Lots of ordinary folks seem to be in an uproar about the fallout on Wall Street, and they deserve some reassurance NOW! In last night's text poll on WGN News, nearly 90% of the respondents said they were worried about the state of the economy.
What we all have to bear in mind, it seems to me, is that this is a financial crisis, not an economic crisis. Yes, Lehman and many others made bad bets on mortgages and related securities, as I mentioned yesterday, and yes, the consequences of that bad bet will be visited on investors far and wide (and on the people who got themselves into unaffordable mortgages), especially as the stock market continues to plunge (note that I am intentionally not linking to the hysterical stories about world markets plummeting!). But this doesn't mean the medium- to long-term view is dim for the broader economy. The markets are fickle and have short memories--they will bounce back. Notice, by the way, that crude oil futures are also in free-fall (nearing $90 a barrel!), which seems more likely to impact us commoners far more than the goings-on in lower Manhattan.
For a reality check, see this discussion on the all-things-banking BankRate.com and this post on the business-oriented Conglomerate blog. Don't take rash action on investments or deposits. Don't go crazy. It's too late to run from this storm, but it will not be nearly as bad as the doomsday soothsayers are suggesting.