Wall Street's Bomb: What's the Fallout for You?

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What if I have a brokerage account at Merrill Lynch?

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You'll still have one; and with the same name. Merrill Lynch has nearly 17,000 financial advisors between its retail brokerage and wealth management units. That's part of what attracted Bank of America — B of A CEO Ken Lewis called it "the crown jewel of Merrill Lynch" — so chances are, your broker isn't going anywhere, and he or she will try to make sure that you don't either. B of A plans to keep the Merrill name and organization intact.

Bank of America has about 2,000 of its own financial advisers, and a system in place to connect those planners with the bank's other customers, like those with savings and checking accounts. That infrastructure will be ramped up to accommodate the new Merrill advisers. So if you've got an account at B of A, get ready for the upsell.

I have a mortgage with Washington Mutual — or Wachovia — and now I see hear talk about those companies, too. Should I be worried?

No. You still have a house, and you still a mortgage to pay. Back in Depression-times, mortgages were often callable. If the lender needed its capital back, it could force you to pay off your loan. But we don't do that anymore with mortgages (for good reason).

If a bank that holds your mortgage goes belly up, your loan, along with all the others it made, will be assets in a bankruptcy proceeding. What's most likely to happen is that some other bank will come along and buy the loan, and then you'll have mail your mortgage payments to a new address.

Should I take all my money out of the bank and put it under my mattress?

There's probably no need for that. Let's not forget that the FDIC ensures bank deposits up to $100,000. (And up to $250,000 for IRAs and certain other retirement accounts held at FDIC-insured banks.) If you have more than $100,000 in deposits at a single bank, well, congratulations. But you probably want to spread it around. Sometimes people wind up over the FDIC limit simply because banks merge. Bank of America, to take a prime example, started its acquisition binge long before Countrywide and Merrill Lynch. Inertia prevents plenty of people from opening up new accounts elsewhere. Now might be a good time to do that.

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