The Golden Truth: Time To Move Your Account Out of E-Trade

Friday, August 14, 2009

Time To Move Your Account Out of E-Trade

The Citadel hedge fund group is in the process of dumping their stock in E-Trade. About two years ago they bought a majority stake in the ailing company in order to "vulturize" E-Trade's distressed home equity loan assets. Well, now Citadel is dumping its equity stake:

"The Chicago-based alternative investments giant is slashing its stake in E*Trade by more than two-thirds, it said in a Securities and Exchange Commission filing. Citadel, E*Trade’s largest shareholder with a 14.9% stake, plans to sell shares under an insider stock-trading plan, putting some on the block every day until the end of October"

Adios E-Trade

It might not bother you that your stock portfolio is in the custody of a dying patient losing its healthcare, but then I found this gem at www.zerohedge.com:

"Citadel is getting ever more intertwined with the online broker's operations, in fact giving the Chicago firm almost exclusive control over E-Trade's customer trade flow"

I Would Get My Account Out of E-Trade A.S.A.P.

In other words, Citadel is in a position to make a lot of money off of your stock trades at E-Trade, either front-running your orders or providing your order with inferior trade execution - and in a manner which allows Citadel to make a small "skim" off of your order flow.

The moral of the story is that you are better off moving your brokerage/IRA account to well-capitalized firm with a good balance sheet, like Fidelity or Schwab.

2 comments:

EconomicDisconnectFriday, 14 August, 2009
Nice catch, I would agree that E-Trade may not be the way to go after this.

Im off on vacation for next week. I look forward to getting caught up whwn I return. Great site.
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Dave in DenverSaturday, 15 August, 2009
thanks for the feedback gyc. have a great vacation.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.