August 2007. The housing market is cracking, but experts say 'subprime is contained.' Over the next 19 months, Bear Stearns fails, Lehman collapses, the global banking system freezes, and the S&P 500 loses 57%. The hardest part: multiple false rallies fool investors into thinking the worst is over — before each new catastrophe.
Housing market showing cracks. Several subprime lenders bankrupt. Treasury says: 'Subprime is contained.' S&P near all-time highs.