a decade of living dangerously

It was a decade of living dangerously.

With interest rates low and lending standards lower, credit became the currency of the decade.

Exotic mortgage products helped housing prices more than double. Consumer spending shot up more than 48 percent - even while wages stagnated - as shoppers snapped up big-screen TVs, gadgets like iPhones and fashion labels like Gucci and Jimmy Choo.

The amount of debt consumers carried shot up 67 percent, peaking in June 2008 at $2.57 trillion. Likewise, businesses large and small borrowed money to finance a wave of mergers and expansion.

Then, the crash.

At the end of 2006, homeowners began defaulting on their mortgages at an alarming rate. The foreclosure rate broke record after record. Lenders failed by the dozen. In late 2009, more than 14 percent of homeowners with a mortgage were either behind on their payments or facing foreclosure.

For Bear Stearns and Lehman Brothers, which bet too heavily on securities backed by risky mortgages, the losses were fatal. The ripple effects across banking and other industries, sparked a recession that led to massive job losses and drastic cutbacks in consumer spending.

There are some signs of a recovery, but not of a quick rebound.

Stocks have recovered a portion of their losses, but it will appear on most investor's balance sheet as a lost decade - the first 10-year period investors saw a negative total return.

Nearly 27 million people are unemployed or underemployed. Consumers have cut back on spending and started saving, but it will take years to dig out of the debt hole. Home prices have receded to 2003 levels, and further in Arizona, California, Florida and Nevada.

The decade that began with the view that the sky was the limit is ending with both investors and consumers feeling grounded.

Here's a look at some of the key moments in personal finance in the 2000s.