Makin' Money
Going to the mattresses?
Sure seems like that’s the place to park your money these days. Wow — what a weekend. And you felt it, too. We had more than 70 listener emails in our inbox this morning… many, if not most, of them asking about Lehman, WaMu, Merrill, Fannie, Freddie, and AIG. (I didn’t count all the phone calls.) You say you’re very worried about where to put your money. And we’re going to try to help you sort it out on this week’s show.
First and foremost you should know that if you parked your money with Lehman or Merrill, it is safe. At Lehman, your account will likely be transfered to another investment house. In the worst case scenario, the agency that protects investment accounts, the Securities Investor Protection Corporation (SIPC), will move toward a liquidation of Lehman’s assets. And that would mean it could take some time to get your money to you. But since 1970 SIPC has recovered 99 percent of retail account holdings from bankrupt brokerages. So barring anything unforeseen, you will not lose your money. And again, it’s not even likely to get to the point of liquidation. Instead, your investments will be transfered to another management firm.
At Merrill, this is just like any other takeover. It will take time to complete, and until then you won’t notice any difference in your ability to move your money around. Eventually your statements will start coming from Bank of America instead of Merrill Lynch. And that’s about all the change you’ll see.
We’ll be going deeper into these questions and issues on the show — we have Marketplace’s Bob Moon booked to talk us through the latest news from Wall Street as the week goes on. And we’re devoting the entire first segment of Getting Personal to your questions about these developments. We’re also hoping Vanguard founder John Bogle will be able to join us again as he has after previous Wall Street shockers. He’s always a valuable voice of calm and reason in a storm!
It’s not ALL doom and gloom, of course — even after today’s (Monday) 500-point drop on the Dow. Tune in for a nifty tutorial from Marketplace’s Steve Henn on where, exactly, your money goes after it hits campaign coffers. We had planned to air it last week, but had to bump it for the Fannie/Freddie wrapup. And Rachel Dornhelm introduces us to a Silicon Valley entrepreneur who’s designed a DIY ethanol pump. It can be yours for the bargain price of $10,000.00!
Does that sound like a good show? What else do you want explained about this crazy market? What are you thinking about it all? Are you managing to stay calm? Or are you ready to stuff everything under your mattress? Inquiring minds want to know…
- September 15, 2008
- 1 comments
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Latest Comments
- And if you threw it all a-way (10)
- Al wrote: I just heard a playdoyer on PBS for the "American" way of na... [read]
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- Spare a dime? Or $900 billion? (4)
- Jay wrote: And now they want to add $700 billion to the total? <a hre... [read]
- Tom Woodall wrote: On today's show (Sept. 20) you asked your colleague why Lehm... [read]
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Comments (1)
I appreciated Tess Vigland's piece on what effects the Lehman collapse and Merrill takeover will have on account holders.
What about risk of policy holders (rather than stockholders) of AIG or its subsidiaries (EG, former 21st Century in CA)? Should the AIG holdings corp not get the credit it needs in aftermath of Fed appeals, investor ratings service credit downgrades of AIG and its property and casualty subsidiaries ("a"), or shift from dubsidiaries, it may go insolvent. Then what happens to policies and claims?
Would one be prudent not to renew and/or seek a more solid insurer?
FROM TESS: Great question, Stephen, and we're getting lots of similar ones from folks who hold AIG policies, including annuities. We will definitely address those this weekend.