Special Anniversary: My Diary from Princeton during the 2008 Financial Crisis
Today marks the 13th anniversary of the Federal Reserve lowering rates to zero.
For the past 6 months, we’ve been on a tour of the Roaring 20s through the lens of markets and financial journalism. Only one bubble in America’s history is comparable to 1929, and that’s 2008.
This country was in the throes of a similar financial crisis just 13 years ago. Instead of the Great Depression, we got the Great Recession.
Today marks the anniversary of the Federal Reserve lowering rates to zero on December 16, 2008, where they remain firmly anchored.
In both calamities, an extraordinarily dangerous event occurred: frozen credit markets. The fallout was swift, violent, and sobering. Low inflation ensued for one decade.
In 2018, I published the first and only stock market diary of the Financial Crisis of 2008. The book, “When Decades Became Days,” is not just any diary. It’s a diary of how investor psychology changed. Because of Princeton University’s prominence in finance and proximity to New York, I had unique vantage points throughout the panic — lectures from government officials, access to finance titans, and internships on Wall Street.
Very few saw the crisis coming, as you will read. I was taught during my freshman year in 2006 about the Great Moderation and how financial bubbles were relegated to the dustbin of history. Ben Bernanke had just left Princeton to lead the Federal Reserve and even he did not foresee the crisis ahead!
I encourage everyone here to read (or skim) the book. You will learn something about investor psychology leading up to a market crash.
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Sincerely,
James Derek Tate