Some phase of the economy is the No. 1 news story almost every year, but 2013 offered an interesting twist: It was possible to argue that nearly every financial story had equal parts good and bad news attached to it.
It all depends on how you view things.
For example, the unemployment rate fell from 7.9 percent in January to 7 percent at the end of November. That meant that 1.3 million Americans found work in 2013, which is good. It also meant that 10.9 million were still out of work, which is bad.
The story is the same with consumer debt, which declined by 0.7 percent in 2013. That’s the good news. The bad news is that most of that was because of foreclosures in the housing industry, thus reducing mortgage debt. Credit card debt was up for the first time since 2008, rising from $850 billion to $858 billion, and student loan debt soared past $1 trillion, up 12.3 percent for the year.
The good news and bad news continued on virtually every story. Here is a look at the 10 most impactful stories from 2013, from Debt.Org’s perspective:
10. Boomers Stampede Across the Finish Line
The baby boomer generation, as is its custom, is cutting a wide swath across all segments of the economy. Boomers are retiring at the rate of about 10,000 a day, which leaves a lot of job openings to fill. Unfortunately, about 18 percent of them continue to work beyond 65, causing a logjam among young workers looking to move up. The good news is that the tidal wave of retirees is creating business opportunities in senior housing, health care, travel and recreation. The bad news is that there are so many of them – the senior population will double over the next 15 years – that they will become a huge burden on government resources.
9. JPMorgan Chase Settles for $13 Billion
When JPMorgan Chase agreed to pay $13 billion for its huge role in the mortgage-backed securities fraud of 2008, it was greeted with cheers. The big boys were finally made to pay for their role in crippling the U.S. economy. On the other hand, not one JPMorgan official will go to jail, which proves once again it’s safer to steal billions from American consumers than it is to steal $100 from a 7-Eleven. Oh, and homeowners, including many who dealt with JPMorgan Chase, owe $913 billion more than their homes are worth.
8. Government Wins, Graduates Lose
Does it pay to have a college degree? It certainly does for the federal government. The feds make loans to just about anybody and everybody who wants to go to college, and the profit on that investment was $41.3 billion in 2013. Only Exxon Mobile ($44 billion) and Apple Inc. ($41.7 billion) earned more. Many of the nearly 70 percent of college graduates who took out loans are wondering about the return on their investment. They took out an average of $29,400 in student loans to get a diploma, and many still don’t have their first full-time job.
7. Hello, Social Media
Companies got several examples of how valuable a platform social media is for communicating and advertising with audiences. In April, a hacker broke into the Associated Press account and sent a fake tweet saying there were two explosions in the White House and President Obama was injured. The Dow Jones index plunged 149 points in just two minutes, but gained 142 points back three minutes later after the AP tweeted back that the story was false. Four months later, investor Carl Icahn tweeted that he had taken a “large position” in Apple Inc., and the company’s stock jumped 5 percent almost immediately. On the other hand, Snapchat investors have to wonder what management was thinking when it turned down a $3 billion offer from Facebook and a reported $4 billion offer from Google.
6. Welcome Home!
The housing market, dead and buried under the rubble of the Great Recession, continued its quiet comeback in 2013. U.S. homes gained $1.9 trillion in total value this year, the biggest jump since 2005. Home builders are confident the surging market will continue in 2014. The confidence index for home builders was at 58 this month, the highest it’s been in eight years and 11 points higher than it was just a year ago. As one business owner put it: “When the housing industry perks up, every industry perks up with it.” The bad news? Americans still owe $913 billion more than their homes are worth.
5. Obamacare Limps Out of the Gate
The Affordable Care Act – better known as Obamacare – made a lame debut in October. Healthcare.gov, the government’s website to sign up for insurance, couldn’t handle the volume of inquiries and was shut down for repairs and upgrades. The staggered rollout earned a loud “I TOLD YOU SO!” from critics of the plan. Though sign up is progressing, most Americans can’t meet the Jan. 1 deadline originally established. This will be a story – good or bad — throughout 2014 It would be no surprise if it moved up to No. 1 a year from now.
4. Consumer Financial Protection Bureau Flexes Muscle
Consumers may not know much about the Consumer Financial Protection Bureau (CFPB), but credit card companies and lenders are getting all too familiar with the agency. The CFPB obtained orders for Discover Bank to refund $200 million to customers for deceptive marketing practices with its credit card: $16 million against Capital One for misleading consumers about its credit cards; $112.5 million against American Express Centurion Bank for deceptive practices; $19 million against Cash America for overcharging military service members and their families for payday loans; and the list goes on and on. Memorize the CFPB acronym. The agency is very aggressive. You likely will see it a lot in the news.
3. An Actual Budget
Congress actually doing its job and producing a federal budget should never be a big story, but since it hasn’t happened in four years, it was a big deal when House, Senate and president agreed on one. Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., compromised enough on both sides of many issues to get the budget through Congress and avoid another government shutdown. Some Republicans don’t think there were enough programs cut, and some Democrats didn’t think there was enough revenue raised, but most of their constituents were happy that the posturing about which side was right, is over.
2. Let the Bull Run
The stock market barreled out of the gate the first trading day of 2013 and shattered records the rest of the year. The Dow Jones industrial average was up 308 points on Jan. 2 and gained more than 3,000 points heading into the final week of trading. That is a phenomenal 23.5 percent gain. The S&P jumped 36 points the first day and gained 397 points during the year, a 28 percent jump. The NASDAQ was the biggest winner, starting with a 93-point gain on Jan. 2 and piling up a 1,039-point gain for a 34.4 percent jump. And this comes after a remarkable run in 2012, when the Dow added 7.3 percent, the S&P 500 jumped 13.4 percent and NASDAQ was up 15.9 percent. How much longer can this run last?
1. Shut It All Down
This shouldn’t be the No. 1 story, but anytime the government puts itself out of business, it affects nearly every area of the population. Republicans in the U.S. House said they wouldn’t support any legislation funding the government after Sept. 30 unless it repealed or delayed the president’s health care law. Democrats refused to budge, and the federal government shut down on Oct. 1. This led to furloughed workers, interrupted paychecks, and the closing of parks and national monuments. The Republicans took the blame for forcing the shutdown. Polls showed the party’s favorable rating dropped to an all-time low. On the other hand, most of America didn’t seem to mind doing without a few weeks of government. Maybe we can make this happen for two weeks every year!