Bankers on the Block

The nation awakes Monday morning to the news that one of its most prominent securities firms has filed for bankruptcy. Maybe you've been reading about the troubles Lehman Brothers has been having of late. It came to a head over the weekend, as neither the feds nor a corporate angel was willing to bail the company out. There's more, however. Other prominent firms in the financial sector are also teetering on the brink. Merrill Lynch agreed to sell itself to Bank of America yesterday. Insurance giant AIG and savings and loan bigs Washington Mutual also find themselves strapped for cash, and looking for help.

All this comes on the heels of the Fannie Mae and Freddie Mac bailout, which in turn followed the shotgun wedding of Bear Stearns and JP Morgan Chase. Keeping in mind these aren't mom and pop operations we're talking about, a fair question to ask is, how come? How is that financial names Americans have come to know and trust are falling apart like this? The easy answer may be greed. It seems many of these companies invested heavily in the mortgage market that's now dragging the whole country's economy down.

Beyond that, it would appear a lack of discipline in the financial sector and regulation on the part of government also brought these firms to the brink. It gets like that when everybody at the top is making out like bandits. Six figure bonuses, lavish parties, and a never ending boom market come together to create a sense of entitlement to good times for all on Wall. St. And then it ends.

There's no telling how this market meltdown will affect the average American. There will no doubt be a huge shakeout on Wall St., meaning thousands will be out of work. They will join the hundreds of thousands of everyday folk who struggle to find comparable work. The guess here is most won't feel sorry for the high flyers. There may not even be much pity for shareholders who've seen their money evaporate before their eyes.

Recession? What recession?