A Detailed Timeline of the 2008 Financial Crisis

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The 2008 financial crisis was perhaps the most pervasive and devastating economic crisis since the Great Depression 80 years earlier. Starting with the collapse of the U.S. subprime mortgage market, its domino effect rippled outward, leaving almost no economy untouched. But what happened? How did we get there? What exactly happened? And how did we recover? Here’s a detailed timeline of the events of the 2007 and 2008 recession.

February 2007
Home sales peak

Single family home sales hit an all time high in February 2007. | Source

February 2007
March 2, 2007
Federal leaders battle on possible lingering recession

William Poole states that he expects great economic GDP growth to continue in 2007 which contradicted the statements of Alan Greenspan, who said that a recession (although not likely) was in fact a possibility | Source

March 2, 2007
March 6, 2007
Stock markets rebound from one of the worst weeks in equities the week before

The stock market, a leading indicator of peoples economic belief, rebounded after an extremly down week the week before. | Source

March 6, 2007
March, 2007
The housing market starts to take a toll on the financial industry

By this time, hedge funds started to become affected by the large amount of mortgage-backed securities on there balance sheet. Unregulated MBS really factored into this large amount of hold in such an asset class. | Source

March, 2007
April 11, 2007
Several indicators and warning signs are ignored by the Fed

The market drops 90 points as investors became worried after the Federal Open Market Committee meeting. Worry occurred due to the hope of the rate being lowered. | Source

April 11, 2007
April 17, 2007
Homeowners begin to receive help

Banks and agencies, at this point, begin to help lenders (especially those with adjustable rates) by allowing them to convert the loan to a fixed rate loan. This was meant to prevent the amount of foreclosures. | Source

April 17, 2007
April 26, 2007
Durable Goods report shows a recession is near

The durable goods orders, although an increase, was actually experiencing a YoY decline. This was a trending decline since April of 2006, indicating an economic downturn. | Source

April 26, 2007
June 19, 2007
Reports of home sale statistics begin to turn

Total home sales were reported as a decline from the years before along with the national median existing home price. | Source

June 19, 2007
June 22, 2007
Bear Sterns Bails Out Its Fund

Bear Sterns pledges $3.2B in the form of a collateralize loan to bail out its Bear Stearns High-Grade Structured Credit Fund.
. | Source

June 22, 2007
July, 2007
Bear discloses the collapse of two major funds

Bear Sterns sends a letter to investors saying two of it’s funds — the Bear Stearns High-Grade Structured Credit Fund and the  Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund – have lost nearly all their value.
. | Source

July, 2007
August 6, 2007
American Home Mortgage Investment goes broke

American Home Mortgage Investment files for bankruptcy protection, showing that adjustable rates are not being paid off by risky lenders. | Source

August 6, 2007
August, 2007
Fed lowers Feds Fund Rate

The FOMC lowers the Fed Funds Rate to 4.75 from 5.25, forcasting an aggressive expansion policy to come from the Fed. This was further proven through the continual lowering of the Fed Funds rate throughout December 2007. | Source

August, 2007
November 21, 2007
$75B Superfund created

Treasury Secretary Paulson, persuaded JPMorgan Chasem Citi and Bank of America to set up a distressed debt fund to buy subprime mortgages to provide some banks easy access to liquid cash. The fund is worth $75 billion. | Source

November 21, 2007
October 22, 2007
Fed Governor Randall Kroszner warns of misvaluation of CDOs

Randall Kroszner (Fed Governor) warns that people, even the experts, do not know how to value CDO’s since the complexity of their nature. He also warns about the credit market never being the same again. | Source

October 22, 2007
October, 2007
Private Equity falters

Analysts estimate a drop in private equity deals down to $91 billion from the previous high of $177 billion reached in the second quarter of 2007. | Source

October, 2007
December 21, 2007
Auction of $40 billion of loans

After lowering the federal fund rate, banks still refused to lend due to the fear of getting caught up with bad, illiquid debt on there balance sheet. To further entice lending, the Fed set up “Term Auction Facilities” which are basically auctions of loans that would get paid back to the Fed. | Source

December 21, 2007
December, 2007
Foreclosure rates double

Foreclosures became 97% higher than December 2016. 1% of homes at this time were in foreclosure proving the housing crisis is really here. | Source

December, 2007
Q4 2007
Negative GDP Growth

GDP growth was now expected to fall in this quarter due to mass amounts of people using home equity lines of credit; in conjunction with the decrease in home prices, this leads to lower consumer spending. | Source

Q4 2007
December 2007
The U.S. officially enters recession

The National Bureau of Economic Research (NBER) would later declare that the recession started in December 2007. | Source

December 2007
January 11, 2008
Bank of America buys Countrywide Financial

Countrywide Financial is bought by Bank of America starting a trend of takeovers due to financial instability of banks and bankruptcy risks. The deal would eventually cost Bank of America $50 billion. | Source

January 11, 2008
February 13, 2008
Bush signs economic stimulus package

President George W. Bush signs an economic stimulus package in the form of a tax rebate in an effort to curb the housing crisis. | Source

February 13, 2008
March 2008
The bailout begins

The U.S. government announces it will release large loans to banks. | Source

March 2008
March 11, 2008
The Fed bails out bond dealers

The U.S. government announces it will bail out bond dealers by lending them $200 billion in treasury notes. | Source

March 11, 2008
March 17, 2008
First emergency Fed meeting in 30 years

The Federal Reserve holds its first meeting in over three decades, agreeing to guarantee Bear Sterns assets in a JP Morgan Chase buyout. | Source

March 17, 2008
March 19, 2008
FMOC lowers fund rate by .75%

The Federal Open Market Committe lowers the fund rate by 0.75%. This sends the value of the dollar down and oil prices up. | Source

March 19, 2008
April 30, 2008
FOMC lowers fund rates again

The Federal Open Market Committe lowers the fund rate again — down to 2.00%.  | Source

April 30, 2008
April – June, 2008
The Fed buys bad bank dept

In this time, the Federal Reserve will lend approximately $225 billion to failing banks and auction nearly $1.2 trillion. This takes place through the Term Auction Facility.  | Source

April – June, 2008
September 7, 2008
The U.S. government takes over Fannie Mae and Freddie Mac

Both Fannie Mae and Freddit Mac are placed in the conservatorship of the U.S. government | Source

September 7, 2008
September 15, 2008
Lehman Brothers files bankruptcy

Lehman Brothers files bankruptcy showing that “Too Big to Fail” was not a viable means of running a bank.  | Source

September 15, 2008
September 16, 2008
AIG gets bailed out

AIG, the largest insurer in the world, gets bailed by the federal government in an agreement that the U.S. government will take an almost 80% stake in the company, showing how desperate situations were becoming. | Source

September 16, 2008
September 17, 2008
The US economy nearly collapses

Money market mutual funds became dry and businesses had no money to run which could’ve led to a complete economic disaster if it only lasted a little longer. | Source

September 17, 2008
September 18, 2008
Paulson and Bernanke submit $700B bail out plan to congress

Paulson and Bernanke want to bail out funds, banks, etc in danger of defaulting by buying up there mortgage backed securities in a $700 billion plan to congress. | Source

September 18, 2008
September 21, 2008
Goldman Sachs and Morgan Stanley become holding companies

Goldman Sachs and Morgan Stanley become holding companies and will experience a much greater degree of oversight from the federal government. | Source

September 21, 2008
September 25, 2008
Washington Mutual Bank closes

Washington Mutual Bank officially collapses, making it the largest bank failure in the history of the United States. | Source

September 25, 2008
September 29, 2008
Congress rejects $700B bail out proposal causing stock market to crash

Congress rejects a large bail out package for Wall Street, known as the Troubled Asset Relief Program or TARP, causing the Dow to drop a massive 778 points. | Source

September 29, 2008
October 3, 2008
Congress passes a revised version of TARP

Congress passes a second version of TARP, including revisions, which is then signed by the President. | Source

October 3, 2008
October 6, 2008
Stock market crashes anyway

Despite congress passing TARP, the stock markets plunge worldwide. | Source

October 6, 2008
October 7, 2008
The Fed announces massive $1.7T loan program

The Federal Reserve agrees to issue short-term loans to businesses that couldn’t find them anywhere else. | Source

October 7, 2008
Mid-October, 2008
Coordinated global effort

The governments of the United States, European Union and Japan coordinate to tackle the financial crisis. | Source

Mid-October, 2008
October 21, 2008
Fed saves Money Market funds

The Federal Reserve lends Money Market funds $540 billion, saving pension funds and university endowments. | Source

October 21, 2008
November 2008
TALF is born and the government saves more loans

The Term Asset-Backed Securities Loan Facility is created to keep credit companies from going under, and the FDIC backs of a trillion dollars more of loans. | Source

November 2008
December 16, 2008
Fed interest rate goes to zero

For the first time in history, the Federal Reserve lowers its interest rate to zero. | Source

December 16, 2008
December 19, 2008
Big automakers bailed out

The federal government awards General Motors and Chrysler $13.4 billion from the funds set aside for TARP. | Source

December 19, 2008
February 17, 2009
Obama signs stimulus package into law

President Obama signs the American Recovery and Reinvestment Act — a $787 billion stimulus package — into law. | Source

February 17, 2009
June 2009
The recession ends

After 18 months of global financial turmoil, the recession officially ends. | Source

June 2009
October 2, 2009
Unemployment peaks

Unemployment rates peak at 10%, the highest in 26 years. | Source

October 2, 2009
July 22, 2010
Dodd-Frank is signed

President Obama signs a massive Wall Street reform bill: the Dodd-Frank Wall Street Reform and Consumer Protection Act. | Source

July 22, 2010
2011 – 2012
A return to normalcy

Over the next couple of years, things start to return to normal. Unemployment reverses and falls below 9% in March of 2011, and the Dow hits a record high of 15,658 in August of 2012. | Source

2011 – 2012
US Health Care & Medical Debt Statistics
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