The Financial Crisis: This Day—One Year Ago, Sept. 1
Unlike the Cuban missile crisis of almost 50 years ago, the drama of the US financial crisis of 2008 lasted for weeks, not days, and the brooding stress and compounded uncertainty of each passing day took months to dissipate.
For much of September and October, fear and anticipation drove Wall Street and Washington, with one eyeing the other in a one-of-a-kind symbiotic exercise between commerce and government.
Though it's too soon to describe the crisis as a distant memory, a year — and a very long one at that — as passed.
With an economic recovery now in sight for many, a look back at the month that shook the world is more than appropriate.
So, for the next 30 days, CNBC will give you a snapshot of each day in September, putting events and analysis in perspective.
Labor Day 2008 is no holiday for many, from the financial center of New York City to the oil patch of the Gulf Coast.
U.S. markets are closed for the holiday, but exchanges in Asia and Europe are open and stock prices fall, with the fate of Lehman Brothers, the suddenly shaky investment a concern for investors and officials alike.
On the political front, the Republican National Convention gets underway in Minneapolis, where party leaders and the GOP's presumptive presidential nominee, Sen. John McCain, are no doubt brainstorming over the inevitable Democratic attacks on the Bush administration's handling of economy and the crisis.
Lehman steps up talks with Korea Development Bank to raise as much as $6 billion in a share sale set to conclude that week, the Sunday Telegraph reports, as management looks for a much-needed cash injection.
The bleeding continues elsewhere.
U.S. activist hedge fund Atticus Capital has lost more than $5 billion this year, Reuters reports. And the Bank for International Settlements says financial firms continued to transfer funds out of the U.S. and into Europe in the first quarter of 2008.
Hurricane season arrives pretty much on cue for the US, but winds up providing less turbulence than the forthcoming financial storm.
Hurricane Gustav proves milder than feared, leading to hopes that stocks will open higher Tuesday (Sept. 2) after the holiday weekend. However, Quincy Krosby, chief investment strategist at The Hartford, warns on CNBC of storms' "wide-reaching impact," for an economy that has clearly been running out of steam.
What You Were Reading:
- Cramer: Lehman's a 'Lurking Black Hole'
- Oil Prices Plunge to $111 As Gustav Threat Eases
- 12 Costliest Hurricanes in US History
Krosby warns that hurricane season could be costly, if it produces enough dislocation and property destruction. "Anything that taxes the consumer will obviously be a negative for the economy," she said.
Crude oil prices fall, as Gustav largely spares the Gulf Coast's refineries, but at $111 a barrel, the energy spike remains a drag on the economy. Meanwhile, the U.S. dollar strengthens, the usual safe harbor in a storm.
What the Experts Were Saying:
John Harwood discusses the impact Gustav is having on the Republican National Convention; Hampton Pearson covers the Bush Administration reaction to the storm.
John Kilduff of MF Global and Daniel Yergin of Cambridge Energy Research Associates assess Hurricane Gustav's damage to America's oil industry—and economy.