Financial Crisis Timeline: December 2008 - January 2009 (Part 4)

February 12th. 2018


December 1, 2008


A report from the National Bureau of Economic research confirms United States economy entered a recession in December 2007. From the public's perspective, it equates to a weatherman calling for rain three days after it already happened. President-elect Obama begins work on establishing the largest economic stimulus bill in American history.


December 9th 2008


For the first time since the 1930’s the three month T-bill goes negative, meaning investors are willing to pay money to the treasury for three months as a hedge against significant losses on risky equities and investments.


Former Top executives from Fannie Mae and Franklin D. Raines and Freddie Mac’s Richard F. Syron testified before Congress about their roles in overseeing risky investments being made by the mortgage giants, in spite of warnings.


December 11, 2008


Bernie Madoff, President of Bernard L. Madoff Investment Securities LLC, Is arrested for running the largest Ponzi Scheme in American History.


December 10th, 11th, and 12, 2008


The auto industry is front and center on Capitol Hill. This time they arrive in Washington by more conventional travel means. However, the situation grows tenuous. The U.S. Senate is reluctant to provide the financing necessary for America's three largest automakers in order to keep them from shutting down amid declining revenues and mounting debt.


December 20, 2008


The Bush Administration offers the auto industry pardon by granting a 17.4 billion dollar taxpayer financed loan to both General Motors and Chrysler LLC. However, significant concessions between the government and the auto makers include establishing better wage structures that are in line with competition abroad.


December's Staten Island real estate market


The state of the economy is weighing more significantly on local real estate sales and for the second month in a row, Staten Island sales of residential one and two family homes come under 200 units. The median sold price still sees little change with a year to date decline of 7%. However, things will erode much further in the first month of the new year.


January 2009


The year begins as gloomy as it ended. Uncertainty still abounds and America awaits the official arrival of its 44th President, Barack Obama. He is thrust into the crisis before he even takes office. In an effort to stem the tide of an economic cycle not seen since the Great Depression, he and his cabinet had already begun to lay the groundwork for what will become the largest government spending package in American history.


January 5, 2009


The Federal Reserve Bank of New York starts purchasing fixed rate mortgage backed securities that were issued from the now government-run entities Fannie Mae and Freddie Mac.


January 16, 2009


Bank of America, now strapped with fiscal woes, taps $118 billion in TARP Money.


January 2009: Staten Island’s real estate market sees its darkest month since the financial crisis began. Benchmark lows have been reached


Sales drop 21% from just a month prior, and 43% from August. The median sale price of homes that did sell that month stood at $367,000, down from $395,000 - a drop of 7% from the prior month. The loss is staggering, as panicked selling seemed to grip the real estate market much like Wall Street at this point.


The months of inventory of homes on the market skyrockets to nearly 19 months. It’s also the first time since 2005 the average home sales price on Staten Island would fall below $400,000.


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