Housing Market Crash

Dated events

1. Aug. 9, 2007 · BNP Paribas freezes three funds holding US subprime mortgage securities
   French bank BNP Paribas announced it was freezing three investment funds because it could no longer figure out what the U.S. mortgage assets inside them were worth. This scared banks worldwide because it meant nobody could trust the prices on mortgage-related investments, so banks stopped lending to each other. In the following weeks, central banks had to pump billions into the banking system to keep it functioning.
2. March 14, 2008 · Bear Stearns runs out of cash and gets emergency Fed-backed funding via JPMorgan
   Investment bank Bear Stearns ran out of cash because other firms refused to do business with it, fearing its huge pile of bad mortgage loans. This showed that even a major Wall Street bank could be destroyed in days by losses tied to home loans, making people wonder which bank might be next.
3. Sept. 7, 2008 · US regulator FHFA places Fannie Mae and Freddie Mac into conservatorship
   U.S. regulators, with backing from the Treasury, placed mortgage giants Fannie Mae and Freddie Mac under government control because losses on home loans had wiped out their financial cushion. These two companies backed roughly half of all American mortgages, so their failure would have meant millions of people could no longer get or refinance home loans. The takeover temporarily calmed fears but signaled just how deep the housing crisis had become.
4. Sept. 15, 2008 · Lehman Brothers files for Chapter 11 bankruptcy
   Lehman Brothers, a 158-year-old investment bank loaded with toxic mortgage assets, filed for the largest bankruptcy in U.S. history after the government declined to bail it out. Because Lehman owed money to so many other companies around the world, its failure triggered a chain reaction of fear, nobody knew who else might suddenly go broke. In the days and weeks that followed, credit markets essentially froze and stock prices around the world plunged.
5. March 9, 2009 · S&P 500 closes at 676.53, the lowest point of the 2007-2009 bear market
   After roughly 17 months of falling markets, bank failures, and job losses, stock prices finally hit their lowest level of the crisis. By this point, U.S. home values had dropped by roughly a third from their peak, and millions of homeowners owed more on their mortgages than their houses were worth. Over the following weeks, prices rebounded quickly, rising more than 20 percent within about three weeks, as government rescue programs started to take hold.

Assets named in this scenario · 9

Financial Select Sector SPDR FundiShares 20+ Year Treasury Bond ETFJPMorgan ChaseMitsubishi EstateSegroSPDR S&P 500 ETF TrustUnibail-Rodamco-WestfieldVanguard Real Estate ETFVonovia

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