Top 5 Life Changing Events in 2008 – The Year That Was

Tuesday, December 2, 2008
By Faisal Laljee

We still have one month left in the year, and while there could be a melt-down or two yet, 2008 will certainly go down in the annals of history as one of the most brutal, most controversial and certainly the most interesting year that we will ever have seen in our life times. If an average person were asked last year to predict the fortunes of Oil, AIG, Bear Stearns, Dow Jones and the VP pick for McCain, I am most certain they would have got it wrong. Here are some of the most important and impactful things this year that effected your financial portfolio and/or our lives:

Oh Oil !
From all time highs to multi-year lows and all this in a short span of time from July to November. Indeed oil fell from a record $147.27 in July to $46.96 today, its lowest level since May 2005. That is a drop of over 68% in a mere 4 months. Those who didn’t sell their oil holdings lost a ton. Those that shorted oil earlier this year lost a ton. Those that sold their trucks to avoid the gas prices at the pump are kicking themselves. Gas Prices at the pump peaked at close to $5 per gallon and sits as around $2 today. Needless to say, Oil was nobody’s friend this year.

Insurance for the World’s Largest Insurer AIG
Ok so maybe the headline is misleading, but the fact remains that the government did buy a near 80% stake in AIG, whose stock dropped from $56 at the beginning of the year to less than $2. This is the world’s largest insurer people and few would argue that it would cease to exist today had the government not invested some $80 billion odd into AIG.

Financials Need Financing
Goldman Sachs dropped from over $200 to almost $60, Morgan Stanley from $50 to $10, Bear Stearns from $100 to 0, Citigroup from $28 to $3.50 last week, Bank of America from $40 to $14. The list goes on with the whose who of US Financial institutions going belly up. Finally the government decided to loan out $700 billion to these institutions.

Tech Stocks Burned
Google at $250? Apple under $100? Research in Motion at $40? Microsoft near $15? Yahoo at $10? Nasdaq down 46%? Some of these levels not seen in over 3 years. Holy cow Batman! I get why Yahoo is $10, but what did Google do to deserve a 67% drop? Did their earnings drop? Did they miss estimates? Not really, but we did officially enter a recession according to the Bureau of Economic Research. Oh yes and we discovered that NBER should be re-titled to National Bureau of Stating the Obvious (NBSO).

From Alaska with Love
Barrack Obama became the first African-American to be elected to the highest office in the world. In the end, he made it look easy and although few would argue in retrospect that Sarah Palin didn’t cost McCain his campaign, I personally feel he would have lost no matter who he picked (considering the economy stayed in a downward spiral all year). But truth be told, she made the elections fun amidst the grim headlines that flashed our screens day in and day out. Her presence and her speeches, although offensive to some, made for delightful conversation at the office. I heard even Putin bought a pair of binoculars to see what the fuss was about.

There is so much more that went down this year, like the automakers buckling under the weight of the recession, the dollar dumping and then gaining 30% in 3 months, housing foreclosures reaching record levels, market volatility hitting all time highs with average intra-day moves of near 4%, but with all the hell that broke loose this year, they don’t make the Top 5 for 2008.

– Faisal Laljee

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One Response to “Top 5 Life Changing Events in 2008 – The Year That Was”

  1. John

    It set its all time high price around $147 due the strong economic growth globally, but global financial crisis caused the decline in demand, so the per barrel oil price is as low as $40 – set to four years low level. This low price is something that was estimated by one of the analysts at DB.

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