Why the ghost of 2008 still haunts us in 2022
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All week there are events in the news that have come under the banner of “it hasn’t happened since 2007/2008”.
10-year Treasury yields briefly rose above 4%, a level not seen since 2008. This move helped push mortgage rates to their highest level, 6.7%, since – wait for it – July 2007. Across the pond, where the UK bond market crashed earlier this week, a seemingly exhausted London banker told the Financial Times: ‘At one point this morning I was worried that this be the beginning of the end. It wasn’t quite a Lehman moment. But it got closer.
The timing of all these events is indeed a bit frightening: today, September 29, marks 14 years to the day that stock markets around the world crashed, ushering in the worst global financial crisis since the Great Depression.
With all this gloom, it’s natural to wonder if history is about to repeat itself.
To be clear: the market eventually fully recovered, even though it took years. And in many ways, the economic and financial angst plaguing the world is by no means a repeat of the run-up to the Great Recession. It’s a whole different beast now.
But it’s precisely because of those scars from 2008, still powerful memories for many, that economists and analysts get nervous when things go as badly as they have in recent weeks.
Right now, the dominant mood is fear. Economies hobbled by inflation and soaring borrowing costs are vulnerable to economic shocks – whether those shocks come from a catastrophic hurricane, or a superpower declaring war on a neighbor, or a radical fiscal regime. unfunded. Or, God forbid, a resurgent pandemic.
All of this means that there aren’t many good places for investors to put their money right now. Stocks and bonds are both in bearish territory, and many analysts say the market could remain volatile until inflation is brought under control (which, if we enter a recession, could happen very soon… not a good silver lining, I know.)
If there’s one lesson to be learned from the Great Recession, it’s not to panic. By my colleague Jeanne Sahadi:
Let’s say you invested $10,000 in early 1981 in the S&P 500. That money would have grown to nearly $1.1 million by the end of March 2021. But if you had only missed the top five trading days over those 40 years, this would have only reached about $676,000.
In other words: hold on tight, my friends, and try to avoid checking your 401(k) balance for the foreseeable future.
Stocks fell on Thursday, giving up Wednesday’s big gains and pushing the Dow Jones back into a bear market.
The S&P 500, one of the broadest measures of U.S. corporate health, fell 2.1%, hitting a new low for the year. The Dow Jones and the S&P 500 are once again not far from their lowest levels since November 2020.
Heckuva way to wrap up the third quarter, huh? The stock market even had a promising start to the quarter in July. But fears about inflation, rate hikes, rising bond yields and recession came back with full force in August and September.
Continuing a great tradition of Corporate Rebranding Nonsense, Johnson & Johnson places all of its consumer healthcare products under a newly formed parent company.
Soon, Band-Aid, Tylenol, Benadryl and Johnson baby powders will all be sold under the “Kenvue” umbrella brand.
It’s pronounced “Ken”, like the doll, “view”.
Here’s the deal: Johnson & Johnson, the owner of these labels, is in the process of splitting into two companies – one focused on medical devices and drugs, the other on consumer health products, reports my colleague Nathaniel Meyersohn.
J&J keeps its recognizable name for its biggest pharmaceutical company, but it needed something new for the small consumer.
The company said on Wednesday it had landed on Kenvue, a combination of “Ken”, an English word for knowledge mostly used in Scotland, and “vue”, a reference to sight.
“Kenvue” is the winning nickname a small team of J&J, working with a naming agency, landed on. The goal was to be memorable. And, above all, to erase trademarks in more than 100 markets and “pass linguistic and cultural checks in 89 languages and dialects”.
The company also released Kenvue’s new logo – white letters on a green background, the limbs of the letter “K” resembling a side heart.
What does it mean? Absolutely nothing, and that’s the goal.
Businesses revolve around perfectly clean names. There is no possibility of a negative connotation, as it is a made up word. As far as I know, it doesn’t sound like a swear word in another language. Kenvue is harmless. Bloodless. This is the company’s brand image tofu.
“It’s really just a holding company behind all these other brands,” an expert told Nathaniel. “They want a name that will fade into the background and the brands will stand out.”
(Mission accomplished. I already forgot the new name and just typed it 40 seconds ago.)
MY TWO CENTS
The best review I can give of the new brand is that it is forgettable. Other companies have notoriously (infamously?) failed to successfully land with new names.
Netflix in 2011 quickly backtracked after trying to rebrand its DVD streaming service as “Qwikster”. More recently Fiat Chrysler and PSA Group merged in 2020 under the collective name “Stellantis” which is still the name of the company but I still think that sounds like something you should ask your doctor if you are presenting signs of seasonal depression.
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