2008 Wall Street Crisis Timeline (as of October 3, 2008)

2008 Wall Street Crisis: 2008 Wall Street Crisis:

www.investmentbankeronlife.com

A TimelineA Timeline

January 11: January 11:

• Bank of America buys mortgage lender Countrywide Financial for $4 billion in an all-stock deal.

2008


March 16: March 16:• JP Morgan Chase buys brokerage

firm Bear Stearns for $2/share in a deal backed by the Fed and Treasury Department. The price is later revised to $10/share.

2008


July 11: July 11:• IndyMac is seized by the FDIC after

depositors withdraw $1.3 billion over an 11-day period. This brought to 12 the number of banks seized by FDIC in 2008.

2008


July 13: July 13:• Government-sponsored mortgage

finance companies Fannie Mae and Freddie Mac are nationalized by the federal government in an effort to support the U.S. housing market.

2008


September 7: September 7:• The federal government takes

control of financial giants Fannie Mae and Freddie Mac, which were nationalized in July. The two hold or guarantee about half the nation's $10 billion in mortgage loans.

2008


September 15: September 15:• Investment bank Lehman Brothers

files for Chapter 11 bankruptcy protection.

• Rival Merrill Lynch agrees to be taken over by Bank of America.

• The Dow Jones fell 504 points, the index’s worst since the 2001 terrorist attacks.

2008


September 16: September 16:• Insurer American International

Group (AIG) is rescued by the federal government through an $85 billion loan package in return for an 80% stake in the company. The move comes amid a cash crunch, triggered by $18 billion of losses over three quarters, a sinking stock price and debt downgrades.

2008


September 19: September 19:• U.S. Treasury Secretary Henry

Paulson calls for the government to spend hundreds of billions of dollars to take toxic mortgage assets off the books of financial companies to restore financial stability . News of the bailout plan helps world stock markets soar.

2008


September 20: September 20:• Treasury Secretary Henry Paulson

outlines details of a $700 billion bailout plan for firms troubled by bad mortgage debt.

• A U.S. bankruptcy judge approves a revised version of Barclays purchase of the core U.S. business of Lehman.

2008


September 21: September 21:• Goldman Sachs Group Inc. and

Morgan Stanley become bank holding companies regulated by the Fed, essentially ending Wall Street's investment banking model.

2008


September 23: September 23:• Warren Buffett’s Berkshire Hathaway

invests $5 billion in Goldman Sachs, citing the rescue plan as a contributing factor.

2008


September 25: September 25:• Washington Mutual is seized by the

FDIC, making it the largest U.S. bank failure, with $307 billion in assets.

• JPMorgan Chase buys WaMu’s banking assets for $1.9 billion.

2008


September 29: September 29:• U.S. House of Representatives

rejects the $700 billion rescue plan in a stunning 228-205 vote. The Dow Jones falls by a record 777 points.

• Wachovia agrees to sell most of its assets to Citigroup in a deal brokered by regulators.

2008


October 1: October 1:• U.S. Senate passes a modified U.S.

financial rescue plan aimed at restoring global financial stability, sending the measure to the U.S. House of Representatives for a vote on Friday.

2008


October 3: October 3:• President Bush signs the historic

$700 billion rescue bill approved just hours earlier by the U.S. House of Representatives in a 263-171 vote.

• Wells Fargo agrees to buy Wachovia for $15.4 billion or $7 a share, better than Citigroup’s earlier offer of about $1 a share.

2008


Economy & Finance

2008 Wall Street Crisis Timeline (as of October 3, 2008)