Financial Crisis Timeline

September 10 2003 Ron Paul introduces the Free Housing Market Enhancement Act in order to put an end to federal subsidies for Freddie Mac and Fannie Mae. He asserts that "the special privileges granted to Fannie and Freddie" are creating a "short-term boom in housing" but that "like all artificially-created bubbles" it would eventually come to an end and with disastrous results for American homeowners. [The Free Housing Market Enhancement Act never passed through the Subcommittee on Capital Markets.]

Fourth Quarter 2005 Real Estate market drops 1% from last quarter.

First Quarter 2006 Real Estate boom abruptly comes to an end; drops 3.3% from fourth quarter 2005.

March 2008 US Government offers $29 billion of credit in the form of guarantees for the toxic mortgage-backed debt held on the books of Bear Stearns. The credit was made available as part of a deal where JPMorgan Chase acquired its smaller rival. US Federal Reserve also extends the availability of cheap financing to investment banks as well as commercial banks.

May 2008 Washington returns $168 billion to American taxpayers in an attempt to stimulate the US economy.

May 21 2008 Bloomberg News requests that the Federal Reserve provide data on collateral posted from April 4 to May 20. [See June 19 2008 for their Response]

June 19 2008 The Federal Reserve responds to Bloomberg's May 21st request, replying that it needed until July 3rd to search documents and determine whether it would make them public.

July 11 2008 IndyMac, the US mortgage bank, is seized by regulators after a run on the bank left it short of funds. The bank files for bankruptcy protection three weeks later.

July 21 2008 US financial regulators spend a week trying to secure a takeover of two collapsed banks, First National Bank of Nevada and First Heritage Bank in California. Between them, the mortgage lenders controlled assets of $3.6 billion.

September 6 2008 The US Government takes control of mortgage companies Fannie Mae and Freddie Mac. Promises to inject up to $100 Billion into each.

September 7 2008 Silver State becomes eleventh US bank to collapse. The lender had $1.7 billion of deposits.

September 14 2008 Lehman Brothers files for bankruptcy protection. It controlled $600 billion of assets.

September 14 2008 Central bank governors relax collateral standards in order to accept securities that are not rated AAA.

September 16 2008 The Federal Reserve lends AIG $85 billion for two years. In exchange the Federal Government receives a 79.9% stake in the company. "An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won't have to go through a tumultuous fire sale."

October 3 2008 Bush signs HR-1424 into law; this statute enacts the Emergency Economic Stabilization Act of 2008 which created the $700 Billion Troubled Asset Relief Program (TARP). Also included in HR-1424 was more than $100 billion in tax breaks and a provision to temporarily raise the federal deposit insurance from $100K to $250K.

October 25 2008 Bloomberg News files a request for the Federal Reserve to disclose the recipients of the more than $2 Trillion in taxpayer money it had lent out and the collateral it is accepting for those loans. As the Federal Reserve had not responded, Bloomberg files a lawsuit on November 7th under the Freedom of Information Act. [See December 8th for the Federal Reserve's response to the lawsuit.]

November 6 2008 Total Federal Reserve lending exceeds $2 Trillion.

December 8 2008 The Federal Reserve responds to Bloomberg's November 7th lawsuit, saying that it is allowed to withhold internal memos as well as information about trade secrets and commercial information.

December 20 2008 Bill to provide $14 Billion in short-term financing to the auto-industry and establish a "car czar" fails to pass in the Senate after Senate Republicans "demanded that the United Auto Workers union agree to accept a lower pay and benefits package that would be in line with compensation earned by workers at U.S. factories producing cars for Japanese companies such as Honda, Toyota and Nissan."

December 21 2008 Bush administration announces it will consider use of "the TARP program to prevent a collapse of troubled automakers" (Bush Administration Press Secretary Dana Perino).

February 17 2009 The American Recovery and Reinvestment Act of 2009 is signed into law.

May 20 2009 The Helping Families Save Their Homes Act of 2009 is signed into law. Within the act is an amendment added by Senator Chuck Grassley that gives the GAO the ability to audit Fed emergency aid to specific companies, such as AIG, Bank of America Corp. and Citigroup Inc. This amendment does not give the GAO access to any information on off-balance sheet transactions, monetary policy or discount-window loans to banks.

June 11 2009 "Testifying before the House Oversight Committee today, the CEO of Bank of America, Ken Lewis, said that federal regulators threatened to fire him and the bank's board of directors if the bank failed to complete a planned acquisition of then-teetering investment bank, Merrill Lynch." Bank of America had wished to exercise their right to refrain from merging with Merill Lynch after discovering that the Bank was worth $16 billion less than what the Federal Reserve demanded they pay for it.

June 15 2009 The U.S. Treasury Department issues a report that mortgage lending at the 20 U.S. banks that received the greatest share of TARP funding dropped 3 percent to $114.2 billion.

June 29th 2009 The Standard & Poor’s 500 Index increase in the past three months has been the steepest in seven decades. Most investors believe that the recession is coming to an end. Others believe that the stimulus packages and bailouts have formed a huge bubble that will eventually come to an end with disastrous results.

June 29 2009 "Four months after President Barack Obama pledged $275 billion to shore up home sales, the engine that powered every U.S. recovery since 1960 is stalled."