Much of the world thinks of the global financial crisis as having begun with the fall of Lehman Brothers, on Sept. 15, 2008.
For us at Planet Money, though, it began the weekend before with the news that the federal government was stepping in to rescue mortgage giants Fannie Mae and Freddie Mac. On Morning Edition yesterday, Adam Davidson talked about the adrenaline rush of covering the biggest economic story in decade:
I -- I remember every minute of that day. I really think that's true. For months, we had had rumors that Fannie Mae and Freddie Mac were in trouble. But I don't think a lot of people outside of Washington or Wall Street were paying a lot of attention. And then, all of a sudden, on Sunday -- September 7th, was a Sunday last year -- we started hearing they are collapsing, the government is stepping in and rescuing them, taking them over. I jumped on a plane. I mean, it felt like covering a war. I jumped on a plane and flew to an already-existing conference of mostly former finance ministers from around the world.
And interviewing them, I started to hear language I never thought I would hear in my life. People were talking about the entire global economy coming to a total standstill. We have a global economy built on credit, Fannie Mae and Freddie Mac are crucial to that global credit system. And if they go down, the entire global economy collapses.
Since that day, we've seen bank failures tap the FDIC's resources, foreclosures keep climbing and unemployment grow by amazing leaps. Remember when 7.2 percent seemed like a lot? It's been a heck of a year -- how's by you?