Great Recession/Timelines: Difference between revisions
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: The average house price rises by 80% [http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_102626.xls] between 2001 and 2006 and then falls by 8% from its 2006 peak to mid-2007 . | : The average house price rises by 80% [http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_102626.xls] between 2001 and 2006 and then falls by 8% from its 2006 peak to mid-2007 . | ||
== | ==Financial crisis (June 2007 to November 2008)== | ||
June 2007 | |||
: US [[Credit rating agency|Credit rating agencies]] downgrade over 100 bonds backed by subprime mortgages. | |||
: 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 | |||
: 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> | |||
==Recession== | ==Recession== | ||
Revision as of 07:15, 2 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 November 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]