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dreamsharkIt's hard not to feel a little nervous when venerable banking institutions like Lehman Brothers are failing. Merrill Lynch, which did not fail this week but faltered long enough to be snapped up by a bigger bank, was the brokerage that my family used throughout my childhood for college funds and other investments. It's sad to think of the Merrill Lynch bull icon going away. It's also the brokerage where most of my mother's estate resides, and I am right in the middle of slogging through the paperwork to distribute the money to myself and my siblings. *gulp*
I haven't actually talked to anybody in my Merrill Lynch office since the acquisition. I imagine that they are plenty distracted with trying to figure out what happens to their corporate benefits and with reassuring frantic clients, so I thought I'd wait until they received the tax id form I sent in today before I bothered them. However, I did google "Lehman Brothers clients" to find out whether investors at Lehman Brothers had lost their savings. That got me to this web page for the Securities Investor Protection Corporation which explains how individual investors are insured against losses when brokerages fail.
Briefly, investors still own all the securities and so on that they bought through the failed brokerage and are insured for up to $100,000 for any cash that is lying around in the brokerage account itself. That is more than enough to guarantee my mother's account, not to mention my own modest investments at a different brokerage. If any of you are in the habit of keeping more than $100,000 in cash at your brokerage, you might want to think twice. Other than that, it's mostly a matter of hoping that your investment mix will ride through the worsening recession and pop back up on the other side. I have to admit to a moment of minor panic when I read the stuff in the paper about a possible "run on the bank" on money market funds, as I have quite a bit of cash sitting in those. But by the time I read about it, the Fed had already moved to prop them up. Well done, Mr. Bernanke!
I haven't actually talked to anybody in my Merrill Lynch office since the acquisition. I imagine that they are plenty distracted with trying to figure out what happens to their corporate benefits and with reassuring frantic clients, so I thought I'd wait until they received the tax id form I sent in today before I bothered them. However, I did google "Lehman Brothers clients" to find out whether investors at Lehman Brothers had lost their savings. That got me to this web page for the Securities Investor Protection Corporation which explains how individual investors are insured against losses when brokerages fail.
Briefly, investors still own all the securities and so on that they bought through the failed brokerage and are insured for up to $100,000 for any cash that is lying around in the brokerage account itself. That is more than enough to guarantee my mother's account, not to mention my own modest investments at a different brokerage. If any of you are in the habit of keeping more than $100,000 in cash at your brokerage, you might want to think twice. Other than that, it's mostly a matter of hoping that your investment mix will ride through the worsening recession and pop back up on the other side. I have to admit to a moment of minor panic when I read the stuff in the paper about a possible "run on the bank" on money market funds, as I have quite a bit of cash sitting in those. But by the time I read about it, the Fed had already moved to prop them up. Well done, Mr. Bernanke!
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no subject
Date: 2008-09-20 04:46 am (UTC)Right now I'm worried about the election.
no subject
Date: 2008-09-20 05:20 am (UTC)no subject
Date: 2008-09-20 01:47 pm (UTC)Especially when some Muslim clerics are going absolutely wacko (http://www.israeltoday.co.il/default.aspx?tabid=178&nid=17181).
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Date: 2008-09-20 12:27 pm (UTC)