Great Recession/Timelines: Difference between revisions
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imported>Nick Gardner |
imported>Nick Gardner |
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June 2007 | June 2007 | ||
: US [[Credit rating agency|Credit rating agencies]] downgrade over 100 bonds backed by | : US [[Credit rating agency|Credit rating agencies]] downgrade over 100 [[Bond (finance)|bonds]] backed by [[subprime mortgage]]s. | ||
: Two of the ''Bear Stearns'''' [[investment bank]]'s [[hedge fund]]s are threatened by losses from mortgage [[default (finance)|defaults]] [http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms]. | : Two of the ''Bear Stearns'''' [[investment bank]]'s [[hedge fund]]s are threatened by losses from mortgage [[default (finance)|defaults]] [http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms]. | ||
August 2007 | August 2007 | ||
: The French ''BNP Paribas'' bank announces that it is unable to value bonds backed by US house mortgages[http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aNIJ.UO9Pzxw]<br> | : The French ''BNP Paribas'' bank announces that it is unable to value [[Bond (finance)|bonds]] backed by US house [[Mortgage|mortgages]][http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aNIJ.UO9Pzxw]<br> | ||
: The [[interbank market]] is near collapse [http://www.gata.org/node/5802]. | : The [[interbank market]] is near collapse [http://www.gata.org/node/5802]. | ||
| Line 29: | Line 29: | ||
September 2008 | September 2008 | ||
: The US ''Lehman Brothers'' [[investment bank]] is [[bankruptcy|bankrupt]] [http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf][http://lehmanreport.jenner.com/][http://www.sec.gov/news/testimony/2010/ts042010mls.htm] with losses of $365 billion to insurers of its bonds. $785m worth of its [[ | : The US ''Lehman Brothers'' [[investment bank]] is [[bankruptcy|bankrupt]] [http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf][http://lehmanreport.jenner.com/][http://www.sec.gov/news/testimony/2010/ts042010mls.htm] with losses of $365 billion to insurers of its bonds. $785m worth of its [[Fund (finance)|funds]] are written off and [[money market]] investors suffer a massive loss [http://www.usnews.com/blogs/new-money/2008/9/17/reserve-primary-fund-investors-may-lose.html]. | ||
: There is panic in the [[money market]] and a halt in trading in the [[interbank market]]. | : There is panic in the [[money market]] and a halt in trading in the [[interbank market]]. | ||
: There are multiple bank failures and rescues in the United States and Europe. | : There are multiple bank failures and rescues in the United States and Europe. | ||
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October 2008 | October 2008 | ||
: | : There are nationwide bank rescues, recapitalisations, depositor guarantees by United States and European govermments' | ||
::''(See [[Crash of 2008/Timelines#October|The Crash stage 3/October]] timeline of the [[Crash of 2008]] article). | ::''(See [[Crash of 2008/Timelines#October|The Crash stage 3/October]] timeline of the [[Crash of 2008]] article). | ||
Revision as of 05:11, 4 February 2011
Prelude (trends: January 2000 to June 2007)
Capital flows:
- Flows of capital into the advanced countries, rising from about 8 per cent of world GDP in 2002 to about 16 per cent in 2007
US Monetary policy
- Progressive discount rate reductions by the Federal Reserve reducing the federal funds rate from 6 per cent in 2000 to 1 per cent in 2003, followed by increases to 5.25 per cent in 2006)[1].
US housing boom and bust
- The average house price rises by 80% [2] between 2001 and 2006 and then falls by 8% from its 2006 peak to mid-2007 .
Financial crisis (June 2007 to December 2008)
June 2007
- US Credit rating agencies downgrade over 100 bonds backed by subprime mortgages.
- Two of the Bear Stearns'' investment bank's hedge funds are threatened by losses from mortgage defaults [3].
August 2007
- The French BNP Paribas bank announces that it is unable to value bonds backed by US house mortgages[4]
- The interbank market is near collapse [5].
September 2007
March 2008
- The US Bear Stearns investment bank is rescued [7].
August 2008
- The US government-sponsored house mortgage lenders Fannie Mae and Freddie Mac are rescued from bankruptcy [8].
September 2008
- The US Lehman Brothers investment bank is bankrupt [9][10][11] with losses of $365 billion to insurers of its bonds. $785m worth of its funds are written off and money market investors suffer a massive loss [12].
- There is panic in the money market and a halt in trading in the interbank market.
- There are multiple bank failures and rescues in the United States and Europe.
- (See The Crash stage 3/September timeline of the Crash of 2008 article).
October 2008
- There are nationwide bank rescues, recapitalisations, depositor guarantees by United States and European govermments'
- (See The Crash stage 3/October timeline of the Crash of 2008 article).