It wasn't pretty, economically speaking.
The century's first decade launched with the dot-com bust, when Internet and technology-related companies benefited and then failed from speculative investing.
It ended with the Great Recession, the December 2007-June 2009 crash in the markets, housing, consumer confidence and jobs.
"We've had this horrific decade," market strategist Philip Orlando said Thursday in Jacksonville. Orlando is senior vice president, senior portfolio manager and chief equity market strategist of Pittsburgh-based Federated Investors Inc. and a frequent guest host on CNBC and other media programs.
Now, six years after the start of recession and 31/2 years after it ended, the economy has rebounded. For example, on Monday, after topping 16,000 points for the first time, the Dow Jones industrial average closed at 15,976.
"We've come back with a vengeance," Orlando said last week as the market continued to rise.
Orlando shared his views Thursday with clients and guests of the Otterson Allison Wealth Management Group of Raymond James & Associates at an event at The River Club.
Yet, not all economic factors are strong.
Orlando outlined the problems and potential for the economy, concluding that the Washington, D.C.-related "fiscal drag" has transitioned to a more constructive "wealth effect."
Also, several investor concerns have been favorably resolved, including the impending expected transition of the Federal Reserve leadership from Ben Bernanke to Janet Yellen, and U.S. stocks remain attractively valued for the longer term.
Orlando talked about the headline-grabbing and talk-show topics of fiscal policy matters – the fiscal cliff, the Bush tax cuts, exemptions and deductions, dividends and capital gains, and how consumers at the top and bottom of the spending ladder all were affected.
He also delved into the automatic sequester spending cuts, and what he considers "the complete lack of balance" in which defense and non-defense discretionary spending is cut disproportionately higher to spending cuts on entitlements.
"Everyone in Washington knows what the solutions are," he said. "No one wants to suggest them."
While the economy is in recovery, however, it hasn't been as strong as those in the past.
Orlando compared the recoveries under Presidents Ronald Reagan and Barack Obama. Both inherited recessions, but the recovery under Obama has been much slower and weaker.
"The reason we are recovering slowly is we shot ourselves in the foot," Orlando said, referring to "the collective lack of confidence in Washington's ability to handle fiscal policy."
Fiscal policy is determined by lawmakers and regulators by adjusting tax rates and government spending.
Monetary policy is determined by the Federal Reserve, the nation's central bank.
Still, Orlando outlined the domestic economic fundamentals that are improving:
• Employment. The October unemployment rate of 7.3 percent is down from the peak of 10 percent in October 2009, just after the recession. However, he cautioned that the real rate is 13.8 percent, based on the broadest definition of unemployment that counts those who are unemployed and underemployed.
• Housing. Orlando said mortgage rates are low, bank-lending standards are starting to ease, housing formation rates and housing prices are rising, delinquencies and foreclosures have eased and housing permits and starts are up but are slow. "Starts and permits have doubled. We need to triple," he said. Housing affordability is at its best level in a decade.
• Consumer confidence. Moves and stalls by lawmakers have affected consumer confidence, which has fallen.
• Manufacturing. Manufacturing is coming back strongly.
• Autos. Vehicle sales bottomed out during the recession at 9 million in February 2009, rising to 16 million this year in August and more than 15 million in September. However, "dealers said their lots were a ghost town" during the 16-day government shutdown in October.
Aaron Bowman, senior vice president of the JAX Chamber's JAXUSA Partnership economic development division, attended Orlando's presentation and assesses the economy as still fragile.
He said while the recovery is historically slow and weak, "leading indicators right now are still positive that we are on our way to getting through this."
Duval County Property Appraiser Jim Overton also attended.
"From a real estate appraisal viewpoint, I was comforted he said we were two years into a five-seven year recovery, and the housing upturn would be robust," Overton said.
"My office's analysis shows some sectors of the local market are indeed improving, some rather dramatically, but others are not. For our market, 'not quite yet' may be more appropriate, he said.
Patricia Otterson is senior vice president of investments with the Otterson Allison Wealth Management Group.
"In spite of many headwinds, Phil Orlando believes the market still has the potential to move higher over the next year. I think that is a very fair assessment and prediction," she said.
"We have a resilient, dynamic and innovative economy that is recovering. The markets are responding to all that," she said.
@MathisKb
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