Some were still children when the financial crisis hit the world in 2008.
From that crisis, caused by the collapse of subprime mortgages, Gen Z and millennials often saw only images of Lehman Brothers employees leaving their offices in New York with their boxes in their hands or images of abandoned houses in the Midwest and Florida. At the time, social media had not yet become such an important part of our daily lives.
Fourteen years later, the world is bracing for another sharp economic downturn described by Mark Zuckerberg, CEO of Meta Platforms (META), parent company of Facebook, Instagram and WhatsApp, as "one of the worst downturns that we've seen in recent history."
Meta, Alphabet ((GOOGL)), Microsoft ((MSFT)), Tesla ((TSLA)): most major tech companies have already announced a hiring freeze, a first for Google since the 2008 crisis.
'Boomer Fallout'
And for the new generation of investors, who took their first steps in the financial sphere in the midst of a pandemic by using the WallStreetBets forum of the Reddit platform, the difficulties currently facing the economy are the fault of "irresponsible" boomers (people born between 1946 and 1964).
"What a surprise. Boomers are going to F... the economy for the 5th time in 20 years," one user of WallStreetBets posted on the channel, using an expletive.
"I always find it funny, when boomers go and say 'hard time create strong man'. If you consider that boomers had the easiest time its hilarious that they think of themselves as strong man. Millennials and gen Z are the one who have to grow up in boomer fallout they leave behind," added another Reddit user.
"Yeah Boomers are always off at their location in that cycle," said another one. "The reality is Gen z and Milliennials got born into s--- economic conditions. Just hoping we avoid a full Great Depression 2.0," another said.
"Boomers. A plague of locusts, devouring every resource they could grab. Free college education, sex, drugs, rock and roll, all the best careers, toys and cheap housing for them... but you don't even get the left over scraps because you're 'just looking for a handout," ranted another Reddit user, listing what he considers all the benefits the Boomer generation has had for them.
"Boomers are going to work till they die, but it's not because they want to. It's because they have to because they're crazy irresponsible with money," adds another Reddit user.
Is This Dot-Com 2.0?
Many of these young investors have lost a lot of their very first investments in the current market rout. The cryptocurrency market has lost over $2 trillion since November. Bitcoin prices, the king of digital currencies, have fallen 70% since their all-time high of $69,044.77 on November 10. Ether, the second digital currency by market value, collapsed by 76%.
This crypto crash is due to the Federal Reserve's decision to hike rates to curb inflation which is at a 40-year high, a situation brought about, economists say, by trillions of dollars in stimulus packages and the fact that the Fed kept rates near zero for two years to prevent the covid-19 pandemic from rocking the economy. In doing so, the federal government has flooded the markets with cheap and easy money.
"Responsible culprits of course were Washington’s multi-trillion-dollar deficits, an ignorant – yes ignorant -- Federal Reserve that kept yields near zero and even bought Treasury and mortgage-backed bonds until May of this year, and of course a willing investment public characterized by 'meme apes' and their 'to the moon' hyped forecasts," legendary financier Bill Gross recently wrote in his investment outlook.
"There was so much money in the economy," one Reddit user agreed. Venture capital firms "were literally throwing it away. Now were actually healthy."
"Crypto is going through its 2008 (without the bailouts) so all these random VC backed ponzi schemes are crashing lmao," another added.
"Dot com 2, electric boogaloo," another user agreed, referring to the dot-com bubble of the late 1990s.
WallStreetBets was created on January 31, 2012, with a particular emphasis on highly speculative trading strategies. The community describes itself as "Like 4chan found a Bloomberg Terminal," a reference to the series of anonymous, anything-goes forums.
The channel rocked the stock market right down to its ankles early last year with the infamous GameStop ((GME)) short squeeze that sent shares of the video game retailer into the stratosphere.
WallStreetBets also helped create the concept of the meme stock as the so-called apes displayed cult-like devotion to certain companies, such as GameStop and AMC ((AMC)).
The forum surged from roughly 500,000 users in July 2018 to about 10.7 million users in June 2021, with a spike in January 2021.
