Winners & Losers 2009: The year of government intervention

How a dose of socialism saved unfettered capitalism.

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January 16: The U.S. government announces it will provide Bank of America with US$20 billion in aid, and BOA reports a quarterly loss for the first time in 17 years.

January 27: The Canadian government unveils its “economic action plan,” including $7.8 billion for social housing, $12 billion for works projects and $8.3 billion for training for the unemployed.

February 10: The U.S. Fed expands the Term Asset-Backed Securities Loan Facility (TALF), which lends money to investors to buy securities backed by loans, thereby allowing banks to provide more loans.

February 17: President Obama signs the US$787-billion American Recovery Reinvestment Stimulus Act. The money provides tax cuts, as well as money for infrastructure projects.

February 27: The Treasury Department announces that it will bail out Citigroup for the third time, raising the government stake in the troubled bank from 8% to 36%. Citigroup posts 2008 losses of US$27.7 billion.

March 23: U.S. Treasury Secretary Timothy Geithner unveils plans to buy as much as US$2 trillion in unwanted mortgages and other “toxic assets” from banks. The Dow close at 7,775, up 496 points.

March 30: The White House gives GM enough funding to allow it to operate for 60 days while coming up with a plan to remain viable. Chrysler receives one month to finalize a partnership with Italian carmaker Fiat.

April 14: Ottawa announces $170 million for Canada’s struggling forestry sector, including $120 million to develop new products, and $10 million to demonstrate uses for wood.

June 18: Tony Clement, the industry minister, rejects calls to bail out Nortel, the former high-tech giant, saying there is “no role for government” in saving the company.

June 25: President Obama signs the Car Allowance Rebate System, dubbed Cash-for-Clunkers. The program allows car buyers to trade in less-fuel-efficient vehicles for up to a US$4,500 credit toward a new car.

July 21: The U.S. Federal Reserve and the Bank of Canada both recommit to holding lending rates near 0.25% until June 2010. The Dow closes at 8,915.

September 15: Bernanke defends the costly steps taken to stem the economic crisis. “Without these speedy and forceful actions … more major financial firms would have failed, and the entire global financial system would have been at serious risk,” he says.

October 22: President Obama unveils a program to help small businesses borrow money, by allowing small banks to borrow funds at low rates from the Troubled Asset Relief Program (TARP).

November 18: The European Union approves a $30-billion bailout of Lloyds Banking Group by the British government. The Dow closes at 10,426.

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