Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

It's become a bit of a year-end tradition on this channel to look back over the big news

stories of the year, many of which I discussed at the time, and wrap up with a discussion of what the

next year might hold in store for us. So, 2023 got off to a start with political turmoil

in the United States, as the US House of Representatives struggle to elect a speaker. We saw the

most drawn-out House Speaker election since 1860.

Who'll forget that battle? And after four days and 15 ballots, Kevin McCarthy finally won

a slim majority. He almost managed to hold onto the job for a full year.

No sooner had that drama ended than the US hit its debt ceiling, a limit on the amount

of debt that can be incurred by the US Treasury.

Republicans were demanding deep spending cuts in exchange for raising the borrowing limit,

and the White House and Democrats insisted that

they would not strike a deal on that basis. There was a real risk at the time that the United

States might default for the first time in its history, other than the accidental default that

occurred in 1979 when a broken printer at the Treasury meant that interest

payment checks didn't go out on time.

There was a lot of discussion around the idea that in the event of default, the US dollar

might actually rally, as even if the US had just defaulted, investors, if they panicked, would likely move their

money into the safest assets they could find, which would likely still be US assets.

That would have been an interesting thing to see.

Meme stock investors were upset in mid-January to learn that their nemesis, Ken Griffin's Citadel hedge fund,

had achieved the largest single-year dollar profit of any hedge fund in history after returning

...