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We have all heard about the problems in the banking industry, but has it really bothered anyone? Nope. At least until September 15, 2008 when two of the pillars of the financial world faded into oblivion and raised questions about the mortgage market as a whole.

Lehman Brothers was founded in 1850. It is a massive investment bank with fingers in financial markets across the world. On the morning of September 15, 2008, it filed for bankruptcy protection with 613 billion dollars in debt.

The essential failure of Merrill Lynch is even more troubling. Saddled with bad debt, it was thought to have a solid plan for surviving. Obviously, that was not the case. With help form the Feds, Bank of America purchased Merrill for a song at $29 a share.

I cannot emphasize enough that these failures should make you and me nervous. These are huge banking efforts that make much of the financial world go. Combined with the Freddie Mac and Fannie Mae takeovers, the warning lights should be flashing.

The current financial market is an interesting one. We have never seen such a massive meltdown and yet so little a reaction to it. We are seeing events in the banking industry that have not occurred since the Great Depression and nobody seems to care.

The Federal Reserve deserves the credit for this. Showing a delicate touch, the Fed has been providing liquidity for banks in trouble as well as snapping up and flipping failing banks to those in a more solid position. Amazingly, most of us just yawn.

Why the silky smooth handling of the Federal Reserve has stopped a panic from happening, it has not been able to change a fundamental fact. The housing market and the security backing it are an absolute disaster.

The circumstances surrounding the real estate market are so bad that many larger investors will not put money into mortgages for fear of being sued by their investors. This is because mortgage securities are viewed as being so risky.

That may sound somewhat interesting, but think it through. The backbone of the American Dream of homeownership is now viewed as a bad investment. Homeownership is the key to our middle class, so now what?

Many are suggesting another Great Depression scenario. It this a possibility? With banks failing right and left, including huge financial institutions, one can legitimately ask the question.

If we are going down, we will go kicking and screaming. The Federal Reserve is fighting with all its might. The announcement that banks from around the world will pool 70 billion dollars to help stressed institutions is huge.

Unlike the last Great Depression, the financial markets are intertwined. A depression in the US will be a depression worldwide. Nobody wants that to happen, so look for aggressive action to prevent it.