How Debt, Real Estate and Layoffs Affect the Economy in 2022

Some people may say that if there is more money in the market, the economy will prosper?
Debt has this characteristic. It is super cool to borrow money and spend it. Not only is it cool, but it is also expected to be good. For example, a few years ago, someone in Shenzhen paid 30,000 yuan a month, and the people around said you were crazy, but he said it was nothing, and it would be fine in a few years when the annual income was 2 million yuan. At that time, a lot of consumption was actually based on this “better and better” expectation, and housing prices kept rising because of the increasing leverage.
The decline in real estate now has two obvious effects on the market. As the biggest engine for so many years, it is not working. It involves almost all industries other than foreign trade. The income of real estate practitioners and related practitioners is not good. Everyone is relatively negative.
For example, if the house cannot be sold, the land cannot be sold, government revenue, civil servant income will be affected, countless enterprises in the upstream and downstream of real estate will be affected, and the income of so many employees will also be affected, and eventually it will almost spread to the society each of the fields. Moreover, many cities, including Tianjin and Nanjing, are all civil servant cities, that is, the group of people with the most purchasing power are civil servants. Their income directly affects the state of the market.
Internet companies are essentially advertising companies and sales companies. They don’t create products, they only transfer products. Now that consumption is sluggish and transfers have become less, they can’t do it anymore.
But I still have the same idea. Although the real estate before 2016 was crazy, it was normal, and it was not normal in the next few years. It has developed to the present, and what it has spawned is a kind of deformed prosperity. It’s like a person who is living a good life, and you are very envious, but one day I tell you that you can only live so well by swiping a credit card. Are you shaking your head? I don’t think it’s necessary, and simple food is better than this kind of borrowing money to eat hazel.
So many people say that we will enter a deflationary cycle next, which is wrong, it should be a debt repayment cycle. Repaying debts necessarily means saving money, and it is cutting food and clothing in all industries. How cool it is to borrow money for consumption, and how painful it is to pay back the money. But this kind of transition pain is necessary, after all, we can’t always rely on real estate to survive.
In the future, we will still rely on normal consumption to drive the economy. On the one hand, everyone will experience a better sense of happiness, and on the other hand, it will be healthier and more sustainable.
2

reverse annihilation of money

Real estate has created countless currencies over the years. I won’t say much about this. This thing is not a reservoir, but a pure super money printing machine.
And this kind of money printing is “one-way”. When housing prices rise, everyone is envious of asset appreciation and frantically chipping in to buy a house. Every time they buy a house, they borrow more money from the bank. There is more and more money in the society, so the economy is on fire.
But there is an end to this thing, you can’t keep going up, and sooner or later you will reach the limit, when everyone realizes that real estate may not go up in the future, so they won’t buy it, just wait. Then the stock of funds in the market began to turn around and down.
As a result, the currency in society began to shrink on a large scale. This shrinkage may be due to house slaves repaying their loans, or it may be that they bought a house at a high price, but now they cannot afford the housing loan and decided to sell the house at a low price. In short, everyone stopped borrowing money, and there was less currency in the market. This kind of “less money” can be expressed in many ways. For example, whether the balance sheet is in recession or debt-free, it means that there is less money in the market. A downward cycle is formed.
And just like the above-mentioned “everyone expects the monetary expansion cycle to be the same”, everyone’s expectations in the monetary contraction cycle are also not good. At that time, I felt that when my salary rose, I could pay back no matter how much money I borrowed now. Now everyone’s mentality is to pay it back quickly, and it will be miserable when they can’t make so much money.
3

Layoffs could lead to pay cuts

The Internet industry has been accustomed to a model for many years. As long as you change jobs, your income can increase. This pattern may end in the future.
Why did you get a salary increase when you changed jobs before? Because I invested in countless projects at that time, all companies needed people, and often several companies competed for a computer-related talent. Didn’t the wages keep rising?
But this situation is estimated to be over. The reason is also the logic I was talking about last year. The apps that should be done in the Internet field have basically been made, the superimposed expectations have weakened, and a large number of “pre-research projects” have been cut off. There is no need for so many people.
In fact, let’s think about it for ourselves, are the things related to all aspects of our life, such as socializing, eating, taking taxis, takeaways, etc., the same? You can’t make an app just to go to the toilet, can you? In fact, there is also an app for going to the toilet, but the demand is too small to promote it at all. This also confirms one thing from the side, the Internet industry has penetrated to the end.
I understand this is why Musk cut Twitter to only maintainers, because as a layman, he can see clearly that Internet companies are just like that, with everything they should have, and there is nothing new to study. What is needed are breakthroughs in other areas. In the past few years, Facebook didn’t bother with the Internet. It mainly went to the Metaverse, and Xiao Zha also knew that the Internet had entered its final stage.
Looking at China again, the major Internet companies are not focusing on the Internet, but new fields such as cloud computing, games, and artificial intelligence. People need top-level masters, so they began to lay off marginal departments and concentrate on buying graphics cards for AI.
Moreover, I have talked with HRs of many big factories in the past two years, and they have a common feeling, that is, the salaries of those recruited in the past few years have been high. Especially before 2020, when there were many projects, a lot of investment, and high stock prices, it was too ridiculous to talk about salary when recruiting. In the past two years, they have begun to live a tight life, and feel that the payment is too high, so they want to reduce the wages of these people.
How to drop it? Let’s lay off those one or two million a year and replace them with five or six million. Anyway, the ability is not too bad, and the mentality is even better. What’s even more outrageous is that an employee was recruited for more than one million yuan in 2019. At that time, the market environment was very good and everyone was robbing people, so they gave so much. After firing him last year, I called him again this year and asked him if he would like to come back, and only gave him half of the previous income, and the other party agreed without hesitation. Because he can’t find a job with such a high salary.
This also exposed the troublesome problem of a domestic enterprise, that is, wages can only go up but not down, and if you want to cut wages, you have to toss around. However, dynamic wages have been achieved in the manufacturing sector. In addition, due to the lack of dynamic management, large factories are using outsourcing. Often a project team, only the project manager and a few backbones are their own people, and the rest are outsourced. If the expectation is not good, all outsourcing will be cut decisively, and the backbone will be transferred to other projects.
In the future, “job-hopping and salary increase” will increasingly become a thing of the past. Now, once you lose your job, you may have to compete with your unemployed buddies in the same resource pool, and you may have to compete with those peers who are already running Didi, and you may also have to compete with college students who have just graduated.
Enterprises may also promote a wave of “cost-effective replacement”, that is, replace low-cost ones with high-cost ones.
And don’t think that if it doesn’t affect third- and fourth-tier companies, it will affect them, just like waves, wave after wave.
4

The key issue is still on the investment side

There has always been a political correctness, and everyone is scolding the property of capital seeking appreciation.
But think about it, if you have a few million, and your few million can’t appreciate in value, will you use it to invest in restaurants, shopping malls, or new technologies?
If you don’t invest, others will have no wages, and if others have no wages, they will have to be laid off. If they are laid off, they will have no purchasing power, and new investment risks will become very high, and everyone will not invest. Thinking further, our society is invested by countless such large and small capitals that seek appreciation.
Therefore, the key is expectations and confidence. As long as these two are stable, people will invest, and the money invested will become other people’s wages. With purchasing power, businesses will have profits. Only with profits will they continue to invest, and the economy will turn around again. stand up.
5

People always say, why are you speaking for capital again?

If this problem was still a problem last year or the year before, is it still necessary to discuss it this year? 80% of the jobs in the market are invested by private capital. Some of these capitals are huge, such as the investment companies with multinational backgrounds we usually talk about, and countless ordinary people who have saved some money and want to invest in appreciation. wrong? The entire manufacturing industry in China is almost all produced by infinitely small private capital.
Once the capital is not invested, not only those high-paying jobs will disappear, but also the jobs of ordinary people will disappear.
There may be friends who want to talk, so how about enduring the exploitation of capital?
This brings us back to the basic question, what is the bottom line?
It can only be the law. If various concepts can be used as the bottom line, the bottom line will be so high that no one can do anything.
When I talked about India before, I talked about a problem. The biggest problem in India is the dynamic bottom line. When you play the next game, there is one rule of the game, and another rule in the middle of the game, which makes it impossible for everyone to play. The investment environment in India has always been bad. What a drop, that’s why.
You may not know that the vast majority of manufacturing companies have strictly implemented the labor law, but the way of implementation is not consistent with everyone’s understanding.
A common operation is that the salary is lower than the “legal minimum wage”, about 2,000 yuan a month, and overtime pay is strictly paid, and it is 1.5 times the salary, but the basic salary is a bit low, and the overtime pay cannot be increased.
A situation often arises, “salary 2,000, overtime pay 5,000”. I went to Hangzhou some time ago, and I drove to Suzhou to understand the situation. Generally speaking, the “expected salary of 7,000” for manufacturing workers is just like this. After understanding this, I understand why a new energy giant company had a wave of resignations some time ago, because they worked less overtime, and the employees did not have overtime pay, so the two thousand salary was not enough.
6

Do code farmers have a future?

The very frustrating thing is that the improvement of the treatment of programmers in recent years has led to the concentration of a large number of talents in this industry.
Moreover, the threshold for programmers looks high, but it is actually very low, so that many mathematics and physics and various tiankeng majors are crowded here. It is almost inevitable that the programmer industry is getting more and more volume. But there is one thing to say, the computer is still much better than the construction site.
There are always friends who say, blogger, why are you running on the civil engineering industry all day long?
In fact, no, you can ask civil engineering people, they speak more harshly than me, the main reason is that young people go less, so they are not so curvy. Moreover, many young people are not suitable for the construction site at all, and they will run away with buckets when they go. It is better to think ahead, and if they are not suitable for the construction site, just don’t go.
In the computer field for many years to come, the ceiling is still very high. Some people may say, blogger, are you talking nonsense, which industry has a low ceiling? It doesn’t mean that, but it means that the ceiling of computer technicians is very high, and other industries want to earn more, basically have to get rid of technology.
For a long time in the foreseeable future, it should be no problem for a coder to find a job with a little real skill, it’s just a matter of salary.
Moreover, code farmers are strictly graded, and it can be seen clearly within three or four days after entering the job. Let’s simply divide them into four grades.
The worst part, that is, the fourth level, is not just technically incompetent, but human incompetent. The code is messed up, the documentation is written in a mess, and no matter how simple the job is, it cannot be delivered successfully in one go. This kind of person is also a dog, but it accounts for at least 30% of the workplace. As long as you work with a sense of responsibility, you can surpass these people.
The third level is quite satisfactory, with no obvious advantages and no obvious disadvantages. He can’t solve complicated problems, but he can’t make mistakes in simple problems. Accounted for 50%.
The second level is the core of the team, about 15%. Generally, each project team has a technical backbone, which is what we are talking about. It seems that he can solve any technical problems, and he has a strong sense of responsibility. Project managers are vying for him. As long as the salary is not outrageous, this kind of person will hardly have to worry about finding a job in this life.
This level is the ceiling that most people can reach. It requires a great sense of responsibility, concentrating on researching your own field, an upper-middle brain, and being more careful. You can get there after a few years. But there are very few such people in real life. Don’t look at many people who seem to be busy like dogs every day, but for some reason, their ability has not improved, and their level has remained the same.
Finally, there are a very small number of pure technology giants and industry leaders. This kind of people are often very smart, and there is a clear generation gap with other people. They can solve the kind of things that you can’t solve in your life. problem.
The kind of “Ali Gao P” that people often say, there are such great gods, of course there are also bastards, but the “mixing skills” of this kind of bastards are also unreasonably high, and they don’t know how to fart, but they can keep on thinking about their intentions. It is more difficult than those technical masters to get along and get a high salary. You said whether layoffs are such people first, it is not certain, because they often have a good relationship with the leader, and the leader thinks that the technical backbone can be replaced, but they cannot do without this kind of person.