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-   -   Goodbye Etrade, you dummies (https://www.early-retirement.org/forums/f28/goodbye-etrade-you-dummies-35002.html)

Abreutime 04-22-2008 01:01 PM


Originally Posted by ladelfina (Post 647036)
"turning people away at the door":
I have the impression pretty much every financial institution is hurting badly for cash. Less cash = fewer loans.. and fewer loans would seem to translate into less income. You're right, laurencewill --some of that is missed opportunities -- but I don't think they have a choice. Banks are paying OUT 8%, 10%, 12% themselves just to stay "solvent". It's just the reversing out of the past irrational lending and it's unclear how long it will take and how badly it will seize everything up [cue tinfoil accusations now].

It's not that I love or care about E*Trade.. but I can't see how anyone can get angry over losing credit based on a depreciating asset, either. The keg is empty and the party is winding down. :(

This post is pretty correct. Many financial firms that are highly leveraged (ie. they borrow huge sums of money, and then lend it out to their customers) are de-leveraging due to the more restrictive borrowing environment. They likely need to restrict some of their outstanding obligations, and HELOC business isn't their core business. E-Trade was having trouble with financing earlier in the year and there was a non-trivial risk of blowing up, so they probably have little choice but to reduce some of their secondary businesses.

While you may not be a risky borrower, you probably aren't very profitable.

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