Reports of economic activity

On December 1, the National Bureau of Economic Research

National Bureau of Economic Research

The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end...

 officially declared that the U.S. economy had entered recession

Recession

In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...

 in December 2007, a full year earlier. (See late 2000s recession

Late 2000s recession

The late-2000s recession, sometimes referred to as the Great Recession or Lesser Depression or Long Recession, is a severe ongoing global economic problem that began in December 2007 and took a particularly sharp downward turn in September 2008. The Great Recession has affected the entire world...

)

The Labor Department said that the US lost 533,000 jobs in November 2008, the biggest monthly loss since 1974. This raised the unemployment rate from 6.5% to 6.7%.

On December 9, the Bank of Canada

Bank of Canada

The Bank of Canada is Canada's central bank and "lender of last resort". The Bank was created by an Act of Parliament on July 3, 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the Government of Canada...

 lowered its key interest rate by 0.75% to 1.5%, the lowest it had been since 1958; at the same time the Bank officially announced that Canada's economy was in recession. This move came after the news that Canada lost 70,600 jobs in the month of November, the most since 1982. The official Bank of Canada press release stated that "[the] outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated."

On December 11, the FBI announced the arrest of Bernard Madoff

Bernard Madoff

Bernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S...

 in a Ponzi scheme

Ponzi scheme

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...

 which totaled $50 billion by Madoff's own estimate, and which was soon found to affect banks, individuals, and charities in the U.S. and Europe.

Events

After 5 positive days, on December 1 the S&P 500 fell 80 points to 816, down 9%. Financial stocks in the S&P 500 fell 17%. The Dow Jones Industrial Average closed at 8149 with a drop of 679 points 7.7% down. Oil fell below $50 a barrel in New York Trading. The General Accounting Office released a report that claims that the Oversight of the Troubled Assets Relief Program

Oversight of the Troubled Assets Relief Program

The Emergency Economic Stabilization Act created the Troubled Assets Relief Program to administer up to $700 billion. Several oversight mechanisms are established by the bill, including the Congressional Oversight Panel, the Special Inspector General for TARP , the Financial Stability Oversight...

requires additional actions to ensure "integrity, accountability, and transparency". (Washington Post) (bloomberg.com) (Wall Street Journal) (CNN Money)

On December 22, US industry leaders asked the Federal Reserve for assistance un-freezing the commercial real estate market, which has not securitized any loans in the last six months of 2008.