- Countrywide: On Jan. 11 it was announced that Countrywide Financial would be acquired by Bank Of America
- Bear Stearns: On March 17 Bear Stearns failed. The stock had been the subject of much speculation prior to its failure, and company management defended the company's standing until the end. The collapse of Bear led to a confidence crisis in other investment banks and financial institutions.
- IndyMac: On July 14 mortgage bank IndyMac was seized by federal regulators
- Fannie & Freddie: On Sept. 8 mortgage GSEs Fannie Mae and Freddie Mac were placed into a conservatorship, effectively wiping out the value of their equity
- Lehman, AIG & Merrill: On Sept. 15, Lehman Brothers filed for bankruptcy, AIG was bailed out by the government and Bank of America bought Merrill Lynch. Lehman represents the biggest bankruptcy in U.S. history.
- WaMu: On Sept. 25, JPMorgan bought the banking assets of Washington Mutual after the bank collapsed and was taken over by the FDIC. WaMu represents the biggest bank failure in history.
- Wachovia: On Sept. 29, it was announced that Citigroup would acquire Wachovia, although Wells Fargo eventually outbid Citigroup.
|Iceland||OMX Iceland 15||-90.0%|
Holy Crap! It's like that joke "I spent a month in (insert your least favorite city) one night." We did a lot of experiencing in 2008, let's hope 2009 is far less interesting. FWIW I am expecting a very large rally, a run back close to the lows with a mid to low single digit finish around SPX 925.
More important than any prediction is to take whatever comes and react when appropriate and be proactive when that is appropriate.
As far as sector leadership, in other years I've had opinions going in (some right, some wrong) but 2009 is more difficult. If positive leadership comes from the same sectors as during the bull market then I will take that to mean we are still in a bear phase. I would be more trusting (in terms of new bull market) if positive leadership came sectors that lagged in the 2003-2007 bull market.
I believe my expectation of big bear market rally followed by a run toward the low (give or take) netting out to not much of a move is consistent with the notion of stumbling along the bottom.