One Year Ago, the nation teetering on a recession, experienced the economic equivalent of 13 days, a 5 week period that changed the landscape forever. And to think, at the time, our water cooler talk was focused on the hot chic from Alaska who was the out of nowhere Republican VP nominee….

Morning Outlook

September 5, 2008-
Ugh, so yeah, jobs worse than expected, same with retail sales. I wonder if the rebate checks are wearing off of the American consumer. The times of a market rally with a drop in oil are over; it’s back to the basic fundamentals of the economy. What is in store for us today? Hopefully it’s better than a 350 point drop! Wall Street looks to open lower after yesterday’s massive fallout, with investors worried that the government’s August jobs report will show the continued weakness in the economy. Crude dropped below $107 a barrel in early morning trading as the dollar continued to gain. Will the stronger dollar effect 3rd quarter exports?

Economic Calendar

Slow news today, thank god I doubt we can handle more than one report after yesterday. Of course, the payroll data happens to be one of the leading economic indicators. Investors are awaiting data from the Labor Department that is expected to show the economy lost jobs for the eighth month in a row and that the unemployment rate moved higher to 5.8%. Employers likely cut payrolls by around 75,000 in August, even deeper than the 51,000 eliminated in July

The Dow Jones industrial average closed at 11,220 on Sept. 5, the Friday after Labor Day last year. There was an economic slowdown under way — no one doubted that. Whether it amounted to a bona fide recession was semantics, a question for economists.

One Year Ago Today

But on Sunday morning, the federal government took an extraordinary step: It seized control of mortgage giants Fannie Mae and Freddie Mac, committing up to $200 billion of taxpayer money.

The companies, which combined either hold or guarantee half the mortgage debt in America, were posting billions of dollars in losses each quarter as an increasing number of homeowners stopped paying back their loans. Investors doubted the companies had the financial strength to survive the housing crash.

President George W. Bush, with less than five months to go in his presidency, said taking over Fannie and Freddie would be “critical to returning the economy to stronger sustained growth.”

It turned out to be the beginning of something much more dire — far beyond a correction, far beyond even a garden-variety recession, far beyond anything most people had lived through.
What it turned out to be was the beginning of five weeks that shook the American financial system to its foundations. The stock market convulsed. Wall Street itself was redrawn. The word “depression” was suddenly on everyone’s lips.

But for five weeks in September and October last year, venerable Wall Street investment houses staggered, or disintegrated outright. The government concocted unprecedented rescue plans with 12-digit price tags almost impossible to comprehend.

It was a time when no place for money seemed safe.