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JEREMY HOBSON: Now let’s get to the stock market. As of this morning the Dow is up about 86 percent from the low it hit on March 9th, 2009. That’s two years ago this week.
So we’re pleased to be joined now live by economist Gary Schilling. He’s with us from Springfield, New Jersey. Good morning, Gary.
GARY SCHILLING: Good morning.
HOBSON: So, how did we do that? How did we get up so high?
SCHILLING: With a lot of monetary and fiscal stimulus in response to the recession and the near meltdown of the financial market. Plus a rebound from a very very scary situation when a lot of people thought the financial sector here and abroad was going out of business.
HOBSON: And Gary, for ordinary Americans that are invested — either directly or through their retirement — If we’ve come up 86 percent since the low, does that mean that everything is OK, it never happened?
SCHILLING: Well, first of all, bare in mind that if you go down 50 percent, you’ve got to double — you’ve got to go up 100 percent just to get even. And we’re not back even yet with the peaks, but no, a lot of people bailed out at the bottom, they were really scared. They were cashing in their U.S. stock mutual funds, withdrawing money from them until really last December when they started to put money back in. And as a result, these people basically are still well behind. They rode the market down, bailed out at the bottom, and have not gotten back in until very recently, so a lot of post-war babies as a result are going to work longer than they thought because their 401-Ks have been destroyed.
HOBSON: Economist Gary Schilling, thanks so much.
SCHILLING: You’re welcome.
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