The Lehman bankruptcy in September stands out as the key event from which other issues materialized or were intensely magnified. It was neither fear nor greed that ruled the day; it was absolute panic. This paper provides a review of 2008 and an in-depth look into 2009. Although we remain cautious on the outlook for equities in early 2009, we believe markets can recover later in the year in anticipation of an economic bottom toward year-end.