There were rumblings before the fall of 2008.
The downfalls of Countrywide, Bear Stearns, and IndyMac
made us ooh and aah. And curse.
But those opening acts couldn't prepare us for the shock
of the headliner. Over the course of a few weeks, our entire
financial system was on the precipice of ... of what, we're
still not sure.
The Grim Reaper took bank after bank, sneering "Who's
next?" each time. Troubled non-banks ironically converted to
banks to gain access to government aid. The Treasury and Fed
were put in the uncomfortable position of bailing water
instead of steering the ship. We worried about the effects of
bailouts, but we worried equally so about the effects of no
bailouts. Faith in the markets was shaken, as evidenced by
the insane day-to-day price volatility and the newsflash that
short-term Treasury rates actually went negative ... yes, as
a whole,
we were paying the government money to hold our
savingsbecause we distrusted every other investment
vehicle that much.
Look what happened in just over a month: Â
September 7, 2008--
Fannie Mae (NYSE: FNM) and
Freddie Mac (NYSE: FRE) go into
conservatorship on a Sunday night, starting the "Weekend at
Bernanke's" series.
September 14, 2008--
Bank of America (NYSE: BAC) announces it's
rescuing Merrill Lynch, adding it into the lifeboat with
Countrywide.
September 15, 2008-- That same weekend, the
government draws the line and refuses to bail out Lehman
Brothers, effectively forcing it into bankruptcy.
September 16, 2008-- The next day, the government
rescues
AIG (NYSE: AIG).
September 25, 2008–
JPMorgan (NYSE: JPM) buys a failed
Washington Mutual from the FDIC. Make room in the JPMorgan
lifeboat, Bear Stearns.
October 3, 2008--
Wells Fargo (NYSE: WFC) wins a battle with
Citigroup (NYSE: C) for the honor of
rescuing Wachovia.
October 14, 2008-- The $700 billion TARP program
is rolled out, starting with a capital injection into the
nine largest U.S. banks.
As we come up on all these one-year anniversaries, we
Fools are looking back and taking stock. Bookmark this page
and check back in over the next month or so as we put
everything in perspective, debate the winners and losers, and
discuss today's opportunities.
We'd love to hear your thoughts in the comments section,
either on this article or in the articles listed below:
their current investment prospects.
Alex Dumortier on the
big risk we're still facingone year post-meltdown.
Matt Koppenheffer gives a
one-year progress reportto Mssrs. Bernanke, Paulson,
and Geithner.
Alyce Lomax isn't a fan of the
institutionalized speculationthat's occurred over the
past year.
Morgan's answer to the question:
Is Bank of America a buy?Alex weighed in on
B of A's prospectsas well.
Morgan on
the vagaries of valuing Citigroupas it currently
stands.
Matt on
how the government's done so faron its bailout
"investments."
This article was originally published as
The Market Meltdown: A Year Lateron
Fool.com
Copyright © 2009 The Motley Fool, LLC. All rights
reserved.
|