Great Recession/Timelines: Difference between revisions
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: The governments of the [[G7 countries]] announce major [[Recession of 2009/Addendum#Fiscal stimulus packages|fiscal stimulus packages*]] and their [[central bank]]s announce [[Recession of 2009/Addendum#Central bank measures|monetary and banking measures*]], but [[recession]]s develop in most advanced economies, with negative [[Recession of 2009/Addendum#Growth rates|growth rates*]] of 3 to 5 per cent among the G7 countries (and of over 14 per cent in the [[Great Recession/Addendum#The Baltic countries|the Baltic countries]]) and [[Recession of 2009/Addendum#Unemployment rates|unemployment rates*]] of 10 per cent in the United States and France. There are falls in [[Recession of 2009/Addendum#World trade|world trade*]] of over 12 percent. | : The governments of the [[G7 countries]] announce major [[Recession of 2009/Addendum#Fiscal stimulus packages|fiscal stimulus packages*]] and their [[central bank]]s announce [[Recession of 2009/Addendum#Central bank measures|monetary and banking measures*]], but [[recession]]s develop in most advanced economies, with negative [[Recession of 2009/Addendum#Growth rates|growth rates*]] of 3 to 5 per cent among the G7 countries (and of over 14 per cent in the [[Great Recession/Addendum#The Baltic countries|the Baltic countries]]) and [[Recession of 2009/Addendum#Unemployment rates|unemployment rates*]] of 10 per cent in the United States and France. There are falls in [[Recession of 2009/Addendum#World trade|world trade*]] of over 12 percent. | ||
: Recession-induced [[budget deficit]]s raise [[Recession of 2009/Addendum#Public debt estimates|public debt*]] to an average of GDP in the [[G20]] countries. | : Recession-induced [[budget deficit]]s raise [[Recession of 2009/Addendum#Public debt estimates|public debt*]] to an average of 100 per cent of GDP in the [[G20]] countries. | ||
==Recovery== | ==Recovery== | ||
==Aftermath== | ==Aftermath== | ||
Revision as of 11:09, 4 February 2011
Prelude (trends: January 2000 to June 2007)
Capital flows:
- Flows of capital into the advanced countries, rising from about 8 per cent of world GDP in 2002 to about 16 per cent in 2007
US Monetary policy
- Progressive discount rate reductions by the Federal Reserve reducing the federal funds rate from 6 per cent in 2000 to 1 per cent in 2003, followed by increases to 5.25 per cent in 2006)[1].
US housing boom and bust
- The average house price rises by 80% [2] between 2001 and 2006 and then falls by 8% from its 2006 peak to mid-2007 .
Financial crisis (June 2007 to November 2008)
June 2007
- US Credit rating agencies downgrade over 100 bonds backed by subprime mortgages.
- Two of the Bear Stearns'' investment bank's hedge funds are threatened by losses from mortgage defaults [3].
August 2007
- The French BNP Paribas bank announces that it is unable to value bonds backed by US house mortgages[4]
- The interbank market is near collapse [5].
September 2007
March 2008
- The US Bear Stearns investment bank is rescued [7].
August 2008
- The US government-sponsored house mortgage lenders Fannie Mae and Freddie Mac are rescued from bankruptcy [8].
September 2008
- The US Lehman Brothers investment bank is bankrupt [9][10][11] with losses of $365 billion to insurers of its bonds. $785m worth of its funds are written off and money market investors suffer a massive loss [12].
- There is panic in the money market and a halt in trading in the interbank market.
- There are multiple bank failures and rescues in the United States and Europe.
- (See The Crash stage 3/September timeline of the Crash of 2008 article).
October 2008
- There are nationwide bank rescues, recapitalisations, depositor guarantees by United States and European govermments'
- (See The Crash stage 3/October timeline of the Crash of 2008 article).
November 2008
- The first G20 summit of leaders of the Group of Twenty countries agree to adopt expansionary fiscal policies.
Recession (December 2008 to October 2009)
(Wikilinks marked thus * are to statistical tabulations))
- The governments of the G7 countries announce major fiscal stimulus packages* and their central banks announce monetary and banking measures*, but recessions develop in most advanced economies, with negative growth rates* of 3 to 5 per cent among the G7 countries (and of over 14 per cent in the the Baltic countries) and unemployment rates* of 10 per cent in the United States and France. There are falls in world trade* of over 12 percent.
- Recession-induced budget deficits raise public debt* to an average of 100 per cent of GDP in the G20 countries.