Plus: how a squid-ink corn dog will help bring $540 million to Calgary July 4, 2022 Made in Canada IN THIS ISSUE 🏠 Mortgages lose a little risk 😬 Consumers lose confidence 🏹 A hedge fund loses everything WHAT HAPPENED LAST WEEK Drew Angerer/Getty Images | Prime Minister Justin Trudeau The week in markets 🫤 🩴 😲 ✂️ 😣 Not as bad as some recent weeks, but still not good: the S&P fell another 2%, and the TSX fell 1%. Bonds rallied, as investors lowered inflation expectations and ratcheted up recession fears. In fact, market pricing now implies that the BOC and the Fed will need to shift to cutting rates in the second half of 2023. In crypto, if you really want to know, Bitcoin and Ether both fell and are trading near 2022 lows. IMPORTANT The government’s feeling gassy. Europe, having partially banned Russian imports, is dealing with skyrocketing energy costs. But Trudeau is here to help, floating the idea (proposed months ago by Conservatives, who must be loving this) of a transatlantic pipeline to ship Canada’s excess gas across the Atlantic. Maybe it could even be done before the next time Putin tries to invade a country. Regular Canadians are just feeling queasy. This week in data that reflects what a lot of us probably already know: consumer confidence, already basically subterranean, sank yet again. Turns out record inflation and free-falling markets are too much for a still-robust economy and unemployment levels last haven’t been this good since Jaws came out. There’s likely more blood in the water: with 57% of those surveyed expecting the economy to tank, worrying ourselves into a recession becomes a very real threat. INTERESTING High-risk mortgages get a little less risky. OSFI, Canada’s banking authority, announced new regulations for some highly leveraged mortgages. Starting in late 2023, payments made on qualifying loans can’t only go toward paying down interest — at least not until the principal hits a less terrifying balance. It’s good news for borrowers who hope to ever get out of debt, as well as banks who enjoy getting paid. It’s official: Three Arrows Capital is done. After weeks of insolvency rumours, the crypto hedge fund defaulted on a $670 million loan, a Virgin Islands court ordered its liquidation, and on Friday it filed for bankruptcy. 3AC is the latest crypto domino to fall, and one of the largest. It already appears to be taking others down with it, too ( sorry, Voyager). THE FOMO INDEX IMPORTANT 💸 CRA reports that Ottawa loses $34 billion a year in uncollected taxes — plus the money it took to find that out. Source 👾 Billions stolen by North Korean hackers now worth much less after crypto crash. Feel better? Neither do we. Source 🎉 AirBnB officially bans party rentals. And it would like everyone in bed by ten, please. Source 📱 The iPhone turns 15 this week. All it wants is a new iPhone. Source CRASH & BURN TO THE MOON 📚 Authors protest Amazon’s 7-day e-book return policy. Amazon shrugs and says, “try writing longer books.” Source 🚗 Ben Affleck’s 10-year-old backs Lamborghini into BMW while at dealership with dad and JLo. Still not as embarrassing as Gigli. Source 🍁 Need to get from Toronto to NYC in just 12 hours? Great news: the Maple Leaf Train is back. Source ⚔️ Paid Plague Leave! A Medieval Times in New Jersey is unionizing. Source WHO CARES WHAT’S UP THIS WEEK FRIDAY July 8 The Calgary Stampede is back! After nearly going bust during the pandemic, the 10-day festival of cowboy cosplay returns in full force. It should bring in an estimated $540 million for the city’s economy — along with incredible indigestion if you’re foolish enough to chase a squid-ink corn dog with Kraft mac-n-cheese soft serve. THE BIG IMPORTANT STORY DOSSIER Meet Sam Bankman-Fried, the Billionaire Backstopping Crypto Crypto mogul Sam Bankman-Fried is on a buying spree. Here’s what you need to know. Name: Sam Bankman-Fried Nickname: SBF Age: 30 Missed opportunity for a nickname: SBF30 Net worth: $20 billion USD Who he is The billionaire co-founder of crypto exchange FTX who’s suddenly throwing around his money — and doing his best to single-handedly prop up the industry. How he made all that money He started a crypto-trading firm in 2017 and soon figured out how to exploit a difference between the bitcoin price in Japan and the price in the U.S. — and made $20 million in three weeks. A couple years later, he launched FTX. How much of that money he’s pledged to give away 99%. He practices “effective altruism.” It’s a movement centred on doing the most good, backed by data, inspired by philosopher Peter Singer and practiced by philanthropists like Warren Buffett and Bill Gates. (Maybe not a shocking position for the offspring of two Stanford professors.) What he’s donated so far He made over $30 million in political contributions to the Democratic party this year and plans to increase that to $1 billion for the 2024 U.S. elections. How he became one CEO people are talking about more than Elon Maybe you’ve noticed, but crypto firms have faced a snowballing liquidity crisis these past few weeks. SBF has essentially become crypto’s lifeguard, throwing financial life preservers to (and possibly buying) struggling lending platforms Voyager and BlockFi. He was also reportedly in talks to save Celsius — a lender that had to freeze withdrawals after the crypto equivalent of a bank run — until he saw their balance sheet. Why some people are a little skeptical about his intentions ”Saving“ companies looks a lot like consolidating power — at an incredible discount. And it’s not just altruism: if one of these banks imploded, they’d have to sell a bunch of crypto, which could trigger a chain reaction in the entire crypto community — a snowball even bigger and faster-growing than traditional banks saw in 2006-2008. What all of this might mean for crypto Here’s what Mike McGlone, senior commodity strategist for Bloomberg Intelligence, told TLDR: “Some of the greatest wealth is created during substantial corrections in markets, and that’s what he’s doing. [SBF] is basically becoming a lender of last resort in the space while simultaneously enhancing FTX’s value as a safe haven. Plus, he’s helping to reframe a somewhat crumbling foundation. You know what they say: when the tide goes out, you find out who was wearing clothes.” Or, in this case, shorts. – Sarah Rieger OTHER VERY GOOD READS 🐴 The 10-Year-Old Tweet That Still Defines the Internet Everything happens so much |The Atlantic 🌞 The Extremely Large Life of a Suntan-Lotion Mogul How Ron Rice became the king of tan |The New Yorker 🎮 The Rare Video Game Heist Pristine nostalgia worth millions, gone in a night |Vanity Fair THE WISDOM OF TWITTER The SBF predictions are getting out of hand: THOUGHTS ON TODAY’S ISSUE? 🤑 Love it 🙂 Good 🙁 So so TLDR is better with friends! 👯 Share this link in the group chat, Slack thread, or print it out and mail it to anyone who wants to sign up. This week’s newsletter contributors: Brennan Doherty (writer), Devin Gordon (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Sara Black McCulloch (fact checker), Ciara Rickard (copy editor), Peter Martin (senior editor) and Kat Angus (managing editor). 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