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2008: A subprime year

Dec 29 2008 10:29

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Paris - Key events that hit financial markets, companies and consumers in the year now ending:

January

  • The US Federal Reserve, or central bank, makes the first of several interest rate cuts.
  • Crude oil prices go over $100 per barrel for the first time ever. Gold also rockets.
  • Bank of America buys Countrywide, the US's biggest mortgage lender, which is struggling in a falling market.
  • The French bank Societe Generale says that a trader, Jerome Kerviel, lost €4.9bn ($7.15bn) through unauthorised trades.

February

  • Germany faces a huge tax evasion scandal after a prosecutor turns up evidence that hundreds of people were hiding assets in Liechtenstein.
  • The British government nationalises Northern Rock, a major bank involved in risky property loans.

March

  • Gold tops 1 000 dollars an ounce.
  • Bear Stearns becomes the first big US investment bank to get into trouble due to exposure to subprime, or risky, property loans. It is sold off in a deal engineered by the central bank.

April

  • The giant Swiss bank UBS announces massive losses due to risky investments.
  • Rising world food prices cause riots in Egypt and several sub-Saharan African countries.

May

  • High fuel prices cause protests by fisherman and truckers in several European countries.

June

  • The US unemployment rate rises by a half percentage point to 5.5%, the biggest leap in two decades.

July

  • Oil prices hit an all-time peak at just over $147 a barrel.

    - World trade talks collapse in Geneva.

August

  • A five-day war between Russia and Georgia brings new concerns for oil prices and the West's energy security.

September

  • The US administration takes over Freddie Mac and Fannie Mae, giant institutions which underpin most of the country's property loans.
  • Lehman Brothers bank files for bankruptcy.
  • On September 15 the US stock market plunges by more than 4.4%. Markets also crash around the world.
  • The US government steps in to save American International Group, one of the world's biggest insurers. In Britain, Lloyds TSB bank swallows up HBOS, a competitor threatened with bankruptcy.
  • Fortis bank is bailed out by Belgium, the Netherlands and Luxembourg, while France and Belgium step in to save the Dexia bank.
  • The US administration draws up a $700bn operation to mop up banks' "toxic" mortgage debt.

October

  • World stock markets crash again on October 10.
  • British Prime Minister Gordon Brown proposes concerted action to save the world's banking system.
  • Iceland nationalises its biggest banks amid a massive credit crunch due to borrowing abroad.

November

  • Democrat Barack Obama wins the US presidential election. The United States reports another huge jump in unemployment to 6.5%.
  • The Chinese government announces a huge economic stimulus plan, which briefly lifts world stock markets.
  • The International Monetary Fund warns of a global recession for 2009.

December

  • Details emerge of a worldwide financial pyramid scheme run by a top US financier, Bernard Madoff. Losses are expected to reach $50bn.
  • European Union leaders draw up a concerted €200bn ($260bn) plan to hold off a recession.
  • After much hesitation, US President George Bush announces help for his country's two biggest auto companies.
  • Oil prices fall below $40 a barrel.
  • The Russian ruble drops to a three-year low against the dollar.

- AFP

 
 
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