SARGEN & LIPSKY: THE DECLINE OF U.S. FINANCIAL DOMINANCE

The Decline of U.S. Financial Dominance

The Effectiveness or Lack Thereof of Federal Reserve’s Monetary Policy

It has been four years since the start of the worst financial crisis in the post war era. It feels like a lifetime to me. Lehman Brothers filed for bankruptcy in September 2008, tipping the world into a systemic financial meltdown which we have been recovering from ever since. It’s helpful to step back every once and while and see how far we have come since the market lows of March 2009, when the S&P closed under 700. It has more than doubled since then, but oh what a ride it has been!
Read MoreHide TextOne of this week’s guests, Fort Washington Investments Nick Sargen, points out that there have been three distinct market phases since the financial crisis began. First, “the sell off” from September of ‘08 to March of ‘09 when global credit markets froze, economies fell into recession, and the Fed drove interest rates to zero. During the sell-off, the S&P lost 46%, other markets plummeted; U.S. Treasuries and gold were the only major asset classes to gain.
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