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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 74.32+0.9%Jan 22 3:59 PM EST
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To: Dinesh who wrote (74582)11/13/2007 8:53:23 AM
From: RetiredNow  Read Replies (1) of 77400
 
Hi Dinesh, the answer to your question is that if there is a run on E-Trade, meaning that everyone rushes to get their money out of the accounts, at least that amount above $100K that is FDIC insured, then E-Trade will be forced to sell it's securities assets to fund those withdrawals. The securities they are currently holding are sitting at an unrealized loss of $5B. If they had to sell those securities to fund withdrawals, then that $5B in unrealized losses become real. They say they can withstand $1B in writedowns today and still be well-capitalized, but that's not saying much. If it were me, I'd get all my money out of E-Trade, or at least knock it down to under $100K. Check out the article below. It goes into more detail on E-Trade's woes:

E-Trade shares fall on writedown fears
ft.com
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