Banks in serious trouble!

[jasonfish320]

Wow, as if things couldn't get any worse...Merrill Lynch gets acquired by BOA and Lehman brothers bank files the largest bankrupcy in U.S. history...NOT GOOD! Do we ever learn? They should never have allowed these crazy azz sub-prime & ARM mortgages. Now, it's only a matter of time until the other insitutions start going under, and then maybe a bank isn't the safest place to have my money afterall. According to the FDIC the government insures up to 100k, but that's crap because the insurances of the gov. are only backed by$50 billion and theres over $1 trillion dollars held by private individuals in U.S. bank accounts...hmmmm do the math!

[Rodman_Rob]

china's gonna be foreclosing on us any day now.

wait a minute, we're china's #1 consumer of china made goods, how's that gonna work out. interesting and scary times out there, that's for sure.

[tnfisherman]

its going to be like a another great dresspion but worst this time

the end is near

[WTL]

The end is near? How melodramatic can you get?

The end is gonna be way worse than a stupid financial depression.





Financially, we are in a little trouble. I am not a expert in finance or econ, but there are numerous obvious issues with the economy, the way Americans do business with each other and the way America as a country does business abroad - that doesnt even factor in the march of history, technology and progress that always pushes some people up and leaves others behind.

[CarpMan]

What the financial meltdown means to you -- if you're not in finance world
Posted Sep 15th 2008 2:00PM by Amey Stone
Filed under: Bad news, Market matters, Merrill Lynch (MER), Amer Intl Group (AIG), Lehman Br Holdings (LEH)

Over the weekend and on Monday, the population of the country suddenly divided. On one side are average folk who aren't involved in financial markets, except for maybe their 401(k), credit card, mortgage or checking account.

For those people -- the great majority of the population -- Monday started the week pretty much like any other. If they glanced at the news, it was to note more headlines predicting financial ruin for investment banks and institutional investors (the news is of the actual ruin of Lehman Bros. (NYSE: LEH) and probably Merrill Lynch (NYSE: MER) and AIG (NYSE: AIG), but after months of such news, that may have been lost on many people). Wall Street may not have been front of mind to most people going about their day today.

Latest Developments:
• Stocks Sink on Lehman News
• Will Fed Resume Rate Cuts?
• An Unprecedented Bankruptcy
• Banks Establish Emergency Fund
• Bank of America to Buy Merrill
• Future of AIG Uncertain
• SEC to Rein in Naked Shorts

Then there is the other side of the new dividing line: People involved professionally in the financial markets. For us, the events of the weekend and today are a sea change. Huge investment banks failing, securities trading opened on a Sunday to allow firms to unwind their positions, the government finally saying no to massive bailouts. There are going to be multiple thousands of finance professionals who lose their jobs. What will that do to the economy?

For me, a New York City resident and editor of BloggingStocks, I've felt the kind of nervous anxiety all day where I don't know if I'm going to cry or laugh. Among our team there has been plenty of gallows humor -- two actually quoted the same R.E.M. lyric in messages to me before 8 a.m.: "It's the end of the world as we know it."

That sounds dire (indeed, today feels very dire to me). But when I put aside my anxiety and wonder what all this means to folks that aren't engaged in the financial world professionally, here is how I see things shaking out:

For investors: The stock market will no doubt be extra-turbulent through the end of the year (on top of the financial sector's meltdown, we have election uncertainty and a weakening economy to worry about). I don't expect stocks to trade higher by the end of the year and think we may see a dramatic sell-off in the weeks to come. If we get a sell-off, you should use it to buy some strong stocks on the cheap. If you expect to need cash in the next year that you currently have invested in stocks, I would suggest gradually using rebounds in the market over the next few weeks to exit some positions. This is a good time to have an extra cash cushion.

Nation's Largest Bankruptcies

Mary Altaffer, AP10 photos


With $639 billion in listed assets, Lehman Brothers ranks as the nation's largest-ever bankruptcy filing by far. Click through the gallery to see corporate America's other large bankruptcies.
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For customers of financial services firms: If you have a Merrill Lynch credit card, an AIG insurance policy, or a Lehman Brothers brokerage account, I don't think you need to worry. Lehman accounts are protected, and you can move your assets to the new firm of your choice. If you did business with Merrill, you'll soon be doing business with Bank of America. It's unclear if AIG will survive, but your policies will likely be transferred to a new firm. Now, if you want to sue your broker for investing your money in any of these companies, you have a tough challenge ahead.

If you borrowed money from one of these firms: If you have a credit card, mortgage, or business loan from any of these firms, don't think this is your lucky day. You still owe the money and the firms, even as they morph into new forms, will still come after you for it.

If you need to borrow money: Surprisingly, I think ordinary consumers may find it easier to borrow money in the future as a result of this mess. Interest rates are likely to come down and basic consumer lending -- credit cards, lines of credit, car loans -- are profitable for banks who will be turning to consumers for more of their profits.

For the real estate market: The parts of the country where financial firms are major employers will feel some additional pain as many thousands of folks lose their jobs and many need to either move or trade down to a smaller home. Wealthy neighborhoods of the New York metro area will likely be hurt the most. Major cities on both coasts may feel some additional pain, but most local housing markets in the U.S. will not be affected much at all since it seems mortgage rates will remain stable and there are plenty of banks willing to lend money.

For the broad economy: The sudden demise of such large and storied financial firms will be a blow to the economy. A lot of very wealthy people are going to lose their jobs, which will impact many more jobs down the line. Housing markets will suffer more, retailers and automakers will be hurt.

But at least for now, it doesn't feel like the economy will come crashing down. I have faith that the Federal Reserve will keep the contagion from spreading. And I think about how, to the great majority of Americans, this is just more of the same dismal financial news we've been reading for over a year now. They are still taking the bus, buying groceries, showing up at work, picking their kids up after school. They are dreaming of their retirements, kitchen renovation, or next vacation. They are out there working and spending and keeping the economy afloat.

Is this the end of the world as we know it? No. Do I feel fine, as the lyrics of that R.E.M. song continue? No. Not today. Tomorrow, maybe.

[tnfisherman]

i meant that this is just the beganing ,, its going to be so bad that you would wish you could die ,,,,,,it going to be bad ,,

[bamabassman]

well to me it is like my grandparents said about the depression... ain't gonna be much different, we ain't got no money now. what's it like to have no money then. no money is no money. just wait it out. and i liked what rodman rob said. now that is funny. i guess we'll have to go back to using good ol U S A products again.

[WTL]

Its gonna be so bad that I wish for death? lol



If I woke up tommorow and the dollar was worth nothing, I had no job and everyone else was out of work too - you know what I'd do?


Say **** it. I'd grab the rods and head to the woods to be a mountain man. I would never wish for death just cause of a little money burning.

[MIbasser]

My poor 401k...... I don't want to know how much I've lost. I may switch a lot it to bonds, much more safe.

[barkelypup]

IMHO those corporations made idiotic buisness decisions or in the case loans to people who could in no way afford to pay them back. Now they are reaping the benifits of there actions. I say good riddence. The Problem with this is they are requesting Govt bail outs because they took a chance and it failed. Where does it end? They bailed out Fannie and Freddie at the tax payers expense. Those are some of the same tax payers who have failed at buisiness. All so some big wigs could save thier fortune. And by the way if the end is nigh. What a Glorious day that will be! If you are so worried about the end I would suggest looking to Jesus. He knows who you are and would welcome you with open arms. After all he is the End. First book of Revolations verse 8 it says. "I am the Alpha and Omega. The Begining and the ending saith the Lord Which is and which was and which is to come the Almighty." Now on later in that book it goes to tell about how bad it will be for the non believer and from what I've read its not going to be fun. Don't think I'm preaching to you because I'm not. You are free to do what ever you like. I Just wanted share that with you all and to let you know that it is too late to pray once the Devil has come.

Y'all have a great night and great day tomorrow.

bP