Banks Gambling Bigger to Make More Profits

This came off Reuters:
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(Reuters) - Citigroup Inc (C.N) is considering cutting its cash on hand by about $35 billion, which should help the bank buy higher yielding assets or redeem expensive debt to boost earnings.
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In periods of mounting distrust for the banking establishment, is it really wise to resort to such a move? Holding more cash should be a better move, but perhaps as investors/speculators are scrutinizing corporate profits closely, they might have little or no choice.


As explained in my previous post, corporate profits should be expected to dwindle in coming quarters, as falling demand as a result of unemployment kicks in. Question is, how long can corporate profits stay high enough to keep stock prices high? Perhaps the elite have already cashed out knowing that the music is about to stop; leaving the fools to play musical chairs.


Personally, I think the prediction that there will be a major shift of wealth from service providers to producers of real goods, will come true. Time to de-leverage your lifestyle, and save up in real assets.