Can anyone remember the 2008 crash?

[Camouflags]

I was too young but can anyone tell me what it felt like before it crashed? Why did it crash? What crashed?!
Personally how did it affect you? Is this worse so far?

I had bought my house less than a year before and lost my job (that I loved).

I was lucky, I walked into my current job less than three weeks later and never looked back.

Back then I didn’t have children though, there was no risk of death. This is worse.

Now is very much far worse. My whole life & that of DC & everyone I know didn't get huge upheaval in 2008. My pension took a hit in 2008 but not 50% fall. Companies responded in 2009 by having a lot of staff go PT, that doesn't seem likely this time. I recall tension around SARS1 better actually. That tension is more like this yr, but that was still just watchful waiting. And SARS1 fizzled out.

Watch "the big short"

What then happened was a loss of confidence in the market that lead to a run on Northern Rock, urgent Nationalisation (legislation was passed in 3 days).

The big collapse was Lehman Brothers. The problem was that LB was systemic i.e. it was massively interconnected with other institutions in the markets - they all had thousands of transactions with each other so it created a domino effect. Additionally, there were parental guarantees within the group that moved liability from Europe to the US.

It felt surreal on one level. Nobody knew what was going to happen next.

However, I had also worked on the collapse of the Russian economy in the late 1990’s and some of the financial implications for banking. That was also surreal.

Big shocks happen more often than people realise.
Barings/BCCI/Kobe Earthquake/AIDS
Russian Economy - 1998
Tech Stocks / Enron - 2001-2002
Boxing Day Tsunami - 2004
Hurricane Katrina -2005
Financial crisis - 2008
Fukushima Tusnami - 2011
Superstorm Sandy -2012

As a PP said we came within a hairsbreadth of complete financial collapse in 2008.

This was not made public at the time but it's the only time I've ever seen financial professionals really worried. Normally we're fairly blase about the ups and downs.

This is what is worrying me. The whole way through this (well the lasy few days because I've been avoiding the news) we have been alright thinking dps job is secure. But its nearly april and there are rumours of contracts not being renewed. April-june was supposed to be none stop work- work planned over the last 5 years, now we have no idea if it can even go ahead.
I have 3 dc and one on the way. We were looking up! Now nothing.

@ChazsBrilliantAttitude

That’s what I don’t understand - we know these shocks happen and we are affected by them and it was clear to me that the mechanisms we were unpicking particularly in finance were the very tools that shield the most vulnerable from the worst effect. I’ll never understand how this wasn’t recognised by more for what it was. It was so clear to see.

Yes,
I lived through the crash of '87. We lost everything - house, business, car, we were declared bankrupt and financially we never recovered. We never could afford to buy a property again. In those days there was financial help available in the form of benefits. We were poor and lived hand to mouth but nothing like today when people have nothing. We weathered the 2008 crash because we did not have a mortgaged property and were able to claim housing benefit. However we were forced into an IVA and had to pay it off over five years. Lost our pension too as that had to go in the pot to pay creditors.

This is BIG. And very bad because it affects everyone. I also have no confidence in this government. They will fuck it up just like they did last time... and the time before.

We must look after each other as best we can.

Yes and this is much much worse IMO.
But I don't know if that’s because I was in my indestructible early 20s with no real responsibilities like children.

@NotQuiteUsual same. Looks like we wont be buying now after 5 years of saving (and 2 family members stealing substantial (to us) amounts off us. If they hadn't stole our money we would have a house 2 years ago! As soon as we got back on our feet this happens.

BTW We are freelancers and every job has been cancelled within the last few weeks.

I remember 2008, 1992 and going back to early 1970s

None of them were anything like this bad
Such an epidemic is a 1 in 100 years event, which brings more problems than a purely financial event

Even just looking at the economy / financial side:

Guardian Live quoted an economic prediction of UK GDP dropping by 10-20%
I was discussing with my brokerage manager in Germany yesterday and he agreed that is likely
(The 2008 crash only lost about 5% GDP, for comparison)

I remember. I was in Australia where they didn’t even go into recession and even there people were loosing jobs left right and centre.

To give a perspective
The Boxing Day Tsunami in 2004 is estimated to have killed over 227,000 people in a single event.

It’s still hard to comprehend the scale.

Camouflags the only plus is we might have enough savings to weather this storm now. I'm sorry you're in the same position. Its crap isn't it?

I remember it well. We had a fair bit invested in stocks and shares, and when the FTSE was plummeting I was panicking and thinking we should sell.
On the contrary, said dh, now is the time to buy, and when it had gone lower still, we did - I know we were fortunate to be able to do so. And eventually it rose again.

I’m also old enough to remember the crash of 1987 (I think) which had my father very worried.
But it rose again then, too.

Those were financial crashes and of course this is different, we are in uncharted waters, but I would be very surprised if, in time, the markets don’t rise again eventually, as they always have before.

I remember the one before that more. Early 90s. Just out of uni. Getting a job was tough. I had to move away from family. Why did it crash? Not sure really. There was no major event. Just a cyclical thing really

I honestly don’t mean this as a joke, but with the way pensions disappear, there’s a lot to be said for my grandparents generation who kept it under the mattress. It may not have made interest, but it would still be there when things went south. 😔 my heart breaks for you all that are affected by such an uncertain times.

I guess with this event, when it’s over, it’s over. It’s the when that is the tricky bit.

@notquiteusual
Thats what I was thinking too, I am glad we have a bit of a barrier. Only 8k though as we were buying the cheapest and only 5% deposit.
Honestly it wont help for long with rent. Possibly stretch to a year and a half with no luxuries.
Although luxuries count as toilet roll and nappies these days dont they?!

2008 was very bad financially, and it hasn't been dealt with properly. We have been on emergency interest rates ever since, we have no room for manoeuvre now when things get worse. A lot of money was printed to keep the banks afloat, now we have extremely high levels of public and private debt. House prices are crazy due to the very low interest rates. Debt debt debt
The hangover from 2008 is going to make the financial affects of Coronavirus much much worse.

@ChazsBrilliantAttitude i remember that- as a child I was upset that my parents wanted to watch the news on boxing day. I wonder how my kids are dealing with this.
My 6yo son was talking about coronavirus 2 weeks ago when I thought it was still all a media hype! Its only when he said on monday that his teacher said school will close on friday I decided to take my fingers out of my ears and it's all escalated.
Sunday i went to the pub! This morning all my kids are off school and dps job is a big fat questionmark!

These events are tough and it’s understandable people are scared. There will be some people who are affected very badly and I don’t want to minimise that. However, overall we recover from these shocks.

I wouldn’t say too much to a young child other than explaining why they won’t be going out much and school is closing.

Yes this is worse. Much much worse. Overnight loss of income and sickness together. 2008 happened over a very long period of time.