Dec. 23, 2008— -- Not since the Great Depression has America seen so much heartache and pain in the financial world.
It would be a massive understatement to say that 2008 had a few folks who lost big in the stock market.
The year was full of sob stories, from homeowners being forced out, to everyday investors seeing their 401(k)s shrink, to millions of Americans losing their jobs.
In every downturn, though, there are also a few winners and 2008 was no exception. So here is a look at some of 2008's financial world winners and the -- unfortunately -- longer list of losers.
The clearest indicator of just how bad a year it was can be seen in the stock market. The Dow Jones industrial average is down more than 35 percent and the NASDAQ is down more than 41 percent.
The pain has hit all: big-time investors, everyday savers, pension funds and even charities. Falling stock prices along with falling home prices have made all Americans feel worse off and many have cut back on their spending to compensate.
Just when it seemed the year couldn't get much worse, news came that trader Bernard L. Madoff had allegedly lost $50 billion -- yes billion -- worth of investors' money in a massive scam.
The scope of his victims is impressive. Steven Spielberg and Jeffrey Katzenberg both are reported to have lost from the funds. So did banks HSBC and Royal Bank of Scotland. Tufts University has written off a $20 million investment with Madoff, and Yeshiva University is another reported victim. And that's just the tip of the iceberg. What a way to end the year.
Perhaps the biggest signs of Wall Street's fall can be found by looking at Bear Sterns, Lehman Brothers and Merrill Lynch -- three of Wall Street's most esteemed and biggest investment banks who all saw their demise in 2008.
The first to fall was Bear Stearns. The firm was heavily invested and highly leveraged against subprime mortgage investments. Investors became worried about the firm's health in March, and in a matter of days, people pulled their money, creating a massive cash shortage. The federal government orchestrated a last-second bailout with J.P. Morgan Chase buying Bear out for just $10 a share. Within the previous year, its shares had been trading as high as $130.
Then, in September, the market was hit with another devastating blow: Lehman Brothers announced that it, too, could no longer continue operations and was filing for Chapter 11 bankruptcy protection. It was the largest filing in U.S. history.
Lehman's North American operations were sold to Barclays and Nomura acquired its overseas assets.
The third Wall Street demise came from Merrill Lynch, which was quickly sold off to Bank of America.
J.P. Morgan Chase and its CEO James S. Dimon were among the few winners on Wall Street this year. The bank played a major role in the credit crisis, first taking over Bear Stearns in a government-orchestrated deal and then buying out most of Washington Mutual after federal officials seized the bank.
The company's stock is down for the year -- but then again, so is everybody's -- and only time will tell if Dimon's moves were smart. But at least at the end of 2008, he appears to have emerged a winner.
As the recession has deepened, casinos have been hit hard, especially those in Las Vegas where visitors arrive after either a long drive through the desert or a flight into town.
Among the biggest losers to emerge from Las Vegas' losing streak is Las Vegas Sands CEO Sheldon Adelson, who recently invested $475 million of his own money to bolster the ailing company.
The billionaire has lost at least $16.6 billion this year thanks to his Sands holdings, according to analysis by Steven Hall & Partners, a compensation-consulting firm in New York. Part of the reason for Adelson's massive losses is his outsized investment in the company: Individually and through family trusts, Adelson owns nearly 70 percent of Sands -- much more than other big-time, billionaire CEOs.
The losses on Wall Street have reverberated throughout academia and the Ivy League. Harvard and Yale, both known for having large, well invested endowments, have both suffered in this downturn.
Yale's endowment lost a fourth of its value in the four-month period ending in October. Harvard lost 22 percent since the end of June. Neither is expected to see a quick turnaround.
Nearly two dozen banks have failed this year, causing stress and panic for some and losses for those who had saved more than the FDIC limits. The biggest names to go under in 2008: IndyMac, Washington Mutual, Wachovia and Countrywide. The Main Streets of America look very different than a year ago, as banks start to take down one name and slowly put up the new parent company's name and logo.
It has been a pretty miserable year for retailers, as laid-off shoppers, or those who just fear losing their jobs, held on to their wallets a little bit tighter. But one retailer -- the world's largest -- appears to be profiting off the recession.
Wal-Mart posted a 10 percent increase in third-quarter profits. Some of that is attributed to bargain hunters and some to shoppers taking advantage of early Christmas sales. But not all is rosy at the retailer: Predictions for next year are gloomy, with the economy even hitting Wal-Mart stores around the world.
U.S. taxpayers are either big losers or winners in 2008, all depending on your perspective. Congress passed a $700 billion bailout plan called the Troubled Assets Relief Program, or TARP. It was originally supposed to buy the banks' bad mortgage investments, but has since been used for a wide range of bailouts.
Insurance giant American International Group, or AIG, got $40 billion from TARP. And most recently, General Motors and Chrysler got a short-term loan from the program.
Many homeowners have asked where their own bailout is, saying that Washington has focused too much on Wall Street and corporate America. Another group says that the taxpayers might ultimately win when the economy recovers, having bought shares in all these bailed-out companies at a discount.
General Motors, Chrysler and Ford all had a bad year. First, the Big Three automakers were hit with record gas prices. Americans abandoned their gas-guzzling SUVs and pickup trucks -- the bread and butter of the Big Three -- for small, more fuel-efficient cars.
Then, just as gas prices started to fall, consumer credit lines tightened and many would-be buyers found themselves unable to get a loan for that new car. The Big Three have turned to the government for help. Lawmakers and President Bush at first rebuffed the automakers, but ultimately GM and Chrysler -- the two automakers in the most precarious situation -- got an emergency loan.
The fate of the Big Three ultimately will fall to President-elect Obama and the new Congress.
But the American companies aren't alone. Even foreign automakers are feeling the pain. Japanese automaker Toyota announced Monday that it expects to post its first operating loss in 70 years.
This year might be best summed up as the year of foreclosure. In November alone, one of every 488 homes in the United States received a notice of foreclosure, according to RealtyTrac. Many mortgages have been reworked by banks, but it doesn't appear that those modifications are necessarily working.
The Comptroller of the Currency -- the regulator that overseas national banks -- reports that more than half of the mortgages modified in the first three months of this year were delinquent within six months. And the Mortgage Bankers Association reported earlier this month that about one in 10 homeowners were late or in foreclosure.
Many people lost money when insurance giant American International Group, or AIG, was taken over by the government. In a matter of days, the company's shares became nearly worthless.
One of those who lost the most was Maurice "Hank" Greenberg, who spent 27 years as CEO of AIG.
"I've lost my entire net worth, literally my entire net worth," Greenberg told ABC News at the time. "I worked 40 years building the greatest insurance company in history, one that everyone in the world envied -- who was in this industry."
Greenberg lost roughly 95 percent of his assets, valued around $3 billion, analysts said at the time. But don't feel too bad. At the time of AIG's collapse, Greenberg, privately or through the companies he runs, still owned a private jet, an office on Park Avenue and homes in New York City and Brewster, N.Y.