How hold stocks?



This is a little misleading. According to the article I linked earlier, first a brokerage client gets back his/her share of the brokerage's assets. Then up to $500,000 is reimbursed in cash or by re- purchasing the lost shares and giving them to the client. Then typically brokers' supplemental insurance kicks in. It seems all major brokers have this supplemental insurance. "[O]nly 349 people have not received the full value of their accounts from their prorated share of the firm's assets plus SIPC coverage... most of those cases happened before 1978, when the maximum SIPC could advance was $50,000, rather than today's $500,000 limit."
Lastly, it is $500k per brokerage firm. So say use two brokerages, and a person has $1 million dollars+ of protection.
If a person cannot grasp these facts, they probably should not be buying stocks, U.S. treasuries etc. in the first place. There is a lot more risk intrinsic to simply owning securities than there is in brokerages failing, IMO.
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http://groups.google.com/group/misc.invest.financial-plan/browse_thread/thread/70183e572dfec825

Of course, it's unclear how useful excess SIPC insurance would actually be. The insurance is just that -- insurance provided by a private company -- so I wonder how well capitalized it actually is and how many claims it can actually handle.
I also recall reading that CAPCO, the main (only?) provider of excess SIPC insurance, is thinking of exiting the business.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
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CAPCO dropped JPM (not the other way around, from your brokerage statement) but is any other supp insurer in place or is JPM trying to line up another supp insurer? Seems like not having supp insurance could make a dent in JPM business. OTOH I suppose JPM could also be counseling its brokerage clients not to put in more than the SIPC would reimburse.
Clarification: JPM is not formerly Bear Stearns but rather JPM, a much larger company, bought Bear Stearns with government support ec.
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snip
In the several posts you put on the internet on this, you quoted from a brokerage statement, "CAPCO will not be renewing any of its surety bonds at their termination on February 16, 2009." I was going by what the brokerage statement said (as quoted by you).
If I were a JPM client, I would call JPM and ask what is going on, rather than guessing.

I think I will go with "Bear Stearns," per the 18 million hits my search engine gives vs. about a thousand for "Bears Stearn."
Putting aside the trees so as to see the forest, I agree the main point of your original post is important information.
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snipped-for-privacy@gmail.com wrote:

How does Bernie Madoff effect this?
Xho
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Re SIPC coverage:

Googling turns up much on this. The SIPC has been notifying a certain category of Madoff's victims of their rights and it appears many will recover $500k. Others were doing investing with Madoff that is not covered by SIPC rules etc. A quick pick: http://www.time.com/time/business/article/0,8599,1871173,00.html
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On Apr 10, 1:06pm, snipped-for-privacy@webtv.net (H B) wrote:

In this scenario, why would you hold any stock? Then, it's more likely that the stock will be worth less than the paper used to print it...
HTH
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