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The Financial Crisis: This Day—One Year Ago, Sept. 4

White knights are hard to nail down as the savvy start hedging their bets and bear season arrives on Wall Street.

Speculation over Lehman Brothers' future continues to mount, with many betting on HSBC as a possible bidder. The rumor-mongering, however, apparently goes too far, as Mitsubishi UFJ Financial Group rejects outright a media report that it's considering buying a stake in Lehman.

This Day 1 Year Ago - A CNBC Special Report - See Complete Coverage
This Day 1 Year Ago - A CNBC Special Report - See Complete Coverage

As Lehman twists in the wind, some in the markets call for government intervention in the marketplace.

Pimco founder and co-CIO Bill Gross declares that the US government must give the Treasury power to buy debt and other assets to stave off a financial crisis.

Gross warns that he and other big investors will avoid buying bank debt until Treasury Secretary Henry Paulson injects some $400 billion to $500 billion into the financial system.

  • Watch Exclusive Interview with Fannie & Freddie Regulator

But Gross tells CNBC that Pimco will still consider taking on debt from Fannie Mae and Freddie Mac. (Why? Watch full Gross interview—and debate with Jim Cramer—below.)

What You Were Reading:

Alaska Gov. Sarah Palin, named John McCain's presidential running mate, addresses the Republican National Convention on Sept. 3 and Rep. Adam Putnam (R-Fla.) tells CNBC why Palin has "a unique understanding of our energy needs" at a critical time. (See Putnam interview, below.)

The dollar hits its highest level against the euro this year—again—after the European Central Bank cut its outlook for euro-zone growth

The Crisis: 1 Year Later - A CNBC Special Report - See Complete Coverage
The Crisis: 1 Year Later - A CNBC Special Report - See Complete Coverage

Crude oil prices drop nearly $1.50, settling at $107.89 a barrel; oil has now fallen for five straight days and, losing 8.7 percent of its value in that time.

Investors ignore that positive factor and instead focus on glum weekly jobless claims data, showing a gain of 15,000 in the most recent week, snapping three-weeks of improvement.

The Dow tumbles 344.65, or 3 percent, to close at 11188.23. The S&P 500 also sheds 3 percent, while the tech-heavy Nasdaq loses 3.2 percent. All three major indexes are now more than 20 percent below their October 2007 highs:

What the Experts Were Saying:

Bill Gross, founder of Pimco, analyzes financials and debates the markets with Mad Money's Jim Cramer.

JPMorgan Chase faces issues with sales of credit default swaps and derivatives to local governments. Mary Thompson reports.

Rep. Adam Putnam (R-Fla.), Republican Conference Chairman, touts Sarah Palin's understanding of the energy industry and the U.S. economy's needs.