What this "Financial Crisis" means to ME!

All of this talk going on about Freddie Mac and Fannie Mae, the Lehman Brothers, and the American International Group (AIG) is not only confusing, it is one of those things that makes you just want to scream at the TV..." WHAT DOES THIS MEAN TO ME!"

Well, in a nutshell, over the course of three to four weeks a few financial disasters have rocked America:
1. Freddie Mac and Fannie Mae had to be bailed out by the US government from bankruptcy because they basically had no net worth. These are the two largest mortgage financing companies in the US.
2. Merrill Lynch sold itself to Bank of America
3. The Lehman Brothers Holdings, the 4th largest investment bank in America, filed for bankruptcy.
4. AIG, one of the worlds largest insurers, was headed for bankruptcy before the US
government bailed them out with $85 billion.

All of this is a result of the mortgage fallout that has taken place in the last few years. With house prices going down and foreclosures at an all time high, many investment banks and mortgage lenders have found themselves in debt from non-paid mortgages. As a result, these companies began to see their profits being eaten up by their debts, and they just could not play catch up!
So, many of them filed for bankruptcy, and now the US government is forced with deciding what is going to happen next, and what moves they will make to ensure that this type of cycle, the biggest since the 1930s depression, does not repeat itself. The governments intervention is the largest of the sort since The New Deal.

So what does this mean to you:
1. Fluctuating stock rates and returns
2. Low interest rates
3. Continually dwindling mortgage prices
4. Some, but limited, worry about the money you have invested at financial institutions
5. The possibility of a major comeback financially after the smoke has settled in this crisis!!!