Financials: The Most Important Financial Chart of the Past Century
Industry Focus
The Motley Fool
4.6 • 854 Ratings
🗓️ 23 May 2016
⏱️ 29 minutes
🧾️ Download transcript
Summary
How interest rates have shaped stocks and the economy since the Great Depression.
If you want to understand the last century of finance, it helps to have a general idea about the trend in interest rates since the 1930s. Not only does this explain the spectacular bull market that began in 1982 and ended when the technology bubble burst in 2000, but it also helps one understand why and how the U.S. economy grew so rapidly during this stretch.
In this episode of Industry Focus: Financials, The Motley Fool’s Gaby Lapera and John Maxfield kickoff lifecycle week by discussing how and why interest rates have gone full circle since the Great Depression.
Transcript
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| 0:00.0 | Hello everyone welcome to industry focus the podcast that dives into a different sector of the stock market every day |
| 0:07.2 | You are listening to the financials edition filmed on May 18th Wednesday of 2016 and this show is going to be aired on May 23rd which is a Monday |
| 0:17.0 | 2016 so join us as we journey into the mysterious world of the wild interest rate. |
| 0:24.0 | That was my best David Attenborough impression. |
| 0:27.0 | I'm so sorry and I'm really glad that my job doesn't depend on that, |
| 0:31.0 | because it was bad. Anyway, my name is Gabby |
| 0:34.2 | Lapera joining me on the phone to talk about the life cycle of interest rates |
| 0:37.4 | is financial analyst John Maxfield. Thanks for joining us. |
| 0:40.3 | It my pleasure as always, Abby. |
| 0:44.0 | So to our listeners, just a quick note, if anything important happens between May 18th and May 23rd |
| 0:49.1 | in the financial world, we are not going to cover it on May 23rd because the show is pre-filmed. |
| 0:54.0 | I'm going to go camping and I hope I don't die and I'm very very excited. |
| 0:58.0 | So this week on Industry Focus is Life Cycle Week. |
| 1:01.0 | Each show is going to talk about the life cycle of something important to that sector. |
| 1:05.4 | So for example, I believe health care is going to be talking about the life cycle of a drug. |
| 1:10.0 | But on the financials edition, we are going to be talking about the life cycle of interest rates, which is something that fascinates both John and I. |
| 1:17.0 | And we're very excited to talk about just a quick reminder that you should not take anything in this episode as gospel truth as a |
| 1:27.0 | prediction of the future because we can't know what the Fed is going to do with the interest |
| 1:31.1 | rate. No one can know that. but if we did, we would make |
| 1:34.5 | a lot of money and you probably would never hear us again. |
| 1:38.6 | So let me set the scene with a chart from the Federal Reserve. The chart starts back in the 1950s and leads into today to the 2016 and the chart is a chart of what interest rates look like in the United States. |
| 1:53.8 | The 10-year Treasury constant maturity rate, which is, and it looks beautiful, right? |
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