In its earliest days in the summer of 2007, it was labeled a “crunch,” shortly followed by “storm.” As credit conditions worsened into the fall, financial industry players and some observers were quick to reassure investors that this storm was indeed a cycle, something the markets had weathered in the past. But then analysts began tossing the “crisis” word around and, by November, William Seidman, the then 86-year-old former chairman of the Federal Deposit Insurance Corp., felt compelled to remind players that “things will get much worse, but I don’t think it is going to imperil the financial system the way the S&Ls did.”

Almost a year later, the jury’s out. What the financial industry is suffering through may not be the S&L crisis, but it’s a crisis all its own, with global implications. Billions of dollars in writedowns have caused some once-hallowed halls of capitalism to topple, wiped out 10 years’ worth of stock appreciation at others, raised the ire of Wall Street and investors, prompted the Federal Reserve to open the discount window to investment banks and, eventually, triggered its involvement in the bailout of Bear Stearns. By late summer, the government had seized control of Fannie Mae and Freddie Mac in an attempt to stabilize the financial markets, 12 banks (and counting) had failed, and the list of deposed CEOs was growing along with their institutions’ mounting losses.

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