Well is anyone switching out of Schwab because of their bankruptcy rating,
? I have read that their probably of going bankrupt is over 46 percent, whereas for vanguard and fidelity each is below ten percent
Answers
https://www.macroaxis.com/invest/ratio/SCHW/Probability-Of-Bankruptcy
The way they use "Probability of Bankruptcy" is unrelated to probability of bankruptcy. Here are some snippets:
"The Probability of Bankruptcy SHOULD NOT be confused with the actual chance of a company to file for chapter 7, 11, 12, or 13 bankruptcy protection. Macroaxis simply defines Financial Distress as an operational condition where a company is having difficulty meeting its current financial obligations towards its creditors or delivering on the expectations of its investors. Macroaxis derives these conditions daily from both public financial statements as well as analysis of stock prices reacting to market conditions or economic downturns, including short-term and long-term historical volatility. Other factors taken into account include analysis of liquidity, revenue patterns, R&D expenses, and commitments, as well as public headlines and social sentiment."
(Screaming caps in original)
"Based on the latest financial disclosure, The Charles Schwab has a Probability Of Bankruptcy of 50.0%. This indicator is about the same for the Financial Services average (which is currently at 49.93) sector and 14.03% higher than that of the Capital Markets industry. The probability of bankruptcy for all United States stocks is 25.53% lower than that of the firm."
According to MacroAxis (as linked by alan1) ...
Three of the NRSROs (Nationally Recognized Statistical Rating Organization) are wrong with an affirmed "A" rating (or better).
If you are moving your money, don't move it to ...
JP Morgan Chase, as they have a 49% chance of going bankrupt.
Bank of America / Merrill, as they have a 48% chance of going bankrupt.
Morgan Stanley / E*Trade, as they have a 48% chance of going bankrupt.
Interactive Brokers (a huge clearing broker), as they have a 43% chance of going bankrupt.
And, in a call from 2014, MacroAxis was confident that Sony had a 78% chance of going bankrupt in 2 years.
Is anyone seriously going to leave them based on this news?
Is Merrill Edge any safer per MacroAxis?
No one is leaving Schwab because of some joke of a rating system devised by MacroAxis (IMHO). Does anyone believe the 7th largest financial institution and one of the "Big 4" brokerages has an ~ 50% chance of bankruptcy in the next two years? What about Chase and B of A, the 1st and 2nd largest banks? According to MacroAxis, they also have an ~ 50% chance of bankruptcy in the next two years.
This is why just a little moderation of the forum would be a good thing.
Every brokerage is legally required to separate its clients’ assets from the brokerage’s own assets. In the event of a bankruptcy, 100% of your assets will be transferred to another brokerage firm.
Schwab is a retail broker. Not an investment bank. Not an over leveraged commodity trader. Not a ponzi scheme.
Read and understand alan1 and Infinityy's posts.
One more thing to ponder, Schwab bought TD Ameritrade's brokerage assets. The FTC, SEC, FDIC, 50 state attorneys general and every other alphabet soup agency in the US and Canada approved the merger. This group had access to material non-public information related to the merger. I find it amusing that Macro Axis, a shop (I believe) smaller than a typical Schwab office, with access to only public information and "social sentiment", can determine the the "Probability of Bankruptcy" for huge firms like Schwab, Chase and B of A.
And, for good measure ... Sony is still in business!