GOIH Capital Markets---ETFC Bankrupt---write down will wipe out equity.

GOIH Capital Markets---ETFC Bankrupt---write down will wipe out equity.

ETFC trading below $5.00 fast going to zero. No equity after the write down. Already traded 18 million shares and moving fast on the down side. Our models predicted this outcome three months ago.

Citi Investment Research analyst Prashant A. Bhatia cut his rating on the stock to "Sell" from "Hold" and lowered his price target to $7.50 from $13.
E-Trade shares fell $2.59, or 30 percent, to $6 in premarket trading Monday.
Bhatia said there's a 15 percent chance that E-Trade will declare bankruptcy and said management may be forced to sell loans and securities at significant discounts.
"The continued negative news flow about charges resulting from its mortgage and CDO exposure, an SEC inquiry, and continued deterioration in its financial condition, all increase the likelihood of significant client attrition," Bhatia wrote in a client note.
CDOs combine slices of different kind of risk and are often backed partly by subprime mortgages, or loans given to customers with poor credit history.
Bhatia said some of E-Trade's competitors have fared better and questioned E-Trade's leadership and how management is steering the company through its troubles.
"That peers have virtually entirely avoided the credit crisis, again highlights the flawed strategy and lack of credible risk management by E-Trade's senior executives and the board of directors," Bhatia wrote in a client note.
Bhatia said E-Trade may now have trouble keeping employees, noting that the company has seen an 8 percent reduction in its work force over the past two quarters.
"The incentive for employees with options to remain at the firm may now be significantly lower," Bhatia wrote.