Plus: the cardboard economy September 22, 2025 Sign Up | View online IN THIS ISSUE 8 min read 🚙 Tesla’s turnaround 📦 Cardboard cutbacks 💥 Explosive prosecco As Dunder Mifflin goes, so goes the economy? Find out why cardboard sales are such a useful indicator. | NBCUniversal Worried, perplexed, confused, or just bored? We want to hear from you! Send us a voice memo with your most pressing macro or micro money questions, from the global economy to your own personal finances. You can leave a voicemail for us at 226-444-2833 or send a voice memo to tldrpodcast@wealthsimple.com. Thanks! Now, on to the newsletter. —The Editors THE WEEK IN MARKETS Summer's over — welcome to Rate Cut SZN! The Bank of Canada cut rates for the second time this year on Wednesday, bringing our benchmark rate down to 2.5%. Then hours later, the U.S. central bank topped the move by announcing a long-anticipated 0.25% rate cut (to around 4.25%), and it also hinted at two or three more cuts before the year is out. Federal Reserve chair Jerome Powell held the line on rates for nine months, so what changed? "The balance of risks has shifted," Powell says. The worsening job market, in the Fed's estimation, outweighs the inflationary risk of America's trade war. Now traders get to debate What It All Means for the markets: is this a sign that the bull market is over, like in 2000 and 2008? Or the start of the after-party, like in 1994 and 1997? So far investors are leaning hard on the latter. The markets are enjoying their hottest September in years. THE CHART OF THE WEEK WHAT HAPPENED LAST WEEK IMPORTANT Parliament’s back! Here’s a primer on the post-summer docket: Prime Minister Mark Carney has prioritized increasing banking and telecom oversight to promote competition and reduce consumer costs, along with approving $60 billion in major energy projects and making housing more affordable. On that last item: no shovels in the ground yet, but the government has launched a new version of its green homes program, starting in Manitoba. INTERESTING Tesla’s slumping, but the cult of Elon is as strong as ever. Tesla’s sales revenue has been dropping since 2023 — and yet its stock price has magically erased its recent losses. How? Musk revealed last week that he’d spent $1 billion of his own money to buy 2.57 million Tesla shares, and his show of faith apparently inspired investors to reciprocate. That’s really it. Bloomberg’s Matt Levine explains: “Tesla recently proposed giving Musk a $1-trillion pay package to keep him motivated over the next decade, and I suppose [this stock purchase] sends a similar message.” The price jump added US$17 billion to Musk’s net worth — not a bad return for his $1-billion spend. Movie theatres are spending Marvel money to give you the luxury treatment. With another blah box-office summer in the books, North American exhibitors are pouring a total of US$1.5 billion into upgrades this year to jump-start their struggling businesses, according to industry group Cinema United. That includes fancy recliners, arcade games, and kitchens — a reflection of how dining (not just popcorn) now accounts for 10% of theatrical revenue. It seems to be working; the upgrades are expected to drive a 12% increase in ticket sales. Want a real-time economic indicator? Count the cardboard boxes. They carry 75% to 80% of the nondurable goods we buy — so when companies stop buying boxes, or buy fewer, it’s a clear indicator that they expect to sell less stuff, soon. (Former U.S. Fed chair Alan Greenspan was one notable fan of this data point.) During COVID quarantine? Box bonanza. But last month, shipments of empty cardboard boxes in the U.S. fell to their lowest quarterly level in a decade. It’s just one indicator, but paired with rising unemployment, it could suggest a pattern. —Sarah Rieger FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🍷 Costco prosecco recalled because unopened bottles might shatter. Normally, the only thing shattered by Kirkland wine is you. Source 😆 Conservatives accuse B.C. premier of wasting money on a joke writer. When asked for comment, he said, “I tell ya, I don’t get no respect at all.” Source 🏝️ LimeWire buys the Fyre Festival. Will test theory that the problem with the original was substandard peer-to-peer file-sharing. Source 💲 Tim Hortons and Canadian Tire merge reward programmes. Timmies hopes it’ll further blur the line between coffee and tires. Source CRASH & BURN TO THE MOON 🌛 The moon is slowly drifting away from the Earth. Told you not to believe all that “Let’s get lunch” stuff. Source 🍨 Jerry quits Ben & Jerry’s. Look for new flavours: Quarter Baked, Everything but the Other Guy, and Cherry, I’ll-See-Ya. Source 🎤 AI music company taking Whitney Houston’s voice on tour. Or you could just hear it all the other ways. Source 🎃 Dry summer in parts of Canada means smaller pumpkins this year. It’s fine; there’ll be less to scrape off the street. Source WHO CARES THE BIG IMPORTANT STORY Q&A What if the Housing Bubble Actually Pops This Time? What Then? Home prices in Canada are doing something strange: they’re finally, actually falling. Nationally, prices for single-family homes, though still high, have dipped by almost 3% since this time last year, while condos are down 5.4%. One person who has been following all this closely is Brent Donnelly, a professional trader who grew up in Canada and now writes one of our favourite market newsletters, Friday Speedrun. (Sign up here.) Donnelly has an aggressively unsentimental view of the economy because it’s his job to spot trends the broader market is ignoring. That’s why our interest was piqued when he recently warned that the market is “sleeping on how bad things are getting in Canada.” We called him up to ask him to explain why. Time will tell whether he’s correct (and bear in mind that it’s generally unwise to panic if he is). But we wouldn’t be doing our journalistic duty if we only published rosy stories! Explain why you think the market is overlooking weakness in Canada. The short answer is housing. In 2013, Maclean’s published a cover story saying that housing in Canada was going up in flames. It’s famous [because it wasn’t true]. So here we are in 2025, and anyone who says housing is going to be a problem looks like an idiot because they’ve been wrong for so long. The reality, though, is that home prices are going down and unemployment has risen from 5% to 7.1% [since 2023]. Why is that meaningful? Because variable-rate mortgages are popular in Canada. I’ve never been bearish on Canada because unemployment was low for a long time. So let’s say your mortgage payment goes from $2,000 to $2,800; if you still have a job, you’re going to find a way to pay your mortgage, so you don’t open up a Pandora’s box of financial problems. But if you lose your job, then you don’t have that choice, which helps to explain why home prices have started to come off. The situation is different in the U.S., because there was a massive deleveraging [or debt reduction] in 2008. All the consumer debt and leverage blew up, and people turned in their keys and their houses were foreclosed on. Cut to the scene from The Big Short where the analysts are walking around the empty Florida suburb and an alligator is living in the pool. Exactly. In Canada, though, consumer debt and mortgage debt kept going up. So if unemployment rises and home prices come off, that’s a potentially toxic mix for a highly leveraged economy that has no room for error. Let’s say you’re right. Are you imagining mass foreclosures? No. Usually when shit hits the fan, the world muddles through. That said, somewhere between 8% and 20% of the Canadian economy is reliant on real estate. So a weak housing market will hurt a lot of workers, and the situation could become negative for banks if more people can’t pay their mortgages. What would that mean broadly for Canada? Growth will slow, and the economy will probably be sucking wind relative to peers over the next, say, two years. How might a trader navigate all this? Good investing often comes down to avoiding booby traps. And by that I mean you can just avoid parts of the market you think are out of control or unsustainable — be it real estate, Canadian banks, AI stocks, etc. Then you can wait for the dust to settle and buy the collapse. There’s an opportunity cost if you’re wrong, but there’s no real cost. You’ll lose some upside, but you’re [avoiding the most extreme negative outcome]. You’re not painting a sunny picture! The tide is going out, and we’re about to see who’s swimming naked, and I would say Canada is swimming naked more than most other countries. Interview by Jared Sullivan. This conversation was edited for length and clarity. OTHER VERY GOOD READS 👷 Canada Runs on Serf Labour Foreign workers are handcuffed to bad jobs they can’t leave. | Maclean’s 🎢 The Very Expensive Engineered Fun of Theme Parks Rides are bumping against the limits of physics to deliver new experiences. | The Atlantic* 🍿 Why Netflix Struggles to Make Good Movies For $7.99/month, what does it give you in return? | Stat Significant *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF SOCIAL Ah yes, what we were all clamouring for: a phone with less battery space. THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Maude Campbell (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (lifecycle marketing manager), Eva Grace Clement Cruz (lifecycle marketing associate), Setareh Sarmadi (senior editorial producer), Matthew Karasz (markets editor), Jared Sullivan (senior editor), Peter Martin (senior editor), and Devin Friedman (editor-in-chief). Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE Crypto is offered by Wealthsimple Investments Inc., a member of the Canadian Investment Regulatory Organization All investments involve risk. See Crypto Fee Schedule, Relationship Disclosure, and Crypto Risk Disclosure for details. Coins showcased are for illustration purposes only and are not recommendations or investment advice. 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