What Were the Top Ten Events of the Decade?

The Most Important Financial News Stories

The events surrounding the Great Recession eclipsed most of the other financial news stories in the past decade. Take a walk back in time. Who would have thought in 2007 that so much would change in just ten years?

China Emerges as the World's Largest Economy

An investor looks at the stock market in Wuhan of Hubei Province, China. Photo by China Photos/Getty Images
China's economy continues to grow at 8%, despite the global recession. It produces $7.9 trillion, making it the world's third largest economy (after the EU and the U.S). China is the largest banker to the U.S., owning $800 billion of U.S. Treasuries. This gives it leverage. For example, in August 2007, China threatened to sell part its holdings if Congressional pressure to raise the value of the yuan continued. More

The Day the Global Banking System Stopped Working

On Wednesday September 17, banks withdrew $160 billion from ultra-safe money market accounts. Banks were hoarding cash for write-downs on bad mortgages and withdrawals in bank runs. By the end of the week, banks held $190 billion in cash, as opposed to a normal $2 billion reserve. Hoarding led to an increase in LIBOR, which affects $360 trillion in loans and credit card assets. The credit freeze led to a cash shortage for most businesses. In response, the Federal Reserve lowered interest rates to zero, reducing LIBOR. However, banks continue to hoard cash today to write down foreclosures. More

$787 Billion Stimulus Package

The main purpose of President Barack Obama's $787 billion Economic Stimulus package was to prevent the re-emergence of the panic that gripped investors in 2008. It was to be spent over three years. It has been criticized for not fixing the economy fast enough. By July 2009, over $179 billion was allocated to Federal agencies. It was only supposed to spend $185 billion in 2009. It was designed to increase GDP growth by 1.4%-3.8% by the end of 2009, and prevent 2.3 million job losses. In Q3 2009, the economy would have only grown .7%, not 2.8%, without the Economic Stimulus Program. More

$700 Billion Bank Bailout Bill

On September 18, 2008, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke asked Congress for the largest bailout package since the Great Depression. By October 3, the Senate passed the $700 billion bailout bill, now known as the TARP program. The program was initially designed to purchase toxic mortgages from banks, freeing up cash for more loans. However, it was taking too long to implement, so on October 14, the Treasury used $350 billion for the Capital Repurchase Program, which purchased preferred stock in major banks. More

AIG Bailout

U.S. Federal Reserve Chairman Ben Bernanke
U.S. Federal Reserve Chairman Ben Bernanke testifies before the House Financial Services Committee. Photo: Win McNamee/Getty Images

On Tuesday, September 16, AIG, the world's largest insurance company, announced it was going bankrupt. Federal Reserve Chairman Ben Bernanke said that AIG's bailout made him more angry than anything else in the recession. Like a hedge fund, AIG took risks with unregulated products, such as credit default swaps. It wrongly used cash from people's insurance policies. The Fed stepped in to avoid the collapse of the $3.6 trillion money-market fund industry, which invested in AIG debt and securities. Most mutual funds also owned AIG stock. More

Lehman Brothers Collapse

On Monday, September 15, 2008, Lehman Brothers announced bankruptcy. This was the day after Treasury Secretary Paulson said no more bailouts. He refused government protection for Lehman's $60 billion in uncertain mortgage assets in a weekend negotiation with potential buyers Barclay's and Bank of America. At the time, he thought the amount was too much, and he was being pressured to keep the government off the hook. Now, it seems like small potatoes. Lehman's Brothers bankruptcy panicked global bankers, leading to The Great Recession.

Costliest Hurricane of All Time

woman with dog after Hurricane Katrina
Lana Seymour and her dog Fifi peer out from their house to survey the damage in the French Quarter after Hurricane Katrina blew through the area early on August 29, 2005 in New Orleans, Louisiana. Photo by Chris Graythen/Getty Images

On August 29, 2005, Hurricane Katrina hit land, causing economic losses of $between $108 billion to $250 billion. Only $66 billion of this was insured. Half of the losses were a result of flooding in New Orleans. It caused GDP growth to drop from 3.8 percent in Q3 to 1.3 percent in Q4. It affected 19 percent of U.S. oil production and caused oil prices to rise $3 a barrel. More

Cost of Iraq War: Timeline, Economic Impact

The 9/11 attack led to increased defense spending - first in Afghanistan and second in Iraq. By 2006, the War on Terror had increased the defense budget to $600 - $700 per year, creating an annual budget deficit of $500 billion per year. By 2007, the debt had almost doubled to $9.2 trillion - without spending a penny of bailout or stimulus money. More

Dow Dropped 50 Percent in 17 Months

Traders work on the floor of the New York Stock Exchange during morning trading on September 22, 2011 in New York City. The Dow Jones industrial average (INDU) dropped 337 points within the first 10 minutes of trading as the global economy struggles and investors continue to lose confidence. Photo by Spencer Platt/Getty Images

Between October 9, 2007 and March 6, 2009, the Dow Jones Industrial Average dropped 50%. This was the worst decline since the Great Depression, when the Dow fell 80%. However, it occurred in only 17 months, while the Great Depression drop took three years. More

Greece Debt Crisis

Greek debt crisis
Greece's financial pressures almost forced it to abandon the Greek euro. Photo: Eduard Andras/Getty Images

The Greece debt crisis warned of the danger facing other heavily indebted countries. In 2015, Greece nearly defaulted on its debt and exited the eurozone. It triggered the Eurozone debt crisis, creating fears of a global financial crisis. Although the crisis was resolved, it still throws into question the viability of the European Union itself.  More