The Solari Report / 2018 Annual Wrap Up / Part One 20070930 Goldman reports $11B income during FY 1997, $4B of which is from shorting of the subprime mortgage-backed securities market. Corporate 20080000 Bear Stearns collapses, kicking off the 2008 Financial Crisis, a housing crisis that results in a 31.8% drop in housing prices and the Great Recession. Event, Corporate 20080300 Tony Blair Faith Foundation is formed. Corporate 20080500 Lehman Brothers files for bankruptcy protection after Treasury Secretary Paulson announces there will be no more bailouts. Lehman’s becomes the largest bankruptcy in U.S. history. Corporate Event, Treasury 20080725 Catherine Austin Fitts is thrown off of KPFA radio in Berkeley, California on a pretext, shortly before the Freddie Mac and Fannie Mae takeover and as the Bohemian Grove starts their annual meeting. Shortly thereafter, a large San Francisco money manager announces it has lost the $1 billion it invested in Fannie Mae that April, saying it had "no idea" there was a problem. Catherine Austin Fitts had been on KPFA radio at 5pm for years explaining the problem to the entire San Francisco Bay Area audience. Media 20080906 Takeover of Fannie and Freddie, when the director of the Federal Housing Finance Agency (FHFA), James B. Lockhart III, announces his decision to place the two government-sponsored enterprises (GSEs) into a conservatorship run by the FHFA. Corporate, HUD, event 20080915 2008 FY end. $595.8B in undocumentable adjustments against Treasury at Army. DoD 20080916 AIG is bailed out when the Federal Reserve provides an $85 billion two-year loan to prevent its bankruptcy and further stress on the global economy. In return, the Fed takes ownership of 79.9 percent of AIG's equity. In the end, the government turns a $23B profit on the sale of its AIG shares acquired in the bailout. Bernanke is quoted as saying AIG took risks with unregulated products like hedge funds while using cash from people's insurance policies. “AIG had become a major seller of credit default swaps in an attempt to boost its profit margin. These swaps insured the assets that supported corporate debt and mortgages. If AIG went bankrupt, it would trigger the bankruptcy of many of the financial institutions that had bought these swaps.” The AIG bailout occurs one day after U.S. Treasury Secretary Henry Paulson says there will be no further Wall Street bailouts. That move forced investment bank Lehman Brothers into bankruptcy. [Kimberly Amadeo, “AIG Bailout, Cost, Timeline, Bonuses, Causes, Effects: Why It Made Bernanke Angrier Than Anything Else in the Recession,” The Balance, updated November 5, 2018] Corporate, Treasury, Media 20080930 Enactment of Emergency Economic Stabilization Act of 2008 (the “bailout” of the U.S. financial system)—Establishes the Troubled Asset Relief Program (TARP) for funding most U.S. banks through the purchase of toxic assets and equity from financial institutions to strengthen the financial sector. Passed by a Democratic-controlled Congress and signed into law by President George W. Bush. Law 20081003 Bernard Madoff, the former NASDAQ Chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admits that the wealth management arm of his business was an elaborate Ponzi scheme. Event, Corporate 20090120 Barack Obama becomes 44th President of the United States after defeating John McCain. Event 20090126 Timothy F. Geithner becomes Secretary of the Treasury and serves until January 25, 2013. Treasury 20090200 The SEC promulgates amended regulations designed to address concerns about the integrity of the process by which NRSROs rate structured finance products, particularly mortgage-related securities. law 20090500 Congressman Alan Grayson at a Congressional hearing questions Federal Reserve Chairman Ben Bernanke on $550B of loans to foreigners (or "central liquidity swaps" in Federal Reserve- ese). Which financial institutions received this money? Bernanke's answer: I don't know. As the Fed was lending this money, the dollar increased by 30% in value. Grayson asks, was this a coincidence? Bernanke's answer: yes. Bernanke says Congress approved this in 1913 in the Federal Reserve Act, and this facility has been used repeatedly over the years. Event 1 8 6