The s&p 500 tanks a ton and banks call on loans from these AI hyped companies using the price of the stocks as collateral (previously expected to rise). Credit crunch and now companies tighten the belts even further so higher unemployment again. Federal funds rate gets slashed and those that can manage steady good work during the recovery years will be fine. Everyone else will be struggle busing as usual
If you have a stable job with good pay or good upward mobility in the company potential and don’t have periods of unemployment, if it has a 401k, you’re 401k is being invested while the market is down. When unemployment is high, the Federal Reserve sets the federal funds rate much lower to try and stimulate the economy. That results in lower rates for consumer loans. So people that have stable jobs that pay well enough can take out loans and/or refinance their current loans to do better than they were.
When the market recovers, you’ve had years of experience that you can now use for job hopping at more senior level roles when the job market recovers. Also a lot of late career people end up consulting for companies large and small with inexperienced staff. Those that didn’t fare well in a career during a market downturn, it’s either stagnation or hardship after hardship
It doesn’t necessarily have to be office/lab work. I know people that grinded the past decade+ in restaurants until an owner would trust them to manage a restaurant including all the supplies and payroll and then trust them enough to partner on a another restaurant and then that be their ticket to financial security. Some in their 30s, some 40s, some 50s. It’s a grind but at least they didn’t end up drug addicts and alcoholics like so many others
you’re 401k is being invested while the market is down
Sure but you just lost half your 401k, including half of what was invested while the market was overpriced.
When unemployment is high, […] That results in lower rates for consumer loans. So people that have stable jobs […] can take out loans
Yes, but lenders also tighten their criteria during these times because even a stable job is dramatically less stable during a recession or depression. It’s very difficult to borrow money in an economic downturn.
When the market recovers, you’ve had years of experience
Sure but if the market didn’t collapse you would still have those years of experience. During a collapse fewer people will have consistent employment.
It’s a grind but at least they didn’t end up drug addicts and alcoholics like so many others
Not sure where you were going with this part.
The universal economic truth is, in times of economic uncertainty the working class does the heavy lifting.
The s&p 500 tanks a ton and banks call on loans from these AI hyped companies using the price of the stocks as collateral (previously expected to rise). Credit crunch and now companies tighten the belts even further so higher unemployment again. Federal funds rate gets slashed and those that can manage steady good work during the recovery years will be fine. Everyone else will be struggle busing as usual
Can you elaborate on managing “steady good work”?
Being in a non-federal government job, in a non insane state.
If you have a stable job with good pay or good upward mobility in the company potential and don’t have periods of unemployment, if it has a 401k, you’re 401k is being invested while the market is down. When unemployment is high, the Federal Reserve sets the federal funds rate much lower to try and stimulate the economy. That results in lower rates for consumer loans. So people that have stable jobs that pay well enough can take out loans and/or refinance their current loans to do better than they were.
When the market recovers, you’ve had years of experience that you can now use for job hopping at more senior level roles when the job market recovers. Also a lot of late career people end up consulting for companies large and small with inexperienced staff. Those that didn’t fare well in a career during a market downturn, it’s either stagnation or hardship after hardship
It doesn’t necessarily have to be office/lab work. I know people that grinded the past decade+ in restaurants until an owner would trust them to manage a restaurant including all the supplies and payroll and then trust them enough to partner on a another restaurant and then that be their ticket to financial security. Some in their 30s, some 40s, some 50s. It’s a grind but at least they didn’t end up drug addicts and alcoholics like so many others
This is a really odd take.
Sure but you just lost half your 401k, including half of what was invested while the market was overpriced.
Yes, but lenders also tighten their criteria during these times because even a stable job is dramatically less stable during a recession or depression. It’s very difficult to borrow money in an economic downturn.
Sure but if the market didn’t collapse you would still have those years of experience. During a collapse fewer people will have consistent employment.
Not sure where you were going with this part.
The universal economic truth is, in times of economic uncertainty the working class does the heavy lifting.