S&P 500 index dropped to the lowest level below 7000 since October 28, 1996. Although the drop on Tuesday was moderate, the Dow Jones industry average tumbled 300 points a day earlier that sent both the Dow and the S&P 500 index to their lowest level in more than a decade. Monday's slump in the stock market was primarily triggered by the bigger than expected loss of $62 billion for the fourth quarter announced by AIG -- the biggest in U.S. corporate history. The U.S. government injected to AIG another $30 billion. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.
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The Westerners say, "Rome wasn't built in one day." The Easterner say, "It takes more than a day's cold to freeze the river over three feet." What happened in the past 8 years led to today's woes.
ReplyDeleteWe are entering depression, like it or not.
Whatever measures are taken to address the problems are just our best bet. We don't know what the outcomes will be - that's the scary part of it. Sigh!