The Federal government is spending hundreds of billions of dollars to add liquidity to the financial markets to avoid a complete collapse. Here's a chronology of the how the crisis evolved, what caused it and steps the government has been taking along the way.
Feds Nationalize Fannie and Freddie
The Treasury Department was authorized to spend $100 billion to guarantee Fannie and Freddie's loans.
August - Will High Mortgage Rates Force Nationalization of Fannie and Freddie?
High LIBOR rates meant that Fannie and Freddie could not sell their mortgages in the secondary market, which meant they couldn't raise enough capital to keep going.
July - Congress Passes Fannie and Freddie Bailout Package
Bill allows $300 billion in FHA loan guarantees, $25 billion in Fannie and Freddie loan buybacks, $15 billion in housing tax break, and $3.9 billion in housing grants.
June - Federal Reserve Auctions Top $1.2 Trillion
In June, the Federal Reserve lent $225 billion to provided liquidity through its Term Auction Facility. What was supposed to be a temporary stop-gap measure has become permanent.
