Business Maverick

Business Maverick

It Took 12 Years for the Crisis to End in U.S. Financial Stocks

Pedestrians walk through Times Square in New York, U.S., on Friday, April 26, 2019. Photographer: Michael Nagle/Bloomberg

One of the last vestiges of the financial crisis crumbled Thursday as financial stocks in the S&P 500 briefly surpassed their previous closing high, eclipsing the record they touched in February 2007 before losing more than 80% of their value in less than two years.

Banks, brokerages and insurance companies tracked by the S&P 500 Financials Index needed 12 years to make the round trip, which required a sixfold increase starting on March 6, 2009. They’re the last industry in the S&P 500 to erase their 2008-era decline.
Financial shares briefly top 2007 record

“What a long, strange trip it’s been,” said Kim Forrest, chief investment officer at Bokeh Capital Management in Pittsburgh. “The existing banks — because there’s a whole lot less banks than there were in 2007 — have survived and changed in meaningful ways, that’s what this reflects. They’ve shoehorned themselves into this low new interest rate environment.”

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