10 financial panics in U.S. history
Published: August 1, 2012
Although thought to be rare, financial panics were relatively common in the U.S. By some accounts there were 18 panics since the formation of the republic. Here are 10 of the more notable panics starting with the most recent in 2008.
You knew things were heading for a bad ending when the barista at Starbucks told you she was building a 4,000-square-foot house in the toniest town in the state. Indeed, that was the crux of the housing market meltdown: Banks were gladly handing out jumbo mortgages to anybody with a pulse, even if borrowers were in over their heads. The red-hot property market finally started to regain some sanity in mid-2006, and prices started to fall back to earth. At the same time, many homeowners were horrified to find that their five-year adjustable rate mortgages were resetting — at sky-high interest rates. In 2008, the music stopped, and there weren't nearly enough chairs in the room. Foreclosures soared. Wall Street, which had been funding the boom, got its comeuppance, too. Lehman Brothers (pictured) went bust, and rival Bear Stearns and Merrill Lynch might have followed suit if not for government-brokered rescues. Five years later, unemployment stands at 8.2%, economic growth remains stagnant and housing prices are still far from pre-crash levels.