Plus: OpenAI’s executive exodus October 1, 2024 Sign Up | View online IN THIS ISSUE 8 min read 🤖 Investors for OpenAI 🎞️ Penalties for Cineplex 🔋 Megawatts for Microsoft It’s always great to sit back and catch a movie with your BFFs. What’s not so great, and unlawful, are sneaky box-office fees. We explain below. | Columbia Pictures THE WEEK IN MARKETS How gold got ahead We hope you had a meaningful holiday. Here’s what’s going on with markets: last week the major stock indexes yet again notched record highs, and gained ground yesterday too. But that’s a story we’ve talked about a lot lately. So let’s instead discuss the year’s top-performing asset globally: gold. It’s up about 30% so far in 2024. Why? Well, for one, central banks are slashing interest rates, giving investors less incentive to keep money in savings accounts (because why bother if they’ll make less interest?) and giving them more reason to convert their cash into gold, which offers a hedge against inflation. Another factor driving the gold rush is that investors typically flee to gold as a safe haven amid rising geopolitical tensions, and we’ve got plenty of that right now. Gold tends to lag other assets over the long term (here’s an explainer we published all about it). But when the world is wobbling, almost nothing is steadier. If gold climbs further, that’ll likely suggest one of two things: investors think more instability lies ahead, or faster rate cuts. WHAT HAPPENED LAST WEEK IMPORTANT Plot twist: Canada fines Cineplex for sneaky fees. The Competition Tribunal slapped the movie-theatre giant with a $38.9-million penalty for tacking on a $1.50 online booking fee for customers not enrolled in its loyalty programs. That fine is about four times as large as the previous record fine of this nature. (Cineplex is appealing the ruling.) The win is significant for the Competition Bureau, which has lost several high-profile cases recently, like last year when it failed to block the Rogers–Shaw merger. The Bureau exited that scuffle licking its wounds. But lawmakers have since passed new measures that empower the agency to crack down on Canada’s many, many quasi-monopolies. Its next target is a formidable one: the airline industry. China throws itself a lifeline. China’s economy is a bit of a mess. Its benchmark stock index, the CSI 300, has lost about US$6.5 trillion in value since 2021 and at one point earlier this month it was down 45% from its all-time high. After a lot of hand-sitting, Beijing finally announced some US$340 billion in stimulus measures last week. In response to the news, the CSI 300 rallied more than 25% and yesterday notched its single-best day since 2008, but economists are skeptical that the injection will do more than buy China time to shore up its core weaknesses in real estate and manufacturing. So far, China’s slowdown hasn’t affected Canada much (and it might not at all), with one big exception: weak oil demand from China has dragged down crude prices and will likely lead to a glut of the stuff next year. INTERESTING OpenAI decides doing good is for dorks. The nonprofit research firm behind ChatGPT was founded to “benefit humanity as a whole.” Now it wants to ditch its nonprofit status and go public, so it can rake in mountains of cash (which it needs because it’s burning a lot of money). The organization has already changed a lot: it was founded by a four-person brain trust, and now, after another departure, only CEO Sam Altman remains. But he seems fine with that; in fact, he might have engineered this outcome. Last year, Altman got canned (briefly) by the OpenAI board for getting too aggressive, and now he has consolidated power and has fewer checks on him than ever. Critics, in turn, worry that Altman — the “Oppenheimer of our age” and a man who has himself admitted that AI might “cause significant harm to the world” — seems increasingly cutthroat about OpenAI’s ambitions. Microsoft is going nuclear for AI. Constellation Energy says it’ll reopen the Three Mile Island nuclear plant in Pennsylvania, the location of a partial meltdown in 1979, to provide power to exactly one company — Microsoft — for exactly one purpose: artificial intelligence. In order to power its AI data centres, the tech giant pledged to buy all the plant’s electricity for 20 years. AI requires a small country’s worth of power, so maybe it’s not crazy that Microsoft wants to lock up an entire plant’s worth of juice. (Amazon bought a nuclear-powered data centre earlier this year.) Nuclear power is mounting a comeback in the U.S. and Canada as a way to reduce emissions and meet energy demand. It is a bit ironic, though, that the Three Mile Island disaster essentially put the U.S. nuclear-power program on ice decades ago, and now the site is helping to revive the thing it nearly killed. —Srivindhya Kolluru & Jared Sullivan FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🦞 Twenty percent of seafood in Calgary stores, restaurants are the wrong species. So there’s no such thing as “bone-in” scallops? Source 🤖 Meta’s AI chatbot is getting a Judi Dench voice. Lawn furniture prices on Facebook Marketplace will sound much more dignified now. Source 📦 Amazon launching in-garage deliveries in Canada. Porch pirates really hoping people order their garage door openers from Amazon first. Source 🚀 SpaceX will send five uncrewed spacecraft to Mars in the next two years and maybe explode many more in the process. Source CRASH & BURN TO THE MOON 🐀 Entire Alaskan island hunting a single rat. Now 100% sure Mouse Trap game doesn’t actually work. Source 🪱 Woman finds three live worms in her Shein order. They really shouldn’t call them scarves. Source 🤩 Eight new emojis coming soon, including long-awaited “exhausted face,” or, as it will come to be known, “face.” Source 🫒 Olive Garden strikes delivery deal with Uber. At last, you can pay $45 for breadsticks like in the old country. Source WHO CARES THE BIG IMPORTANT STORY FINANCE 101 How to Make Your Kids a Teeny-Tiny Bit Rich Do you have kids? Or are you thinking of someday having kids? Or are you happily child-free but plan on being a generous aunt/uncle/grandparent figure to other people’s kids to relieve your guilt about all your uninterrupted sleep and constant vacations? If any of the above apply, we’ve rounded up four big steps you can take to put the children in your life on the right path moneywise, according to financial experts and economists. And, yes, some of it might seem like eat-your-peas advice, but sometimes we all need to be reminded to eat our peas. Start saving for your kiddo ASAP This likely goes without saying, but you should get your own money situation on a solid footing before you start saving for your kids — like how flight attendants say to put on your own oxygen mask before helping others. But, if you can swing it, you should invest money for your kids as soon as possible. Start with so-called “tax-advantaged” accounts like Registered Education Savings Plans (RESPs), which are for post-secondary education, and In-Trust-For accounts (ITFs), which are for just, like, whatever. Within an RESP, capital gains (aka profits from selling assets) aren’t taxed until your kid withdraws the money, and if your kid is in school and has little or no income, they’ll likely pay little or no tax. ITFs are similar — while taxes are paid on them yearly, capital gains only have to be paid at the tax rate of the child beneficiary, not of the adult putting the money in. (Just make sure you set yours up correctly to earn that benefit.) A little can go a long way: if you contribute $100 a month into an investment account that grows 7% annually (with 2% inflation), you’ll have the equivalent of about $35,000 after 18 years — with $13,500 in gains on top of $21,600 in contributions. Not bad! That’s enough to pay for four years of tuition at the average Canadian university. Double your monthly contribution to $200 and your kid could end high school with a cool $70,000 in the bank. Read to your kids about the utterly thrilling world of money OK, OK: it’s not always that thrilling, but odds are your kid won’t learn much about money in school, so it’s on you to do it. The Four Money Bears and Rock, Brock, and the Savings Shock are both popular personal-finance books for grade-school kids. Connect to a community Harvard economist Raj Chetty and his colleagues have done large-scale studies on which communities have the highest rates of “social mobility” — a measure of whether children are able to ascend the socioeconomic ladder relative to their parents’ place on it. And they’ve found that the best predictor of mobility is how many friendships there are across class lines in a given place. They call it “economic connectedness,” and the basic idea is that children are more likely to broaden their horizons and raise their ambitions if they’re part of a dynamic, strong community, be it through their neighbourhood, a church or other religious group, public schools, or other similar such institutions. The power of community is so strong that Chetty and Co. have even found that girls who live in areas with many female patent holders in a specific field are far more likely to grow up to hold patents themselves in that field. So, try to join some sort of community if you’re able. Encourage them to get a degree Back to education: you should probably ignore the skepticism about university and nudge your kid to go. Research consistently finds that attending university tends to be a worthwhile investment when you compare the economic outcomes of people with and without a degree. Indeed, the median annual income of Canadians with a bachelor’s degree is more than $30,000 higher than those who hold only a high-school diploma. STEM and business degrees are associated with the highest eventual wages, but any degree tends to be better than no degree. —Ben Mathis-Lilley OTHER VERY GOOD READS 🍵 The Big Steep Why are so many people investing in pu-erh tea? | The Walrus 👕 Shein Workers Have Had It* And they’re finally going public. | Wired 🐺 Welcome to the Golden Age of Scams “We are at an epidemic level of fraud.” | Time 🤑 A No-Tears Guide to Mortgage Renewals Here’s how to save money (and stress). | Wealthsimple Magazine *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. POSTS OF WISDOM “Dear diary, one day I’m going to create SO MUCH shareholder value…” THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (lifecycle marketing manager), Matthew Karasz (markets editor) Jared Sullivan (senior editor), Peter Martin (senior editor), Kat Angus (managing editor), and Devin Friedman (editor-in-chief). Disclosures: Contributors to this newsletter own shares in Amazon and Microsoft. Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 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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