The Roaring Twenties 2.0 – Revisited!

This article is original content, last update in December 2023, written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA.

Woman wearing 1920s flapper dress.

All the way back in January, 2020 we wrote about The Roaring Twenties 2.0. What has been the biggest change since then?

The Pandemic

No question.  It would be easier to describe what the Pandemic has not changed rather than what it has changed.  The answer is…not much.  You name it, and the Pandemic has changed it. Business…Work-From-Home (WFH) model.  Education…I do not even know where to start with this one.  What about consumer spending patterns? Home Depot (HD) and Lowes (LOW), although their stock price certainly did not increase the most, are squarely in the winner’s circle.  Travel was out. Takeout was in.

Where are we now?  We went from Covid-19 to the Delta Variant to the Omicron Variant and now the XBB. 1.5 Variant. Who knows what’s next?  We do know, or at least are lead to believe, we will be dealing with some sort of variant going forward for some extended period of time.

Back in the original post, we said, “Why will we have the Roaring Twenties 2.0? Technology, interest rates and the employment outlook are three strong reasons to say yes.” Let’s revisit and update:


Back then we said, “Technology will only accelerate in the future. The valuations will ebb and flow, which means prices go up and down.  However, the disruption of industries will continue, even in some spaces where it should not.”

Technology rode the wave. Now, the worm has turned.

Has it ever!

Rising interest rates have altered the investment landscape particularly in the Technology Sector. Here are the losses for 2022 for some of the former high flyers:

*Facebook, excuse me Meta Platforms (FB) (64)%

*Amazon (AMZN) (49)%

*NetFlix (NFLX) (51)%

*Alphabet formerly known as Google (GOOGL) (39%)

This brings new meaning to the FANG Stocks…right?

Then there was the ‘new kid on the block’ Zoom Video (ZM). This stock was only off (62)%.

Just wondering, was there ever a more appropriate name for a company?

Interest Rates

Ah, yes, interest rates.  As we said back then, “During the Great Recession of 2007-2009 (which was very poorly labeled) the government cut interest rates to almost zero. Then they artificially manufactured a way to keep them there for almost a decade.”

Well, here we are now in early 2023 and interest rates rose all through 2022. The Federal Reserve Board (The Fed) has been on a mission to fight inflation.  The annual inflation rate in the U.S. for the trailing 12 months ending November 2022 is 7.1%.  1) Although inflation has cooled a little bit, it was recently running at 40-year highs.  Repeat:

Inflation was recently running at 40 Year Highs.

The Fed’s primary response has been to raise interest rates. In December 2022, they raised the target federal funds rate range to 4.25%-4.50%.  The most recent 50 basis is the seventh consecutive increase in interest rates and the highest since December 2007. 2)  This was, of course, the month and year when the Great Recession of 2007-2009 kicked off.  You know what happened then.

Keep in mind, the Feds target for the inflation rate is 2%.  With the rate currently running at over 7%:

The Fed has a long way to go and will keep raising rates to bring down inflation.


Back then we said, “If you want a job, there is one available for you.  OK, it might not be at the pay scale or the hours you want and the commute might be a bit much. And, yes, the boss might be a jerk. Sorry about all of that. But if you want to work, there is job out there for you.”

What a ride.  Tons of folks were laid off at the beginning of the pandemic.  In April 2020, the unemployment rate reached 14.8%, the highest rate observed since data collection began in 1948.  (1) The unemployment rate in December, 2022 fell to 3.5% (2).

Now, you guessed it, employers can’t find anyone to work. This is even AFTER the Federally enhanced unemployment benefits have expired. 

The federal minimum wage is $7.25 an hour, which has not changed since 2009. In Connecticut the minimum wage of $14 an hour will increase to $15 an hour on July 1, 2023.  Amazon (AMZN) announced it will pay $18 an hour for new hires in their fulfillment centers.   As one astute observer said, working there is anything BUT fulfilling.

Therein lays the rub.  Many of these positions are entry level. 

We also mentioned what could potentially go wrong.  The big three we mentioned were Trade, a Recession and Confidence. 


Back then we said, “As Bob Dylan sang, ‘The times they are a-changin.’ Amen. Rising tariffs, intellectual property theft and counterfeiting top the list of global trade issues. Negotiations with China over trade have been going slowly.” 

Now we are having even more fun with trade.  Now everyone knows what a supply chain is.  Excuse me; everyone now knows what a supply chain ISSUE is. Indeed. How many cargo ships are sitting in the Pacific Ocean?  And at what cost to get the goods now?

The bottlenecks in the supply chain are slowly working themselves out. Companies won’t necessarily bring a lot of the work back to the U.S. They will however figure out ways to get their supply chains shorter and products closer to their customers.


Back then we said, “There will be a recession. There always is. Plan accordingly. There were a ton of lessons learned from the The Great Recession. Perhaps the most important lesson is that the sequence of returns really matters.” 

Well, we did get a recession.  According to the National Bureau of Economic Research the recession ended in April of 2020 after a mere two months. No surprise, this was the shortest recession in U.S. History. It was only one third as long as the 6 month recession in 1980 and one fourth as long as the recession following the bubble in 2001. (3)

At the risk of repeating myself we will have another recession. Who knows when this will be? 


Back then we said, “Confidence is a tricky one. When folks are working and getting their paycheck direct deposited, life is good. Sing along.”

Looking at the massive decline in unemployment mentioned above, many folks are back to work.  This is a good thing. 

Rising interest rates hit the bond market, the the stock market. It is only a matter of time for it to hit the real estate market. Hard.  

What didn’t we mention back then?


Wow, has this quickly reared its ugly head. Jerome Powell, Chair of the Federal Reserve, was saying that inflation was “transitory” (or temporary).  He has since backed off on this commentary.  Which means, um, err, ah, well get used to it.  Inflation is something many of the younger folks have never seen before.

As mentioned above, inflation is running at the fastest pace in 40 years.

Exhibit A of inflation is going into the grocery store and when you pull in to buy gas.  Really?

Then there is a big ticket item like buying a home. Ouch. Don’t worry; eventually there will be The Last Bidding War for Homes

What can you say about buying a vehicle? Even more Ouch. New car prices are up 8.9% since March 2020.  That pales in comparison to used car prices that are up a staggering 39.8% during the same period. (5)

Notice that both inflation and interest rates are rising.  However, interest rates and inflation don’t necessarily move in lockstep.


Back then we said, “The Roaring Twenties 1.0 (the 1920’s version) did not end well. The Wall Street Crash of 1929 was brutal.  The Dow lost 90% from its high in September 1929 to its low in July 1932.  (6) This brought on the Great Depression, which regrettably was appropriately labeled.”

As Yogi Berra said, “It’s tough to make predictions, especially about the future.”

Stay strapped in and enjoy the ride!

  4. Wall Street Journal December 12, 2021

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