Williamo’s Blog.

No comments from the peanut gallery, just a couple quotes from this CNN article…

Monday was the single worst day on Wall Street since a big stock tumble in the wake of the 9/11 attacks on America seven years ago. The Dow Jones Industrial Average stock index fell a whopping 504 points, a loss of almost four percent. The more representative S&P 500 index dropped almost five percent, while the tech-heavy NASDAQ Composite index closed 3.6 percent lower.

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Things came to a head last week with the government’s unprecedented takeover of mortgage giants Fannie Mae and Freddie Mac that unsettled many. But over the weekend, U.S. Treasury Secretary Henry Paulson refused to help bail out Wall Street’s big banks in trouble over their bets on bad real estate.

Here’s a summary of what has transpired so far:

1. Lehman Brothers has filed for Chapter 11 bankruptcy. The 158-year-old investment bank has accumulated debt totaling $613 billion. It failed to secure a takeover by British bank Barclays or Bank of America over the weekend, and had no choice but to throw in the towel. Lehman Brothers says it’s protecting its assets and maximizing its value by declaring bankruptcy.

2. Merrill Lynch has agreed to a merger with Bank of America. Once B-of-A decided to end talks with Lehman Brothers, it turned its attention to Americans’ largest brokerage and quickly struck a deal to acquire it for $50 billion in stock — a deal that effectively ends Merrill’s independence. Merrill had posted losses of over $17 billion this year.

3. The American International Group announced plans to restructure. AIG — one of the world’s largest insurers — said it would sell off part of its business to help recoup losses from the subprime mortgage crisis. In the past 9 months, AIG has lost more than $18 billion. On Monday night, three credit rating agencies downgraded their ratings for the company, making it harder to raise the funds to get it out of the red.

To put things in perspective, there were five major investment banking firms dominating deals on Wall Street at the start of 2008. Now, nine months in only two remain.

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Many believe the current turmoil hitting the financial system is the worst since the Great Depression.

Why does this all matter to you?

More than half of Americans are invested in some way or shape in the stock market, through 401(k) plans, Individual Retirement Accounts and mutual funds. Many of these funds are tied to indices that are heavy with financial stocks now in trouble. So, stay tuned ad the turmoil on Wall Street sends ripples out onto Main Street.

(http://tips.blogs.cnn.com/2008/09/16/the-sky-is-falling/)

Let’s revisit one particular quote:

“Many believe the current turmoil hitting the financial system is the worst since the Great Depression.”

That is all.