Chronology of current financial crisis

The current financial crisis had begun as early as January 2008, when the US markets seemed to slumber considerably. Although it could not be predicted that the end result of the events back then would speed up a rapid degradation of the world economy, it can be well understood now that it could have been prevented then. By March 2008, the Dow Jones average for industries had plummeted to its all time low in recent times. The bankers did not pay heed to the situation and did not consider about the depreciating assets with them.

The market started to grow even gloomier, as Bear Stearns was taken over by JP Morgan Chase, in a matter of fire sale to avoid total bankruptcy. Even after this, the mortgage crisis reached sky high, forcing most of the banks to be shaken at their bases. By early September 2008, condition got worse with the US Federal Reserve, having to bailout the gigantic Freddie Mac and Fannie Mae, who had almost half of the entire US mortgage equity with themselves. It was a $200 billion bailout condition, in which the company was entitled to call for help through that amount.

If you thought that the situation would improve, you were wrong, as next to follow was the disastrous collapse of the Lehmann Brothers, which led to various ripple over the world's economy. Several software markets lost their banking projects, as the corporations related to Lehmann Brothers had to put everything on standstill. This also triggered the cancellation of several employments, which left out numerous individuals jobless, all of a sudden. Considering the situation the entire market got panic stricken, unable to decide where to venture their investments.

Almost after this incident the AIG group, which had several tie ups with industries all over the world had been threatened with the same consequences as that of Lehmann Brothers. However this time the intervention from the US Federal Reserve, which bailed out the company proved effective. Even then the shaky situation of the entire company has had its effect on the world economy and stock market. Furthermore, there were several other banks that followed suit to AIG and led the government to sanction a $700 billion retrieval measure.

Until recently, Citibank has also been taken up into the deep whirlpool in the chronology of current financial crisis, triggering the loss of jobs for 15,000 individuals and a bail out appeal to the Federal Reserve. If the situation continues the scenario may see the global economy being built from square one, but hopefully it would stabilize in a matter of few months.

Linus Orakles
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