The top story in the news was the historic change in the financial sector. What a historic week in the financial sector: Fannie Mae, Freddie Mac, Merrill Lynch, Lehman, and protection for AIG. This is by far the biggest story for Wall Street, not for main street.
Stock prices in the financial sector dropped to reflect underlying value. When a bubble pops it can be very painful for investors who are not diversified. People with a diversified portfolio felt a little pain.
What happened to the financial sector looks a lot like the tech bust earlier in the decade. We will get through this market gyration.
To me the biggest news today was not reported, the price of oil and gas futures. Oil hit $95 per barrel and gas hit $2.55 per gallon. This is incredible given that hurricane Ike hit oil platforms and gas refineries were shutdown. This indicates that oil and gas prices will continue to go down.
Why is this more important? Because this will impact the consumer's pocketbook and improve the economy. The news in the financial sector is due to an event in the past that can not be undone. Lower energy costs helps the economy in the future and will lead to higher stock prices.
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