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# Reflections on 2023: A Year in Finance and Economic Events

2023 has been a tumultuous year filled with significant financial and economic milestones. In the latest episode of The Plane Bagel, host Richard Coffin provides a retrospective on these notable happenings as we transition into 2024. With a blend of casual commentary and informative analysis, this summary captures the essence of a year that was more eventful than it may initially seem.

## Economic Performance Review: A Positive Shift

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To kick off the discussion, Coffin highlights the improved performance of the markets compared to the previous year. The S&P 500 completed 2023 with a total return of around **25%**, inching closer to its all-time high. In Canada, the S&P TSX managed a respectable **10%** return, while the MSCI Emerging Markets Index saw a **16.6%** net return. Notably, bonds also fared well, with the S&P 500 Bond Index rising by **8%**, despite a flat ending for the 10-year Treasury yield.

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Inflation remained a hot topic, experiencing a notable decline throughout the year, with November figures showing a rate of **3.1%** in both the U.S. and Canada. Other commodities exhibited varied performances: while gold surged by **12.1%**, oil fell by approximately **8%**, and Bitcoin made headlines with a staggering **162%** increase year-to-date.

## 2023: A Timeline of Key Events

### January: The Debt Ceiling Crisis

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The year opened with a significant economic event as the U.S. hit its debt ceiling of **$31.4 trillion** on January 19. This led to a **three-month crisis** as negotiations stalled between President Joe Biden and House Speaker Kevin McCarthy. Extraordinary measures were employed to keep the government operational until a temporary suspension of the ceiling was agreed upon on May 27.

### February: The Rise of Generative AI

February marked a turning point in technology with **ChatGPT** rapidly gaining traction. Surpassing **100 million** monthly active users within two months, this phenomenon ignited the generative AI Gold Rush, prompting companies to launch an array of text, image, and video generating AI systems.

### March: Banking Instabilities and Crises

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The month of March proved critical for the finance sector. On March 10, **Silicon Valley Bank** collapsed due to massive withdrawals and losses in its bond portfolio, marking it as a central player in what was dubbed the **regional banking crisis**. This was followed by the downfall of **Silvergate** and **Signature Bank**. The situation escalated with the **Credit Suisse** takeover by UBS on March 19, reflecting the broader banking instability connected to rising interest rates.

The events in March led to a series of failures, culminating in **First Republic Bank's** collapse on May 1, surpassing Silicon Valley Bank as the second-largest bank failure in U.S. history.

### June to July: Federal Fed Actions and Changes

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In July, the Federal Reserve launched its **FedNow** service, streamlining payment processes for financial institutions. The month also saw the Fed enact its final rate hike for 2023, raising the federal funds target rate to **5.5%**, the highest level in over two decades.

### Economic Anomalies and Cultural Contributions

As summer transitioned into fall, the U.S. economy received a significant boost from **Taylor Swift**’s A.A. tour, alongside **Beyonce's** Renaissance tour and the blockbuster movie **Barbie**, which contributed an estimated **$8.5 billion** to the economy.

### Broader Geopolitical and Corporate Developments

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Autumn brought escalating geopolitical tension with the **Hamas attack on Israel** on October 7 and significant troubles in China's real estate market linked to **Country Garden's** defaults. On October 30, a staggering valuation drop left **X** (formerly Twitter) at **$19 billion**, marking a loss of **$25 billion** for Elon Musk.

November saw high-profile legal cases, including **Sam Bankman-Fried’s** conviction and **Binance's** founder pleading guilty to multiple charges, reflecting the close scrutiny over cryptocurrency operations.

## Looking Forward: 2024 and Channel Updates

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As Richard Coffin wraps up his reflection, he expresses excitement for the upcoming year. With over **830,000 subscribers**, the channel has seen tremendous growth, and Coffin aims to maintain this momentum while also addressing essential financial literacy fundamentals to cater to a broader audience base.

He also plans to take a break in January to recharge and prepare for new projects, underscoring the importance of balancing personal time and professional growth.

## Conclusion: A Year Filled with Lessons

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As we close the chapter on 2023, it is evident that the year was marked by significant shifts in economic landscapes, technological advancements, and the evolving nature of finance. The remarkable developments witnessed not only reflect the changing dynamics of the world economy but also provide invaluable lessons for individuals and investors navigating the intricacies of finance. With anticipation for what 2024 will unfold, the journey ahead promises both challenges and opportunities. Happy holidays to all, and here’s to a prosperous New Year!