 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 | | |  | Sometimes you can't see the whole picture. (ju_see/Shutterstock) | | | I was writing a piece about the state of the Canadian economy this week and a song lyric kept playing over and over in my head. It was by the late, great John Prine, who sang, "broken hearts and dirty windows make life difficult to see."
It's a good line and it's apt right now. I find it's hard to get a good look out the window and really see where we are.
GDP numbers for July showed the economy stalled. The preliminary estimate for August forecasts a small gain.
This week, we'll get jobs numbers for September. The range of economist expectations is... large. Maybe we added 25,000 jobs. Maybe we lost 30,000 jobs. It's hard to say.
The labour market has been an exceptionally mixed bag over the past year. We added 150,000 jobs in January, shocking just about everyone who follows this kind of thing.
Then we saw things slow a bit in May and again in July. But both times the economy shed jobs, it staged a pretty solid bounce-back the next month. | | |  | | | But we know the landscape is changing. We know the economy has already slowed to a trickle. The technical definition of a recession is two back-to-back quarters of negative growth.
That chart doesn't look bad. In a way, it's encouraging. But remember, Canada added more than a million people to its population last year. Numbers released last week showed Canada’s population has surged by the most this country has seen since 1957.
Padding out the population forces the economy to grow. All those new people buy groceries and have to get to work and go to the movies and take transit.
RBC economist Rachel Battaglia says all that extra consumption can make the economy feel like its's doing better than it really is.
"Canada’s exceptionally strong population growth is masking a faster deterioration than would ordinarily be implied by measures like GDP. Population growth adds to GDP by increasing demand in the economy as well as the supply of workers," she wrote in a note to clients.
On a per-person basis, she says real GDP growth has declined for four consecutive quarters.
Add to all that, plummeting confidence in the economy. | | |  | | | The good news is just about everyone agrees the economy will get through this rough patch by early next year.
A new forecast from Dawn Desjardins, chief economist at Deloitte Canada, shows a pretty solid rebound over the course of 2024.
By mid-year, she says the Bank of Canada will likely be looking at bringing interest rates back down, which will help nudge that recovery along as well.
The bad news, for any households or businesses that are hurting today, is that the recovery is still a long way off.
What do you think is going to happen?
As always, send me a note.
My email is: peterarmstrong@cbc.ca | | |  | | The latest jobs numbers are set to be released on Friday. Economists are split over whether the labour market expanded or shrank in September. | | | | | | We'll get the latest deep dive on the state of Canadian international merchandise trade this week. Data for August will be released on Thursday. | | | | | | We'll get a look ahead at price pressures in the U.S. this week. The S&P Global/CIPS Manufacturing PMI, which looks at how much producers paid for input costs, is out on Monday. | | | | | Three things to read, watch and listen to this week | | |  | Going Infinite is an all-access look at the rise and fall of Sam Bankman-Fried. (W.W. Norton) | | | 1. Michael Lewis on SBF | | | If someone gave me a magic wand and said I could get any author to write the all-access book about Sam Bankman-Fried, I'd choose Michael Lewis.
Lewis, of course, is the brain behind spectacular business books like Liar's Poker and The Big Short.
Well, as fate would have it, my wish was already in the works. Back when Sam Bankman-Fried was just a weird-looking dude in rumbled cargo shorts running the world's biggest and most successful cryptocurrency exchange, he granted Lewis full, unfettered access to his world.
So, when SBF's world came crashing down, Lewis had a backstage pass.
"He’s let me see everything," Lewis told The Guardian. "When it all comes crashing down last November, it’s literally me, his parents and his therapist."
Here's how publisher W.W. Norton frames the new book:
"Both psychological portrait and financial roller-coaster ride, Going Infinite is Michael Lewis at the top of his game, tracing the mind-bending trajectory of a character who never liked the rules and was allowed to live by his own — until it all came undone."
The SBF saga is still a long way from over, but it is already one of the most fascinating tales of our time. And I can think of few people even remotely as well-equipped as Lewis to figure out what happened.
Going Infinite: The Rise and Fall of a New Tycoon is on stands as of Oct. 3.
Check out The Guardian interview with Michael Lewis here.
Check out the book's listing here. | | | 2. A Hollywood ending | | | The last time Hollywood writers went on strike, the ending wasn't exactly the stuff of fairy tales.
Back then, the union representing writers recognized the sacrifices members had made, yet felt the deal addressed many key concerns.
This time, the Writers Guild of America heralded the deal as "exceptional — with meaningful gains and protections for writers in every sector of the membership."
On the CBC podcast Commotion, host Elamin Abdelmahmoud spoke with two Hollywood writers, Kathryn Borel and Jackie Penn, about the moment a deal had been reached.
"I felt stunned. I felt numb," said Borel. "When this strike began, it was so existential it felt like we were fighting for the soul of our industry."
And by most accounts, the writers won.
The New York Times podcast The Daily did a great segment with John Koblin, a media reporter for the Times, who says three main areas were addressed: compensation, transparency and the future of artificial intelligence.
For years, writers were paid a decent wage for writing TV shows. But the real money came when a show was a hit. Successful shows were then sold off into syndication runs and aired on TV channels around the world.
Every time they were aired again, writers got a cheque. Streaming changed that, and writers wanted a new deal.
But that requires more transparency. On cable TV, we know how many people are watching. Nielsen ratings are public, so writers, studios and unions all work with the same data.
Netflix and the other streamers have no such practice, and so creators had no way of knowing if a show was a hit or not.
This deal also addresses AI. Koblin says all those studios are sitting on piles of old scripts and there was ongoing concern that a studio executive would take a stack of scripts written by someone like Nora Ephron (who wrote movies like You've Got Mail) and submit them to AI.
"That’s a writer's worst nightmare. They don't want a robot to be a credited writer of a movie," Koblin told The Daily.
The new deal addresses all of those issues.
Check out The Daily from The New York Times here. | | | 3. Continued cable-cutting | | | In case we needed any more evidence of how much the traditional TV market has changed, new numbers show just how fast and hard things have shifted.
A Variety magazine article lays out the cold, hard numbers.
"Cable, satellite and internet TV providers in the U.S. turned in their worst subscriber losses to date in the first quarter of 2023 — collectively shedding 2.3 million customers in the period, according to analyst estimates," wrote Variety's Todd Spangler.
The article says the total pay-TV penetration in American households has fallen to a mere 58.5 per cent.
"As of the end of Q1, U.S. pay-TV services had 75.5 million customers, down nearly 7% on an annual basis," writes Spangler. "Comcast, the largest pay-TV provider in the country, dropped 614,000 video customers in Q1 — the most of any single company — to stand at 15.53 million at the end of the period."
Large-scale cord-cutting is a thing people have been talking about for years. But it was always seen as something that's coming at some point down the road.
These numbers show it's indisputably here now. And that means changes in how TV is made, how advertisements are sold and how we consume entertainment, news and sports.
Check out the Variety article here. | | | How the economy looks beyond Bay Street | | | Amazon's 'real' business | | | When I think about Amazon, I generally imagine packages with that iconic swoosh logo being delivered to front porches around the country.
I think about giant fulfillment centres with robots rushing products from shelves to conveyer belts to be wrapped up and shipped out.
But there is more to Amazon than mere shipping. Much more.
And the good folks at the newsletter Chartr have a fantastic piece laying out precisely what that is. | | |  | Amazon's advertising services revenue has now topped $10.7 billion US per year.
That's more than the combined ad revenue at X (formerly known as Twitter), YouTube and Snap combined.
All this comes as Amazon announced plans to roll out a new ad-supported tier for its streaming service Prime Video.
"Amazon has said that the limited ads will allow the company to continue its content spending, which soared 28% to $16.6 billion in 2022, after splashing out on mega shows like The Rings of Power," wrote the team at Chartr.
The newsletter points out that Amazon's $10.7 billion in ad revenue makes up a mere eight per cent of its $134 billion in net sales in 2022.
The sheer size and scope of Amazon's business is staggering. But when ads are bringing in that much cash, it's probably something we should get used to.
What do you think? Will we see more ads on streaming services?
Drop me a line at peterarmstrong@cbc.ca. | | | Share this newsletter | | or subscribe if this was
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