Last night, as I was trying to understand the Bear Stearns buyout, Greta asked me a simple question: “How does this affect us?”

It’s a tough question.

In the short term, it doesn’t affect us at all. My job is secure, we don’t own a home, and we don’t plan to access our (tiny) investment portfolio until Jack goes to college. In fact, falling interest rates could be lucrative for us, because it could allow me to refinance my student loans at much more attractive rates (if anyone is willing to refinance student loans come July)

But let’s imagine the worst case scenario for a minute. Cue dreamy music….

• Lehman Brothers announces that it is taking an unexpected $20 billion writedown of its mortgage related assets
• Lehman Brothers files Chapter 11
• SAC Capital implodes
• Tudor shuts down
• Wal-Mart is unable to issue commercial paper
• Wal-Mart is unable to pay its suppliers
• Supermarkets are no longer able to stock basic necessities like milk and bacon.
• You see where I’m going with this.
• Mastercard and Visa shut down their payment networks over fear that issuing banks will not be able to pay up
• The Fed cuts interest rates to zero
• The Fed hooks up firehoses to armored trucks and sprays money at bewildered citizens
• Gun-toting libertarians smile
• Warren Buffet buys Bank of America for $0.02/share

It’s kind of fun to imagine what the total disintegration of the United States would look like. Not fun, ha ha, but an interesting thought experiment. Let’s hope today goes better than that.

Incidentally, if you’re curious what anarchy might look like, check out J Neil Schulman’s Alongside Night. It’s awesome.