The Dominoes Fall: A Timeline of the Squeeze and Crash …

n w colla its leader of October 13, 2008, the Financial Times characterized the western orld’s banking system as suffering ‘the equivalent of a cardiac arrest.’ The pse of confidence in the system means that ‘it is now virtually impossible for any institution to finance itself in the markets longer than overnight.’ This occurred less than a month after Lehman Brothers collapsed, without bailout. Six months earlier Bear Stearns had been bailed out after JPMorgan Chase had bought it for $10 a share, at the regulator’s urging. After Lehman fell, who would be next? And if Lehman, who was not at risk? Despite the earlier U.S. government bailouts of the erstwhile government mortgage originators, Fannie Mae and Freddie Mac, and the later bailout of the world’s largest insurer, American International Group (AIG), everything changed with the demise of Lehman Brothers. I