(By Greg)UPDATE - 09/29/2008:
Today was another day for the record books! The Dow Jones, again, what most refer to as "the market", was down 777 points! In terms of points, that is the biggest one-day drop the Dow has ever had. In terms of percentage points, it's not even close to the "Crash of 1929" or "Black Monday" in 1987!Friday: 09/19/2008:
Most of you may know this time in our country as: "The Credit Crunch", "Financial Crisis", "Financial Meltdown", "Housing Debacle", etc.
The past 12+ months, but mainly September 2008, will be a moment in time that will forever be written in stone and one for the history books! Although it was unbelievable what has happened, I am excited to be a part of history--let me explain. Also, September 2008 and the remainder of 2008 is left to be written...
For September 2008 here's a list of some events:
Merrill Lynch: World's LARGEST brokerage firm bought out by Bank of America!
Lehman Brothers: World's OLDEST (founded in 1850) brokerage firm filed for bankruptcy!
American International Group (AKA: AIG): World's LARGEST insurance company bought out by the federal government!
Morgan Stanley: Another Wall Street darling, is in talks to possibly be bought out by Wachovia!
Goldman Sachs: The only "original" Wall Street firm left, if Morgan Stanley gets bought out!
Also in 2008, Bear Stearns, one of the world's LARGEST brokerage firms at the time, was bought out my JPMorgan! Lastly, Freddie Mac and Fannie Mae (owners of roughly 50% of the mortgages in the USA) were taken over by the Federal Government!
The Dow Jones, which most refer to as "the market", had volatility this week (9/15-9/19) that hasn't been seen in decades. Here's the daily change on the Dow, with shares traded on the NYSE. Keep in mind that the average number of shares traded on a daily basis on the NYSE is: 1.4 Billion shares.
Monday 9/15: -504 points (1.8 Billion shares)
Tuesday 9/16: +141 points (2.2 Billion shares)
Wednesday 9/17: -449 points (2.1 Billion shares)
Thursday 9/18: +410 points (2.5 Billion shares)
Friday: 9/19: +369 points (3.0 Billion shares)
Even with these wild swings, we still ended the week down 33 points!
Friday 9/19 will be a day I will never forget! Again, average daily volume on the NYSE is: 1.4 Billion shares. 30-minutes after the market opened on 9/19, volume had already reached 1.0 BILLION SHARES--AMAZING!!!!! End-of-day figure: 3.0 BILLION SHARES!!!!! Did you read that?
I saw stocks move today/yesterday with the greatest of swings like I've never seen before and probably never will see again! Our company stock, TROW, saw a daily spread today from: $47-$70, $23, in one day! Honestly, if you played your "cards" right the last 3 days, this market probably made some millionaires overnight!
While most of you were astonished and in awe at what "the market" did this week, I was on the complete opposite side of the spectrum! Today, I got a glimpse of what times were like in the 1930s. When I arrived at work today, Pershing's systems (Pershing: our clearing firm who clears all of our trades and is the LARGEST clearing firm in the nation) were down and over-loaded by all the volume yesterday, last night, and this morning--Pershing does about 250,000 trades on average per day. Yesterday, they processed 750,000+ trades! Instead of submitting everything via our wonderful technology we have access to, we reverted to the days of old: paper trades, time-stamping, and running around with our heads cut-off--wow, what an eye-opener! On a bad day, we may have 15+ calls on hold! At any given time today, we had 80+ calls on hold! It looked like the trading floor of the NYSE--chaos, traders everywhere, people yelling, sweat dripping, etc! A day I will never forget...
This weekend and early next weekend appears to be an extremely busy day within T. Rowe Price. We are in the process of making a spreadsheet to determine how much money Pershing lost on our behalf today and will attempt to replenish those losses soon. The only bad thing, Pershing never takes the blame, even when they are in the wrong!
I'm sure I could continue with what went on in the market this past week, but most of it would not excite you, and most of it you've probably already heard on the news!
HAPPY TRADING!