Where were you in September 2008?

[audreyh1]

We are fast approaching the 10 year anniversary of what was for me the scariest financial news month ever. A lot happened in September 2008 that reavealed t the unlicensed how very badly our financial system had been damaged and how unprepared our leadership was to handle it. Up until then it appeared that any crisis had been contained. But suddenly it became an emergency.

September 2008

7: Mortgage giants Fannie Mae and Freddie Mac are taken over by the government.

15: Bank of America agrees to purchase Merrill Lynch for $50 billion.

15: Lehman Brothers files for bankruptcy-court protection.

16: American International Group, the world's largest insurer, accepts an $85 billion federal bailout that gives the government a 79.9% stake in the company.

21: Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies subject to greater regulation by the Federal Reserve.

25: Federal regulators close Washington Mutual Bank and its branches and assets are sold to JPMorgan Chase in the biggest U.S. bank failure in history.

29: Congress rejects a $700 billion Wall Street financial rescue package, known as the Troubled Asset Relief Program or TARP, sending the Dow Jones industrial average down 778 points, its single-worst point drop ever.

Oct. 3: Congress passes a revised version of TARP and President Bush signs it. Wells Fargo & Co., the biggest U.S. bank on the West Coast, agrees to buy Wachovia for about $14.8 billion.

Timeline from https://www.usatoday.com/story/mone...onology-2008-financial-crisis-lehman/2779515/

 

[Another Reader]

I was on vacation in Arizona, watching the market crash, in early October. I bought a bunch of Wachovia and Countrywide CD's late in 2007 and in early 2008 as well, figuring if the FDIC went under, so would everything else. The last of them matured in 2013.

]mod edit]

 

[eastnortheast]

I feel fortunate that I was generally oblivious to the whole thing. That is not to say I was not aware of the melt down as it was happening.

It was more that i was gainfully employed, business was good, I was well enough respected in the company that I did not fear for my job, etc. I felt like I was in the eye of the storm for the most part.

Things were happening all around me (foreclosures in the neighborhood, friends losing their job, etc.), but for me, nothing really changed. Still put the same % in the 401 K, budget remained pretty much the same, lifestyle did not change one way or the other. Looking back, I feel pretty darn lucky.

 

[Dtail]

My company had their first layoff ever, but I survived. No bonus or raise that year, but thankful to still work another 8 years.

 

[Dash man]

We were watching the Phillies march toward winning their division and eventually winning the World Series. A great year! As far as the markets are concerned, it didn’t affect our lifestyle much, and we did begin purchasing stocks throughout the downturn and climb that followed. Both of our jobs at the time were pretty secure. Sadly, we did see my SIL and her family fall into a bad situation that eventually cost them their home in FL.

 

[Walt34]

I feel fortunate that I was generally oblivious to the whole thing. That is not to say I was not aware of the melt down as it was happening.

Pretty much the same with me. I was already retired with a DB pension that was and is well funded and I was working at a post-retirement job that was a government contractor position so we were entirely unaffected in daily life. My 457 account sure was though!

And while the news stories were full of events like people losing their jobs and home foreclosures we didn't know anyone directly that was affected. Some homes in the development went up for sale and I heard some were foreclosures but other than that we didn't notice much different.

 

[rodi]

Scary times, for sure. I worked for a company that made cable settop boxes - so we were surrounded by tv's in the labs, in the offices, in the cubicles...... most tuned to news and finance shows. My boss would come back from lunch and lament that the DOW shouldn't drop 100 points just while he was at lunch.

But since I was still working, the money kept coming in, contributions were still made to the 401k, and our plan to pay off our mortgage was still being worked.

I'd be even more afraid now... no salary coming in... early enough in my retirement to have SOR concerns.

 

[scrabbler1]

In September of 2008, I was getting ready to give my notice of resignation, effective at the end of October. I was aware of the crashing markets, for sure, as the value of the stock funds in my 401k and in my taxable account were dropping a lot. But I stayed the course, learned that the value of the company stock was largely unaffected at its third quarter 2008 evaluation, and retired at the end of October to begin my new life.


The crashing markets were actually a big help toward the start of my retirement because it presented me with a huge buying opportunity in the bond fund whose NAV was down by about 25%.

 

[Franklin]

I remember like it was yesterday. I had FIRE'd from financial mega firm the mid point of 2006. I had about $6MM in their stock and another mil of my own. At 52 I took a month long trip to the Caribbean to decide what the next chapter was all about. Yes, I had planned to slowly unravel the stock concentration AFTER my trip. Well, while away I began to hear about the direction of economy, sub prime, etc. Long story short it was a miserable trip as I pondered "how to catch a falling knife". I watched my stock drop form the $50's to $4. Needless to say I was forced (and fortunate) to make an entry point to another MegaCorp. Lost just about everything I had around that time. But the good news was I was able to join new maga corp at a good entry point. I tacked another 10 years of hard work in and by 61 "got it all back". Lesson learned, diversify! Now FIRE at 62 and ahead of the game. (for a second time and hopefully the last) Never ever want to go there again!

 

[willatl]

It was def a scary time. Watching a lot of cable business news back then but haven't much since. I saw my modest investments lose $150K that year but never sold anything.


This was years before my ER so I had funds from working to still invest. So kept investing as usual and bought a lot of individual stocks during that time. Today I'm sitting on a heap of LTCG to start unwinding next year when in a lower tax bracket.

 

[swakyaby]

I remember like it was yesterday . . . it was a miserable trip as I pondered "how to catch a falling knife".

Sounds so painful. I was still w*rking, and trying not to look at my investment reports. Noticed that businesses all over town were slowly putting up "going out of business" signs, and knew it was much much worse for so many others.

 

[tb001]

I was working in financial services trying to transition out of service provider role into finance, so it was all too real. Watched my dad cash out of the market in October of 2008. Delayed my transition by about 18mo. A lot of good lessons for sure, not the least of which is what a difference 10 years makes. And the importance of a few years of lower risk money to ride it out.

Franklin, that must have been incredibly gut wrenching, but also fantastic that you were able to build it back up so quickly.

 

[W2R]

I was here, a mod, and still working with a 11/2009 retirement in mind (which was not delayed).

I looked back and found this post of mine in September 2008:

It's hard to believe that Lehman Brothers is actually filing for bankruptcy. Futures are -269.00 for the Dow right now. OK, I should stop watching CNBC, I know.

Things looked pretty frightening at that time. I did not know what to expect but I knew that I had to stay strong and stay the course.

The thought of my retirement possibly being snatched from me just as I approached it, was very distressing (to put it mildly).

 

[COcheesehead]

Stayed the course financially. Greater issues moving my Dad into assisted living.

 

[RobbieB]

Other than the house next door being foreclosed and vacant for a year and a half and others on the street I live on (but not vacant for as long) it was no big deal.

In fact it was a good thing as stocks got cheap and I dollar cost averaged twice as much. I made a lot of dough during the slump -

 

[Dreamer]

I had retired 06/06 and was receiving my pension. My DH was still working and we continued his 401k up to the max.

My DH did not like seeing our investments go down and would ask me what I was doing with our money. It got to the point that I told him not to open mail from his 401K, my TSP and Vanguard. I remember getting very nervous. I credit the good folks here for keeping me on the straight and narrow. Thanks again.

 

[savory]

I just completed my Peace Corps service where I learned how to live with a lot less.

 

[97guns]

I was on the sidelines with cash, just laid off work and collecting unemployment, the day the markets reopened after the 9/11 halt I dump all my stocks

 

[audreyh1]

I feel fortunate that I was generally oblivious to the whole thing. That is not to say I was not aware of the melt down as it was happening.

It was more that i was gainfully employed, business was good, I was well enough respected in the company that I did not fear for my job, etc. I felt like I was in the eye of the storm for the most part.

Things were happening all around me (foreclosures in the neighborhood, friends losing their job, etc.), but for me, nothing really changed. Still put the same % in the 401 K, budget remained pretty much the same, lifestyle did not change one way or the other. Looking back, I feel pretty darn lucky.

Didn’t your company suddenly find itself short of cash that October? A lot of companies were using Money Markets to meet payroll and found themselves caught short when credit markets froze. That stopped a lot of businesses in their tracks.

 

[Ronstar]

Our sales at work were off 70% from our 2005 highs, and we layed off about 70% of the employees. But we had a few good contracts that pulled us through. My 401k took a big hit, but I never changed anything- just rode it out.

 

[Al18]

I was lucky enough to work for a company that continued to give yearly raises and bonuses and did not have layoffs. I increased my 401K contribution rate from 15% to 20%. 10 years later, I'm counting the weeks until I retire. Currently I'm prepared for a 25% drop, but couldn't stomach much more.

 

[street]

September, I most likely was bow hunting really don't remember all the financial dilemma now. I do know nothing changed for me kept buying never changed one thing and didn't sell or move anything.

In those years I really didn't worry or listen to what was happening in the financial world. I stayed the course and didn't loose any sleep.

 

[NW-Bound]

Where was I in Sep 2008?

Oh, about 20% down from my portfolio highwater mark in Oct 2007.

Of course I did not know then that there was still more pain to follow.

29: Congress rejects a $700 billion Wall Street financial rescue package, known as the Troubled Asset Relief Program or TARP, sending the Dow Jones industrial average down 778 points, its single-worst point drop ever...

My diary said that the S&P went down 8.8% that day, compared to 7% for the Dow. That 8.8% was matched by the Nasdaq.

 

[audreyh1]

Where was I in Sep 2008?

Oh, about 20% down from my portfolio highwater mark in Oct 2007.

Of course I did not know then that there was still more pain to follow.



My diary said that the S&P went down 8.8% that day, compared to 7% for the Dow. That 8.8% was matched by the Nasdaq.

It was such a huge drop that day!

 

[Jerry1]

I was 47 and working. Worked in health insurance. Generally I worked in healthcare administration my entire work life. It was good to me in the late 80’s and it save my butt in 2008 as well. The genius in me knew things were wrong (yeah, right, meba genious) so I pulled most of my money from the market. Hardly lost anything. Now for the sad part. As they say, you have to make two good decisions. My loss was getting back into the market too little too late. Did alright, but would have done better if I was fully invested before 2008 through today. My reluctance to get back in also affected my contributions into my 401k. Kind of a double whammy.

Now I do my best to focus on and stick with a proper AA.