As recent as this past weekend and in Monday's (Sept 15th, 2008) news, it seems the American population is fueled by two sets of demographics, those involved with the economic fate of the nation and others with little or no financial know-how with exception to maybe managing their 401k, credit card debt or mortgage needs.

 For most American people the week started just any other, waking up to their first morning cup of Joe or sitting in bumper-to-bumper traffic, working for the weekend all over again.  They weren't looking at the headlines thinking we are heading for harder times or a Great Depression because great financial institutions and banks are in trouble, folding under; many were despaired over the remnants of Hurricane Ike and its path of destruction or possibly the oil crunch and fueling their cars of the week's commute.  No such financial news is lost on the majority of Americans.  Wall Street sometimes is just a fabled place, another Main Street in America, a film by Oliver Stone starring Michael Douglas, not a place that decides the interest rate or the spare change to be saved.  No, Monday was just another day.

For those professionals who make their bread and butter, take home the bacon to fry it up in a pan, for those who work in the financial district, this last weekend and Monday present historical markers of a changing tide.  No longer will the federal government step in to save huge, once prosperous financial giants as the giants fall from grace or banks continue to fail and securities trading allows firms to unload; things will only get worse before they get better? This could have amazing fallout where whole industries stop existing and thousands lose their jobs.  In an economy already ailing from a failing mortgage industry, what can happen?  Is this just another symptom or source of the problem?  What now will happen to our economic future?  Hell there is no guarantee but this is scary.

One cannot begin to feel the sky is falling; the beginning of Armageddon is upon us?

 Tried and true models of business and mostly success are no longer the winners?  We are headed to uncertain times.  This may sound like dire straits? We have a been through worse, hell our financial ways of life were under attack seven years ago on 9/11 and we bounced back, didn't we?  Truth be told, these are tough times for so many people and there is no telling if things will come out clean in the wash.

For starters, the year-end for investors and Wall Street is going to be like a roller coaster. What does not make matter any better is the election.  Many are waiting to see the results of an historical neck and neck race.  No telling who will be in office come January and this is somewhat disconcerting because after years of poor leadership someone with innovative ideas and proactive abilities is needed.  There is going to be much drama in the weeks to come on Wall Street.  You are going to see a lot of negative action as people sell and ditch underperformers in hopes of breaking even.  The stocks just aren't going to be able to trade higher.  I mean if you've got the money to invest, you should go with strong stocks and get them for cheap.  Still for many people in need of cash and now, this is the time to exit and bow out gracefully. 

Many may be concerned about their brokerage accounts.  If you carry a Merrill Lynch credit card, have an AIG insurance policy, or a Lehman Brothers brokerage account; there is not much cause for worry.  It is a changing of the guard, no longer will you be doing business with someone you were familiar with.  Lehman accounts are safe but you also have the option of moving to another firm.  Bank of America bought Merrill Lynch like Countrywide before them and it is my prediction the BFA will soon own the world if not every financial holding from Wall Street to Market Street in San Francisco.  So if you have a Merrill account you will soon be under that umbrella. AIG, we will have to watch and see.  It is uncertain but if they go under, you will be with a different service provider.  Ironically in this sue-happy society of ours, you will have a fight on your hands if you want to go after your broker for investing your funds inappropriately.

Many people are thinking JACKPOT!  Still if you have any debt such as credit cards, mortgages or another loans, you still have to pay on them.  You will still owe money to the new firms and they will exercise the right to collect the debt if you fail to repay.

There may be good news to come out of this for the future of debt. It may be really tough to get a loan or a refi right this moment because all risk is being judged during a very risky time but in the coming months and years, things are going to turn around, I think.  For one, interest rates are likely to go down again to historic levels, opening doors to consumer lending but also consumer spending, or a thriving economy.  You know that for banks at any time, credit cards, lines of credit and auto loans are big money makers but these vehicles of industry will pave the way back to a more healthy economic status. 

While there be negative repercussions, they have been coming for a while as the mortgage industry folded, you will see many areas of solid commerce tighten and hurt because of financial woes.  Many professionals tied to Wall Street and the insurance field will be laid off, unable to live beyond their means and need to change their lifestyles.  This will mean more houses on the market and many people going back to school, switching careers and living paycheck to paycheck.  It is my belief that while areas outside of New York City will suffer but also others dependent upon these high paying once lucrative jobs.  Most major cities where the cost of living is high and the housing markets are steep; this is where the most pain will be found.  Still local housing markets will be predicated by local trends of growth and depending on jobs may find an upswing as many first time buyers enter the market due to low interest rates and bank programs to achieve these goals. 

Still for the giants to fall is a major bleep in the history of economics and this time will take its toll.  It is sad but true, the old adage or urban myth that the rich get richer and the poor just get poorer may not be true any longer in this new reality.  While people from all walks of life will lose their jobs, some very rich people will either go into early retirement or find themselves collecting unemployment. The housing market will continue at a stand still while retailers and automakers will suffer due to lack of consumer confidence or funding.  People will see the need to reduce and recycle but not acquire.

You must remember that for the moment, the sky in NOT falling and the economy is not paralyzed completely.  In this predicament, you can have faith that the Federal Reserve will be proactive enough to ensure a dissipation of the trickle down effect.  I think that for most Americans, Monday's news only represents the further negative forecast that most were expecting especially after the mortgage industry took a dirt bath, it was only a matter of when really. I mean we still all have to survival, fill that gas tank, head to the office, stop at the store on the way home, continue to save for a rainy day and hope for the best.  We can still have dreams of tropical vacations, healthy retirement funds, a new basement family room and college fund savings.  We may be cautious but we are all making it work for us and that spending behavior will later save the day.  Years ago if you are of that GenX crowd, you will know, it is not the end of the world as we know it because we have reason to feel fine, if not today then maybe tomorrow.