alt Hacker NewsOne thing we know for sure -- A huge portion of the S&P 500 is exposed, the average consumer is pretty tapped for credit, and if people's stock accounts / 401ks go down they naturally retract their spending some. Which means a recession across all but necessities.
Plus loan rates are high meaning rational people either pay less for, or completely avoid buying houses, cars, and all the things that go with (furniture, yard maintenance tools etc)
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locallost • today at 6:09 PM
I agree, but also the housing market is already pretty dead because current owners have very low rates on their mortgages.
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Great comment. Additional downstream impact is that those who feel wealth ("wealth effect" [1]) from an inflated SP500 will no longer feel as wealthy and will reduce spend accordingly when a correction occurs, further slowing an economy at stall speed without AI capital investment.
[1] https://en.wikipedia.org/wiki/Wealth_effect