Looks like I used the wrong term there, sorry. I was referring to Cede & Co, and in the moment assumed they could be considered a clearing house. It is technically called a certificate depository, sorry for the confusion there.
Cede & Co technically owns most of the stock certificates today [1]. If I buy a share of stock I end up actually owning an IOU for a stock certificate.
You can actually confirm this yourself if you own any stock. Call the broker that manages your account and ask who's name is on the stock certificate. It definitely isn't your name. You'll likely get confused or unclear answers, but if you're persistent enough you will indeed find that the certificate is almost certainly in the name of Cede & Co and there is no certificate in your name, likely no share identifier assigned to you either. You just own the promise to a share, which ultimately isn't a problem unless something massive breaks (at which point we have problems anyway).
If I'm not mistaken, at least in the US most brokers also aren't the titled owner. That falls to Cede & Co which acts as a securities depository.
This is where the waters get murky and really risk conspiracy theory. My understanding, though, is that the legal rights fall to the titled owner and financial institutions, with the legal benefactor having very little recourse should anything actually go wrong.
The Great Taking [1] goes into more detail, though importantly I'm only including it here as a related resource if anyone is interested to read more. The ideas are really interesting and, at least in isolation, do make logical sense to me but I haven't had time to do my own digging deep enough to really feel confident enough to stand behind everything The Great Taking argues.
I would bet my left leg that the US gov't would never allow Cede & Co. to fail. Same for Options Clearing Corp. They are too important to a highly functioning financial system.
Banks and trading houses are kind of the exception in that regard. I pay my bank monthly for my mortgage, and thus I live in a house that the bank could repossess if they so choose.
The phrase really should be about force rather than possession. Possession only really makes a difference when there's no power imbalance.
Banks have the legal authority to take the home I possess if I don't meet the terms of our contract. Hell, I may own my property outright but the government can still claim eminent domain and take it from me anyway.
Among equals, possession may matter. When one side can force you to comply, possession really is only a sign that the one with power is currently letting you keep it.
Absolutely not. You are protected my law, regardless of whatever odious mortgage contract that you signed.
What is about HN that makes so many commenters incredibly distrustful of our modern finance system? It is tiring, and they rarely (never?) offer any sound evidence to the matter. Post GFC, it is working very well.
