Tuesday, September 16, 2008

The Wall St. Meltdown...Greed is Good?

Let's just recap the timeline of events from this year on Wall St.:

- February 2008: The U.S. Congress approves a 150-billion-dollar spending package to stimulate the economy.

- March 2008: On the verge of collapse and under pressure by the Federal Reserve, the U.S. central bank, Bear Stears is forced to accept a buyout by U.S. investment bank JPMorgan Chase at a fire-sale price. The deal shakes confidence and sends seismic ripple effects throughout global financial markets.

- July 2008: The California mortgage lender IndyMac collapses.

- September 2008: The U.S. government takes over Fannie Mae and Freddie Mac. The crisis at U.S. investment bank Lehman Brothers deepens. Stock prices of other financial institutions also fall sharply, including those of the U.S. investment bank Merrill Lynch, the insurance giant American International Group (AIG), and Washington Mutual, the largest U.S. savings and loan bank.

- September 15, 2008, 'Black Monday': The investment bank Lehman Brothers filed for Chapter 11 bankruptcy protection after 158 years in business; Merrill Lynch, the world's largest stock broker agreed to be bought by Bank of America (BoA) for $50 BILLION. And finally, AIG, the world's largest insurance company, searched for ways of raising $40 billion in cash from the FED. Oh, and the Dow closed 500 points lower for the worst point drop in more than seven years...


On the original "Black Monday" (October 19, 1987), the Dow Jones Industrial Average plummeted 508 points, losing 22.6% of its total value. The S&P 500 dropped 20.4%. This was the greatest loss Wall Street ever suffered in a single day.

...it's only Monday folks. Strap on your seatbelts 'cause it's going to be a bumpy ride. Next on the docket: stocks continue to fall (investors continue to dump due to a lack of confidence in the market); Washington Mutual and Wachovia, the clock is ticking and more than likely either JP Morgan or Goldman will snatch them.

On the flip side, the price of oil finished below $100 a barrel for the first time in six months...buuut gas prices rose to $4 a gallon in large parts of the South affected by Hurricane Ike.

This is a tragic day folks, and not only will it get worse, but the recession (yes, we are in one) will get deeper and last for the next year. This is what the next President will inherit...think about that this November 4th when you cast your vote.

UPDATE: So according to The Hollywood Reporter, "Fox is ready to revisit if greed is indeed good by pushing anew with its "Wall Street" sequel, titled "Money Never Sleeps."

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