My Blog, Your Money

What a week!  Here’s a recap:

Monday

-         In the early hours of the morning, highly regarded investment bank Lehman Brothers announced it would file for Chapter 11 Bankruptcy, by far the largest in history.

-         Merrill Lynch is bought by Bank of America for $50 billion creating an industry titan rivaling Citigroup.

-         The Dow Jones Industrial Index dropped over 500 points, the largest point drop since the World Trade Center attacks in September 2001.  At 504.48 points, it ranks as the 6^th largest in history right behind the 508 points lost on Black Monday in 1987.

Tuesday

-         The Federal Reserve chose to keep interest rates unchanged at 2%.  The Dow responds by recovering 141 points.

-         However, the government announced an $85 billion bailout of AIG that that night leading to…

Wednesday

-         The Dow dropped 450 points as money fled the stock markets into gold (up a record $70), oil (up $6, second largest gain ever), and bonds (yield of the 3-Month Treasury dropped to 0.02%, the lowest since 1940).

Thursday

-         Reports of a government plan fueled a 410 gain in the Dow.

Friday

-         The Bush administration announces a staggering bailout plan valued at over half a trillion dollars.  The Dow soars another 368 points.

Saturday

-         Bush proposes $700 billion bailout to Congress.  At less than 3 pages, the proposal outlines a plan that would purchase up to $700 billion in bad mortgages for the next 2 years.  To accommodate this request, the statutory limit on the national debt would be raised from $10.6 trillion to $11.3 trillion.

All in all, after those wild swings, the Dow which opened the week at 11,416.37 ended at 11,388.44, virtually unchanged.  As many have recently remarked, I’ve never seen a week quite like this.  Here’s to hoping that Saturday’s bailout plan is successful.  Go Bulls!