gracie – look down below in the other bloggers section. There are two threads about ETrade problems. Simply put, due to subprime mortgages, they may suffer up to $5 Billion losses. They can only take $1 Billion in losses before becoming insolvent. This is the same stuff that happened to Merrill & Citi. Only those were better capitalized and hence didn’t face insolvency (as yet). If ETrade gets hit with $5B loss, I am quite sure it will go under.
