posted on Aug, 28 2012 @ 11:54 AM
reply to post by jefwane
MF global was an investment fund. If you were invested in Morgan Stanley funds, and the company went under, as I mentioned, you'd have trouble
getting your money. Morgan Stanley buys microsoft for you. You own microsoft. If Morgan Stanley goes under, you still own microsoft. The only way
you'd wind up with nothing under a failed Morgan Stanley would be if they were producing phony documents and they never bought your stock. Then
they would be doing what Madoff did.
That is not the case here.
The other thing to note is that many cash accounts at houses like Morgan Stanley have insurance coverage, up to a certain amount so there's added
protection but, as previously mentioned, your cash is not mixed with their cash and, in the event they go under, and your cash is gone, then you have
a situation where they didn't lose your money, they outright stole it.
Not the case here.
If you want to fear a collapse of a bank, feel free to do so but you should fully understand the impact on the individual accounts before you foster
an atmosphere of unwarranted fear.
And, since y'all are so concerned about losing your money, here's a nice tidbit regarding banks:
No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933.
Note, this only applies to FDIC insured accounts. Investment banks have different insurance on the cash accounts. When Lehman collapsed there were
cases of money market funds being worth slightly less than a dollar per share (the normal value).