Asklemmy

43940 readers

549 users here now

A loosely moderated place to ask open-ended questions

Search asklemmy 🔍

If your post meets the following criteria, it's welcome here!

Open-ended question
Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
Not ad nauseam inducing: please make sure it is a question that would be new to most members
An actual topic of discussion

Looking for support?

Looking for a community?

Lemmyverse: community search
sub.rehab: maps old subreddits to fediverse options, marks official as such
!lemmy411@lemmy.ca: a community for finding communities

~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~

founded 5 years ago

MODERATORS

397

Why is everything going to shit? (feddit.de)

submitted 1 year ago by Knusper@feddit.de to c/asklemmy@lemmy.ml

131 comments fedilink hide all child comments

Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I don't fully get it either.

I've got the following explanation. The sentences marked with "???" are were I'm lost. Anyone mind telling me, if they're correct and if so, why?

The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.

This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didn't have to be profitable, because they could pay out investors from money that other investors gave them???

This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???

you are viewing a single comment's thread
view the rest of the comments

[–] ILikeBoobies@lemmy.ca 5 points 1 year ago

Too many reasons to list so I’ll add another

Stocks are only ever allowed to go up, if they go down you risk death

Covid caused massive increase in some stocks, now those companies need to find new ways to create revenue from the base they had prior to Covid to out match the base they had during it

Some companies had drop in stocks during Covid, they need to make it up to their shareholders so they don’t lose confidence