September 2008: A Giant Bank Collapses

It's September 15, 2008. Lehman Brothers, a 158-year-old investment bank, has just filed for bankruptcy, the largest in U.S. history. For months there have been problems in the housing market, but most people assumed the government would never let a bank this large fail. Now it has. The market falls sharply and banks have stopped trusting each other. You have $10,000 invested in a broad fund that tracks the whole market.