E-trade finally 'fessed up to being burned by the mortgage market. After reassuring investors repeatedly that its portfolio was solid, the online brokerage has belatedly signed up to the roster of companies disclosing heavy losses from residential mortgage exposure. In an effort to reduce its dependence on commissions, E-Trade stepped outside straight retail brokerage several years ago and built up an almost $30bn portfolio of home equity loans. The business initially drove strong gains in E-Trade's profits but became an albatross after the collapse of the subprime market. Investors have sold the shares heavily since June in spite of indications from E-Trade that its loan portfolio was not at risk of significant losses.

In response to its falling share price, E-Trade said last month that much of the mortgage debt in its portfolio was buttressed by insurance and high credit ratings. Its shares recovered slightly, only to be hammered again after Monday's U-turn. Even the most loyal E-Trade investors should be seething.