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.”

This week's interesting finds

Aisha, partner since 2023 (Toronto, ON)

This week in charts

China

(Opinion) With China unlikely to see a baby boom, boosting population quality should be the focus

China will join high-income countries such as Japan and South Korea in facing depopulation and it will be replaced by India as the world’s most populous country this year.

In a resource-constrained global environment, a declining population is not necessarily a bad thing. With fewer consumers, there will be a reduction in carbon dioxide emissions, which will benefit the environment.

Attempts to stimulate an increase in the birth rate on the mainland in recent years have had a limited impact as having a small family or being childless has become a way of life among married couples in modern China, whether by choice or as a compromise due to the high costs of raising a child.

Instead, the government should prepare for the challenges of population decline before the population ages further. The most effective way to do this would be to focus on improving the quality of the population and setting up infrastructure to support it.

The government must invest in education and skills training to ensure that the workforce is ready to embrace the transformation from a labour-intensive manufacturing economy to a knowledge-based consumer economy. To maintain a 3 per cent gross domestic product growth rate in the face of an ageing population, there needs to be at least a five-fold increase in labour productivity.

The government needs to improve physical and mental health by reforming the healthcare system. In addition to promoting active ageing, Beijing must encourage the development of healthy living habits, including a balanced diet, and reducing smoking and alcohol consumption to alleviate the pressure on the healthcare system.

The chances of the negative population growth being reversed are slim unless there is a drastic change in the immigration policy to attract foreign talent.

Nearly half of foreign businesses in Hong Kong are planning to relocate

Nearly half of all European businesses in Hong Kong are considering relocating in the next year, according to a new report. Companies cite the local government's extremely strict Covid-19 protocols that mirror those on the mainland.

Among the firms planning to leave, 25% said they would fully relocate out of Hong Kong in the next 12 months, while 24% plan to relocate at least partially. Only 17% of the companies said they don't have any relocation plans for the next 12 months.

The city's "zero Covid" strategy led to severe consequences for businesses and residents, the report from the European Chamber of Commerce said. Hong Kong's "biggest advantage" — its global connectivity and proximity to mainland China —"has been almost completely disabled," the Chamber said.

The European survey released Thursday tracks with a similar report from the American Chamber of Commerce in January, which found that 44% of expats and businesses are likely to leave the city, citing Covid-related restrictions.

"Hong Kong still holds business opportunities but an array of issues, especially draconian travel restrictions and worsening US-China relations, weigh on sentiment," the US report said.

Even without the Covid crisis, headhunters were having trouble bringing talent to Hong Kong because of Beijing's growing oversight of the semiautonomous territory. Massive and at-times violent protests prompted by a Beijing-imposed extradition bill plunged the city into a political crisis in the summer of 2019. A year later, as Covid-19 restrictions kept protesters at bay, China passed a wide-ranging national security law that broadly curtails free speech rights in Hong Kong.

This week's fun finds

Is It Real or Imagined? How Your Brain Tells the Difference.

So “why are we not constantly hallucinating?” asked Nadine Dijkstra, a postdoctoral fellow at University College London. A study she led, recently published in Nature Communications, provides an intriguing answer: The brain evaluates the images it is processing against a “reality threshold.” If the signal passes the threshold, the brain thinks it’s real; if it doesn’t, the brain thinks it’s imagined.

Such a system works well most of the time because imagined signals are typically weak. But if an imagined signal is strong enough to cross the threshold, the brain takes it for reality.

Dijkstra’s study of imagined images was born in the early days of the Covid-19 pandemic, when quarantines and lockdowns interrupted her scheduled work. Bored, she started going through the scientific literature on imagination — and then spent hours combing papers for historical accounts of how scientists tested such an abstract concept. That’s how she came upon a 1910 study conducted by the psychologist Mary Cheves West Perky.

Dijkstra expected that she would find the Perky effect — that when the imagined image matched the projected one, the participants would see the projection as the product of their imagination. Instead, the participants were much more likely to think the image was really there.

Yet there was at least an echo of the Perky effect in those results: Participants who thought the image was there saw it more vividly than the participants who thought it was all their imagination.

The observations suggest that imagery in our mind’s eye and real perceived images in the world do get mixed together, Dijkstra said. “When this mixed signal is strong or vivid enough, we think it reflects reality.” It’s likely that there’s some threshold above which visual signals feel real to the brain and below which they feel imagined, she thinks. But there could also be a more gradual continuum.

The differences between Perky’s findings and Dijkstra’s could be entirely due to differences in their procedures. But they also hint at another possibility: that we could be perceiving the world differently than our ancestors did.

Her study didn’t focus on belief in an image’s reality but was more about the “feeling” of reality, Dijkstra said. The authors speculate that because projected images, video and other representations of reality are commonplace in the 21st century, our brains may have learned to evaluate reality slightly differently than people did just a century ago.

Dijkstra and her team are now working to adapt their experiment to work in a brain scanner. “Now that lockdown is over, I want to look at brains again,” she said.

She eventually hopes to figure out if they can manipulate this system to make imagination feel more real. For example, virtual reality and neural implants are now being investigated for medical treatments, such as to help blind people see again. The ability to make experiences feel more or less real, she said, could be really important for such applications.

Why You Should Actually Let Yourself Eat the Foods You ‘Can’t Be Trusted’ Around

Although there’s limited research on so-called food addiction in humans, rodent studies on the subject suggest that the over-consumption of sugar, for example, tends to happen when restriction is involved: A 2016 review published in the European Journal of Nutrition found that only rats who are food-deprived and/or have intermittent (i.e. not constant) access to sugar seem to binge on it.

It’s impossible to say whether the same thing is true for humans, but one (very small) 2011 study published in the American Journal of Clinical Nutrition had some notable findings: 32 women were assigned to one of two groups, both of which ate mac and cheese five times total. One group ate it once per week for five weeks; the other ate it daily for five days in a row. Researchers measured the participants’ calorie intake and found that while the once-a-week group ate more of the mac and cheese as the trial progressed, the daily eaters actually ate less. Their explanation for this? “Habituation,” a phenomenon in which repeated exposure to something decreases the strength of your response to it.

“When you’re deprived of a certain food, or food in general, your sensory system tends to get more aroused to make food look, smell, and taste better,” Kate Sutton, LCMHC, a therapist and certified intuitive eating counselor based in Raleigh, North Carolina, tells SELF. It’s normal to experience intense cravings for food when you’re not getting adequate calories and to specifically crave foods that you’re avoiding or heavily limiting.

But as the research above suggests, despite the instinct to keep a certain food at arm’s length (or even further), the best way to get over such out-of-control feelings might actually be to expose yourself to that food over and over again, even if it feels uncomfortable (or downright terrifying) at first.

The case of the Lego Bandit

In brickspeak, Louis is an Adult Fan of Lego — known as AFOLs, for short — and among the most ardent. His grandmother gave him his first set, the Lego Clone Scout Walker, for his sixth birthday, igniting a singular passion that hasn't let up since. Under his handle Republicattak (the missing "c" a childhood misspelling that gnaws at him), he shares his custom Star Wars-themed builds on his YouTube channel. Unlike many aspiring influencers, he keeps his identity private, other than his first name, to avoid embarrassment at work. "Otherwise, it'll be very awkward," he tells me over Zoom in his thick French accent. "Because in my videos, I'm very much like, basically, a grown man playing with toys."

On that October day, his toys were everywhere. Colorful parts littered the walkway outside his house — a green baseplate here, a yellow sloped brick there. As Louis slowly followed the trail, he recognized chunks of his most beloved builds: a broken cockpit from his UCS X-Wing, the black treads ripped from his Clone Turbo Tank, a limbless Stormtrooper Minifigure staring helplessly from inside its helmet. "It was like a horror movie," he recalls, "but for Lego."

His cash and laptops were untouched, but the Millennium Falcon his parents had given him was gone; so was the original Clone Scout Walker from his grandma. Most painful of all, the intruders had destroyed the massive, original Lego opus he'd been building over nights and long weekends for 10 months, a 35,000-piece installation he called "Imperial Gate."

"I really feel like the whole part of my stomach is missing," Louis recalls. "It is just so much that I'm just collapsing on the ground. I will just crush my head against the floor. Then I will just stand up and crush my head against the walls and just screaming. I will just run outside screaming. I will maybe scream for at least 10, 20 minutes."

That afternoon, he taped what he said was his final YouTube message. "I don't know what I'm going to do," he said into his cellphone camera, blinking back tears. "It really was my passion. That's the end of this channel."

This week's interesting finds

Matilde, partner since 2010 (Toronto, ON)  

Downtowns 

IPOs

Household spending

As household budgets tighten, big brands double down in dollar stores 

Makers of food and household staples are pushing deeper into dollar stores because the low-cost retailers are opening thousands of locations each year. They are adding fresh produce and attracting shoppers squeezed by inflation, giving manufacturers with slumping sales a chance to grow. "It used to be, you would get odds and ends" liquidated from other retailers' unsold inventories, said Ed Johnson, a principal with Deloitte Consulting LLP focused on retail and consumer products. 

Now, makers of pantry staples are treating dollar chains with the same rigor as Walmart due to their size and scale, Johnson said. A study by Tufts University found the low-cost stores, which number well over 35,000 in the U.S., are the fastest-growing U.S. food retailers by share of household spending - though Dollar Tree stopped selling eggs. 

Executives at packaged food companies like Conagra Brands Inc. say the stores are increasingly attractive because they are installing more freezers and refrigerators for items like budget TV dinners, breakfast sandwiches and yogurt. 

"The main play is frozen vegetables," and frozen fruit, in dollar stores' expansion into private label food, said Jim Griffin, executive vice president at Daymon, a consulting firm that works with retailers on their store brands. "There's strong consumer acceptance." 

Griffin added that dollar stores are also introducing more "premium" private label brands, like Dollar General's Nature's Menu for pets. 

Most dollar stores - which are less than half the size of a Walmart location or most traditional grocery stores - only sell the fastest-selling, basic items because of limited shelf space. Crane said the metric dollar store executives watch the closest is "dollars per point of distribution" for individual products, which measures how much in sales each item generates over time.   

New EV entries nibbling away at Tesla EV share 

Throughout 2022, EVs have gained market share and consumer attention. In an environment where vehicle sales are limited by inventory and availability, EVs have gained 2.4 points of market share year over year in registration data compiled through September - reaching 5.2% of all light vehicle registrations - according to S&P Global Mobility data. 

The nascent stage of market growth leaves others competing for volume at the lower end of the price spectrum. New EVs from Hyundai, Kia and Volkswagen have joined Ford's Mustang Mach-E, Chevrolet Bolt (EV and EUV) and Nissan Leaf in the mainstream brand space. Meanwhile, luxury EVs from Mercedes-Benz, BMW, Audi, Polestar, Lucid, and Rivian - as well as big-ticket items like the Ford F-150 Lightning, GMC Hummer, and Chevrolet Silverado EV - will plague Tesla at the high end of the market. 

With the Model Y and Model 3 combined taking 56% of EV registrations, the other 46 vehicles are competing for scraps until EVs cross the chasm into mainstream appeal. (A recent S&P Global Mobility analysis showed the Heartland states have yet to embrace electric vehicles.) 

"Evaluating EV market performance requires looking through a lower-volume lens than with traditional ICE products," Brinley said. "But growth prospects for EV products are strong, investment is massive and the regulatory environment in the US and globally suggests that these are the solution for the future." Production volumes today are restricted by factory capacity, the semiconductor shortage and other supply chain challenges, as well as consumer demand. But the issue of production capacity is being addressed, as automakers, battery manufacturers and suppliers pour billions into that side of the equation. Though there are many signals suggesting consumer demand is high and that more buyers may be willing to make the transition - and to do so faster than anticipated even a year ago. 

But consumer willingness to evolve to electrification remains the largest wildcard. Looking past Model Y and Model 3, no single model has achieved registrations above 30,000 units through the first three quarters of 2022. The second-best-selling EV brand in the US is Ford. However, Mach-E registrations of about 27,800 units are about 8% of the volume Tesla has captured, according to S&P Global Mobility data. 

While logic dictates that further growth will require more EVs being offered in the $25,000-$40,000 price range, the willingness of buyers to spend more today reflects an aspirational nature to the choice. 

Tesla's EV-only strategy gives it a retention advantage - as few EV owners have returned to ICE powertrains. But as new EVs arrive, loyalty will be tested. Currently, the Model Y has a 60.5% -brand loyalty and had nearly 74% of buyers come from outside the brand (the conquest rate) - tops in the industry. Who is Tesla conquesting from? Toyota, Honda, BMW and Mercedes-Benz. Toyota and Honda are only beginning to get into the EV market, though have yet to enter the fray in earnest.  

This week’s fun finds 

What It Takes to See 10,000 Bird Species 

I was sitting in the middle seat of a battered van snaking up switchbacks to the summit of Tinajas Valley, tires inches from the edge of steep drop-offs. Next to me was Peter Kaestner, one of the world’s most prolific birders. “I can see why I haven’t seen this bird before,” he said, speaking loudly as the van rumbled over dirt and rocks. “It’s not the kind of thing you’re gonna bump into.” Kaestner is tall, with friendly blue eyes, and gives off a smart approachability. (He jokes that when he was younger he resembled Robert Redford, but he knew that he’d hit a turning point in his life when people started comparing him to former Syrian president Hafez al-Assad.) 

We were headed to a ridgetop to look for the elusive white-throated earthcreeper, a drab brown bird with a curved beak like a T. rex claw. The bird prefers steep-walled desert washes at specific elevations in the central Andes, and would be a “lifer” for Kaestner. Birders call the complete tally of all birds they’ve ever observed their “life list,” and each new species a lifer. A person who keeps track of their life list is a “lister,” and someone obsessed with listing on a global scale is a “big lister.” I’m a lister myself, though I spend more time researching birds than chasing them. For my PhD at the University of New Mexico, I studied hummingbird migration and speciation in the Andes. These days I work as a postdoc at the Cornell Lab of Ornithology, which runs eBird, the go-to platform for scientists and hobbyists to record bird observations. 

On eBird, Kaestner is ranked number one, and he wants to be the first person in the world to see 10,000 bird species. The 69-year-old’s life list is currently at 9,796. The couple hundred birds he still needs are some of the rarest and most difficult in the world to spot. They’re often found in places that are basically inaccessible, off-limits due to political unrest, or threatened by deforestation and climate change. But Kaestner’s quest to hit 10,000 is his personal Dawn Wall, an obsession he’s sustained over decades, and he will not stop until he reaches his goal—if even then. 

Kaestner has taken a nontraditional path to reaching 10,000. The pursuit is often considered a rich person’s pastime, like climbing the Seven Summits: many obsessive listers and bird chasers take months or years off work, spend personal fortunes, retire to chase birds full-time, or turn to vanlife. Kaestner is an exception. He birded his way to about 9,500 while working for the Foreign Service for 36 years on a modest government salary. He and his wife, Kimberly, a diplomatic specialist, fought for tandem placements so they could work together overseas, and he often achieved his birding goals through creative scheduling. 

While living in Kuala Lumpur, Kaestner left the house at 3 A.M. on Saturdays to drive more than two hours each way in search of the rusty-naped pitta, returning to the Malaysian city by noon to play with his young daughters. “It took me over two dozen trips to get that bird,” he says. “But I wanted to be home to spend the afternoon with my family.” 

“He does go off on his birding trips where it’s just birding, but he always makes time for family,” says Kimberly. “He’s always been good that way.” 

In 1986, Kaestner became the first person in the world to see a representative of every bird family in existence, 159 back then. But the birding event that most changed his life was his 1989 discovery of the Cundinamarca antpitta, a species new to science. Kaestner had traveled outside Bogotá, Colombia, for work and was exploring a forested area up a newly constructed road. Suddenly, he heard a call he didn’t recognize. 

He recorded it, then played the call repeatedly to lure the bird in, waiting for over 45 minutes. At one point, the bird popped up and called behind him. He crawled through the undergrowth and reached a clearing. Then Kaestner saw it. It wasn’t a known Colombian bird, he was sure of it. But back then, the references he needed to verify whether it was a new bird for Colombia, or a new species entirely, didn’t exist. Upon returning to Bogotá, he confirmed that it was a species previously unknown to science; it was formally described by biologists in 1992. His recordings and dictated field observations are now archived in the Cornell Lab of Ornithology’s Macaulay Library. For Kaestner, who has always been driven to contribute to the scientific record, the discovery was monumental. Antpittas remain his favorite birds. 

High costs putting farming out of reach for young people, affecting all Canadians 

The rising cost of land is making it harder than ever for young farmers to enter the business. And those barriers come at a time when a growing number of older farmers are planning to leave the industry. Organizations promoting farm succession worry that if young people are unable to enter the industry, only the largest companies will endure, reducing the diversity of crops and livestock and widening the gap between Canadians and their sources of food. 

"The main challenge right now is really the cost of agricultural land," said Benoît Curé, co-ordinator of ARTERRE, a program that pairs aspiring farmers with landowners and farmers planning to retire. 

Curé said multiple factors are contributing to rising prices, including real estate speculation — especially near Montreal suburbs — and strong competition for the best soil in a province where only around two per cent of the land is suitable for farming. 

Last year, the price of agricultural land rose by 10 per cent, which isn't unusual, he said in a recent interview. "Over the last 10 years, we've had annual increases of about six to 10 per cent." The average dairy farm in Quebec is now valued at almost $5 million, he said, almost double what it was in 2011. 

With 20 per cent down payments usually expected for farm purchases, "you have to almost be a millionaire before starting your agricultural business," Curé said. If young people can't afford to get into farming, then most rural communities risk being left with two or three large farms, he lamented. 

Farming has always been a capital-intensive industry — with high costs for land, equipment and inputs — but prices across Canada have risen above the revenue that can be generated from that land, said Jean-Philippe Gervais, the chief economist of Farm Credit Canada, a Crown corporation that lends to farmers. 

"The relationship between the price of the land and the revenue that can be expected from the land — that ratio is the highest we've ever seen," Gervais said in a recent interview. "So we're really at prices that are the highest we've ever seen, not just in absolute value in dollars per hectare, but also relative to what can be generated in income." 

It's now rare for farmers to turn a profit from land they buy just by farming it, he said, adding that most farmers only make their money back when they sell. Large, established farms can fund the purchase of more land from the revenue generated on land that's already been paid for, he added.