gwinner

Countering the AP's 'E*Trade Financial Earnings Preview'

I'm a long-time customer and have been holding ETFC long but I got out of my position after hours (I wanted to sleep tonight). The stock will probably retreat into the $2 range yet again, almost certainly with the next macro mortgage meltdown, which is inevitable in the current economy.

I'd like to know how much of their loan portfolio is ALT-A and Option-A (e.g., the next mortgage cliff)? Is anything else hidden shareholders should know about? I was disturbed by the announcement regarding Fannie and Freddie, was this well known (e.g., Cindy, did you know)? Why hadn't E*Trade disposed of these non-core positions before the recent free fall? I guess they were "trying" to avoid taking more losses in 2Q.

Financials like BAC and WFC will be rewarded with increased business and stronger earning in Q3 and Q4 as opportunity, customers and money migrate their way. E*Trade has a longer, slower trajectory to recovery due to past transgressions. Great company and market opportunity, but saddled with untimely baggage left by the previous management team.

Disclosure: No longer long