September 15, 2008 was one of the most important days in American financial market history. Lehman Brothers, one of the oldest and most respected investment banks on Wall Street, filed for bankruptcy, sending a shock through the financial system to a degree not seen since the Great Depression. Massive layoffs from businesses and defaults by households ensued. Several years and trillions of dollars of money supplied by the Federal Reserve later, most Americans still feel as if the economic recovery has never commenced. So today, five years after the collapse of Lehman Brothers, what is the state of the U.S. economy? Stock markets have risen to all-time highs, yet employment is still well below pre-crisis levels, and most Americans still feel as if the economy is still in recession. So why have stock markets and general economic consensus decoupled? Jonathan H. Todd combs through economic data and financial research to try to parse out exactly why the disconnect between the job and investment markets exists, and where the economy should head from here. Things may seem dire to most Americans today, with a huge pool the unemployed, a massive debt accumulated by the U.S. government, and as uncertain a global economic outlook as ever. The Financial Crisis resulted in a devastating and lasting impact from coast to coast, spawning mass mortgage defaults, and draining the savings assets and 401k accounts of many ordinary Americans. Taking a 40,000 foot view of the economy, the case for optimism and the case for pessimism are laid out, in an attempt to understand how the American economy is likely to perform after five years of poor growth. While there are still many reasons to be worried about the future of our country, there are many reasons to be optimistic as well. The equity markets have recovered, but the real economy - where Americans work, spend, and live - may feel that same strong growth in the near future.
About the Author: Jonathan H. Todd is an investor, financial analyst, and a consultant to small technology businesses. Focusing on macroeconomic developments to drive investment decisions, Jon has been an active participant in the markets for over a decade. Jon received his AB in Law, Letters, and Society from the University of Chicago ('06), and MBA from Vanderbilt University ('12). Other professional experiences include several years managing portfolios of securitized debt products at Bank of America. A native of Los Angeles, CA, Jonathan now lives in Boston, MA.