The Federal Reserve released the transcripts from its 2009 FOMC meetings. The document dump also came with accompanying presentation materials.
For the March 2009 FOMC meeting, which was when the stock market had crashed to its lows, System Open Market Account manager Trish Mosser brought a stack of charts that probably haunt the nightmares of Wall Street's veterans.
Five of them remind us of how scary things got.
The first two capture the stock market crashes. The first is of European, Japanese, emerging markets, and US equity indices. The second captures the crashing financial stocks.
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The third, fourth, and fifth charts show surging bank credit-default swap (CDS) spreads. CDS is basically insurance against a default, and when they rise, it means people are freaking out.
The initial spikes occurred during the fall of 2008, which is when Lehman Brothers went bankrupt and Merrill Lynch got bought by Bank of America at a huge discount to market value.
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For the banks that walked away from the crisis, prices came back CDS spreads crumbled.
"I am concerned that stock prices and credit markets may suffer additional setbacks and make some of our forecasts for the stock market going forward a little more problematic," the Boston Fed's Eric Rosengren said at that meeting. He made that statement days into what has been an epic six year-long bull market.