 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 | | |  | GDP numbers this week will show us how much damage has been done to the economy. (Miha Creative/Shutterstock) | | | The question I am asked most often is when I think things will start to get better.
If you squint just so, you can start to make out the broad outline of a recovery shaping up in the second half of this year.
As inflation comes under control (and we saw pretty solid progress on that front last week), the Bank of Canada can start to think about cutting rates. As rates start to come down, all those households that have been so squeezed over the past two years will (finally) get a bit of relief.
As they have a touch more money to spend, the economy can start to grow again.
As confidence seeps back into the economy, businesses will spend more, consumers will buy more and the broader economic picture will improve.
The question, of course, is when we can expect to see that happening.
I have written before about the Bank of Canada's refusal to provide a timeline for rate cuts. I asked Bank governor Tiff Macklem about whether we can start to see a change in its forward guidance as we get closer.
Macklem said, "we don't give forward guidance on our forward guidance," which gave me a chuckle.
Last week, we got the latest statement and update forecast from the U.S. Federal Reserve. And with that forecast came the so-called dot plot.
This is where members of the Federal Open Market Committee say where they think the federal funds rate will be at the end of the next few years. | | |  | | | This chart of the dot plot suggests the Fed will cut three times in 2024.
That would have the federal funds rate in the United States down to 4.5 per cent or so by year's end.
The closest measure Canada has is called swaps, where investors bet on where they think interest rates will be in a month or a quarter or a year.
Right now, the swap markets indicate a belief the Bank of Canada will also cut rates three times by the end of this year. That would take the bank's key overnight lending rate all the way down to 4.25 per cent.
That should prove mildly stimulative and act as a boost for the economy.
But (isn't there always a but?) that sense of economic well-being may well take longer to set in.
Measuring that is a tricky job.
But a look at GDP per capita tracks fairly closely with how people have generally been feeling about the economy.
And even though GDP is expected to remain positive and start growing again in the second half of the year, when you look at GDP per capita, it's not nearly as rosy. | | |  | | | That chart comes from this excellent TD Economics report from last July.
It found some stark challenges facing Canada's economic growth.
"Despite turning in solid headline growth in recent years, Canada has lagged behind the U.S. and other advanced economies in terms of standard of living performance (or real GDP per capita)," wrote TD economist Marc Ercolao.
Both the growth numbers and the population numbers have changed a bit since that report, so I reached out to Ercolao to ask if he had updated data.
He did and we built the chart with his latest figures that covered the third and fourth quarters of 2023. GDP came in a bit weaker than initially forecast and population turned out to be even stronger than expected.
But the forecast for the road ahead changed slightly, too.
"We forecast positive real GDP per capita to be obtained one quarter earlier in Q4-2024 (vs Q1-2025 at the time I published). This is reflecting our slightly slower, but still robust population growth as well as a slight upgrade to 2024 real GDP growth," he told me in an email.
It's a reminder how quickly the numbers change, but also how lousy the economy will continue to feel even once we turn the corner this summer.
What do you think?
As always, send me a note.
My email is: peterarmstrong@cbc.ca | | |  | | Canadian GDP numbers will be released on Thursday. Economists expect they will show a modest bit of growth in January. | | | | | | We will get the latest jobs data on Thursday. The Survey of Employment, Payroll and Hours is a deep dive into the labour market. Keep a close eye on wages this week. | | | | | | The Bank of Canada's senior deputy governor Carolyn Rogers will give a speech in Halifax on Tuesday. As we get closer to the central bank cutting rates, speeches like this provide clues to how the bank sees the economic data unfolding. | | | | | Three things to read, watch and listen to this week | | |  | Mr. Beast, a.k.a. Jimmy Donaldson and the second-most popular YouTuber in the world, is headed for Amazon Prime. (Amazon) | | | 1. Mr. Beast's economy | | | My sons are obsessed with Mr. Beast.
As I walk through the living room, I often hear his dry, monotone voice as he narrates his latest YouTube video.
Get used to it. The guy is taking over.
Jimmy Donaldson (Mr. Beast's real name) has figured out what this new era of TV looks like. He rose to fame making videos that may seem banal. (One involved him counting to 10,000. That's it, just him, sitting in front of a camera, counting. It currently has 29 million views.)
These days, he offers viewers vast sums of money to stand inside a circle or videos of him and his friends spending a night in a $100-million US mansion and comparing it to a $1 shack (that one has piled up 198 million views).
So it was probably inevitable that one of the bigger broadcasters would pick him up. And perhaps even more inevitable that it was a streamer, not a traditional broadcaster that signed him.
Donaldson struck a deal with Amazon MGM Studios to make what they're calling "the biggest reality competition series in television history."
Here's how Hollywood Reporter framed the new show:
"The project is based on his YouTube show and titled Beast Games. It will feature 1,000 contestants competing for a $5-million cash payout. The prize is touted as the biggest single prize in the history of television and streaming," wrote James Hibberd and Lesley Goldberg.
It will be interesting to see how the YouTube star makes the move. As Hollywood Reporter makes clear, he's no stranger to success.
"In February, Donaldson told Time magazine that his channel brings in $600 million to $700 million per year, which is re-invested back into his productions," they wrote.
The Washington Post reported this deal may be worth as much as $100 million US. Amazon has not set a premiere date for his new show.
Check out Mr. Beast's YouTube channel here.
Read the Hollywood Reporter article here. | | | 2. AI's video boom | | | I have raved about the Wall Street Journal's Joanna Stern before.
She is far and away my favourite writer focusing on the world of tech and internet. Her latest offering focuses on the new OpenAI video venture called Sora.
She sits down with the CTO of OpenAI, Mira Murati, who runs Sora.
The whole interview is amazing and smart and fascinating for anyone even remotely interested in this new front on the AI development.
But one section is getting a lot of play. I mean, a lot. It swamped my social media feeds last week, as everyone I know was commenting on it.
The section in question has Stern asking Murati how the company trained the AI to make these amazing, lifelike videos.
"What data was used to train Sora?" Stern asked.
"We used publicly available data and licensed data," responded Murati.
"So, videos on YouTube?"
Murati made a face. "I'm actually not sure about that," she said.
"Videos from Facebook? Instagram?" asked Stern.
"If they were publicly available," said Murati. "But I'm not sure."
The exchange strained credibility for a lot of people who watched it. The idea that the head of a division wouldn't know such basic information does seem odd.
On the one hand, she was clearly trying to avoid saying something wrong and getting in trouble. On the other, being so vague has made people wonder what's up.
It's not quite to the level of Kate Middleton Photoshopping, but it's a good reminder that more information is always better, and if you leave people guessing, they probably won't come up with great ideas on their own.
In a way, that exchange is the least interesting part of an otherwise smart, entertaining and informative interview.
Give it a watch.
Check out Joanna Stern's interview with OpenAI CTO Mira Murati here. | | | 3. The big business of disinformation | | | A recent episode of the podcast Apple News In Conversation is ostensibly about the problems with disinformation and how it may wreak havoc on the upcoming American presidential election campaigns.
But, in a lot of ways, the part that was left unsaid was the most interesting. To me, the real threat around disinformation isn't how easily people can be duped or how useful it can be.
The real threat is how profitable it can be. Every click, every share, every round of outrage some social media post generates means more money for its platform.
Author, legal analyst and former U.S. attorney Barbara McQuade does a fantastic job of laying out how disinformation is being used.
In conversation with guest host Brian Stelter, she explains where we are and how the notion that any social media platform is simply a "virtual town square" is preposterous.
"In the town square, if someone is giving a speech up on their little soapbox, you can see who it is," she said.
You can also see how people are reacting. But the advent of bots and fake accounts can amplify disinformation and accelerate its journey through the internet.
So, McQuade has some good tips on how to spot disinformation.
And some advice for policy-makers and what they can target.
She calls for "regulations that regulate social media, but not the content so much as the algorithms."
Those algorithms dictate how prevalent a post will be, who can see it and how high up in your feed it appears.
Those algorithms are proprietary and kept from the public.
McQuade, who wrote the book Attack from Within: How Disinformation Is Sabotaging America, says that needs to change.
Listen to Apple News In Conversation here. | | | How the economy looks beyond Bay Street | | | What are you using your crypto for? | | | There's a famous story in the crypto world about a guy who bought two pizzas for 10,000 bitcoins in 2010.
It's been heralded as the first time someone used bitcoin to buy something in the real world.
I hope it was delicious. If the guy had just held onto them, they'd be worth a staggering $658 million US today.
These days, most people who own bitcoin use it as an investment. That's according to a survey from the Ontario Securities Commission.
It found that 10 per cent of Canadians held some kind of crypto in 2023. That's down slightly from the 13 per cent who owned crypto in 2022.
Aside from using it as an investment to convert to currency or buy other crypto came this surprising stat. | | |  | That tweet comes via John Paul Koning, who has a must-read blog you should check out.
And yes, you read that right.
Seven per cent of Canadians who owned crypto say they used it to pay a ransom.
30 per cent have never used their crypto assets. But 7 per cent used their crypto to pay a ransom? That sounds like an episode of Law & Order, not a report from the Ontario Securities Commission. | | | Share this newsletter | | or subscribe if this was
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