On Monday the DOW fell about 150 points, on Tuesday it skyrocketed over 400 points after the Fed offered $200 billion to banks to help ease the credit crisis, then on Friday the DOW dropped almost 200 points again after news of an emergency bailout for Bear Sterns, the nation's 5th largest investment bank. We also got news of the collapse of Carlyle Capital after that fund defaulted on more than $16 billion in assets. Not helping matters was news of higher foreclosure rates in February, Oil prices hitting $110 per barrel, Gold topping $1000, and the US Dollar continuing to plunge. After all this volatility the week basically ended close to where it started !
Next week: The Fed meets again on Tuesday and it is widely expected that interest rates will be cut again by at least .50 points. This could trigger another selloff in the US Dollar. We will also get a slew of earnings reports from the brokerage firms including Bear Stearns, Goldman Sachs, Morgan Stanley, and Lehman Brothers -it will be an interesting week! The markets will be closed on Good Friday.
There is also talk of the world's Central Banks possibly intervening to stop the fall of the dollar.
Late breaking news: JP Morgan will buy Bear Stearns for $2 a share -how sad! This stock traded at around $170 per share early last year, and dropped from $57 to $30 on Friday.
News Stories:
*** JPMorgan to Buy Bear for $2 a Share
Bear Stearns' Big Bailout
Dollar Falls to 12-Year Low of 100 Yen on Carlyle Fund Failure
Fed to Lend $200 Billion, Accept Mortgage Securities
Fed takes boldest action since the Depression to rescue US mortgage industry
Fed set to slash U.S. rates as credit turmoil rages
Fannie May Fail - Barron's
US Foreclosure Activity Rose in February
Foreclosure rate doubles for Countrywide
Carlyle Capital in default, on brink of collapse
Financial markets' biggest test since 1930s
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.
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