The Financial Crisis: A Timeline

The developments of the past few weeks are likely to change our financial markets as much as any short period in most of our lifetimes. Here's a rundown of recent major events.

Sept. 7: U.S. Seizes Fannie Mae, Freddie Mac
Government takes control of the mortgage giants, putting the liability of more than $5 trillion of mortgages onto the backs of U.S. taxpayers.
WATCH: Fannie and Freddie Rescue Plan

Sept. 11: Lehman Brothers Says It’s Actively Looking to Be Sold
Shares of the investment bank plunge 45% as traders feared it was having a difficult time finding a suitor.

Sept. 15: Lehman Brothers Files for Bankruptcy
This is the largest bankruptcy filing in the history of the United States, at $639 billion. After a weekend of feverish negotiations, potential buyers such as Bank of America (BAC) and Barclays (BCS) walk away, leaving Lehman and its CEO, Dick Fuld, with basically no other options.
WATCH: Life After Lehman

Sept. 15: Bank of America Says it Will Buy Merrill Lynch for $29 a Share
After walking away from Lehman Brothers, the bank said it would pay $50 billion for the brokerage house.
WATCH: Bank of America-Merrill Lynch Deal

Sept. 16: Government Announces $85 Billion Emergency Loan to Rescue AIG
Feds say a failure of the company could be devastating to the financial markets as well as the economy. This is in exchange for a nearly 80% equity stake in the company.
WATCH: How Did AIG Get Into Trouble?
WATCH: How Does AIG Affect You?

Sept. 17: Barclays Makes Deal with Lehman to Buy North American Banking Division
The British bank, which had passed on buying Lehman before it filed for bankruptcy, picks up the failed firm's North American investment banking and trading operations for $250 million.
WATCH: Barclays-Lehman Deal

Sept. 19: Bush Administration Announces Bailout Plan to Confront Crisis
Congress is asked to give the administration new powers to execute a plan that could cost taxpayers billions to buy toxic debt and bad mortgages. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Paulson hold meetings with lawmakers over weekend to convince them to approve the measures.
WATCH: Making Sense of Paulson’s Plan

Sept. 21: Goldman Sachs, Morgan Stanley to Become Bank Holding Companies
The Federal Reserve approves transformation of Morgan Stanley (MS) and Goldman Sachs (GS) into bank holding companies from investment banks in order to increase oversight and allow them to access the Fed's discount window.

Sept. 23: Bernanke and Paulson Testify on Capital Hill on Bailout
The Fed Chairman says, “If financial conditions fail to improve for a protracted period, the implications for the broader economy could be quite adverse.”

Sept. 24-27 and Maybe Beyond: Bush Works With Legislators on Bailout Plan
The President asks Barack Obama, John McCain, and Congressional leaders to meet and discuss rescue legislation. Congress works to hammer out legislation that's acceptable to enough interested parties to pass and, hopefully, be successful.
WATCH: How We Got to This Crisis
WATCH: What Happens Without a Bailout

Sept. 26: Washington Mutual Becomes Largest Thrift Failure With $307 Billion in Assets
JPMorgan (JPM) agrees to pay $1.9 billion for the banking operations, but doesn't take ownership of the holding company.
WATCH: WaMu's Collapse

 

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