To say the least, it’s been an incredible year for the financial world and
the stock market. And we’ve still got another 12 weeks left before we hit
2009.
In less than six months, the list of financial catastrophes reads like one
that could cover an entire decade instead…
- Two leading investment banks (Bear Stearns and Lehman Brothers) have become
extinct.
- The federal government has stepped in to save Fannie Mae (NYSE:
FNM), Freddie
Mac (NYSE: FRE) and American International
Group (NYSE: AIG), the largest insurer in the world.
- Bank of
America (NYSE: BAC) has acquired Merrill Lynch (NYSE:
MER), the largest brokerage firm.
- Wells
Fargo (NYSE: WFC) has snatched Wachovia Corp (NYSE:
WB) from under the nose of Citigroup (NYSE: C)
and is set to grab 75-80% of Wachovia’s deposits, versus 20-25% for Citigroup,
according to Reuters. Many other banks have gone broke and more than
115 are on the FDIC watchlist.
- With the financial system at breaking point, the federal government approved
a $700 billion bailout package.
With global economic conditions in total shambles, the Dow Jones Industrials,
S&P 500, and Nasdaq Composite are only down 27.6%, 30.4%, and 32.6%
for the year, respectively.
I say “only” because of the significant damage that many sectors have endured
- from financials, to tech stocks, and most blue chip firms.
So let’s see what got us into this ugly state of affairs - the worst
investment climate in a generation - and what the future may hold in store…
From The 1960s To Today… Presidential Policies Trigger Problems
The roots of the Stock Market Collapse go back a long way. Whether it was
Lyndon Johnson’s pervasive policies of the 1960s, or Ronald Reagan’s tough
stance against Jimmy Carter’s liberal policies, the U.S.
