Like how a cat that jumps on a hot stove will never again step on a cold one, many people are still investing and planning with memories of the financial crisis of 2007-2009 foremost in their minds: the so-called “Great Recession.” With the benefit of almost a decade of hindsight, I propose a new moniker for the 2007-2009 financial crisis.
In the 18th and 19th centuries, extreme economic downturns were generally referred to as “Panics.” Examples are the Panics of 1837, 1857, 1873 and 1893. These Panics would then lead to recessions or depressions, depending on the duration of the downturn.
The triggering event of a Panic would often be the failure of a specific industry or company (railroads, banking, land or commodities). The 2007-09 financial crisis began with overheated real estate prices which translated into overvalued financial assets. First you had Lehman Brothers, followed by Fannie and Freddie, and then you had panic in the marketplace.
Therefore, from here forward, I am referring to the financial crisis of about ten years ago as the Panic of 2008.
Remember, you heard it here first.