Financial Crisis Timeline: April 2009

April 2nd 2009: Jobless claims at 26 year high
According to the Labor Department, new applications for insurance jobless insurance benefit rose 12% to a seasonally adjusted 669,000 in the week ended March 28th. The number of laid off workers receiving unemployment benefits also jumped to a record high.

April 2nd 2009: G20 to triple IMF and World Bank aid
G-20 leaders have pledged to triple IMF and World Bank aid to $1.1 trillion US

April 2nd 2009: KPMG UK faces $1 billion suit
A liquidation trust made up of the debtors of New Century have accused KPMG of covering up serious problems which led to the collapse of the company. The suit demands KPMG of at least 41 billion in damages.

April 3rd 2009: US unemployment rate rises 8.5%
US unemployment rate rose to 8.5% in March, a 0.4% point rise on the loss of 663,000 jobs in a month, according to US Labor Department. Since recession set in December 2007, the US has lost 5.1 million jobs.

April 7th 2009: Foreclosures spur scams in United States
According to FTC it found 71 companies running suspicious advertisements regarding foreclosure help in print or online and has filed law suits against five of those companies.

April 7th 2009: New Zealand business confidence slips 35 year low
The New Zealand Institute of Economic Research has said that 65% of companies surveyed last quarter expect the economy will worsen in the next 6 months, the most since 1974.

April 7th 2009: Australia now officially in recession
The Reserve Bank governor announced that the Australian economy is now in recession and lowered the key interest rate from 3.25% to 3%. The interest rates are already 50 year low.

April 8th 2009: US economy expected to expand slowly in 2010
According to the minutes of a Federal Reserve meeting, US economy is expected to ease this year and will “expand slowly” next year.

April 9th 2009: Barclays to sell iShares
Barclays has agreed to sell its iShares asset management business to private equity firm CVC Capital Partners for 3 billion pounds ($4.4 billion), but kept the right to hunt for a better deal for two months.

April 9th 2009: Number of Americans receiving unemployment insurance at record high
According to the Labor Department, jobless claims fell to seasonally adjusted 654,000 last week. Moreoever, total number of un-employed Americans receiving unemployment insurance increased to 5.84 million from 5.75 million, setting a record 10th straight week and the most since 1967.

April 15th 2009: US recession deepens
According to the Federal Reserve, industrial output slumped to a decade low in March and annual inflation fell for the first time in 54 years.

April 24th 2009: Microsoft sales drop for the first time in 23 years
Microsoft quarterly revenue fell by 6% to $13.7 billion for the first time in 23 years.

April 24th 2009: Unemployment in Spain Rose to 17.4%
The Spanish unemployment rose to 17.4% in the last quarter of 2008, or more than twice of the European Union average.

April 24th 2009: Ford does not need money for now
Ford announced it does not need more government funding at the moment and can do with the $21.3 billion it currently has in cash. On the other hand, bankruptcy looms over its rivals GM and Chrysler.

April 24th 2009: GM receives another $2 billion
General Motors have received $2 billion of additional funding from Obama administration as fresh working capital. The Treasury Department has set a deadline of June 1st for the automaker to restructure. GM and Chrysler have so far received $20 billion of government soft loans that have helped them to carry on business.

April 24th 2009: Lawsuit filed against JPMorgan Chase in connection with Madoff
Victims of Madoff’s ponzy scheme have filed a lawsuit against JPMorgan Chase stating that the bank continued to maintain his checking accounts and trading with his brokerage firm long after it realized Madoff was running a fraud scheme.

April 26th 2009: US GDP shrinks again
According to estimates by economists, the US GDP shrank by 4.7% in the first quarter of 2009. It had shrunk 6.3% in the last quarter of 2008.

April 26th 2009: IMF: Recession and housing slump to continue in UK
According to IMF, recession will go well into 2010 in UK, while there will be a prolonged housing slump.

April 26th 2009: IMF considering issuing bonds
IMF is considering issuing bonds to some developing countries like China and Brazil to raise funds to combat global economic slump.

April 30th 2009: Chrysler files for bankruptcy
US automaker Chrysler has filed for bankruptcy and will join forces with Italian Fiat to form a new global company.

Financial Crisis Timeline: March 2009

March 2nd 2009: AIG reports $62 billion quarterly loss
US insurer AIG has reported $62 billion loss for the last quarter of 2008.

March 3rd 2009: Dow falls below 7,000
Dow Jones Industrial Average fell down below 7,000 points for the first time since 1997, after AIG reported a $62 billion quarterly loss. Legendary investor Jim Rogers asks AIG to be allowed to go bankrupt rather than making America bankrupt.

March 3rd 2009: Buffet’s Berkshire to cut jobs
Warren Buffet’s Berkshire Hathaway, which recorded its worst financial year ever in 2008, will cut more jobs this year. The company laid off workers in several of its subsidiaries from 6% to 16%.

March 4th 2009: Tycon Electronics to cut 20,000 additional jobs
Pennsylvania based electronic company Tycon Electronics has announced it would cut additional 20,000 jobs worldwide.

March 6th 2009: Unemployment rate jumps to 25 year high
The US unemployment rate has reached 8.1% which is the highest in the past 25 years. Unemployment in the US now stands at 12.5 million.

March 6th 2009: Stocks slide
Dow Jones Industrial Index closed at 6,512 points as adverse unemployment figures come out.

March 6th 2009: Unemployment rate in Silicon Valley reaches 9.4%
The unemployment rate in Silicon Valley has reached 9.4% as the total number of unemployed in the Santa Clara – San Benito county area reached 897,000.

March 6th 2009: Job cuts at IBM
In recent weeks, IBM has laid off 4,600 workers. However, the company is following the policy of having scattered and quiet layoffs, probably to avoid the radar of news agencies.

March 6th 2009: GM stock continues to fall
GM stock is trading at $1.28, the lowest level since April 1993 mainly due to increased speculation that the company is edging closer to bankruptcy.

March 6th 2009: Undisclosed losses at Meryl lead to probe
Meryl Lynch declared a loss of $13.8 billion in the final quarter of 2008 but it did not became clear on paper until Bank of America’s share holders approved the merger of the two corporations and Meryl paid $3.6 billion in bonuses. This has lead to a trading probe inside Bank of America.

March 6th 2009: Dow Chemical and Rohm and Haas in merger talks
Dow Chemical and Dow and Haas have announced that the two companies are locked in merger talks, however they cannot predict the outcome of these talks.

March 10th 2009: Delta Airlines to cut capacity
Delta Airlines will cut its international capacity by an additional 10%. The Airlines announced 6% cut in capacity in December 2008.

March 10th 2009: Hedge Funds to cut 20,000 jobs this year
A Wall Street recruiting and compensation firm has said that hedge funds could cut as much as 20,000 jobs this year as the outlook for investment managers look dim.

March 10th 2009: AT&T to invest and add jobs
AT&T will add 3,000 jobs to its wireless, broadband and video business and invest $17 billion to $18 billion this year.

March 11th 2009: Credit card rewards being slashed
Credit card issuers ranging from Citigroup to JPMorgan Chase are slashing rewards, increasing interest rates and increasing fees as loan losses mount. Last month American Express, the largest credit card company in terms of sales volume, asked some client to take $300, pay off their debt and close their accounts.

March 16th 2009: Oil trades up as stocks rally
Oil price rose above $47 per barrel as stocks in US and other parts of the world rallied. OPEC has decided to observe the current curbs in oil supply more strictly rather than introducing new curbs.

March 16th 2009: Barnanke sees recovery in the beginning of 2010
Federal Reserve Chairman Ben Bernanke has suggested that the US recession might last for more the full year and the economy may begin to recover by the beginning of 2010.

March 16th 2009: Homebuilder sentiment unchanged in March
The National Association of Homebuilders announced that the Homebuilder sentiment remained unchanged in March (at 9) near historic lows, one point off the all time low in January 2009. Index readings below 50 indicate negative sentiment.

March 16th 2009: US industrial output lowest since 2002
According to government report, US industrial output fell for the fourth consecutive month in February 2009 and is at the lowest point since April 2002.

March 16th 2009: New York Manufacturing Index at record low
According to a survey, manufacturing production in New York State fell to yet another record low in March 2009 as new orders and investments diminished.

March 16th 2009: SAP lays off workers
SAP laid off an undisclosed number of workers as part of its previously announced plan to lay off 3,000 jobs. The rumors are that the layoffs were made at SAP’s Palo Alto California lab.

March 17th 2009: Nokia to lay off further 1,700 jobs
Nokia Corp. will cut further 1,700 jobs world wide in order to cut costs.

March 17th 2009: Caterpillar cuts another 2,454 jobs
Caterpillar announced to cut 2,454 jobs in three states in US, the bulk of which (nearly 1,600) will go in Illinois

March 17th 2009: Housing posts surprise rebound
The number of new apartments and homes started in February jumped 22% from January to a seasonally adjusted figure of 583,000. All parts of the country reported increase apart from the West that was hit the most with the housing crisis.

March 17th 2009: Anger over AIG bonuses
Politicians and public are demanding for answers after the disclosure that AIG paid $165 million in bonuses to its executives as the company was kept afloat with tax payers’ money.

March 19th 2009: US workers on jobless benefits hit record high
The US workers drawing state unemployment benefits scored another record high early this month. However, the number of people filing new claims for jobless benefits fell to a seasonally adjusted 646,000 in the week ended March 14th.

March 20th 2009: Finnair to temporarily lay off 1,600 workers
Finnair announced it would temporarily cut 1,600 jobs starting next month and double its savings program.

March 20st 2009: US budget deficit to be projected at $1.8 trillion
The US budget deficit is expected to be projected at $1.8 trillion by the Congressional Budget Office for the fiscal year 2009 ending in September 30th. This will complicate Obama’s plan for a $3.55 trillion budget for 2010. Nominal GDP is projected to have a 1.5% drop.

March 21st 2009: Romanian transport ministry plans to cut 12,000 plus jobs
Romania’s transport ministry has plans to cut 12,139 jobs in the railway system

March 21st 2009: EU pledges new money for IMF
EU pledged $500 billion to IMF but did not announce any government spending plans to fight global economic slowdown.

March 22nd 2009: World Bank: Global recession is WWII like
World Bank’s head Bob Zoellick has said that the global recession is WWII like. He said the global economy will shrink up to 2% and stimulus packages could spark another crash in financial markets.

March 24th 2009: China suggests creating super sovereign reserve currency
Ahead of the G20 summit, the governor of China’s central bank has proposed the formation of a super sovereign reserve currency as part of reforms in international monetary system. This would decrease the dependence on one currency to provide more stability in the future. Last week, same call was heard from Russia.

March 24th 2009: IATA says world airlines to suffer $4.7 billion in 2009
International Air Transport Association has said that airlines are expected to lose $4.7 billion in 2009. This figure is a revision of the estimated $2.5 billion predicted by IATA last year.

March 25th 2009: Japan’s exports halved
Japan’s exports declined by 49.4% yea-on-year plunge in February 2009 which also marked the fourth month running of record export decline. The imports were down by more than 40%.

March 25th 2009: Hospira to layoff around 1,700 employees
Hospira will cut around 1,700 jobs in the next two years at Lake Forest pharmaceutical and medication-delivery concern.

March 26th 2009: HSBC staff in UK face potential layoffs
HSBC has announced that around 1,200 HSBC workers in UK face potential layoffs following an operational review of its business.

March 26th 2009: US treasury secretary proposes sweeping overhaul of financial system
US treasury secretary Timothy Geithner has proposed to overhaul US financial system. The proposal includes regulating hedge funds, private equity and credit default swaps.

March 27th 2009: IBM to layoff 5,000 workers
IBM has told its employees it plans to lay off 5,000 workers this week.

March 27th 2009: KV Pharmaceuticals to lay off around 1,700 employees
The St. Louis based pharmaceutical company KV Pharmaceuticals plans to layoff around 1,700 employees which would mostly affect North Texas.

March 27th 2009: Agilent Technologies to cut 2,700 jobs
Santa Clara based Agilent Technologies will cut 2,700 jobs or 14% of its work force. Its Electronic Measurement Group makes instruments for testing networks, cell phones and other electronic equipment.

March 29th 2009: Norway to offer $4.56 billion to IMF
Oil-rich Norway has said it is ready to offer $4.56 billion to IMF and wants the institution to play a bigger role in monitoring financial markets.

March 31st 2009: GM’s CEO says bankruptcy possible
GM’s CEO Frtiz Henderson said the company could file for bankruptcy before the 60-day deadline set by the government to restructure itself.

March 31st 2009: Global banks to write down $17 billion more in 2009
J. P. Morgan Securities forecast global wholesale and investment banks might incur additional pretax write downs of $17 billion for the rest of 2009 to reach market-to-market valuations of structured credit assets.

AIG Paid Bonuses at the Expense of Tax Payers

The news that some employees in AIG's Financial Products unit received $165 million in retention bonuses has caused severe commotion throughout United States. This division dealt heavily in instruments called credit defaults swaps that lead to billions of dollars of losses. Government has paid AIG $170 billion in bailout money to help the insurer from going bankrupt and to avoid a serious blow to the world economy. In total, AIG is dishing out $450 million in retention bonuses. It was revealed in 2008 that some top executives of AIG spent more than $400,000 on spa treatment after the bailout money was committed by the government. This is the company that lost almost $62 billion in the last quarter of 2008.

The government of United States did nothing to stop AIG from paying out the bonuses. It has essentially made a mockery out of the tax payer's money. It seems as if the ordinary Americans are working hard, day and night, to fill the pockets of the same bankers and insurers who are responsible for pushing the US and the world into the financial mess. And the US government seems to be a party to this crisis. This is the government that controls or atleast thinks it controls almost the entire world. Why then, does it seem so helpless against its own bankers and insurers? It appears as if the people in the government are trying hard to cover up the financial king pins so that maximum amount of taxpayers' money is distributed among them before these giant companies collapse.

Public outrage is increasing day by day and the government will not be able to play games for long. People will, sooner or later, realize that the government is playing "good cop, bad cop", just to make a fool out of them. The preseident does nothing to stop the bonuses in the first place and then expresses his outrage in public to show the world the extent of his shock. It is becoming clearer that the people in power are just an extension of the greedy bankers and they are helping eachother out at the expense of the tax payer.

The Socialist America

According to Merriam-Webster dictionary, Socialism is "any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods." Sounds familiar? Well, United States seems to have turned into the biggest socialist country that the world has ever seen. No other government before must have spent billions, rather trillions of dollars in an attempt to buy, stabilize or support private organizations at such a large scale. United States in the past have insisted of being the champion of capitalism. So why the sudden change of heart? Well, because the heart condition is pretty bad. The "doctrine of necessity" had to kick in. This same country has been criticizing the socialist system for too long now. However, when it deemed appropriate, it felt no shame in adopting the same system. Why not let those go into bankruptcy that deserve it? Probably because its not the American people that the government cares about; its those bankers that it doen't want to lose. There is a very very strong lobby that does not want the system to break down. Such a break-down would not only bring changes in the finanical climate of the world, it would also turn upside down the global political system too. Someone, somewhere does not want that to happen. Whose interests are these politicians serving? Not the American people ofcourse. Something is terribly wrong. The American public needs to know the truth.

And why is the American government so inclined towards protectionism as is mentined in the latest Obama Spending Bill that has been critized by Canada, Europe and Asia. Is it justified to talk about globalization when it suits you and shun it when it does'nt? Is it right to tell other countries to open up their markets while you close your borders more and more? In order to have a just political and finanical system in the United States and the world, just policies would have to be implemented. This may only come about if the current financial system is allowed to fail or it inevitably fails. This would be very painful in the short run, however it may bear fruit in the longer run.

Financial Crisis Timeline: February 2009

Feb. 2nd 2009: US spending and income fall
According to the Commerce Department American consumers cut spending for a sixth consecutive month as it fell 1% in December 2008. Incomes fell by 0.2%.

Feb. 2nd 2009: California withholds tax refunds
Due to the current $16 billion budget gap projected to reach $42 billion by June 2010, California has withheld payments worth $3.5 billion that includes around $2 billion in cash refunds.

Feb. 2nd 2009: Macy’s to cut 7,000 jobs
The department store operator, Macy’s will cut 7,000 jobs and quarterly dividends as its quarterly earnings fell much below than expected that made its stock to fall.

Feb. 3rd 2009: PNC Financial to layoff 5,800 workers
PNC Financial Services Group will layoff 5,800 workers after suffering losses.

Feb. 5th 2009: US jobless claims rise to highest levels since 1982
Labor Department reported the number of newly jobless workers seeking benefits rose last week to a seasonally adjusted 626,000 from the previous week’s upwardly revised figure of 591,000.

Feb. 5th 2009: GSK to cut 10,000 jobs
British pharmaceutical group GSK will cut 10,000 jobs which amount to around 10% of its work force. The company’s net profits declined 11.7% to 4.6 billion pounds in 2008.

Feb. 6th 2009: Emerson to cut 14,000 jobs
St. Louis based Emerson Electric Co, manufacturer of garbage disposals, will cut 14,000 jobs this year. The company has slashed 7,000 positions since October last year due to lower demand.

Feb. 6th 2009: Regulators close failed banks
Regulators have closed nine federally insured financial institutions this year, the latest being First Bank Financial (California), Alliance Bank (Georgia) and County Bank (Georgia). Twenty five US banks failed in 2008, more than in the previous five years combined.


Feb. 6th 2009: Sharp to cut 1,500 jobs
Sharp will cut 1,500 jobs in its home market Japan after suffering heavy losses and sales slides.

Feb. 7th 2009: News Corp. suffers $7.6 billion in losses
News Corp. reported a $7.6 billion operating loss in the second quarter after it was hit by a downturn in advertising sales and booked a $8.4 billion write-downs in television licenses, goodwill and the value of newspapers assets.

Feb. 9th 2009: Nissan to layoff 20,000 jobs
Japan’s Nissan will cut 20,000 jobs worldwide by March 2010.

Feb. 10th 2009: GM to layoff 10,000 employees
General Motors, which was granted $13.4 billion in government loans in December 2008, will cut 10,000 global jobs (14% of workforce) in 2009 and impose pay-cuts on most remaining white collar US workers.

Feb. 10th 2009: FedEx Freight to cut 900 jobs
FedEx Freight, a unit of FedEx Corp. will cut 900 jobs at around 150 of its facilities.

Feb. 11th 2009: World oil use to fall most since 1982
According to International Energy Agency (IEA) world oil use in 2009 will fall to lowest level (84.7 million bpd), a fall of 980,000 barrels per day.

Feb. 11th 2009: US trade deficit falls to lowest level in six years
According to the Commerce Department, the US trade deficit fell by 4% in December 2008 to $39.9 billion due to depressed demand in imports as economy falters.

Feb. 11th 2009: US mortgage applications slump to 8 year low
The Mortgage Bankers Association said the seasonally adjusted US mortgage applications index fell nearly 25% to 235.9 last week that ended on 6th Feb 2009. This is the lowest level since the year 2000.

Feb. 11th 2009: UBS faces worst loss in Swiss history
The Swiss bank UBS suffered a 11 billon pounds loss in 2008 – the worst in Swiss history.

Feb. 11th 2009: Wal-Mart to layoff 800 employees
Wal-Mart will layoff 800 employees at its Arkansas headquarters and fewer new stores will be built.

Feb. 11th 2009: Chinese Chinalco to invest $19.5 billion in Rio Tinto
Chinese state-owned aluminum group Chinalco will spend up to $12.3 billion on stakes of up to 50% in nine of Rio Tinto’s mining assets and buy $7.2 billion of bonds convertible into shares. The deal will secure resource supplies to China and help cut Rio’s debts.

Feb. 11th 2009: Caterpillar offers early retirement to 2,000 employees
Caterpillar that laid off 20,000 employees last month is now offering voluntary retirement to around 2,000 production workers in United States.

Feb. 12th 2009: Spain enters recession
Spain’s entered recession for the first time since 1993 as its economy shrank 1% during the fourth quarter of 2008.

Feb. 12th 2009: Pioneer to cut 10,000 jobs; close television business
Japanese electronics giant Pioneer said it would cut 10,000 world-wide jobs and close television business as it braces for a record loss. The company will also reduce its top management’s pay by 20-50%.

Feb. 13th 2009: Obama’s stimulus package passed by Senate
The US senate yesterday approved President Obama’s $787 billion stimulus bill with 60-38 votes. The Sentate voted the compromise bill on the same day House of Representatives also passed it. Bipartisanship as expected by Obama was not achieved as votes were divided on party lines. The bill now awaits Obama’s signature to turn into a law.

Feb. 13th 2009: Lloyds shares sink as HBOS suffers a $12.8 billion loss
Shares of UK’s Lloyds Banking Group were down 31.6% as the announcement that HBOS (it acquired last year) suffered a loss of $12.8 billion in 2008 was made.

Feb. 13th 2009: Borgwarner to cut 4,500 jobs
US based auto parts manufacturer Borgwarner hasl cut 4,500 jobs in US and Europe ude to adverse conditions in the automobile sector. Other cost-cutting measures will also be taken.

Feb. 15th 2009: Japan’s economy is in biggest slump since 1974
Japan’s economy shrank 3.3% in the fourth quarter of 2008, the most since 1974 when the country faced problems due to the oil crisis.

Feb. 15th 2009: British economy to shrink 3.3% in 2009
The Confederation of British Industry has said that Britain’s economy will shrink 3.3% in 2009.

Feb. 15th 2009: Obama forming Auto Task-force; will drop “Car Czar” idea
Obama is forming a government task force to re-structure the dwindling Auto industry instead of naming a “Car Czar” with sweeping powers.

Feb. 17th 2009: Financial firm accused of massive fraud
Securities and Exchange Commission accused Robert Allen Stanford, chief of the Stanford Financial Group, of fraud in the sale of around $8 billion of high yielding certificates of deposit held in the firm’s bank in Antigua.

Feb. 17th 2009: Gold hits 7-months high
Spot gold rose to $966.15/968.15 an ounce in New York, a fresh seven-month high, after US manufacturing data showed weaker performance than expected

Feb. 17th 2009: Barclays closes down Equifirst
Barclays has shut down its US mortgage business organization, Equifirst, less than 2 years after buying the business.

Feb. 17th 2009: California out of cash; may layoff 20,000 state workers
California, the world’s eighth biggest economy, is on the brink of running out of cash and will notify around state 20,000 workers today that their jobs may be eliminated.

Feb. 17th 2009: Trump Entertainment files for bankruptcy
Trump Entertainment Resorts that owns three casino hotels in Atlantic City and New Jersey including Trump Taj Mahal, Trump Plaza and Trump Marina, filed for Chapter 11 bankruptcy protection due to declining gambling revenues.

Feb. 17th 2009: Liberty Media saves Sirius XM from bankruptcy
Liberty Media will invest $530 million in Sirius XM Radio for a 40% stake and thus save the company from impending bankruptcy.

Feb. 17th 2009: Smithfield Foods to layoff 1,800 workers and close plants
Smithfield Foods will cut 1,800 jobs and close six plants by December 2009 in United States

Feb. 17th 2009: Clariant to cut 1,000 jobs
Swiss chemicals manufacturer Clariant will cut 1,ooo jobs as it faced heavy fourth quarter losses in 2008. The company will specify later where the losses will be made.

Feb. 18th 2009: Obama unveils $275 billion housing plan
US President Obama unveiled the $275 billion to help 9 million American families from losing their homes.

Feb. 18th 2009: Taiwan’s economy hits recession
Taiwan’s economy showed an 8.36% recession in the last quarter of 2008 and is expected to fall by 3% in 2009. The Central Bank announced a 0.25% cut today which was the seventh such cut since September 2008.

Feb. 18th 2009: Goodyear plans to cut 5,000 jobs
Goodyear, the largest US tire maker plans to cut 5,000 world-wide jobs or 6.7% of its workforce in addition to freezing salaries world-wide and cutting production.

Feb. 25th 2009: Pacific Brands to cut jobs and eliminate labels
Australia’s biggest manufacturer of underwear, Pacific Brands will reduce 23% of jobs, eliminate labels and end most of its manufacturing.

Feb. 26th 2009: Fannie Mae seeks aid after $25.2 billion loss
Fannie Mae lost $25.2 billion in the fourth quarter of 2008 and has asked the government for $15.2 billion in aid. Fannie Mae was taken over by regulators in September 2008.

Feb. 27th 2009: Obama unveils $3.55 trillion spending plan
Obama has unveiled a $3.55 trillion spending plan that would make the deficit hit $1.75 trillion in the current fiscal year and raise taxes on the wealthy.

Feb. 27th 2009: US economy shrinks 6.2% in fourth quarter of 2008
The Commerce Department announced that the US economy shrank at an annual rate of 6.2% in the final quarter of 2008, much steeper than the earlier expected 3.8% drop.


Feb. 27th 2009: New Jobless claims reach 667,000
The Labor Department has said that the US workers who lost their jobs filed 667,000 new claims for unemployment insurance last week. The number of job hunters receiving continuing unemployment benefits topped 6.5 million, a record.

Feb. 27th 2009: US oil demand lowest in a decade
The US oil demand in December 2008 was revised by 4% from an early estimate to 19.199 million barrels per day, lowest since 1988.

Feb. 27th 2009: US Treasury to raise stake in Citigroup
The Treasury Department has reached a deal with Citigroup whereby its stake in the struggling company would increase to 36% from 8% as Citigroup announced its 2008 loss to have reached $27.7 billion. Under the deal the Treasury Department agreed to convert up to $25 billion of preferred stock investment in the bank into common stock.

Feb. 27th 2009: 40,000 Council jobs threatened in UK
At least 40,000 jobs are expected to be lost in UK this year as Councils plan to layoff.

Feb. 27th 2009: Nordic region in steep recession
Nordic region has entered steep recession as Denmark confirmed it is in its worst recession in three decades while output in Sweden and Finland have shrunk the most in at least 17 years.

Feb. 27th 2009: GM posts $9.6 billion fourth quarter loss
GM has posted a $9.6 billion fourth quarter loss in 2008. In total GM lost $30.9 billion in the year 2008.

Feb. 27th 2009: GM spins off Opel; wants $4billion from Government
The European arm of General Motors announced it would spin off its German subsidiary Opel in to a separate company and will also need $4 billion from government as bailout money.

Feb. 27th 2009: Sotheby’s to cut more jobs and reduce selling in Amsterdam
Auctioneer Sotheby’s will cut more jobs and reduce selling in Amsterdam as part of a restructuring plan in UK and Continental Europe.

Feb. 27th 2009: JP Morgan Chase revises layoff figure to 14,000
JP Morgan Chase announced it would cut 14,000 jobs, up from the 9,200 figure it announced in December 2008.

Feb. 27th 2009: Dell’s net income drops 48%; may cut jobs
Dell’s net income dropped by 48% for the quarter ended Jan 31, 2009. The company may cut jobs in the Asia-Pacific region.

Feb. 27th 2009: Nortel to cut additional 3,200 jobs globally
Nortel Networks will cut 3,200 additional jobs globally in the coming months due to the “unprecedentent economic environment” as put by the company.

Feb. 27th 2009: California unemployment reaches 10.1%
Unemployment rate in California has reached 10.1%, highest in 26 years.

Feb. 27th 2009: RBS suffers historic loss
UK’s Royal Bank of Scotland announced it suffered $24.1 billion, UK’s biggest ever loss by any company as the government agreed to put in $25 billion bailout money in the bank as fresh capital.

Feb. 28th 2009: AIG nears pact with Government
AIG is close to a deal with US government that would include an additional $30 billion equity commitment, more lenient terms on existing preferred investment and a lower interest rate on an existing $60 billion government credit line. Last year government had increased its aid to the troubled insurer to $150 billion US.

Feb 28th 2009: HSBC plans shares sales up to $18 billion
Britain’s HSBC will announce a share sale of up to 418 billion, in what could become the country’s biggest ever rights issue.

Financial Crisis Timeline: January 2009

Jan 5 2009: Obama pushes for new stimulus plan
President elect Barak Obama met with members of congress for the approval of the new $770 billion stimulus plan over 2 years that seeks $310 billion in tax cuts.

Jan 6 2009: Cigna to layoff 1,100
Cigna Corp. said it would cut 1,100 jobs worldwide.

Jan 6 2009: Alcoa to cut 13,500 jobs
Pittsburgh based Alcoa, the world’s third largest aluminum manufacturer will cut 13,500 jobs (13% of workforce) and slash spending and output to cope with the economic slowdown. It will also relieve around 1,700 contractors in addition.

Jan 8 2009: Citigroup supports plan to adjust mortgages in bankruptcies
Citigroup has agreed to a plan that would let bankruptcy judges alter mortgages in an effort to prevent more housing foreclosures.

Jan 8 2009: Wal-Mart slashes forecasts
Wal-Mart lowered its earnings forecast to 91-94 cents a share for its fiscal fourth quarter, from its prior guidance of $1.03 to $1.07 a share, issued in November. This was mainly due to the fact that Wal-Mart missed the same store sales forecasts for December.

Jan 8 2009: Nissan to cut 12,000 jobs
Japan’s Nissan, the third largest auto manufacturer in the country, announced it would cut 1,200 jobs at a UK factory due to dramatic decline in demand


Jan 8 2009: Lenovo to cut 2,500 jobs
China’s computer manufacturer, Lenovo, will cut 2,500 jobs, or 11% of its work force, around the world in a bid to enhance savings.

Jan 8 2009: TDK to layoff 9000 workers
Japan’s Electronic components manufacturer announced that it would layoff 9000 workers and close four plants overseas due to drop in demand.

Jan 8 2009: Billion dollar Satyam fraud shakes Indian market
Indian stocks plunged 7.2% yesterday as Satyam’s chairman Ramalinga Raju admitted the Hyderabad-based software services firm overstated its cash and bank balances by $1.03 billion in its September end balance sheet. Satyam shares fell 77.69%.


Jan 9 2009: Unemployment highest since 1945
According to a US Labor Department report, United States lost 2.6 million jobs in 2008, highest since 1945 when 2.8 millions jobs were cut. Unemployment reached 7.2% nationwide in December, highest in 16 years. Employers slashed 524,000 jobs in December, 584,000 in November 2008 and 423,000 in October 2008.

Jan 9 2009: Morgan Stanley may takeover Smith Barney
Citigroup is in talks with Morgan Stanley to merge their brokerage operations in a deal that could result in Morgan Stanley taking over Citibank’s Smith Barney unit. The move will result in the biggest mortgage in the country (8,000 Morgan Stanley brokers and 11,000 Smith Barney brokers). It would surpass Bank of America’s recently acquired Merrill Lynch brokerage unit (16,000 brokers).

Jan 10 2009: Schlumberger to layoff 1,000 employees
The world’s largest oil fields provider Schlumberger announced it would cut 5% of its North American workforce (up to 1,000 jobs) in response to global slowdown in oil and gas drilling.

Jan 12 2009: Boeing to layoff 4,500
Chicago-based Boeing will layoff 4,500 workers at its Seatle based Airplanes unit that builds wide-body planes such as 747 and 737.

Jan 13 2009: Pfizer to layoff 800 scientists
World’s biggest pharmaceutical company Pfizer announced it would layoff 800 global researchers by the end of the year out of a total of around 10,000 researchers.

Jan 14 2009: Retail sales in December 2008 fall more than expected
The Commerce Department declared total retail sales slumped 2.7% to a seasonally adjusted $343.2 billion in December 2008. November sales fell to a revised 2.1% figure following an earlier estimate of 1.8%.

Jan 14 2009:Nortell Networks files for bankruptcy

Canada based Nortell Networks, the biggest manufacturer of telephone equipment, along with a number of its affiliates filed for Chapter 11 bankruptcy in US. Its shares fell more than 76% in electronic pre-market trading.

Jan 14 2009: Citigroup to shed “Financial Supermarket” Model
Citigroup announced yesterday it agreed to merge Smith Barney into a joint venture with Morgan Stanley. It is expected to continue selling its assets that would result in dismantling of the financial supermarket model. It could sell assets worth around $600 billion. The Citigroup’s shares today fell below the $5 critical level.

Jan 14 2009: Seagate to shed 2,900 jobs
Seagate Technology announced it would cut 2,900 or 6% of its world-wide work force. This includes 10% reduction in the company’s US work force.

Jan 14 2009: Councils in UK to cut thousands of jobs
The Times reported councils across UK are to cut thousands of jobs that would affect the job market
adversely.

Jan 14 2009: Barclays lays off 4,200 workers
Barclays today announced it would cut 2,100 workers from its UK banking business, the same number it announced yesterday to be laid off in fund management, private banking and investment banking units.

Jan 14 2009: Freemans Grattan to cut 3,800 UK jobs
Freemans Grattan, British home shopping firm owned by mail order German Otto Group, will cut 3,800 UK jobs due to losses.

Jan 15 2009: Delta Airlines to cut 2,000 jobs
Delta Airlines that bought North West Airlines lat year, is expected to cut 4,000 jobs

Jan 15 2009: Meadwestvaco to cut additional 2,000 jobs
Paper and plastic products manufacturer Meadwestvaco announced it would cut 2,000 jobs. This announcement came just two months after the Virginia based company announced major job cuts.

Jan 15 2009: Holcim to cut 3,300 jobs
Switzerland’s Holcim, one of the largest cement manufacturing groups in the world will layoff 3,300 jobs.

Jan 16 2009: Citigroup splits and announces $8.29 billion loss
Citigroup announced its plan to split into two and announced the fourth quarter loss of $8.29 billion.

Jan 16 2009: Bank of America loses $1.79 billion
Bank of America posted a loss of $1.79 billion in the fourth quarter, its first quarterly loss in 17 years. Bank of America will get a $20 billion life-line from the government to help absorb Merrill Lynch.

Jan 16 2009: Merrill Lynch loses $15.3 billion
Merrill Lynch posted a loss of $15.3 billion in the fourth quarter due to writedowns of troubled assets.

Jan 16 2009: Consumer Price Index falls for third consecutive month
The consumer price index fell 0.7% in December 2008, after falling 1.7% in November.

Jan 16 2009: Deal for Circuit City fails; will be liquidated with 30,000 becoming jobless
It is expected that the deal for selling Circuit City has failed and the company will be fully liquidated. The company had filed for Chapter 11 bankruptcy in November. The liquidation will result in 30,000 employees being laid off.

Jan 16 2009: Chrysler Financial gets $1.5 billion loan
Chrysler’s finance arm, Chrysler Financials will get $1.5 billion from the Treasury for 5 years to fund new car loans and boost sales.

Jan 16 2009: Wellpoint to cut 1,500 jobs
US health insurer Wellpoint will cut 1,500 jobs (3.5% of workforce) to reduce administrative costs.

Jan 16 2009: HSBC stocks hit 10 year low
Shares of Europe’s biggest bank HSBC fell to 543 pence, a 10 year low today (down 0.8%). The rating of the stock has been downgraded by Goldman Sachs.

Jan 16 2009: GE to cut 7,000 – 11,000 jobs
GE Capital Unit will cut between 7,000 to 11,000 jobs and reduce costs by $2 billion at the unit in 2009.

Jan 16 2009: Hertz to layoff 4,000
Rental car company Hertz will cut down 4,000 jobs worldwide to cut costs in the face of growing economic meltdown.

Jan 16 2009: AMD to cut 1,100 jobs
Advanced Micro Devices announced it would cut 1,100 jobs and reduce salaries up to 20% of its top executives due to slowing economy.

Jan 16 2009: ConocoPhillips to cut 4% of its workforce
The third largest US oil company announced it would cut 4% of its workforce and expects big write downs on some of its exploration and production assets.

Jan 19 2009: Second UK government bailout; Bank stocks plummet
The British government is to announce a second bailout package for banks that would guarantee at least 100 billion pounds ($220 billion) of new lending. Bank shares in the UK stock exchange fell drastically despite the bailout. The shares of Lloyd’s Banking Group fell by 34%, while those of Barclays fell by 10%.

Jan 19 2009: RBS to report biggest loss in UK history
RBS would report a loss of 28 billion pounds ($41 US) for 2008, the biggest loss reported in the history of UK. The shares of RBS fell 66% to a 23 year low level. Following the announcement of the new bailout package, the taxpayers’ share in RBS could rise from 57.9% to 70%.

Jan 20 2009: Rohm and Haas to cut 900 additional jobs
The chemical maker, Rohm and Haas, being bought by Dow Chemical will cut 900 jobs in addition to 925 jobs it cut last June.

Jan 21 2009: Singapore’s economy in worst ever recession
Singapore’s economy has entered the worst ever recession as it shrank in the fourth quarter at a seasonally adjusted annualized pace of 16.9%.

Jan 21 2009: Australia’s BHP to cut 6,000 jobs and take a US $1.6 billion hit
BHP Billiton will cut 6,000 jobs (6%) of its work force and lose its giant Ravens Thorpe nickel mine in Australia that would lead to $1.6 billion in impairment charges in FY 2009.

Jan 21 2009: Clear Channel to layoff 1,850 nationwide
San Antonio (TX) based Clear Channel Communications, the world’s largest outdoor advertising company (973,000 displays in 60 countries), will layoff 1,850 employees (9% of workforce) across US in response to sagging economy.

Jan 21 2009: Warner Bros. to cut 800 jobs
Movie Studio Warner Brothers announced it would lay off 800 workers (10% of workforce) in the coming weeks due to the adverse economic conditions.

Jan 22 2009: Ericsson to cut 5,000 jobs
The fourth quarter profit in 2008 has been announced as 1.7 billion Swedish kronors less than for the same quarter in 2007. Ericsson has blamed restructuring and losses faced by Sony Ericsson for the drop. The company is laying off 5,000 global workers, mainly consultants and other temporary staff.

Jan 22 2009: Sun Microsystems to layoff 5,000 employees
Sun Microsystems laid off 1,300 employees and said that 5,000 people might lose their jobs in the next 18 months.

Jan 22 2009: Intel to shut 4 plants and layoff 6,000 workers
Intel Corp. announced it would shut down 4 chip plants (one each in Oregon, California, Malaysia and Philippines) and layoff 6,000 workers worldwide.

Jan 22 2009: Samsung declares first ever quarterly net and operating loss
South Korea’s Samsung Electronics posted first ever quarterly net and operating loss due to weak chip sales and decline in flatscreen sales. The company announced net operating loss of US $16.16 million in the fourth quarter of 2008.

Jan 22 2009: Huntsman to close UK plant; cut 1,175 jobs
US chemical manufacturer Huntsman (Woodlands, Texas based) announced it would cut 1,175 jobs and close a titanium dioxide plant in UK.

Jan 22 2009: AMD suffers a loss of $1.4 billion
Sunnyvale, California based Advanced Micro Devises suffered a net loss of US $1.4 billion in the fourth quarter of 2008. The net loss for the same quarter in 2007 was US $1.8 billion.

Jan 23 2009: Microsoft $1 billion short in sales target; will cut 5,000 jobs
Microsoft missed the fourth quarter sales target by $1billion US due to sluggish PC market and due to customers shifting to low cost “netbooks. Microsoft has announced that it would be laying off 5,000 workers in the next 18 months, first such layoffs since its foundation 34 years ago.

Jan 26 2009: Earnings of American Express fall
Fourth quarter earnings of American Express fell by 72% due to higher loan losses, lower customer spending and a strengthening US dollar.

Jan 26 2009: Texas Instruments’ profits fall; will cut 3,400 jobs
Texas Instruments announced it would cut 12% of its workforce or 3,400 jobs after posting a quarterly fall in profits.

Jan 26 2009: US financier arrested due to $400 million ponzi scheme
Nicholas Cosmo, Chief Executive of Agape World Inc. based in New York has been arrested due to allegedly running a “ponzi” scheme worth $400 million.

Jan 26 2009: Fannie Mai could need $16 billion
Mortgage Finance Company Fannie Mai could need $16 billion from US government through taxpayers’ aid. Freddie Mac last week said it needed $35 billion from government in addition to $13.8 billion it received last year.

Jan 26 2009: Corus to cut 3,500 jobs
Tata’s Corus, Europe’s second largest steel maker will cut 3,500 jobs in UK and Netherlands following collapse in demand from car manufacturers and builders.

Jan 26 2009: Phillips to cut 6,000 jobs
Consumer Electronics giant Phillips is planning to cut 6,000 of its global workforce due to fourth quarter losses in 2008 that amounted to roughly $1.9 billion.

Jan 26 2009: Sprint to cut 8,000 jobs
Sprint plans to cut 8,000 jobs (14% of workforce) by the end of March after an ill-fated merger with Nextel.

Jan 26 2009: ING to layoff 7,000 workers
ING Group, the biggest Dutch financial services company, will cut 7,000 jobs (5.4% of workforce) following the second successive quarterly loss. The company is expected to post a 1 billion Euro loss for the year 2008.

Jan 26 2009: Home Depot to layoff 7,000 employees
Home Depot is cutting 7,000 positions due to the slump in housing activity. The company will also close several stores.

Jan 26 2009: Caterpillar to layoff 20,000 jobs
The heavy machinery maker Caterpillar will be cutting 20,000 jobs or 18% of its workforce.


Jan 26 2009: Starbucks to layoff 1,000 additional employees
Coffee giant Star Bucks will be laying off 1,000 additional employees due to some new problems that the company is facing.

Jan 27 2009: Best Buy to cut jobs
Best Buy will cut an unknown number of jobs in addition to 500 workers who agreed to leave voluntarily.

Jan 28 2009: Obama wins the new $825 billion Stimulus Package from House
The US House of Representatives passed Obama’s $825 billion economic stimulus package on a 244-188 vote. The package will offer $275 billion in tax cuts and $550 billion in spending.

Jan 28 2009: Wells Fargo loses $2.55 billion
Wells Fargo announced the first quarterly loss of $2.55 billion since 2001. Its stocks soared 31%.

Jan 28 2009: Target to cut 9% of headquarters staff and close distribution center
Discount retailer Target Corp. will cut 9% of its headquarters staff, close a distribution center and reduce planned store openings. The affected jobs will total to around 1,500.

Jan 29 2009: Boeing to cut 10,000 world-wide jobs
Boeing whose net income fell 34% in 20008 to $2.7 billion, announced it would cut 10,000 world-wide jobs in 2009 as order cancellations mount.

Jan 29 2009: Startbucks to close 300 stores; cut 6,000 jobs
Startbucks will be closing 300 stores and layoff 6,000 workers as losses rise.

Jan 30 2009: US GDP sinks to the lowest in a quarter-century
The US economy shrank at 3.8% pace at the end of 2008 which is the worst in last 25 years. The figures are expected to be revised even lower in the months to come.

Jan 30 2009: Cessna to cut 4,600 US jobs
Cessna Aircraft Co. announced to cut 2,000 jobs in addition to 2,600 indicated earlier.

Jan 31 2009: NEC to cut 20,000 jobs
Japanese electronics giant NEC will cut 20,000 Japanese and world-wide jobs as it lost 129 billion Yens in the last nine months.

Financial Crisis Timeline: 2008

Timeline of Financial Crisis for the year 2008:


Feb 20: Sharper Image files for bankruptcy
San Francisco based Retailer of high-end electronics and gifts, Sharper Image Inc. filed for bankruptcy protection due to declining sales, three continuous years of losses and litigation. The company operates 184 locations country-wide.

MARCH 16: Bear Sterns bought by JP Morgan Chase & Co
Bear Stearns is bought by JP Morgan Chase & Co in a deal orchestrated by and backed up by the government following a sharp decline in shares and a collapse in confidence in the company.

JULY 11: IndyMac Takeover
Federal regulators seize IndyMac Bank after it succumbs to the pressures of tighter credit, tumbling home prices and rising foreclosures. IndyMac is the largest thrift ever to fail in the US.

July 30: Mervyns files for bankruptcy protection
Hayward, California based store, Mervyns, has filed for Chapter 11 bankruptcy protection.

Sept. 7: Fannie Mae, Freddie Mac Seized by Government
The U.S. government takes control of mortgage companies Fannie Mae and Freddie Mac, which held about half of the country's mortgages. The move put the liability of more than $5 trillion of mortgages on the taxpayers.

Sept. 14: Bank of America Buys Merrill Lynch
Bank of America, the nation's largest bank, credit card company and mortgage lender, buys Merrill Lynch for $50 billion. The purchase makes Bank of America the largest retail brokerage.

Sept. 15: Lehman Brothers Files for Bankruptcy
After the firm reported $19.3 billion in revenue in 2007, Lehman Brothers was forced to file for bankruptcy after it failed to find a buyer for its $60 billion in failing assets. The company had been in business for 158 years.

Sept. 16: Government Gives AIG Emergency Loan
In exchange for nearly 80 percent equity stake in the company, the government announces it will give insurance giant AIG an $85 billion emergency loan. The government said a failure of AIG could be devastating to the already struggling economy and financial markets.

Sept. 17: Barclays Makes Deal With Lehman
After passing on buying Lehman Brothers before the firm filed for bankruptcy, Barclays -- a British bank -- buys the company's North American investment banking and trading operations.

Sept. 19: Bush Announces Bailout Plan
The Bush administration asks Congress for powers to execute a $700 billion plan to buy bad debt and mortgages.

Sept. 25: JP Morgan Acquires Washington Mutual Bank
JP Morgan Chase announced the acquisition of Washington Mutual Bank, the largest savings and loan in US, from Washington Mutual Inc. JP Morgan will assume assets, deposits and branches for a $1.9 billion payment to FDIC (Federal Deposit Insurance Corporation).

Sept. 21: Goldman Sachs, Morgan Stanley Change Status
Goldman Sachs and Morgan Stanley get approval from the Federal Reserve to transform from investment banks to bank holding companies. The change means the companies will be regulated by the Federal Reserve, and will give them access to its emergency loan program.

Sept. 29: Citigroup Agrees To Buy Wachovia's Banking Operations
Citigroup agrees to buy the majority of Wachovia's banking operations for $2.1 billion in stock.

Sept. 29: House Rejects Bailout Package
The House of Representatives rejects the $700 billion rescue bill by a 228-205 vote.

Sept. 29: Dow Suffers Largest Ever One-Day Drop
The Dow falls 777.68 points to mark its largest one-day point loss in history. The decline is spurred by the House of Representative's rejection of the $700 rescue plan.

Oct. 1: Senate Passes Bailout
The Senate passes an amended proposed bailout bill, putting pressure on the House to do the same.

Oct. 3: Wells Fargo Tries To Acquire Wachovia
Days after Citigroup agrees to buy Wachovia's banking operations, Wells Fargo says it will acquire the company for $14.8 billion in an all-stock deal, without government assistance. This starts a battle between Citigroup and Wells Fargo for the company.

Oct. 3: House Approves Bailout, Bush Signs Bill
After the House voted in favor of the bailout 263-171, President George W. Bush quickly signed it. After the vote Bush said the government "acted boldly" to prevent the Wall Street crisis from spreading, but said "our economy continues to face serious challenges."

Oct. 6: Dow Drops Below 10,000
For the first time since 2004, the Dow Jones industrials dropped below 10,000. At one point during the day, the Dow was down 800 points before it rallied near closing to finish the day down 369 at 9,955.50.

Oct. 8: AIG Gets Another Loan From Feds
The Federal Reserve agrees to provide AIG with a loan of up to $37.8 billion, on top of the $85 billion loan it received in September.

Oct. 8: Motorola to cut 3,000 jobs
Motorola announced it would cut 3,000 or less than 5% of its work force and delay the spin-off of its mobile devices unit as it plans to try production of smart phones to excite the public in 2009.

Oct. 9: Dow Falls Below 9,000
Financial fears caused the Dow to drop to below 9,000 for the first time in five years. The Dow dropped almost 700 points to close at 8,579.19.

Oct. 10: Wells Fargo Wins Battle For Wachovia
Antitrust regulators clear Wells Fargo to acquire Wachovia.

Oct 21: IMF to rescue Iceland
Iceland, teetering on the verge of national bankruptcy due to global financial meltdown, is likely to receive a $6 billion (€4.5 billion) rescue package tailored by the International Monetary Fund (IMF), Nordic countries and Japan.

Oct. 22: Ukraine to get more than $20 billion in international loans
Ukraine will receive more than $20 billion in international loans, out of which around $16 billion would be provided by IMF.

Oct. 28: Dow Has Second-Largest Point Gain Ever
The Dow soars 889 points to reach the 9,065 level.

Oct. 30: Economy Shrinks In Third Quarter, Signaling Recession
The government says consumers cut back on their spending in the third quarter by the biggest amount in 28 years.

Nov. 5: Economy Stumbles After Election
The Dow falls more than 400 points on renewed fears of a recession.

Nov. 10: AIG Gets Bigger Bailout
The government provides new financial assistance to troubled insurance giant American International Group, including pouring $40 billion into the company in return for partial ownership.

Nov. 10: DHL Cuts 9,500 Jobs
Mail and logistics company Deutsche Post AG says it will cut 9,500 jobs and close all of its DHL express service centers in the U.S. amid heavy losses in the market there.

Nov 10: Circuit City Files for bankruptcy protection
Virginia based Circuit City filed for Chapter 11 Bankruptcy despite closing down 155 stores and cutting 17% of its 43,000 work force.


Nov. 13: Jobless Claims Soar
The government says that the number of newly laid-off individuals seeking unemployment benefits jumped more than expected last week to a seven-year high. The Labor Department says jobless claims increased by 32,000 to a seasonally adjusted 516,000.

Nov. 13: Budget Deficit Reaches Record $237.2 Billion
The federal government begins the new budget year with a record deficit of $237.2 billion, reflecting the billions of dollars the government has started to pay out to rescue the financial system. The Treasury Department says the deficit for the first month in the new budget year was the highest monthly imbalance on record.

Nov. 14: Bush Wants to Give $25 Billion In Loans To Carmakers
The White House is throwing support behind a plan to speed release of $25 billion in loans to troubled automakers but is rejecting a Democratic proposal to use money from a financial bailout for car companies. Spokeswoman Dana Perino said the Democratic proposal would lead to partisan gridlock because the $700 billion rescue package was never intended to help automakers and shouldn't be now.

Nov. 15: World Leaders Seek To Prevent Future Economic Crisis
World leaders are agreeing to flag risky investing and regulatory weak spots in hopes of avoiding future financial meltdowns. President George W. Bush and leaders from nearly two dozen countries endorse broad goals to fend off any future crisis and revive the economy. They are pledging to lay the foundation for reform so that the kind of global crisis now dragging down the economy does not happen again.

Nov. 15: Pakistan to get IMF bailout
Pakistan announced today that the country will receive $7.6 billion from IMF. This would be the first IMF rescue in Asia since the global financial crisis began.

Nov. 17: Citigroup to cut 53,000 Jobs
Citigroup, the second biggest bank in US will slash 53,000 jobs in the coming quarters after suffering heavy losses in the current financial crisis. The job cut announced is in addition to the 22,000 job cut the company announced in last October.

Nov. 19: Dow drops below 8,000 for the first time since 2003
Wall Street hit its lowest level since 2003. The Dow Jones industrial average fell below the 8,000 mark. It dropped nearly 430 points to 7,997. The news came as major automakers await a decision from Congress about a bailout for their industry.

Nov. 20: Jobless Claims Rise
Labor Department reports that claims for unemployment benefits hit their highest level since 1992. The Labor Department said new applications for jobless benefits rose to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week.

Nov. 22: UK unveils stimulus plan
British Finance Minister Alistair Darling has unveiled a $430 billion package of measures intended to stimulate the flagging U.K. economy, suspending rules that have kept government borrowing in check since the ruling Labor Party came to power in 1997.

Nov. 24: Citigroup Rescue
US Government takes $20 billion stake in Citigroup, guarantees $306 billion in risky loans and securities

Nov 26. European Commission launches stimulus plan
The European Commission unveiled a Recovery Plan worth about EUR200 billion or 1.5% of European Union's gross domestic product. The plan envisages timely, targeted and temporary fiscal stimulus for the economy. Nearly EUR170 billion will be in national budgets and around EUR30 billion will be in the EU and European Investment Bank budgets.

Dec. 2: US Recession Official
The National Bureau of Economic Research (NBER) declared that he US economy is in recession and the economic slump infact started in December 2007. It is expected to last till the middle of 2009 and will be the most severe slump since the 1981-82 recessions.

Dec 2: JP Morgan to Axe 9,200 Washington Mutual Jobs
JP Morgan Chase announced it will cut 9,200 jobs at former Washington Mutual, which on 25th Sep. became the largest US bank to fail. The cut amounts to more than 21% of the work force.

Dec 2: Oil Falls to 3 Year Low
Crude oil fell to the lowest in more than three years on signs the U.S., the world’s largest energy consumer, may be in the longest slump since World War II.

Dec 3: Bank of America Could Cut 30,000 Jobs as it Absorbs Merrill Lynch
Bank of America could end up cutting 30,000 jobs as it moves to absorb Merrill Lynch. The majority of layoffs are likely to come from Merrill’s side of business.

Dec 3: US Automakers Want Up to $34 Billion in Aid
General Motors, Ford and Chrysler submitted requests to Congress for what could amount to $34 billion in Federal assistance to save the struggling industry from collapse.

Dec 4: Dupont to cut 2,500 jobs
Dupont says it will cut 2,500 jobs, mostly serving the U.S. and European automotive and construction markets, because of lower demand linked to the steep global decline in home building, auto sales and consumer spending.

Dec 5: AT&T to cut jobs by 12,000
AT&T said Thursday that it would cut jobs by 12,000 or 4% of its workforce – the job cuts will take place in December and throughout 2009.

Dec 5: Viacom to cut 850 positions
Responding to the economic downturn and weaker revenue, Viacom Inc. is slashing more than 850 jobs (7% of its workforce) and freezing salary increases next year. Deepest cuts will come at its division MTV Networks, which includes MTV, Nickelodeon, VH1 and Comedy Central.

Dec 8: Dow Chemical to cut 11,000 jobs
Dow Chemical announced it was slashing 5,000 full time jobs, or 11% of its global staff, and an additional 6,000 contract workers, as it cuts 30% of its total production.

Dec 8: 3M Slashes 1,800 jobs, cuts 2008 outlook
Diversified manufacturer 3M Co said on Monday it would cut 1,800 jobs and lowered its 2008 outlook due to the global economic downturn, sending its shares down as much as 7.4 percent.

Dec 9: NYC Comptroller says city may lose 165,000 jobs
NYC Comptroller William C. Thompson Jr. said over the next two years about 165,000 jobs may be lost, of that around 35,000 on Wall Street. He said the city will not see the bottom of economic downturn until the beginning of 2010.

Dec 9: Sony to cut 16,000 jobs
Japan’s Sony said it would cut its global work force by 4% or 16,000 jobs. This would include half of the regular and half of contractual employees.

Dec 9: Oil falls 4% on forecast for shrinking demand
US crude oil fell to $42 a barrel after hitting a session low of $41.95 after US government forecast the world economic slowdown would shrink global oil consumption this year for the first time since the early 80s.

Dec 9: Rio Tinto to cut 14,000 jobs
Global miner Rio Tinto, faced with $40 billion in net debt, said it could cut 13% of its global workforce or 14,000 jobs, slash capital spending by more than half and sell more assets.

Dec 9: Anheuser-Busch to cut 1,400 jobs
World’s largest brewer, Anheuser-Busch announced it would cut some 1,400 US jobs – or another 6% of its workforce to help save atleast $15 billion a year.

Dec 10: US House passes $14 billion Auto Bailout – Chances grim in Senate
US House of Representatives passed the $14 billion Auto Bailout package for the “Big Three”, GM, Ford and Chrysler. However, it would be an uphill task to get it approved by the Senate. The loans are intended to carry the companies through March 31 2008, after which more help would be determined according to the quality of restructuring implemented by the “Detroit Three”.

Dec 10: Yahoo to cut 1,500 jobs
Yahoo announced it would cut 1,500 jobs which that would include 3% of its workforce in India.

Dec 10: Office Depot to cut 2,200 jobs
Faced with shrinking profits and ever-increasing operating costs, Office Depot has decided to cut 2,200 jobs across North America and close 112 stores in the next 3 months.

Dec 11: US Retail Sales post biggest drop in 5 years
SpendingPlus, a subsidiary of Master Card reported US retail sales excluding autos posted their biggest monthly drop (3.8%) in 5 years November, despite a sales spurt over the crucial “Black Friday” weekend – the three days after the Thanksgiving Holiday in November.

Dec 11: KB Toys files for bankruptcy protection
KB Toys filed for bankruptcy protection just 14 days before Christmas despite offering heavy discounts to generate sales. The company operates 277 mall-based stores, 40 KB Toy Works stores which are mainly in strip malls, 114 outlet stores and 30 short-term holiday stores. It has 4,400 full-time employees and 6,515 seasonal employees

Dec 11: BlackRock to cut 500 jobs
BlackRock Inc., the largest publicly traded asset manager, has cut 500 jobs worldwide as it grapples with a surge in outflows during the global credit crisis.

Dec 11: Stanley Works to cut 2,000 jobs and close 3 plants
Tool maker Stanley Works said today it will cut 2,000 jobs, close 3 manufacturing facilities and revise future outlook, citing weakness in its construction and industrial segments and the effect of a stronger dollar.

Dec 12: Investors facing billions in potential losses due to Madoff Fraud
Bernard Madoff, 70-year old former chairman of NASDAQ Stock Exchange, was arrested Thursday for allegedly masterminding a Ponzi scheme through a hedge fund he ran. Potential losses from the fraud are said to be around $50 billion and the affected may include rich investors from New York and Florida, banks, funds of funds, corporations, endowments, universities and foundations. The full extent of damage will only be known with time.


Dec 15: Toyota to cut sales goal and costs
World’s top automaker Toyota is expected to cut its 2009 global sales forecast by atleast 1 million vehicles to 8-8.7 million (as opposed to planned 9.7 million before), down from the record sales of 9.37 million in 2007. Toyota is also expected to announce cost cutting measures.

Dec 17: Federal Reserve cuts key interest rate to historic low
In a move to stimulate the ever-weakening US economy, Federal Reserve slashed the key interest rate (target fed-funds rate) from 1% to a range of 0 to 0.25% - the lowest since it began publishing the target in 1990. The move was met by an overnight rally in US stock markets.

Dec 17: Woolworth’s to close 807 stores
Woolworths, the 99-year old bastion of the British high street that sold everything from sweets to toasters, will close by Jan. 5 2009 with the loss of 27,000 jobs.

Dec 17: France’s Valeo to cut 5,000 jobs
The second biggest auto parts maker of France Valeo announced it would cut 5,000 jobs or 9.3% of its workforce due to sharp drop in vehicle production. Around 1,600 positions would go in French plants while 1,800 jobs will be cut in other European countries.

Dec 17: Rio Tinto cancels $10 billion Saudi Joint Venture
Mining giant Rio Tinto will not participate in the Saudi 700,000 tons per year Aluminum joint venture as it will not be able to finance its 49% of the share or $10 billion because of financial crisis. Saudi group Maaden owns the rest of 51% share.

Dec 19: US Government announces $17 billion Auto Bailout
The US government will give $17.4 billion to GM and Chrysler in short term loans in return for deep concessions, including giving the government the option to take stakes in the companies and them to show their viability by March. $13.4 billion will be made available immediately and further $4 billion will be given in February contingent upon drawing down the remaining $350 billion TARP fund. Ford is not included in the package but seeks $9 billion line of credit.

Dec 19: Polaroid files for bankruptcy
Instant photo inventor Polaroid filed for Chapter 11 bankruptcy in order to facilitate the company’s financial restructuring due to the alleged fraud investigation its founder Petters Group is going through.

Dec 19: Oil falls below $37
Oil prices fell to $36.22 a barrel (4.5 year low) due to slowing global economy despite announcement by OPEC that it would be cutting oil production by 2.2 million barrels a day.

Dec 19: Caterpillar to layoff 814 workers
Caterpillar Inc. hit by a drop-off in demand for diesel engines said it plans to layoff 814 production workers at its engine assembly plant in Mossville, Illinois

Dec 19: Citizens Financial Group to lay off 900 workers
Citizens Financial Group announced it would be cutting 900 jobs in 13 different states across the commercial, retail and global transactions sectors.

Dec 22: Electronic Arts to cut 1,000 jobs
California based company, Electronic Arts, the second biggest video games publisher boosted planned job cuts by 1,000 or 10% of its work force. And will consolidate or close atleast 9 studio or publishing locations.

Dec 23: US economy shrank 0.5%
Government data has shown that the US economy shrank 0.5% in the third quarter of 2008, after growing at 2.8% in the previous three months. The fourth quarter is expected to be worse.

Dec 23: Unisys to cut 1,300 jobs
IT solutions and services provider Unisys announced it would cut 1,300 jobs across the world, freeze salary raises, slash retirement plan contributions and consolidate facilities in order to cut costs and return back to profits.

Dec 24. Jobless claims rise to a 26 year high
According to the Labor Department, unemployment insurance last week rose by 30,000, to a 26 year high of 586,000, seasonally adjusted, and the four week average of new claims rose by 13,750 to 558,000.

Dec. 24: GMAC to get a life line
GMAC which is 49% owned by GM and provides auto-financing to GM customers and dealerships has been approved by Federal Reserve to become a holding company from a financial services firm, which will allow it to get funds from the government’s $700 billion bailout package.

Dec. 29: Kuwait cancels $17 billion deal with Dow Chemical
Kuwait has cancelled a $17 billion petr-chemical joint venture deal with the US company Dow Chemical. The company had planned to use the proceeds of this deal to repay large part of $13 billion in debt on its acquisition of rival company Rohm and Hass. Kuwaiti parliamentarians were against the deal as they did not deem it viable in the face of current financial crisis.

Dec 29: UK could lose 600,000 jobs in 2009
According to The Chartered Institute of Personnel and Development, UK unemployment could reach close to 3 million in 2009 while 600,000 jobs could be lost in the same year.

Dec 29: Russian professor predicts US will disintegrate due to debt collapse
A Russian professor, Igor Panarin, has predicted that the United States will break-up into 6 parts by 2010 due to the mounting debt crisis that he called a pyramid bound to collapse.

Dec 30: Home prices fall a record 18%
According to Standard & Poors/Case-Shiller Home Price Indices, the prices of US single family homes have plunged to a record 18% from a year earlier. The composite index of 21 metropolitan areas fell 2.2% in October from September 2008.

Dec 30: 73,000 retail stores could close in the first half of 2009
A recent report by International Council of shopping Centers (ICSC), 73,000 stores could close in the first half of 2009. The Council had predicted that 148,000 stores would shut down in 2008.

Dec 30: GMAC gets $6 billion relief
GMAC received a $6 billion injection from the U.S. government late Monday night as part of the Troubled Asset Relief Program.

Party is over for Pakistan's Economy

The eight years of the previous government brought an economic boom in Pakistan. Between 2004 and 2008, real GDP grew at an average of 7%. There were plenty of employment opportunities. Salaries in blue collar jobs reached levels never seen before. Stock Market made record-breaking gains. Privatization proceeds, foreign direct investment, increased remittances and international aid increased foreign exchange reserves to more than $16 billion by 2007. Two sectors, Telecom and Finance, specifically achieved phenomenal growth.

Deregulation in the telecom sector played a vital role in turning around the scenario in this industry. Most of the growth could be attributed to the cellular sector. There was significant foreign direct investment. Network coverage spread to around 90% of Pakistan. The growth rate was 100% between 2004 and 2008 with the number of subscribers reaching around 80 million. Companies improved the quality of service, decreased rates and expanded coverage. This, in addition to the availability of cheap handsets, enabled people from less privileged classes of society to have access to such services. As of today 5 major cellular companies are in operation: Mobilink, Ufone, Telenor, Warid and Zong. Fixed line telephone sector, however, experienced much less growth with consumers reaching just 4.8 million by 2007. Wireless local loop subscribers reached 2 million by the end of 2007. There was growth in Internet subscriptions as well, however this service remained out of the reach of less income groups that contributed to the digital divide.

Banking sector performed very well. Privatization played an important role. State Bank requirements also encouraged existing banks to increase their branch network significantly. Assets of all banks showed a net expansion of Rs. 4,351 billion by 2007. By 2008, 80% of banking assets were controlled by the private sector. A number of Middle Eastern and European Banks started operations in the country including Barclays, RBS (ABN Amro takeover), Dubai Islamic Bank, Emirates Global Bank and others. A number of local groups established banks, mostly in collaborations with foreign partners.

Credit became widely available to businesses and individuals. An ever-increasing number of people obtained leased cars, home loans, personal loans and credit cards. The number sold of electronic and electric devices sky-rocketed. The non-banking financial sector achieved great success as well. For instance, the net assets of mutual funds increased from Rs. 25 billion in FY 2000 to Rs. 313 billion in FY 2007.

Pakistan’s stock market was the fastest growing market in the world between 2000 and 2008. It received enormous foreign investment in addition to the active contributions by local investors. The Karachi Stock Market (KSE 100 Index) grew from 1,521 points in June 2000 to more than 15,000 points by mid 2008.

There was growth in other sectors too. Power sector was one such sector. Construction and Real Estate markets showed vast improvements. Foreign companies like Emaar and Al Ghurair Giga invested heavily in Pakistan. Projects such as Centaurus, Platinum Square, Gold Crest and Giga Towers were announced. Immense investments went into new property and housing schemes. Hotel industry finally began to see light at the end of the tunnel as projects such as Jumeirah in Islamabad, Sofitel in Karachi and Hayat Regency in Lahore were announced. Retail sector also performed well. Malls, super markets and departmental stores sprang in different parts of the country. Foreign stores like Metro, Makro and Carrefour announced their entry. Advertising industry achieved tremendous growth as well in Print, Television, Radio, Outdoor and Internet media.

The situation started to change swiftly as the caretaker government took charge. Rise in oil and food prices at international level, falling currency, slippages in budget, failure to pass on the increased oil price to the consumer, heavy government borrowing from State Bank, mismanagement of wheat crisis and corruption had badly hurt the economy. Recent growth in Pakistan seemed to have been consumption oriented. Agricultural and Industrial sectors were neglected. Trade and current account deficits deteriorated. By April 2008, overall inflation rose to 17.2 percent. The previous government could not match the rise in number of vehicles, sold, to road infrastructure improvements which lead to traffic congestion problems. It did not produce more electricity to take care of the growing energy needs. Shortage of electricity, oil, gas and food posed serious problems for the economy. Although, availability of credit helped people improve their lifestyles, many blamed the banks for charging exorbitant interest rates, while others felt that the old concept of “living within one’s own means” was violated by spread of easy credit. Global financial crisis had its impact felt on Pakistan since exports fell and budget cuts were implemented by multinationals operating in the country. Companies tightened their budgets for existing projects and cancelled those for new ones. The once booming employment market started to take a hit. Stock market faced the worst crash as foreign investment was withdrawn. GDP growth came down to 5.8% in FY 2007-2008, as opposed to the average of 7% in the past few years.

In November 2008, Pakistan announced it would receive a loan of $7.6 billion from IMF as foreign exchange reserves had fallen to very low levels and balance of payments had become extremely worse. The policies of the present government will determine how well Pakistan recovers from the current situation. Deteriorating relations with India and adverse law and order situation will be major challenges in addition to a host of other problems for the present regime in recovering the country out of the present economic crisis, if indeed the government has the ability to achieve this goal.

Where did General Motors go Wrong?

GM is the world’s largest automaker that has remained the industry leader for the past 77 years. It employs more than 250,000 people and manufactures in 35 countries. In 2007, more than 9 million vehicles were sold all around the world. The budget of GM is more than that of countries like New Zealand and Pakistan. Management Science books are filled with examples of GM, stating how big the company really is, how well it manages its operations, how efficiently it uses technology, how immaculate its supply chain is, how it cares for the employees, how well it creates economies of scale and so on. This is not just a company; it’s a legend in its own right. Why then are we hearing that General Motors is on the verge of bankruptcy? That doesn’t sound logical. Where did GM go wrong? What happened? Why is it asking for bailouts?


In 1990, GM introduced an electric car with zero emissions, which was marketed in the United States, in some regions. It was called E1. The response was not so good and the project was scrapped. The company was later criticized for abandoning E1.

In 2007, after the union strikes, contracts were signed with worker unions, providing product and employment guarantees. Such strikes not only resulted in lost production but also kept financial burden on the company. Half a million former employees get pensions and health care benefits from GM.

As the Japanese competitors, like Toyota and Honda, continued to produce compact and fuel efficient cars, GM remained committed to making larger vehicles that were not so fuel efficient. It kept changing names for newer models but that did not increase sales as the company had lost respect in consumers’ eyes. Japanese car manufacturers came up with new models while retaining old names to bank on their reputation. In 2004, GM started refurbishing its SUVs for introduction as new models in 2007. The fuel costs increased the same year and people started focusing on fuel efficient vehicles. This trend has continued till today. After the sharp rise in oil prices in 2008, consumers bought more of Japanese cars while sales of SUVs declined. In addition to the issue of fuel efficiency, Japanese competitors continued to offer more interesting and comfortable features in their cars, while GM failed to do so at the same pace. Japanese are also good at cutting costs during production which is another reason they survive even when prices are going down.

GM has a good supply chain and it is amazing to see how it manufactures and supplies cars the world over. However, the supply chain only provides what the manufacturer wants and it does not have control over the upstream market demand. The manufacturer in this case did not produce what it should have. In order to do that, GM had to re-structure and re-align the entire supply chain.

Although GM did introduce the world’s fist hybrid car in 2004, the company sold just 843 hybrid cars in the first quarter of 2008. On the other hand, Ford and Toyota sold 5,225 and 430,000 hybrid cars respectively. This shows that General Motors did not follow up with a good initiative that it had taken, just as it had scrapped the E1 project years back. In 2007, GM lost $50 billion and its stock value decreased by 76% in 2008. The talks of merger with Chrysler failed the same year. By December 2008, GM was almost out of cash and could not survive beyond 2009. The possibility of filing for Chapter 11 bankruptcy began emerging as the company asked the government for billions of dollars from the TARP (Troubled Assets Relief Program). On 19th December 2008, the government approved a $13 billion financing for GM and Chrysler while $4 billion could be provided later. The Detroit big three have to prove their viability by March 2009 before they can receive more cash.

In conclusion, GM failed to see the writing on the wall. This is a classic case of a manufacturer producing what it deems to be suitable for the consumers, rather than what consumers really want. The union contracts must have had negative impact on GM, unlike foreign competitors, but the situation got worse due to wrong product decisions. Past success cannot guarantee future accomplishment. In a fast changing competitive world, companies have to be flexible enough to change along with the changing global conditions, consumer tastes, competitor strategies and government regulations.