Away from the football stadia and Hurricance Ike coverage this weekend, the major financial players in government and on Wall Street have been frantically trying to save the nation from another fiscal crisis.
And it looks like they've failed.
Tomorrow, another major brokerage and financial firm will go under, this time filing under Chapter 11 of federal bankruptcy code. That provides a filer temporary relief from creditors while it reorganizes in some business entity or makes it more attractive for buyers by selling some assets. Beyond that shocker about Lehman Brothers, the big name of Merrill Lynch has been purchased for $44 billion by Bank of America, reports Marketwatch.com.
The nation's declining home prices have rocked Wall Street financial houses and the mortgage portolios of bank stock they own and other instruments. The crisis soon will threaten more institutions as commercial property values start to decline.
Whomever wins the White House will have a big mess on his hands. It will overshadow Iraq and Afghanistan and cause even more pain in U.S. households.
What should you do? Do not invest any money into the stock market without the advice of a certified financial planner -- NOT A BROKERAGE FIRM/FINANCIAL HOUSE. You can get a free meeting and advice from a planner. You do not necessarily have to have a certain amount of money to see a planner. Ask him or her first.
If you have money in the stock market, ask the planner first what to do. This is a short-trading market. That means profit can only really be made in buying and selling stock in a single day or over a week. Such trading takes big money to pay high commissions in order to make a profit.
For most people, the yearly return on investments during the next 12 months will probably be 2 percent at most in fixed instruments. Municipal bonds can deliver 4 to 5 percent and tax free, but you are buying into a term of 30-years for these instruments. Again, get a financial planner and ask for investments inside and outside of Wall Street. Diversify your holdings to maximize profits and limit risks. And start watching CNBC (Channel 46 Comcast) on weekdays for more awareness about the financial markets.
Sorry for the bad news. But the action outside of football and hurricanes is where the fate of a nation is being decided for the coming year. A friend of mine who is an attorney told me over lunch Friday that his colleagues in bankruptcy law are gearing for a heavy caseload. The state of Tennessee already is among the nation's leaders in the number of personal bankruptcy filings.
As an economics writer, I covered the federal bankrutpcy court in the Western District of Oklahoma for 10 years during the Oil Bust. The hardship was heartbreaking from the banker to the rig worker.
In the coming months, we will need to become more of our brothers and sisters keepers, more than at any other time in our years on this Earth. May God make us courageous, compassionate and heroic.
To read more, click on: http://www.nytimes.com/2008/09/15/business/15lehman.html?_r=1&hp&oref=slogin
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