2022 is like a splash of cold water for crypto bros, retailers, vans and remote workers
This year has been difficult on many fronts. Russia invaded Ukraine. Inflation has risen worldwide. Europe is struggling with an energy crisis heading into winter. Developing countries are struggling with a food crisis. And to top it off, a global recession is widely expected, if it isn’t already here.
For Americans, 2022 has delivered a whole set of truths closer to, well, home. All the trends that characterized the 2010s have come crashing down in a historic bout of economic destruction. Think of crypto bro or the meme stock trader whose big profits have turned into big losses. Or think of the remote worker who fled a big city, only to worry that their job will be the first to be laid off in the layoffs. Even many vans, who for the past decade seemed to have found a way to largely escape the cares of the world, have become disillusioned with the nomadic lifestyle glorified in TikTok and Instagram posts.
For these Americans, 2022 has felt like a splash of cold water. The Federal Reserve is a big reason for that. For the past dozen years, the US Federal Reserve’s inflation-increasing policies of super-low interest rates and massive bond purchases have fueled an “alt bubble,” in which asset prices across the board seemed to reach new highs.
The resulting “wealth effect” couldn’t last forever, and this year marked the end, with the Fed promising to fight soaring inflation with higher interest rates—even if that means a recession. “While higher interest rates, slower growth and softer labor market conditions will reduce inflation, they will also cause some pain for households and businesses,” Fed Chair Jerome Powell warned this summer.
With the Fed still hawkish, equity markets have had a bad year – the S&P 500 is down more than 20% so far this year. Looking nervously at your 401(k) has become an unhealthy obsession for many.
Cryptocurrency investors have had an even worse year. It has been difficult to maintain high hopes during the “crypto winter” of 2022. Bitcoin is down more than 50% so far this year, and other cryptocurrencies have fallen even more in a widespread selloff that has made a mockery of the “buy the dip” mantra.
JPMorgan Chase CEO Jamie Dimon told lawmakers last month that cryptocurrencies are “decentralized Ponzi schemes, and the idea that it’s good for somebody is unbelievable.”
Meanwhile, 2022 is shaping up to be crypto’s “biggest year ever for hacking activity,” according to Chainalysis. Hackers have collected more than $3 billion in 125 hacks this year, the blockchain intelligence firm noted recently, and this month has been the biggest ever for hacking activity.
Meme stock investors have also faced disappointment. Bed Bath & Beyond stock topped $22 in March, but struggles soon became apparent, the CFO committed suicide last month, and the stock is now below $6. AMC Entertainment, another meme favorite, has also seen a significant decline, as has video game retailer GameStop.
The speculation in crypto and meme stocks was not healthy anyway, said Ken Griffin, CEO of hedge fund Citadel. “Money misallocated in speculative assets does not create jobs in the long run [and] doesn’t help create the long-term prosperity that makes America the country it is,” he said late last month at the CNBC Delivering Alpha conference.
Not everyone joined the speculation frenzy, of course. Some Americans decided to leave the stress behind by embracing the “van life.” The alternative lifestyle caught on among remote workers during the pandemic, after becoming popular in the 2010s among millennials seeking nomadic adventure. Videos romanticizing the lifestyle – drinking wine under the stars, sleeping by the beach – received millions of views on Instagram and TikTok, and van conversion companies struggled to keep up with rising demand in the middle of the supply chain.
But like Fortune reported this week, many of those who try the van life have become disillusioned with it, sometimes after spending a significant portion of their savings on converting or refurbishing a vehicle. A 33-year-old described it as “glorified homelessness” and was horrified by gas prices. Another put it more bluntly: “Van life influencer culture is full of sh––,” complaining among other things about endless repairs and having to pay for hotel rooms when it’s too hot to sleep in a van.
Other lifelong vans have dreaded constantly figuring out where to park and sleep, bathing and showering challenges, and public perceptions that they lean more toward “bums” than “adventurers” when a parking spot becomes home for the night.
Of course, the van life is still popular and companies are making money. Ford is teasing an upcoming RV called the Transit Trail, with an executive tweeting a van video about it and writes: “From workplace to campsite.” But for many, the day-to-day reality of the lifestyle has proven far removed from the glamorous videos of it on Instagram.
For workers who hope they can continue to work from vans or at home or even secretly from Bali, 2022 hasn’t been too kind either, with high-profile CEOs signaling more opposition to the idea. That has left remote workers, many of whom claimed to be more productive outside the office during the pandemic, feeling less confident about their work arrangements and prospects.
Tesla CEO Elon Musk said in May that “teleworking is no longer acceptable” and employees unhappy with the change should “pretend to work somewhere else.”
BlackRock CEO Larry Fink said last month that his investment firm would take a “harder line” on telecommuting and that bringing workers back to the office would help reduce record US inflation.
Citadel’s Griffin isn’t big on remote work either. Earlier this month, he advised ambitious young professionals against it, saying it’s time for America to return to the office and “get back to it.”
With 98% of CEOs expecting a U.S. recession in the next 12 to 18 months, according to a new Conference Board survey, telecommuters increasingly fear they will be among the first employees to be fired in potential layoffs. A survey of executives released this month by software firm Beautiful.AI suggests they are right to be afraid.
Then there’s this concern: If work can be done remotely, can companies eventually outsource it? Surely a worker somewhere in the world is happy to do the job for less.
Anna Stansbury, who teaches the future of work at the MIT Sloan School of Management, warned of that possibility this month, using Google and Facebook encoders as examples. If they were able to work ‘for a year and a half without ever going to the office, it seems very, very likely that many companies will rethink this in the longer term and outsource the kinds of jobs that didn’t used to be outsourced , she said.
Telecommuting, meme shares, cryptocurrencies, and even van living gave many Americans a sense that they could gain more control over their lives. 2022 has been a reminder that much bigger forces sometimes take the wheel.
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