Financial Crisis - A look Back

It was one year ago today the United States financial system began collapsing. Lehamn Bro...  More »

It was one year ago today the United States financial system began collapsing. Lehamn Brothers, the fourth largest investment bank on Wall Street, shut down a year ago today. Shortly after it was a domino effect on wall Street. andamp;lt;a href=andamp;quot;http://www.kxnet.com/t/brad-feldmanandamp;quot; class=andamp;quot;kxInlineLinkandamp;quot;andamp;gt;Brad Feldmanandamp;lt;/aandamp;gt; looks back and asks the question are we better off today. (Pres. George W. Bush) andamp;quot; we know what the problems are, we have the tools to Fix them and we are working swiftly to do so.andamp;quot; But no one really knew just how bad the economy was. Following Lehman Brothers collapse the federal government came to the rescue... but not before Goldman Sachs and Morgan Stanley, the last of the largest independent Investment Banks transformed into bank holding companies. This all after Bear Stearns, Freddie Mac and Fannie Mae all received bail out money fvrom the federal government. The seven hundred billion dollar bailout bill was passed and signed in early october. (Wayne Muehler/ Investment Centers of America) andamp;quot;In spite of what happened to Lehman Brothers I think if we if that situation presented itself again today I think it would be handled differently but a lot of things happened pretty quick back then.andamp;quot; It goes with the saying hindsight is twenty-twenty. So with what we learned from then are we better off now compared to a year ago? (Eugene Graner/ Heartland Investor Services) andamp;quot;We are not better off than a year ago. The larger brokerage firms are now even larger making even more money because they have socialized risk.andamp;quot; (Wayne Muehler/ Investment Centers of America) andamp;quot;No we are not better off now...maybe we are better off in the sense that the system has had a chance to cleanse itself of some of the problems that it had.andamp;quot; So does another collapse loom? Eugene Graner says yes...and he predicts it will come on the next year in the form of option arm loans. (Eugene Graner/ Heartland Investor Services) andamp;quot;This is the teaser rates that the people who could afford the homes they would buy into a home with a small payment for two to five years then it would reset at a higher payment two to three years down the road. Those start resetting in 2010. The next shoe is about to drop in home forclosures.andamp;quot; However, investors have seen the stock market rise again...closing above ninty-six hundred... Wayne Muehler says in the past six months the stock market has risen about fifty percent. But investment bankers such as Muehler watch clients take a more conservative approach...banks are seeing more savings amid fears of another downturn. (Wayne Muehler/ Investment Centers of America) andamp;quot;You should expect some sort of pullback at some point along the way. I don't know if that starts tomorrow or six months from now but you dont see markets going up that far, that fast without at some point some correction happening.andamp;quot; Muehler is taking a not if but when approach to the possibility of another downturn...but hoping if any lessons were learned from a year ago a major collape will be prevented. Brad Feldman KX News The financial experts we talked with say people are taking a much more conservative approach to investing. They also say the amount people are saving is going up as well.  « Less