Just when you think the stock markets might have turned the corner (stocks gained the most in five years on Tuesday and S&P issued a statement yesterday saying the end is near for subprime related writedowns), another bomb dropped on the Wall Street Friday: Bear Stearns, one iconic company on the Street, needs emergency funding from JPMorgan Chase and the Federal Reserve Bank of New York to stay alive.
That news didn’t do any good to the stock markets which gained a little at the open after a mild inflation report from the government. Stocks dropped more than 300 points at one point and eventually closed almost 200 points down, giving up all the gains of the week.
As stocks got pounded, commodities surged and spot gold broke the $1,000 mark for the first in history (BTW, oil also reached a record $110 a barrel)! It was just six months ago, when gold was around $750, the manager of Tocqueville Gold Fund [TGLDX], that fund that I own, predicted $1,000 gold. And now, here we are, $1,000 gold!