TheStreet.com's Jim Cramer says the intervention will help all financials worldwide.

How about this? We are better off than we were yesterday.

You have to understand that we simply wouldn't be able to open most financials if AIG (NYSE: AIG) (Cramer's Take) had failed. Our new sovereign wealth fund, the Federal Reserve, came up with an elegant plan to take over AIG and make good on what would have been broken guarantees that would have caused worldwide capital calls and bank closings that honestly would have made the Great Depression seem like the Little Depression, World War I to our new World War II. That's worth avoiding.

It's hard to rally on this. People are still reeling from the enormity of it and the fragility that we didn't know about. I am actually pleasantly surprised that the Fed recognized that we had a problem this size on our hands.

You have to look at this only one way: Without this nationalization, we might not have had banks paying off other banks. We would have a seize-up and a destruction of capital that we simply couldn't handle.

Now we are going to rebuild on a firmer basis.

U.S. stock futures edged lower Wednesday morning after the government announced late Tuesday it would help save AIG. Investors may be relieved with the action on AIG and even the Federal Reserve decision not to move Tuesday, leaving room for a future rate cut, there are still big concerns about the state of financial markets. Investors today will also get data from on building permits and housing starts for the month of August. Oil rebounded today ahead of inventory report to over $93 a barrel.

The Federal Reserve said late Tuesday that it would to lend $85 billionAmerican International Group (NYSE: AIG), taking a 79.9% stake in the company. AIG shares are still sinking 30% in pre-market trading.

Meanwhile, as the government refused to help Lehman Brothers (NYSE:LEH) and the company filed for Chapter 11 Monday, Barclays PLC (NYSE: BCS) said it would buy Lehman's banking and capital markets business for $250 million. Barclays walked away from the deal a few days ago, perhaps waiting for a better price, in what many say BAC should have done with Merrill. BCS shares are up over 5% in pre-market trading, LEH's down over 25%.

Morgan Stanley (NYSE: MS) reported its quarterly earnings early to calm investors, posting better-than expected results. It seems the last two major independent investment houses, Morgan and Goldman Sachs (NYSE: GS), which also reported earning Tuesday, both posted third-quarter profits despite continued chaos in the financial markets.

J.P. Morgan Chase (NYSE: JPM) is reportedly in advanced talks to make a bid for Washington Mutual (NYSE: WM).

MOST NOTEWORTHY: Cisco Systems, Kirby and First Fed Financial were today's noteworthy downgrades:

• UBS downgraded Cisco (NASDAQ: CSCO) to Neutral from Buy after channel checks indicated orders are slowing, which gives them concern over the July quarter.
  
• Stephens cut Kirby (NYSE: KEX) to Equal Weight from Overweight as they believe a good 2008 is already priced into shares and that the liquid barge industry cycle may be nearing a top.
  
• First Fed Financial (NYSE: FED) was lowered to Neutral from Outperform at Credit Suisse, citing credit quality deterioration.

OTHER DOWNGRADES:

• JP Morgan removed HB Fuller (NYSE: FUL) from its Focus List.
  
• RBC Capital downgraded SourceFire (NASDAQ: FIRE) to Sector Perform from Outperform.
  
• Goldman cut Lloyds TSB Group (NYSE: LYG) to Sell from Neutral.

MOST NOTEWORTHY: Turkcell (TKC), Lloyds TSB Group (LYG), DSW Inc (DSW) and the European telecom sector were today's most noteworthy upgrades:

• JP Morgan upgraded shares of Turkcell (NYSE: TKC) to Overweight from Neutral following a meeting with management, as they are more comfortable with the company's growth prospects.

• Citigroup upgraded Lloyds TSB Group (NYSE: LYG) Group to Buy from Hold as they believe the company's free cash flow generation will drive faster dividend growth.

• Matrix finds DSW Inc (NYSE: DSW) shares fairly valued at current levels and believes improving pricing is leading to higher profit margins and upgraded shares to Hold from Sell.

• Credit Suisse upgraded the European Telecom sector to Overweight from Market Weight to reflect higher forecasts for mobile growth...

OTHER UPGRADES:

• HSBC upgraded Ericsson (NASDAQ: ERIC) to Overweight from Neutral.

• Lehman upgraded Internet Initiative Japan Inc (NASDAQ: IIJI) to Overweight from Equal Weight.

• Magna International (NYSE: MGA) was upgraded to Outperform from Market Perform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Lloyds TSB Group PLC (NYSE: LYG) is a favorite conservative stock idea for 2007 from Jack Adamo, editor of Insiders Plus.

"While it is not the Lloyd's of London of specialty insurance fame," points out Adamo, "this London-based financial services powerhouse has roots dating back to 1765, and operates in three segments: U.K. retail banking; insurance and investments; and wholesale and international banking. It also provides brokerage, asset management, and pension services.

"It's not exactly exciting, but I think it will noticeably outpace the market in 2007. What it has going for it is financial clout, with a $60 billion market capitalization and a current dividend yield of 5.7%. Growth in earnings is expected to come in around 12.5% from 2006 to 2007.

"Lloyds currently trades for 11.25 times expected 2007 EPS of $3.86 per share. I look for total return to come in at around 18% in 2007. Lloyds' high yield provides cover in a down market, and may add extra price appreciation as investors go for yield in a falling market. That could push total return to the 25% range.

"Another significant factor in its favor to consider is the likely appreciation of the British pound sterling against the U.S. dollar, which will provide a boost to returns for U.S. investors."