FEB. 8, 2007: HSBC says its bad debt provisions exploded because of a slump in the U.S. housing market. Normal people begin to learn what subprime is.
Source: BBC
APRIL 2, 2007: New Century files for bankruptcy. It was the largest subprime lender in the United States.
Source: SEC Filing
JUNE 21, 2007: Merrill Lynch sells off assets in two Bear Stearns hedge funds as the funds hemorrhage billions of dollars on bad subprime bets.
Source: Reuters
AUG. 9, 2007: France's largest bank, BNP Paribas, freezes withdrawals from three investment funds after U.S. subprime mortgage losses crush markets. "The complete evaporation of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets fairly regardless of their quality or credit rating," BNP said in the release.
Source: Bloomberg
SEPT. 4, 2007: Libor — the interbank interest rate — hits 6.7975%, its highest level since December 1998.
Source: BBC
OCT. 24, 2007: Merrill Lynch announces an $8.4 billion quarterly loss, the largest in its history, thanks to write-downs on subprime mortgages.
Source: Bloomberg
OCT. 31, 2007: Meredith Whitney says Citigroup will have to cut its dividend. Later, it does.
Source: Bloomberg Businessweek
OCT to NOV 2007: Many CEOs would not make it through the financial crisis. Stan O'Neal at Merrill and Chuck Prince at Citigroup both exit, taking monster severance packages with them. O'Neal, for one, walked out with $161.5 million.
Source: NBC
DEC. 11, 2007: The FOMC reduces the federal funds rate to 4.25% and cuts the primary credit rate to 4.75%.
Source: FOMC
MARCH 16, 2008: JPMorgan Chase buys Bear Stearns for $2 a share in a fire sale (later it would be $10 a share). The Federal Reserve finances the deal, providing $30 billion so Bear doesn't go bankrupt.
Source: Bloomberg
2008: Insurers like MBIA, who have written against the failure of CDOs, get downgraded and collapse. Hedge funder Bill Ackman would reportedly make his investors over $1 billion on a short position.
Source: Confidence Game
SEPT. 7, 2008: The saga of Fannie Mae and Freddie Mac, guarantor of half of U.S. mortgages, culminates with a takeover by the U.S. government.
Source: Treasury Dept. press release
SEPT. 16, 2008: For only the second time in history, a money market fund "breaks the buck" and reports share value below $1. Americans run on money market funds, long considered safe havens, en masse. $140 billion has been withdrawn year-to-date.
FALL 2008: Longstanding banking giants like Wachovia and Washington Mutual begin to disappear as they are bought by other banks for pennies on the dollar.
SEPT. 29, 2008: The U.S. House of Representatives defeats a proposed $700 billion emergency bailout package, 228-205. Stocks plunge 788 points as the votes are counted live.
Source: NYT
OCT. 3, 2008: TARP is passed. Congress approves a $700 billion bank bailout, but stocks continue to fall following investor worries that the bailout won't be enough.
Source: CNBC
OCT. 13, 2008: Treasury Secretary Hank Paulson sits down with nine major bank CEOs. When they leave the room hours later, the federal government has taken a huge equity position in Wall Street. The total bailout package looks more like $2.25 trillion, well more than the original $700 billion available.
Source: NYT
OCT. 16, 2008: Warren Buffett authors a New York Times op-ed called "Buy American. I Am." He gets absolutely crushed by critics when markets crash further. Rising stock prices in the post-crisis years would later vindicate him.
Source: NYT
OCT 2008: Commentators wonder if this is the end of life as we know it. "The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism," wrote The Washington Post's Anthony Faiola. Simon Jenkins at The Guardian called this line of thinking "journalistic wish-fulfillment and glee."
NOV 2008 — SPRING 2009: The Financial Crisis continues, crippling employment. Eventually the Dow Jones plunged to 6,547.05 on March 9, 2009. It was at its lowest since April 1997.
Source: CNN Money
