Financial Crisis Timeline: October 2008 (Part 2)

January 19th. 2018

October 1st, 2008 to October 10th 2008.

 

America’s financial crisis descends in cataclysmic fashion as Dow Jones Industrial Average free falls nearly 2000 points. The global economy follows suit. This marks the worst weekly fall in the stock market’s history.

 

Fueling the market’s free-fall was a report that September sales of cars and light trucks had dropped 27% from just a year earlier. Factory orders diminished and manufacturing activity descended. Unemployment rose significantly, eroding investor confidence further.

 

October 1st 2008

 

U.S. Senate moves on a modified 700 billion dollar bailout bill, passing it and sending it on to the House for final approval. There are concerns that this bill may not have the legs to make it through the house. It doesn’t stop there, according to many news sources as the Rescue Bill contains a substantial amount of “pork” money causing further angst amongst the public.

 

October 3rd 2008

 

Wachovia strikes a deal with Wells Fargo, allowing for its takeover of the former. Its stock is worth $15.1 billion. The deal wasn’t without controversy as Citigroup had a prior deal to take over Wachovia’s banking business.

 

The 700 Billion Dollar Rescue Bill passes house and becomes law. Officially called the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), the bill initiates what is known as the Troubled Asset Relief Program.

 

The Bailout is not perceived as a friend of many struggling American families who face mounting personal financial struggles, but became necessary according to economists.

 

October 6th 2008

 

After a series of lawsuits pending against Countrywide Financial for predatory lending practices, Bank of America takes over Countrywide and seeks to assist in reworking the terms of mortgage holders loans.

 

October 17th, 2008

 

Consumer Confidence sinks to its lowest point ever recorded.

 

October 22nd, 2008

 

The market takes wild daily swings as investors try to come to grips with the economic situation. The Dow average plunges over 500 points on this day. Nearly a week later, on October 27th, 2008, the Dow Average climbs over 900 points.

 

October 29th 2008

 

The Federal Open Market Committee votes to reduce its target for the federal funds rate 50 basis points to 1.00 percent. The Federal Reserve Board reduces the primary credit rate 50 basis points to 1.25 percent.

 

October 31st 2008

 

J.P. Morgan seeks to modify sub-prime mortgages after its takeover of WaMu.

 

Staten Island’s Real Estate Market

 

October home sales beat September’s with 240 sales. Median home sales price remained at $395,000. While the Case Shiller index showed a 17.7% decline in home prices for the prior year, Staten Island home prices showed only about 6 1/2% decline in home prices.

 

However, with Wall Street's decline in full thrust, November will be the turning point in Staten Island's real estate market.

 

November 3rd, 2008

 

Circuit City announces it will close 155 stores nationwide including the one located on Richmond Avenue in Staten Island, due to the current economic situation. The Institute for Supply Management completed a survey showing the US manufacturing industry has reached a 26 year low.

 

November 4, 2008

 

A relative upstart in politics, Barack Obama becomes the 44 President of the United States. America’s clouded future becomes the main issue for voters. At the time of the election, more than 2/3 of Americans felt the country was headed in the wrong direction. Playing that card was the former Illinois Senator and now President.

 

Obama had the ability to appeal to public discourse over the state of affairs in America, especially middle class America. “Change we can believe in” became the slogan from a future president who saw a weary America with people losing their homes, businesses shedding jobs and wealth cascading downward at a pace not seen in a generation.

 

For the first time the decade’s issue of terrorism, in the wake of 9/11, stood secondary to the country’s economic future.

 

November 5, 2008

 

Concerns about the poor fiscal health and a shuttering of America's three largest automakers - GM, Ford and Chrysler - raises fear that 3 million US auto industry workers can lose the jobs as a result. Bailout rumors surrounding three of Americas largest automakers are now becoming fact. The Auto Industry, once the fabric of the Americans manufacturing economy for nearly a century, was about to shut down.

 

November 6, 2008

 

The nation’s unemployment situation gross tenuous as 3.84 million people are collecting unemployment benefits on this date, the worst in over 26 years. Fears of another economic depression are becoming mainstream news.

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