We hit solid green last week as the markets popped upon news of the MOAB (Mother of all bailouts). The government is proposing to buy up to $700 billion in mortgage-backed securities from banks and investment houses. Today the Oracle of Omaha sunk $5 billion into Goldman Sachs preferred shares. He indicated that he believed that the government will act rationally and follow through with the bailout. This makes me believe the deal will go through.
Quite the Monday crash, eh my friends? The trouble started last week when Lehman Brothers (LEH) showed signs of collapse. Monday the company filed for the largest bankruptcy in U.S. history. The company has $613 billion in bank debt, $155 billion in bond debt, and assets worth $639 billion. The Down Jones fell 500 points in reaction to the announcement. That was the largest point drop since the day after the September 11, 2001 attacks. No wonder Lehman workers showed up on that day with pizza, beer, tequila, and their resumes.
This last week has been pretty rough and tumble in the markets. Lehman Brothers (LEH) continues the parade of subprime mortgage disasters to grace the scorched earth of the stock market. The company was hoping to sell out to Korea Development Bank, but after KDB pulled out of the deal Lehman started dropping like a rock. Lehman announced on Wednesday that they lost $3.9 billion and on Thursday refused to respond to rumors the company was looking for a buyer. Tough times for shareholders and employees at Lehman this last week.
It has been about nine months since I first started this blog. When I first started, my goal was to write about something I liked and share it with the Internet community. I would have been happy if just one person found something worthwhile in my ramblings. However, we passed an important milestone in the Dividend Investing Blog this week. We have finally broken the century mark for subscribers to the feed. I want to thank all the loyal readers. I’m looking forward to the next one hundred subscribers.
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