Jan. 9, 2008: Bank of America Acquired Countrywide
Bank of America agreed to buy Countrywide with a stock-swap deal for about $4 billion, taking over the troubled, largest mortgage-lender
Mar. 16, 2008: Bear Stearns' Downfall
Nearly a year after two big hedge funds at Bear Stearns blew up; it has suffered a near-death experience. Federal Reserve arranged JPMorgan Chase's takeover for Bear for a bargain basement price of $2 a share, which is a disgraceful outcome for the 85-year-old firm.
Jul. 2, 2008: Dow Jones Index Entered Bear Market
The
Dow Jones Industrial Average entered official 'bear market' territory for the first time since 2002 as it closed down at 11,215.51, some 20% below its high of October 2007. Meanwhile oil has hit a new record of more than $144
Jul. 9, 2009: S&P 500 Followed the Dow Into Bear Market
Standard & Poor's 500 Index entered into its first bear market territory since 2002 after falling to 1,244.68 which was down 20.3% from its October 2007 high
Sept. 7, 2008: U.S. Bailed Out Fannie Mae and Freddie Mac
In an extraordinary federal intervention in private enterprise,
the U.S. government seized the nation’s two largest mortgage finance companies, committing as much as $100 billion to each to backstop any capital shortfalls.
Sept. 09, 2008: Lehman Brothers Struggled to Survive
As it searched for a buyer, Lehman Brothers continued to struggle after losing more than half its market value. Analysts feared that the investment bank was running out of time and options, and speculation arose that, unlike the rescue and sale of Bear Stearns, the government was unlikely to come to Lehman’s rescue.
Sept. 12, 2008: U.S. Warned Bank Chiefs to Help Solve Crisis
The Federal Reserve summoned the chiefs of Wall Street’s largest financial houses, insisting that they needed to work together to arrest the downward spiral in the financial markets. Adding urgency to the meeting were growing concerns that the insurance giant A.I.G. and Merrill Lynch might also need billions of dollars in fresh capital to strengthen their businesses.
Sept. 14, 2008: Lehman Filed Bankruptcy, Merrill Was Sold
Unable to find a buyer or a bailout,
Lehman Brothers filed for bankruptcy. In the meantime Bank of America purchased Merrill Lynch for $50 billion to avert a deeper crisis, ending Merrill’s 94-year history independence. Meanwhile, another crisis loomed as the insurance giant A.I.G teetered under the Weight of its losses and sought a $40 billion lifeline from the Federal Reserve.
Sept. 15, 2008: Wall Street Plunged
The Dow Jones industrial average fell by 504 points, the index’ worst loss since the Sept. 11 terrorist attacks in 2001. Shares of A.I.G. also fell 60 percent after the Federal Reserve rebuffed its request to a $40 billion loan.
Sept. 16, 2008: Fed’s Loan Rescued A.I.G.
The Federal Reserve agreed to lend A.I.G. $85 billion in a deal that would give the government control over the troubled insurance giant. As a major provider of financial insurance contracts to investors, A.I.G. was potentially on the hook for billions of dollars in losses stemming from complex debt securities that were once considered safe.
Sept. 17, 2008: Credit Markets Continued to Malfuction
With many credit markets not functioning normally, investors worldwide frantically moved their money into the safest investments.
The Dow Jones industrial average fell 49 points, while gold had its biggest one-day gain in nearly 10 years.
Sept. 18, 2008: U.S. Proposed Vast Bailout to Stem Crisis
The Treasury and Federal Reserve began discussion on what could become the biggest financial bailout in the U.S. history. Reports of the discussion sent stocks soaring with the Dow rising 410 points.
Sept. 19, 2008: Bush Administration Asked Congress for Emergency Powers
The Bush administration asked Congress for the ability to buy hundreds of billions of dollars in distressed mortgages despite many unknowns about how such a plan would work. Stocks soared for a second consecutive day. Treasury Secretary Henry M. Paulson Jr. told lawmakers that failure to pass the rescue plan might lead to nothing short of disaster.
Sept. 20, 2008: Bush Sought $700 Billion in Bailout
To stem the crisis,
the Bush administration formally proposed a vast bailout of financial institutions, requesting unfettered authority for the Treasury to buy up to $700 billion in distressed mortgage-related assets from the private firms
Sept. 21, 2008: The End of a High Finance Era
The Federal Reserve announced that Goldman Sachs and Morgan Stanley, the last big independent investment banks on Wall Street, would transform themselves into bank holding companies subject to far greater regulation, a move that fundamentally reshaped an era of high finance that defined the modern Gilded Age.
Sept. 22, 2008: A Skeptical Advance of the Bailout
Skepticism among lawmakers deepened as some voiced anger over the proposal’s $700 billion price tag as well as doubts about the plan’s chances of success. Even so, administration and Congressional leaders moved closer to an agreement, despite demands by some to add pay caps for executives whose firms seek help.
Sept. 25, 2008: Washington Mutual Seized; Bailout Plan Stalled
Federal regulator seized Washington Mutual in the largest bank failure in American history, as regulators engineered an emergency sale of the company to JPMorgan Chase.
Sept. 29, 2008: Market Plunged after Bailout Plan Failed; Citigroup Bought Wachovia
As the House rejected a measure intended to bail out the nation’s troubled financial institutions,
the Dow Jones industrial average reacted by plunging 778 points. Earlier, Citigroup moved to purchase Wachovia’s banking operation.
Oct. 1, 2008: Senate Approved Bailout Plan
The Senate passed a $700 billion financial bailout package, putting pressure on the House to reverse course and approve a new plan after rejecting a similar proposal.
Oct. 3, 2008: Bush Signed Bailout; Well Fargo to Buy Wachovia
After it defeated an earlier version, the House approved a $700 billion bailout bill, following the passage of an identical measure in the Senate. President Bush promptly signed the bill authorizing the Treasury to undertake what could become the most expensive government intervention in history. Meanwhile, Wachovia agreed to sell its assets to Wells Fargo in a move that stunned Citigroup, which had agreed to buy Wachovia just four days earlier.
Oct. 5, 2008: Financial Crises Spread to Europe
Over the weekend, European leaders vowed to work together to stop growing financial panic, but they failed to provide a system wide solution. The German government promised to guarantee all private savings accounts in the country, and BNP Paribas, the French bank, said it would acquire most of what remained of Fortis, the troubled Dutch bank.
Oct. 6, 2008: Global Stock Markets Plummeted
Investors conveyed fears of dire consequences for the global economy, as
equities plunged worldwide. The Dow fell as much as 800 points before a late recovery, finishing down 369.88, and below 10,000 points for the first time since 2004.
Oct. 8, 2008: Central Banks Coordinated Rate Cuts; U.S. Might Buy Stakes in Banks
The Federal Reserve and other leading central banks moved together to cut interest rates around the world. Meanwhile, the U.S. Treasury said it might move to buy ownership stakes in banks as a way to recapitalize them.
Oct. 9, 2008: Stocks Plunged Again; Dow Under 8,600
Another late-day decline pushed
equity markets down sharply as concerns about the global financial system grew. New data showed retail investors were withdrawing billions of dollars from stock mutual funds, a sign the panic was spreading. Meanwhile, Citigroup withdrew its bid to acquire Wachovia, ending a battle with Wells Fargo over control of the troubled bank.
Oct. 10, 2008: Roller Coaster Week Ended
Stocks lost ground for a seventh consecutive day amid mounting chaos in financial markets around the globe, with the Dow Jones industrial average finished its worst week on record, at one point dipping below 8,000. Group of 7 nations sought coordinated action to address the crisis.
Oct. 13, 2008: Markets Rocketed Higher on Treasury Bank Plan
Stocks soared 11 percent, the Dow’s biggest one-day gain in 75 years, on word the Treasury planned to inject $250 billion into banks in exchange for equity. Other markets cheered similar moves around the world. Meanwhile, Mitsubishi UFJ said it agreed to provide additional capital to Morgan Stanley.
Oct. 14, 2008: Paulson Forced Banks to Take Bailout Money
The Treasury Department announced plans to invest up to $250 billion into the nation’s banks.
Oct. 15, 2008: Stock Plunged Again Amid Fresh Fears about Economy
The Dow sank 733 points, underscoring the depth of the economy’s troubles. In a speech, Ben S. Bernanke warned that the proposed financial bailout will take times to work.
Oct. 20, 2008: Credit Thawed, Markets Warmed
As lending showed signs of easing, markets rose sharply, with the Dow gaining 413 points. Meanwhile, the Treasury was said to be urging healthier bank to acquire weaker ones using funds from the government’s $250 billion bank rescue package.
Oct. 22, 2008: Woes at Hedge Funds Deepened; Markets Fell Sharply Again
Hedge funds lost $180 billion over the last three months, as many wealthy investors have headed for the exits. The Dow lost 514 points, or 5.7 percent, and Wachovia reported a staggering $23.9 billion loss a head of its merger with Wells Fargo.
Oct. 23.2008: Greenspan Conceded Errors
Almost three years after stepping down as chairman of the Federal Reserve, Alan Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of reckless mortgage lending.
Oct. 24, 2008: Many Currencies Plunged; China Aimed to Stem Defaults
Some currencies plunged as stocks sink worldwide that led to talk of a coordinated intervention by leading industrial nations. Meanwhile, China announced measures to support real estate prices amid fears of surging loan defaults.
Oct. 26, 2008: Oil Prices Plummeted
After reaching a record of more than $147 a barrel in July, oil prices collapsed and the global financial crisis extended its reach into the Persian Gulf states.
Oct. 28, 2008: Dow Soared Nearly 11%, Bucked Record Consumer Pessimism
Markets in the U.S. soared more than 10 percent, following earlier rallies in Europe and Asia, as well as anticipation that the Fed will further lower interest rates. The sudden enthusiasm for stocks came despite a report showing record low levels of consumer confidence.
Oct. 29, 2008: Fed Cut Key Interest Rate to 1%
The Federal Reserve trimmed its benchmark interest rate by half a percentage point to 1 percent in an effort to rejuvenate a reeling economy.
Oct. 31, 2008: Wild October for Stocks Ended: Economy Shrank
The most volatile month in Wall Street history ended with the S&P 500 index posting its worst month since the crash of 1987.
The economy also turned in worrisome numbers, shrinking at a 0.3 percent rate as consumer spending fell for the first time in 17 years.
Nov. 4, 2008: President-Elect Faced Sputtering Economy
As Barack Obama won the presidential election, he faced towering economic challenges, including energy, trade, health care, the shrinking auto industry and financial regulation. Highest on his agenda was said to be passage of a new economic stimulus package.
Nov. 7, 2008: Jobless Rate Hit 14-Year High
The unemployment rate jumped to 6.5 percent, the highest level in 14 years and a sign that American workers may face difficult times for months to come. October’s loss of 240,000 jobs was the 10th straight monthly decline, bringing the total number of jobs lost in 2008 to 1.2 million.
Nov. 9, 2008: Iceland’s Economy Collapsed; China Unveiled Stimulus Plan
In Iceland, a swift and unreal collapse of the country’s banking industry led to rising prices, high unemployment, lost savings and shattered national pride. China announced a $586 billion stimulus plan aimed at bolstering its weakening economy, a sweeping move that could help fight the global economic slowdown. The amount, equivalent to 7 percent of the country’s gross domestic product, will be used mainly on infrastructure projects.
Nov. 12, 2008: U.S. Shifted Focus of Bailout to Consumers
The Treasury Department abandoned its original strategy behind the $700 billion rescued plan, as administration officials acknowledged that banks and financial institutions were as unwilling as ever to lend to consumers. A new strategy, sill in the planning stages, is discussed by Treasury Secretary Henry M. Paulson Jr. The program, with the aim of helping companies that issue credit cards, make student loans and finance car purchases, would for the first time use bailout funds specifically to help consumers.
Nov. 18, 2008: Auto Chiefs Pleaded for Aid
The heads of the three Detroit automakers pleaded for emergency government aid to stave off potential collapse, saying that two of the three companies might run out of money by the end of the year. But after four hours of congressional testimony, it appeared they had not persuaded enough lawmakers to pass any legislation to help them.
Nov. 19, 2008: Stock Markets Tumbled to Lowest Levels in a Decade
With credit markets still locked up and investors getting worried about the big banks, Wall Street marked a grim milestone when
stock markets tumbled to their lowest levels in a decade. In all, the slide from the height of the stock markets had wiped out more than $8 trillion in wealth.
Dec. 1, 2008: Economist Officially Declared U.S. Was In Recession
National Bureau of Economic Research confirmed that the
U.S. economy officially sank into a recession last December, which means that the downturn is already longer than the average for all recessions since World War II.
Dec. 11, 2008: Madoff Was Arrested in Vast Ponzi Scheme
Bernard L. Madoff, a legendary money manager, was arrested and later charged with running
the largest fraud in Wall Street history, a Ponzi scheme that spanned 20 years and cost investors $65 billion. Months later he pleaded guilty and began serving a 150-year prison sentence.
Dec. 16, 2008: Fed Cut Interest Rates Virtually to Zero
Going further than expected,
the central bank cut its target for the overnight federal funds rate to range of zero to 0.25 percent and brought the U.S. to the zero-rate policies that Japan used for years in its own fight against deflation.