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The Night Before Christmas: Wall Street Version

The Committee was meeting and all through the Fed
Danced visions of Lehman and Fannie and Fred
Their failures created a huge credit crisis
Infecting all bonds with a terminal virus

Investors sold everything, markets went bust;
Bondholders did, too; no one knew who to trust.
Most business slashed payrolls, production and spending;
They couldn’t get credit, no bankers were lending.

The Fed offered loans of unlimited size
To keep lenders solvent, avert their demise.
That action, untested; some thought it too bold;
But ’twas done to prevent a depression of old.

Obama was chosen to stitch up the hole
That markets had rented in the capitalist soul.
But new plans from Geithner created more fears
And stocks plunged anew to their lowest in years.

Economies soured and trade all but vanished,
And confidence plunged as new taxes were brandished.
New layoffs exploded, expansion forsaken.
Gold, dollars and T-bonds were bought as safe havens.

But right in the midst of that ominous terror,
The stock market troughed, then it rose more than ever
Bond issuance grew and demand for debt rose
As investors returned to that market in droves.

Economy’s growing, job losses are ending.
Most business expanding, consumers are spending.
Production was slashed, inventories grew spare.
Like Old Mother Hubbard, sales cupboards are bare.

The crisis was so bad, some still fear the worst
May still lie ahead in a double-dip burst;
Stock prices have risen, now some dread a bubble;
Fed watchers are worried rate hikes will bring trouble

We think the economy, stronger than feared,
Will overcome whichever problem is reared.
The crisis has lifted, for that we can send
Some thanks to the Fed and the good Doctor Ben.

Oh-8 was the worst year in many a mem’ry;
Oh-9 did improve but we’re still glad it’s hist’ry.
We trust that Oh-10 will bring much less to fear.
Merry Christmas to all and to all a good year!

The verse is by Bob Baur, chief global economist at Principal Global Investors