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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: patron_anejo_por_favor who wrote (49577)4/12/2006 4:03:17 PM
From: mishedlo  Read Replies (2) of 116555
 
posted by CynicalBear on the FOOL about Etrade
Anyone here have a reply or can verify?

Okay, I'm positive a lot of my fellow posters on this board have E*Trade accounts. Here is something potentially crazy that I just discovered this morning:

E*Trades appears to have BLOCKED ACCESS TO INVESTING IN ALL MONEY MARKET FUNDS!!

For example, I already owned a good position in PKCXX (Pimco Money Market C) which I just bought in my E*Trade taxable account one month ago. Today I went to add some funds to this position, and got the following message when I went to add shares:

"This fund not available for purchase through E*TRADE Securities."

Well no problem, I thought, E*Trade may have just severed their relationship with PIMCO. So I went to the fund screener and searched for all money market funds: only 6 funds come up now, just a month ago there was a huge selection. And guess what? When you attempt to invest in each one of those funds, so you get the same message:

"This fund not available for purchase through E*TRADE Securities."

So this is crazy but it appears that E*Trade has blocked its' customers from the ability to invest in any Money Market Funds at all. And guess what else I've discovered? They've closed access to all their money market sweep assets to new investors! It is clear what they are doing: forcing invidual investors to keep their cash in E*Trade's (now default and un-changeable) interest-bearing sweep which only pays 0.01% interest. So they are in effect stealing your cash yield and taking it for themselves.

If anyone else has an E*Trade account please check on this and post your opinions and discoveries here. When I get a chance today or tomorrow I'm going to call them up and attempt to do a broker-assisted trade into one of the money market funds and see what kind of explanation the broker gives me for the blocked access.

I suppose it is possible that this is a "temporary site glitch", but I doubt it. If it is true that E*Trade is systematically blocking investors from the entire money market asset class, this is the kind of action that should incite an individual investor revolt: we should try to get this published by the mainstream financial media and/or move our assets away from this company. When I get a chance I will call them to get an explanation on this, and I most certainly will be moving my assets from them if I do not like their answer.

Bottom line is, I am really dissappointed. Exactly 1 year ago I was an extremely satisfied E*Trade customer, but since they've going on their acquisition spree over the past year their service has gone straight to Hell.
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