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Finance is known as the mother of all industries, and every move of finance affects the fate of every industry and even everyone. If there is anything that made the most money in the past, it must be finance, but entering 2023, the financial industry is also bleak. Even Wall Street, the global financial center, ended dismally. The world's top 20 banks laid off nearly 60,000 employees, more than during previous financial crises. Even Wall Street, as the global financial center, ended dismally, with nearly 50 percent of its employees laid off? Will a new round of crisis break out on Wall Street? What does this large-scale layoff in the financial industry portend? How should ordinary people deal with it in 2024?
Massive layoffs in the financial sector
Finance is regarded as the mother of all industries, but this year the banking industry has ushered in the largest wave of layoffs, with more than 60,000 layoffs by major banks around the world, which is regarded as the largest wave of layoffs since the financial crisis.
Recently, according to relevant media reports in the UK, the world's largest banks have laid off more than 60,000 employees this year, including many well-known banks such as Goldman Sachs and Wells Fargo. It can be said that not only we are going through the cold winter, but the whole world is going through the cold winter, and even the big capital in the United States is laying off employees, so to speak, the whole world is changing.
Moreover, the scale of this layoff is seen as exceeding the scale of the previous financial crisis, which can be said to be quite large.
And we know that the United States and the United Kingdom are both financial powers, and they have laid off employees in the financial sector, which shows that the global financial sector is not having a good time.
And it's not just the big layoffs in the financial sector, in fact, since the beginning of this year, we have heard that several banks have been bought or bankrupt, such as Silicon Valley Bank in the United States and the famous Credit Suisse, etc., all of which show that the current economic environment is not good.
And we know that for a long time in the past, global economic development actually belonged to the process of stock game. So we're seeing economic growth in various countries, but that's also accompanied by a rapid spike in debt. For example, the size of the U.S. debt in the United States, which used to be less than about $10 trillion, is now close to $33.9 trillion.
Since the beginning of this year, banks such as Credit Suisse have actually been in poor operating condition, but they have not carried it through the wave of interest rate hikes in the United States.
And we know that the United States, as the center of world finance, and the Federal Reserve as the world's central bank, the Fed's interest rate hike will naturally inhibit the development of the financial industry, because we know that the essence of the financial industry is to provide financing and credit. And now the interest rate in the United States is around 4.5%, and countries around the world naturally have to raise interest rates in order to narrow the spread, so we see that the global opportunity is raising interest rates.
So this naturally leads to a phenomenon that everyone has to live a tight life. As interest rates rise, the scale of repayment for all people naturally increases a lot, so there is a decrease in consumption and a decrease in corporate financing. The end result is a decline in banking operations and eventually layoffs and bankruptcies.
It can be said that almost all of this today is closely related to the US interest rate hike. The so-called interest rate hike to reduce inflation is actually to increase the people's debt repayment pressure, and ultimately reduce everyone's consumption expectations.
And we're seeing that interest rates in the U.S. are still at high levels, so are there going to be even more layoffs and bankruptcies in the future? I would say, it's possible.
Because in the past, the West and even the whole world can be said to be in a cycle of debt expansion, and we all know that the debt will always be repaid, and today's interest rate hike in the United States has only greatly advanced this day.
Is it still possible to cover up the bubble through a bubble? The essence of the subprime mortgage crisis in the United States was the lack of financial supervision, and in the end, the brutal growth and finally the crisis, but has the crisis really been completely solved fundamentally?
Is a new crisis coming?
It's the bubble that always has to burst, it's the dream that always has to wake up. Today's state of global banks and even the United States tells us that there is no future from real to virtual, and the bubbles that blow up will eventually disappear without physical support.
Since the beginning of this year, it can be said that the global economy has been a bleak year, and it is also a year of crisis for the U.S. financial industry. In terms of bank layoffs, it shows that the financial sector that the whole West is proud of is not doing well. And this is still the West's forte.
And there have been relevant media reports that the Fed's losses have reached about 800 billion since the beginning of this year, that is to say, the dealers who harvested were now bleeding.
And we know that the problems facing the United States today are much more serious than those faced in '08. In '08, the United States collapsed its own debt by raising interest rates, but did the United States really learn its lesson? It seems that it did not, but finally passed the crisis by passing on the crisis to the world.
Today, the United States continues to expand brutally on the basis of 08 years, and the debt has nearly doubled, and the global essence is in a period of overcapacity and the industrial revolution is in the ascendant.
Moreover, in today's confrontation between China and the United States, many Chinese companies can raise funds for IPOs in the U.S. market, which can not only allow Western financial institutions to expand their business, but also facilitate Chinese companies to raise capital, thereby promoting the development of science and technology.
However, we have also seen that the United States has suppressed Chinese enterprises in various ways, and the final result is that Chinese companies are financing less and less through the United States, and Western financial institutions are unable to receive orders, and at the same time, the West's innovation ability is not enough, and there are no more innovative enterprises to finance.
Therefore, on the one hand, the increase in risks, on the other hand, the decrease in returns, is naturally accompanied by the collapse of cooperation. And this is the appearance of American anti-globalization. And we all know that the financial industry in the United States is very strong, but there is not much physical support, and the United States today wants to find a support point for the dollar through the dollar tide. But will all this happen?
I don't think so. At the same time, will a new crisis happen? I think I would like to refer to the bankruptcy of Silicon Valley Bank, it actually happened, but on a very small scale. And we've prepared for the day.
Moreover, according to the cycle of economic development, after the rapid expansion of debt, it will inevitably be accompanied by the contraction of debt, and this coupled with the interest rate hike in the United States, it will naturally contribute to the contraction of the financial industry and the sluggishness of the global economy.
For us ordinary people, it is natural to shrink investment and do a good job in the security protection of funds, etc., and the liquidation of debts is bound to be a more painful process, but this day will not last forever. And we can also see that the Fed has begun to pivot gradually, so spring is no longer far away.
At the same time, for China and the United States, who can survive the debt settlement will have an advantage in the next round of the game. Therefore, what seems to be a crisis is actually hidden behind more opportunities.
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