Home > Life in Japan > Features
  print button email button

Sunday, May 31, 2009

Chronicle of calamities on the road to ruin


Staff writer

The credit crunch didn't happen overnight. Here is a timeline of how trouble spilled out from the United States and around the world, and from the financial industry to many other sectors of the international economy:

2006: The U.S. mortgage market shows signs of trouble, with rates of loan delinquencies and foreclosures rising.

April 2007: The New Century Financial Corp., one of America's biggest subprime mortgage lenders, collapses.

June 2007: Bear Stearns, one of the largest underwriters of mortgage bonds in the U.S., announces the collapse of its two internal hedge funds.

July 2007: Credit-rating agencies Moody's and Standard & Poor's announce the downgrades or upcoming downgrades of subprime mortgage-backed securities; U.S. Federal Reserve Board Chairman Ben Bernanke tells the Senate Banking Committee that subprime mortgage- related losses could top $100 billion.

August 2007: American Home Mortgage Investment Corp., another major housing lender in the U.S., fails; BNP Paribas, the largest bank in France, freezes three investment funds, saying it cannot calculate their value.

September 2007: Customers rush to branches of the U.K.'s Northern Rock Bank to withdraw money.

March 2008: The U.S. Federal Reserve approves a $30-billion credit line to assist JPMorgan Chase buy Bear Stearns. JPMorgan agrees to pay a paltry $2 a share.

September 2008: Lehman Brothers goes under; Merrill Lynch is sold to Bank of America Corp.; U.S. mortgage-buyers Fannie Mae and Freddie Mac are taken over by the government; the American Insurance Group (AIG) faces crisis due to insurances it sold to cover mortgage- backed securities. It subsequently received an $85-billion government bailout.

October 2008: Iceland nationalizes the country's largest bank and suspends all trading on its stock market.

January 2009: The government of Iceland is thrown into turmoil as the prime minister steps down.

February 2009: U.S. President Barack Obama signs the $787-billion American Recovery and Reinvestment Act of 2009 into law.

March 2009: The U.K. government takes a controlling interest in Lloyds Banking Group.

April 2009: Chrysler LLC, America's third-largest automaker, files for bankruptcy.

May 2009: A bankruptcy filing looms for General Motors Corp., the world's largest automaker until 2008.


Related link



Back to Top

About us |  Work for us |  Contact us |  Privacy policy |  Link policy |  Registration FAQ
Advertise in japantimes.co.jp.
This site has been optimized for modern browsers. Please make sure that Javascript is enabled in your browser's preferences.
The Japan Times Ltd. All rights reserved.