But what do all these bank failures mean?

[mrs_p]

My hubby and I are mid-thirties and have small 401Ks, several IRAs, investments, a little savings, etc. We are both students and are not working right now and we just don't know what any of this means (english and biology degrees did not prepare us for this)? What happens next? Are we supposed to move our money into bonds? Will everyone be calling their financial planners tomorrow? Do we need to get one?

[movonne]

1. ? I would like to know...

[lligrd]

2. Didn't Financial Planners Contribute To This Mess

Hard to predict where the chips may land now. The time to plan ahead was yesterday. Going to be very interesting.

[still_one]

4. Not really. It was the wall street brokers who pushed the subprime mortgage mess

Of course some financial planners may have given their clients bad advice, and didn't diversify them

[still_one]

3. As long as you are diversified, don't worry. In fact it would be best not to do anything

with your accounts right now.

If you are nervous, you might want any new money going into your IRA's and 401Ks to sit in money markets until things stabilize

As long as your savings accounts are less than 100K per account you have nothing to worry about

[mrs_p]

7. thank you

makes sense to just hold tight!

[lligrd]

9. Unless Of Course McCain Gets Elected nt

[still_one]

12. It wouldn't matter, however mccain isn't going to get elected /nt

[lligrd]

15. I Meant That In Response To "You Have Nothing To Worry About"

And I stick by it. While your advice is sound if somebody in charge is able to stabilize and turn the economy around, if McCain wins, all bets are off.

I'm with you as far as McCain winning but what about him stealing it? I still see that as a possibility.

[still_one]

26. It depends what your time horizon is. The financial implosion has actually been going on for some

time now, and there is no question that the excess is in the process of unwinding

There is also no question that we are in a major recession, maybe worse, but assuming there won't be a nuclear war, I would say if you are young enough, you have enough time to recover

Incidently, if there is a nuclear war, it doesn't matter anyway

[CoffeeCat]

11. but isn't there the question...

...about what happens if there are multiple bank failures? The FDIC cannot
insure and pay for the failure of ever bank--if there is a complete meltdown.

I am not purporting to understand this complex situation. However, I duly
noted, when the last two big banks melted down--that a few media outlets
managed to report that saving these banks really stretched the FDIC coffers.

Is there any validity to this?

And yes, the treasury can always print loads of money to cover the FDIC deposits. However, wouldn't
this cause hyperinflation?

[still_one]

16. What the FDIC is doing right now is moving insolvent bank accounts to banks

that are solvent

Not every bank is insolvent, and not every brokerage firm is going under

We already know there are about 100 banks on the feds list. They will spread this out over time

and yes it will cost the taxpayers something from this mess

[nadinbrzezinski]

5. You've got time for this to recover

now if you were retired... then worry

[mrs_p]

10. makes me worry for our

grandparents and parents set to retire in the next few years. it seems like the only thing to do is wait for tomorrow. (we do have a second bedroom with bunk beds and as long as we can pay the rent, we can put up our family members if need be.)

btw - i've been following your posts for months, and appreciate your insights!!

[nadinbrzezinski]

14. I worry about my 78 and 84 year old mom and dad

will be making some calls tomorrow

They don't need this shit

[still_one]

17. I would hope as they neared retirement age, they started moving more of their assets

to fixed income?

[alittlelark]

6. Everbank....

We have done very well w/ CD's.



BOTTOM LINE - get out of US currency.

[lligrd]

8. If It Gets Bad Enough It Will Be Felt Worldwide

But I see Cheney took your advice long ago.

[still_one]

20. It is being felt worldwide /nt

[alittlelark]

21. Yes, it will be felt worldwide.

If you are not out now.......GET OUT.

I don't want to scare you.....

[still_one]

18. Not necessarily /nt

[alittlelark]

25. Happy Happy Joy

UH YEAH

[mrs_p]

13. thanks for everyone's comments

i'm sure a DU'er will do this when the dust settles, but it would be nice if someone can break all this down into dummy terms for those of us here who just don't understand what's going on... i'll try to read up on it more between studying for my upcoming tests. thanks, again, for DU'ers' help in all this mess.

[Gman]

19. Pull it all out

bury 3/4 of it in coffee cans in the backyard. Stuff the rest into your matress.

But that's just me. I'm not convinced that's not the best investment strategy right now.

We did do something similar, though. We've got everything in cash accounts, guaranteed interest at a low interest rate. It's not making money but it's damn sure not losing any. If we'd done what the "financial advisor" wanted us to do in December last year, we'd probably be down 25% right now from that point. I told the guy my coffee can, matress strategy. He laughed too, and said, "but we're talking long term here". I told him that preserving the principle should be goal #1 right now. We agreed to disagree, turns out I was very right and a whole lot of other people are down.

we're 50's-ish.

[still_one]

23. It all depends. If you need the money now, then by all means you should be in cash

[iiibbb]

22. It means there will be opportunities...

... the market isn't going to go away... and it will rise again.

In the long run (and you're young enough) not much to worry about as long as you stay employed.

[still_one]

24. You are absolutely right, "as long as you stay employed" /nt