Monday’s Market Trends Recapby Tim Manni
Last week was one of the most tumultuous weeks the financial markets have ever experienced. If you’re looking for a free tool to guide you through the latest financial developments, and explain to you where the markets may be headed, be sure to subscribe to HSH’s weekly financial newsletter Market Trends. The latest issue, Mortgage Rates and New Market Realities, goes though each of the markets’ latest developments, from Lehman filing for Chapter 11, to the doubling in LIBOR rates:
September 19, 2008 – Just a week after announcing that Fannie Mae and Freddie Mac won’t go out of business, cascading changes in financial markets left Federal regulators with no remaining appetite for the machinations of the private sector. The agonizing writhing and twisting of markets saw the failure of Lehman Brothers, the announced sale of Merrill Lynch to Bank of America, and the need for an $85 billion stabilization plan for AIG, a huge insurer.
That was before the week even started.
The aftermath of those announcements left the markets running for cover, first in a flight-to-quality buy of Treasuries, which helped rates decline. That was Monday. By Tuesday, the FOMC meeting came to a close with no change in policy, but a significant expression of concern: “The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee”, said the announcement. As we noted in our post-meeting commentary, “With such a push-me, pull-you arrangement, the best course of action is none until the stronger force driving the economy emerges.”
HSH’s free, weekly Market Trends Newsletter, an in-depth analysis of various financial markets of the week prior, is published every Monday. Email subscribers — receive it in your inbox by Friday night, so sign up today!