What happened in 2008 stock market crash

For more insight, see Liquidity And Toxicity: Then, with the Banking Act of 1933 a. Your email address will not be published.

The Dow dropped 275 points. The Dow responded by plummeting 13 percent throughout the month. For the first two months of the year, there was an eerie calm. AIG fell prey to the subprime crisis as it fell short of cash to pay off the credit default swaps it issued previously against falling mortgage backed securities.

what happened in 2008 stock market crash

The payments then fluctuate as frequently as monthly, often becoming much larger than the initial payments. In the up-trending market that existed from 1999 through 2005, these mortgages were virtually risk-free.

what happened in 2008 stock market crash

The U. Its abrasive chairman and chief executive, Dick Fuld, had attempted to finesse a merger with the Korean Development Bank. Communiques from G7 finance ministers' meetings are usually several waffly pages long, with the pet subjects of different member-countries covered in carefully diplomatic language; but this time, they knew they had to offer some reassurance to a petrified financial world.

The 2008 Crash: What Happened to All That Money?

Why had their venerable 158-year-old investment banking firm, a bulwark of Wall Street, gone bankrupt? Even the officials at the U. Meanwhile the economy continued to lose jobs as in October; the labor department report showed the economy shedding 240k jobs during the month.

This period also ranks among the most horrific in U. It rose despite growing concerns about the subprime mortgage crisis.

Three weeks that changed the world

It was a kingpin in securitising sub-prime debt. In addition, the U.

what happened in 2008 stock market crash

Topics Banking 2008 in review. That same day, Lehman Brothers would be forced to file for Chapter 11 bankruptcy protection.

The Fall of the Market in the Fall of 2008

Table of Contents. This loss was due to the holding of commercial paper issued by Lehman and was only the second time in history that a money market fund's share value has " broken the buck.

what happened in 2008 stock market crash

Brazil's Ibovespa was halted after dropping 10 percent. The intention of a stop loss order is to limit the potential decline of a security's value.

what happened in 2008 stock market crash