As Portfolio.com so eloquently stated, President Bush has "Lyndon Johnson's war and now Herbert Hoover's bank runs. Other than that, it's going well."
With the high-profile collapse of The Bear Stearns Companies Inc. (NYSE: BSC) and questions surrounding the liquidity of other banks, some, like Jim Cramer, are urging people to relax and not rush to withdraw money from bank and brokerage accounts. This is reasonable: deposits that aren't unusually large are fully insured and there's really no reason to worry.
In today's Wall Street Journal, James B. Stewart writes (subscription required) that "before anyone panics and starts another run on a big bank, let me say unequivocally that client assets in the big brokerage firms are safe from the danger of any Bear Stearns-type collapse."
Stewart's right. But here's the thing: if your account with E Trade Financial Corporation (NASDAQ: ETFC) or another scandal-plagued financial services firm is giving you sleepless nights, switch! There's just no reason not to -- the different banks are all reasonably competitive and moving money around is pretty easy.
I know: if everyone does that, it will cause a run on the bank. But not everyone will, and if moving money will ease your nerves, go for it.
Worried about your bank or broker? Switch!
Posted Mar 19th 2008 4:46PM by Zac Bissonnette
Filed under: Scandals, Bear Stearns Cos (BSC)
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Reader Comments (Page 1 of 1)
3-19-2008 @ 5:36PM
bob said...
Wait...Jimmy Stewart said not to pull my money out of my accounts? Did another angel get into heaven?
3-19-2008 @ 7:38PM
Mike Rehling said...
'Scandal'??? I am an E-trade account holder and a shareholder. They hold NO sub-prime, have a Heloc portfolio that they are working through, but have reserved for, and a platform that is consistently rated #1! My deposits are insured, and their brokerage business added a net 45000 accounts last month alone! No reason to switch, and no reason to write silly, shallow, and non factual comments in this type of venue. If you want to be taken seriously, try looking at the facts.
3-19-2008 @ 7:26PM
Mike Rehling said...
'Scandal'? What scandal? They sold their sub prime portfolio late last year, got an equity infusion, and their Heloc portfolio has been transparently reported and losses reserved for on their balance sheet.
Their trading platform is constantly rated #1, my deposits are insured, and so are my brokerage accounts. They broomed the old management, brought in strong managers, and in February alone they added 45000 accounts!
I am a customer and a shareholder and this type of vapid comments, supported by not a single 'fact' is exactly what the entire financial community does NOT need!
3-19-2008 @ 8:10PM
Joseph Zirbes said...
Zac Bissonnette, you are an idiot. Dropping names like E-Trade and using "Scandal" after it. Learn journalism before you open your mouth. What Scandal? Do tell Ms. Bissonnette.