8 votes

Morgan Stanley to acquire E*TRADE for $13 billion

11 comments

  1. [11]
    drannex
    Link
    Their very first point "Combined platforms will have $3.1Tn client assets, 8.2MM retail client relationships and accounts, and 4.6MM stock plan participants" is precisely why this needs to fail...

    Their very first point "Combined platforms will have $3.1Tn client assets, 8.2MM retail client relationships and accounts, and 4.6MM stock plan participants" is precisely why this needs to fail and not be allowed by the FTC.

    2 votes
    1. [10]
      j3n
      Link Parent
      Why exactly? Those numbers seem to be in the same order of magnitude as other major banks/brokerages.

      Why exactly? Those numbers seem to be in the same order of magnitude as other major banks/brokerages.

      5 votes
      1. [9]
        vorotato
        Link Parent
        I'm not sure having a small few businesses evenly consolidating all the wealth is good, even though it may be better than one single business doing so. It's one thing to say people should be able...

        I'm not sure having a small few businesses evenly consolidating all the wealth is good, even though it may be better than one single business doing so. It's one thing to say people should be able to be wealthy, it's another entirely to say that people should be able to buy our nations.

        2 votes
        1. [8]
          j3n
          Link Parent
          There is a broad complaint to be made about who controls most of the economy right now as regards the rise of large index funds, but I don't see how that plays into this merger, which doesn't...

          I'm not sure having a small few businesses evenly consolidating all the wealth is good, even though it may be better than one single business doing so.

          There is a broad complaint to be made about who controls most of the economy right now as regards the rise of large index funds, but I don't see how that plays into this merger, which doesn't significantly change the status quo in that regard. Whether it's a problem that large index funds own more and more of the total stock market is widely argued and there's not really a clear answer on whether it's actually a problem or not.

          It's one thing to say people should be able to be wealthy, it's another entirely to say that people should be able to buy our nations.

          I have absolutely no idea what this means.

          4 votes
          1. [7]
            vorotato
            Link Parent
            Many people object to the consolidation of wealth to an extent that a business can operate with the power of a developed nation. You may not, but it's not a particularly unpopular view. I don't...

            Many people object to the consolidation of wealth to an extent that a business can operate with the power of a developed nation. You may not, but it's not a particularly unpopular view. I don't really understand how to make that clearer, so perhaps you could ask more questions.

            1. [4]
              Deimos
              (edited )
              Link Parent
              I honestly don't understand what you and @drannex are talking about either. E*trade is a brokerage, the money belongs to their clients, who asked them to invest it in particular stocks/funds/etc....

              I honestly don't understand what you and @drannex are talking about either. E*trade is a brokerage, the money belongs to their clients, who asked them to invest it in particular stocks/funds/etc. for them. How do you think this gives them the power of a developed nation?

              Morgan Stanley's existing wealth-management division was already managing about 3.5x what E*trade is.

              5 votes
              1. [3]
                Litmus2336
                Link Parent
                Yeah, I agree. The financial services market, compared to most industries, still has a low barrier of entry. Robinhood, M1 Finance, and other startups have recently shown this space is still ripe...

                Yeah, I agree. The financial services market, compared to most industries, still has a low barrier of entry. Robinhood, M1 Finance, and other startups have recently shown this space is still ripe for new competitors. I don't think this really is an example of monopolistic practices.

                There are plenty of industries where we should be enforcing anti-trust laws, but I'm not sure we need a knee-jerk reaction to this one.

                3 votes
                1. [2]
                  vorotato
                  Link Parent
                  I think we don't have to look to pure monopolies to enforce anti-trust laws, though I agree that there is still competition in the space. It can be disheartening to watch smaller players get...

                  I think we don't have to look to pure monopolies to enforce anti-trust laws, though I agree that there is still competition in the space. It can be disheartening to watch smaller players get gobbled up by old gods. My personal fear is that if this acquisition is okay, what will stop the acquisition of smaller startups, which are likely to have even less FTC friction. Perhaps that's a slippery slope fallacy, but somehow I feel like we've seen this happen before and the consequences of it happening in this sector are more impactful than others. I'd like to see what E*Trade customers feel about this because I suspect they're going to have a good bead on what the consequences might be. Personally I used TradeKing and then they were bought by Ally. I preferred Tradeking to Ally but Ally is acceptable. If Morgan Stanley bought Ally though I'd probably be pretty pissed.

                  2 votes
                  1. drannex
                    Link Parent
                    This is precisely why I left the comment. Thanks.

                    This is precisely why I left the comment. Thanks.

                    1 vote
            2. [2]
              j3n
              Link Parent
              So you're basically saying that there should be a maximum capitalization that corporations are not allowed to exceed? Are you further suggesting that there are corporations in existence today that...

              So you're basically saying that there should be a maximum capitalization that corporations are not allowed to exceed? Are you further suggesting that there are corporations in existence today that "can operate with the power of a developed nation"? Even if that were the case, neither Morgan Stanley nor the proposed combined entity would be my first choice to demonstrate such.

              1 vote
              1. vorotato
                Link Parent
                I do agree with the first two points, and the third :). I was mostly agreeing with the broad idea proposed by drannex, I wasn't trying to say that this is the ideal example. We have seen a...

                I do agree with the first two points, and the third :). I was mostly agreeing with the broad idea proposed by drannex, I wasn't trying to say that this is the ideal example. We have seen a significant consolidation of banks and trading firms post 2009, and I think the knee jerk reaction is probably mostly just related to seeing it again and again. I'm mostly just glad I don't have an E*Trade account...

                1 vote