Not so bad

November sucks. Dark. Cheerless. Time change. Cold and wet. Snow, yuck.

But the 11th month of 2022 has turned into a beacon of hope for investors, markets and perhaps the world. Just consider what’s been going on…

The latest inflation number in the US came in cool. Not hot. The back of this thing, investors think, has been broken. CBs will stop killing us in a few months.

The Dems beat the Trumpers. There was no Red Wave in the American midterms, which means 45 was repudiated after inserting himself into the fray. He may still announce on Tuesday, but DeSantis will wipe the floor with him. Good for stability. Good for us all.

Jobs are plentiful and wages rising. The unemployment number in Canada last week was epic. Ten times better than expected. American stats also strong with virtual full employment in place. We have never contemplated a bad recession with job strength like this.

The Bank of Canada boss said two days ago rate hikes aren’t done yet, but we’re close. Any downturn here will be short and shallow. Two beautiful words. So stay invested.

The Russians put their ratty tails between their legs and marched – or skedaddled – out of a key Ukrainian city they’d held since Putin’s mad war began. The tide has turned. There will be come kind of resolution in 2023.

Corporate profits have been steadfast. The crypto delusion is rapidly evaporating. And have you heard anyone talking about paying multiple millions for a NFT of a monkey lately? Me, neither. This distracting, unproductivity, puerile pantfull is coming to an end.

In the scheme of things, maple’s good. So far in 2022 the mighty S&P 500 is still down almost 17%. The Dow’s off 7.8%. In comparison, Bay Street is only 5% below it’s heady January level, which means a few decent weeks could actually see it end this teary year with a gain.

The Canadian inflation number to be released this week will be high, pretty much cementing in a BoC hike on December 7th but, weirdly, interest rates are stabilizing. Government bond yields fell last week on that encouraging US cost-of-living data, and five-year mortgage costs are stalling in the 5-5.5% range. Yeah, sales have crashed (this November may be the worst in over 20 years) and prices have yet to see bottom. But this is not going to murder the GDP.

Gas prices are down. There have been more good days than stinkers on the financial markets lately. Two-by-fours are affordable (sort of) again, as lumber prices have crashed this year by over 70%.

The story of a year in one chart: lumber prices

There’s more, of course. Nobody’s writing fatuous media stories about ‘quiet quitting’ any more. Elon’s getting spanked. The federal deficit has withered. Golden retriever puppy prices have dropped 40%. Biden’s talking to Xi. Adele is trapped in Las Vegas, which means we’re safe.

So 2022 was messed up by central banks and Putin. If there’d been no Ukraine war and no monetary tightening cycle, it would have been an entirely different year. But in 2023 it’s reasonable to expect both conflict and rate hikes to pause. Inflation will subside. We’ll all get used to the increased cost of money. The economy will grow again. Profits will continue. Markets will reflect it all.

No, it’s not different this time. No cliff. No great reset. No generational debt crisis. No depression. No collapse. None of that stuff the professional bears have been selling to you all year on doomer web sites would come to pass. These turned out to be just events, and life is always full of them. Some big, some meaningless. All of them noisy. Temporary.

Today still is a gift. Don’t blow it.

About the picture: “First snow dump of the Prairies this year and Skip The Rescue Wonder Dog enjoys a seasonal stroll around our acreage,” writes Kris. “Still a young pup and this is his first foray into the white stuff which seems to cause much frolic and gives the owners of the leash a reason to enjoy the fresh air antics. The early morning routine is now coffee whilst reading the daily words of wisdom from the blog and then outside for the welcome exercise as we ponder things financial from the Teachings of Garth ( MSU ). Very much appreciate the steady hand on the tiller in these anxious times Garth, and having a wonderful loving animal to care for adds to the balance in life.”