GENESIS OF A MELTDOWN

SEPTEMBER 2008

7 The US government seizes control of Fannie Mae and Freddie Mac, the two publicly traded companies that together hold or guarantee about half of the nation's mortgage loans.

10 Wall Street legend Lehman Brothers puts itself up for sale after reporting a huge US$4 billion (S$6 billion) loss.

14 Regulators decide not to save Lehman Brothers, and Merrill Lynch hastily agrees to be bought by Bank of America for US$50 billion.

15 Lehman collapses. With US$639 billion of assets, it is the largest bankruptcy in US history. Fear mounts over American International Group (AIG), the world's largest insurer.

16 Asian markets feel the fallout, with Japan's Nikkei index plunging 570 points. The US government unveils a US$85 billion emergency loan to rescue 'too big to fall' AIG.

17 Russia suspends share trading, while the Libor hits a seven-year high. British bank Lloyds agrees to take over rival HBOS, Britain's biggest home loan lender.

18 Central banks around the globe inject US$180 billion into the international banking system to ease liquidity. The Federal Reserve slashes its key interest rate by half a percentage point to 4.75%, its first cut since 2003. The US bans short-selling in all financial stocks. Other countries follow.

19 Then US Treasury Secretary Henry Paulson says he will spend US$700 billion to take toxic mortgage assets off the books of financial companies. The US Treasury announces a US$50 billion plan to guarantee investments in money market mutual funds.

21 The last two untarnished investment banks, Morgan Stanley and Goldman Sachs, convert to deposit-taking bank holding companies.

24 'Sage of Omaha' Warren Buffett invests US$5 billion in Goldman and warns that failure to agree to the Paulson plan could result in an 'economic Pearl Harbour'.

26 Washington Mutual, with US$307 billion in assets, is seized by the US government and sold to JPMorgan Chase for US$1.9 billion.

THE CONTAGION SPREADS

29 Interbank lending rates spike on fears over which bank will be the next to fall. Britain nationalises mortgage lender Bradford & Bingley. Troubled Wachovia agrees to be taken over by Citigroup for US$2.1 billion. The US House of Representatives rejects the US$700 billion bank rescue plan.

OCTOBER

1-3 The US Senate and House of Representatives pass the revised US$700 billion Paulson plan.

6 Germany announces a &yen50 billion (S$102 billion) plan to save one its biggest banks, Hypo Real Estate.

8 The Fed extends another US$37.8 billion in loans to AIG and leads a coordinated global round of emergency interest rate cuts. Britain announces a &pound500 billion (S$1.06 trillion) bank rescue package.

9 Iceland, whose Prime Minister warned of 'national bankruptcy', takes control of its biggest bank, Kaupthing.

10 A global stock market rout starts in Asia as recession fears deepen, with Japan's Nikkei index tumbling almost 10 per cent. London's FTSE 100 loses a tenth of its value. Singapore slides into recession.

13 Britain announces a £37billion plan to recapitalise Royal Bank of Scotland, HBOS and Lloyds. The 15 euro-zone members unveil similar bank rescue plans.

14 The United States government announces a US$250 billion plan to recapitalise banks.

16 UBS bank gets US$60 billion in support from the Swiss government.

19 Financial services company ING gets a &yen10 billion capital injection from the Dutch government. South Korea announces a US$130 billion plan to stabilise its financial markets.

24 Investors begin to pull money out of emerging markets in Eastern Europe, Latin America and Asia on fears of debt default. Global markets dive.

29 The IMF and the European Union agree to a US$25.1 billion economic rescue package for Hungary.

30 Japan unveils a 5trillion yen (S$80billion) economic stimulus plan. Germany plans to spend up to &yen25 billion on boosting business.

31 The Bank of Japan cuts its key interest rate for the first time in seven years, to 0.30 per cent from 0.50 per cent.

NOVEMBER

4 Democratic candidate Barack Obama wins the US presidential election.

6 The IMF approves a US$16.4 billion loan to Ukraine.

9 China announces a two-year US$586 billion economic stimulus package.

10 The US government announces a third US$40 billion bailout of AIG.

13 Germany slides into recession.

23 Citigroup gets second government bailout, of US$20 billion.

24 Britain announces a 20 billion pound stimulus package.

JOB LOSSES MOUNT, CRISIS DEEPENS

DECEMBER

1 The US economy sinks into recession.

6 Germany passes a &yen31 billion stimulus plan.

9 Japan's Sony says it will cut 16,000 jobs.

11 Prominent fund manager Bernard Madoff is arrested and charged with running a US$50 billion 'Ponzi' scheme. Bank of America announces 35,000 job cuts.

16 The Fed slashes interest rates to 0 to 0.25 per cent - a record low.

19 The US government throws a US$17.4 billion lifeline to Detroit carmakers.

21 Ireland nationalises Anglo Irish Bank.