Tag Archives: loss

Dow Jones – The Crash of 2008


The Crash of 2008 crushes stocks in a wild last hour of trading. The Dow’s loss tops 7%; the S&P 500 drops 7.6%. Investors flee markets, skeptical that fixes to the credit crisis will work. General Motors shares collapse on fears it won’t survive.

A key event appeared to be news that General Motors (GM, news, msgs) was facing a new downgrade by Standard & Poor’s. The stock was at $4.76, down 31%.

“There’s no safe place to hide,” Jon Najarian of OptionMonster.com, told CNBC.

The selling actually caused oil prices to fall in after-hours trading. Crude was at $84.78 at 3:20 p.m. Crude had closed at $86.59 in regular trading, down 2.7% on the day. Some analysts believe crude will fall under $80 soon. The Organization of Petroleum Exporting Countries is concerned enough that it has called a Nov. 18 meeting, possibly to cut production to boost production.

The sell-off came after news that Treasury Secretary Hank Paulson will reportedly use his new authorities to buy direct stakes in U.S. banks to help restore confidence in the markets. Investors, however, didn’t seem convinced.

Investors want immediate gratification from the measures the Federal Reserve and Treasury have taken to stop the bleeding in the financial crisis, but several traders are urging patience, saying that it will take time for results to work their way into the financial markets and actually boost confidence.

Short-selling will be allowed once again today after a temporary ban by the Securities and Exchange Commission expired at midnight.

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Lehman Files for Biggest Bankruptcy in American History, rumors of warnings with AIG and Citibank and the coming market meltdown


Sept. 15 (Bloomberg) — Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.

The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarfs WorldCom Inc.’s insolvency in 2002 and Drexel Burnham Lambert’s failure in 1990.

Lehman was forced into bankruptcy after Barclays Plc and Bank of America Corp. abandoned takeover talks yesterday and the company lost 94 percent of its market value this year. Chief Executive Officer Richard Fuld, who turned the New York-based firm into the biggest underwriter of mortgage-backed securities at the top of the U.S. real estate market, joins his counterparts at Bear Stearns Cos., Merrill Lynch & Co. and more than 10 banks that couldn’t survive this year’s credit crunch.

“There is likely to be a domino effect as other firms and individuals who relied on Lehman for financing feel the effects of its meltdown,” said Charles “Chuck” Tatelbaum, a bankruptcy lawyer with Lauderdale, Florida-based Adorno & Yoss and former editor of the American Bankruptcy Institute Journal. “The whole thing is frankly frightening for the U.S. economy.”
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