Safety or risk?

On 11 August, "A week that started off with a $6.4 trillion global stock rout and a broad rally in bonds ended relatively quietly, calming from historic volatility triggered in part by the prior week's disappointing US jobs report." ET. "Equities suffered heavy losses around the globe on Monday (5 August) as Wall Street added to a rout that started in Japan, while the dollar tumbled against the yen and nervous investors looked for signs of a recession in the US." "Earlier Japan's benchmark Nikkei average had closed down 12.40% for its largest one-day fall since October 1987" Reuters. "The Bank of Japan (BOJ) raised interest rates to levels unseen in 15 years and unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus." Rates were raised to a mere 0.25% from 0-0.1% but "the hawkish comments pushed the dollar below 151 yen for the first time since March." Reuters. In the US, "The unemployment rate rose 4.3% in July, and nonfarm payroll employment edged up by 114,000." bls.gov. This was seen as "an unexpected setback" because hiring was 35% lower than expected and the unemployment rate was "the highest since October 2021"." AP. "The massive sell-offs had come after a higher-than-expected US unemployment rate...sparked worries the US economy was heading for a recession." This was exacerbated by a winding down of the yen carry trade. "The so-called 'carry trade' is commonly used in currency markets where investors borrow money from economies with low interest rates such as Japan or Switzerland, to fund investments in higher-yielding assets - this time stocks - elsewhere." Reuters. According to the Bank of International Settlements (BIS) cross-border yen borrowing has "increased by $742 billion since the end of 2021". "Brokers said it would be safe to assume some carry trades would have happened involving Indian equities," and "According to NSDL data, the assets under custody of Japanese foreign portfolio investors in domestic equities till 30 June was Rs 2.05 trillion. The highest was by US FPIs at Rs 30 trillion." ET. "The reason I have a lot of cash is because I expect the next sell-off to be the worst in my lifetime, because the debt has gone up everywhere. Even India has debt now," said American investor Jim Rogers. Warren Buffett's Berkshire Hathaway has cash holdings of $276.9 billion as "It was the seventh straight quarter Berkshire sold more stocks than it bought." ET. Retail investors in India now hold 40% of floating stocks on the National Stock Exchange (NSE). New investors are attracted by the rising prices and prices keep rising as more investors buy into the story. This is a 'naturally occurring Ponzi scheme', wrote Vivek Kaul. Americans are shifting to the safety of cash. Indians are gambling on shares. Safety first, or no risk no gain?