GFC 2008

Jan. 5. Unemployment rate hits 5%, the highest level in more than two years.

January 15: Citi Writes Down $18 Billion; Merrill Gets Infusion

January 16: Fitch lowers rating on AMBAC to AA

January 22: Fed cuts interest rate 75bps

January 30: The Federal Reserve cuts again, 50 basis points

Feb. 8. Monthly retail sales hit lows not seen in nearly five years.

February 14: UBS confirms sub-prime $18.4 billion loss

Feb. 20. Crude oil closes at more than $100/barrel for the first time.

March 3: HSBC in $17bn credit crisis loss

Mar 4 February manufacturing activity hits a five-year low.

March 6: Peloton Capital hedge fund collapses

March 14: Bear Stearns gets Fed funding as shares plummet.

March 16: Bear Stearns gets acquired for $2 a share by JPMorgan Chase in a fire sale avoiding bankruptcy. The deal is backed by Federal Reserve providing up to $30B to cover possible Bear Stearn losses. (Offer raised to $10 on March 24)

April 4: Fitch lowers MBIA rating to AA

Apr 25 Sales of new homes decline 8.5% in March to the slowest annualized rate since October 1991.

May 6: UBS AG Swiss bank announced plans to cut 5,500 jobs by the middle of 2009

May 17 Consumer sentiment hits a 28-year low.

June 5: Ratings on Bond Insurers MBIA, AMBAC lowered from AAA to AA by S&P

Jun 9 The average price for gasoline reaches $4/gallon for the first time.

July 12 IndyMac, one of the country’s largest thrifts, is seized by federal regulators.

July 25 Automaker Ford posts a record quarterly loss of $8.7 billion.

Aug. 2 Automaker GM logs a net loss of $15.5 billion, the third biggest in its history.

September 7: Federal takeover of Fannie Mae and Freddie Mac pledge $200B of support

September 14: Merrill Lynch sold to Bank of America amidst fears of a liquidity crisis and Lehman Brothers collapse

September 15: Lehman Brothers files for bankruptcy protection

September 15: Moody’s and Standard and Poor’s downgrade ratings on AIG’s credit on concerns over continuing losses to mortgage-backed securities, sending the company into fears of insolvency.

September 16: The US Federal Reserve loans $85 billion to American International Group (AIG) to avoid bankruptcy.

September 19: Paulson financial rescue plan unveiled after a volatile week in stock and debt markets. Treasury temporarily guarantees money market funds against losses up to $50B.

September 25: Washington Mutual was seized by the Federal Deposit Insurance Corporation, and its banking assets were sold to JP MorganChase for $1.9bn.

September 29: Emergency Economic Stabilization Act defeated 228-205 in the United States House of Representatives.

September 29: Federal Deposit Insurance Corporation announces that Citigroup Inc. would acquire banking operations of Wachovia. Wells Fargo later steps forward and makes the deal for Wachovia without government aid.

Sept. 29 The Dow Jones Industrials drop 777 basis points, its biggest one-day point drop.

October 1: The U.S. Senate passes HR1424, their version of the bailout bill.

October 3: The U.S. House of Representatives passes HR1424 and President George W. Bush signs it into law. It contains also easing of the accounting rules.

October 6-10: Worst week for the stock market in 75 years. The Dow Jones lost 22.1 percent, its worst week on record, down 40.3 percent since reaching a record high of 14,164.53

October 6: Bank of America agrees to settle claim of predatory lending charges against recently acquired Countrywide Financial.

October 6: The Danish government announces plan to guarantee all banking deposits and some inter-bank loans.

October 6: BNP Paribas agrees to takeover Fortis from the Belgian government for €14.5 billion. This deal makes BNP the largest bank operating in the Eurozone.

October 6: Iceland, as a measure to ease the 2008 Icelandic financial crisis, passes legislation that allows the government to nationalize, merge, or force ailing banks into bankruptcy.

October 7: The Internal Revenue Service (IRS) relaxes rules on US corporations repatriating money held oversees in an attempt to inject liquidity into the US financial market. The new ruling allows the companies to receive loans from their foreign subsidiaries for longer periods and more times a year without triggering the 35% corporate income tax.

October 8: Central banks in USA (Fed), England, China, Canada, Sweden, Switzerland and the European Central Bank cut rates in a coordinated effort to aid world economy. Fed provides $38B cash to AIG for securities lending.

Oct. 8 Consumer credit outstanding reported as having shrunk in August, the first contraction in more than 10 years.

October 10: Japanese company Yamato Life files for bankruptcy becoming what is viewed as the first direct casualty in Japan from the fallout of the US subprime mortgage crisis.

October 13: French president, Nicolas Sarkozy, pledges €360 billion in liquidity to French banks. In return for the bailout, the French government will demand conditions on the banks such as changes to pay and bonus structures.

October 13: The UK government starts the nationalization process by injecting £37 billion in the nation’s three largest banks. The UK government will own a majority share in the Royal Bank of Scotland (RBS) and over a 40% share in Lloyds and HBOS. In return, the banks have agreed to cancel dividend payments until the loans are repaid, have board members appointed by Treasury, and limit executive pay.

October 13: Germany approves a plan to inject €500 billion into credit markets. Concessions by banks who tap into this fund include a €500,000 limit on executive pay, a ban on bonuses, and a ban on dividend payments.

October 14: The US taps into the $700 billion available from the Emergency Economic Stabilization Act and announces the injection of $250 billion of public money into the US banking system. The form of the rescue will include the US government taking an equity position in banks that choose to participate in the program in exchange for certain restrictions such as executive compensation. Nine banks agreed to participate in the program and will receive half of the total funds: 1) Bank of America, 2) JPMorgan Chase, 3) Wells Fargo, 4) Citigroup, 5) Merrill Lynch, 6) Goldman Sachs, 7) Morgan Stanley, 8) Bank of New York Mellon and 9) State Street.

October 14: United Arab Emirates’ (UAE) ministry of finance added a $19 billion liquidity injection to domestic banks bringing the total dollars injected to $32.7 billion.

October 14: The Australian government unveils a $10.4 billion stimulus package.

October 14: The Icelandic stock exchange begins trading again after a three day shutdown. The opening did not include Iceland’s three largest banks which were nationalized last week.

Oct. 31 Third-quarter real GDP declines by 0.3%, the first decrease since 2001.

November 6 The International Monetary Fund (IMF) approves a $16.4bn loan to Ukraine to bolster its economy, shaken by global financial turmoil. The Bank of England slashes interest rates from 4.5% to 3% – the lowest level since 1955. The European Central Bank lowers eurozone rates to 3.25% from 3.75%.

November 9 China sets out a two-year $586bn economic stimulus package to help boost the economy by investing in infrastructure and social projects, and by cutting corporate taxes.

November 12 US Treasury Secretary Henry Paulson says the government has abandoned plans to use some of the $700bn bail-out money to buy up banks’ bad debts and decided instead to concentrate on improving the flow of credit for the US consumer.

November 14 The eurozone officially slips into recession after EU figures show that the economy shrank by 0.2% in the third quarter. Leaders of the G20 developed and emerging economies gather in Washington to discuss ways to contain the financial crisis and agree on longer-term reforms.

November 15: G20 Summit agrees to 5 broad principles for future action to reform financial markets.

G20 Summit Declaration

Strengthen Transparency & Accountability

Enhance Sound Regulation

Maintain Financial Market Integrity

Reinforce International Cooperation

Reform Financial Security Forum and IMF

November 20 The International Monetary Fund (IMF) approves a $2.1bn (£1.4bn) loan for Iceland , after the country’s banking system collapsed in October. It is the first IMF loan for a Western European nation since 1976.

Nov. 20 Consumer prices in October drop their furthest in a one-month period since World War II.

November The US government announces a $20bn (£13.4bn) rescue plan for troubled banking giant Citigroup after its shares plunge by more than 60% in a week.

November 24 The UK government announces a temporary cut in the level of VAT – to 15% from 17.5% – in its pre-Budget report . Chancellor Alistair Darling also says government borrowing will rise to record levels, but defends the move as essential to save the UK from a deep and long-lasting recession.

November 25 The US Federal Reserve announces it will inject another $800bn into the economy in a further effort to stabilise the financial system and encourage lending. About $600bn will be used to buy up mortgage-backed securities while $200bn is being targeted at unfreezing the consumer credit market.  The Fed also announces that it will buy up to $60B in mortgage backed securities and will lend $200B to holders of securities backed by consumer loans.

November 26 The European Commission unveils an economic recovery plan worth 200bn euros which it hopes will save millions of European jobs. The scheme aims to stimulate spending and boost consumer confidence.

December 1 The US recession is officially declared by the National Bureau of Economic Research, a leading panel including economists from Stanford, Harvard and MIT. The committee concludes that the US economy started to contract in December 2007.

December 2: Detroit’s automakers, making a second bid for $25 billion in funding, present Congress with plans to restructure their ailing companies and provide assurances that the funding will help them survive.

December 4 French President Nicolas Sarkozy unveils a 26bn euro stimulus plan to help France fend off financial crisis, with money to be spent on public sector investments and loans for the country’s troubled carmakers.

Dec. 10 For the first time in history, the Treasury sells four-week notes at 0% yield.

December 11 Bank of America announces up to 35,000 job losses over three years following its takeover of Merrill Lynch. It says the cuts will be spread across both businesses. The European Central Bank, as well as central banks in the UK, Sweden and Denmark, slash interest rates again.

December 16 The US Federal Reserve slashes its key interest rate from 1% to a range of zero to 0.25% – the lowest since records began.

December 19 President George W Bush says the US government will use up to $17.4bn of the $700bn meant for the banking sector to help the Big Three US carmakers, General Motors, Ford and Chrysler.

Dec. 21 – Ireland agrees to inject 5.5 billion euros ($7.7 billion) into its three main banks, taking Anglo Irish Bank under its control.

Dec. 24 – Japan approves an 88.5 trillion yen ($980.6 billion) budget, its biggest ever, to help finance a 12 trillion yen fiscal stimulus program.

December 29 The US Treasury unveils a $6bn bail-out for GMAC, the car-loan arm of General Motors.

December 31 The FTSE 100 closes down 31.3% since the beginning of 2008 – the biggest annual fall in the 24 years since the index was started. The Dax in Frankfurt lost 40.4% over the year while the Cac 40 in Paris dropped 42.7%.

2007

2009