The 2008 financial crisis is another instance of an anomaly. For many years, banks had extended non-traditional loans to those with poor credit and low incomes so they could purchase homes. Home prices rose sharply as more people purchased properties. Lenders found themselves in a difficult situation as people were unable to afford their homes.
Congress rejected the Fed’s planned bank bailout measure in September of that year, which caused the market to plummet. The legislation was approved by Congress in October, but it didn’t immediately repair the damage to the stock market. The market dropped a staggering 38.49% in 2008.