WDEF News 12

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It's being called the biggest bankruptcy in history.

News that Lehman Brothers went bankrupt sparks concern among local investors.

It's the latest financial giant to hit trouble.

A local expert says the economy will bounce back in the long run, but not before likely getting worse.

"I think everything's just a mess" says Flo Jackson.

She feels Lehman Brothers' and other financial failures..right in her pocketbook.

Her 401 K already lost 5 thousand dollars.

Flo Jackson, Worker, "It worries me you know I'm not really sure how things are going to go. Hopefully maybe when the next presidential election some things will turn around I'm hoping."

UTC economics professor John Garrett says things will turn around...just not likely any time soon.

John Garrett, Economics Professor, "We are in a period where you should not expect your 401 K to do very well for the next little while."

He says the numbers indicate we're in a recession right now and it seems to be getting slightly worse.

Garrett, "If we have a normal one people are un prepared for the economic pain and devastation that they'll face for two or three years. The recession will only last probably a year. But the period of low prosperity will last three or four years."

So now's the time to take cover...

Garrett, "Batten down the hatches and prepare for stormy weather."

By not taking on new commitments, saving several months of income, making sure your job's secure, finding a back up job if it's not, and if you're unemployed prepare to lower your expectations.

Also downsize while you can.

Garrett,"The sooner you do it and under the less pressure the better off you are."

Many we spoke to have already started.

Saju Andrews, "We try to save any which way we can. Try to reduce driving and anything we can to cut down on expenses."

Dr. Garrett adds today's market drop was bad, but not nearly as bad as predicted.

He says ten years from now these stock prices will probably look like bargains so it's actually a good buying opportunity.

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