What's it all mean?

Are my savings safe?

Will I be able to get a mortgage or credit card right now?

How about my 401(k) and other retirement accounts?

Should I take my money out of stocks?

Jackson County residents and people across the country are asking themselves many questions after Congress failed to throw the U.S. financial markets a $700 billion lifeline, resulting in a nearly 800 point plunge in the Dow Jones industrials Monday.

The answers to such questions don't come easy, but local banking officials say they are confident in their institutions' abilities to protect customers' money and make loans.

Dennis Wayman, president of State Bank of Medora, said Tuesday he has been reassuring people the financial meltdown won't have a major effect on local banks.

"We've been getting calls from customers who are concerned with their FDIC coverage," Wayman said. FDIC is the Federal Deposit Insurance Corporation, and it protects deposits of up to $100,000.

Many government officials are pushing for an increase in FDIC coverage as a way of strengthening the bailout legislation that was approved Wednesday night by the Senate. It now goes before the House for a second vote, possibly on Friday.

"They (customers) want us to look at their accounts to see if they are fully insured, and once we sit down with them and show them that they are, they leave feeling better about the whole situation," Wayman said. "People are nervous with all they are seeing on TV, but they are only (seeing) the worst part. I don't see a lot of effect, at least not on local banks."

Dave Geis, president of Jackson County Bank in Seymour, said Wednesday he supports a temporary increase in FDIC coverage.

"It would help insure deposits of a larger amount and make people more confident in putting their money in banks and leaving it there," he said.

Although he agrees there hasn't been much impact locally from the country's financial meltdown, he said there is some risk of it reaching here.

"If government doesn't act, it could end up reaching down to Main Street," he said. "There has been a different experience in small towns than in the big cities, but I don't doubt that large credit markets will begin to tighten up."

But tightening up on requirements for credit isn't necessarily a bad thing, Wayman added.

"I see it as a good thing," he said. "People need to learn they can't borrow their way out of debt. It's a good time for people who are struggling to seek out financial and credit counseling and try to get ahold of their situation."

Terri Wilson, vice president of corporate communications with National City Bank in Seymour, said speculation is leading to unwarranted panic.

"We can't control the market turmoil or the irrational speculation, but our customers can be confident that National City is a strong, stable and well-capitalized company that has raised the capital we need to manage through the turmoil in the market and to continue to serve them," she said. "National City has the strength and financial flexibility to weather the current storm and continue to help our customers achieve their financial goals."

Based on Tier 1 capital, a regulatory measure of financial strength, National City is the highest among all large U.S. banks and is $7 billion in excess of what regulators and private equity investors say is well-capitalized, Wilson added.

Investments

DonJay Rice, financial adviser with Edward Jones Investments in Seymour, said Wednesday he has been walking clients through the situation and telling them to keep one thing in mind when making financial decisions.

"Panic is never a good investment strategy," he said. "We as Americans have had to digest so much information in just the last three weeks and it all boils down to what a client's financial goals are."

Taking time to review investment portfolios and retirement plans is important in determining a course of action, he added.

"It really depends on whether you have a short-term financial goal or a long-term goal," he said. "If your portfolio is stocks or even bonds based, accounts are down, and if you are expecting that money in six months, then you'll want to evaluate your investments to make sure they are properly diversified and working for you."

As for long-term investors, Rice warns of making hasty decisions.

"Don't make a decision for the long-term based on the short-term situation," he said. "We have to look at the long-term history of the markets. We've been down before, but we've come out of it."

Wayman said he has a personal stake in the outcome of the crisis as he is invested in the system, but he wouldn't recommend people withdraw money from banks or the stock market to protect it.

"Right now is the worst time to take that money out," Wayman said. "No one has a crystal ball and the markets could go down more. I will ride it out myself."

Investments representative Mat DuSablon of JCB said today he's receiving questions that cover the spectrum, from how can an investor take advantage of the situation to those bordering on panic.

His advice is simple: "Don't panic," he said.

"As we look at history, we always rebound from these types of things," DuSablon said. "It may not be immediate, but investing is a long-term thing."

DuSablon said if you're within five to eight years of retirement, now could be a good time to take a look at your portfolio and consider whether diversification is in order.

"But it's certainly not a good time to jump out," he said. "That could be your worst move."

Although DuSablon has heard a few panic questions, most have been focused on whether his clients should make adjustments to their portfolios and whether they should continue to hold stock in the financial sector.

A few people have asked how to take advantage of Monday's plunge in stock prices.

"They've experienced this many times and see it as a good opportunity (to buy stocks)," DuSablon said. "A lot of people are in the let's-wait-and-see-what-happens mode."

Mortgage lending

Another major concern with the recent economic crisis is the state of subprime mortgage lending, which politicians and industry leaders say led to the current situation and the recent failure of many banks and mortgage lenders, including Wachovia and Washington Mutual. Subprime mortgages are those that are at a higher risk of foreclosure because of the holder's poor credit or lack of income.

Wayman said the real culprit is mortgage-backed loans. Because mortgage loans may take years to pay off, lenders must find ways to replenish their funds in order to make more such loans. To do this, lenders sell groups of mortgages into the secondary mortgage market to issuers or guarantors such as Fannie Mae and Freddie Mac, both of which were taken over by the U.S. government last month because of their "precarious financial condition," an Associated Press report stated.

"Many of those loans should have never been made in the first place," Wayman said.

As for State Bank of Medora  and other local banks' ability to make loans, Wayman is optimistic.

"The money is there, and we would sure like to make some good loans," he said.

Geis said Jackson County Bank also has enough money to meet loan demands.

"Our net deposit flow has been steady and we have fairly good loan activity in commercial and business loans," he said. "Our residential loans have been stable. Really, the only thing we are seeing different is lower auto loans, but with gas prices being up, that's not a surprise."

Wilson said National City doesn't have as much to worry about when it comes to mortgages, because of limited exposure.

"Our exposure to the residential mortgage market is small," she said. "National City began to exit the nonprime market much earlier than other banks."

Although Wayman agrees something needs to be done to strengthen the U.S. economic outlook, he said he doesn't think the answer is with the government.

"I have a real problem with government getting into business," he said of the recent bailouts of Fannie Mae and Freddie Mac as well as the proposed $700 billion plan. "It won't be easy to do nothing, but I think it will be tougher if we let the government step in and handle it."