The Recession Events (What will Happen During this Recession)

This period like every other isn’t different because it is a recession period just like every other recession but the only little difference about this recession is the fact that it was accompanied with a pandemic. Well, all recessions are accompanied with one thing or the other. A lot of things happen during recession and this things often follow the same pattern and it is visible it is going to happen again this year. When recession comes along, the general public become really scared and this affects the market, commodities, companies, and the economy in general, some people lose their jobs, a lot of people struggle to make a living, nobody is splurging on anything, demands for goods and services starts to reduce because the average person do not have the purchasing power.

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What do you think will happen even in this midst of this recession and everything looks like it is falling apart, well I will be putting out a few things that will certainly be happen during this recession, and they are;

Government bailing out the Rich and Businesses

This recession I going to be hitting hard on everyone but every company cannot fold up during this period because if they do, the economy crashes. For big corporations, the government will be coming to the rescue so they do not go bankrupt since they provide jobs for the average individual. As a single person, if you are involved in an accident, you do not get a bailout, if you have a small business with little staffs being employed and you head towards bankruptcy this period, the only thing you might get is a loan at a reduced interest from a bank but not a bailout, but CEOs of corporations that employ a lot of people can be very unreasonable with investment this period trying to risk money into so many other types of businesses because at the end of the day, the government will be willing to give them bailout during the recession because if they close up, the citizens will suffer. If you did not know, a lot of banks got bail out in the 2008 recession and there is a possibility that airlines will be getting bailout after this pandemic because they are losing money on a daily basis as they aren’t working.

Dumping stocks before the market crashes and Buying when the Market crashes

It is no news that the market is really down currently and it is normal to happen in a recession. Before the COViD-19 pandemic became a big issue, a few people had foreseen that it could be disastrous to the market and decided to pull out funds from the market, in fact a lot of people decided to do a simple trading like pump and dump so they make profit. It is said that short sellers made over $50 Billion during the coronavirus sell-off. You might wonder how possible but before the coronavirus case became serious, Billionaire investor Bill Ackman turned $27 million into $2.6 billion by leveraging that the coronavirus will tank the stock market.

As the stock markets already crashed, a lot of people are already buying into the market at the bottom, do not forget that unless this pandemic wipes out the entire universe, the stock market will surely rise again. So during this recession, a lot of people will see it as a stock market black Friday where they can now buy shares at below half the original price.

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Companies will bankrupt and competitors will buy them

There is a difference between a large corporation and a privately owned company, even though large corporations have the backings of the government with bailouts, a lot of other companies will go bankrupt. During this recession, a lot of companies will start keeping money aside waiting for their competitors to go bankrupt or collapse do they can buy the companies for a cheap price.

Real Estate price will Fall

Before the pandemic, a lot of companies already built estates on credit with the intention to sell but it is visible that with the current situation, a lot of people will not have the money predisposed and at that will not be buying houses for a while and soon the banks will come knocking and at that point (let us say in the next 18 months) commercial real estate companies will start selling off property at a discounted amount.

Cheap Labor as People will lose their jobs

We must be factual with ourselves, things will not remain the same after this pandemic and one of the major changes will be people will lose their jobs. I might be difficult to admit but in the next 12 to 18 months, there will be a lot of brown envelopes from employers to employee and there will be a lot of job hunting so companies will start looking for cheap labor. A lot of companies will want to utilize the labor market and get someone that will do the same job or better for a cheaper price.

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Low interest rate from banks

Banks will also not be immune to the recession and at such will need to get their business going and at such will be willing to give out loans at a low interest rate to people with good credit. It is better to have a good credit score during this period as you might need the bank to come to your rescue.

The next few months will be very dramatic as there will be a lot of rise and falls in the economy and from the way I see it, there might soon be a change in world order. Macro economy and geopolitics will lead to a change in world hierarchy and it looks like China is buckling up for this and a recession is always a push to a change in world orders. Do not forget that the USA became a world power after the Second World War so there is a possibility that things might change soon and if this pandemic doesn’t bring the change, then be rest assured that the pandemic isn’t the biggest unrest that would happen, something bigger might come up but this time maybe not a virus but a war.

Question

• what do you think will happen if the Yen becomes the reserve currency?
• What other event do you think will take place during this recession?
• What are your plans for the recession?