September 7, 2008

On September 7, 2008, the US government took control of the two largest mortgage financing companies in the US, Fannie Mae and Freddie Mac. This was the first major event of a colossal financial crisis. 

Within that same month, the 158-year-old Lehman Brothers investment bank failed and collapsed. 

Shortly after, Merrill Lynch was purchased for $50 billion (it was valued at over $100 billion the year before). 

The next catastrophe was that AIG had oversold credit default swaps on bad collateralized debt obligations and had to pay out more than it had on deposit—AIG had bet more than it could afford to lose and was now bankrupt.