Great Recession/Timelines: Difference between revisions
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==2002-2007 US housing boom and bust == | ==2002-2007 US housing boom and bust == | ||
* The average price of a US house increased by about 70% between 2000 and 2006 | * The average price of a US house increased by about 70% between 2000 and 2006 <ref>http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_112766.pdf</ref> and then fell to 6.5% below the 2006 peak by July 2007<ref>http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm</ref>. | ||
* [[subprime mortgage crisis/Timelines#2007| The subprime mortgage crisis]] - including losses from [[mortgage]] [[default (finance)|defaults]] by the ''Bear Stearns'' bank's [[hedge fund]]s | * [[subprime mortgage crisis/Timelines#2007| The subprime mortgage crisis]] - including losses from [[mortgage]] [[default (finance)|defaults]] by the ''Bear Stearns'' bank's [[hedge fund]]s<ref>http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms</ref> and the [[bankruptcy]] of the ''American Home Mortgage Corporation'' <ref>http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2208983.ece</ref>. | ||
==2007-2008 International financial panic== | ==2007-2008 International financial panic== | ||
* August 9: The French bank ''BNP Paribas'' freezes its funds because it is unable to value their mortgage-backed assets. | * August 9: The French bank ''BNP Paribas'' freezes its funds because it is unable to value their mortgage-backed assets. <ref>http://invest.bnpparibas.com/en/news/default.asp?Code=LPOI-75W9PV</ref> | ||
* September 12 The ''Lehman Brothers'' [[investment bank]] becomes [[bankruptcy|bankrupt]] | * September 12 The ''Lehman Brothers'' [[investment bank]] becomes [[bankruptcy|bankrupt]]<ref>http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf</ref> with losses of up to $160 billion to holders of its unsecured bonds prompting a sudden loss of confidence in [[money market]] funds and the onset of a [[credit crunch]]. | ||
* [[Crash of 2008/Timelines#The Crash|The crash of 2008]] | * [[Crash of 2008/Timelines#The Crash|The crash of 2008]] | ||
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==2008-2009 The international response== | ==2008-2009 The international response== | ||
'''The Banking systems rescues.''' | '''The Banking systems rescues.''' | ||
* The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees | * The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees <ref>http://news.bbc.co.uk/1/hi/business/7658307.stm]</ref><ref> [http://news.bbc.co.uk/1/hi/business/7658277.stm</ref>, and similar action is agreed by European Union leaders <ref>[http://www.latimes.com/business/la-fg-euecon13-2008oct13,1,7737780.story</ref> and the US President<ref>http://www.whitehouse.gov/news/releases/2008/10/20081014.html</ref>and there are rescues of individual banks in Europe <ref>http://www.ft.com/cms/s/0/f93a9b08-91ad-11dd-b5cd-0000779fd18c.html</ref><ref name="dw-world">http://www.dw-world.de/dw/article/0,2144,3692522,00.html</ref> <ref>http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4894402.ece</ref><ref>http://www.newsvine.com/_news/2008/08/25/1782809-danish-central-bank-rescues-nations-no-10-bank</ref> and the United States <ref name="dw-world"/>. | ||
'''The coordinated monetary stimulus'''. | '''The coordinated monetary stimulus'''. | ||
* A [[discount rate]] cut of half per cent by the [[central bank]]s of the United States, Europe, China, Britain, Canada, Sweden and Switzerland | * A [[discount rate]] cut of half per cent by the [[central bank]]s of the United States, Europe, China, Britain, Canada, Sweden and Switzerland <ref>http://news.bbc.co.uk/1/hi/business/7658958.stm</ref>. | ||
'''Agreement on a collective [[fiscal stimulus]]''' | '''Agreement on a collective [[fiscal stimulus]]''' | ||
* November 15: The first [[G20 summit]] of leaders of the [[Group of Twenty]] countries agree to take expansionary fiscal action | * November 15: The first [[G20 summit]] of leaders of the [[Group of Twenty]] countries agree to take expansionary fiscal action | ||
* The [[money market]] panic persists ([[LIBOR]]-[[OIS]] [[spread]]s reach over 350 [[basis point]]s (compared with August 2007 rates of around 10 points) | * The [[money market]] panic persists ([[LIBOR]]-[[OIS]] [[spread]]s reach over 350 [[basis point]]s (compared with August 2007 rates of around 10 points)<ref>http://research.stlouisfed.org/publications/es/08/ES0825.pdf</ref>.) | ||
'''Domestic measures''' | '''Domestic measures''' | ||
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* The [[The European Central Bank]] discount rate is cut to 1 percent - the interest rate on the main refinancing operations of the [[Euro]] system be decreased by 25 basis points to 1.00%, from 13/05/09[http://www.ecb.int/press/pr/date/2009/html/pr090507.en.html]. ECB quantitative easing starts - with plans to buy €60bn worth of bonds. [http://www.ecb.int/press/pressconf/2009/html/is090507.en.html] ECB balance sheet total reaches €2,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | * The [[The European Central Bank]] discount rate is cut to 1 percent - the interest rate on the main refinancing operations of the [[Euro]] system be decreased by 25 basis points to 1.00%, from 13/05/09[http://www.ecb.int/press/pr/date/2009/html/pr090507.en.html]. ECB quantitative easing starts - with plans to buy €60bn worth of bonds. [http://www.ecb.int/press/pressconf/2009/html/is090507.en.html] ECB balance sheet total reaches €2,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | ||
* Ireland's supplementary budget - a number of tax increases and public expenditure cuts designed to reduce the deficit to 10.75 per cent of GDP for 2009 [http://www.budget.gov.ie/2009SupApril09/FinancialStatement.html]. | * Ireland's supplementary budget - a number of tax increases and public expenditure cuts designed to reduce the deficit to 10.75 per cent of GDP for 2009 [http://www.budget.gov.ie/2009SupApril09/FinancialStatement.html]. | ||
* The [[Bank of England]]'s [[discount rate]] is to reduced to0.5% and announces £75 billion asset purchase under its Asset Purchase Scheme [http://www.bankofengland.co.uk/markets/apf/] The Bank of England's balance sheet total reaches £227 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf] | * The [[Bank of England]]'s [[discount rate]] is to reduced to0.5% and announces £75 billion asset purchase under its Asset Purchase Scheme [http://www.bankofengland.co.uk/markets/apf/ ] The Bank of England's balance sheet total reaches £227 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf ] | ||
====Asia==== | ====Asia==== | ||
: The Bank of Japan's balance sheet total reaches Y110,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | : The Bank of Japan's balance sheet total reaches Y110,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | ||
--> | |||
<references/> | <references/> | ||
Revision as of 14:32, 11 March 2010
2002-2007 US housing boom and bust
- The average price of a US house increased by about 70% between 2000 and 2006 [1] and then fell to 6.5% below the 2006 peak by July 2007[2].
- The subprime mortgage crisis - including losses from mortgage defaults by the Bear Stearns bank's hedge funds[3] and the bankruptcy of the American Home Mortgage Corporation [4].
2007-2008 International financial panic
- August 9: The French bank BNP Paribas freezes its funds because it is unable to value their mortgage-backed assets. [5]
- September 12 The Lehman Brothers investment bank becomes bankrupt[6] with losses of up to $160 billion to holders of its unsecured bonds prompting a sudden loss of confidence in money market funds and the onset of a credit crunch.
2008-2009 The international response
The Banking systems rescues.
- The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees [7][8], and similar action is agreed by European Union leaders [9] and the US President[10]and there are rescues of individual banks in Europe [11][12] [13][14] and the United States [12].
The coordinated monetary stimulus.
- A discount rate cut of half per cent by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [15].
Agreement on a collective fiscal stimulus
- November 15: The first G20 summit of leaders of the Group of Twenty countries agree to take expansionary fiscal action
- The money market panic persists (LIBOR-OIS spreads reach over 350 basis points (compared with August 2007 rates of around 10 points)[16].)
Domestic measures
2009 Global downturn and (patchy) recovery
2009-201 The fiscal stability issue
- ↑ http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_112766.pdf
- ↑ http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm
- ↑ http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms
- ↑ http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2208983.ece
- ↑ http://invest.bnpparibas.com/en/news/default.asp?Code=LPOI-75W9PV
- ↑ http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf
- ↑ http://news.bbc.co.uk/1/hi/business/7658307.stm]
- ↑ [http://news.bbc.co.uk/1/hi/business/7658277.stm
- ↑ [http://www.latimes.com/business/la-fg-euecon13-2008oct13,1,7737780.story
- ↑ http://www.whitehouse.gov/news/releases/2008/10/20081014.html
- ↑ http://www.ft.com/cms/s/0/f93a9b08-91ad-11dd-b5cd-0000779fd18c.html
- ↑ 12.0 12.1 http://www.dw-world.de/dw/article/0,2144,3692522,00.html
- ↑ http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4894402.ece
- ↑ http://www.newsvine.com/_news/2008/08/25/1782809-danish-central-bank-rescues-nations-no-10-bank
- ↑ http://news.bbc.co.uk/1/hi/business/7658958.stm
- ↑ http://research.stlouisfed.org/publications/es/08/ES0825.pdf