Whew! What a year 2008 was. The financial industry collapsed, we elected our first black president, and we bailed out the companies that sold us those gas hogs that caused our oil to spike to $150. Despite hundreds of trillions of dollars being used to bail out the economy, we’ll likely remember 2008 for the election, schizophrenic oil prices ,and the minuscule (relatively) bailout of the automakers.
Below you will find my comprehensive list of the events of 2008, which includes my review from the first half of 2008. If you want to add something, leave it in the comments and I’ll update the post. Most of the links are to posts I wrote, which in turn have posts to news stories, or direct links to the stories. Enjoy!
January 14 – National average price for a gallon of regular gas is $3.07 according to The Department of Energy
January 15 – The Weakonomist buys a 2008 Honda Accord. Given the great deal he gets and the accelerated payoff schedule, he doesn’t bother trying to negotiate down the financing.
January 22 – Emergency Fed Cut: Media hype leads to the “recession” being a word on the same level as your choice of derogatory terms. Said media creates market turmoil. To keep Wall Street executives from jumping out of window like 1929 Superman is contracted to physically lift up the NYSE to keep it afloat Fed Chairman Ben Bernanke cuts the fund rate 75 basis points in an unprecedented and unscheduled move.
January 29 – The US House of Representatives, lead by Wonder Woman, introduces the Economic Stimulus Act of 2008. Most taxpayers will receive a $600 stimulus check.
January 30 - Additional Cut: 8 days after the emergency cut The Fed cuts the rate another 50 basis points.
February 13 – The Economic Stimulus Act of 2008 is signed into law by the president.
February 29 – Philip becomes The Weakonomist when he registers Weakonomics.com with BlueHost. No one notices.
March 14 - Bear Stearns Collapse: Amid speculation of a liquidity problem (that means people thought they wouldn’t be able to sell their investments for cash) Bear Stearns stock falls from around $60 to $5. The Fed and JP Morgan bail out the investment house in a series of events that will likely define the sub-prime meltdown of 2008. This will be in textbooks someday. Additional reading: CNBC may be to blame for causing the run on Bear.
March 18 – Scheduled Fed cut: Bernanke and team cut the funds rate another 75 basis points.
March 31 – Henry Paulson, Treasury Secretary, comes out of nowhere to recommend drastic changes to the regulatory policy of investments, mortgages, and the industries associated with it.
April 15 – Tax day for everyone: Well, except for Wesley Snipes.
April 21 – National average price for a gallon of regular gas cross $3.50 in a move now considered to be the death of the large truck and SUV market.
April 30 – Fed cut: The federal funds rate is again cut to bail out borrowers with adjustable rates. The 25 basis point move has taken rates from 4.25% down to 2% in 4 months.
May 1 – The Weakonomist thinks it might have been worth his time negotiate the APR on his car as current deals are half what they were in January. However, The Weakonomist still won’t pay more than $500 in interest over the life on the loan.
May 12 – Death of a Campaign: Hillary Clinton, in a desperate attempt to differentiate herself from Obama, supports the notion of suspending the 18.5 cent federal gas tax for the summer. The American public surprises The Weakonomist by seeing how stupid that really was.
May 13 - Congress introduces a bill to halt the purchase of oil for the strategic petroleum reserve.
June 2 – Wachovia cans their CEO for the poorly timed purchase of Golden West in 2006 - the 2nd largest seller of sub-prime mortgages. Wachovia’s stock price looks like that really steep water slide you’re too scared to go down because you can’t injure yourself since your wife is too drunk to drive home from your “daycation” or “staycation” to the local water park because you can’t afford to drive out of state. You go for it anyway, twisting your ankle, ripping your trunks, and showing your rear end to the entire water park. Embarrassed, your children swear they will never speak to you again for not taking them to Disney World. Your drunk wife flirts with the lifeguard.
June 9 - National average price for a gallon of regular gas passes $4.00. The Geo Metro becomes popular again, defying all logic. Commuters consider a switch to equidaen transportation but the price of grain has spiked with oil.
June 19 – Ralph Cioffi and Matthew Tannin are arrested and paraded through New-York by the government on charges of fraud and conspiracy in their subprime mortgage hedge funds at Bear Stearns.
June 25 – CountryWide Financial shareholders approve the sale of their company for $4 billion to Bank of America. A bargain considering the purchase would have cost $24 billion last year. Compare to Wachovia’s purchase of Golden West in 2006, CountryWide’s smaller rival, which they paid $25 billion for and you can see why they had to dump their CEO in June.
July 1 - Bank of America completes is acquisition of CountryWide Financial. They are immediately sued.
July 4 - America takes a break. The rest of the world realizes they’re screwed too.
July 11 - IndyMac, the Freddie Mac of subprime mortgages, fails massively. Turns out it was created by Countrywide founder Angelo “Tropicana” Mozillo because Freddie Mac can’t buy his crappy mortgages.
August 2 – National average price for a gallon of gas is $3.87.
August 8-24 - Americans lost the Gold Medal count to the guys that make our iPods. The Weakonomist explains how the Olympics are paid for.
August 20 - Debate rages on whether or not Freddie and Fannie should be bailed out.
September 1 – Hurricane Gustav strikes land, sending one final spike in the price of oil to $150. Of course we didn’t know it was the final spike.
September 9 - The debate is over, the bailouts begin.
September 15 - Lehman Brothers declares bankruptcy. The significance here is the government let them fail.
September 15 – Bank of America buys Merrill Lynch. A rocky relationship begins.
September 17 – AIG strong-arms the federal government into keeping them alive. For a story on the three events above click here.
September 23 – Investment banking as an industry is effectively dead.
September 25 - WaMu fails, is bought by JP Morgan
September 29 – Not to be out done, a virtual bankrun almost sends Wachovia packing. They’re saved by Citi, then Wells Fargo. Wells Fargo wins the ensuing legal battle. Citi dies 4 month later, but not before getting a bailout.
October 8 – The Federal Reserve cuts the target lending rate 50 basis points to 1.5%
October 14 – Hank Paulson launches TARP, the Troubled Asset Relief Program. This is the bank bailout.
October 14 – National average for a gallon of gas touches $3.50.
October 29 – The Federal Reserve cuts the target lending rate 50 basis points to 1.0%
November 4 – We elect Jesus Barack Obama to be our next president.
November 25 – Citigroup gets a bailout to deal with the losses from not getting Wachovia. The effort later proves futile.
November 25 – Treasury Secretary Hank Paulson announces a multi-trillion dollar bailout of the financial sector, which now makes the government a bank, investor, and insurer.
December 1 – The National Bureau of Economic Research gives their seal of approval on being in a recession. Here are five questions not to ask during one.
December 1 - OPEC meets in Cairo to discuss the drop in oil prices. No one seems to be able to agree on what they should do, which is good for oil prices.
December 5 – Unemployment hits 6.7%, 2 million jobs are gone before the end of the year.
December 12 – Former NASDAQ chairman and famous investor Bernie Madoff is busted for running a Ponzi Scheme.
December 16 – The Federal Reserve cuts the target lending rate 100 basis points to 0%. To make it not seem so bad, they say the rate is “between 0% and 0.25%. It is now basically free for banks to borrow from the Fed.
December 19 - Christmas comes early to Detroit, they get their much needed bailout.
December 31 – National average price for a gallon of gas is $1.60
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
