Neighbors 4 Neighbors

Shaky Economy Leads To Many Big Questions

MIAMI (CBS4) ― The credit crisis has left many people struggling to make ends meet and even more people with more questions than answers. Now, the battle between investors and banks are getting even messier.

Morgan Stanley and Goldman Sachs, the last two investment firms, became commercial banks Monday, allowing them to take deposits. Meanwhile, Washington Mutual continued its free-fall. The bank's stock dropped 22 percent, ended down 90 percent for the year.

"The reason why they're tumbling down so much is because nothing has happened," explained Ladenburg Thalman analyst Dick Bove, "We don't know exactly when the government's going to step in."

There are opportunities, though. Last week, gold broke records by jumping $90 in one day. Monday, it was oil's turn. At one point, it made a new single-day record by shooting up $25.

Financial planner Jack Firestone says Wall Street's frayed nerves will continue to steer the market until Congress approves the administration's billion dollar bail-out.

Firestone says the lack of confidence on Wall Street affects everything from gas prices to the cost of food and even the future finance rates on our credit cards and mortgages. "Markets are driven by fear and greed and we've failed to realize the emotional nature of the market and that's where we are."

Dennis Valdez is trying to keep his money as safe as possible. He recently moved some of his investments into a lower-yield, lower-risk money market funds and short-term bonds.

To boost his family's income, he's encouraging his kids to keep busy with their part-time jobs. His hardest job now is cutting back his monthly spending. "You eat out a lot less now," Valdez explained, "You're careful how you're spending your money. And I got kids who are in school and work part-time so it's difficult working and making sure they have part-time jobs."

Now CBS4 News and Neighbors 4 Neighbors is trying to make sure you get answers to any questions. A panel of experts were available Monday evening to answer economy and money-related questions. They answered more than 275 calls, dealing with everything from 401ks to safe banking.

The financial planners stressed sticking to long-term plans.

"Everybody knows the idea of buying low and selling high," Charles Sachs explained. The worker from Evensky & Katz went on to say, "The fact is people usually do exactly the opposite."

Homeowners should monitor mortgage rates. Last week, they were the lowest they've been since February. If you financed the average house in South Florida in August at 6.5 percent, last week's lower rates put $122 a month back in your wallet.

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