Late 2003 found the financial services industry leveling out after a tumultuous few years in 2000-2002. Stock markets were crawling back, regaining some ground from spectacular losses. Property and casualty insurance underwriters moved back into profitability in 2002 after unprecedented losses the previous year. Interest rates remained quite low, although up from a low point which occurred in June 2003. Investment bankers and stock brokerages seem to have put the stock market crash, stock analyst woes and accountability problems of 2000-2002 behind them, and layoffs in that sector have leveled off. Even tech stocks and online trading were gaining ground, well off their low points, while the occasional IPO was finding success. Venture capitalists are starting to open their wallets again, but at much lower levels than during the boom of l995-2000.
Despite this relatively good news, there are still major concerns within the financial sector. For example, the level of consumer debt is terrifying and the number of personal bankruptcies reached an all-time high during the 12 months ending on June 30, 2003: 1.61 million filings, up 30% over the previous 12-month period. (Consumers have been encouraged to take on debt due to very low interest rates and the ready availability of loans of all types.)
Battered by falling values in their stock portfolios, mutual fund investments and 401(k)s, individual investors have greatly lowered their expectations of future returns on their investments. Many have turned to real estate for a large portion of their portfolios, snapping up rental houses, bigger primary residences and second homes, driving up home values in the process. Others have steadfastly continued to pump money into their retirement accounts. more info >>
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