Plus: Disney beats Netflix — what’s next? August 15, 2022 Made in Canada IN THIS ISSUE Estimated read time: 6 min 🐟 Salmon in Canada 🍺 Beer in Britain 😿 Ads...everywhere WHAT HAPPENED LAST WEEK One casualty of all this money leaving the crypto market? Watch prices. Some are down 20%. | Getty Images THE WEEK IN MARKETS Another week, another rally. (That’s four in a row for anyone counting — the longest streak of rally weeks since the November peak.) Why? A combination of strong earnings, falling gas prices, not-so-terrible inflation news, and the hope that future rate hikes will be smaller. Tech and consumer companies led the way (big gains for companies like $NFLX and $TEAM). And crypto got in on things too (bitcoin up about 5%, eth about 15%). It’s interesting to note that the crypto rise happened on the heels of the relatively good inflation numbers – it wasn’t a big move by crypto standards, but the fact that crypto continues to move like other risky assets (down when inflation/rates goes up, up when inflation/rates goes down) means it’s still not behaving like the hedge some hoped it was. As fun as it all was, more good times are far from certain: we saw similar rallies before the biggest falls in ‘01 and ‘08. IMPORTANT U.S. prices stayed flat! Pass the still-way-more-expensive-than-last-year champagne! July’s consumer price index showed no overall price increase, and markets jumped at the prospect that rate hikes are working. (We’ll get Canada’s hopefully similar results on Tuesday. More on that in a sec.) Prices over the last year are still up a wallet-straining 8.5%, though — way more than the 2% target. And that means those rate hikes aren’t likely to go anywhere. Disney ($DIS) beats Netflix ($NFLX), celebrates with ads. Disney execs must have felt like kids double-fisting mouse-shaped popsicles as they shared better-than-expected Q3 numbers. Resort visits are way up and fears of the shared intestinal issues of sea cruises are way down, but the biggest reason for the stock’s 6% bump was Disney+: subscriptions shot to 152.1 million. The service is burning cash, which is why later this year subscribers are going to have to choose between paying 38% more or watching ads. The more things change... INTERESTING What’s a crypto party without mixers? Tornado Cash pools blockchain transactions to make it less obvious who’s paying whom. (Think of it like putting $20 in a pile of money someone can take from instead of handing it to them directly.) It’s called a mixer or tumbler. Fans say it’s good for privacy. Regulators say it’s good for money laundering. Since Tornado is code, not a company, it’s hard to hold the right people accountable. The Netherlands arrested the suspected developer and the U.S. Treasury made the software itself illegal, meaning any American using it — including Jimmy Fallon (who didn’t mean to) — could be looking at prison time or fines. A bull market for salmon (that bears still like). B.C. is seeing a mega-return of pink and sockeye salmon after the government cracked down on open-net farming operations. The revival spells welcome news for B.C.’s commercial-fishing industry, which employs about 6,600 people and generates some $250 million annually. TLDR IS BETTER WITH FRIENDS! 🤝 Share this link in the group chat, Slack thread, or print it out and mail it to anyone who want to sign up. THE FOMO INDEX IMPORTANT 👩🏻‍💻 Porn stars sue OnlyFans for bribing Meta to flag them as terrorists. That costs extra. Source 🍕 Domino’s files for bankruptcy in Italy. They must not like Italian food there. Source 🍺 New study shows 52% of Brits say beer’s gotten too expensive. 100% still plan to buy it, though. Source 🎮 People watched gaming streams 20% less than last year. Rumored to have gone outside a bit, too. Source CRASH & BURN TO THE MOON 🍃 Cyber attack halts pot deliveries in Ontario. Stoners will be so bummed when they notice. Source 🇨🇦 Lori Loughlin applies to work in Canada and gets accepted. Nation's rowing teams on high alert. Source 🎾 Serena Williams announces she’ll retire from tennis. Tennis grateful for everything, hopes people will still watch. Source 🧑🏼‍🎤 The People vs Reality: She-Hulk, Attorney at Law premieres on Disney+. Source WHO CARES WHAT’S UP THIS WEEK TUESDAY August 16 Inflation numbers come in, and we’re actually kinda looking forward to it. Steady consumer prices in the U.S. are a good omen for Canada, and good numbers here could nudge Tiff toward a smaller rate hike in September. Walmart ($WMT) announces Q2 earnings. A few weeks ago, the world’s third-largest employer slashed expectations like they were high prices, estimating profits could drop by 10%. Why? Inflation convinced everybody to stop buying earbuds and focus on things like…dinner, which the company also sells but with a much smaller margin. THE BIG IMPORTANT STORY CRYPTO Did the crypto crash change the economy? Last year, as crypto prices soared, bitcoin booster Max Keiser went on CNBC Africa and shredded a $10 bill. “This is garbage!” he exclaimed, adding that fiat currencies would go to zero. “If you don't understand that yet, you’re going to be impoverished!” It was a heady time, in fairness. In six years, crypto’s market cap swelled from $5 billion to $3 trillion, creating 100,000+ bitcoin millionaires alone. And you know what these crypto tycoons did with their wealth? They spent it. Like crazy. Well, fast forward to now: a trillion dollars’ worth of crypto has gone poof, and tens of thousands of bitcoin millionaires are, well, no longer millionaires. The crash has affected markets — some important, some not — far beyond crypto. A sampling: ⌚Watches: Turns out, crypto bros love trophy timepieces. Watch-trading platform Chrono24 told Bloomberg that the value of the Patek Philippe Nautilus 5711A fell from US$240k to US$190k in Q1, as crypto prices hit toilet territory and traders flooded the second-hand market with timepieces. The Rolex Cosmograph Daytona Ref. 116500, valued around $50k in May, now goes for around $42k for the same reason. ⛏️ Graphics cards: Graphics-card-maker Nvidia recently announced that it missed quarterly earnings projections by a whopping $1.4 billion. Why? Basically, fewer people are buying graphics processing units (which help computers crunch numbers faster) to mine crypto, which is about half as lucrative as it was last fall, with bitcoin down nearly 50% YTD. 🏠 Real estate: As real-estate prices fall broadly, San Francisco, Toronto, and other tech cities are seeing big drops in luxury-home demand. And, notably, no one is using bitcoin to buy property anymore, and understandably so: a Manhattan building listed for US$29m in bitcoin fell to $16.8m and had to be relisted. (Metaverse-land prices have fallen off a cliff, too.) 🚗 Lambos: OK, people are still forking out $200k for Lamborghinis, which is more than a little surprising given the inescapable When Lambo? crypto meme. But color us not surprised if demand dips the longer the downturn drags out. WHAT IT SAYS ABOUT CRYPTO: When asset markets have bubbles and busts, it can have broad economic effects. But this one… didn’t really. There have been layoffs, but they’ve mostly been contained to the crypto and tech industries. So why didn’t this sudden crash in value (and wealth evaporation) have broader effects, like when the subprime bubble burst in 2008? Largely because crypto is still in its infancy, and investors knew it was risky. Unlike 2008, for instance, big banks didn’t hold enormous amounts of crypto, so the crash didn’t threaten the entire financial system. A lot of crypto observers see a silver lining here: ten years from now, we’ll probably be grateful that this crash exposed certain dangers and pointed out the role regulators might play in putting up much-needed guardrails. It might be a case of crypto-bro Rolexes (and other adjacent markets) taking one for the team this time. — Sarah Rieger OTHER VERY GOOD READS 🤦‍ A Shocking Look At How The IRS Actually Works They’re still using Windows XP?! | Washington Post 💳 What Is the Cost of a Cashless Society? Digital payment could shortchange the country’s most vulnerable | The Walrus ⛺ The Rise of America’s First Black-Owned Outdoors Retailer How Slim Pickins was built from the ground up | Texas Monthly THE WISDOM OF TWITTER A tweet so visceral that you probably didn’t even notice the typo: 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), Haley Cullingham (copy editor), Peter Martin (senior editor), Jared Sullivan (senior editor), Kat Angus (managing editor), and Devin Friedman (editor-in-chief). Full disclosure: contributors to this newsletter own ETH and stock in Disney. 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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