'08: Our Date With Disaster

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By Frank Ahrens
Washington Post Staff Writer
Thursday, January 1, 2009

When did 2008 begin?

Was it Oct. 14, when the federal government spent the first dollar of taxpayer money to buy into private banks, effectively changing the principles of the U.S. economy?

Was it Sept. 21, when Treasury secretary Hank M. Paulson Jr. gave Congress a three-page plea for $700 billion to rescue failing Wall Street firms that threatened to bring down the national -- perhaps global -- economy?

Was it a few days earlier in September, when the government seized control of struggling mortgage funders Fannie Mae and Freddie Mac, watched Lehman Brothers fall, gave AIG an emergency $85 billion loan and told Americans that they were on the verge of a great abyss?

Or was it all the way back on March 16, when J.P. Morgan Chase agreed to buy failing Bear Stearns -- once the most profitable of all Wall Street investment banks -- for $2 a share?

Regardless of which date you pick, this year has been split into two parts -- Before Crisis and After Crisis.

Compressed into just the past few months of 2008, Americans endured a lifetime's worth of seismic collapses, whipsawing markets, epoch-defining ideological shifts and heartbreaking human drama. What was happening in the economy back in January? Who knows? That feels like another century, another country.

Seems almost quaint. At least it was familiar -- none of that news had a once-in-a-century global meltdown feel to it.

Before Crisis 2008, we carped about airlines going a la carte, charging for extra bags, peanuts and beverages.

We speculated that Microsoft's $31-per-share bid for Yahoo would be a game-changer and might even knock Google off its perch. It sure seemed big at the time. Yahoo turned down Microsoft's offer, pushing for a higher price. Microsoft walked away, killing Yahoo's stock and forcing chief executive Jerry Yang to reverse field and prostrate himself before Microsoft. When the software giant told Yahoo to take a hike, out went Yang, who appears to have passed on the best deal since the French to sell offered Louisiana to Jefferson. Yahoo, by the way, closed 2008 yesterday at $12.20 a share.

We watched gas prices soar past $3 per gallon, then $4 per gallon, as oil hit an all-time high of $147 a barrel in July. The big news at the time was oil speculators and talk of a possible "green" bubble, as wind and solar stocks briefly sparkled.

We thought about Apple, wondering whether the new 3G iPhone due out in summer would pop the company stock and offset concerns about the health of Steve Jobs, a pancreatic cancer survivor, who was being seen less and less.


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