-8-
DOW JONES AVERAGE
•
Not only has consumer net worth been reduced by the declining value of real estate, but also the financial crises have sharply reduced the value of their investments.
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Chart 5 shows the plunge in equity prices as measured by the Dow Jones Average since 2007. Indeed, by early March, the Dow had reached the lowest level in 12 years, reaching half its earlier peak value, although there has been some improvement in recent weeks.
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Thus, as pointed out, many 401K accounts were first being referred to as 201Ks and more recently 101Ks. It’s no wonder that the combination of reduced home
values and equity prices have caused the consumer to show increasingly reduced confidence, particularly given the uncertainty of keeping a job as well as if or when the current government financial rescue and stimulative programs will work.
DOW JONES AVERAGE
CGFA
2004
2005
2006
2007
2008
2009
4
6
8
10
12
14
16
Thousands
CHART 5
