In the first quarter of 2008, the financial markets struggled with a continuing credit crisis that appears to be the worst since the savings and loan debacle of the early 1990s. Financial stocks continued to falter almost across the board, though J.P. Morgan Chase JPM managed a 7.6% gain for the quarter through March 24 as the government approved its purchase of investment bank Bear Stearns BSC (for what now appears to be $10 per share) in an effort to put Bear's obligations in the hands of a solvent party.

Besides encouraging the buyout of Bear Stearns, the Federal Reserve lowered the federal funds rate from 4.25% to 2.25%, lowered the discount rate (the rate at which a limited number of institutions can borrow directly from the Fed) from 4.75% to 2.5%, opened the discount window to investment banks, and reduced the capital holding requirements for Fannie Mae FNM and Freddie Mac FRE.

As is often the case, skittish markets brought out the inner bulls of some top investors, and we also see some opportunities in the market. Click for more. 

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