LITMIR.BIZ

Скачать книгу

2006 2.9% 2005 3.5% 2004 3.8% 2003 2.9% 2002 1.7% 2001 1.0% 2000 4.1% 1999 4.8% 1998 4.5% 1997 4.4% 1996 3.8% 1995 2.7% 1994 4.0% 1993 2.8% 1992 3.5% 1991 –0.1% 1990 1.9% 1989 3.7% 1988 4.2% 1987 3.5% 1986 3.5% 1985 4.2% 1984 7.2% 1983 4.6% 1982 –1.8% 1981 2.5% 1980 –0.3% 1979 3.2% 1978 5.5% 1977 4.6% 1976 5.4% 1975 –0.2% 1974 –0.5% 1973 5.6% 1972 5.3% 1971 3.3% 1970 0.2%

      The National Bureau of Economic Research (NBER), a private nonprofit research organization which came into existence in 1920, has documented U.S. economic activity back to 1802. Through 2021, the NBER data show that the United States has experienced 48 recessions — or about one per five years.

      While their definition is a bit more complicated, a recession is generally defined by two consecutive quarters of declining real gross domestic output. (NBER uses a more detailed definition, which looks for a decline in employment, industrial production, real personal income, real manufacturing, and trade sales.)

Touring Past Crises: What Happened and Why

      When a major crisis hits — for example, the 2008 financial crisis, the 2020 COVID-19 pandemic, the 2001 terrorist attacks, and prolonged recession — unexpected things happen. And if you’re one of the millions of people adversely affected, stress and emotions can add to the financial quandaries and problems you face. Each crisis is unique and impacts the economy and individuals personally in differing ways.

      Past experience and the “school of hard knocks” can certainly improve how well you react to each such event. But you can prepare for and better manage through especially challenging times by examining such past episodes.

      Why pilot training has relevance for your tour …

What I’m suggesting is a similar type of training that commercial airline pilots go through on flight simulators. Consider that you wouldn’t want a pilot encountering an unusual event (for example, dual engine failure requiring a water landing) for the first time in a real flight with hundreds of passengers on board a jumbo jet! All those US Airways passengers onboard Captain Sullenberger’s jet were grateful that he and his copilot had extensive training and knew what possible options to quickly consider when their plane’s twin engines shut down after striking a flock of geese soon after takeoff from LaGuardia Airport in New York City.

      This book aims to provide you with the training and historic perspective so that you are well prepared to deal with and navigate a wide range of personal financial challenges. When an unexpected crisis occurs, our biological wiring causes our fear reaction to kick in, which can cause more problems.

      Keeping calm and keeping perspective are vital. Knowing how prior crises have unfolded and gotten resolved can help. Also, there are opportunities to benefit from lower prices on investments like stocks, real estate, and small business at such times, but many people aren’t financially or emotionally positioned to do so.

      When a crisis unfolds, I don’t need to tell you that it’s “breaking news.” Nearly everyone consumes some news and media coverage, whether through traditional outlets (such as radio and television) or through newer platforms (such as social media, blogs, podcasts, and so forth). I can tell you from thousands of personal observations that the economic coverage and biases of those outlets can and will get in the way of you making the best personal financial decisions. And so too can your own biases and beliefs, especially if you follow politics and identify reasonably strongly with candidates from a particular political party or ideology.

      The Panic of 1907

      You probably didn’t know or realize it at the time, but the 2008 financial crisis actually shared numerous parallels with the so-called Panic of 1907. And, the 1907 panic was similar to other financial panics, bank runs, and bank failures that came before it. Such episodes were reasonably common as the government-operated Federal Deposit Insurance Corporation (FDIC) insurance system for banks didn’t come into existence until 1933. There was also no other federal oversight or backstop for banks, like the Federal Reserve, which didn’t exist in 1907 (but came out of this crisis).

      According to a Federal Reserve Bank of Boston review of the Panic of 1907 and other panics:

“Some were more severe than others, but most followed the same general pattern. The misfortunes of a prominent speculator would undermine public confidence in the financial system. Panic-stricken investors would then scramble to cut their losses. And because it wasn’t uncommon for speculators to double as bank officials, worried depositors would rush to withdraw their money from any bank associated with a troubled speculator. If a beleaguered bank couldn’t meet its depositors’ demands for cash, panic would

Скачать книгу