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> Now to see the insanity of the A-->B-->C-->D-->D-->E-->F setup: how can I lend you a chair, it goes from hand to hand from A to F, and at the same time I stil
by qeternity 6y ago
> Now to see the insanity of the A-->B-->C-->D-->D-->E-->F setup: how can I lend you a chair, it goes from hand to hand from A to F, and at the same time I still have it on my patio?
Securities only have utility when you sell them. It’s more like having a chair in your garage that you’re not using, and lending it to your neighbor. Do you still own a chair? Yes. Does your neighbor have a chair? Yes.
When you want the chair back you simply ask for it back, and your neighbor can either borrow a chair from someone else or buy their own.
- andi999 6y agoThe danger with stocks is they are all the same (from the same company). Nobody would think of selling the chair they borrowed from the neighbor (if they want to stay friendly with the neighbour). Maybe it is more like eggs. You ask you neighbour for a few eggs, and later give them back (but everybody understands them to be different eggs)
- exporectomy 6y agoPeople do that with money. "Can I borrow $20 to pay the rent? I'll pay you back next week, I promise."