The 27 scariest moments of the financial crisis

Elena Holodny

2016-09-15T12:44:00Z

hank paulson ben bernanke tim geithner chris cox john duggan — Then Treasury Secretary Henry Paulson looks over at his colleagues including then Fed Chair Ben Bernanke and then NY Fed President Tim Geithner. REUTERS/Hyungwon Kang

Eight years ago, the US economy went into recession, the US housing market crashed, and credit markets seized, bringing the banking industry to its knees.

Businesses went down. Workers lost jobs. And Americans were losing hope, which only made things worse.

For many, the critical low moment Lehman Brothers bankruptcy on September 15, 2008. But the memory of critical events before and after that day is slowly fading.

Business Insider outlined the major moments from 2007 to 2009. From the initial reports of subprime defaults to the collapse of Lehman Brothers to AIG's second bailout, here are the 27 scariest moments of the financial crisis.

Note: Former Business Insider reporter Steven Perlberg contributed to this feature.

FEB. 8, 2007: HSBC says its bad debt provisions exploded because of a slump in the US housing market. Regular people begin to pay attention to what subprime is.

Source: BBC

APRIL 2, 2007: New Century files for bankruptcy. It was the largest subprime lender in the United States.

detroit bankruptcy — The side of a building in Detroit, Michigan. Joshua Lott/Reuters

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.

matthew tannin — Matthew Tannin, former investment bank Bear Stearns hedge fund manager, is escorted by law enforcement officials to a waiting car after being arrested in New York June 19, 2008, after a federal criminal probe into the collapse of funds he and fellow former hedge fund manger Ralph Cioffi oversaw, according to the Federal Bureau of Investigation. REUTERS/Chip East

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.

bnp paribs — People pass the Paris headquarters of France's biggest listed bank, BNP Paribas, which froze 1.6 billion euros ($2.2 billion) worth of funds citing U.S. subprime mortgage sector problems, August 9, 2007. Regis Duvignau/Reuters

Source: Bloomberg

SEPT. 4, 2007: Libor — the interbank interest rate — hits 6.7975%, its highest level since December 1998.

Burse trader Dirk Mueller reacts as he sits in front of the German DAX index board at Frankfurt's stock exchange, August 17, 2007. Kai Pfaffenbach/Reuters

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.

new york stock exchange trader wall street headache sad

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: Numerous 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%.

ben bernanke — U.S. Federal Reserve Chairman Ben Bernanke testifies before the House Budget committee hearing on the state of the Economy on Capitol Hill in Washington, February 2, 2012. REUTERS/Yuri Gripas

Source: FOMC

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.

Alfredo Ochoa and his one-year-old daughter, Josefina, attend a rally to ask state lawmakers to stop home foreclosures and help modify loans at the State Capitol in Sacramento, California November 25, 2008. Max Whittaker/Reuters

Source: Treasury Dept. press release

SEPT. 14, 2008: Bank of America buys Merrill Lynch for $50 billion.

Source: CNN Money

SEPT. 15, 2008: Meanwhile, Lehman Brothers can't find a buyer and files for bankruptcy.

Source: CNBC

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.

trader financial crisis — A trader sits on the floor of the New York Stock Exchange in New York November 1, 2007. The financial sector dragged down the stock market on Thursday, wiping out the previous session's Fed-fueled gains, after brokerages downgraded the two largest U.S. banks, renewing fears of more fallout from the credit crisis. Shannon Stapleton /Reuters

Source: NYT, AP

SEPT. 17, 2008: The Fed rescues insurance giant AIG from bankruptcy for $85 billion.

Source: NYT

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.

mutual bank — A sign at a Washington Mutual Bank (WaMu) branch is shown in San Francisco, California September 26, 2008. Robert Galbraith/Reuters

Source: WSJ, CNN Money

SEPT. 29, 2008: The U.S. House of Representatives defeats a proposed $700 billion emergency bailout package, 228-205. Stocks plunge 778 points.

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. 8, 2008: The New York Fed bails out AIG for the second time, for $37.8 billion.

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. 15, 2008: The stock market has another hellish day, plunging 733 points (7.9%).

Source: CNBC

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.

"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497," Buffett wrote in the NYT.

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."

new york stock exchange — Man on the floor of the New York Stock Exchange rubs his eyes near the end of the trading day in New York, December 11, 1996. Reuters

Source: WaPo, Guardian

DEC. 11, 2008: The NBER announces that the economy is officially in a recession.

ben bernanke fed fail — Ben Bernanke Chip Somodevilla / Getty Images

Source: NBER

FEB. 17, 2009: Obama signs the American Recovery and Reinvestment Act of 2009.

Source: CNBC

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

Banks would continue to report losses, fight regulation efforts, and eventually stomach higher capital requirements.

Eventually, after extraordinary bailouts from the Fed and Congress, the market bottomed and the economy slowly recovered.

U.S. President Barack Obama speaks to college-bound students at a "Reach Higher" initiative event hosted by the first lady at the White House in Washington July 23, 2015. REUTERS/Kevin Lamarque — Obama. Thomson Reuters

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The 27 scariest moments of the financial crisis

FEB. 8, 2007: HSBC says its bad debt provisions exploded because of a slump in the US housing market. Regular people begin to pay attention to what subprime is.

APRIL 2, 2007: New Century files for bankruptcy. It was the largest subprime lender in the United States.

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.

SEPT. 4, 2007: Libor — the interbank interest rate — hits 6.7975%, its highest level since December 1998.

OCT. 24, 2007: Merrill Lynch announces an $8.4 billion quarterly loss, the largest in its history, thanks to write-downs on subprime mortgages.

OCT. 31, 2007: Meredith Whitney says Citigroup will have to cut its dividend. Later, it does.

OCT to NOV 2007: Numerous 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.

DEC. 11, 2007: The FOMC reduces the federal funds rate to 4.25% and cuts the primary credit rate to 4.75%.

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.

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.

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.

SEPT. 14, 2008: Bank of America buys Merrill Lynch for $50 billion.

SEPT. 15, 2008: Meanwhile, Lehman Brothers can't find a buyer and files for bankruptcy.

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.

SEPT. 17, 2008: The Fed rescues insurance giant AIG from bankruptcy for $85 billion.

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 778 points.

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.

OCT. 8, 2008: The New York Fed bails out AIG for the second time, for $37.8 billion.

OCT. 15, 2008: The stock market has another hellish day, plunging 733 points (7.9%).

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.

DEC. 11, 2008: The NBER announces that the economy is officially in a recession.

FEB. 17, 2009: Obama signs the American Recovery and Reinvestment Act of 2009.

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.

Banks would continue to report losses, fight regulation efforts, and eventually stomach higher capital requirements.

Eventually, after extraordinary bailouts from the Fed and Congress, the market bottomed and the economy slowly recovered.

And now, take a look at...

What 25 major world leaders and dictators looked like when they were young

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