Is The Wall Street Financial Crisis Freaking You Out?
(Getty Images) Have you dared to look at your stock market portfolio?
You don't have to be a stockbroker to feel the affects of the financial tornado that whipped through Wall Street yesterday, resulting in the bankruptcy of Lehman Brothers, the fourth largest investment bank in the U.S., and the panicked sale of Merrill Lynch to Bank of America. Meanwhile, AIG, the world's largest insurance company, is also in big trouble, and so is Washington Mutual.
And let's not forget the recent collapse of investment house Bear Stearns, and the government takeover of mortgage giants Fannie Mae and Freddie Mac.
These are scary financial times indeed.
Stocks tumbled more than 500 points yesterday in what was their worst slide since Sept. 17, 2001, the first day the market opened for trading after the 9/11 attacks.
We can thank the subprime mortgage crisis in large part for this massive mess. Lehman Brothers and Merrill Lynch were both up to their eyeballs in debt that wasn't being repaid because so many people who have bought homes in the last few years couldn't really afford them to begin with. And, by the way, if you want to get a loan now, good luck. Even if you've got good credit, it's going to be a lot harder.
One thing's for sure: We can all learn a lesson from these stunning developments on Wall Street. It's time that we all stopped living so far beyond our means (if anything, I think my financial idol Suze Orman would agree that we all should live below our means). Additionally, anyone investing in stocks should be well aware of and able to handle the risks.
Now it's your turn to vent: What do you make of all of this financial turmoil? Are you scared your 401(k) is going to be decimated? Do you fear we are headed for a depression, or do you think the markets will quickly rebound after wringing out the excess?
And do any of you readers work at Lehman Brothers or Merrill Lynch? Or AIG? If so, what's it like on the inside, and how are you doing?