WhyItDropped

S&P 500 · September 17, 2008

The week Lehman failed

-4.71%

single-day change vs previous close

Part of a longer stretch

The Global Financial Crisis bear market

midway through · 2007-10-09 → 2009-03-09, -56.78% over the whole period

What happened that day?

  • On 17 September 2008 the S&P 500 fell 4.71% in a single day
  • Lehman Brothers filed for bankruptcy on 15 September. The decision not to rescue it shocked the market
  • The very next day the government did rescue a large insurer, and nobody could tell what the rule was any more
  • That uncertainty made financial institutions distrust each other and funding markets froze
  • A money market fund broke the buck, and even products people considered safe were suddenly in question
  • This is the week the crisis went beyond control. The low came six months later in March 2009

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.