Everything Is Over

Listen to this 'Talk of the Nation' topic

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Cleaning out the Lehman offices... Source: Chris Hondros/Getty Images hide caption

itoggle caption Source: Chris Hondros/Getty Images

In 1862, Emanuel Lehman, one of three brothers who founded the cotton trading firm Lehman Brothers, wrote a letter to his British in-laws, saying, "Everything is over." The problem was cataclysmic: the Civil War had cut off communications between Montgomery, Alabama, where Lehman Brothers was founded, and New York, where much of its business was done. As it turned out, everything was far from over; the firm moved to New York after the war, and created a formidable investment institution that survived almost everything, even the Great Depression in 1929. Today, however, everything is over. The hundred fifty eight year old Lehman Brothers did not manage to survive the credit crunch stalking Wall Street, and this morning, it filed for bankruptcy protection. Another badly injured — but still limping — player, Merrill Lynch, was bought by Bank of America, and fear of a domino affect has Wall Street mixing it's coffee with bourbon this morning. Of course, the demise of Lehman doesn't mean the world is ending — and we've got answers for all your anxiety — or at least a good guess about where to stand so the sky doesn't fall on you.

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I'm not afraid of everything collapsing. I agree with your guest, we need some leveling out and it's time for us to be more financially responsible on all levels: personal, business and government (state, local and country)

Sent by Brenda | 2:12 PM | 9-15-2008

This failure seems to be associated in large part to a lack of of global responsibility that our nation has to world. Is this not side result of this administration's go it alone policy these past 8 years.

Sent by klaus Holzer | 2:15 PM | 9-15-2008

Americans have been lectured for the past eight years about the inherent wisdom
of the market and the evils of regulating the investment industry. Whenever
warnings went out about the hazards of derivatives or of banks getting cozy with
investment houses, important-looking people with business degrees would scorn
the messengers and their supposedly naive and anachronistic mindsets. We need
to recognize now that the credit meltdown was
completely preventable, and the guilty parties are not the homeowners holding
sub-prime mortgages.

Sent by S.W. Conser | 2:16 PM | 9-15-2008

Brief: Regulation assumes regulators know what to look for in the entire financial system. The truth is, in a predictive sense, this is not possible or reasonable. The government involvement in backing securities skewed market forces as investors sought out government backed loans as risk became meaningless. I fear calls for increased government involvement at a detailed level.

Government involvement created this mess. I hope we do not make the same repeat the mistake.

Sent by kurt | 2:20 PM | 9-15-2008

What happens to peoples IRA or 401K savings if it wrapped up with one of these "giants"? My IRA investments are with C Schwab. How are they holding up? How can I know? I didn't know about Lehman until Saturday.

Sent by Keith L Mathews | 2:22 PM | 9-15-2008

Regulation assumes regulators know what to look for in the entire financial system. The truth is, in a predictive sense, this is not possible or reasonable. The government involvement in backing securities skewed market forces as investors sought out government backed loans as risk became meaningless. I fear calls for increased government involvement at a detailed level.

Sent by kurt | 2:24 PM | 9-15-2008

The analogy that has been running through my mind is that the financial industry has acted like a powerful football team creaming the weaker team (investors and borrowers) because the referees were absent from the field ... rather they were in the stands cheering as the score was run up.

I have no sympathy for the financial industry workers ... but I do for the mutual fund investors and cheated borrowers.

Sent by Alyssa | 2:24 PM | 9-15-2008

Every time there is a Deregulation of an industry: We as taxpayers have to bail out that industry. Let me know one deregulated industry that we have not had to bail out. Deregulate Energy: Enron. Deregulate Healthcare: HealthSouth. Deregulate Banking: Savings and Loan disaster. Deregulate Airlines: Airline bailouts. Deregulate Securities: FannieMae/FreddieMac/Lehman/Bear Stearns/Countrywide
This is a real danger, because the Republicans are pushing to privatize social security is the loss of all retirement income. Imagine all the fees and losses that all tax payers will incur when this happens.
I hope that you people understand the doom that can occur from this.

Sent by Lowell | 2:26 PM | 9-15-2008

I am a member of WBUR. We have to stop looking to blame people. We must look for solutions. I am 46 years old and working. Shaking up of the market is a good thing. I think my family and I can weather the storm. Until we add personal accountability into our public and private investment decisions people will get hurt. We have to understand that everyone cannot own a home - today - and unless we start saving and reducing our debt, the problem will be harder to over come.

Sent by Joe Chromy | 2:30 PM | 9-15-2008

Someone mentioned Morgan Stanley in earlier comments. I have some of my 401K money there. Should I be concerned about moving those funds? Can private investors lose their savings invested with these companies?

Sent by Sharon | 2:32 PM | 9-15-2008

I think the writing is on the wall for us. Due to a neurological disease I started using a manual wheelchair a few years ago, now I have an electric wheelchair and we have a small home that is challenging for for me to navigate around. We want to move and started looking for another home a year and a half ago. Since then the values of our current home has dropped and there is a dearth of homes for sale. Now i's likely to get worse before it gets better I don't think we will be moving any time soon. Right now our future and the future of our country is a big question mark. Better stock up on Antacids.

Sent by Ali Harrod | 6:16 PM | 9-15-2008

It seems immoral to me that no media talks about where all the money has gone that was generated by Sub-prime, etc. We are hearing about the losers, but why not label the winners.Isn't conservatism about the leaders of industry doing battle and the fittest surviving? Who are they, who are these winners?When the Savings and Loans went down, we had some people to hang it on:Keating, etc. Now the winners will slip off unknown, unabashed by their conquest.

Sent by Sylvester Bretschneider | 6:41 PM | 9-15-2008

One caller to the show briefly touched on all the main street people who have their 401K in Wall Street. There is concern of the meltdown's impact on everyone in the country.

I have not heard however about the flip-side of the scenario. The "Great White Wave" of baby boomers who will start turning from investors into drawing on the 401K. This mass will start to draw down the stock market as the total investments start to shrink.

The shift of money management may come right as this crisis is just starting to recover.

Sent by John | 10:15 PM | 9-15-2008

Lehman collapse is nothing new. The whole financial system of this country needs an
overhauling. De clearing bankruptcy is a fashion. At the same time the basis of interest on which the whole economy depends needs change.http://www.statedemocracy.org

Sent by dennis moore | 2:08 AM | 9-16-2008

This financial mess is a direct result of the current administration, the love of "Reaganomics" and the Republican congress that de-regulated everything they could get their hands on. Looking at this very predictable debacle, why in the world would we we vote for "more of the same" in November?

Sent by JKB | 9:56 AM | 9-16-2008

What's more disturbing is that we as a nation feel we need to be protected from ourselves. People who were too lazy to do enough research to know that investing is risky should not be investing. Otherwise, socialism here we come.
http://www.e-m8.org

Sent by Oleg Tumarkin | 2:24 AM | 9-17-2008