Broke and broker
You don't need to be an investor in a particular company to feel the pain of a down day. Watching discount broker E*Trade (NASDAQ:ETFC) surrender more than half of its value in a single trading day had plenty of non-shareholders biting their nails.

See, E*Trade's markdown came on the heels of an analyst report that warned of a wider subprime fallout within the brokerage company's mortgage business. In a sobering conclusion, the analyst even mentioned the slight chance that the company may file for bankruptcy protection.

That was enough to make many of the company's 4.7 million retail brokerage clients -- including our own Seth Jayson -- jittery.

E*Trade is by most accounts a great broker, with speedy executions and some awfully attractive rates on its banking products. The perception is the problem now. If clients vote with their feet, we have to begin wondering about the E*Trade we'll be left with, if the company gets through this pain in the mortgage-backed assets.

Some of the concerns are unwarranted. Each E*Trade account is backed by $100,000 of FDIC insurance; account securities have $500,000 in SIPC coverage. E*Trade itself has a $600 million insurance policy for coverage beyond that.

So whom are we kidding here? Still, the big winner in all of this will probably be Schwab (NASDAQ:SCHW) or TD Ameritrade (NASDAQ:AMTD). The one that's able to acquire E*Trade on the cheap -- and hopefully sooner rather than later, to keep defections in check -- will be the true opportunist in this subprime meltdown.

In brief
It was a busy week, so let's dip briefly into a few of the intriguing financial headlines.

  • XM Satellite Radio (NASDAQ:XMSR) and Sirius Satellite Radio (NASDAQ:SIRI) held separate shareholder meetings on Tuesday to approve their merger. It passed on both floors! So why aren't XM and Sirius hitched already? Well, regulators have yet to sign off on the deal. It's been nine months since the companies first announced their plans to hook up. What is the FCC waiting for? Hanna Montana tickets? The season premiere of Lost? If it's taking this long to define a monopoly, maybe monopolized regulators are the problem.
  • Coming back for an encore after being booed off the stage during its first set, Microsoft (NASDAQ:MSFT) rolled out new versions of its Zune digital media players this past week. They're sleek. They're upgraded. They've got Wi-Fi. The only thing missing? They're not iPods.
  • News Corp. (NYSE:NWS) made it official during Tuesday's shareholder meeting: The Wall Street Journal's website will eventually become a free product. Some observers, including our own Rich Smith, think that's a bad business decision. Making back what the company will forgo in subscription fees from increased online ad revenue will be nearly impossible. That's the not the point, though. Now that News Corp. has launched the Fox Business Network, it has to appear to be in touch with the masses. The wall at WSJ.com was going to fall eventually, and at least now News Corp. can give the impression that it brought the barrier down itself. Now if only I can get my print subscription for free! See what you can do about that, Rupert Murdoch.

Until next week, I remain,

Rick Munarriz

Schwab is a Motley Fool Stock Advisor newsletter selection. Microsoft is an Inside Value recommendation. Subscribe to either service and take advantage of a 30-day money-back offer.

Longtime Fool contributor Rick Munarriz recommends windshield wiper fluid when trying to look back. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.