Make us your home page

Lehman damage far worse than Ike's

Did the hurricane in Texas or Wall Street deliver a more lasting blow to the U.S. economy? Lehman trumps Ike, hands down.

Not to minimize Ike, but coastal Texas will rebuild quickly with the help of government and insurance money. Restoring confidence in battered Wall Street is a herculean task. On Monday the Dow fell 504 points or 4.42 percent, dropping below the 11,000 mark for the first time since mid July. It was its worst day since the aftermath of the Sept. 11, 2001, attacks.

How bad was it? Wall Street winds whipped the likes of insurance giant AIG, whose shares plunged 60 percent Monday, and already beleaguered Washington Mutual was off 26 percent to close at a puny $2. Shares of Bank of America and Wachovia, the two biggest banking companies operating in Florida, lost a fifth and a fourth of their values in a single day.

These are stunning economic events to witness just seven weeks before one of the more important presidential election in our lifetimes. It is the federal government's tip-top priority to try to rebuild investor confidence. Lately, it's not doing a very good job.

So how do basic folks like you and me survive this maelstrom? Very carefully. Each of us must reassess where our money is, determine its safety and rethink how we want to try to preserve it and, hopefully, grow it in a nerve-racking stock market.

Is the worst of the financial storm over? Doubtful. Such painful events — from the collapse of Bear Stearns, Lehman Brothers' bankruptcy and Monday's sale of Merrill Lynch to Bank of America — are tied to the rise and fall of housing.

Until housing prices stabilize and people believe they can buy a home and feel confident they will not lose 10 percent of their purchase price in the first year, we're going to be in for some rough weather. We're probably talking about 12 to 18 months more of economic pain until things start to show signs of rebounding.

For now, there's work to do. Here are five practical steps we should all take to get our own houses better prepped in the event of another pounding by a financial Category 2 or worse. Remember, Ike was a Cat 2 storm.

1. Don't panic. Trust your investments enough to avoid widespread selling. There may even be some selective buying opportunities now that some stocks have declined so far.

2. Too nervous for stocks? Consider money market funds, Treasury bonds or bank certificates of deposit. But try to avoid selling stocks at big losses in the process.

3. Make sure your bank is in good shape. New numbers came out Monday showing more second-quarter deterioration in the health of many Florida banks. Seven small Florida banks are in deep distress and may require regulatory intervention this year.

4. Look at rising CD rates. Banks that need more cash are willing to pay higher rates. That's why we see Tampa Bay area ads for Countrywide Bank's 4-percent, 7-month CD, or Washington Mutual's 4.25-percent, 8-month CD, or BankUnited's 4.8-percent, 13-month CD.

5. Be sure bank deposits remain under FDIC insurance limits. Go to for details if deposits in one bank could exceed $100,000.

Robert Trigaux can be reached at Get inside Tampa Bay businesses with his new Venture blog at

Lehman damage far worse than Ike's 09/15/08 [Last modified: Tuesday, September 16, 2008 10:30am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. The FHP trooper behind quota on speeding tickets will retire Sept. 5

    State Roundup

    TALLAHASSEE — A Florida Highway Patrol official's call for troopers to meet ticket quotas has cost him his job.

    Major Mark D. Welch, Troop Commander of Troop H, wrote an email asking his employees that he wants them to write two citations each hour. "This is not a quota," he wrote. His resignation is effective Sept. 5. [Florida Highway Patrol]
  2. Trump shuts down CEO advisory councils as main group acts to disband


    President Donald Trump's main council of top corporate leaders disbanded on Wednesday following the president's controversial remarks in which he equated white nationalist hate groups with the protesters opposing them. Soon after, the president announced on Twitter that he would end his executive councils, "rather than …

    President Donald Trump meets with Merck's chief executive, Kenneth Frazier, second from left, and other leaders of the pharmaceutical industry in the Roosevelt Room of the White House last January. On Wednesday, Trump's main council of top corporate leaders disbanded following the president's controversial remarks in which he equated white nationalist hate groups with the protesters opposing them.
[New York Times file photo]
  3. A long-awaited vision for Tampa's Westshore Marina District

    Real Estate

    TAMPA —Eleven years after plans to develop a waterfront tract on the Tampa side of the Gandy Bridge were first announced, a new rendering gives a hint of what Westshore Marina District ultimately will look like.

    Rendering of Marina Pointe, a condo project overlooking Tampa Bay as part of the Westshore Marina District. [Courtesy of Masterfile Corp.}
  4. Buddy Brew Coffee to open downtown Tampa location


    TAMPA — Buddy Brew Coffee plans to open a new location in downtown Tampa at Park Tower in early 2018. The specialty coffee craft roaster, which was founded in 2010, has five other locations throughout Tampa including the Oxford Exchange, Sarasota, Hyde Park Village and Terminal F inside the Tampa International …

    A cappuccino is displayed at Buddy Brew in Tampa in January 2017. [CHARLIE KAIJO | Times]
  5. Where to pig out for National Bacon Lovers Day

    Food & Dining

    That's right: Sunday is the national day devoted to all things bacon, National Bacon Lovers Day. Which, really, isn't too different from the other 364 days of the year. But here's a little roundup of some special places to celebrate everyone's favorite meat snack (seriously, even vegans have a grudging respect …

    A creme-filled doughnut topped with maple frosting and bacon at Dough on MacDill Avenue in Tampa.