Back From the Brink

Last week we looked into the abyss. And pulled back.

On Monday Lehman failed. Tuesday AIG scrambled for financing. On Wednesday AIG was propped up. Thursday was a day of general panic. And Friday the Treasury rode to the rescue.

In years to come, I think Thursday will be remembered as the day we pulled back from the brink. Gold had shot up over $100. The Dow had fallen 1000 points. And Treasury Bills yielded less than one tenth of one percent. Several major financial concerns saw their market value fall in half.

But something turned the situation around. It may have some comments about short-selling that came out of London. It may have been the rumors of talks between Paulson, Bernanke, and Congress. Whatever it was, by the end of the day Thursday the markets had breathed a collective sigh of relief. Friday’s rally was almost an afterthought.

After all these gyrations, the markets ended the week almost where they began. If you’d stayed away, you might wonder if you missed anything. But those who lived through this week’s volatility aged about five years!

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-03T21:11:40+00:00 September 22nd, 2008|Global Market Update|0 Comments

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