March 16
- Bear-Stearns, 5th largest US investment bank,
bought out by JPMorgan Chase; brokered by Treasury with credit from Fed
($30 Billion guarantee).
July 13
- US mortgage lender IndyMac collapses - the
second-biggest bank in US history to fail.
July 14
- Fannie Mae & Freddie Mac receive newly approved
aid from the Fed & Treasury. The Fed allows Fannie & Freddie to
qualify for short term loans. The Treasury is given authority by
Congress to provide loans and investment to Freddie and Fannie.
The companies, known as
government-sponsored enterprises (G.S.E.s) are
the two largest banks in the world. They own or guarantee nearly
half of the nation's mortgages. The debt securities they issue to
finance their operations are widely owned by foreign governments,
pension funds, mutual funds, big companies and other large
institutional investors.
September 7
- Treasury nationalizes Fanny & Freddie
guaranteeing debt ($5.4 Trillion Newsweek; $200 Billion CNN) and
investing government money.
September 13
- The Federal Reserve, along with 10 banks, announced
a $70 billion pool of funds to aid troubled financial firms. The Fed
also loosened its lending restrictions.
September 15
- Lehman Bros. (4th largest I-bank) files bankruptcy.
- Merrill Lynch bought out by BofA, brokered by
Treasury.
September 16
- AIG (American International Group) Treasury buys
80% of AIG stock for $85 Billion. AIG has heavy sales of debt credit
swaps for mortgages. With $1.1 trillion in assets and 74 million
clients in 130 countries.
September 17
- Investors gave an enormous thumbs-down to the AIG
news, sending stocks plummeting, while traders piled funds into safer
havens. Gold rose $70, a new record. Oil rose $6, its second-largest
jump ever. And the yield on the three-month Treasury sank to 0.02%, the
lowest level since 1940.
September 18
- With a crisis on its hands, the Fed convinced five
other central banks around the world to invest a total of $180 billion
in global financial markets.
September 19
- The SEC (Securities and Exchange Commission) took
"emergency action" Friday morning and temporarily banned investors from
short-selling 799 financial companies. The Treasury also said it would
insure up to $50 billion in struggling money market fund investments at
financial companies
- Morgan Stanley's short selling of MS stock
forces share price (capital) down due to fears that the Fed's Primary
Reserve Fund is too small to repay investor losses if MS requires
funds.
September 20
- Treasury announces $700 Billion bailout proposal.
September 21
- Goldman Sachs and Morgan Stanley changed their
status from investment banks to bank holding companies, giving them
access to Federal funds to help buoy them.
September 22
- A day after its status change, Morgan Stanley
announced it agreed to sell up to a fifth of the company to Mitsubishi
UFJ Financial Group, one of Japan's largest banks.
September 23
- Goldman Sachs announced that it will raise capital
by selling $5 billion of preferred stock to Warren Buffett's Berkshire
Hathaway.
September 24
- The Fed announced that it would flood the system
with even more cash, making $30 billion available to the central banks
of Australia, Denmark, Norway and Sweden.
September 25
- Washington Mutual was seized by FDIC regulators,
marking the biggest bank failure in the nation's history; JPMorgan
Chase acquired the WaMu’s banking assets for $1.9 Billion.
September 28
- White House announces $700 Billion dollar bail-out
agreement.
September 29
- House of Reps. rejects Bush $700 Billion bailout
plan.
- Wachovia Bank bought out by Citigroup, brokered by
FDIC.
October 3
- The US House of Representatives passes a $700
Billion government plan to rescue the US financial sector.
- Wells Fargo announces a buyout of Wachovia for $12
Billion, wresting Wachovia from Citibanks $2 Billion federally backed
offer.
October 8
- In an unprecedented coordinated action 12 countries
lower interest rates simultaneously to stop the credit freeze:
including U.S. Japan, Germany, England, France, Canada, Italy, China.
Stock markets worldwide continue to fall.
October 9
- AIG (American International Group) the world’s
largest insurance company received an additional $38 Billion loan from
the Federal Reserve.