Welcome to Mind Your Business! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong | | |  | | | Real estate prices in Canada are cooling, but the year-over-year stats are staggeing. (Andrey_Popov/Shutterstock) | | | What to watch for: |  | | The latest eye-popping stats from Canada's red hot real estate market come out on Wednesday. The new housing price index should show things have cooled since the peak, but remain terrifyingly high. | | | | | | The great Canadian consumer continues to drive the recovery. We'll get the latest retail sales stats on Friday. | | | | | | One of Canada's biggest telecommunications companies will report earnings on Wednesday. Last week, an international report found Canada's mobile service was the most expensive in the world | | | | | I've been hearing people warn about an impending real estate bubble bursting for just about my entire adult life.
But even by Canada's overheated expectations, the last year has been nothing short of bonkers.
Data released last week shows the housing market is finally taking a step back and letting off some of the steam it built up.
The Canadian Real Estate Association said in a release Thursday that home sales have now fallen for three straight months.
But that’s not what grabbed my attention. The monthly figures may indeed show a cooling of sorts. But the yearly numbers show something else entirely.
“The actual (not seasonally adjusted) national average sale price posted a 25.9 per cent year-over-year gain in June,” according to last week's release. | | |  | | | That’s a number so big it can be hard to get your head around. By comparison, the TSX has averaged a return of slightly more than nine per cent over the last 60 years.
A return of 25.9 per cent is more the kind one expects from risky bets on crypto currencies, not the return on buying a house.
We’ve been warned for years that these kinds of numbers are unsustainable. We all know how hard this makes it for the next generation to buy into the housing market.
And it’s not just the big cities. Colleague Pete Evans wrote this piece back in April documenting how the real estate boom was flooding into small towns a long way from the traditionally overheated markets like Vancouver and Toronto.
Another aspect here is how much wealth homeowners are gathering as the value of their property soars. Ben Rabidoux, the founder of North Cove Advisors and Edge Realty Analytics, punched the latest stats into this CREA tool and came up with this chart | | | Measuring Canadian business optimism |  | | | I don’t know what’s going to happen. And I generally don’t trust the people who claim to know for certain what’s coming. The cooling of these past months is encouraging. This week we’ll add more data to the pile with the new housing price Index.
That index is a bit more backward-looking, but it matters if only because it’s the one the Bank of Canada uses to assess the state of the housing market.
If there's one thing we obsess over more than housing prices, it's the sky-high costs of mobile phone plans in this country.
So, it was no surprise that this tweet spread through my timeline with a certain ferocity last week. |  | The top left portion of this chart shows countries where data is cheap, so people there tend to use a lot of it. That red blip on the bottom right is Canada, where — you guessed it — we pay far more for data so we tend to use way less of it
The Big Three telecos in Canada have said the survey uses old numbers and doesn’t reflect its newer offerings. But there’s something stark about seeing all this laid out so clearly.
And it will certainly help frame the discussion around Rogers Communications earnings that are out this Wednesday. | | | LOOSE CHANGEThree things to read, watch and listen to this week | | | | | | |  | The HBO show Succession dropped its Season 3 trailer. The season launches in September. (Zach Dilgard/HBO) | | | 1. Big finance shows tease a return | | | Last week, I wrote a bit about my favourite money movies. Some of you wrote back about great money TV shows, specifically Succession from HBO and Billions from Showcase.
Both shows have now dropped trailers for their next seasons. Both will premiere in September.
Succession is the Shakespearean tale of an extremely wealthy media baron and his conniving children. There’s been much speculation about which real-life media baron the lead character played by Brian Cox is modelled after.
But in this appearance on The Late Show with Stephen Colbert, Cox says the character initially had Canadian roots.
Colbert says Cox has played a multitude of famous roles. “Now you’re playing Rupert Murdoch,” Colbert says.
Cox smiles and responds: "Or Conrad Black."
You see, in the original script the Logan Roy character was from “Quebec in Canada.”
Watch the interview with Cox here.
Billions, meanwhile, is the tale of the young, dashing, troubled hedge fund billionaire Bobby Axelrod. It stars Damian Lewis and Paul Giamatti and it’s created by Brian Koppelman (the writer of Rounders and Oceans 13 just to name two).
Both shows are smart and get the finance/econ stuff right. Both drag you in by good storytelling and then make you question who the good guy really is.
Watch the trailer for Succession Season 3 here
Watch the trailer for Billions Season 5 here | | | | | 2. Inflation: How long will 'transitory' last? | | | I've written a lot about inflation in this newsletter. And the word that seems to come up the most is "transitory." Many experts believe the rise in prices we're seeing right now is temporary.
But the counterpoint to all this is well worth exploring. The Wall Street Journal has this offering warning that "Americans should brace themselves for several years of higher inflation than they’ve seen in decades."
Experts in the WSJ piece worry that policymakers who are convinced inflation won't last may get caught out and move too slowly to get it under control.
The Bank of Canada now expects inflation in this country to come in at three per cent this year, 2.4 per cent next year and 2.2 per cent in 2023.
That is persistently high. Kevin Carmichael has a typically smart piece in the Financial Post wondering if the central bank is willing to let inflation run hot in order to secure a proper economic recovery.
Incidentally, there's a video playing in the FP article of an interview with Frances Donald, global chief economist at Manulife Investment Management. She says the real question isn't whether inflation will be transitory or not, but rather "how long transitory will last." | | | | | 3. Do I have to start thinking about what I'll wear to the office again? | | | How many of you have spent the last 16 months in sweatpants? Perhaps a suit jacket within sight of the Zoom camera, but sweats and slippers under the table?
How different will your work life be in a few months?
So much is about to change. This has never happened before. Consider the logistics involved in flooding office towers with people again for the first time in 16 months.
You can almost feel the chapter of a textbook being written underfoot right now.
Business Insider is conducting something of a poll to get the data started.
The Harvard Business Review set out to explore why a return to work is causing so much anxiety
After 16 months in sweats, you can’t blame a nation of work-from-home-ers for being a bit nervous about going back to the office.
Well, leave it to the free market to find solutions to the world’s problems. This Toronto stylist has launched a consultation service to transition you from sweats back to work clothes.
Melissa Austria runs a shop called GotStyle. She launched Clothes of Conduct as a way for customers to up their style game in conference calls during the lockdowns. She told me this week that the service is morphing into a return-to-work consultation to help clients rediscover proper work clothes.
Check out her website here. | | | Check out the Marketplace Watchdog newsletter for the latest consumer stories. Subscribe here |  | | | THE SNAPSHOTHow the economy looks beyond Bay Street | | | | | | | Marvel's big bet | | | Disney did something weird last week.
In an unusual step, it unveiled not just the box office revenue from its latest movie, but it also published how much it made by streaming the blockbuster on Disney Plus.
Black Widow, starring Scarlett Johansson, is the first Marvel movie to get a theatrical release in two years. It crushed pandemic records with an $80-million opening weekend.
But what caught everyone off guard was Disney’s announcement that the film had brought in an additional $60 million in rental revenue on Disney Plus.
Variety Magazine crunched the numbers and found that puts Black Widow into some elite Marvel territory. | | |  | Streaming services have mused about releasing streaming revenue figures for years. But Disney just went ahead and did it.
There are two major forces at play here. One is the push to get streaming companies to open up the books a bit and allow more transparency into the economics of streaming.
The other issue is around the changing dynamic of how movies are released.
Usually, theatres get exclusive access to the big-name blockbusters and streaming companies only get to stream to their audiences after the theatres have maximized their revenue.
I emailed the CBC's movie expert (and arts reporter) Eli Glasner to ask his take. He says the release of streaming revenue numbers is "a flex." Some not so-subtle bragging that millions of customers were willing to shell out extra to watch the latest Marvel movie.
But he also said it shows how much the economics of the movie industry are shifting. Sure, $60 million is a drop in the Marvel bucket.
"But Disney keeps all of it," he emailed me. "That's $60 million that stays in the Disney coffers, as opposed to ticket sales which distributors typically split 50/50."
Everyone wonders if things will go back to normal now that the pandemic is easing. These subtle moves seem to say that Disney may not be interested in what used to be normal. | | | That's it for this week. | | | Drop me a line anytime. Send ideas, comments, feedback and notes to peterarmstrong@cbc.ca. Problems with the newsletter? Please let me know about any typos, errors or glitches.
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