E*Trade and FDIC Insurance

I have received a few emails tonight about the troubles at E*Trade, and the implications for investors. Lots of people are in full worry mode, which is too bad, but also entirely understandable given the bottomless feeling of the current credit crisis.

Anyway, many of you are car-crash curious about how Federal Deposit Insurance fits in the banking/brokerage system picture. You could do worse than reading this quick primer from the WSJ on when and where FDIC insurance applies, and when it doesn’t.

[Update] E*Trade bankruptcy contracts are now being traded on Intrade. No volume yet.