Thursday, Sept. 29, 2011
THEN On Sept. 29, 2008 the Dow Jones Industrial Average falls a record 777.68 points in one day after Congress fails to pass a $700 billion bailout deal for Wall Street. The bankruptcy of the global financial-services firm Lehman Brothers threatens to collapse the banking industry as its own troubles expose the toxic assets and subprime loans rife in the financial sector. Days later Congress passes the Troubled Asset Relief Program to buy up the bad assets from the largest American banks. NOW Three years later the U.S. banking sector is on better footing, but a sovereign debt crisis in Europe is threatening the global economy. Last Saturday, in a statement to the International Monetary Fund, U.S Treasury Secretary Tim Geithner warned that the sovereign debt crisis in Europe is “the most serious risk now confronting the world economy.” The possibility of default by the Greek government has upset markets around the world as Greece’s default would likely take a toll on the European banking system, and have repercussions on the fragile U.S. economy.
