E-Trade gets hedge-fund bailout
Faced with its own little chunk of the subprime mortgage crisis, E-Trade, one of the Internet's oldest brokerage firms, announced today it will take a $2.55 billion cash infusion from Citadel Investment Group. The bailout comes after E-Trade announced $197 million in pretax writedowns on its portfolio of securities and said it set aside another $237.8 million in loan-loss provisions, according to the WSJ. But fret not, this is good news. Citadel made its bet because it feels the mortgage market is at a low point and that E-Trade's mortgage securities retain their intrinsic value. It's a bet that things will go back to normal. No coal in your stockings after all, E-Traders!