What a week and weekend this has been - the Government, State Rescue Operations and large corporations were all very busy. Millions of people were and remain at risk on many different levels - millions were affected by hurricane Ike, millions remain on the doorstep of foreclosure and millions will be affected by the closing and restructuring of various Fortune 500 companies.
Worst Housing Slump in History
Treasury had to step in to save Fannie Mae and Freddie Mac from almost certain disaster. Collectively these two giant hold about 50% of the countries mortgages.
Their initial $200 billion dollar bailout symbolizes the largest bailout by the U.S. government ever. Ever!
Worst Financial Collapse in History
On top of that the Government had to provide $29 billion in loans for the shotgun marriage between Bear Sterns and JP Morgan Chase and the $9 billion for failed IndyMac Bank.
And another rescue this weekend was the acquisition of Merrill Lynch & Co for $50 billion by Bank of America.
Meanwhile the chapter 11 bankruptcy filing of 158 year-old Lehman Brothers – estimated at $639 billion will be the largest bankruptcy filing in U.S. history ever. Ever!
Worst Texas Natural Disaster in History
Hurricane Ike hit Galveston Bay, the heart of America's oil production over the weekend and causing untold flooding and damage. Early calculations are already estimating the damage to be in the ball park of $100 billion making this one of the largest natural disasters in the US. The cost of Katrina was estimated to range between $250-300 billion.
This is on top of the estimated cost of hurricane Rita of $4 billion and hurricane Ivan at $2.6 billion. Despite short term drop in oil prices, Ike’s impact will most likely be felt across the country as gas prices are expected to rise to $4 a gallon again in the wake of closed refineries.
Today’s Parting Thought
For those in real estate, hold on to your PDA’s - the impact on the real estate market is still going to be felt well into 2009. |
