Scenario Hub2008 Global Financial Crisis

2008 Global Financial Crisis

Banking Crisis · Expert Difficulty · United States / Global

32:14

+850 XP

Expert

Scenario Context — September 2008

Lehman Brothers has filed for bankruptcy. Credit markets are seizing up globally. The Federal Reserve faces a crisis of confidence in the entire US banking system. Study the macroeconomic indicators below to understand the scale of the shock before making your predictions.

Key Macroeconomic Indicators

Fed Funds Rate

2.0%

prev: 5.25%

Unemployment Rate

7.2%

prev: 5.0%

CPI Inflation

3.8%

prev: 5.6%

GDP Growth (QoQ)

-2.4%

prev: +1.2%

USD Index (DXY)

86.4

prev: 72.1

Economic Sentiment

28/100

prev: 62/100

Click any indicator card to see context

S&P 500 Index

Jan 2007 – Apr 2009

-38.5%

Credit Spreads (bps)

Investment Grade vs High Yield

IG HY

Key Events Timeline

15 Sep 2008BreakingLehman Brothers files for Chapter 11 bankruptcy

14 Sep 2008M&AMerrill Lynch sold to Bank of America for $50bn

07 Sep 2008PolicyUS government seizes Fannie Mae and Freddie Mac

16 Sep 2008BailoutAIG receives $85bn emergency Fed bailout loan

03 Oct 2008FiscalUS Congress passes $700bn TARP bank rescue package