Will The Implosion Of The Tech Industry Bring Down The Entire U.S. Economy? – Investment Watch

by Michael

The tech trade has develop into one of many central pillars of our economic system, and tech shares led the best way up throughout the inventory market growth.  However now tech shares have been crashing and lots of of our largest tech trade firms have been shedding massive numbers of staff.  If the strongest sector of our economic system continues to quickly deteriorate in 2023, what is going to that imply for our weaker sectors?  I feel that the reply to that query is apparent.  The reality is that we’re in far greater hassle than “the consultants” notice, however most individuals nonetheless assume that every thing will work out simply nice someway.

If financial situations had been actually about to “return to regular”, the tech trade wouldn’t be shedding hundreds upon hundreds of staff.  The next comes from a CNN article entitled “Silicon Valley layoffs go from bad to worse”

At Amazon and different tech firms, the second half of final yr was marked by hiring freezes, layoffs and different cost-cutting measures at various family names in Silicon Valley. But when 2022 was the yr the nice instances ended for these tech firms, 2023 is already shaping as much as be a yr when folks at these firms brace for a way a lot worse issues can get.

Did you catch that final half?

Even CNN is admitting that 2023 might be even worse for the tech trade than 2022 was.

In fact final yr was actually, actually unhealthy for the tech trade.  In response to Challenger, Grey & Christmas, tech layoffs “were up 649% in 2022”.

I used to be floored after I first noticed that determine.

649 p.c is a reasonably large shift.

And one distinguished personal fairness CEO simply warned Fox Enterprise that we might see a “bloodbath” for tech shares throughout the months forward…

In an interview with FOX Enterprise on Friday, Eric Schiffer, CEO of the personal fairness agency, The Patriarch Group, mentioned: “As a result of tech is so oversold, there is likely to be potential exits for a restricted short-term bear rally, however there’s a hazard going through shareholders.”

Shareholders ought to brace themselves for a deeper brutal tech massacre pushed by the Fed and its ‘Terminator’ like mission to boost charges and wipe out inflation,” he warned. “Many tech firms will enact job carnage within the first quarter, with Salesforce and Amazon simply the beginning.”

The tech-heavy Nasdaq is already down by a couple of third from the height of the market, and trillions of tech inventory wealth has already been worn out.

So what is going to issues appear like if we really see one other “massacre” for tech shares this yr?

At this level, I don’t assume that the majority Individuals notice what’s coming.

Mass layoffs are already beginning to occur all over America, and one economist that was simply interviewed by CNN believes that situations might be even worse “by the end of the first quarter”

“I feel we’re seeing an inflection level; the speed of jobs development is slowing and quite a lot of these tech layoffs that we’re listening to about, I feel are going to start out materializing throughout the broader economic system by the tip of the primary quarter,” John Leer, chief economist at Morning Seek the advice of advised CNN’s Chief Enterprise Correspondent Christine Romans in an interview Friday.

Sadly, the reality is that the U.S. economic system has been bleeding good jobs for fairly a while now.

In accordance to Fox Business, the official numbers that the federal government has been giving us present that the U.S. economic system has been dropping a median of two,100 full-time jobs since Could…

However there are extra disturbing developments current within the knowledge. The economic system has been dropping full-time jobs at an alarming charge: 2,100 day by day since Could. Employers are shifting from full-time to part-time jobs, which frequently happens earlier than these companies cease hiring altogether. Then, layoffs arrive.

That is usually what we see as our economic system heads into a significant downturn.

First, many employers begin shifting from full-time workers to part-time workers, after which when issues get unhealthy sufficient they only begin dumping staff.

And at this level we’re already beginning to see among the wealthiest firms in America let folks go.  In reality, Goldman Sachs goes to be giving hundreds of extremely paid workers the axe starting on Wednesday

The worldwide funding financial institution is letting go of as many as 3,200 workers beginning Wednesday, based on an individual with information of the agency’s plans.

That quantities to six.5% of the 49,100 workers Goldman had in October, which is under the 8% reported final month because the higher finish of doable cuts.

In the meantime, the price of dwelling continues to go even greater.

Earlier at this time, I used to be surprised to be taught that pure fuel payments for a lot of residents of southern California could soon double

Southern California Gasoline Co. and San Diego Gasoline & Electrical have issued stark warnings to clients that their January pure fuel payments might double, citing components for traditionally excessive wholesale prices that embody sinking inventories, provide constraints and a chilly begin to winter that has soaked the West Coast.

And though the Federal Reserve has been taking excessive measures to struggle inflation, meals costs simply proceed to soar to absurd heights.

Survey after survey has proven {that a} stable majority of Individuals reside paycheck to paycheck proper now.

As the price of dwelling turns into more and more oppressive, extra Individuals are turning to their credit cards for assist…

New knowledge launched by the Census Bureau this week discovered that greater than 35% of households used bank cards or loans in December to help with spending wants previously week. That marks a rise from 32% in November and simply 21% in April 2021, based on the Family Pulse Survey.

The rise in bank card utilization is considerably regarding as a result of rates of interest are astronomically excessive proper now. The common bank card APR, or annual proportion charge, set a brand new report excessive of 19.14% final week, based on a Bankrate.com database that goes again to 1985. The earlier report was 19% in July 1991.

The greed of the bank card firms seemingly is aware of no bounds.

As I have repeatedly warned my readers, you don’t want to be carrying quite a lot of debt throughout the laborious financial instances which can be coming.

19.14 p.c is the typical charge on bank card balances now, and that signifies that half of the nation has charges which can be even greater than that.


In case you are at the moment carrying bank card debt, I’d encourage you to get that paid off as quickly as you may.

As a result of financial situations are solely going to get harsher from right here, and also you positively don’t need to be financially crippled by excessive curiosity debt throughout the extreme disaster that’s quickly approaching.

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