The Recession of 2022

2022 has seen one of the biggest recessions since the Great Recession of 2008. It looks like there might be another Great Recession. Countries like Ghana, where I’m from and live have seen their currency rate depreciate in a way it hasn’t not in a long time. As of January 2022, 1 dollar was equivalent to 6.29 GHS but currently, 1 dollar is equivalent to 14.39 GHS making it the highest the dollar has ever gone against the Cedi.

Ghana isn’t the only country experiencing this economical hardship, there are other countries with similar problems. Unfortunately, they are not the only ones with these problems. As a matter of fact, It looks like the tech stocks have had a worse experience. Due to the hike in interest rates, economic uncertainty, global pressure, and the strong American dollar, the tech-heavy Nasdaq index has fallen more than 30% since Jan 2022 and falling into a bear market.

Last week saw the fall of these NASDAQ stocks escalate in an unprecedented way. Big Tech firms like Apple, Meta’s Facebook, Microsoft, Tesla, Amazon, and Adobe have all had worse returns in the third quarter of the year. Even Disney, a streaming company has also suffered its worst day trips in 21 years and others like Warner Bros and Lions Gate Entertainment Corp are all trading for less than $10. 

The big question now is, what seems to be causing the stocks of these tech and streaming firms to fall? Well, it seems to be the same problem but at a higher scale this time. When their stocks experience growth, they are pampered and cheered upon but when the unpredictable happens and the stocks fall, they are punished for it and are made to suffer the consequences alone.

The owner of Meta, Mark Zuckerberg was made to let go of 11,000 employees by his investors after the stocks of Facebook fell. These in addition to the laid-off employees of Twitter are now out there searching for new job opportunities which seem to be out of reach at the moment. This is its way is creating more trouble for the American government as the number of unemployed person soar.

Another huge factor has to do with Russia’s invasion of Ukraine. No one, including the best of analysts and forecasters, could have predicted that this was going to happen. Inflation was already growing but, this caused it to soar as the costs of everything plummeted. This has persisted and made sure that inflation skyrockets. As business conditions seem rather uncertain other firms are following in the footsteps of Meta and Twitter by laying off employees to stabilize their stocks.

What does this mean for you and me? Analysts are predicting that this recession is going to die down as it did back in 2008 and if you are smart you can take advantage of it. Whether that’s true or not, we can’t surely tell. But what we know for sure is that we have to brace ourselves in case a bigger recession occurs shortly.