{"id":198390,"date":"2007-11-12T17:33:00","date_gmt":"2007-11-12T22:33:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2007\/11\/12\/etrade-likely-to-go-belly-up\/"},"modified":"2007-11-12T17:33:00","modified_gmt":"2007-11-12T22:33:00","slug":"etrade-likely-to-go-belly-up","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2007\/11\/12\/etrade-likely-to-go-belly-up\/","title":{"rendered":"E*Trade Likely to Go Belly Up"},"content":{"rendered":"<p>It&#8217;s been a tough day for them.  <a href=\"http:\/\/online.wsj.com\/article\/SB119488109085890062.html?mod=yahoo_hs&amp;ru=yahoo\">E*Trade shares are <span style=\"font-weight: bold;font-size:180%;\" ><span style=\"font-weight: bold;\">down<\/span> 57%<\/span> today<\/a>, following the announcement Friday that they had significant exposure in mortgage backed securities. (I covered it <a href=\"http:\/\/40yrs.blogspot.com\/2007\/11\/e-trade-and-wachovia-see-major-losses.html\">here<\/a>)<\/p>\n<p>One analyst says that it is <span style=\"font-weight: bold;\">65% likely that they will go belly up<\/span>.<\/p>\n<p>E*Trade is claiming that it will remain solvent with &#8220;an immediate write-down over $1 billion&#8221;.  Given that has a &#8220;$3 billion portfolio of asset-backed securities&#8221;, it would seem unlikely, except for the fact that <span style=\"font-weight: bold;\">no one actually knows what they would sell for<\/span>.  There is no functioning market for these vehicles.<\/p>\n<blockquote style=\"color: rgb(0, 0, 153);\"><p>Sandler O&#8217;Neil analyst Richard Repetto said investors should no longer buy E-Trade stock, but said he doesn&#8217;t believe the firm is facing the worst-case scenario others are forecasting. He added the firm isn&#8217;t likely to have to take the more than $1 billion in losses needed to hurt its &#8220;well capitalized&#8221; standing, unless credit issues spread to the portfolio of prime asset backed securities or home equity loan performance &#8220;materially worsens.&#8221;<\/p><\/blockquote>\n<p>And there is the rub.  Everyone believes that the credit issues will spread, and that home equity loan performance will tank.<\/p>\n<p>If you have more than $100K in E*trade, I would suggest that you get out.  Under that amount, you are federally insured.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s been a tough day for them. E*Trade shares are down 57% today, following the announcement Friday that they had significant exposure in mortgage backed securities. (I covered it here) One analyst says that it is 65% likely that they will go belly up. E*Trade is claiming that it will remain solvent with &#8220;an immediate &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1261,973,1265],"tags":[],"class_list":["post-198390","post","type-post","status-publish","format-standard","hentry","category-bubble","category-economy","category-housing-crash"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/198390"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=198390"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/198390\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=198390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=198390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=198390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}