Our financial system is crumbling this week.

[Simbagal23]

It appears Barclays bought part of Lehman Bros......

[ghostrunner]

Basically, there's been some dismal 5 and 10 year stretches along the way, but over time there's no reason to think the market won't recover from something like this. I don't know if investors had any wool pulled over their eyes so much as they didn't do enough homework to begin with. I know I didn't when I first started putting money away.

The stock market is not the economy, and I certainly hope the goal of these actions is not to protect investors. I'm sure that there will be be a recovery, but in the mean time there will be plenty of pain for people who did not make these bad investments and rely primarily on labor income (the majority).

I was talking about the gloomy stock market comments that Freed Roger referenced.

I'm not a big fan of bailouts either, but in a sense we do bail individuals out when they lose their jobs because they need help and the cost of losing their health and productivity is undesirable. I'm not sure that large companies should be so different if the impact of losing them is too harmful. The post-9/11 airline bailout was unnecessary. These I'm not sure about yet.

[UK]

I reiterate my question from earlier today:

Why is the fed using OUR money to bail out SOME financial institutions who made bad, risky investments, but lets others go down the toilet?

if I were a Lehman shareholder, I'd be livid/suicidal/throwing molotov cocktails at government buildings.

As far as Lehman, it simply came out of nowhere, it happened too fast to devise any sort of bail out plan.

There's likely going to be 2 more institutions to going down, we'll see what happens.

The gov't failed to regulate them the 1st time around, now to save the economy from further decline, they have to regulate them now thru asset stabilization.

[TheoSqua]

Yeah, think of a company like AIG going out of business.

That's 1 TRILLION dollars in assets that just disappear. That alone could put the economy into a depression.

[AWvsCBsteeeerike3]

It's a great time to be dumping money into a 401K....unless you truly believe the economy will never recover and the US will crumble.....

[Freed Roger]

It's a great time to be dumping money into a 401K....unless you truly believe the economy will never recover and the US will crumble.....

Yes - i truly believe in the unless scenario -so what then?

[Freed Roger]

Ok actually, I don't think were crumbling. but how realistic is a forever upward trend on he NYSE. I don't think its always "blue skies" when dumping money into the 401K. but yes definitely contribute to take advantage of company match.

instead of dumping more into 401K - hows about this for a safe return on your money - paying down your debts? unless you don't have any.

...or hows about logging off and getting my arse back to work. see ya.

[AWvsCBsteeeerike3]

It's a great time to be dumping money into a 401K....unless you truly believe the economy will never recover and the US will crumble.....

Yes - i truly believe in the unless scenario -so what then?

Move to China.

[sighyoung]

Ok actually, I don't think were crumbling. but how realistic is a forever upward trend on he NYSE. I don't think its always "blue skies" when dumping money into the 401K. but yes definitely contribute to take advantage of company match.

instead of dumping more into 401K - hows about this for a safe return on your money - paying down your debts? unless you don't have any.

...or hows about logging off and getting my arse back to work. see ya.

We'll have to see if the loan to AIG keeps that company afloat. AIG wrote the insurance policies for a lot of banks and brokerage houses involved in the subprime mortgage crisis. Several banks are solvent only because they have this insurance to cover their mortgage losses. AIG evidently didn't set aside much money to cover potential mortgage losses, which was stupid, and which is why they're in financial trouble.

If AIG goes under, though, many banks would lack coverage for their losses, and you would see a wave of bank failures. We're not even close to being out of the woods on this yet.

[Arthur Dent]

We'll have to see if the loan to AIG keeps that company afloat.

Aren't we basically on the hook for it at this point? I assume that if the loan is insufficient the amount will be raised.