Whither E*TRADE
We sent the following note to our clients and those we have put on our “Friends of Alexis and Palmer” email list. If you would like to be added to this list, please send a request to info@alexis-palmer.com with your name and affiliation.
We are getting inquiries about E*TRADE, their financial future, and the safety of accounts held at E*TRADE.
General takeaway:
- E*TRADE is definitely over its head but has value as a going concern.
- Even if people try and take a lot of cash out of E*TRADE, it has numerous ways to borrow a lot of money.
- Cash deposits/CDs up to $100,000 are usually FDIC insured and safe. (Use the FDIC calculator to know exactly how much coverage you have)
- Securities in brokerage accounts up to $500,000 are covered by SIPC insurance and are safe.
- Accounts over $500,000 are covered by excess SIPC insurance – we have not done the math to see if it will cover all holdings.
- An easy way to increase the security of large cash deposits is to buy a money market fund or short term bond fund – this then becomes covered under SIPC.
More on E*TRADE
I worked for a brief period for E*TRADE five years ago and I still know people who work there. I became VERY concerned about their mortgage holdings several months ago after they publicly released certain portfolio information about their mortgage holdings. Since that time, the stock price declined over 70%. That said, E*TRADE has a number of strategic options which I think could keep it afloat. I actually published an “article” on SeekingAlpha.com (http://seekingalpha.com
Please remember that everyone’s financial situation is different and the information provided may not apply to your situation in particular.
Topics: Financial Planning, Housing Bust, Investments, Stock | 1 Comment »
November 15th, 2007 at 5:26 pm
great website, Elizabeth. How can I get on your mailing list?