MacNicol’s Monthly Commentary – August 2022
With this commentary, we plan to communicate with you every month about our thoughts on the markets, some snapshots of metrics, a section on behavioural investing and finally an update on MacNicol & Associates Asset Management (MAAM). We hope you enjoy this information, and it allows you to better understand what we see going on in the marketplace.
“Too many people spend money they earned. To buy things they don’t want. To impress people that they don’t like.”
– Will Rogers
Not in a recession… “wink-wink, nudge-nudge”…
Bank of Canada Governor Tiff Macklem is eminently qualified to lead our nation’s Central Bank, but his job just got a lot tougher. Though not technically in a recession, our economy did not grow whatsoever in May according to figures from Statistics Canada. Slowing growth places Governor Macklem’s more forceful approach towards inflation at the juxtaposition of a more plodding Canadian economy and one that continues to struggle with outrageous inflationary pressures.
[Eminently qualified, amply paid. Macklem’s official compensation at the Bank of Canada is public knowledge and listed as somewhere between $457,300 and $538,000. Of all the challenges Macklem faces, political inquiries into his credibility could be the most daunting. Besides, what does anyone making half a million per year really know about inflation?]
Canada’s real GDP was unchanged in May after a 0.3% expansion in April. Growth in service industries was offset by a decline in goods-producing industries. With growth slowing down as businesses continue to face supply constraints and labor shortages, and consumers beginning to buckle under the weight of not only more expensive food, fuel and rents but also higher carrying costs for debt. Indeed, the Canadian economy could be maxed out.
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