AN IMPORTANT MESSAGE TO E*TRADE CUSTOMERS Dear E*TRADE FINANCIAL customer August 17, 2007 The last few days have been unlike any that the market has seen in many years. And if you have been watching the financial news, you are undoubtedly hearing rumors circulating about many financial services companies, including E*TRADE FINANCIAL. I'm here to separate fact from fiction and provide you with reliable â and accountable â information about the strength of E*TRADE's business. I want to assure you that your accounts and your assets are safe with us, and that we put the utmost value on our relationship with you. * E*TRADE is a financially healthy organization. We have disclosed in great detail our limited exposure to credit risk in sub-prime mortgages â less than one fifth of one percent of E*TRADE's overall mortgage portfolio. The vast majority of financial analysts who monitor our business applauded our proactive efforts to add transparency, and are indicating that market concerns about our portfolio are exaggerated. * E*TRADE has ample liquidity to manage its way through the current credit environment. For our customers, this means we are well capitalized, have strong cash flow, high cash reserves and significant excess borrowing capacity. In addition, E*TRADE Securities customers are protected by SIPC coverage, while E*TRADE Bank customers benefit from FDIC coverage, with up to three times the amount of FDIC coverage for sweep deposit accounts. * E*TRADE's business fundamentals are firmly on track. The second quarter ended June 30, 2007 was one of the best quarters in the company's history in terms of revenue, new trading/investing account activity, net new customers and deposit growth. Our July metrics show continued strength and record customer engagement. * E*TRADE continues to adhere to our strict discipline with respect to risk mitigation. For as long as we've run the balance sheet, we've focused on prime and super-prime loans. Our approach is conservative, as reflected in the fact that 97% of the first mortgages we hold have high FICO scores and combined loan-to-value ratios below 80%. Currently, volatility in the mortgage industry is impacting the entire financial services industry. The E*TRADE franchise is strong and growing, producing new and innovative products and services to best serve you. We will continue to work diligently to prove to you every day that we are deserving of your business. Thank you for your continued patronage. Jarrett Lilien President, COO and Director, E*TRADE FINANCIAL
Like other said before, US financial system will not collapse in any foreseeable future. If the government is forced, they will just print money. Yes, the inflation will spiral, but the system will not collapse. And please do not think that you will be able to use money as toilet paper. Could a dollar buying power turn into a quoter, very unlikely, but possible. But no way into a penny.
If a broker goes under, should have no financial impact on customers... customer capital is required to be segregated from broker assets.
This thread belongs with all the other wackos on the Kitco forum. Be sure to bring your tin foil hat.
Relax. Noones saying it is going to happen, just playing with hypotheticals, brokers have collapsed before, its not impossible for it to happen.
Your funds will be safe if IB were to go bust. The money is deposited with Citibank and IB cant touch it if it were to go under.