Top 10 Business News Stories of 2008
(Results of the Associated Press Annual Poll U.S. newspaper and broadcast editors):
1) Wall Street Turmoil - Mortgage securities devaluation, freezing of debt markets, largest bank failure in U.S. history (Washington Mutual), $150 billion government loan to American International Group Inc. (took over Fannie Mae, Freddie Mac), Merrill Lynch acquired by BofA, Goldman Sachs Group Inc., Morgan Stanley transformed into commercial banks, government agreed to shoulder hundreds of billions in possible losses, plowed $20 billion into Citigroup Inc.
2) Real Estate - Foreclosures hit new highs, housing starts hit all-time low.
3) $700 Billion Rescue ('Bailout') Package - First half ($350 billion) allocated to banks, insurers, automakers.
4) World Economies - Argentina nationalized pension funds; Iceland's three main banks, currency collapsed; Japan, much of Europe fell into recession; China's exports plunged in November by largest amount in seven years.
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6) Stock Market Losses - Everywhere; Russian authorities closed Moscow's stock market for days at a time; Wilshire 5000, broadest measure of U.S. stocks, down more than $7 trillion for year.
7) Detroit Bailout - U.S. automakers' sales down about 16% for year, GM/Chrysler running out of cash; Bush administration reversed course, offered $17.4 billion in rescue loans.
8) Commodities Prices Rise - Prices for corn, fuel, grains soared; American shoppers grappled with substantial food inflation for first time in 17 years; USDA forecast food prices would rise 5-6% for year (compared with average 2.5% annual rise for prior 15 years).
9) $50 Billion Ponzi Scheme - Bernard Madoff earned steady returns of 7-9%/year, in good/bad markets, for almost 20 years; December - admitted returns were falsified, his investment company was a scam; could cost investors %50 billion, largest Ponzi scam in history.
10) Money Market Reserve Primary Fund - invested heavily in Lehman debt, asset value fell to 97 cents for every $1 invested; first time in money market industry in 14 years; $40 billion in redemption orders in week Lehman filed for bankruptcy.
