Or should that be "rest in pieces"?
Lehman Brothers, a 158-year-old financial services firm, and one of the pillars of Wall St., went bankrupt today. It started as a cotton trading company in Alabama, and survived the Civil War, World War I, the Great Depression, and World War II...but could not survive the mortgage crisis.
It's hard to describe the mood here in New York. Even people who don't work in the financial field know people who do. There's a feeling of fear, disruption, shock. This wasn't supposed to happen.
The really scary thing is that this might be just the beginning. Everyone thought it was over with Bear Stearns back in March. Lehman is proof that it's not over...that it might be far from over. Everyone was hoping the mortgage crisis was in the bottom of the 9th. Now it's looking like it's more like top of the 2nd, or maybe even the singing of the national anthem.
The words "worse than the Great Depression" were spoken repeatedly on the news today. Hyperbole? Maybe. But there's also the possibility that it's accurate, or even an understatement. The financial system is in serious trouble. Teetering on the brink of the abyss, even. Everyone is doing all they can to keep it from toppling, but I fear there is no way to fix it without serious pain.
This is a slow-motion train wreck, and it's only just beginning. Mostly, it has not affected ordinary people. Yet. Eventually, it will. I think there is a real possibility that we actually are headed into an economic crisis worse than the Great Depression.
So what do to? Save your money. Try to have an "emergency fund" of one year's expenses. If that's not possible, save as much as you can. Anything is better than nothing. Avoid debt - even "good debt" like a mortgage or a student loan. Think about what you would do if you lost your job, or had to take a severe pay cut.
I know this is way off-topic from what I usually write about in this blog. But hey, I'm interested in current events the way other people are interested in movies or music. This blog reflects my interests, just as others' personal blogs do.
I also feel a need to warn people. I don't know if anyone will listen, but I still feel obligated to say something.
Labels: off-topic, The Greater Depression
