Monday, September 15, 2008

it's the end of the world and I feel ... uh oh

Every financial news organization has broken out the big screamy photos and headlines today, as Wall Street institutions go down like dominos, the Dow cannonballs south, and veteran financial analysts are left making worrying comments about uncharted territory.

This level of global equity market inner workings is beyond me; one of the moments that really drove home for me how dire things could get was an offhand comment Fortune's deeply experienced columnist Allan Sloan wrote a few months ago in an analysis: "How can the Fed afford this largesse? Easy. Unlike a normal lender, the Fed can't run out of money - at least, I don't think it can."

Um, you're not totally sure? Uh oh.

Not being an investment banker, or an investor (not checking 401k. muttering through teeth "long-term returns, long-term returns ..."), I'm not immediately affected by any of this -- although living in NYC, I do have a few friends who work at places in the Wall Street orbit, who got pulled into emergency meetings today about how the sudden disappearance of a fair chunk of the Street knocks craters in their companies' revenue streams.

On the flip side, I also got IM'd by quite a few friends gleefully forecasting what low or nonexistent Wall Street bonuses this year will do to the local real-estate market, which is perennially driven into the stratosphere by big-spending financial-industry Masters of the Universe. One friend calculated that it would be worth the complete wipeout of his IRA if housing prices drop 10%.

But I suspect the economic Armageddon is about to hit home with a vengeance, because the next bank everyone expects to topple or get bought is WaMu. The bank I switched to after my last bank got shut down by the FDIC.

This time, I really might start stuffing money under a mattress.