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To: Dinesh who wrote (74582)	11/12/2007 12:07:24 PM
From: John Koligman	Respond to of 77400

Well, here is a comment off the ETFC thread at the 'Yahoo Zoo', except this guy seems to make some sense.. John "Just to be on the safe side, if I had money at Etrade (and I do not), I'd buy US Treasurys with any cash in the account. The last thing you want at this point is to have your money in some POS money market fund that is in commercial paper. It makes absolutely no sense IMO to take that kind of risk with cash in order to get a few basis points more yield. As for stock positions, shouldn't be a problem (except, of course, that should you have to wait for delivery of your shares they will be subject to the usual (or perhaps unusual) market fluctuations). From what I've read, SPIC protection is a bit of a bad joke (though certainly better than nothing). Also, it only comes into play if the fiduciary in question has committed some kind of malfeasance. If your money is in a money market fund that "breaks the buck" due to holding @#$%y toilet paper, the SIPC would merely laugh in your face (well, truth be told, they wouldn't even expend that much effort on your behalf) since they do not insure against losses due to market movements. ==== I had a very bad experience with Etrade back in their early days. They sent out monthly statements one month such that parts of one customer's statement were sent to the next customer on the mailing list. They were never forthcoming about how many customers were affected. I suspected it was widespread, but in any case, since another customer had my account number as a result, I requested Etrade issue me a new account number, and thus began months of having no access to my account (despite repeated calls to customer "service"). They probably cleaned up their act since then, but once a company makes it onto my "DO NOT PATRONIZE" list (the one that includes Dell Computer), they do not get another chance unless they have the only cure for an illness (and it's hard to believe Etrade or Dell would ever meet that criterion)."

To: Dinesh who wrote (74582)	11/13/2007 8:53:23 AM
From: RetiredNow	Read Replies (1) \| Respond to 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