financial crisis headlines (Oct 7, 2008)
in February of 2008, I took my first role in financial markets. My job was to manage a sizable bond portfolio that, on the surface, looked robust and boring: AAA-rated mortgage-backed securities, A or better financials, B or better “high quality” high yield corporate bonds. What could go wrong?
Three weeks later, Bear Stearns went under and the ride of a lifetime began.
Here are some notes I took while things were unfolding. So many names only live in people’s memories now…
September 2008 (S&P 500: -9.2%)
- September 7: FNMA and FHLMC are put under the conservatorship of the FHFA
- September 14: Bankruptcy of Lehman Brothers
- September 14: Merrill Lynch announces sale to Bank of America
- September 16: US government takes over AIG
- September 16: Reserve Primary money market fund breaks the buck
- September 17: Putnam Prime Money Market Fund closes due to a “run on the fund”
- September 18: HBOS is acquired by Lloyds
- September 21: Goldman Sachs and Morgan Stanley become bank holding companies
- September 26: Washington Mutual files for Chapter 11 bankruptcy
- September 28: UK nationalizes B&B Bank
- September 29: House rejects $700B Troubled Assets Relief Program (TARP) proposal
- September 29: Forced takeover of Wachovia by Citigroup
- September 29: Iceland nationalizes Glitnir Bank
- September 30: Belgium, France, Luxembourg support Dexia with loans and capital injections
- September 30: Irish Government guarantees all bank deposits until September 2010
October 2008 (S&P 500: -14.5% as of Oct 7)
- October 3: $700B Troubled Assets Relief Program is approved
- October 3: Wachovia backs out of Citigroup acquisition, says it would merge with Wells Fargo
- October 5: BNP Paribas takes over Fortis
- October 6: Germany nationalizes Hypo Real Estate Holding AG
- October 7: Fed announces it will buy unsecured and asset-backed commercial paper
- October 8: Fed, ECB and four other central banks cut interest rates