I read quite a few ‘The Year That Was’ posts in the past day or so, and i did want to come out with one of my own.But then, goes beyond saying that the post might have gone unnoticed on the context of being redundant.Not that,I am gonna have thousands of PageViews for this one either, but then when Manrag came with the list of events with the monthly listing, I had to give them space for the sheer dedication and the kind of effort that he put in.Now,when i read it,i am actually getting nightmares thinking how ghostly the past year went for the Finance&Economy of the world.Good thing that the year has passed by and barring few(read Lehman Brothers & Likes) we are still holding ground.
Please comment if you think anything was missed:-)
January– The month of January marked what would be a rapid succession of highly speculated and breathtaking Rate cuts by FED as it cuts rate for first time
• Oil prices crossed $100 for First time ever in history.
• Gulf nations make merry through Petro Dollars
• BOA buys Countrywide, the US’s biggest mortgage lender.
• At that time it looked a gigantic event, but what was to follow no body knew or even dreamt about.
• Jerome Kerviel, Trader in Societe Generale lost Euro 4.9 billion thru unauthorized trades. So much Individual Brilliance!!
February– Northern Rock, a UK bank nationalized as it faces credit crunch after suffering hefty losses in risky Realty Sub prime loans.
March– Bullion reaches 1000$ an ounce on the back of falling Dollar. Then came the news which would send a Tsunami thru the entire US and other parts of world.
• BEAR STEARNS one of US’s tope 5 investment banks was sold to JP Morgan Chase in a Firesale organized by FED. It was called a Firesale as it was sold at $2 while its closing Price was $30 on Friday. Later the price of sale was revised to $10.It was just tip of Iceberg for things ahead to come.
April– UBS, Europe largest bank announces Record losses due to risky announcements.
May– Fuel prices peak up leading to protests by Truck unions and Fisherman in some European countries.
June– US employment rate rises by half a percent. Its steepest rise in 2 decades reaching 5.5%.
July– Oil prices hit all time high of 147 USD per barrel( 159 liters).
• WTO talks collapses again in GENEVA, after tough negotiations on Farm Subsidies by US govt to its farmers and NAMA.
August- Oil futures show rise due to tensions between Russia and Georgia
September– The month of September took the breath out of Financial Markets. The series of events which framed out were truly Ghastly for global economy.
• It was start of CoC a.k.a Crisis of Confidence. WMD’s( CDS, MBS,CDO’s) caused the giant US banking institutions which were thought by FED as the one’s which can’t fall to bite the dust..
• US nationalize Freddie MAC and Fannie MAE, which were largest loan givers in US.
• Lehman brothers files for Bankruptcy
• US govt steps up to save AIG, the world’s largest insurer by proposing 85 Billion pounds and nationalizing it. Further 50 billion pounds were added later.
• Lloyds’ TSB swallows HBOS( Halifax bank of Scotland)
• Fortis Bank bailed by combined efforts of Belgium, Netherlands and Luxembourg, DEXIA bank saved by France and Belgium..
Then came the mother of all Bailouts.$700 Billion from US Treasury as a part of TARP( Troubled Asset Relief program) to write off Toxic Assets of Banks and to other institutors..
October– UK steps up actions and ask for synchronous world efforts to spur the global economy and it triggered a series of Rate cuts, stimulus packages announced across the world to declog the world financial markets and reduce the liquidity crunch .
• Barrack Obama wins presidential campaign,
• Unemployment rate jumps to 6.5%.
• China announces package worth 600 Billion USD, which for some time lifts world markets amid hopes of recovery. then came the report of IMF, which accepted( or said” option is yours to choose”) that world is hugging a Recession.
• Bernard Madoff , a top US Financier is caught in a fraud worth 50 Billion USD through a pyramid scheme. Institutions like HSBC, Credit Suisse suffer huge losses.
• Europe draws plan of 200 Billion euros to rev up the demand. Dollar gathers strength as banks world over shifted their focus towards safe US treasuries. “Flight to Safety” it was called.
• After much drama and hectic parleys US govt finally passed a 17.4 billion USD bailout for GM and Chrysler (owned by Cerberus capital partners< PE fund) and GMAC, loan giver to GM consumers is also nationalized..
After the realty bubble it was Commodities which suffered due to sluggish demand and huge inventory buildups. Crude is actually reached 34$ levels.
It goes beyond saying the Beating Stock Markets took around the globe.The Major Indicies all over got butchered badly and some of them even are at half their levels
Clearly, The Year 2008 was one of the worst nightmare in the context and finance and economy.But then, it did turned gloomy for various other reasons too including the growing agony caused due to Terrorism.
I desperatley wanted to make a list of “The Year That Was” also including the fewer good things that happened in the year 2008, but then Manrag had his 2008 financial fiasco research ready and i am publishing it verbatim.I am gonna try putting one with the better things that happened in 2008 and may be will expect you to come around to read that too.
Do you find anything missing from this catalogue of financial blood-bath?