Doomsday on Wall StreetIf you've been watching CNBC, since 7am EST like me, you would think the sky is falling and rightfully so. The news has been coming fast and furious and the casualties are piling up. Lehman - gone. Merrill - gone. AIG - life support (according to various reports on CNBC the bond markets signal AIGs demise). Recall, we already lost Countrywide and Bear earlier in the year. AMBAC, MBIA shaken. Freddie and Fannie in custodianship.The pillars of American finance are buckling under the immense greed and promiscuos financing practiced in the last decade. As I write this I'm watching Paulson chit chat about his perspective on the this mess. According to him the housing crisis is the crux of the matter. I can see that. Basically all these money bags were lending money on the order of 25, 30, 35 to 1 all on the basis of housing valuation. So why are we all so surprised this is happening?How could the risk models not predict an outcome where the underlying assets depreciated so rapidly? Well, I can't imagine that they didn't. But why did they think it wouldn't? I'm all for home ownership, but honestly when loan officers are lending moeny hand over fist to unqualified buyers, this is what you get. Housing prices skyrocketed and in the end there were no qualified buyers to step in at those prices. So then you get a major contraction which devalues home prices that credit and mortgages were being financed and insured by the money boys on Wall Street.In the end, more heads will roll. The financial landscape will change. It will be harder to get money. It will be harder to finance projects, business, homes. Eh, what can you do? In the end, if you are a normal guy working an average job and squeeking out a living, I would say: SAVE, SAVE, SAVE. Open accounts with banks that are FDIC insured, don't keep more than $100,000 with any one bank. If you have less than $100,000 with an FDIC insured institution then you are safe and secure and backed by the good faith and power of the US Government. If you are in the good fortune to have more than $100,000 dollars in liquid assets I would chop em up and move em around the large banks. Major banking institutions like BofA, JPM, Citi, USBank, Wells, Wachovia. Also note your retirement accounts. Some accounts are insured up to $200,000. Know your exposure.Although there will be more casualties, here in America the list of big names is getting shorter by the day. This could mean we are reaching the end of the road and there is light at the end of the tunnel. What this means for foreign institutions I am less certain. Clearly they have been limiting their exposure and declaring their write downs every quarter like the rest of the players. But I think the story is not over there. International institutions are more levered to their local economies and a lot of those economies are starting to contract. Jury's still out.With all the doomsday predictions and naysayers poo pooing the state of the American economy, I would still like to point out that we are the most transparent, liquid, largest and most powerful economy on the planet. If you are trying to run from this economy there aren't that many places to go. Stock up on cash and sit out the turmoil on the sidelines.