Year That Went By
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Year that went by
Major Events in 2008 that Changed the World Highs & Lows of 2008 Crude 148.8 35.1 Gold 1,037 680
Rupee vs. UDS
52.1 39.3
Inflation 12.5% 4.84%
Sensex 21,207 7,697
Deepak Tiwari Research Analyst
History often intrigues and fascinates us. Whenever we look back and think about our past, we often wonder if it really happened to us. Some events we always like to cherish and some would haunt us even if we want to forget them. In year 2008 too, we witnessed moments of ecstasy and agony as well. Though there are hundreds of events that took place and it’s not possible and desirable to describe them in this report, however we will zero in on major events that changed the world for forever. Some of the events that will go in the annals and 2008 will be remembered for are: global financial crisis, India’s nuclear deal with the US, Mumbai terror attack and ‘Chandrayaan’ amongst others. Financial Mess: We really don’t know when this storm is going to settle in. The consensus is that it will rebound in the FY 2010 but everybody is groping and making wild guesses. Nobody knows what is in the store like what we recently saw in Madoff scandal. The crises like sub-prime and Madoff exposed the efficacy of the SEC and raised the question mark on the whole financial systems of the developed countries. As of now, several bailout plans and stimulus packages worth over $10 trillion has been unveiled and many more such packages are in the offing. No doubt such proactive measures will mitigate the severity of the crisis and will help the economies recover before the long. Politics: The year began with the assassination of popular Pakistani leader Benazir Bhutto and launch of world’s smallest car ‘Nano’ by the Tata. Many countries saw new administration stepping in. If Cuba’s veteran Fidel Castro retired after 49 years in office, new regime took place in Russia led by Dmitry Medvedev while Wen Jiabao was allowed to continue as Chinese Premier for another five years term. In Pakistan, Nepal and Bhutan, new governments came into power throwing out monarchy or dictators. And finally, the US people elected Mr. Barack Obama for a ‘change’. Terror: Terror continued to wreak havoc killing thousand innocents and India as usual was one the severest victims. It started with a suicide car blast outside the Indian embassy in Kabul followed by a series of blasts in Bangalore, Ahmadabad and New Delhi and ended up wounding Mumbai severely. Sports: In sports, China successfully organized Beijing Olympics games and was the maximum medal gainer. Michael Phelps made new world record by winning his sixth gold medal of the Beijing Olympics while Abhinav Bindra made us proud by winning India’s first ever individual gold medal. Viswanathan Anand retained the World Chess Championship title in Germany and Sachin Tendulkar became the highest aggregate run scorer in Test cricket. Bizarre events: At a time when the whole world is competing to outdo each other, in India, communities like gujjars agitated to be included as OBC. A state-wide agitation was carried out by people of J&K paralysing the lives just for a peace of land. It’s shameful that in India, hundreds of people still die in stampedes as we saw in Naina Devi temple in H.P. and Chamunda temple near Jodhpur. And despite so called development, 2.4 million preventable child deaths occur every year in China and India. In Malaysia, where its opposition leader Anwar was sentenced for sodomising his aid, banned the practice of yoga by Muslims. In unusual compensation cases, Italy compensated Libya for the forced colonization in the 1910s, paying $5 billion over the next 25 years whereas Libya paid $1.5 billion in compensation for past terrorist attacks to the US, clearing the way for normal diplomatic ties between the two countries. Can we claim such compensations from our neighbour? And now, we should learn one lesson from the Governor of California Arnold Schwarzenegger who acted to end a budget crisis by firing 22,000 California state workers and cutting the pay of 200,000 more. One wonders if our government can dare to do the same in order to contain its fiscal deficit. We hope the next year will bring us more happiness and prosperity for all of us. We expect markets will rebound in 2009 and we will see less terrorist attacks. This report is divided in four sections as follows:
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Dec 26, 2008
A. B. C. D.
Global Financial Crisis: At A Glance Global Financial Crisis: A Chronology Major events that took place in year 2008 Some of the interesting events of 2008
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1
A. Global Financial Crises: At A Glance
The Cost of Global Bailouts in 2008*
Country/ region
US Institutions that bankrupted in 2008
$ 10.1 Trillion
Estimated cost of bailout in USD billion
USA
7,000
Europe
1,300
That’s the total cost of bailouts
SL
Bankrupt Banks 1
Northern Rock United Kingdom
2
Bear Stearns, New York
3
ANB Financial, Arkansas
Japan
275
4
First Integrity Bank, Minnesota
China
586
5
Roskilde Bank, Denmark
Russia
210
6
IndyMac, California
Others
729
7
First Heritage Bank, California
10,100
8
First National Bank of Nevada
9
IKB
Recent Bailouts
10
Silver State Bank
Country
Bailout cost
Purpose
11
Fannie Mae
Japan
US $ 54 billion
Govt. spending
12
Freddie Mac
Canada
US $ 3.3 billion
13
Lehman Brothers
14
AIG
Taiwan
US $ 18.9 billion
To support Detroit's trio China's support in financing
Ireland
US $ 7.7 billion
Bailout for three banks
15
Washington Mutual
US
US $ 17.4 billion
Auto industry
Total *Till December 7, 2008
The World's biggest bailouts Industry/ Corporation
Year
Over 15 major banks and financial institutions have failed only in the US in 2008
Cost in 2008
Savings & Loan debacle in USA
1989
$293.8 billion
South Korea
1997
$78 billion
Indonesia
1998-99
$64.7 billion
Brazil
1998-01
$36.7 billion
Argentina
2000-01
$50.7 billion
The History of US Government Bailouts Industry/ Corporation
Year
Cost in 2008 ($)
Penn Central Railroad
1970
$3.2 billion
Lockheed
1971
$1.4 billion
Franklin National Bank
1974
$7.7 billion
New York City
1975
$9.4 billion
Chrysler
1980
$3.9 billion
Continental Illinois National Bank and Trust Company
1984
$9.5 billion
Savings & Loan
1989
$293.8 billion
Airline Industry
2001
$18.6 billion
Bear Stearns
2008
$30 billion
Fannie Mae / Freddie Mac
2008
$200 billion
American International Group (A.I.G.)
2008
$85 billion
Auto Industry
2008
$25 billion
Troubled Asset Relief Program
2008
$700 billion
Dec 26, 2008
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2
B. 2008 Global Financial Crisis: A Chronology Albeit the much talked and discussed sub-prime crisis began to show its sign in the early 2007 but its real and full impact was manifested only in the month of September 2008. February o
The US Congress approves a $168 billion economic stimulus package and sends it to President George W. Bush for his approval.
March o
The US investment bank Bear Stearns gets emergency funding from JPMorgan Chase, with the Federal Reserve Bank of New York's backing.
o
JPMorgan Chase announces plans to buy investment bank Bear Stearns for $2 a share following liquidity problems caused by the crisis.
o
The US Federal Reserve System becomes a lender to twenty large investment banks, backs JPMorgan Chase in purchasing failed Bear Stearns, and lowers direct lending rate.
o
The US Federal Reserve System cuts the federal funds rate by 75 basis points to 2.25%.
April o
The Federal Reserve System cuts interest rates in the United States by a quarter percentage to 2%.
o
The United States Federal Reserve System auctions off $24.12 billion in Treasury securities to help relieve the subprime mortgage crisis.
o
The United States Federal Reserve System reports that banks are tightening lending standards on home mortgages, other types of consumer loans and business loans in response to the subprime mortgage crisis.
May
June o
Wachovia, the fourth largest bank in the United States, fires its CEO, G. Kennedy Thompson, due to losses incurred in the subprime mortgage crisis.
o
The AIG, the world's largest insurance company, removes Martin J. Sullivan as its CEO due to losses caused by the subprime mortgage crisis.
o
Ireland's Economic and Social Research Institute (ESRI) says the country is in the grip of a recession for the first time in a quarter of a century. However, it predicts the economy will return to positive growth in 2009 and normal growth by 2010.
o
The European Central Bank increases interest rates in the Eurozone to 4.25 per cent to tackle inflation.
o
The US federal government's Office of Thrift Supervision closes down the IndyMac Bank, the largest savings and loan bank in the Los Angeles area, after determining that it is unlikely to be able to meet depositors' demands.
o
The US Federal Reserve tightens mortgage regulation in an attempt to stamp out the practices that led to the subprime mortgage crisis.
o
U.S. President George W. Bush signs The Housing and Economic Recovery Act of 2008 in response to the subprime mortgage crisis.
July
August o
Unemployment in the United States rises to 5.7%, its highest rate in more than four years.
o
The New York State Attorney General Andrew Cuomo reaches a $7 billion settlement with Citigroup to buy back auction rate securities from about 40,000 clients throughout the United States.
o
UK home repossessions rise by 48%. The OECD reports slower growth and declining employment in the U.S.
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o
The Consumer Price Index in the United States rises by .8 per cent in July 2008 giving an annual inflation rate of 5.6 per cent, the highest in 17 years.
September o
According to several news reports, the US government plans to take control of Fannie Mae and Freddie Mac in a takeover plan.
o
The US federal government places mortgage financing companies Freddie Mac and Fannie Mae into conservatorship. The Federal Housing Finance Agency will manage the companies on a temporary basis.
o
Washington Mutual, the largest savings and loan in the United States, ousts Chief Executive Kerry Killinger as a result of losses incurred as a result of the subprime mortgage crisis.
o
U.S.-based financial services company Lehman Brothers announces a third-quarter loss of $4.9 billion and plans to sell assets.
o
The European Commission predicts the U.K., Germany, and Spain 'to fall into recession'; the outlook for rest of the Eurozone is gloomy.
o
The AIG seeks an emergency $40 billion loan from the United States Federal Reserve.
o
Bank of America negotiates to buy Merrill Lynch for $38.25 billion in stock.
o
The United States Federal Reserve announces several initiatives to expand emergency lending to combat the crisis.
o
Lehman Brothers files for Chapter 11 bankruptcy resulting from the subprime mortgage crisis.
o
The US Federal Reserve agrees to lend the AIG $85 billion in return for a 79.9% stake.
o
Russia's government lends the country's three biggest banks, Sberbank, VTB Bank and Gazprombank, as much as 1.13 trillion rubles ($44 billion) for at least three months to boost liquidity.
o
The BBC reports that British bank HBOS is in advanced talks with Lloyds TSB as HBOS share prices plummet as a result of exposure to the subprime mortgage crisis.
o
Trading is suspended for the third day in succession on Russia's two main stock exchanges, the MICEX and the dollardenominated RTS, amidst fear of financial collapse.
o
Russian President Dmitry Medvedev orders ministers to inject another 500 billion rubles (£10.8 billion, US$20 billion) of funds from the state budget into the markets and pledges in remarks broadcast on national television that the financial system would receive "all necessary support".
o
British bank Lloyds TSB completes a £12.2bn takeover of rival HBOS, the UK's largest mortgage lender. The Competition Commission has allowed the deal as it has government backing, despite the fact that it will leave Lloyd's HBOS in control of a third of the UK mortgage market.
o
Following the recent rapid fall of the share value of HBOS, The FSA restricts short selling in an attempt to bring about market stability in the United Kingdom. This action follows a similar move by SEC in the United States on Wednesday.
o
The Securities and Exchange Commission declares an emergency ban on shorting financial-sector stocks.
o
The U.S. Securities and Exchange Commission and United Kingdom Financial Services Authority take emergency action to temporarily ban short-selling of financial companies stock.
o
The United States Department of the Treasury guarantees money market mutual funds up to an amount of $50 billion to guarantee their viability.
o
The Bush administration asks the United States Congress for $700 billion to buy mortgage-related assets to try and resolve the subprime mortgage crisis.
o
Goldman Sachs and Morgan Stanley, the two last remaining independent investment banks on Wall Street, become bank holding companies as a result of the subprime mortgage crisis.
o
The Proposed bailout of U.S. financial system (2008) to rescue the U.S. Banking system is debated by the 110th United States Congress.
o
Government officials say that the Federal Bureau of Investigation is looking into possible fraud for mortgage financing companies Fannie Mae and Freddie Mac, Lehman Brothers, and insurer American International Group.
o
Ben Bernanke, the Chairman of the Federal Reserve, warns the United States Congress that failure to pass the Paulson Plan quickly would make a recession more likely.
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o
Japanese investment bank Nomura Holdings acquires the European, Asian and Middle Eastern equities and investment banking operations of Lehman Brothers.
o
President of the United States George W. Bush addresses the nation on prime time television to discuss the crisis and the Paulson plan. He warns that the United States faces a "long and painful recession" if the package is not passed.
o
Jobless claims in the United States rise to a seven year high while orders for durable goods fall to their lowest level in 18 months, underscoring the weakness of the United States economy. Home sales in the United States during August 2008 fall to a 17-year low.
o
In the biggest bank failure in American history, the Federal Deposit Insurance Corporation (FDIC) seizes Washington Mutual and sells most of the bank to JPMorgan Chase.
o
The United States Senate passes a large spending bill including $25 billion in taxpayer subsidised loans for automakers and the end of offshore drilling bans.
o
Government officials announce plans to nationalise British bank Bradford & Bingley in the aftermath of the subprime mortgage crisis.
o
US Congressional leaders and the George W. Bush administration reach an outline Emergency Economic Stabilization Act of 2008 of a bailout of financial institutions as a result of the subprime mortgage crisis.
o
British bank Bradford & Bingley is to be purchased by the Treasury and Financial Services Authority.
o
Belgian bank Fortis NV is partly nationalised as part of an 11.4 billion euro rescue package funded by the Governments of Netherlands, Belgium and Luxembourg.
o
The United States House of Representatives rejects a proposed bailout of the U.S. financial system.
o
Head of the Swedish National Debt Office Bo Lundgren says that the $700 billion U.S. financial industry bailout is based on toooptimistic valuations, and may not be enough to restore confidence in the financial system.
o
The German government and private banks inject 35 billion Euros into the struggling Hypo Real Estate, a bank that is heavily involved in the real estate business. The bank had been stuggling because its Irish subsidy Depfa Bank had suffered massive losses during the subprime mortgage crisis. The HRE is the first company from the DAX that had to be rescued by the government in recent memory.
o
Citigroup acquires the banking operations of Wachovia, the troubled Charlotte, N.C.-based bank. Under the agreement, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans, while the U.S. Government will take losses beyond that.
o
The Government of Iceland takes control of the country's number three bank, the struggling Glitnir Bank.
o
The British Government confirm that the mortgage and loans components of Bradford & Bingley will be nationalised, whilst the company's savings operations will be sold to the Spanish banking group, Grupo Santander. (BBC News) The financial crisis around Europe deepened with the nationalization of Fortis and a cash infusion from the Benelux states amounting to €11.2 billion.
o
Intervention is needed to support the US's Wachovia, Britian's Bradford & Bingley, Iceland's Glitnir, Germany's Hypo Real Estate and the Belgian-Dutch group Fortis, following on from the Subprime mortgage crisis.
o
Shares of major Irish banks rise sharply following the announcement of a State guarantee of all deposits in Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, Irish Nationwide Building Society and EBS, worth an estimated €400 billion. The guarantee includes Bank of Ireland branches in Northern Ireland while the coverage of AIB's subsidiary, First Trust is still under discussion. Deposits in foreign-owned banks remain guaranteed to €100,000.
October o
U.S. Representative Carol Shea-Porter says that "more than 400 economists, including Nobel laureates, appealed to Congress to slow down and make sure [they] got [the bailout bill] right".
o
The U.S. Senate approves HR1424, a revised version of the proposed bailout of the nation's financial system.
o
The United States Securities and Exchange Commission says it would extend the short-sale ban to as long as October 17 or up to three business days after the passage of the proposed bailout plan, but will not make it permanent.
o
The Wall Street Journal reports that the short-sale ban fails to prevent stock-price declines, increases the volatility in the stock market and makes trading more expensive for investors.
o
U.S. President George W. Bush signs the US$ 700 billion bailout bill after it is passed by the House.
o
The German government moves to back troubled Hypo Real Estate with a 50 billion euro rescue plan.
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o
German Chancellor Angela Merkel announces that Germany will explicitly guarantee the deposits in banks held by its citizens.
o
The Dow Jones industrial average falls by as much as 800.06 points, its biggest intraday drop on record; the Dow closed below the 10,000 mark for the first time since October 26, 2004.
o
Speaking before a U.S. House Committee, Richard Fuld, CEO of failed Lehman Brothers says that he believed all his decisions "were both prudent and appropriate" given the information he had at the time.
o
Significant losses are marked on stock exchanges world-wide: São Paulo Stock Exchange suspended trading after a 15 percent drop in its benchmark index.
o
United States Secretary of the Treasury Henry Paulson announces that Neel Kashkari will be in charge of administering the Emergency Economic Stabilization Act of 2008.
o
Trading is suspended on Russia's leading stock exchanges after shares plunged nearly 20 percent amid a backdrop of falling oil prices and fears over the global economy.
o
Russia agrees to provide Iceland with emergency loans of 4 billion Euros ($5.4 billion).
o
Iceland's Financial Supervisory Authority takes control of troubled Landsbanki Bank.
o
The Reserve Bank of Australia reduces interest rates by 100 basis points to 6.0 per cent to combat the effect of the subprime mortgage crisis.
o
The US Federal Reserve announces plans to buy billions of dollars of short-term commercial paper to restore liquidity to the money market.
o
The Chairman of the Federal Reserve Ben Bernanke warns that the crisis will weaken the United States economy well into 2009 and expressed a willingness to cut interest rates.
o
President Dmitry Medvedev announces an extra 950 billion roubles ($36.4 billion) of new emergency credit for banks at a Kremlin meeting.
o
Britain's Chancellor of the Exchequer Alistair Darling releases details of a rescue package aimed at restoring confidence in British Banks. As part of the deal the British Government will provide £50bn of investment, provide a further £200bn in short term loans and guarantee up to £250bn of intra-bank loans.
o
The US Federal Reserve Board cuts interest rates by half a percentage point to 1.5% as part of coordinated activity with the European Central Bank and other central banks.
o
Head of International Monetary Fund says the US Financial Crises threatens to send the world into a recession. IMF releases World Economic Outlook report with gloomy projections for the global financial system.
o
Greece introduces a 100,000 Euro guarantee for the 230 billion Euro bank deposits in the country for three years, well above the EU-wide Ecofin-mandated minimum of 50,000 Euro for one year, and gives assurances that the Greek banking system is stable, while the Greek central bank announces a drop in the expected growth of the Greek economy to 3.3% (from 4%) because of decreased consumption caused by high petrol and food prices.
o
Kaupthing Bank, Iceland's largest bank, is nationalized by the country's Financial Supervisory Authority.
o
The United States Secretary of the Treasury Henry Paulson says that the Bush administration will proceed with plans to buy stocks in United States financial institutions.
o
Group of Seven finance ministers who met in Washington with IMF chief and World Bank president announce a plan to combat the crisis including the use of "all available tools" to support key institutions and prevent their failure.
o
United States President George W. Bush commits to collaborative action with G7 finance ministers.
o
The International Monetary Fund warns of a global meltdown and offers to lend to countries if needed.
o
The Prime Minister of Australia Kevin Rudd announces that the Government of Australia will guarantee all deposits in all Australian banks for three years as a result of the subprime mortgage crisis.
o
New Zealand and the United Arab Emirates will also guarantee all bank deposits in their banks.
o
The Federal Reserve approves the merger of Wells Fargo and Wachovia after Citigroup withdraws the legal case in a New York federal court to put a hold on the merger.
o
President George W. Bush announces new measures to attack the current economic crisis including plans for the U.S. government to buy stakes in major banks.
o
The Parliament of Germany passes a 500 billion euro ($673.8 billion) bank bailout.
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o
Iceland's Kaupthing Bank fails to pay interest to its 50-billion-yen (US$493 million) bondholders in Japan.
o
Government heads of 45 countries from Asia and Europe meet in Beijing as the 7th Asia-Europe Meeting convenes with financial crisis topping the agenda.
o
Nine major US banks will receive a $US125 billion capital injection from the federal government, says a Treasury Department official.
o
The United States Treasury Department spends US$125 billion of its $700 billion bailout fund on nine banks, some of whom had argued that they did not need the money.
November o
The United States government announces a second bailout of AIG; the total value of the new plan, roughly US$150 billion, represents the largest government support package extended to a private company in US history.
o
American retail chain Circuit City files for protection from its creditors under Chapter 11 of the United States Bankruptcy Code.
o
Sweden's Financial Supervisory Authority announces that it is revoking the banking licence of the struggling Carnegie Investment Bank.
o
China announces a stimulus package involving US$586 billion to finance programs in 10 major domestic areas in the next two years.
o
The Eurozone enters its first recession as the combined gross domestic product of the 15 members dropped 0.2% in the second and third quarters of 2008.
o
Citigroup will cut 75,000 jobs by early 2009.
o
The Japanese economy posts consecutive second-quarter contraction for the first time since 2001, officially putting the country in a recession.
o
HSBC Holdings announces 500 layoffs in Hong Kong. Pepsi announces 3,000 layoffs in the United States, Canada, Mexico, and Europe.
o
The IMF approves a US$2.1 billion rescue package for Iceland following its financial crisis.
o
Automotive industry crisis: Executives of the top three U.S. automakers (Ford Motor Company, General Motors, and Chrysler) testify before Congress for a bailout package.
o
Citigroup receives US$32 billion from the United States Emergency Economic Stabilization Act.
o
The US Federal Reserve announces a new US$800 billion "stimulus" package in which it will buy debt and mortgagebacked securities and make loans to holders of consumer debt.
o
BHP Billiton, the world's largest mining company, withdraws a $66 billion bid for the Rio Tinto Group due to the global financial crisis.
o
The European Union proposes a €200 billion stimulus package that will include already-spent money.
December o
S&P downgrades Russia since 1999, while data showed that the Central Bank spent US$30 billion in currency market interventions in November 2008.
o
The White House and U.S. Congress agree on a proposal for a US$17.4 billion bailout package for three major US automakers.
o
The US consumer price index fell in November by 1.9% on a non-seasonally adjusted basis, the biggest decline since the nadir of the Great Depression in January 1932.
o
Madoff, a former chairman of the Nasdaq exchange market has been arrested on a single securities fraud charge for operating a $50 billion Ponzi scheme from his investment advisory business.
o
Canada announces a US$3.3 billion bailout for its troubled automotive industry.
o
Toyota Motor Corporation, the world’s largest automaker, forecasts its first operating loss in 70 years, due to the automotive crisis.
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C. Major events that took place in year 2008 Benazir Bhutto assassination. Tata Motors launched the world's cheapest production car, Nano. The Cuba Prez and Army Chief Fidel Castro retired, resigning after 49 years in office. Microsoft was fined a record €899 million by the EU anti-trust commission. Wen Jiabao was elected as Chinese Premier for another five years term. Dmitry Medvedev assumed the role of the President of Russia. South Ossetia war between Russia and Georgia. Nepal declared to be a federal, democratic republic abolishing the 240 year old Nepalese monarchy. A suicide car bomber struck outside the Indian embassy in Kabul, Afghanistan, killing 41 people. Russia and China found solution to their over 40 years old 4,300-kilometer border dispute. Zimbabwe introduces a new 100-bn-dollar bank note as the annual inflation rate hits 2.2 mn %. A series of seven bomb blasts rocked Bangalore, killing 2 and injuring 20 followed by a series of bomb blasts in Ahmadabad, killing 30 and injures over 100 people. World Trade Organization trade talks in Geneva collapsed. The International Atomic Energy Agency unanimously approved a safeguards agreement with India, a precondition of the nuclear deal with the United States. Poland and United States reached an agreement on basing missile defense in Poland. Russia threatened Poland with military consequences. Pakistani President Pervez Musharraf announced his resignation. Hundreds of thousands of Muslim Kashmiris demonstrated in the Indian state of Jammu and Kashmir demanding independence from India. The estimated cost of Russia and Georgia war to be at $1 billion for the latter. The United States Senate passes the civilian nuclear agreement with India by a vote of 86–13. The ISRO launches Chandrayaan-1, the country's first unmanned lunar exploration mission. Democrat Barack Obama won the 2008 United States presidential election after beating Republican John McCain, becoming the first African American to be elected to the office of President of the United States. China showed its emerging strength not in business but also in sports. It successfully organized Beijing Olympics games and was the maximum medal gainer.
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D. Some of the interesting events of 2008
China relaxed its one-child policy to allow parents of children killed in the 2008 Sichuan earthquake to have another child.
Engineers announced that the Leaning Tower of Pisa has been stabilized for the first time, and will remain stable for 200 more years.
WHO called for complete ban on tobacco advertising.
The Malaysian government announced a 40% increase in fuel prices.
IBM and Los Alamos National Laboratory broke processing speed barrier with the world's first petaflop computer, Roadrunner.
The agitation by Gujjar community of Rajasthan to be included as Other Backward Class.
The Icann relaxed rules on the creation of top-level domain names like .com or .edu, which could pave the way for companies or individuals to create an array of new addresses for the Web.
Bill Gates, the co-founder of Microsoft, finally retired.
The state wide agitation in J&K on land transfer to Amarnath Shrine. Google was ordered to divulge the viewing habits of every user to Viacom if they have watched Youtube videos.
The European Court of Human Rights ruled that an ethnic Tamil man denied asylum in Britain could not be sent back to his native Sri Lanka because he would be at risk of torture there.
The Governor of California Arnold Schwarzenegger acted to end a budget crisis by firing 22,000 California state workers and cutting the pay of 200,000 more.
162 people died in a stampede at a Hindu temple in Naina Devi in Himachal Pradesh.
According to an UNICEF releases, 2.4 million preventable child deaths occur every year in China and India.
Michael Phelps made world record by winning his sixth gold medal of the Beijing Olympics.
Italy compensated Libya for the forced colonization in the 1910s, promising to pay US$5 billion over the next 25 years.
New study showed that children of older fathers are at higher risk of psychological conditions such as bipolar disorder, autism and schizophrenia.
Malaysian opposition leader Anwar sentenced for sodomising his aid.
147 people were dead after a human stampede at the Chamunda Hindu temple near Jodhpur.
Libya paid $US1.5 billion in compensation for past terrorist attacks to the United States, clearing the way for normal diplomatic ties between the two countries.
India's Viswanathan Anand retained the World Chess Championship title in Bonn, Germany, by defeating Russia’s Vladimir Kramnik.
Indian novelist Aravind Adiga won the Man Booker Prize for his debut The White Tiger.
Sachin Tendulkar of the India cricket team became the highest aggregate run scorer in Test cricket.
Malaysia banned the practice of yoga by Muslims.
Inflation in Zimbabwe rose to about 150,000%. The Zimbabwean dollar is essentially worthless.
Source for the events: Wikipedia Disclaimer: This document has been prepared by Arthaeon Financial Services and is meant for sole use by the recipient and not for circulation. This document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed to be reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. Arthaeon Financial Services and/or its affiliates or employees shall not be liable for loss or damage that may arise from any error in this document. Arthaeon Financial Services may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document.
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Major Events in 2008 that Changed the World Highs & Lows of 2008 Crude 148.8 35.1 Gold 1,037 680
Rupee vs. UDS
52.1 39.3
Inflation 12.5% 4.84%
Sensex 21,207 7,697
Deepak Tiwari Research Analyst
History often intrigues and fascinates us. Whenever we look back and think about our past, we often wonder if it really happened to us. Some events we always like to cherish and some would haunt us even if we want to forget them. In year 2008 too, we witnessed moments of ecstasy and agony as well. Though there are hundreds of events that took place and it’s not possible and desirable to describe them in this report, however we will zero in on major events that changed the world for forever. Some of the events that will go in the annals and 2008 will be remembered for are: global financial crisis, India’s nuclear deal with the US, Mumbai terror attack and ‘Chandrayaan’ amongst others. Financial Mess: We really don’t know when this storm is going to settle in. The consensus is that it will rebound in the FY 2010 but everybody is groping and making wild guesses. Nobody knows what is in the store like what we recently saw in Madoff scandal. The crises like sub-prime and Madoff exposed the efficacy of the SEC and raised the question mark on the whole financial systems of the developed countries. As of now, several bailout plans and stimulus packages worth over $10 trillion has been unveiled and many more such packages are in the offing. No doubt such proactive measures will mitigate the severity of the crisis and will help the economies recover before the long. Politics: The year began with the assassination of popular Pakistani leader Benazir Bhutto and launch of world’s smallest car ‘Nano’ by the Tata. Many countries saw new administration stepping in. If Cuba’s veteran Fidel Castro retired after 49 years in office, new regime took place in Russia led by Dmitry Medvedev while Wen Jiabao was allowed to continue as Chinese Premier for another five years term. In Pakistan, Nepal and Bhutan, new governments came into power throwing out monarchy or dictators. And finally, the US people elected Mr. Barack Obama for a ‘change’. Terror: Terror continued to wreak havoc killing thousand innocents and India as usual was one the severest victims. It started with a suicide car blast outside the Indian embassy in Kabul followed by a series of blasts in Bangalore, Ahmadabad and New Delhi and ended up wounding Mumbai severely. Sports: In sports, China successfully organized Beijing Olympics games and was the maximum medal gainer. Michael Phelps made new world record by winning his sixth gold medal of the Beijing Olympics while Abhinav Bindra made us proud by winning India’s first ever individual gold medal. Viswanathan Anand retained the World Chess Championship title in Germany and Sachin Tendulkar became the highest aggregate run scorer in Test cricket. Bizarre events: At a time when the whole world is competing to outdo each other, in India, communities like gujjars agitated to be included as OBC. A state-wide agitation was carried out by people of J&K paralysing the lives just for a peace of land. It’s shameful that in India, hundreds of people still die in stampedes as we saw in Naina Devi temple in H.P. and Chamunda temple near Jodhpur. And despite so called development, 2.4 million preventable child deaths occur every year in China and India. In Malaysia, where its opposition leader Anwar was sentenced for sodomising his aid, banned the practice of yoga by Muslims. In unusual compensation cases, Italy compensated Libya for the forced colonization in the 1910s, paying $5 billion over the next 25 years whereas Libya paid $1.5 billion in compensation for past terrorist attacks to the US, clearing the way for normal diplomatic ties between the two countries. Can we claim such compensations from our neighbour? And now, we should learn one lesson from the Governor of California Arnold Schwarzenegger who acted to end a budget crisis by firing 22,000 California state workers and cutting the pay of 200,000 more. One wonders if our government can dare to do the same in order to contain its fiscal deficit. We hope the next year will bring us more happiness and prosperity for all of us. We expect markets will rebound in 2009 and we will see less terrorist attacks. This report is divided in four sections as follows:
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A. B. C. D.
Global Financial Crisis: At A Glance Global Financial Crisis: A Chronology Major events that took place in year 2008 Some of the interesting events of 2008
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A. Global Financial Crises: At A Glance
The Cost of Global Bailouts in 2008*
Country/ region
US Institutions that bankrupted in 2008
$ 10.1 Trillion
Estimated cost of bailout in USD billion
USA
7,000
Europe
1,300
That’s the total cost of bailouts
SL
Bankrupt Banks 1
Northern Rock United Kingdom
2
Bear Stearns, New York
3
ANB Financial, Arkansas
Japan
275
4
First Integrity Bank, Minnesota
China
586
5
Roskilde Bank, Denmark
Russia
210
6
IndyMac, California
Others
729
7
First Heritage Bank, California
10,100
8
First National Bank of Nevada
9
IKB
Recent Bailouts
10
Silver State Bank
Country
Bailout cost
Purpose
11
Fannie Mae
Japan
US $ 54 billion
Govt. spending
12
Freddie Mac
Canada
US $ 3.3 billion
13
Lehman Brothers
14
AIG
Taiwan
US $ 18.9 billion
To support Detroit's trio China's support in financing
Ireland
US $ 7.7 billion
Bailout for three banks
15
Washington Mutual
US
US $ 17.4 billion
Auto industry
Total *Till December 7, 2008
The World's biggest bailouts Industry/ Corporation
Year
Over 15 major banks and financial institutions have failed only in the US in 2008
Cost in 2008
Savings & Loan debacle in USA
1989
$293.8 billion
South Korea
1997
$78 billion
Indonesia
1998-99
$64.7 billion
Brazil
1998-01
$36.7 billion
Argentina
2000-01
$50.7 billion
The History of US Government Bailouts Industry/ Corporation
Year
Cost in 2008 ($)
Penn Central Railroad
1970
$3.2 billion
Lockheed
1971
$1.4 billion
Franklin National Bank
1974
$7.7 billion
New York City
1975
$9.4 billion
Chrysler
1980
$3.9 billion
Continental Illinois National Bank and Trust Company
1984
$9.5 billion
Savings & Loan
1989
$293.8 billion
Airline Industry
2001
$18.6 billion
Bear Stearns
2008
$30 billion
Fannie Mae / Freddie Mac
2008
$200 billion
American International Group (A.I.G.)
2008
$85 billion
Auto Industry
2008
$25 billion
Troubled Asset Relief Program
2008
$700 billion
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B. 2008 Global Financial Crisis: A Chronology Albeit the much talked and discussed sub-prime crisis began to show its sign in the early 2007 but its real and full impact was manifested only in the month of September 2008. February o
The US Congress approves a $168 billion economic stimulus package and sends it to President George W. Bush for his approval.
March o
The US investment bank Bear Stearns gets emergency funding from JPMorgan Chase, with the Federal Reserve Bank of New York's backing.
o
JPMorgan Chase announces plans to buy investment bank Bear Stearns for $2 a share following liquidity problems caused by the crisis.
o
The US Federal Reserve System becomes a lender to twenty large investment banks, backs JPMorgan Chase in purchasing failed Bear Stearns, and lowers direct lending rate.
o
The US Federal Reserve System cuts the federal funds rate by 75 basis points to 2.25%.
April o
The Federal Reserve System cuts interest rates in the United States by a quarter percentage to 2%.
o
The United States Federal Reserve System auctions off $24.12 billion in Treasury securities to help relieve the subprime mortgage crisis.
o
The United States Federal Reserve System reports that banks are tightening lending standards on home mortgages, other types of consumer loans and business loans in response to the subprime mortgage crisis.
May
June o
Wachovia, the fourth largest bank in the United States, fires its CEO, G. Kennedy Thompson, due to losses incurred in the subprime mortgage crisis.
o
The AIG, the world's largest insurance company, removes Martin J. Sullivan as its CEO due to losses caused by the subprime mortgage crisis.
o
Ireland's Economic and Social Research Institute (ESRI) says the country is in the grip of a recession for the first time in a quarter of a century. However, it predicts the economy will return to positive growth in 2009 and normal growth by 2010.
o
The European Central Bank increases interest rates in the Eurozone to 4.25 per cent to tackle inflation.
o
The US federal government's Office of Thrift Supervision closes down the IndyMac Bank, the largest savings and loan bank in the Los Angeles area, after determining that it is unlikely to be able to meet depositors' demands.
o
The US Federal Reserve tightens mortgage regulation in an attempt to stamp out the practices that led to the subprime mortgage crisis.
o
U.S. President George W. Bush signs The Housing and Economic Recovery Act of 2008 in response to the subprime mortgage crisis.
July
August o
Unemployment in the United States rises to 5.7%, its highest rate in more than four years.
o
The New York State Attorney General Andrew Cuomo reaches a $7 billion settlement with Citigroup to buy back auction rate securities from about 40,000 clients throughout the United States.
o
UK home repossessions rise by 48%. The OECD reports slower growth and declining employment in the U.S.
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o
The Consumer Price Index in the United States rises by .8 per cent in July 2008 giving an annual inflation rate of 5.6 per cent, the highest in 17 years.
September o
According to several news reports, the US government plans to take control of Fannie Mae and Freddie Mac in a takeover plan.
o
The US federal government places mortgage financing companies Freddie Mac and Fannie Mae into conservatorship. The Federal Housing Finance Agency will manage the companies on a temporary basis.
o
Washington Mutual, the largest savings and loan in the United States, ousts Chief Executive Kerry Killinger as a result of losses incurred as a result of the subprime mortgage crisis.
o
U.S.-based financial services company Lehman Brothers announces a third-quarter loss of $4.9 billion and plans to sell assets.
o
The European Commission predicts the U.K., Germany, and Spain 'to fall into recession'; the outlook for rest of the Eurozone is gloomy.
o
The AIG seeks an emergency $40 billion loan from the United States Federal Reserve.
o
Bank of America negotiates to buy Merrill Lynch for $38.25 billion in stock.
o
The United States Federal Reserve announces several initiatives to expand emergency lending to combat the crisis.
o
Lehman Brothers files for Chapter 11 bankruptcy resulting from the subprime mortgage crisis.
o
The US Federal Reserve agrees to lend the AIG $85 billion in return for a 79.9% stake.
o
Russia's government lends the country's three biggest banks, Sberbank, VTB Bank and Gazprombank, as much as 1.13 trillion rubles ($44 billion) for at least three months to boost liquidity.
o
The BBC reports that British bank HBOS is in advanced talks with Lloyds TSB as HBOS share prices plummet as a result of exposure to the subprime mortgage crisis.
o
Trading is suspended for the third day in succession on Russia's two main stock exchanges, the MICEX and the dollardenominated RTS, amidst fear of financial collapse.
o
Russian President Dmitry Medvedev orders ministers to inject another 500 billion rubles (£10.8 billion, US$20 billion) of funds from the state budget into the markets and pledges in remarks broadcast on national television that the financial system would receive "all necessary support".
o
British bank Lloyds TSB completes a £12.2bn takeover of rival HBOS, the UK's largest mortgage lender. The Competition Commission has allowed the deal as it has government backing, despite the fact that it will leave Lloyd's HBOS in control of a third of the UK mortgage market.
o
Following the recent rapid fall of the share value of HBOS, The FSA restricts short selling in an attempt to bring about market stability in the United Kingdom. This action follows a similar move by SEC in the United States on Wednesday.
o
The Securities and Exchange Commission declares an emergency ban on shorting financial-sector stocks.
o
The U.S. Securities and Exchange Commission and United Kingdom Financial Services Authority take emergency action to temporarily ban short-selling of financial companies stock.
o
The United States Department of the Treasury guarantees money market mutual funds up to an amount of $50 billion to guarantee their viability.
o
The Bush administration asks the United States Congress for $700 billion to buy mortgage-related assets to try and resolve the subprime mortgage crisis.
o
Goldman Sachs and Morgan Stanley, the two last remaining independent investment banks on Wall Street, become bank holding companies as a result of the subprime mortgage crisis.
o
The Proposed bailout of U.S. financial system (2008) to rescue the U.S. Banking system is debated by the 110th United States Congress.
o
Government officials say that the Federal Bureau of Investigation is looking into possible fraud for mortgage financing companies Fannie Mae and Freddie Mac, Lehman Brothers, and insurer American International Group.
o
Ben Bernanke, the Chairman of the Federal Reserve, warns the United States Congress that failure to pass the Paulson Plan quickly would make a recession more likely.
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o
Japanese investment bank Nomura Holdings acquires the European, Asian and Middle Eastern equities and investment banking operations of Lehman Brothers.
o
President of the United States George W. Bush addresses the nation on prime time television to discuss the crisis and the Paulson plan. He warns that the United States faces a "long and painful recession" if the package is not passed.
o
Jobless claims in the United States rise to a seven year high while orders for durable goods fall to their lowest level in 18 months, underscoring the weakness of the United States economy. Home sales in the United States during August 2008 fall to a 17-year low.
o
In the biggest bank failure in American history, the Federal Deposit Insurance Corporation (FDIC) seizes Washington Mutual and sells most of the bank to JPMorgan Chase.
o
The United States Senate passes a large spending bill including $25 billion in taxpayer subsidised loans for automakers and the end of offshore drilling bans.
o
Government officials announce plans to nationalise British bank Bradford & Bingley in the aftermath of the subprime mortgage crisis.
o
US Congressional leaders and the George W. Bush administration reach an outline Emergency Economic Stabilization Act of 2008 of a bailout of financial institutions as a result of the subprime mortgage crisis.
o
British bank Bradford & Bingley is to be purchased by the Treasury and Financial Services Authority.
o
Belgian bank Fortis NV is partly nationalised as part of an 11.4 billion euro rescue package funded by the Governments of Netherlands, Belgium and Luxembourg.
o
The United States House of Representatives rejects a proposed bailout of the U.S. financial system.
o
Head of the Swedish National Debt Office Bo Lundgren says that the $700 billion U.S. financial industry bailout is based on toooptimistic valuations, and may not be enough to restore confidence in the financial system.
o
The German government and private banks inject 35 billion Euros into the struggling Hypo Real Estate, a bank that is heavily involved in the real estate business. The bank had been stuggling because its Irish subsidy Depfa Bank had suffered massive losses during the subprime mortgage crisis. The HRE is the first company from the DAX that had to be rescued by the government in recent memory.
o
Citigroup acquires the banking operations of Wachovia, the troubled Charlotte, N.C.-based bank. Under the agreement, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans, while the U.S. Government will take losses beyond that.
o
The Government of Iceland takes control of the country's number three bank, the struggling Glitnir Bank.
o
The British Government confirm that the mortgage and loans components of Bradford & Bingley will be nationalised, whilst the company's savings operations will be sold to the Spanish banking group, Grupo Santander. (BBC News) The financial crisis around Europe deepened with the nationalization of Fortis and a cash infusion from the Benelux states amounting to €11.2 billion.
o
Intervention is needed to support the US's Wachovia, Britian's Bradford & Bingley, Iceland's Glitnir, Germany's Hypo Real Estate and the Belgian-Dutch group Fortis, following on from the Subprime mortgage crisis.
o
Shares of major Irish banks rise sharply following the announcement of a State guarantee of all deposits in Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, Irish Nationwide Building Society and EBS, worth an estimated €400 billion. The guarantee includes Bank of Ireland branches in Northern Ireland while the coverage of AIB's subsidiary, First Trust is still under discussion. Deposits in foreign-owned banks remain guaranteed to €100,000.
October o
U.S. Representative Carol Shea-Porter says that "more than 400 economists, including Nobel laureates, appealed to Congress to slow down and make sure [they] got [the bailout bill] right".
o
The U.S. Senate approves HR1424, a revised version of the proposed bailout of the nation's financial system.
o
The United States Securities and Exchange Commission says it would extend the short-sale ban to as long as October 17 or up to three business days after the passage of the proposed bailout plan, but will not make it permanent.
o
The Wall Street Journal reports that the short-sale ban fails to prevent stock-price declines, increases the volatility in the stock market and makes trading more expensive for investors.
o
U.S. President George W. Bush signs the US$ 700 billion bailout bill after it is passed by the House.
o
The German government moves to back troubled Hypo Real Estate with a 50 billion euro rescue plan.
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o
German Chancellor Angela Merkel announces that Germany will explicitly guarantee the deposits in banks held by its citizens.
o
The Dow Jones industrial average falls by as much as 800.06 points, its biggest intraday drop on record; the Dow closed below the 10,000 mark for the first time since October 26, 2004.
o
Speaking before a U.S. House Committee, Richard Fuld, CEO of failed Lehman Brothers says that he believed all his decisions "were both prudent and appropriate" given the information he had at the time.
o
Significant losses are marked on stock exchanges world-wide: São Paulo Stock Exchange suspended trading after a 15 percent drop in its benchmark index.
o
United States Secretary of the Treasury Henry Paulson announces that Neel Kashkari will be in charge of administering the Emergency Economic Stabilization Act of 2008.
o
Trading is suspended on Russia's leading stock exchanges after shares plunged nearly 20 percent amid a backdrop of falling oil prices and fears over the global economy.
o
Russia agrees to provide Iceland with emergency loans of 4 billion Euros ($5.4 billion).
o
Iceland's Financial Supervisory Authority takes control of troubled Landsbanki Bank.
o
The Reserve Bank of Australia reduces interest rates by 100 basis points to 6.0 per cent to combat the effect of the subprime mortgage crisis.
o
The US Federal Reserve announces plans to buy billions of dollars of short-term commercial paper to restore liquidity to the money market.
o
The Chairman of the Federal Reserve Ben Bernanke warns that the crisis will weaken the United States economy well into 2009 and expressed a willingness to cut interest rates.
o
President Dmitry Medvedev announces an extra 950 billion roubles ($36.4 billion) of new emergency credit for banks at a Kremlin meeting.
o
Britain's Chancellor of the Exchequer Alistair Darling releases details of a rescue package aimed at restoring confidence in British Banks. As part of the deal the British Government will provide £50bn of investment, provide a further £200bn in short term loans and guarantee up to £250bn of intra-bank loans.
o
The US Federal Reserve Board cuts interest rates by half a percentage point to 1.5% as part of coordinated activity with the European Central Bank and other central banks.
o
Head of International Monetary Fund says the US Financial Crises threatens to send the world into a recession. IMF releases World Economic Outlook report with gloomy projections for the global financial system.
o
Greece introduces a 100,000 Euro guarantee for the 230 billion Euro bank deposits in the country for three years, well above the EU-wide Ecofin-mandated minimum of 50,000 Euro for one year, and gives assurances that the Greek banking system is stable, while the Greek central bank announces a drop in the expected growth of the Greek economy to 3.3% (from 4%) because of decreased consumption caused by high petrol and food prices.
o
Kaupthing Bank, Iceland's largest bank, is nationalized by the country's Financial Supervisory Authority.
o
The United States Secretary of the Treasury Henry Paulson says that the Bush administration will proceed with plans to buy stocks in United States financial institutions.
o
Group of Seven finance ministers who met in Washington with IMF chief and World Bank president announce a plan to combat the crisis including the use of "all available tools" to support key institutions and prevent their failure.
o
United States President George W. Bush commits to collaborative action with G7 finance ministers.
o
The International Monetary Fund warns of a global meltdown and offers to lend to countries if needed.
o
The Prime Minister of Australia Kevin Rudd announces that the Government of Australia will guarantee all deposits in all Australian banks for three years as a result of the subprime mortgage crisis.
o
New Zealand and the United Arab Emirates will also guarantee all bank deposits in their banks.
o
The Federal Reserve approves the merger of Wells Fargo and Wachovia after Citigroup withdraws the legal case in a New York federal court to put a hold on the merger.
o
President George W. Bush announces new measures to attack the current economic crisis including plans for the U.S. government to buy stakes in major banks.
o
The Parliament of Germany passes a 500 billion euro ($673.8 billion) bank bailout.
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o
Iceland's Kaupthing Bank fails to pay interest to its 50-billion-yen (US$493 million) bondholders in Japan.
o
Government heads of 45 countries from Asia and Europe meet in Beijing as the 7th Asia-Europe Meeting convenes with financial crisis topping the agenda.
o
Nine major US banks will receive a $US125 billion capital injection from the federal government, says a Treasury Department official.
o
The United States Treasury Department spends US$125 billion of its $700 billion bailout fund on nine banks, some of whom had argued that they did not need the money.
November o
The United States government announces a second bailout of AIG; the total value of the new plan, roughly US$150 billion, represents the largest government support package extended to a private company in US history.
o
American retail chain Circuit City files for protection from its creditors under Chapter 11 of the United States Bankruptcy Code.
o
Sweden's Financial Supervisory Authority announces that it is revoking the banking licence of the struggling Carnegie Investment Bank.
o
China announces a stimulus package involving US$586 billion to finance programs in 10 major domestic areas in the next two years.
o
The Eurozone enters its first recession as the combined gross domestic product of the 15 members dropped 0.2% in the second and third quarters of 2008.
o
Citigroup will cut 75,000 jobs by early 2009.
o
The Japanese economy posts consecutive second-quarter contraction for the first time since 2001, officially putting the country in a recession.
o
HSBC Holdings announces 500 layoffs in Hong Kong. Pepsi announces 3,000 layoffs in the United States, Canada, Mexico, and Europe.
o
The IMF approves a US$2.1 billion rescue package for Iceland following its financial crisis.
o
Automotive industry crisis: Executives of the top three U.S. automakers (Ford Motor Company, General Motors, and Chrysler) testify before Congress for a bailout package.
o
Citigroup receives US$32 billion from the United States Emergency Economic Stabilization Act.
o
The US Federal Reserve announces a new US$800 billion "stimulus" package in which it will buy debt and mortgagebacked securities and make loans to holders of consumer debt.
o
BHP Billiton, the world's largest mining company, withdraws a $66 billion bid for the Rio Tinto Group due to the global financial crisis.
o
The European Union proposes a €200 billion stimulus package that will include already-spent money.
December o
S&P downgrades Russia since 1999, while data showed that the Central Bank spent US$30 billion in currency market interventions in November 2008.
o
The White House and U.S. Congress agree on a proposal for a US$17.4 billion bailout package for three major US automakers.
o
The US consumer price index fell in November by 1.9% on a non-seasonally adjusted basis, the biggest decline since the nadir of the Great Depression in January 1932.
o
Madoff, a former chairman of the Nasdaq exchange market has been arrested on a single securities fraud charge for operating a $50 billion Ponzi scheme from his investment advisory business.
o
Canada announces a US$3.3 billion bailout for its troubled automotive industry.
o
Toyota Motor Corporation, the world’s largest automaker, forecasts its first operating loss in 70 years, due to the automotive crisis.
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C. Major events that took place in year 2008 Benazir Bhutto assassination. Tata Motors launched the world's cheapest production car, Nano. The Cuba Prez and Army Chief Fidel Castro retired, resigning after 49 years in office. Microsoft was fined a record €899 million by the EU anti-trust commission. Wen Jiabao was elected as Chinese Premier for another five years term. Dmitry Medvedev assumed the role of the President of Russia. South Ossetia war between Russia and Georgia. Nepal declared to be a federal, democratic republic abolishing the 240 year old Nepalese monarchy. A suicide car bomber struck outside the Indian embassy in Kabul, Afghanistan, killing 41 people. Russia and China found solution to their over 40 years old 4,300-kilometer border dispute. Zimbabwe introduces a new 100-bn-dollar bank note as the annual inflation rate hits 2.2 mn %. A series of seven bomb blasts rocked Bangalore, killing 2 and injuring 20 followed by a series of bomb blasts in Ahmadabad, killing 30 and injures over 100 people. World Trade Organization trade talks in Geneva collapsed. The International Atomic Energy Agency unanimously approved a safeguards agreement with India, a precondition of the nuclear deal with the United States. Poland and United States reached an agreement on basing missile defense in Poland. Russia threatened Poland with military consequences. Pakistani President Pervez Musharraf announced his resignation. Hundreds of thousands of Muslim Kashmiris demonstrated in the Indian state of Jammu and Kashmir demanding independence from India. The estimated cost of Russia and Georgia war to be at $1 billion for the latter. The United States Senate passes the civilian nuclear agreement with India by a vote of 86–13. The ISRO launches Chandrayaan-1, the country's first unmanned lunar exploration mission. Democrat Barack Obama won the 2008 United States presidential election after beating Republican John McCain, becoming the first African American to be elected to the office of President of the United States. China showed its emerging strength not in business but also in sports. It successfully organized Beijing Olympics games and was the maximum medal gainer.
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D. Some of the interesting events of 2008
China relaxed its one-child policy to allow parents of children killed in the 2008 Sichuan earthquake to have another child.
Engineers announced that the Leaning Tower of Pisa has been stabilized for the first time, and will remain stable for 200 more years.
WHO called for complete ban on tobacco advertising.
The Malaysian government announced a 40% increase in fuel prices.
IBM and Los Alamos National Laboratory broke processing speed barrier with the world's first petaflop computer, Roadrunner.
The agitation by Gujjar community of Rajasthan to be included as Other Backward Class.
The Icann relaxed rules on the creation of top-level domain names like .com or .edu, which could pave the way for companies or individuals to create an array of new addresses for the Web.
Bill Gates, the co-founder of Microsoft, finally retired.
The state wide agitation in J&K on land transfer to Amarnath Shrine. Google was ordered to divulge the viewing habits of every user to Viacom if they have watched Youtube videos.
The European Court of Human Rights ruled that an ethnic Tamil man denied asylum in Britain could not be sent back to his native Sri Lanka because he would be at risk of torture there.
The Governor of California Arnold Schwarzenegger acted to end a budget crisis by firing 22,000 California state workers and cutting the pay of 200,000 more.
162 people died in a stampede at a Hindu temple in Naina Devi in Himachal Pradesh.
According to an UNICEF releases, 2.4 million preventable child deaths occur every year in China and India.
Michael Phelps made world record by winning his sixth gold medal of the Beijing Olympics.
Italy compensated Libya for the forced colonization in the 1910s, promising to pay US$5 billion over the next 25 years.
New study showed that children of older fathers are at higher risk of psychological conditions such as bipolar disorder, autism and schizophrenia.
Malaysian opposition leader Anwar sentenced for sodomising his aid.
147 people were dead after a human stampede at the Chamunda Hindu temple near Jodhpur.
Libya paid $US1.5 billion in compensation for past terrorist attacks to the United States, clearing the way for normal diplomatic ties between the two countries.
India's Viswanathan Anand retained the World Chess Championship title in Bonn, Germany, by defeating Russia’s Vladimir Kramnik.
Indian novelist Aravind Adiga won the Man Booker Prize for his debut The White Tiger.
Sachin Tendulkar of the India cricket team became the highest aggregate run scorer in Test cricket.
Malaysia banned the practice of yoga by Muslims.
Inflation in Zimbabwe rose to about 150,000%. The Zimbabwean dollar is essentially worthless.
Source for the events: Wikipedia Disclaimer: This document has been prepared by Arthaeon Financial Services and is meant for sole use by the recipient and not for circulation. This document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed to be reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. Arthaeon Financial Services and/or its affiliates or employees shall not be liable for loss or damage that may arise from any error in this document. Arthaeon Financial Services may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document.
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