how safe are brokerage cash accnts?

Say you have a reason to keep a lot of brokerage holdings in the cash account - how safe is it? For both big established brokerages and little troubled ones.
The brokerage web sites have a lot of soothing words that I think aren't always forthright. Not talking about money markets, but for instance they will talk about the recent insurance on that while omitting the part about needing to be on deposit 3 weeks ago. Not asking favorite alternatives to cash either... tks
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SIPC covers $100,000 (as part of their $500,000 coverage, but other than the cash, it's just protection against the loss of your securities, not the value of them).
Most large brokerages buy additional insurance above that.
It should be interesting to see the handing over of brokerage accounts at BS and Lehman, both of whom had Excess SIPC coverage through CapCo - as far as I know, to date, not a single cent has had to be paid out by CapCo. They also provide Excess SIPC coverage for a lot of other folks out there - Fidelity, Jones, Goldman, Raymond James, Wachovia Securities.
Other brokerages typically purchase Excess coverage through other third-parties.
Note that SIPC (and Excess) does not cover the value of money market funds - they are securities - they'd get you those shares, but not guarantee the $1 share price.
Most folks don't keep much in the raw cash accounts at brokerages, by design. That's why $100,000 is usually more than enough for that part of the coverage. At most this cash is usually there only between trades and excess cash sitting in such accounts is "swept" into a core money market fund.
If you've got more than $100,000 in a cash account and are not sweeping it into a money market fund, you should probably re-think your handling of that cash.
As far as the value of money market funds, I'd say not to worry. Even the calamitous breaking-of-the-buck a couple of weeks ago at The Reserve Fund Primary Fund - the one which really got all the headlines - was a NAV of $0.97. While a loss of anything at all in a money market fund is unacceptable, bear in mind the scale of losses here. If you're still worried about that, move your money-market assets to a 100% treasury MMF, but I'm not recommending that to anyone, really.
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wrote:

If you mean a money market fund, here's a link to info on the Treasury Guarantee Program:
http://www.businessweek.com/ap/financialnews/D93N9T5O0.htm
Note that this applies to a money market fund. There are other kinds of cash accounts at brokerages and you may be in something else.
-HW "Skip" Weldon Columbia, SC
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Frankly, no one knows.
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How true! Honesty is welcme these days. But don't worry too much; all's well that ends well. Besides, Herbert Hoov,,, Er, sorry, I mean George Bush.... told us on TV to hang in there and everything will work out OK.
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And what would you do instead?
Elizabeth Richardson
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On 2008-10-10 15:06:56 -0700, "Elizabeth Richardson"
It's not so much what I would do; it's what I am going to do--- vote for Obama!
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said:

And why do you think it will make any difference? The problem is in Congress, not the presidency.
Elizabeth Richardson
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On 2008-10-10 15:32:18 -0700, "Elizabeth Richardson"

Lets keep politics out of it then, as the moderator says; lets go back to the OPs original question. I would say his concern about the safety of brokerage accounts, cash and otherwise, is timely and well-advised. I would not suggest he put cash under the mattress. But we have recently seen something that few people would have thought possible--the failure of major banks and a world-wide credit crisis. Who is to say that brokerage accounts could not be next? Who can say that any type of account anywhere, including mutual funds, is absolutely safe? So put not all your eggs into any one basket or into one asset class. I am happy I own my home free and clear. No matter what happens the house to live in will still be there, and I will be sort of safe (as long as the electricity and gas and water still work).
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