Oct 10, 2008 11:48 am US/Eastern
How Will The Market Meltdown Affect Me?
BOSTON (WBZ) ―
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A trader puts his finger to his head on the floor of the New York Stock exchange Oct. 9, 2008, in New York City.
Spencer Platt/Getty Images
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So what does the market free fall mean for most of us?
Financial analyst
Barry Armstrong, host of Money Matters on WBIX Radio, shared his thoughts with
WBZ's Paula Ebben and David Wade Friday morning.
Trading on Wall Street could come to a temporary halt soon: "If wouldn't surprise me if either today or perhaps on Monday they froze the markets and just said 'Look we're going to stop trading' much like they did after 9/11 to quell fears and have an orderly approach."
Expect an infusion of cash into the banks: "I think what they would like to do is make an effort to recapitalize the banks, get them back up and running, get some of this $700 billion that was part of the bailout package out there into the marketplace and start extending credit to small business."
Who is most vulnerable? "I'm worried about the people that don't have earned income, that are relying on investment income. Most retirees would have money tucked away in safe investments like CD's and money market accounts. But there are many retirees who have a disproportionate amount of their money in the markets and they may have seen as much as 40 or 50 percent of that evaporate and it happened very quickly. So that's why you've got panic in the streets right now."
Should people cash out now? "The thing that we've always done in the past is say 'Well, we don't think it can go any lower' but the problem is now we don't know. Nobody knows."
"If anybody is trying to convey that 'Oh I know that the bottom is 5,000,' or 'I know that the bottom is 4,000,' I think that is very inaccurate advice to be putting out there."
"I certainly have never seen anything like this in my lifetime."
How will this affect our day-to-day lives? "I think the biggest thing that consumers need to be prepared for is excessively high rates of unemployment and job losses, because what you're seeing now at the state level is going to trickle down to the corporate level. Small employers have already started doing it."
"The guy that has 15 employees and he was relying on that bank line of credit to make payroll, those jobs have already started to be eliminated. The construction jobs are being eliminated, the financial sector is contracting rapidly, automobile sales are way down."
"We need to be prepared for unprecedented levels of unemployment as the next shoe to drop."
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