Recession of 2009/Timelines
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(for earlier events see the crash of 2008 timelines [[1]])
Timelines 2008-2010
2008, 4th quarter
World
- World GDP falls at an annualised rate of 6% (IMF estimate)[2]
- G20 leaders agree on need for fiscal stimulus [3]
- The oil price falls. (November US light $60/barrel, down fron July $147 peak)[4].
United States
- Federal Reserve Bank promises to buy up to $500 billion worth of mortgage-backed securities guarantee by Fannie Mae and Freddie Mac and up to $100billion worth of their direct debt [5].
- Federal Reserve Bank cuts its discount rate to 0 to 1/4 per cent [6].
- Federal Reserve Bank's $800 billion support package [7]
- Federal Reserve Bank buys mortgage-backed securities - Bank promises to buy up to $500 billion worth of mortgage-backed securities guarantee by Fannie Mae and Freddie Mac and up to $100billion worth of their direct debt [8].
- US Federal Reserve Bank's quantitative easing - Open market purchases raise base money (the Bank's balance sheet total) from $0.9 trillion to $2.2 trillion [9]
Europe
- European Central Bank cuts MRO rate from 3.75% to 2.5" [10]
- Bank of England cuts bank rate from 4.5% to 2%
- Britain adopts a major fiscal stimulus package [11].
- German bank rescue package is agreed [12].
- German Chancellor rejects fiscal stimulus policies ("senseless race to spend billions") [13].
Asia
- China announces a $586 billion fiscal stimulus [14]
2009, 1st quarter
World
- World trade falls - the value of trade by the G7 countries is 23% below that of Q1 2008, and the vale of OECD trade in goods has fallen by 30%[15].
- Trade protection grows - World Bank reports 47 trade restrictions by 17 G20 countries [16]
- Developing countries lose exports [17].
United States
- Congress approves stimulus package - American Recovery and Reinvestment Act(H.R. 1) - a $839 billion stimulus package [18]
- Financial Stability Plan - Government launches a plan intended to restore confidence in the financial system (including mandatory stress tests for major banks) and to provide financial assistance to households and businesses[19]
- Federal Reserve plans to increase the size of its balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. [20]
- Public Private Partnership Investment Program announced [21] for the purchase of $1 trillion worth of toxic assets from banks.
Europe
- European Central Bank cuts MRO rate to 2% [22]
- UK Fiscal stimulus announced - including a temporary reduction of the rate of value-added tax from 17.5% to 15%, a bringing forward of £3 billion of capital investment, and a range of minor tax reductions.
- Bank of England starts quantitative easing [23] and Asset protection [24][25]
- Bank of England cuts discount rate cut- from 2% to 1.5% [26].
- UK banks lent £185 bn under the Special Liquidity Scheme [27]
- UK household saving ratio rises to 3.9% (compared to 1.7% for the year 2008)[28]
- Germany introduces major fiscal stimulus package [29]
Asia
2009, 2nd quarter
World
- Oil price rises - to over $70 per barrel
United States
- Banks fail stress tests - of the 19 banks tested, it was found that ten of them need to raise a total of $74.6bn. Any who fail to raise their quota will come under increased government control.
- 10 banks repay Treasury loans' - received under the Troubled Asset Relief Program.
- Mark to market rule eased for inactive markets to what an asset could fetch in an "orderly" transaction (not including distressed transactions or fire-sales)[30]
Europe
- ECB discount rate cut to 1 percent - the interest rate on the main refinancing operations of the Eurosystem be decreased by 25 basis points to 1.00%, from 13/05/09[31].
- ECB quantitative easing starts - with plans to buy €60bn worth of bonds. [32]
- Ireland's supplementary budget - a number of tax increases and public expenditure cuts designed to reduce the deficit to 10.75 per cent of GDP for 2009 [33].
- Bank of England cuts discount rate to 0.5% and announces £75 billion asset purchase under its Asset Purchase Scheme [34] . The beginning of its programme of quantitative easing [35].
- UK household saving rate rises to 5.6% (compared with 1.7% for the year 2008)[36]