Historical Perspective 100 Years
In the last six months, I have attended multiple conferences focusing on the Economy, Real Estate, the Recession, the Great Depression… my FOCUS is the TRUTH not fiction… the FACTS, not hype.
What follows is a synopsis of these events…from The Great Depression to the Recession of 2008…We are NOT in a great depression and no recession has lasted longer than 18-24 months.
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The Great Depression Decade Data: 1929-39
Key Stat Unemployment: 25%
Dow Jones (down) 89%
GDP (down) 11% ($103 Billion)
The Key Statistic of Unemployment at 25% represented an all-male work force. Today, inclusive of the female work force, this key statistic would be in excess of 40%
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World War II The Baby Boomer Generation
For 2 decades the U.S. saw great consumer confidence and econmic well being. The aftermath of WWII saw the birth of the Boomers…
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The Challenging 70’s Recession: 1973-75
Key Stat Inflation: 21%
Dow Jones (down) 45%
GDP (up) 18% ($1.4 Trillion)
The highest tax bracket was 70%! The oil crisis created long lines at the gas pump and rationing.
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The Go-Go 80’s Recession: 1981-82
Key Stat Prime Rate: 18.87%
Dow Jones (down) 24%
GDP (up) 4% ($3.1 Trillion)
Mortgage interest rates were at an all-time high of 22%…creative financing was the buzz word of the day.
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The Booming 90’s Recession: 1990-91
Key Stat 653 Failed Banks/Savings and Loans
Dow Jones (down) 21%
GDP (up) 3% ($5.8 Trillion)
The Savings and Loans crisis and bail out by the U.S. Government…these banks failed — unlike the 2008 mergers and acquisitions.
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The Consumerism of the 2000’s 2008
Key Stat $6.2T market losses
Dow Jones (down) 51%
GDP (up) 1% ($11.6 Trillion)
* 2000: Americans took $26B in equity out of their homes
* 2004: It had risen to $139B
* 2005: It was $450B
* 2006: It was $620B
42% of this went to consumer spending or
to pay off consumer debt!!
These numbers are astounding…so what happened?? We over spent and under saved and over borrowed and over paid…
NOW we should under spend and over save and under borrow and under pay. THE GOVERNMENT STEPS IN AND WANTS US TO SPEND AND SAVE. This is about the Economy…NOT our lives!
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GDP = Gross Domestic Product
(Sources: Wells Fargo, USA Today, TIME Magazine & Mortgage Bankers Association)
