Yes, folks, we are into the last 2 weeks of the year. What a year it has been for investors. All the sins of the past came home to roost in 2022 after 14 years of excesses from the last 2008 GFC banking crisis.
What had changed? The central banks, the last defence of sensibility, took over the roles of the evil bankers and printed money like there is no tomorrow for years, inflating all asset classes. It took the Covid pandemic to eventually tip everything over the cliff and pricked the ever-growing asset bubbles this year.
Rapidly rising inflation due to an endemic reopening by late 2021 plus the Ukraine war in early 2022 finally caused inflation to suddenly shoot up. The central banks had no choice but to raise interest rates in a quick succession. The last comparable historical period was in the 1980s during Paul Volcker’s fight against inflation when the Fed temporarily raised rates to more than 20%!!!
The Fed has now raised 4.25% year to date on the back of 4 consecutive 75 bps hikes. It just raised 50 bps this week and cautioned that there could be more hikes (although it is 25 bps lower now). It means that the FED has hike rates 7 times this year. They are now basically observing future data to see if the hike actions this year have managed to tame the inflation monster.
There is some optimism that perhaps we have reached a peak> We have moved into a historical long-term level of 3-5% interest rates which is the norm. 2023 will be an interesting year as economists’ forecasts for the new year are the most diverged and different in recent years. No one really has a bloody clue where we will be going. The ongoing Ukraine/Russia war is a constant albatross hanging over our heads.
Meanwhile, year end liquidity is bad and the markets are volatile. We need to sit tight and weather the next 2 weeks and hope that the beginning of 2023 is brighter. 2022 is a year most 0of us would like to forget.
On the personal front, we had a big family gathering (finally!!) of more than 20+ to celebrate mum’s 88th birthday at my sis’s place. Good to see everyone again and also the latest addition to the family – 2 months old baby Scarlette.
I am also into my new consultancy project that could become a full time job next year. We have just completed and submitted our application for a FMC (Funds Management Company) with the authorities and hope that it will be approved within the next few months.
I also had a call with one of my mentees from the mentorship program that I have been participating for the last 5 years. He had graduated 1.5 years ago and worked for a top bracket American bank. He is now approached by another financial institution and wanted my views on changing careers and jobs. I shared with him my experience and the processes to follow plus the things to look out for.
On Fri, I had a year end long lunch with a group of good friends to celebrate the year-end. Between the 6 of us, we had 6 bottles of wine over 5 hours. Good food, great wines and fantastic company. What else can one wish for?
I am looking forward to our year-end family vacation in France starting tomorrow. Great to have both sons with us and the older one is joining us from UK. It will be Paris, Marseille, Lyon and then back to Paris. Weather looks cold but we will definitely have quality family time together.
I will take a break from writing this blog for the next 2 weeks. When I am back, it will be to review my 2022 new year resolution list to grade myself. Then into Jan, it will be to create a new list for 2023. Wishing everyone a merry Christmas and a great 2023 ahead!
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