Us Meltdown – Unfolding The Crisis

The current financial catastrophe can be termed as the most severe financial crisis the world has witnessed after the Great Depression of 1928. As the Wall Street Journal puts it - “ With the benefit of hindsight, everyone can see that the US economy built up an enormous credit bubble that has now popped.... this bubble was created principally by Federal Reserve that kept real interest rates too low for too long. In doing so the Fed created a subsidy for debt and a commodity price spike.”The crunch which seems to have started off with the recent failure of some of the leading US Investment banks has actually a very long history. The bubble which was created by Federal Reserve actually started facing pressure from inside since last one and a half year and finally burst, impacting the economy of whole world.
Some of the key events which led to this great financial crisis :

Jan 11, 2008 - Bank of America pays USD 4 billion for Countrywide Financial after the mortgage lender failed
Jan 30 – UBS announces $4 billion in a new writedown, thus taking total subrprime related writedown to $18.4 billion
Feb 17 – Nationalization of U.K's Northern Rock due to financial crunch March 16 - JP Morgan, a leading US Investment bank acquires Bear Sterns for about $2 a share.
July 13 – Mortgage finance companies Fannie Mae and Freddie Mac nationalized by U.S. Treasury and Federal Reserve
Sept 15 – Lehman Brothers files for bankruptcy – the largest bankruptcy case in the history of US Finance market, Merill Lynch taken over by Bank of America; American National Bank also scuffles for capital
Sep 16 - Central bank pumps in millions of dollars in money market in a bid to save world economies from freezing. Barclay Bank of U.K. buys parts of Lehman Brothers after a week of dilly dallying; Fed comes to rescue of AIG, announces $85 billion in return for 80 percent stake.
Sep 17 - Shares of Goldman Sachs and Morgan Stanley plummet further; curbing of short selling by the US Securities and Exchange Commission
Sep 19 – World market registers an upward swing after the announcement of US plans to buy toxic asset
Sep 20 -21 - US put $700 billion bailout plan to save the burdened firms.
Sep 22 - Lehman Asian operations bought up by Nomura Holdings of Japan for $525 million.
Sep 23 – FBI looks for fraud angle to the crisis, probes Fannie, Freddie,AIG and Lehman for potential mortgage fraud.
Sep 24 - US President, George W Bush warns the world about the potential financial crisis.
Sep 25 - Biggest US bank failure till date. Curtain falls on Washington Mutual and parts sold off to JP Morgan Chase for $1.9 billion
Sep 28 - Leaders of both the parties of US Congress agree to a tentative agreement on the $700 billion fund
Sep 29 – The axe of nationalization falls upon the mortgage mammoth Bradford & Bingley; Spanish bank Santander shows interest in buying its retail deposits and other branch network..