THE CREDIT CRISIS: 10 YEARS AND COUNTING RICK TOBIN *September 2007: A bank run America for $50 billion. begins at one of the largest banks in Great Britain named *September 29th, 2008: The Dow Jones index plummets a still Northern Panicking record negative 777 points. A few days later, Washington Mutual bank customers demand their (WAMU) collapses and is taken over by the federal government cash the before later being spun off to JP Morgan Chase. Per WAMU’s own weakening bank that reminded 2007 SEC (Securities and Exchange Commission) filings, they people of bank runs last seen had assets on record once valued at $328 billion. The collapse of during the Great Depression in Washington Mutual is still the largest banking collapse in U.S. the early 1930’s. After a few history. months of bad news and huge cash *October Rock. funds out of withdrawals from 2008: The FDIC (Federal Deposit Insurance Northern Rock customers, the Corporation) runs out of cash after attempting to save Washington British places Mutual. The FDIC is the main insurance fund that protects Northern Rock under state or banking customers from losing some or all of their cash deposits public ownership in order to in the event that their personal bank goes out of business. keep their doors open on Tragically, the FDIC only had about $40 billion in cash reserves at February 22nd, 2008. the time as compared with WAMU’s $328 billion in assets. The government federal government then secretly and silently rushes in to bailout * March 2008: Bear Stearns is taken Chase over by to JPMorgan avoid bankruptcy at a discounted bargain basement price of just $236 million. *September 15th, 2008: Lehman Brothers files for Chapter 11 bankruptcy protection. Merrill Lynch (the world’s largest stock brokerage firm at the time) is bailed out and acquired by Bank of the FDIC so that there would not be bank runs around the country.