Nightmare on Wall Street

[spaceboy761]

For those of you who have not been following this:

Street scrambles as Lehman, Merrill falter - U.S. business - MSNBC.com

Coming to work on Wall Street was almost surreal. The busiest place on the planet looks vey subdued all of a sudden. This is also going to going go from a Wall Street problem to a Main Street much faster now.

[spaceboy761]

Here's a better recap:

http://biz.yahoo.com/ap/080915/financial_meltdown.html

Let's hope that my firm (AIG) doesn't become the next to go.

[luvsluvin]

I just read about it before coming in here... yikes!

[spaceboy761]

I really can't explain how wild this is. The market was having enough liquidity problems before two of the five major banks went out and a third got put in limbo. My firm is handling this about as poorly as possible. Our new CEO reacted WAY too slowly, and it's going to be a very expensive mistake.

[spaceboy761]

This is totally going to crush the retail banks in two months or so. So far, America is treating this as a problem confined to Ivy League educated New York snobs. It's going to become a crisis for the whole country before Election Day:

Wilbur Ross: Possibly a Thousand Banks Will Close - Financials * US * News * Story - CNBC.com

[spaceboy761]

We're also facing some serious losses from Hurricane Ike as well. Hell of a time for this to hit.

[luvsluvin]

Originally Posted by spaceboy761

This is totally going to crush the retail banks in two months or so.

So, what advice would u give ppl short of stuffing cash under a mattress?

[spaceboy761]

This is unprecedented so I'm not totally sure.

One thing I can say is to break up your money, for the love of God, break up your money. If you have any deposits larger than $100K in a bank, then scout out some new banks and put part of the money in there. If you have 8 statements instead of 3, who cares? FDIC insures all deposits up to only $100K, but I would go as small as $40K-$50K since the Fed is depleting its reserves to unprecedented levels and even the $100K threshold may not be immediately safe in an old school Depression-type run.

Also, if you have a ton of money in the equities market in your 401K, really think about riding out this mess in a money market fund instead. I know that your instinct says to not sell near the bottom, but this is a crap shoot. A yearly return of 0% is very desirable right now, so don't poo-poo the option of taking a guaranteed 3% per year in a boring old money market fund. I would play the bond market and commodities either. Playing this market is like trying to perform heart surgery on yourself: Unless you've been to medical school, it's an insane idea. If you've been to medical school, it's still fairly crazy.

[LadyWrestler]

I have my own method of spreading my investments around. I adjust the distribution once a year. I'm investing for the long haul. I'm not going to panic and move any of my assets around because of this latest crisis!

[Niccivan]

We don't have any investments. Well hardly any at all. My husband and I depleted our 401k earlier this year so I could make it through school. (no lectures, it HAD to be done).

anyways, and at deposits over 100k. If I was wealthy enough to make desposits over 100k at a time, I'd be living the high life somewhere else


With all that said, I read about the crisis ealier this morning. Seems like the world is coming to end, and right before election time. How fun!