It's been 10 years since the Lehman Brothers bankruptcy and the height of the financial crisis, and the stock market is a very different creature.
The crisis profoundly affected stock trading, hurting some trading businesses while dramatically helping others. It accelerated some trends and stopped others in their tracks.
Experts point out that the regulatory reform embedded in the 2010 Dodd-Frank law forced many banks to reduce, and in most cases, eliminate their proprietary trading operations and even curtail their agency business.
Now, traders routinely complain that most markets seem to have fewer committed risk takers. And even though some of the most onerous aspects of the regulation have been repealed, traders note that banks haven't yet raced back to fill that void.
The additional regulatory obligations created under Dodd-Frank made it difficult for companies to go public. After slowly recovering from the 2000 Dotcom bust, the number of IPOs plunged from 213 in 2007 to 31 in 2008. The IPO market didn't really recover until 2013, when 222 companies went public.
But despite pent-up demand, the number of IPOs has remained relatively anemic. Excessively low interest rates (one of the long-term effects of the financial crisis) have made it possible for private equity companies to raise vast sums of money to throw at young companies that would have normally sought to tap the public markets.
Fewer IPOs are only part of the reason the number of publicly traded stocks are shrinking. After rising for more than 20 years, the number of publicly listed stocks dropped dramatically after the dot.com bust, from roughly 7,500 in 1998 to about 5,000 in 2004.
Central banks helped create the greatest trade of the post-financial crisis era: Go long equities, and short volatility.
The ETF trend started pre-2008, but ETFs fit the investing post-crisis investment psychology particularly well.
ETFs, which were almost exclusively tied to passive indexes, grew slowly but steadily throughout the early 2000s. Assets declined from 2007 to 2008 as investors pulled out, but then began taking off.
