I was just trying to plan contingencies in case the shit hit the fan rather quickly with Citi and I wasn't even comfortable initiating a wire that goes through them. I'd probably want to quickly put my money in something at IB that would ensure the SIPC insurance would full cover me (so, obviously my account is >$100,000 but <$500,000). I'm trying to decide if I'm comfortable enough with just having that plan in place or if I'd rather wire some money out. My thinking right now is to wire some money out, I've got a bit more in there now than I ever tap as margin. Keep in there enough to do my trading which is still >$100,000, and have my contingency plan to quickly buy an "investment" in place in order to act quickly if the news gets too bad. The thing is, I really like the flexibility at IB with being able to keep my trading funds in another currency and be able to switch that dynamically. I don't think a lot of other brokers offer that. It was nice to be able to be in yen for a while during that drop the market had, for sure. But, if it's money I'm not actually ever tapping for margin I guess it makes as much sense to have it in an Everbank account in another currency or sitting in an FDIC insured account with a small bit of it at Oanda leveraged into another currency.
Susannah, thanks for the feedback and research you've done. After reading upon SIPC and some member participants, I do not believe more than 100k, period, is covered, in terms of cash on account. So, if you have money laying around in excess of this, b/c you were waiting for an opportune time to put it to work, it's most definitely in peril if the brokerage firm goes belly up. These are dangerous times we're living in. A little bit of complacency or a few wrong assumption could really cost you a lot of money.
C'mon, if everyone pulls their money out then certainly the whole lot is going to collapse. And if you look at where the Deutschmark went then you'll discover that the money is worthless if the lot collapses so it won't do you any good. Where are you going to leave it, at a bank? Have it in the house? Burglary, fire? Bury it in the garden? LOL These are even more risky than leaving it at IB. If IB thinks there is trouble you can expect them not to flush it out to the party in question but somewhere else. IB's strategy is the soundest under the circumstances. Stay rational - many banks will "hold" your wiretrasnfer for at least a day so they can draw the interest of that money and add to their cashflow. Especially in these days and even more so if you are a small customor. They won't do it with IB because then IB will move their business to another bank. Moving your money at this time and not knowing how it is routed is a far higher risk. IMHO IB is presently one of the safer places to be at, I am most definitely not moving anything out of there. If you are worried that the US dollar goes to toast then you can move it internally in IB into another currency - however I do not think that the forex trading is regulated so it may finish up that it is not covered. Perhaps buy/sell some futures contracts or options in the currencies? Have not looked at the currencies in years - am trading something else and am not going to start trading a currency now - more than likely to make the wrong decision that I'll regret later. It is my honest opinion that this mantra of the funds "It's safer to be in cash" has triggered the whole debacle: These funds have so much shares that when they move out who is going to buy ? What happens if there are more sellers than buyers? Business has to continue, people have to eat, taxes have to be collected: is the world going to stop? It is just paper shuffling and fear causing everyone to run around like headless chickens. Wake up! I'm done, I am back to trading so I will not have time to post this week, besides I find it too distracting. But I could not help creating this message seeing some people loosing all reason. Maria
Are you talking about IB? Have you seen the statement about the Lloyd's of London "additional $900k coverage for cash accounts" mentioned on their site? I am skeptical myself, but it must have some meaning.
I wouldn't dismiss the incredible rush into U.S. treasury notes (the one month dipped into negative yield this past week - you had to pay the government to store your money for 30 days) as an one-off event...
So now will there be a run on the bank at Interactive Brokers with everyone wiring money out of their account because Citibank is going to zero? This news cant be good. What if Citi freezes all assets at the bank and you have large quantities of money in IBKR? http://news.bbc.co.uk/2/hi/business/7744814.stm