This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Years After: The State of America

BOSTON ( TheStreet) -- Economist Michael Pento says the U.S. is in much worse financial shape today than it was after Sept. 11, 2001.

But not for the same reasons -- for example, that the unemployment rate today is almost twice that of 10 years ago while consumer confidence has fallen by half.

Pento, president of Pento Portfolio Strategies in Parsippany, N.J., lays out what he says is a shocking statistic that has gone mostly unnoticed: The S&P 500 Index of the largest U.S. companies has risen 10% in the past decade but is down a whopping 85% if measured against gold. Investors, in other words, were burned by high valuations of stocks back in 2001, and since then have made up little ground while different asset classes such as gold and commodities have soared.

View More 9/11 Coverage

That underperformance is what disturbs Pento, who was formerly the senior economist at investment manager Euro Pacific Capital in Westport, Conn., more than anything else he's seen. On Sept. 10, 2001, the S&P 500 closed at 1,092.54 and gold traded below $300 an ounce. A decade later, the S&P 500 is up to nearly 1,200 after fluctuating wildly between its highest point of 1,576.09 in October 2007 and a low of around 680 in March 2009. Gold, meanwhile, has been on an upward march to over $1,800 an ounce as investors seek safe havens for their money.

"That's a crash of epic proportions," Pento says. "Nothing good can ever come out of that one stat. That is one of the less promulgated facts because it's so daunting."

Pento also highlights the massive amount of debt on the balance sheets of both the federal government and individual households. In the fourth quarter of 2001, household debt was 73% of U.S. gross domestic product (GDP). Today, that figure is up to 89% of GDP. Federal debt, at about 55% of GDP 10 years ago, is now at nearly 100% of GDP.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs