In a continuation of last weeks theme, this blog post will give a quick summary of what occurred 5 years ago — at the edge of the financial crisis. From Minyanville’s “Week in Review: August 31, 2007:
“The SPX reclaimed its 200 day moving average this week even as volatility increased in the face of Tuesday’s 281 point sell off on the DJIA. Despite the fact that the commercial paper market remains under water, the lack of new bad news about credit markets and recent comments by Ben Bernanke and President Bush saying that the Federal Reserve and other government agencies will step in if needed have seemed to temporarily stabilize financial markets.
Critical levels remain overhead including last week’s high of 1480 on the SPX. Broker dealers begin reporting on September 13 with Bear Stearns (BSC) and Lehman (LEH). Most of the bad news relating to credit markets and sub prime is already priced in so numbers that don’t significantly miss expectations could ease investor anxiety. Next week important economic data to watch include the Federal Reserve’s Beige Book on Wednesday and Unemployment numbers on Friday.”
Here, we see the first occasion of jawboning by Ben Bernanke. It continues unabated to this day.
And, in what may go down as one of the most ironic posts ever, Bear Stearns and Lehman are about to announce earnings — and the expectation was an easing of investor anxiety!
Talk about being hoisted with your own petard!