2008 financial crisis timeline: from the first warning in 2007 to Lehman

When did the 2008 financial crisis timeline begin in 2007?

The first public warnings arrived in 2007. New Century Financial, a leading subprime lender, filed for bankruptcy in April 2007 (Federal Reserve History), and several other subprime lenders closed soon after. Subprime loans went to borrowers with weaker credit, so rising defaults hit lenders first. These early failures looked local, yet they showed that mortgage losses could travel from lenders to the investors who bought the loans.

On 9 August 2007 BNP Paribas blocked withdrawals from 3 funds holding $2.2 billion, citing a complete evaporation of liquidity (Wikipedia). Banks then hesitated to lend to each other. The page on the 2007 warning signals covers HSBC, New Century, and BNP Paribas one by one, with the reason each event mattered for what followed.

What happened to Bear Stearns in March 2008?

Bear Stearns became the first big bank to fall. Its liquidity pool shrank from $18.1 billion on 10 March 2008 to $2 billion on 13 March (Wikipedia), because lenders stopped rolling over its short-term funding. JPMorgan Chase agreed to buy the bank at first for $2 per share, and on 24 March the price rose to $10 per share. The Bear Stearns collapse in 2008 has the full story.

The Federal Reserve Bank of New York backed the deal through Maiden Lane LLC, which bought $30 billion of Bear Stearns assets with a $29 billion loan from the New York Fed and a $1 billion loan from JPMorgan. The share had traded at $172 a year earlier (EQOS Asia 2008 back-test, 2026), which shows how fast confidence can move.

When did the 2008 financial crisis reach Fannie Mae and Freddie Mac?

On 7 September 2008 the Federal Housing Finance Agency placed Fannie Mae and Freddie Mac under conservatorship, announced by director James B. Lockhart III. The 2 companies held or guaranteed over $5 trillion of mortgage securities and debt at the takeover. Treasury agreed to support up to $100 billion for each one, in exchange for senior preferred stock and warrants for a 79.9% stake. Read more on Fannie Mae and Freddie Mac in 2008.

Congress had passed the Housing and Economic Recovery Act on 24 July 2008, and President Bush signed it on 30 July. That law gave the government the tools it used 6 weeks later. On the timeline, this weekend marks the moment when the state started to hold mortgage risk directly, 8 days before Lehman filed.

What led to the Lehman Brothers filing of 15 September 2008?

Lehman Brothers filed for Chapter 11 on Monday 15 September 2008. Its shares fell 45% to $7.79 on 9 September, it announced a $3.9 billion loss on 10 September, and talks with Bank of America and Barclays ended over the weekend of 13 and 14 September without a buyer (Wikipedia). The Lehman Brothers collapse page follows the sequence in detail.

According to the EQOS Asia 2008 back-test (2026), Lehman carried $619 billion of debt, the largest default in history at that date. The Dow closed down 4.4% on 15 September, and the Reserve Primary Fund fell below $1 per share after losses on Lehman commercial paper. Money markets, which firms use for daily cash, started to freeze.

How did the AIG rescue follow Lehman in the 2008 financial crisis?

On 16 September 2008 the New York Fed created a secured credit facility worth up to $85 billion for AIG, backed by warrants for a 79.9% equity stake (Wikipedia). AIG faced a liquidity crisis after a credit rating downgrade forced it to post more collateral. AIG Financial Products had sold credit default swaps on $441 billion of securities. The AIG bailout of 2008 explains the mechanics.

The study lists $440 billion of credit default swaps sold by AIG alone (EQOS Asia 2008 back-test, 2026), a figure close to the public reporting. AIG later repaid $205 billion, and the government realised a combined return of $22.7 billion, with the last Treasury shares sold in December 2012. The rescue came one day after Lehman, which tied the 2 events together.

When did TARP become law in the 2008 financial crisis timeline?

On 29 September 2008 the House rejected the rescue bill 205 to 228, and the Dow fell more than 777 points that day (Wikipedia). The Senate passed a revised bill 74 to 25 on 1 October, the House followed 263 to 171 on 3 October, and President Bush signed it the same day. The result was the $700 billion Troubled Asset Relief Program.

The Treasury Secretary had immediate access to the first $250 billion, and the later tranches needed further steps. TARP and the 2008 crisis bank bailout shows how the money was used. This vote closes the main phase of the timeline, since confidence stayed fragile in the weeks that followed.

What does the 2008 financial crisis timeline show about advance warning?

The study computes a φ(S) score of 0.234 for the global financial system on public data from 2006 and 2007, below the critical threshold of 0.3 (EQOS Asia 2008 back-test, 2026). It projects the point of no return at about 1.1 year after mid-2006, which falls between mid-2007 and early 2008. The study reports 6 of 9 dimensions in the critical zone.

Set beside the dates above, the score shows a warning before the events. The 2007 failures, the Bear Stearns sale, and Lehman in September 2008 arrive in the window the study describes. The EQOS Asia method page explains how scores are built, and the Λ simulator lets you estimate a score for your own case in 10 minutes.

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About the author

Stéphane Jambu

President, EQOS Forecast Asia

Stéphane Jambu leads EQOS Forecast Asia and works as a consultant in e-commerce, search visibility, and AI. LinkedIn profile