Puerto Rico Economic Pulse ©

September 2009: Connecting the Dots – Part I

A view in retrospect of the financial and economic crisis

Five years ago, nobody could predict that in 2009 the most important concerns would be the loss of jobs and increased foreclosures. Nowadays, the financial crisis that started in the US has spread around the world. Unemployment in the US reached 9.7% in August 2009. Sale of houses in the US fell 25% per year since 2005. The Dow Jones Industrial average dropped to 6,547 points, similar to 1997 levels. Many financial and non-financial companies have filed for bankruptcy and almost all states in the US have large deficits. What are the roots of this debacle? Is it a real estate bust gone terribly wrong? Is it financial exuberance with a large dose of greed and creativity? How did it spread so quickly? This and other issues are addressed in this month’s issue of PR Pulse.