Crisis timeline

2006

U.S. real-estate market begins shrinking as homeowners across the country default on their loans once mortgages reset to higher rates.

2007

July Two Bear Stearns hedge funds with heavy exposure to the U.S. subprimemortgage market blow up, a portent of the trauma to come.

September The U.S. Federal Reserve lowers its key federal funds rate 50 basis points to 4.75%.

2008

Jan. 11 Bank of America announces purchase of troubled subprime lender Countrywide Financial for US$4-billion.

Jan. 22 Fed cuts key rate 75 bp to 3.5%, the largest cut since the 1980s; slashes a further 50 bp a week later to 3%.

Jan. 22 Bank of Canada lowers overnight rate 25 bp to 4%.

Feb. 13 President George W. Bush signs US$152-billion Economic Stimulus Act of 2008.

March 4 Bank of Canada cuts overnight rate 50 bp to 3.5%.

March 16 JPMorgan offers to buy Bear Stearns for US$2 a share; ups it to US$10 a share a week later, still far below the 52-week high of US$133.20 a share.

March 16 Fed opens discount window to investment banks for the first time since the Great Depression.

April 22 Bank of Canada cuts overnight rate another 50 bp to 3%.

April 30 The Fed drops the funds rate to 2%, down 225 bp from beginning of the year.

Sept. 7 Fannie Mae and Freddie Macfall under government control.

Sept. 15 Lehman Brothers files for bankruptcy.

Sept. 15 Bank of America purchases Merrill Lynch for US$50-billion.

Sept. 15 S&P 500 sinks 4.7% to 1,192.70; steepest drop since 9/11.

Sept. 16 Fed loans AIG US$85-billion for 80% stake.

Sept. 18 Fed expands currency swap lines with Canada, the U.K., European Central Bank, Japan and Switzerland by US$180-billion as investors rush to safety.

Sept. 26 Swap lines with European Central Bank and Swiss National Bank totals upped to US$290-billion.

Oct. 3 Troubled Assets Relief Program (TARP) created, government buys toxic assets off banks.

Oct. 8 Global central banks slash interest rates in unprecedented co-ordinated move

Oct. 29 Fed again lowers rate, to 1%.

Oct. 29 U.S. establishes swap lines with Brazil, Mexico, Korea and Singapore for US$30-billion each to meet demand from greenbacks.

Nov. 10 Chinese government announces US$586-billion stimulus.

Nov. 20 S&P 500 falls 6.7% to 752.44, lowest point since 1997. Dec. 9 Bank of Canada declares recession, cuts key rate 75 bp to 1.5%, lowest level in 50 years.

Dec. 16 Fed funds rate settles at 0%-0.25%.

2009

Jan. 20 BoC cuts key interest rate 50 bp to 1%.

Feb. 17 President Barack Obama signs US$787-billion stimulus package.

March 2 AIG announces US$61.7-billion fourth quarter loss, largest in U.S. corporate history.

March 9 S&P 500 (676.53), Dow Jones Industrial (6,547.05) and TSX Composite (7,566.94) hit troughs.

March 10 Markets begin long spring rally; recover more than 40% by September.

April 21 Bank of Canada cuts rates to 0.25% and promises to keep it there until mid-2010.

April 30 Embattled Chrysler LLC files for Chapter 11 bankruptcy protection and announces plans to partner with Italian automaker Fiat.

June 1 General Motors declares bankruptcy.

July 23 Bank of Canada declares recession over.

Aug. 25 President Obama nominates Ben Bernanke for a second term.

(prepared by Eric Lam/Financial Post/National Post)