Election season is in full swing, so naturally a question you’re hearing a lot is: “Are you better off now than you were four years ago?” I’ve had numerous discussions and debates on this point already, and I’ve read a few good posts on the topic as well. The more I read about, and talk about this topic the more I’ve started to realize I may have a unique perspective on things.
Four years ago I was at the epicenter of it all. I was in my first job out of college, an entry-level accounting position at Citigroup. The day I started at Citi the company stock price closed just above $53 per share ($492/share to accurately compare it to today’s price due to a reverse split). By now you know the story, the financial industry exploded, the stock market crashed and all hell broke loose…
From the outside the news was bad enough, but being on the inside of one of the companies at the heart of it all was something I’ll never forget.
At the onset of it all there was a general feeling that we would be alright. We were a HUGE company, mortgages were surely just a small part of our balance sheet, we could easily weather the storm. That was the attitude for a good few months. There were layoffs here and there, and the stock price wasn’t doing so well, but it would surely pass. But, it didn’t pass. The layoffs continued to mount and the stock price was now in a free fall. The hardest part was that everyone heard “Citigroup” and assumed we were all traders or executives getting what they deserved. I can tell you, at the time, neither I, nor anyone I worked with had ever heard of a credit default swap.
The day I’ll never forget came in early 2009. It was right around noon when I stopped by my manager’s office to see that he had Google Finance open. “Come look at this.” he said. I walked into his office to see that our stock price was trading around 75 cents. Needless to say, word quickly spread around the office. It was only a matter of time before EVERYONE had stopped working and was gathered around a computer screen with a ticker open. Our wing of the building had about 150 people working in it. The normal sounds of typing, ringing phones and conversation had been replaced by one thing. A legitimacy eerie silence. Everyone from interns to the director of in charge of us all sat in silence until only one thing was said: “What happens if it hits $0?”
Luckily we wouldn’t find out the answer to that question, however as you can expect, the majority of us didn’t survive with our jobs much longer after that. The silence of that day, and the general feeling of months of waiting for the other shoe to drop are things I will not soon leave behind.
It’s for that reason that I can’t take someone very seriously when they try to say that things are worse today than they were four years ago.
Four years ago, financial institutions around the world were crumbling. The American auto industry was hot on their heels and nobody knew what was next. The American economy was as close to 1929 as it will hopefully ever come again.
The DOW dropped over 600 points in a single day four times during 2008. It shed 50% of its value in just 17 months before bottoming out at 6594. Jobs weren’t much better. The U.S. economy was shedding jobs at record pace. Nearly 800,000 per month in early 2009 before the unemployment rate finally peaked at 10.1%.
Today, unemployment sits at an only slightly better 8.1%. However the economy has shown jobs gains for almost 30 straight months. The stock markets recently hit highs not seen since George W. Bush’s first term in office. For better or worse, Bank of America, Citigroup et al. are still around, loaning money and employing tens of thousands of people. American auto companies are not only still around, but are making their best products in years, and are profitable in doing so.
Things today still aren’t great, but if you want to be taken seriously and at least appear objective. When the question “Are we better off today than four years ago?” arises. The only answer is…yes.