Gladly say goodbye to ’08
More than enough people are ready to put a roller-coaster 2008 behind them, as 2009 rolls in at midnight.
“We’re dealing with something that is really historic, and we haven’t had a playbook,” U.S. Treasury Secretary Hank Paulson said to the Financial Times.
The World Federation of Exchanges, which tracks stocks in 53 developed and emerging markets, said approximately $30 trillion in market value had disappeared by the end of November, the worst performance by equities in 80 years.
Companies such as Lehman Bros. Holdings Inc. and Bear Stearns Cos. Inc. closed shop, as other companies such as Freddie Mac, Fannie Mae and the three U.S. auto giants begged for bailouts.
Stocks in the United States and worldwide were sent in a whirlwind multiple times throughout the year.
“It has been a shocking year; hardly anything was spared in the market carnage,” said Michael Heffernan, senior client adviser and strategist at Austock Group in Australia.
The Standard & Poor’s 500 index has lost 40 percent this year, with just one day of trading left, not too far from its performance in 1931 during the Great Depression when it dropped 47.1 percent in a year. The Dow Jones industrial average declined nearly 35 percent, which makes it the third worst year ever, and the Nasdaq Composite index plunged 41.5 percent, the index’s worst year since its inception in 1971, CNNMoney reported.
Additionally, corporate profits have declined for seven straight quarters, according to the U.S. Bureau of Economic Analysis. If earnings fall through the first half of 2009, as analysts surveyed by Bloomberg project, it would be the longest stretch of decreases since the government started tracking quarterly data in 1947.
The same sad story can be said for oil, whose price has slid to below $37 a barrel, resulting in gasoline prices that are half of what they were a year ago. Single-family home prices fell 18 percent.
“Most of us in the market are going to be very happy for the calendar to tick over to 2009,” said James Gaul, a money manager at Boston Advisors LLC. “I’m slightly optimistic on 2009, but I think there’s still some major hurdles to get through. It’s been so bad, and people have gotten burned in such a severe way.”