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August 26–September 1 – Hurricane Gustav makes landfall on Louisiana as Category 2 and kills seven in the United States, after making landfall on western Cuba as Category 4, and killing 66 in Haiti, eight in the Dominican Republic, and 11 in Jamaica.
- How The Subprime Mortgage Crisis Caused The Recession
- The Recession Underway
- Efforts Towards Recovery
- The Role of The Banks in A Sluggish Recovery
- Why Not Let The Banks Go Bankrupt?
- Why Didn't Obama Do More to End The Recession?
- The Dangers of Derivatives
- How The Bailout Affects You
In November 2006, the Department of Housing and Urban Development warned that new home building permits were 26% lower than the year before. At this point, the mortgage crisis could have been prevented. But the Bush administration and the Federal Reserve did not realize how grave those early warning signs were. They ignored declines in the inverted...
July 2008: The Recession Began
The subprime crisis reached the entire economy by the third quarter of 2008 when GDP fell by 2.1%. But for early observers, the first clue was in October 2006. Orders for durable goods were lower than they had been in 2005, foreshadowing a decline in housing production.Those orders also measure the health of manufacturing orders, a key indicator in the direction of national GDP.
August 2008: Fannie and Freddie Spiraled Downward
Mortgage giants Fannie Mae and Freddie Macwere fully succumbing to the subprime crisis in the summer of 2008. The failure of the government-backed companies that insured mortgages signaled that the bottom was dropping out. The Bush administration announced plans to take over Freddie and Fannie in order to prevent a full collapse.
September 2008: The Stock Market Crashed
On Sept. 29, 2008, the stock market crashed. The Dow Jones Industrial Average fell 777.68 points in intra-day trading. Until 2018, it was the largest point drop in history.It plummeted because Congress rejected the bank bailout bill. Although a stock market crash can cause a recession, in this case, it had already begun. But the crash of 2008 made a bad situation much, much worse.
October 2008: $700 Billion Bank Bailout Bill
On Oct. 3, 2008, Congress established the Troubled Asset Relief Program, which allowed the U.S. Treasury to bail out troubled banks.The Treasury Secretary lent $115 billion to banks by purchasing preferred stock. It also increased the Federal Deposit Insurance Corporation limit for bank deposits to $250,000 per account and allowed the FDIC to tap federal funds as needed through 2009. That allayed any fears that the agency itself might go bankrupt.
February 2009: The $787 Billion Stimulus Package
On Feb. 17, 2009, Congress passed the American Recovery and Reinvestment Act. The $787 billion economic stimulus plan ended the recession. It granted $212 billion in tax cuts and $575 billion in outlays, including $311 billion for new projects such as health care, education, and infrastructure initiatives. On Feb. 18, 2009, Obama announced a $75 billion plan to help stop foreclosures. The Homeowner Stability Initiative was designed to help 7 to 9 million homeowners before they got behind in t...
March 2009: Making Home Affordable Launched
Making Home Affordable was an initiative launched by the Obama Administration to help homeowners avoid foreclosure. The program generated more than 1.7 million loan modifications in its lifespan. The Homeowner Affordable Refinance Program (HARP) was one of its programs. It was designed to stimulate the housing market by allowing up to two million credit-worthy homeowners who were upside-down in their homes to refinance and take advantage of lower mortgage rates. But banks only selected the be...
August 2009: Obama Asked Banks to Modify Loans
By August, foreclosures kept mounting, dimming hopes of an economic recovery. Banks could have, but didn't, prevent foreclosures by modifying loans. That's because it would further hurt their bottom line. But record foreclosures (360,149 in July) only made things worse for them as well as American families. July's foreclosure rate was the highest since RealtyTrac, a real estate information firm, began keeping records in 2005. It was 32% higher than in 2008. Foreclosures continued rising as mo...
October 2009: Banks Weren't Lending
In October 2009, unemployment peaked at 10%, the worst level since the 1982 recession. Almost 6 million jobs were lost in the 12 months prior to that.Employers were adding temporary workers as they grew too wary of the economy to add full-time employees. But the fields of health care and education continued to expand. One reason the recovery was sluggish was that banks were not lending. Lending was down 15% from the nation's four biggest banks: Bank of America, JPMorgan Chase, Citigroup, and...
People are still angry about the $350 billion in taxpayer dollars that were used to bail out the banks.Many people feel that there was no oversight and that the banks just used the money for executive bonuses. In this case, people thought banks should not have been rescued for making bad decisions based on greed. The argument goes that, if we had j...
President Obama was dealing with more than just the recession as he looked toward the midterm elections. He launched sorely needed but sharply criticized healthcare reform. He also supported the Dodd-Frank Wall Street Reform Act. That and new Federal Reserve regulations were designed to prevent another banking collapse. They also made banking much ...
The cause of the meltdown was the deregulation of derivatives that was so complicated that even their originators didn't understand them. Banks became so quick to resell mortgages on the secondary market that they felt immune to the dangers of taking riskier and riskier mortgages. Other aggressive moves by banks to sell more collateralized debt obl...
The Dodd-Frank Act stopped the bank credit panic, allowed LIBOR interest rates to return to normal, and made it possible for everyone to get loans.Without the credit market functioning, businesses were not able to get the capital they need to run their day-to-day business. Without the bill, it would have been impossible for people to get credit app...
- Kimberly Amadeo
- Barack Obama is chosen as the principal African-American President of the U.S. Barack Obama was chosenas the 44th Leader of the US in 2008, impacting the world forever as the primary African-American Leader of the US.
- The Enormous Hadron Collider is enacted. The Enormous Hadron Collider (LHC) is the world’s most remarkable atom smasher. The LHC is a 27-kilometer-long round barrow situated at the European Association for Atomic Exploration in Geneva, Switzerland.
- The Summer Olympics are held in Beijing. Beijing, China, facilitated the 29th Summer Olympic Games in 2008. This was whenever an East Asian city first decided to have the Olympics, and the city took incredible measures to make the occasion a triumph.
- The European Association takes on the Lisbon Settlement. The LisbonAgreement was a significant achievement during the time spent making a bound together European Association.
Aug 9 United States takes all 3 medals in women's fencing sabre event at the Beijing Olympics; first US podium sweep of a fencing event since 1904; Mariel Zagunis takes gold ahead of Sada Jacobson & Rebecca Ward
4 days ago · American presidential election held on November 4, 2008, in which, after a campaign that lasted nearly two years, Americans elected Democrat Barack Obama their 44th president.
- The Editors of Encyclopaedia Britannica
Here are 10 headlines from 2008 that will go down in history -- and a couple that you might have missed. From Asia to Europe, North America to Africa, and even the land down under, the world was humming with activity. And we haven't just recapped the highlights for you.
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The 2008 United States presidential election was the 56th quadrennial presidential election, held on November 4, 2008. The Democratic ticket of Barack Obama , the junior senator from Illinois , and Joe Biden , the senior senator from Delaware , defeated the Republican ticket of John McCain , the senior senator from Arizona , and Sarah Palin ...
