Plus: How getting married can be an investment strategy August 22, 2022 Made in Canada IN THIS ISSUE Estimated read time: 8 min 🐡 Inflation’s less-bad week 🇨🇳 China’s covert recession 😤 Zuck’s algorithm envy WHAT HAPPENED LAST WEEK Can Meta destroy all the cute videos in time? Read about it below. | Design: Wealthsimple THIS WEEK IN MARKETS A lot of observers have called the last few weeks “ the most hated rally of all time.” On one hand, investors are still more pessimistic about stocks and the economy than at any time since ’08 (just see Bank of America’s last couple of fund-manager surveys ); on the other hand, stock prices keep going up. Is the hate-surge finally coming to an end? The week started with a throwback frenzy in meme stocks (GME, AMC, and especially BBBY). For a minute, it felt like January 2021 all over again. But the party died almost as quickly as it started, as the meme stocks gave back almost all their gains. But the real losses came on Friday, when central bankers spooked investors with comments suggesting that more rate hikes are coming. Speculative stocks (like those in the ARKK Innovation fund, which fell more than 5%) tumbled, as did crypto (BTC and ETH slid more than 10%). The broader markets (the TSX, S&P, etc.) were a little more subdued, falling Friday but only enough to erase their gains for the week. Is this a turn back toward the bears? We don’t know anything yet except that it’ll probably be interesting. IMPORTANT Inflation numbers were better. So why do we still feel bad? July data showed Canada’s inflation cooling, but only a little. Prices were basically flat on the month but still 7.6% higher than last year — a heck of a lot higher than the Bank of Canada’s 2% target. Gas prices slid nearly 10%, which helped, but all the other stuff we need, like food, booze, and rent, kept going up. Great for headlines; not so great for regular people. And not enough to prevent another painful rate hike in September. China may already be in a recession. Not that they’d tell anyone. There’s a benefit to suffocating state-run media: everything is always fine (even when there are bank runs and mortgage boycotts). But, as Noah Smith explained in a particularly excellent newsletter, deep worry lines frame that forced smile. China’s cutting rates while we’re all raising them, cranking up deficit spending, and hoping four people wearing the same outfit can convince everyone to buy more properties — and save the real estate market from possible collapse. Sure sounds like a recession, and when a country is this big and strong, even sneezing in a dark closet can have the rest of us looking for tissues. INTERESTING After backtracking, bucking borders, the Build Back Better Bill begins. The U.S.’s huge new Inflation Reduction Act was signed into law, and after some lobbying, its rebates include EVs made in Canada too. Along with making it slightly more affordable for American drivers to feel superior to their neighbours, the law should be a big boost to the Canadian auto industry, which has spent billions greenifying its assembly lines. Maybe it’ll convince Musk to build that Gigafactory here after all too. Bed Bath & Beyond does a whole meme-stock cycle. Despite possibly cutting its AC to save money, the coupon-loving everything store (no, not that everything store) saw its stock spike 79% in a single day before cratering after (former) meme-stock icon Ryan Cohen cashed out with some huge gains. The Game of Thrones prequel arrived, and boy was it expensive. What do you get when you add up production costs of US$20 million per episode and a mid-eight-figure payday for a man who’s never been pictured without a hat? “House of the Dragon” — and maybe a partial explanation for why Warner Bros. Discovery laid off dozens of HBOMax employees and dropped 36 programs (not the Currys!). That’s a lot of subscriptions to sell. SHARE TLDR WITH FRIENDS 🤝 Hi there! Put this link in your group chats, in your Slack threads, on a tattoo on your back — whatever works for you! THE FOMO INDEX IMPORTANT 👀 Lisa LaFlamme fired from CTV after 35 years. Network “going in a different direction” — away from grey-haired women, it seems. Source 🍻 Drink more and get others to do the same so we can tax you, says Japan to its young people. Source 👬 New report shows median net worth of young married couples nine times higher than single people's. Love wins! Source 🗳 TikTok launches midterm-election centre full of all kinds of information for kids to scroll past. Source CRASH & BURN TO THE MOON 🧑‍💻 WeQuestion: WeWork founder Adam Neumann gets US$350m investment to mismanage his next company. Source 🏒 What a deke! Gretzky sued by gum maker for saying it helped him lose 35 lb, then admitting it wasn't true. Source 🍦 Ontario lottery offering $5 ice cream bars meant to taste like things rich people like. So, $5 ice cream bars? Source 🛍 Forget book bags — will there be fries and gravy? Zellers is launching a comeback inside Hudson's Bay stores. Source WHO CARES WHAT’S UP THIS WEEK MONDAY August 22 It’s still earnings season! This week, Canada’s Big Six banks gather round the conference room Polycom to share just how much they’re loving these interest-rate hikes. Who doesn’t want more housing data? Time to see if prices in July continued to slide from astronomical to merely stratospheric. FRIDAY August 26 The Fed goes to Jackson Hole (not for vacation). When he’s not horseback riding, chairman Powell will be leading one of the year’s most important policy meetings for the world’s central bankers. THE BIG IMPORTANT STORY SOCIAL MEDIA In the War Against TikTok, Zuck Has Algorithm Envy Fresh Pew data out this month reconfirmed the number one fear of Silicon Valley’s social-media giants: TikTok is in juggernaut mode, with kids or teens in one study averaging 91 minutes a day on the platform, compared to 56 minutes on YouTube, its closest eyeball-holding competitor. The Chinese-owned viral-video platform reached one billion monthly active users faster than either Facebook or Instagram and is on track to triple its revenue this year. This “unprecedented level of competition,” in Mark Zuckerberg’s words, has left platforms of old scrambling to slow TikTok and retain their bites of the US$223ish-billion global social-media apple. Here’s the way legacy social media (did we just call it that?) is trying to stop TikTok. Shameless cribbing The biggest way ye olde platforms are trying to regain footing is by introducing their own TikTok-esque features. Facebook and Instagram now have “Reels.” YouTube has “Shorts.” Even Netflix has something called “Fast Laughs” in the U.S. And the platforms’ algorithms are now prioritizing what a former Facebook VP called random “America’s Funniest Home Videos” -style content — aka TikTok’s stock-in-trade. This marks a huge shift in strategy. (More on that in a moment.) Throw money at makers The better the content, the stronger your position. Hence YouTube created a US$100-million fund to pay creators for exclusive content (that is, videos they don’t cross-post on TikTok), with monthly bonuses of up to $10,000. Meta pays similar $4,000 bonuses. Which is still a lot better than the “almost nothing” TikTok doles out, especially to Canadians. Lobbying and legacy media Meta has zero room to criticize other companies’ business practices, but it has nonetheless capitalized on the national-security concerns over TikTok’s Chinese ownership (not to mention how it can now allegedly track your keystrokes) by paying to have negative stories about it placed in newspapers (you know, the things Meta obliterated 15 years ago). THE UPSHOT Meta, YouTube, et al. have had little luck slowing down TikTok, in large part because it rewrote the rules of the entire social-media game, as noted social-media geek Matt Navarra recently explained to TLDR. Legacy social platforms gained prominence by sourcing content from users’ friends or family, whereas TikTok is now winning with an unbeatable algorithm that delivers videos that are super addictive regardless of their origin. It’s viral choreographed dance routines versus photos of your cousins’ kids. Which is no contest. Social feeds are becoming less personal as a result. And that, Navarra says, is driving users elsewhere and threatening all social-media platforms. Because, get this: Gen Z, for all its TikTok love, is the sole age group whose social-media use fell last year, as users migrated to private chat apps, like Discord. The social-media era isn’t over. But Apple, for one, is betting that the chat-app trend will continue in a big way, as privacy concerns mount over TikTok specifically and social media generally. Apple, which already kneecapped social platforms by limiting app tracking on the iPhone, reportedly intends to enhance iMessenger with new social-media-like qualities (presumably not the icky ones), giving poor, poor Mark Zuckerberg one more empire-threatening competitor to fret about. — Sarah Rieger OTHER VERY GOOD READS 🏹 The Crypto Geniuses Who Vaporized a Trillion Dollars* The story behind the Three Arrows debacle | Intelligencer 💻 What Productivity-Tracking Software Gets Wrong* What, are we never supposed to go to the bathroom? | The New York Times 🥤 I’ll Be Drinking Diet Coke Till I Die An ode to the world’s best soft drink | BuzzFeed News *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF TWITTER BBBY did its own bubble/bust meme cycle ... in a day THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Brennan Doherty (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Sara Black McCulloch (copy editor), Peter Martin (senior editor), Jared Sullivan (senior editor), Kat Angus (managing editor), and Ria Elciario (editorial producer). Full disclosure: contributors to this newsletter own ETH and stock in Gamestop and AMC. Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Replies to this email address are not monitored. Have questions? Visit our Help Centre or submit a request to our Client Support team. VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE TLDR is offered by Wealthsimple Media Inc. and is for informational purposes only. Any views expressed are those of the individual author and/or of Wealthsimple Media Inc., not of Wealthsimple Financial Corp or any of its other subsidiaries or affiliates. 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