolio where you can sleep well at night" I'm still working and do I guess you would say better than average out there...working for the "fun of the game, camraderie and challenge.."
Have to say, my current thinking is you might be "safer?" in AAPL as due to a better balance sheet than the govt (no printing press though) as it is a utility without the interest rate exposure of a normal utility and has plenty of "fan boys/girls/others" who are addicted to their products...maybe BRK-B too but I saw during the Pandemic ole'Warren kinda froze up a bit, he seemed really rattled for someone who has had many trips around the sun...
I've been adding to FPACX...nice cash buffer in portfolio, thinking Romick and the boys will know what to do AND act at the somewhat correct time...heard on recent podcasts that the "technicals" are looking better, throwing off buy signals...who the heck knows though right?
Good Luck to ALL,
Baseball Fan
In case of DEFAULT So what's the (GQP) plaintiff's argument for likely suing the administration for invoking the 14th as a way of killing this stupid debt ceiling nonsense? "Your Honors, we disagree with requiring the government pay for things it's already purchased?" Could any (sane) lawyer seriously make that argument without being drunk first?
What kind of legal precedent would *that* create if SCOTUS agreed with that argument? Heck, I'd use it to rack up a zillion bucks of purchases on my Amex and then declare my intention to not pay for it when the bill came.
In case of DEFAULT At this time, and for lack of any better alternatives that meet my comfort level, I am keeping 100% of my portfolio in a Treasury Only MM fund and in FDIC insured CDs issued by the largest national banks until the proverbial dust settles.
Good luck,
Fred
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Matthews Korea Fund changes +1.
Alternative to Artisan International Value (ARTKX)?
Schwab Taps Credit Markets To Raise $2.5 Billion In Debt Not really- there are two separate entries there:
• The first shows "Cash and Cash Investments Total $54,014.50"
And down in the extreme lower right of the "Balance Details" section:
• "Funds in linked Bank Account $10,046.00"
And that is agreement with the Account Summary as shown above. The only account we have at the Schwab Bank is a checking account. I'm not sure if that's the same on your side, or if that actually makes any difference at all. This whole thing with the apparent differences in our accounts is very puzzling to me.
