Financial Meltdown

As the financial markets came to a near collapse during the early part of this week, I, like so many others, found myself with head in hand. The Dow dropped nearly 500 points on Monday after Lehman's bankruptcy, Merril Lynch's merger, and AIG's troubling balance sheet came to light. Then, on Wednesday, stoked by investor pessimism, it dropped 450 points (4.1%) to finish at 10,609.66, its lowest closing level since Nov. 9, 2005. This led me to hastily sell off a sizable portion of my stock portfolio on Thursday morning--ironically, the market jumped about 400 points after I sold. The Fed announced that it plans to enact a bailout program which would take the bad assets off the balance sheets of financial companies, freeing them up to resume conducting business in a somewhat regular fashion, and restore some sense of trust and confidence between institutions. The market has reacted positively over the past 2 days but we'll see how this plays out long term.