Signs of a recovery began to emerge in August. Positive economic data
across the globe offered a hint that the worst of the financial crisis
had passed, though many cautioned that the after-effects were likely to
persist for quite some time. The third quarter probably marked
the end of the longest recession since World War II, with the economy
expanding at an annual rate of 2.8 percent for the first time in a
year.
The following is an outline of critical economic events in 2009 that shows how the economy is emerging from the crisis.
Jan. 15, 2009: Bank of America Got Extra Lifeline
Two weeks after closing its Purchase of Merrill Lynch at the urging of federal regulators, the government cemented a deal to supply Bank of America with fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets. The agreement led some to wonder whether the government should re-evaluate its decision not to nationalize the banking industry.
Feb. 10, 2009: Stocks Plunged After Geithner Unveils Financial Reform
The White House vowed to flood the financial system with as much as $2.5 trillion, but the initial assessment of the plan was brutally negative, in large part because investors expected more details. Later the government ordered the nation’s 19 biggest banks to undergo stress tests to check whether they could hold up if the economy deteriorated further.
Feb 17, 2009: Obama Signed $787 Billion Stimulus
After months of wrangling with Congress, President Obama signed the $787 billion recovery package into law. The next day, the president announced a plan intended to help homeowners refinance their mortgages or avert foreclosure.
March 9, 2009: Job Losses Mounted; Stock Markets Hit Annual Lows
Just days after the unemployment rate surged to 8.1 percent, its highest level in a quarter-century, both the Dow Jones industrial average and the S&P 500 hit their yearly lows. This marked the end of
the nastiest bear since great depression.
March 14, 2009: Bonuses at A.I.G. Prompted Further Debate
A.I.G., which received billions in bailout funds, paid roughly $165 million in bonuses to executives in the same business unit that brought the company to the brink of collapse last year. The announcement set off a contentious debate over executive pay, and days later, impelled the company's chief executive to ask employees to return half of their bonuses.
April 2, 2009: World Leaders Pledged Aid and New Regulations
Leaders of the world’s largest economies agreed at the Group of 20 summit meeting to bail out developing countries, stimulate world trade and better regulate financial firms. But the International Monetary Fund, which seemed to regain its role as a go-to institution during times of crisis, declared in the following weeks that an economic recovery would take longer than expected.
April 30, 2009: Chrysler Filed for Bankruptcy
In yet another extraordinary intervention into private industry by the federal government, President Obama forced Chrysler into federal bankruptcy protection so it could pursue a lifesaving alliance with the Italian automaker Fiat. A month later, the White House forced General Motors to file for bankruptcy as well.
June 9, 2009: Banks Began to Exit Bailout Program
With little fanfare, the Obama administration allowed 10 big banks to repay federal aid that had sustained them through the worst of the economic crisis. The move came after the White House said it planned to require companies that received two rounds of federal bailouts to submit any major executive pay changes for approval by a new federal official who will monitor compensation.
July 14, 2009: Big Profits and Bonuses for Goldman
Months after accepting federal aid, Goldman Sachs posted the richest quarterly profit in its 140-year history and announced that it had earmarked $11.4 billion to compensate its workers. Two days later, JPMorgan also reported a strong quarter. The stellar results and subsequently large bonuses rekindled the debate over executive compensation.
Jul. 24, 2009: Investors smelled a recovery
Wall Street's rally got its steam back. S&P 500 was up a lofty 45% from its Mar. 9 low, and the Dow Jones Industrial Average 39% after breaking through and closing above a key psychological barrier of 9000.
Aug. 7, 2009: Signs of a Recovery
Across the globe, positive economic data offered a hint that the worst of the financial crisis had passed, though many cautioned that the after-effects were likely to persist for quite some time.
Aug. 25, 2009: Obama Reappointed Bernanke
In nominating Ben Bernanke to another term as Fed chairman, President Obama praised him for his “bold action and out-of-the-box thinking,” saying it had helped avoid a repeat of the Great Depression.
Oct. 14, 2009: Confidence returned, Dow reclaimed 10,000 mark
Dow Jones Industrial Average closed above 10,000 for the first time in more than year. The sharp rally signaled investors' confidence that the economy is recovering from the financial crisis and recession. It’s Dow’s highest level since global markets plunge on Oct. 6, 2008, when it fell below 10,000 amid the outbreak of financial crisis on Wall Street.
Nov. 6, 2009: U.S. Unemployment Rate Hit 26 Year High
The U.S. unemployment surged to hit its highest level in more than 26 years as employers cut more jobs in October. The unemployment rate rose by 0.4 percentage point to 10.2%, a sign the labor market continues to struggle as the economy emerges from its deep recession. The unemployment rate of 10.2% was the highest since April 1983.
Nov. 24, 2009: Economy Expanded for the First Time in a Year
The Commerce Department reported
the economy rose at an annual rate of 2.8 percent in the third quarter, compared with a contraction of 0.7% in the prior quarter. The third quarter probably marked the end of the longest recession since World War II, with the economy expanding for the first time in a year. The report does not mark the official end of the recession, though.