Seems like discount stock brokerage house Etrade is hosed. Not content with running a fairly decent business as an on-line ultra low cost broker, the Etrade suits decided to play the sub prime mortgage market and got burned. According to the WSJ, a hedge fund, Citadel Investment Group, has "loaned" Etrade $1.75 billion AT 12.5% interest.
Wow. Nothing, but nothing makes 12.5%. For the loan to be real, Etrade would need to make MORE than 12.5% in order to pay the loan back. That's not going to happen, no legal activity makes 12.5%. Citadel will own Etrade outright, and this "loan" is merely a paper device for moving what's left of Etrade's money into Citadel's coffers.
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