Where has the time gone? It was ten years ago this week that the U.S. financial system was brought to its knees.
As the financial crisis was unfolding, Morgenson was working for the New York Times, and subsequently co-authored Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.
There’s no one more qualified to walk us down memory lane and remind us of just how bad things actually were. In case you’ve forgotten, consider this timeline:
- 9/15/2008: Lehman Brothers files for Chapter 11 bankruptcy protection. On the same day, Bank of America announced its intent to purchase Merrill Lynch for $50 billion.
- 9/16/2008: The Federal Reserve Board authorized the Federal Reserve Bank of New York to lend up to $85 billion to AIG under Section 13(3) of the Federal Reserve Act.
- 9/16/2008: The net asset value of shares in the Reserve Primary Money Fund fell below $1 per share, primarily due to losses on Lehman Brothers commercial paper and medium-term notes. When the Reserve fund “broke the buck,” it caused panic among investors who considered money market accounts nearly the equivalent of bank savings accounts.
- 9/19/2008: To guard against a run on money market funds, the Treasury Department announced that it would insure up to $50 billion in money-market fund investments at companies that paid a fee to participate in the program. The year long initiative guaranteed that the funds’ values would not fall below the $1 a share.
- 9/20/2008: The Treasury Department submitted draft legislation to Congress for authority to purchase troubled assets (the first version of TARP).
- 9/21/2008: The Federal Reserve Board approved applications of investment banking companies Goldman Sachs and Morgan Stanley to become bank holding companies.
All this in just one week!! An incredible moment in the history of this country, and it was only ten years ago.
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“Better Off” theme music is by Joel Goodman, www.joelgoodman.com.