In 2000, the national economy had been on a run that lasted about eight years. Interest rates were reasonable and the equity and housing markets were on an upward trend that seemed like it would never end.
Then 2001 and 9/11 hit!
The following comparisons show differences in key interest rates for December 2000 and December 2010:
Fed Funds Rate
Dec 2000 month-end 6.40%
Dec 2010 month-end .18%
30-year Fixed Rate Mortgage Fannie Mae
Dec 2000 month-end 7.41%
Dec 2010 month-end 4.47%
30-year FRM Fannie Mae FHA/VA
Dec 2000 month-end 7.20%
Dec 2010 month-end 5.06%
The following comparisons show differences in the equity markets for the same period.
S&P 500 Composite
Dec 2000 month-end 1,320,28
Dec 2010 month-end 1,257.64
DJIA (30 industrials)
Dec 2000 month-end 10,786.85
Dec 2010 month-end 11,577.51
Nasdaq Composite
Dec 2000 month-end 2,657.81
Dec 2010 month-end 2,631.56
Not only did the Lost Decade show a lack of gains in employment, it showed losses a lack of gains in financial
markets. (Source: FreeLunch.com)
©Copyright 2011 by CBER.