The economy is on everyone’s mind.
What worries everyone is the health of economic activity as the midterm elections loom.
President Joe Biden, whose party has a fragile majority in Congress, goes on to say that the situation is not that dire.
“We are starting to see some of the good news on the economy. Gas prices have dropped dramatically in 46 of the 50 states because of what I’ve been doing. We are moving in the right direction,” Biden said during a press conference on October 20.
He was trying to fend off Republican attacks on the economy and inflation.
The president’s message contrasts with many business leaders and economists who believe that the Federal Reserve’s (Fed) policy of aggressive interest rate hikes to squash inflation will cause the so-called hard landing of the economy, also known as a recession. .
Business leaders say recession is imminent
Jamie Dimon, CEO of JPMorgan Chase, said on October 10 that the economy would enter a recession “within six to nine months.”
David Solomon, CEO of Goldman Sachs investment bank (SG) do you agree.
“I think this is a time to be cautious,” Solomon said during an interview with CNBC on Oct. 18. “And I think if you’re running a risk-based business, it’s a time to think more carefully about your risk box. , your appetite for risk. I think you should expect more volatility on the horizon.”
The banker added: “Now, that doesn’t mean for sure that we have a really difficult economic scenario, but in the distribution of the results, there is a good chance that we will have a recession.”
On the same day, Jeff Bezos, the founder of Amazon (AMZN) one of the barometers of public consumption, advised companies and consumers to prepare for a rainy day.
“Yes, the odds in this economy tell you to batten down the hatches,” Bezos posted on Twitter on Oct. 18.
The recession will last ‘until spring 2004’
More than two-thirds (69%) of Americans are worried about the possibility of a recession by the end of 2023, according to a July survey by personal finance website Bankrate.com.
Many tech groups have already announced hiring freezes, withdrawn job offers, job cuts, travel budgets, marketing budgets, and employee benefits. There are those who have also canceled certain projects. Tech companies are companies that thrive in times of growth. They are often the first affected by a recession.
Elon Musk, the world’s richest man and head of four companies, estimates that the looming recession will last until at least the spring of 2024. For Musk, there is no question of economic decline. And this will continue for at least another 18 months.
It all started with a Twitter thread started by Billy Marcus, the co-creator of the Dogecoin (DOGE) meme coin, of which Musk is one of the biggest supporters.
“Oh wow the coronavirus numbers are pretty low,” Marcus posted on Twitter on Oct. 21. “I think all we have to worry about now is the impending global recession and nuclear apocalypse.”
“It would certainly be nice to have a year without a horrible global event,” Musk replied.
That’s when a Twitter user asked him how long he thought the recession would last.
“How long do you think the recession will last?” the user asked.
“I just guessed, but probably until the spring of the 24th,” the billionaire replied.
How bad will it be?
“How much worse do you think it will get?” the user continued. “Like a little worse or a lot worse?”
According to Musk, it is difficult to say exactly how much the economic situation will deteriorate. But he believes the upside of the recession is that companies that don’t have real fundamentals will disappear.
“It varies a lot,” Musk said. “Tesla and SpaceX are in good positions, but many other companies are not.”
He added: “Recessions have a silver lining in that companies that shouldn’t exist cease to exist.”
This is not the first time that Musk has predicted that the economy will fall into a recession. He has also already warned that “shitty companies go bankrupt and those that are making useful products are prosperous.”
“I think we’re probably in a recession and that recession is going to get worse,” the billionaire said May 16 during a virtual appearance at the recent All-In Conference in Miami. “But you know, these things happen and then there will be boom times again.”
Tesla (TSLA) The CEO added that the recession will “likely” last 12 to 18 months. “Usually it’s the amount of time it takes for a correction to occur.”
Tesla, Musk’s flagship company, is still hiring and has no plans to slow down its vehicle production.