Bearish News

TradeKing’s $4.95 trade fees have attracted a lot of attention in the e-brokerage world, allowing them to steal customers away from competitors. Compare their pricing to $9.99+ at Etrade and Ameritrade, and it’s easy to see why.

Fees and Pricing

Say you make 100 trades per year. Switching to TradeKing would save you $500/year, assuming you pay $9.99 today. That’s $500 more to put to work in the markets every year, money that will compound and grow over time. Investors who trade more often will see even bigger savings, of course.

Follow this link to

Pricing Comparison:

As you can see, trading is much cheaper on TradeKing. Their $4.95 price includes broker-assisted trades. I’ve had to use this option before with Etrade, when my internet went down. It wasn’t cheap. If you get in a similar spot, it’s nice that TK doesn’t charge a ton.

Official TradeKing site here:

Options pricing: Trades are $4.95  plus $.65 per contract. Compare that to $9.99 and $.75 per contract with Etrade. Big difference, especially when you trade volume.

Savings like that can make a huge difference for options traders. TK also offers options price calculators and options screening tools, allowing you to search for options that are fundamentally cheap (or expensive) depending on whether you’re looking to buy or sell.

Mutual Funds: Transaction fees also beat rivals by around 25%. They’re $14.99 vs. $19.99. These small savings make a big difference over time, especially in retirement accounts where your portfolio has decades to grow.

TradeKing is the cheapest online broker I know of. I can’t see fees going much lower, as TK’smargins must already be thin when you factor in exchange fees and business overhead. I assume TradeKing must be relying on some more advanced offerings to pad margins.

Drawback – Not Ideal For OTC/Penny Stocks

One potential drawback is TradeKing’s $.01/share fee on shares priced less than $1. For dumpster-divers and OTC gurus, this is not ideal. Those fees can really add up over time, when you’re doing transactions with 100k or even 1m shares at a time.

Charts and Technical Analysis Review

TradeKing offers some nice technical analysis tools, which are powered by Recognia. You can set up email alerts to notify you when breakouts or other events are happening.

Charting is pretty standard. Pattern-recognition, tons of TA indicators you can add, comparisons, etc. Like research, most investors can find the charts they need for free these days.

Margin Rates

TradeKing’s margin rates are slightly cheaper than the competition, at 6.5%. That compares to ETrade’s 7.99% and TD Ameritrade’s 9.00%.

Research Reports

TK offers MarketGrader fundamental research reports to clients. These look solid, but don’t boast the same big-name appeal that firms Etrade pay for. But to be honest, I find very little value in reports from companies like Standard and Poors.

All these ratings agencies have fee-based relationships with the companies they cover, and that creates a bias problem. I was an Etrade customer for 8 years, and found most of those reports to be useless. Better information can be found for free on the web, in my experience. I’d rather not pay for pricey research that I never use.

Customer Service

TradeKing offers phone support with minimal wait times. They also offer online chat and email support. I made a call to test their claims, and got a real person on the line within a minute. Not bad, considering how cheap the trades are. They also received Smart Money’s #1 in Customer Service award in 2008.

Tax Reporting

Review Conclusion:

Controlling costs today is more important than ever. TradeKing is a good way for investors and traders alike to cut their brokerage fees in half. I’m currently in the process of moving my old Etrade account to them. I make about 120 buys a year, so this should save me $600 in the next 12 months alone. Not bad.

Here’s a link to signup:

Feel free to share your own review of TradeKing in the comment section. I’d like to hear all experiences, good and bad.

Nice interview via CNBC. Mr. Elliot Wave talks about current extreme bullish sentiment and what it means, among other things.

hat tip Mike Panzner

The clip starts with Dodd’s financial reform bill, and leads into a classic rant about the criminality of Lehman Brothers’ accounting “gimmicks” and general anti-bankster goodness.

It seems like there’s an unofficial media brownout of the Lehman accounting scandal. Lack of coverage outside the blogosphere is disappointing to say the least. After chastising themselves for sleeping on the job in 2008/09, mainstream outlets have apparently slipped back into their old ways.

Sure, big media outlets are running some stories. But they aren’t front-page, for the most part. As CJR points out, NYT featured the $3b Tommy Hilfiger buyout over the Lehman story.

This Lehman report is only the biggest financial fraud since Enron. Bigger than Enron, actually. This isn’t a dig at at Dealbook and others at the NYT. They’re providing some great coverage, I just wish it was front and center.

Excerpt from the Columbia Journalism Review:

And just like that the Lehman Brothers scandal drops off the front pages. And not just the front pages—the section fronts, too.

Say, we just learned about a $50 billion fraud on Thursday. Think there might be some newsworthy follow-ups here? Actually there are, and both The New York Times and Wall Street Journal have them, but they stuff them inside.

The Journal, which scored recently by bringing David Reilly back into the fold after a stint at Bloomberg, posts a Reilly news article looking at the culpability of Lehman auditor Ernst & Young. The paper dumps it on C7. The NYT has on the same angle—a very good one to examine closely—and slides it inside on B2.

Somehow the Times thought more people would care about Sorkin’s scoop on a $3 billion deal for Tommy Hilfiger or that it was more important than an auditor approving accounting fraud. They don’t and it’s not.

Maybe it’s too dull or complicated for mainstream? The public devoured information about Bernie’s ponzi scheme, and this is much bigger than that. Yet I’m not seeing any sensationalist headlines. It’s all, “Accounting Gimmicks Discovered in Lehman Chapter 11 Bankruptcy Examiner Report”.

Lax coverage of a huge scandal like this just smells funny. Kind of like that nauseating Geithner fluff piece in the New Yorker. Playing ball with coverage on these issues may be the Price of Admission, as CJR suggests.

Tow the admin line, get exclusives and keep access to the White House. Am I getting too paranoid? That’s probably due to the fact that I keep reading about these crazy financial conspiracy theories on the web, and a few months later they turn out to be real.

More:

• Bill Black and Elliot Spitzer
• James Kwak
• Zero Hedge
• Jesse
• Barry Ritholtz
• Dealbook
• Yves Smith
• Times Online
• Me @ Wealth Daily

I love this guy. In the clip below, he dishes out his patently-straightforward analysis of the Greek debt problem. He demands accountability from the Greeks (and anybody else asking for a bailout), and dismisses concerns that sovereign CDS traders are the problem – “Were they the ones who increased deficits to 12% of GDP?”

Other talking points:

• Will China let their currency float?
• U.S. equities are “overdue” for a correction
• He’s been long the dollar for 5-6 months and it’s still working.
• Calls himself a “horrible stock market timer and trader”. This, from the guy who co-founded the Quantum Fund with George Soros, which saw returns of 4200% over the first 10 years.

hat tip Dollar Collapse.

Bloomberg BusinessWeek is out with a piece on Florida’s misadventures in real estate. Apparently Eaton Vance is dumping Florida municipal bonds tied to real estate deals at $.26 on the dollar.

Still no need to mark down any of those bank assets, of course. The underlying assets will bounce back, we keep hearing. Well, Moody’s says the Florida RE market might not recover until the 2030s.

Thomas Metzold, Eaton Vance Corp.’s co-head of municipals, sold all his defaulted bonds of Tison’s Landing, an unfinished housing development in Jacksonville, Florida, as the debt fell to a third of face value last year.

Dumping the so-called dirt bonds at a discount was a better bet, the Boston-based Metzold said, than taking over 218 empty acres (88 hectares) from the project’s builder and waiting for a real-estate rebound that may not come until the early 2030s, according to a Moody’s Economy.com forecast.

The BW piece is full of good quotes and info, and I do recommend reading the whole thing. Here’s another snippet:

‘It’s the single biggest default wave in the history of municipal bonds,’ said Richard Lehmann, the newsletter’s publisher, who defines default as failing to pay debt service or tapping reserves to do so. ‘There are about 78 more districts with $2.7 billion of bonds on our watch list that are likely to go into default this year.’

Source: Bloomberg BusinessWeek (which I’m quite impressed with lately).