The economy isn’t doing so well and it’s not going to correct itself any time soon. It’s not really that noticeable on the larger scale but any company that produces anything non-digital is still having supply line issues. Not as bad as a few years ago, but still bad enough to cost the global economy a lot of potential growth.
Then there is the higher interest rates, which in themselves are an issue for the economy. Not so much because companies “need” to borrow money as such, but because the ridiculously low interest rates made it easier to make more money since you could fund things with money you didn’t have, since it was basically free to do so. A lot of places even sort of dropped the ball on this, not locking in the rates on their loans because, well, because we’re collectively rather stupid, so many organisations are looking at making deals with banks to find some reasonable place to land these loans in a way that doesn’t hurt anyone too bad.
There is more to it than that, but the over all result is that a long with the inflation (which may have stopped but it’s not like prices are dropping just because they paused increasing) wage stagnation and so on, is that there is a lot less purchasing power and willingness both in the investment and in the consumer markets.
You can say that companies over hires during the COVID lock downs, which isn’t really wrong, but we’re also sort of in a recession that we have collective agree not to talk about. Partly because it’s a weird recession considering the job market is hot.
Is the economy bad? Seems fine to me. In general a “bad economy” seems entirely made up. It’s not like the money just disappears. I think it’s a concept invented to facilitate wealth transfers.
Well it depends on how you look at it. We’ve had to say no to several projects due to high interests rates and global supply lines, and we’re hardly the only company to be in that situation. So on one hand it’s not like we’re not still making money, we’re just making around 90% less than we could’ve done if the supply lines were still capable of delivering the stuff we need and if we were capable of doing projects where a good part were funded by loans on top of investor money.
The net result is that we’re around 2000 fewer people than we planned to be in 2025. Again, not that we aren’t generating money, because we’re still on black books, but far, far, less than what we wanted and it’s not likely to change in the foreseeable future.
One of the major reasons the job market is still doing just fine is because the larger generations are being replaced by much smaller generations, so there are simply fewer workers in the total pool. If there weren’t things wouldn’t look this bright.
Tencent has lost a lot of value in the past few months and has had a terrible year overall. The value has disappeared.
> I think it’s a concept invented to facilitate wealth transfers.
Well, if you transfer a bunch of wealth upwards, it's going to have negative consequences that travel downwards. Those who receive them may describe the economy as "bad." Which not only describes a current state, but probably mostly encodes their lack of hope for any type of future mobility that may change their circumstances.
Tencent lost a lot of value because China decided to crack down on a number of Asian business video game business models last year, and this directly affected a large portion of Tencent's portfolio.
However, according to their Q3 filings (Q4 has not been filed yet), their video game revenue is actually up and they specifically cite the performance of Valorant.
So the issue for Tencent wasn't Riot Games, it was its Chinese developers.
More recent news shows that the "government official" in charge of introducing this new rule was fired and the rulemaking abandoned.
Their total value loss has occurred solidly throughout 2023. No part of the year was particularly good for them, and the regulator news doesn't seem to have had any unique impact, at least looking at their OTC chart.
They fired the person that announced the rule not any of the people that actually came up with it! AFAIK whilst there’s going to be changes the rules will be along similar lines.
FWIW, severance is usually a lump sum, so it absolutely benefits the employees to wait until the new year because the severance will likely get taxed at a lower tax bracket.
