<BreadWithSpam[at]fractious.net> wrote in message
news:yob1vyo8ub0.fsf[at]panix1.panix.com...
- quote -

You may not get $100,000 worth of cash coverage. Read the terms carefully.
For instance, here's Scottrade's statement:

"In order for the cash to be covered by SIPC or excess SIPC, cash held in an
account must be for the purpose of, or as a result of, securities
transacions. Cash held in a securities account for the purpose of eraning
interest, which was notthe result of a securities transaction, may not be
covered by SIPC or excess SIPC."
http://www.scottrade.com/investment_...rotections.asp

Since the OP suggested that there was some reason for the cash being there,
other than as temporary holding between sale of one security and purchase of
another, one might be cautious about relying on the insurance coverage for
the cash (as opposed to a MMF).

Mark Freeland
nNeEwTs[at]nyc.rr.com

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On 2008-10-10 15:32:18 -0700, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> said:

- quote -

Lets keep politics out of it then, as the moderator says; lets go back
to the OPs original question. I would say his concern about the safety
of brokerage accounts, cash and otherwise, is timely and well-advised.
I would not suggest he put cash under the mattress. But we have
recently seen something that few people would have thought
possible--the failure of major banks and a world-wide credit crisis.
Who is to say that brokerage accounts could not be next? Who can say
that any type of account anywhere, including mutual funds, is
absolutely safe? So put not all your eggs into any one basket or into
one asset class. I am happy I own my home free and clear. No matter
what happens the house to live in will still be there, and I will be
sort of safe (as long as the electricity and gas and water still work).

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"Don" <dwzimm[at]telus.net> wrote in message
news:2008101015264450073-dwzimm[at]telusnet...
- quote -

And why do you think it will make any difference? The problem is in
Congress, not the presidency.

Elizabeth Richardson

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On 2008-10-10 15:06:56 -0700, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> said:

- quote -

It's not so much what I would do; it's what I am going to do--- vote for Obama!

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"Don" <dwzimm[at]telus.net> wrote in message
news:2008101009104616807-dwzimm[at]telusnet...

- quote -

And what would you do instead?

Elizabeth Richardson

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On 2008-10-10 07:39:40 -0700, PeterL <po.ning[at]gmail.com> said:

- quote -

How true! Honesty is welcme these days. But don't worry too much; all's
well that ends well. Besides, Herbert Hoov,,, Er, sorry, I mean George
Bush.... told us on TV to hang in there and everything will work out OK.

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On Oct 10, 2:35*am, dumbstruck <dumbst...[at]gmail.com> wrote:
- quote -


Frankly, no one knows.

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On Fri, 10 Oct 2008 04:35:20 -0500, dumbstruck <dumbstruc[at]gmail.comwrote:

- quote -

If you mean a money market fund, here's a link to info on the Treasury
Guarantee Program:

http://www.businessweek.com/ap/finan.../D93N9T5O0.htm

Note that this applies to a money market fund. There are other kinds
of cash accounts at brokerages and you may be in something else.


-HW "Skip" Weldon
Columbia, SC

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dumbstruck <dumbstruc[at]gmail.com> writes:

- quote -

SIPC covers $100,000 (as part of their $500,000 coverage,
but other than the cash, it's just protection against the
loss of your securities, not the value of them).

Most large brokerages buy additional insurance above that.

It should be interesting to see the handing over of
brokerage accounts at BS and Lehman, both of whom had
Excess SIPC coverage through CapCo - as far as I know,
to date, not a single cent has had to be paid out by
CapCo. They also provide Excess SIPC coverage for a
lot of other folks out there - Fidelity, Jones, Goldman,
Raymond James, Wachovia Securities.

Other brokerages typically purchase Excess coverage
through other third-parties.

Note that SIPC (and Excess) does not cover the value
of money market funds - they are securities - they'd
get you those shares, but not guarantee the $1 share
price.

Most folks don't keep much in the raw cash accounts
at brokerages, by design. That's why $100,000 is
usually more than enough for that part of the coverage.
At most this cash is usually there only between trades
and excess cash sitting in such accounts is "swept"
into a core money market fund.

If you've got more than $100,000 in a cash account
and are not sweeping it into a money market fund,
you should probably re-think your handling of that cash.

As far as the value of money market funds, I'd say
not to worry. Even the calamitous breaking-of-the-buck
a couple of weeks ago at The Reserve Fund Primary Fund -
the one which really got all the headlines - was a
NAV of $0.97. While a loss of anything at all in a money
market fund is unacceptable, bear in mind the scale of
losses here. If you're still worried about that, move
your money-market assets to a 100% treasury MMF, but I'm
not recommending that to anyone, really.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
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Say you have a reason to keep a lot of brokerage holdings in the cash
account - how safe is it? For both big established brokerages and
little troubled ones.

The brokerage web sites have a lot of soothing words that I think
aren't always forthright. Not talking about money markets, but for
instance they will talk about the recent insurance on that while
omitting the part about needing to be on deposit 3 weeks ago. Not
asking favorite alternatives to cash either... tks

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