Extreme Market Dislocation: The 2008 Financial Crisis

 
While July 2007 was a watershed month for the subprime credit crisis, September 2008 marked the beginning of a much more widespread global financial crisis.

September 7: The U.S. places both the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Association (Freddie Mac) into government conservatorship.

September 14: Lehman Brothers files for bankruptcy. Merrill Lynch announces it will be purchased by Bank of America.

September 16: To avoid insolvency, insurance giant AIG receives $85 billion from the U.S. Federal Reserve in exchange for an 80% equity interest. The Reserve Primary Fund lowers its share price below $1, effectively ‘breaking the buck.’

September 21: Goldman Sachs and Morgan Stanley convert to bank holding companies.

September 25: Regulators seize Washington Mutual, the largest U.S. savings and loan institution, with most of its assets ultimately going to JP Morgan Chase.

A new crisis had begun that would become global in nature and affect the stability of economies around the world.