timeline of a crisis

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timeline of a crisis
Dow:
14164.53
October 9, 2007
Dow:
11951.09
March 16, 2008
Dow:
11231.96
July 7, 2008
Dow:
September 7, 2008
11220.96
Dow:
10917.51
September 15, 2008
Dow:
11019.69
September 18, 2008
• Dow reaches highest
closing in its history.
• Bear Stearns collapses and is sold to
JPMorgan Chase with
backing from the Fed.
• With mortgage defaults
and home foreclosures
on the rise Fannie Mae
and Freddie Mac hit a
one-year low. The two
companies own or back
half of the country’s $12
trillion in mortgages.
• Treasury bails out Fannie and Freddie.
• The stock market
dives as Paulson addresses the media.
• Panic sets in as
investors flock to
pull out of other
investment banks,
Lehman’s collapse
reverberates across
the globe, nonfinancial companies
like GE have difficulty
operating their businesses and Moody’s
downgrades AIG.
• New York Fed President Tim Geithner
tries to partner the
investment banks
with commercial ones.
• Paulson and Bernanke
pitch TARP to Congress.
Dow:
11059.02
September 16, 2008
Dow:
11015.69
September 22, 2008
AIG Bailout
• Mitsubishi agrees to
invest $9 billion in
Morgan Stanley.
October 2007 – May 2008
• Sharp decline in
housing prices
• A worldwide credit
crunch takes shape
May – June 2008
• Lehman stock falls,
accelerated by critical
words from hedge
fund manager David
Einhorn.
Dow:
10962.54
July 15, 2008
• Paulson’s Bazooka:
As Fannie and Freddie
continue to fall,
Treasury Secretary
Henry Paulson asks
for the power to bail
them out.
Dow:
11734.32
August 8, 2008
Beijing Olympics
Dow:
September 11, 2008
11433.71
• Paulson’s office leaks that the Treasury
will not be bailing out Lehman.
Dow:
September 12, 2008
11421.99
• Wall Street CEOs summoned to the
New York Fed to figure out a plan.
September 13, 2008
• Executives from Merrill Lynch and
Bank of America discuss a sale.
September 14, 2008
• With other banks securing toxic
assets, Barclays agrees to buy
Lehman, but British regulators
indicate they won’t approve the deal.
• Lehman board votes to file for
bankruptcy.
Dow:
10609.66
September 17, 2008
Dow:
11388.44
September 21, 2008
• Goldman Sachs and
Morgan Stanley
become bank holding
companies.
Dow:
10854.17
September 23, 2008
Dow:
10325.38
October 3, 2008
• Warren Buffett agrees
to invest $5 billion in
Goldman Sachs.
• Revised TARP bill is
signed into law by
President Bush.
Dow:
10825.17
September 24, 2008
Dow:
9387.61
October 13, 2008
• John McCain
suspends his
campaign to return to
Washington.
• Paulson gets the
banks to accept the
money from TARP.
Dow:
10365.45
September 29, 2008
• TARP fails to pass in
the House.
Dow:
8046.62
November 20, 2008
• Dow falls to 8046,
lowest point since
2003.
• Fed Chairman Ben
Bernanke and Paulson
discuss going to
Congress to ask for
funding.
OCT 9 ‘07 – MAY 21 ‘08
MAY 22 ‘08 – AUG 31 ‘08
SEP 1 ‘08 – NOV 20 ‘08
TIMELINE OF A CRISIS

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