The Crash of 2008

On September 16, failures of large financial institutions in the United States, due primarily to exposure of securities of packaged subprime loans and credit default swaps issued to insure these loans and their issuers, rapidly devolved into a global crisis resulting in a number of bank failures in Europe and sharp reductions in the value of equities (stock) and commodities worldwide. The failure of banks in Iceland resulted in a devaluation of the Icelandic Krona and threatened the country with bankruptcy. Iceland was able to secure an emergency loan from the IMF in November.^[6] In the United States, 15 banks failed in 2008, while several others were rescued through government intervention or acquisitions by other banks.^[7] On October 11, 2008, the head of the International Monetary Fund (IMF) warned that the world financial system was teetering on the "brink of systemic meltdown".^[8]

The economic crisis caused countries to temporarily close their markets.

On October 8, the Indonesian stock market halted trading, after a 10% drop in one day.

The Times of London reported that the meltdown was being called the Crash of 2008 and older traders were comparing it with Black Monday in 1987. The fall this week of 21 percent was not as bad as the 28.3 percent fall 21 years ago. But some traders were saying it was worse. “At least then it was a short, sharp, shock on one day. This has been relentless all week.”^[9]. Business Week also referred to the crisis as a "stock market crash" or the "Panic of 2008."[