This week's interesting finds

Greg L. (Lake of the Woods, Ontario) 

Featuring one of our advisor partners, Lonn Vokey.  

This week in charts

Power supply 

Supply chain   

Mental health   

Moody’s warns of ‘serious challenge’ to $1.4tn private credit market 

A sharp rise in rates could cause some of these businesses to struggle to afford their interest payments. Moody’s found that the interest coverage ratios on the Ares and Owl Rock funds’ loans — the earnings available to make interest payments — would eventually fall by about half. While Moody’s has sounded a warning, it did not downgrade the ratings or credit outlook of either of the Ares or Owl Rock funds, which are publicly traded lending vehicles called business development corporations. Ares and Owl Rock declined to comment.   

This week’s fun finds 

Four EdgePointers make the pilgrimage 

Claire, Mimi, Patrick and Sarah made their way to P.E.I. for a meeting with advisor partners and took the opportunity to visit the inspiration for Cymbria’s name.   

EdgePoint Football Club undefeated in its first two games 

A 5-1 win keeps the team near the top of the standings.   

Webb telescope just found something unprecedented in the Orion Nebula 

A team of scientists found this Holy Grail compound in the Orion Nebula, a baby star nursery about 1,350 light-years away. That may seem absurdly far, but it's actually the closest large star-forming region to Earth. 

(Image source) 

Using the James Webb Space Telescope, a preeminent cosmic observatory led by NASA and the European and Canadian space agencies, the researchers not only captured a vibrant new picture of the celestial region — blowing the socks off Hubble's version — but found the new molecule lurking in a young star system, known as d203-506. This system has a protoplanetary disk, a sort of Lazy Susan of gas and dust rotating around the core. 

Astronomers are on a quest to find signals of carbon compounds in the greater universe because this chemistry is at the root of all life, at least as far as we understand it on Earth. Coincidentally, ancient Mayan culture referred to the Orion Nebula as the cosmic fire of creation. 

The mysterious signal turned out to be methyl cation, a molecule that until this week was relatively unknown to the layperson. With the announcement, NASA went so far as to provide a pronunciation guide for the term. (For the record, it sounds like "CAT-eye-on," not the last two syllables of "vacation.") Organic chemists say methyl cation assists with the formation of more complex carbon-based molecules. 

Since the 1970s, scientists have predicted this substance was a missing link between simple molecules and more complex organic molecules. But direct evidence of its existence in space had eluded them — until now. NASA likens the role of methyl cation to a train station, where a molecule can remain for a time before routing in one of many different directions to react with other molecules. 

"This detection not only validates the incredible sensitivity of Webb but also confirms the postulated central importance of (methyl cation) in interstellar chemistry," said Marie-Aline Martin-Drumel, one of the coauthors on the new study, in a statement.

 

This week's interesting finds

Christen, partner since 2018 (Los Angeles, California)  

This week in charts 

Yields 

Mass Immigration Experiment Gives Canada an Edge in Global Race for Labor 

A country about as populous as California has added more than all the residents in San Francisco in a year. Last week, Canada surpassed 40 million people for the first time ever — with growth only expected to continue at a rapid pace as it welcomes more immigrant workers, refugees and foreign students across its borders. 

Now, as people flow into the country like never before, Canada has an immediate challenge: how to propel growth in rural regions in dire need of newcomers while minimizing the strains to urban centers already bulging with people. 

The rewards are apparent. Population gains have boosted hiring and consumption, helping the economy withstand a rate-hike campaign by the Bank of Canada — so much so that the central bank this month had to resume tightening after a pause. Yet in a country that’s long been home to one of the world’s hottest housing markets, the government’s plan has drawn criticism that increasing immigration targets merely boosts economic output without raising living standards for individuals. 

Even some prominent, pro-immigration economists are now saying Canada is going too far, too fast.

The looming threats of an aging population — leading to dwindling tax revenue and shrinking budgets — are playing out in different ways around the world. France’s plan to raise the retirement age by two years to 64 led to nationwide protests. Germany risks having 5 million fewer workers by the end of the decade, and already is struggling with strains in its industrial-heavy economy. Japan, where the government has long resisted immigration, is facing acute labor shortages, a rapid population decline, and dying rural towns. 

CIBC under banking regulator’s remediation orders to fix mortgage underwriting lapses 

Canadian Imperial Bank of Commerce has been under remediation orders from Canada’s banking regulator for more than a year after an audit of its mortgage portfolio uncovered breaches of rules that limit how indebted borrowers can be, sources say. 

The problems surfaced last year in a routine regulatory audit of the bank’s mortgage portfolio conducted by the Office of the Superintendent of Financial Institutions (OSFI), which regulates large banks in Canada, according to two sources with direct knowledge of the issue. 

The issues involve thousands of clients, many of whom had lines of credit that were secured against their homes. When these lines were combined with a CIBC mortgage, the total credit available exceeded allowed regulatory ratios. 

The problems discovered did not involve fraud, the sources said. 

The bank still doesn’t know the full extent of the issue, and has already spent tens of millions of dollars screening for problems and creating remedies, according to one of the sources. Internal estimates suggest it could take as much as two more years to fully solve the problems, the source said. However, the cases are not expected to result in noticeably higher losses on loans or have any material financial impact on the bank. 

While the issues CIBC and OSFI uncovered affect only a small part of the bank’s $266-billion Canadian mortgage book, and are largely administrative in nature, stemming from back-office oversights and flaws in IT systems, their discovery has created more turbulence in one of CIBC’s core businesses. The issue also came to light at a moment when OSFI has voiced concerns about Canada’s competitive housing market amid higher interest rates. 

MiFID U-Turn Plan Would Reverse Ban on Free Research for Clients 

A piece of European Union legislation that forced financial firms to separate the cost of investment research from that of trading could be reversed under plans being championed by member states. 

Their proposals would mean an investment firm would only have to inform clients whether they are paying for research and trading jointly, and record the charges attributable to each. 

That’s a dramatic shift from current regulations, which separated the two in a bid to eliminate conflicts of interest that could distract money managers from seeking the cheapest transaction costs for investors. But evidence suggests research provision across the region has suffered as a result. 

The prospect of a major rollback of the rules comes at a key moment for the research industry globally. In the US, a waiver that has allowed brokers to charge European clients separately for trading and research is about to expire, forcing them to finally adapt to the regulatory mismatch between the regions. Meanwhile, the UK is undertaking a review of investment research that’s expected to lead to its own easing of unbundling rules. 

OpenAI plans app store for AI software, The Information reports 

Enterprise customers using ChatGPT often tailor the technology to their specific uses, which range from identifying financial fraud from online transaction data to answering questions about specific markets based on internal documents. According to the news report, makers of such models could offer them to other businesses through OpenAI's proposed marketplace. 

Such a marketplace could compete with app stores run by some of the company's customers and technology partners - including Salesforce and Microsoft - and help OpenAI's technology reach a broader customer base. 

The Information also reported that two of the company's customers, Aquant, which makes software that manufacturers use to guide customers through device maintenance and repairs, and education app maker Khan Academy, might be interested in offering their ChatGPT-powered AI models on OpenAI's marketplace. 

Since its release late last year, hundreds of businesses have adopted ChatGPT to automate tasks and increase efficiency. Companies are also racing to offer their customers new tools and capabilities based on the AI software's advanced large language models (LLMs).   

This week’s fun finds 

EdgePoint Football Club launches with a win 

In our inaugural game, EdgePoint won a squeaker 3-2. 

How clams help keep Polish water clean 

A water pump known as Gruba Kaska (Fat Kathy) is a local landmark in Warsaw. To get there, you must walk 300 metres through a slimy tunnel under the Vistula river. There you will find eight clams hooked up to computers. They are monitoring the city’s drinking water. 

(Image source) 

The system is nifty. When the molluscs encounter heavy metals, pesticides or other pollutants, they close their shells, explains Piotr Domek of Adam Mickiewicz University in Poznan, who has worked on the project for three decades. To create a natural early-warning system, Mr Domek and his colleagues collect the clams from rivers or reservoirs, and attach a coil and a magnet to their shells. Computers register whether their shells are open or closed by detecting changes in the magnetic field. 

“In the case of a terrorist attack, an ecological disaster or another contamination of the water supply, the clams will close,” says Mr Domek. This, in turn, will automatically cut off the water supply. The clams, he thinks, are life-savers. “If contaminated water goes straight to our taps, we will get poisoned,” he says in “Fat Kathy”, a short film that celebrates the invaluable bivalves. 

The Story of Why Over 500 Pubs in the United Kingdom Share the Same Name 

As with most things in England, there's plenty of history and tradition to back up the trend. The name Red Lion adorns the sign above hundreds of drinking holes throughout the country and even the world. In London alone, there are more than 20, according to the latest count of open restaurants on Google. The reason why is up for debate but on a recent trip to London, my tour guide shared the following story, which was corroborated by Historic UK. 

All the way back in 1603, James VI of Scotland inherited the throne to become James I of England. The only problem was that he wasn't incredibly fond of England, seeing as though his predecessor and mother, Mary, Queen of Scots, spent over 18 years in captivity before ultimately being beheaded. The charge against her being a plot to assassinate Queen Elizabeth I. So when he ascended to the throne, he ordered that all buildings of importance display the red lion of Scotland — and that included pubs. The idea was that any Englishman or woman would constantly be reminded that their king was Scottish every time they went for a tipple.

This week's interesting finds

Teresa, partner since 2010 (North York, Ontario)   

This week in charts 

Wages 

Debt 

Cap rates

The Investors Podcast: Mastering the Art of Investing: A Deep Dive with Sam Zell 

On today’s show, we have the honor of interviewing legendary real estate investor and entrepreneur, Sam Zell. Sam Zell has an impressive background, having started his career in real estate in the late 1960s. He is the founder and chairman of Equity Group Investments, a leading private investment firm. Over the course of his career, Sam has made many bold moves and investments, earning him a reputation as a savvy and fearless investor. One of Sam's most notable achievements was his role in creating the modern-day real estate investment trust (REIT) industry. He did this by founding Equity Office Properties Trust in 1997, which became the largest office REIT in the United States. In 2007, he sold the company for a record-breaking $39 billion. Joining us today as a co-host is David Greene, an accomplished real estate investor, and host of the BiggerPockets podcast, one of the most popular and highly-rated podcasts in the real estate investing space. 

Hudson’s Bay utility corridor agreement reached among Prairie provinces 

After years of fits and starts, a memorandum of understanding between the Alberta, Saskatchewan and Manitoba governments has been reached to explore the feasibility of building a deep water harbour at Port Nelson on the Hudson Bay to export natural resources such as potash and liquified natural gas.

Marriages in China slump to historic low 

Marriages in China dropped in 2022 to their lowest since records began, local news outlet Yicai reported on Sunday, continuing a steady decline over the past decade although the matrimonial total may have been affected by stringent COVID lockdowns. 

Just 6.83 million couples completed their marriage registrations last year, data published on the website of the Ministry of Civil Affairs showed, down about 800,000 from the previous year. 

The drop in couples tieing the knot, which follows pandemic restrictions keeping tens of millions locked in their homes or compounds for weeks last year, comes as authorities deal with a declining birth rate and a falling population. 

Demographers warn China will get old before it gets rich, as its workforce shrinks and indebted local governments spend more on their elderly population. 

To encourage marriage and boost the country's flagging birth rate, China said last month it would launch pilot projects in more than 20 cities to create a "new-era" marriage and childbearing culture.   

This week’s fun finds 

Summer 2023 Investment team book and podcast list 

School’s almost out, so we’ve asked the Investment team for some of their recent reading recommendations and podcast proposals to help kick off the start of summer! 

Caribbean treat 

Aisha brought in some West Indian dishes for her moai (our version of bringing EdgePointers together for a meal). There was a lot of flavour packed into those containers! 

US Supreme Court's dog toy ruling puts parody products on notice 

The U.S. Supreme Court handed brand owners a win against parody products on Thursday when it ruled that "Bad Spaniels" dog toys resembling Jack Daniel's whiskey bottles are not shielded by the U.S. Constitution from the liquor maker's trademark lawsuit. 

But in a 9-0 decision, the justices said a precedent known as the Rogers test for assessing the use of trademarks in artistic expression did not apply to VIP's products, reversing a U.S. appeals court and raising the bar for parodies to survive trademark claims. 

The Rogers test is "not appropriate when the accused infringer has used a trademark to designate the source of its own goods - in other words, has used a trademark as a trademark," Justice Elena Kagan wrote. 

Kagan contrasted the case with situations where she said applying the Rogers test was justified, including when Danish pop group Aqua's label MCA Records defeated a trademark lawsuit by Mattel over the band's song "Barbie Girl." 

Can You Change Your Metabolism? 

There isn’t a method to boost metabolism “in a way that’s durable or real,” says Herman Pontzer, an evolutionary anthropologist at the Global Health Institute at Duke University. He says most things people promise will boost metabolism fall into two categories. “There are things that are dangerous and illegal and things that are BS, and you should probably avoid both of them,” Pontzer says. 

Basal, or resting, metabolic rate refers to work performed by cells when we are doing nothing. It’s the baseline hum of being alive as cells keep blood circulating and lungs functioning. Formally, it’s the calories per minute used for these housekeeping duties. That adds up to about 50 to 70 percent of the total you burn through each day, depending on age, says Samuel Urlacher, an anthropologist and human evolutionary biologist at Baylor University in Waco, Tex. 

A common perception is that having a higher metabolism means you can get away with eating more while doing less, without gaining weight. The relationship between basal metabolism and weight is complicated, however, Pontzer says. “The larger you are, the more cells you’re made of and the more energy you burn because your metabolism is all your cells at work, all day,” he adds. But each individual cell is not more active or burning more calories per minute just because there are more cells, Pontzer says. 

“If we go to the gym, and we successfully lose some fat and gain some muscle, we will have a very small result on increasing metabolic rate,” says Susan Roberts, a nutrition researcher and leader of the Energy Metabolism Team at the Jean Mayer USDA Human Nutrition Research Center on Aging at Tufts University. “Changing body composition can make a little difference but not a lot.” 

In terms of weight loss, the timing of a gym visit also might make a tiny difference, Urlacher says. “Those who exercise early in the day have better success with weight loss because it helps control appetite throughout the course of the day.” 

Intuition might whisper that a brisk resting heart rate would also correlate with an increased basal metabolism, but that isn’t the case. A resting heart rate of 50 beats per minute for one person versus 70 for another just means the heart with the slower resting rate might be more efficient at getting oxygen to tissues, Pontzer says.

This week's interesting finds

Olivia, partner since 2008 (Port Credit, Ontario)   

This week in charts

Business debt

Manufacturing 

Young adults in the U.S. are reaching key life milestones later than in the past   

China set to account for less than half of US’s low-cost imports from Asia 

“By the end of 2023, China’s portion of US imports” from low-cost Asian countries, which excludes Japan and South Korea, “will definitely have dropped below 50 per cent”, said Patrick Van den Bossche, one of the report’s authors. 

The US and China are each other’s largest respective trading partners. Last year, Chinese goods made up 50.7 per cent of US manufactured imports from Asian countries, according to the Kearney Reshoring Index, which is based on US trade data. That was down from nearly 70 per cent in 2013. 

While exports from China, once hailed as the world’s factory floor, have declined, imports from Vietnam have doubled in the past five years and tripled over the past 10, according to the Kearney index. India, Taiwan and Malaysia have also contributed a greater share of products from Asia consumed by Americans. 

“US imports from other countries such as Vietnam [are] rising as producers shift manufacturing away from China,” said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. 

Hedge Funds at War for Top Traders Dangle $120 Million Payouts 

The hunt is no different from the bidding war for Premier League or NBA players, one executive said. Last year, a senior portfolio manager was lured by a major New York fund with more than $120 million in guaranteed payouts, according to a headhunter who said he’d done several deals paying north of $50 million. Contracts worth $10 million to $15 million are increasingly becoming common for traders, said another. 

Hedge funds have long been the land of eye-popping rewards, but a few recent trends are converging to take it to new levels. The stellar track record of several giant firms that spread money across teams of traders following multiple strategies has caused their assets to surge. That’s prompted a hiring spree to add more traders and strategies so the existing ones aren’t over-stretched. 

The performance — and resulting wait lists of investors wanting in — has also given the firms leverage over clients to charge many times than the traditional 2% management fee and use that for recruitment and retention. And as the firms increase rewards and defer more of them over several years, it’s taking even bigger offers to tempt traders into leaving. 

“In a world where there’s a lot of liquidity, the bigger challenge in developing a platform business is investing in talent rather than attracting capital,” said Chris Milner, the chief operating officer of London-based Eisler Capital, which is transforming itself into a multi-strategy hedge fund from its roots in macro trading. 

Millions of dollars in signing bonuses and a higher cut of trading profits during initial periods — aimed at replacing any pay lost from leaving a past employer and having to sit out non-compete periods — are now becoming the norm at multi-manager investment firms ranging from Millennium, Citadel, Point72 Asset Management to BlueCrest Capital Management and Balyasny Asset Management. While the rest of the hedge fund industry grapples with outflows, the biggest are beefing up. 

Clients mostly do not get to see details of the payouts and guaranteed bonuses though they foot the bill through an opaque blank check for a “pass through” fee. That payment allows hedge funds to charge clients for anything from compensation and research to entertainment. 

Clients also can be on the hook for expenses such as fitness plans for traders at Point72, relocation expenses at Balyasny, investment and litigation-related costs at Verition Fund Management and key-man life insurance premium for Englander at Millennium, according to their client offering documents reviewed by Bloomberg News. 

Bank governor: Carbon tax boosts inflation rate by nearly half-a-point 

The federal carbon tax has boosted inflation by nearly half-a-percentage point, Bank of Canada Governor Tiff Macklem told members of the House of Commons Standing Committee on Finance in a letter obtained by Global News. 

In his letter to finance committee members, Macklem repeated an observation he made at the committee’s March 3 meeting that the annual increase in what he called the “carbon pollution charge” was adding 0.1 points to the consumer price index each year. In other words, he said, had the federal carbon tax not increased, inflation in January would have been 5.0 per cent instead of 5.1 per cent.

This week’s fun finds

The latest EdgePointer of the Month features relationship manager Sarah Ford. 

Sarah Ford “like the car”, as she explains her name’s spelling, applies a “quality is job one” mantra to everything she does. Whether it’s cooking (and eating), “cheer mom” duties or working as a relationship manager with EdgePoint advisor partners, she’s driven to pursue excellence. With one of the most eclectic territories in Canadian wholesaling, at any point in time you may find Sarah bounding up Bay St. in Toronto, hustling down Water Street in St. John’s or skipping across Queen Street in Charlottetown. Before EdgePoint, Sarah worked at NEI Investments as an inside sales representative and a manager, information systems and marketing. She holds an Honours B.Comm. from McMaster University as well as the CIM designation. 

As her gift to readers, Sarah decided to share some of her favourite dessert recipes. We can’t thank her enough for her diligence in tasting each one! 

Lime mousse cake 

Chocolate pavlova   

White chocolate-raspberry cake 

Milk chocolate soufflé with nougat whip 

Banana bread 

Note – we aren’t responsible for any “long-term growth” caused by eating these treats. 

Robot Pizza Startup Shuts Down After Cheese Kept Sliding Off 

A robot pizza delivery startup that raised almost half a billion dollars has shut down after a series of technological setbacks, according to The Information. 

The company, founded back in 2015, was working on a mobile pizza-making machine for years, but struggled to turn it into a reality. As a result, the company pivoted to working on sustainable packaging back in 2020. 

It's a shocking turn given the sheer amount of money investors — including $375 million from multinational giant SoftBank, which is renowned for its poor investments like the infamous WeWork — have poured into the startup. And in an even broader sense, it once again shows that even as AI makes incredible strides in the market, practical robotics ventures remain enduring difficult. 

According to Bloomberg, the company struggled to physically keep melting cheese from sliding off pies that were being baked in its moving trucks. 

In early 2020, the company laid off over half of its workers before being bought by the appropriately named compostable packaging company Pivot Packaging. At the time, Zume CEO Alex Garden blamed the cuts on the pandemic and a number of deals that fell through, according to Insider. 

Surprisingly, the robot pizza industry is much bigger than one might think. Zume is only one of several robotic pizza-making companies in Silicon Valley trying to automate pizza-making. For instance, Stellar Pizza, which was founded by former SpaceX engineers, is working on a robot that can make dough, roll it out, and cover it in various toppings before baking it. 

Seaweed farming may help tackle global food insecurity 

Producing and selling seaweed could boost incomes for farmers in low- and middle-income countries (LMICs), particularly in coastal regions of Africa and Southeast Asia, said Patrick Webb, the Alexander McFarlane Professor of Nutrition at the Friedman School and senior author of the study. The other authors were Natalie Somers, and Shakuntala Thilsted, who works for the Consultative Group on International Agriculture Research and won a 2021 World Food Prize for research and innovation in aquaculture and food systems. The team reviewed research papers, existing databases, United Nations and World Bank Group reports, and more. 

A more sustainable alternative to raising livestock, seaweed cultivation requires no land, freshwater, or chemical fertilizers, and could become particularly profitable as demand for nutrient-rich seaweed products grows around the world, the study found. Those profits would mean more buying power for those households and communities who produce, process, package, and export the microalgae, which in turn would translate into healthier diets. 

On top of being relatively easy to grow, seaweed has a miniscule carbon footprint, and may even help lower the ocean's carbon levels. Though little is yet known about how much CO2 seaweed releases during harvest, research has found that perennial brown algae farms absorb up to ten tons of CO2 per hectare of sea surface per year. In addition to its "carbon sinking" powers, when added to livestock feed, seaweed could help dramatically reduce methane gas emissions.

This week's interesting finds

Killian, partner since 2023 (Toronto, ON)

  

This week in charts 

Household debt   

U.S. equity indexes 

Corporate loans   

Democracies  

A Visual Breakdown of America’s Stagnating Number of Births

Experts have pointed to a confluence of factors behind the nation’s recent relative dearth of births, including economic and social obstacles ranging from child care to housing affordability.

Absent increases in immigration, fewer births combined with ongoing baby boomer retirements will likely weigh on the labor force supply within the next 10 years, said Kathy Bostjancic, chief economist at Nationwide, an insurance and financial-services company.

“You’re going to have a real shortage of workers unless we have technology somehow to fill the gap,” Bostjancic said.

China Has a Youth Unemployment Problem Because College Grads Are Waiting for Jobs That Don’t Exist

A central problem, economists say, is that China isn’t creating enough of the high-wage, high-skill jobs that are sought after by its expanding base of educated young people, many of whom have loftier expectations than previous generations. 

Rather than trade down for lower-wage jobs, many young people are opting to wait for more opportunities, even though such opportunities might not be available. 

“China’s high youth unemployment rate is not transitory but structural,” said David Wang, chief China economist at Credit Suisse. “There is a mismatch in the skills the youth are trained to provide and the skills that existing jobs require.” 

Chinese officials are trying several tactics to address the problem, including mandating that state-owned companies hire more graduates, while also prodding more young people to take up blue-collar work or move to the countryside. 

Some economists still believe the problem is a passing phenomenon, and that many more youths will find work as China’s broader economic recovery continues. 

Young people are particularly vulnerable to unemployment during downturns—like the one China experienced last year—because of their relative lack of work experience, economists say. Many jobs that got hammered during the pandemic were in fields that are popular among young people, including tourism and catering; those industries are now recovering.   

This week’s fun finds 

Hot sauce reviews – June 2023 edition 

The hot weather alone wasn’t making us sweat enough, so we brought out some hot sauces to try: 

Neil’s Real Deal Hot Sauce – Carolina Reaper (Waterloo, ON) 

• “Flavourful and sweet!” 

• “A good daily sauce.” 

• “Why are you sweating already? This isn’t bad.” 

Da Bomb – Beyond Insanity 

• “My ears hurt.” 

• “There’s no flavour. Wait. It tastes like cigarettes.” 

• “Take that home and don’t bring it back again.” 

Bonus – Frank’s mystery Costa Rican hot sauce he brought for us to try 

• “Really spicy, but seasoned really well.” 

•  “My main complaint is that I don’t know how to get more.” 

The big idea: why colour is in the eye of the beholder 

For a long time, people believed that colours were objective, physical properties of objects or of the light that bounced off them. Even today, science teachers regale their students with stories about Isaac Newton and his prism experiment, telling them how different wavelengths of light produce the rainbow of hues around us. 

But this theory isn’t really true. Different wavelengths of light do exist independently of us but they only become colours inside our bodies. Colour is ultimately a neurological process whereby photons are detected by light-sensitive cells in our eyes, transformed into electrical signals and sent to our brain, where, in a series of complex calculations, our visual cortex converts them into “colour”. 

This is why no two people will ever see exactly the same colours. Every person’s visual system is unique and so, therefore, are their perceptions. About 8% of men are colour-blind and see fewer colours than everyone else; a small number of lucky women might, thanks to a genetic duplication on the X chromosome, be able to distinguish many more than the rest of us. 

One cause of the problem – or perhaps its symptom – is language. In English we divide colour space into 11 basic terms – black, white, red, yellow, green, blue, purple, brown, grey, orange and pink – but other languages do things differently. Many don’t have words for pink, brown and yellow, and some use one word for both green and blue. The Tiv people in west Africa use only three basic colour terms (black, white, red), and at least one Indigenous community has no specific words for any colours, only “light” and “dark”. 

The meanings of colour are no less socially constructed, which is why a single colour can mean completely different things in different places and at different times. In the west white is the colour of light, life and purity, but in parts of Asia it is the colour of death. In America red is conservative and blue progressive, while in Europe it’s the other way around. Many people today think of blue as masculine and pink as feminine, but only a hundred years ago baby boys were dressed in pink and girls in blue. 

When all of this is taken together – the subjective nature of visual perception, the complicating influence of language, the role that social life and cultural traditions play in filtering our understandings of colour – it becomes really rather difficult to reach a conclusion different from that of the 18th-century philosopher David Hume: that, in the end, colour is “merely a phantasm of the senses”. 

When digital nomads come to town 

Most of the workers here are employed in the U.S., but relaxed post-pandemic office norms permit them to work from anywhere. This is the mobile, location-independent lifestyle of the digital nomad. The Semilla is their oasis. 

As their name suggests, digital nomads move around a lot. Medellín is one of the latest hot spots to join a global nomad circuit that spans tropical latitudes. Southeast Asia remains the preferred destination for nomads — on popular website Nomad List, four of the top 10 cities are from the region. The list also features less-expensive European cities in Portugal and Romania, as well as Latin American destinations like Mexico City, which share time zones with the U.S. The typical nomad might visit 12 or 13 countries in a year, all the while holding down a corporate job, usually in the tech sector. Of the workers I spoke to at Semilla, most intended to leave Colombia within a month or two. 

Within these cities, nomads cluster in safe and prosperous neighborhoods. Laureles, in Medellín, is a tranquil barrio with a university, clean streets, and middle-class inhabitants. But the income differential between the nomads and the Colombian professional class is immense. The result is runaway price inflation — rents in Laureles have skyrocketed, and restaurants cannot raise their prices fast enough. A one-bedroom in Medellín now rents for the “gringo price” of about $1,300 a month, in a country where the median monthly income is $300. 

An influx of digital nomads into a neighborhood can distort the local economy. Seeking foreign cash, many cities invite this kind of visitor, but their arrival can skew the cost of living for residents. 

The increase in nomads has become a flashpoint in debates over the city’s housing problems. “[The presence of foreigners] primarily affects the economic livelihood of the regular person here,” said Arturo Mares, a clerk at a furniture store in the upscale Roma Norte neighborhood. “Costs are rising because these people are spending a lot of money here, since they think everything is cheap.” In November, people took to the streets of Mexico City to protest gentrification and rising rents. 

The digital nomads’ visits are transitory, but they leave neighborhoods permanently transformed. Today, there are streets in Medellín, as in Mexico City or Canggu, that look more like Bushwick — where English is more common than the local language, and where the streets are dotted with brightly painted coworking hubs and prissy restaurants serving international cuisine. The more nomads arrive, the more these locations begin to resemble one another. Building exteriors retain their historic character, but interiors converge to a sterile homogeneity of hotdesking, free charging outlets, affordable coffee, and Wi-Fi with purchase. 

Locals can’t keep pace with such decadence; even the head of the city’s tourism board was being priced out. “I used to go out to eat every Friday,” [head of the Medellín Convention and Visitors Bureau Claudia] Heredia said. “Only at current prices, I can’t afford to.” 

And yet Heredia supported hosting nomads in the city. In fact, she said she was hoping more would arrive. I observed that her quality of life had been directly affected by their presence. “Yes,” she said, “but it’s better for the economy.”