Financial Crisis 2008

Main

Bear Stearns

March 2008

-Bear Stearns has difficulty raising short-term financing;
customers begin to withdraw their money
 -Bear is sold to JP Morgan Chase with Federal Reserve
assistance
 -The Fed opens its discount window to the four remaining
investment banks
 -Fed actions provide only temporary relief

Indy Mac

July 31 2008

-Once the leading mortgage companies collapses and files for bankruptcy.
-Now has become OneWest Bank

Fannie Mae and Freddie Mac

September 7 2008

Fannie Mae and Freddie Mac, two governmentsponsored enterprises (GSEs) are placed into conservatorship
-Fannie and Freddie will cost taxpayers more than $400 B

Countrywide Financial

September 15 2008

Merrill Lynch is acquired by Bank of America

Bernake and Paulson

September 15, 2008

Bernanke and Paulson ask Congress for $770 billion in TARP funds

Lehman Brothers

September 15 2008

Lehman Brothers files for bankruptcy
-the largest bankruptcy in U.S. history
-Failure of Bear Stearns and Lehman Brothers caused a sharp
drop in interbank lending and a hoarding of cash, cutting credit
availability and deepening the recession

DOW

September 15, 2008

Congress initially refuses; Dow falls over 700 points in single day

Reserve Fund

September 15, 2008

Reserve Fund is rescued and other money market mutual funds are guaranteed

AIG

September 15 2008

-AIG is rescued
-AIG suffered a liquidity crisis when its credit ratings were downgraded below "AA" levels.

Washington Mutual

September 25, 2008

-Washington Mutual, Inc.'s banking subsidiaries were closed
-Heir assets were sold to JPMorgan Chase, which now operates the former banking assets as a part of Chase Bank.

Bernard Madoff

December 11 2008

-he was arrested and charged with securities fraud.
-Ponzi Scheme

Chrysler

April 30, 2009

-Received billions of dollars in loans from the United States government in late 2008 and early 2009 to prevent both companies from shutting down.
-Chrysler filed for Chapter 11 bankruptcy reorganization

General Motots

July 10 2009

General Motors emerged from government backed Chapter 11 reorganization after an initial filing on June 8, 2009