The Lehman crisis of 2008 still shapes the investment landscape

That’s not surprising. It felt like an epochal event at the time.

Stock markets have traded sideways in frustrating ranges. The US has been different



Stock markets have traded sideways in frustrating ranges. The US has been different

There are of course the FANGs (the big internet platform groups that initially stood for Facebook/Amazon/Netflix/Google). Their growth has been phenomenal, they’ve conquered the world, and they’re American. The presence of Big Tech certainly contributes to US outperformance in a big way. 

But even if you exclude the information technology and communications sectors entirely, the S&P 500 has still done far better than the rest of the world over the last 15 years. This isn’t just the FANGs’ 

Valuation can explain a lot, as Points of Return frequently points out. Exclude financials, and the US trades at 22.5 times this year’s earnings, according to Citi; the figure for Europe is 15.2. Exclude tech, and the US trades at 18.5 compared to 12.5 for Europe. 

But perhaps the critical dividing point is profitability. 

There’s another echo of the year 2008. Back then, China unleashed a massive stimulus that ultimately played a big role in dragging the world out of the worst of the crisis. 

It also created debt problems for the Chinese that persist to this day. 

John Authers Bloomberg 15 September 2023



15TH ANNIVERSARY LEHMAN COLLAPSE





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