SharperDingaan

Just to throw in some reality .... It is highly likely that the BC (& elsewhere) flooding is going to generate all kinds of big claims, that will burn through the vaious reinsurance tranches. Additionally, most would expect that as a Cdn Reinsurer, Odyssey very likely has disproportionatly more exposure to Cdn risk, and the BC claims. If you expect both the Odyssey Q42021 to suck (BC claims), and the whole 2021 to suck (BC fires AND floods), the issuer bid looks very good. FFH gets the shares ..... Q4 is the make/break quarter for the years performance. Given the fire/flood, most would expect FFH to show an UW loss for 2021, and that UW losses offset a good chunk of investment gains. Just burnt 10B to increase exposure to future UW losses! what is it wiith these people! Just can't win with FFH! Market sentiment unlikely to support an ongoing higher share price in the short-term voting machinery. It's mid November .... Now an enterprizing lad ........ might take the opportunity to do a round trip wash sale - buying back over the festive season, at low prices, in a nice thin market Harvest a tax loss? book a round trip gain? and set-up for the once/yr dividend paid in January? Pretty hard to see how one walks away with < 10-15%. SD

Technically, one can't reliably short BTC without using CME futures. Why the CME? Collection on your expected obscene MTM gain is guaranteed, whereas on a backstreet 'exchange' ... not so much! SD

You're simply showing your age! Obviously ... the BTC is the more valuable - 'cause I can short the hell out of the sucker!! The Green Bay certificates is just a direct crowd-fund. Same result, but a lot more efficient than selling branded merch at inflated prices to pocket the gains. Network monetization that 'old school' capitalist just do not get SD

The quote is specific to BTC, and the fixed 21M supply of BTC. Nothing to do with the hyper-ledger. Crypto is a network business. The hyperledger is a monopoly single network, spanning the entire world, collectively built and maintained (regulated?) by the worlds major nations. And .... if you have the biggest, and the most effective network, you set the market minimum price and conditions of use. Of course, nobody is forced to use the hyperledger. If one goes elsewhere, one just pays a higher transaction price for the same or similar utility - hence a entity using ETH has a commercial incentive to move to the hyperledger. However everything on the hyperledger is trackable; if one wishes to transact without a track, one needs alternatives - but they cost. Each with its own pro's/con's depending on the requirement The Hawala & Chiti systems aren't going away anytime soon. SD

Ultimately, the hyperledger/IoT, will displace much of the functionality of ETH. The hyperledger infrastructure progressively cascading down to lower and lower level applications as scaling increases and unit costs drop. Payment processes, smart contracts, blockchain delivery - all as fully integrated components of the hyperledger infrastructure backbone. Not that dissimilar to todays ubiquitous suite of Microsoft product. The hyperleger is still very esoteric today, and very expensive - but it is rapidly changing. Blockchain and smart-contracts are fully integral components, payment is a work in progess. roll-outs progessively release via the cloud. While ETH is todays low cost solution, its eventual commercial obsolecence is enevitable. A good 10 years to run - how much longer depends on ETH's ongoing development between now and then. So what? We are looking at tech solutions with a very limited life; at best they eat the smaller fish, and sell out to a bigger one. Resulting in the most cost effective horse & buggy manufacturer the world has ever seen - but just before the advent of the motor car. Then there is BTC ..... everyone insistimg they must be able to pay for things with BTC (medium of exchange) ... and totally missing that its real value is unit of account, and store of value. SD

The fed is mamipulating the yield curve by artificallly altering the supply/demand of money at all points along the curve. Mechanically, it means cut the supply of money by enough to raise bond prices at that maturity, and lower the YTM. The reduction in YTM offsetting the increase in CPI, to produce no net change. Our earlier mechanics were described incorrectly, but we are saying the same thing. Some argue that demand for money is similar to the C +I + G +(X-M) of total demand. When the yield curve isn't changing, the total demand for money must equal the total supply, and net growth over the four components must equal zero. When the condition is present, one can test each component against independent observation, and draw conclusions. We know that growth in C + G has been high, therefore it must be low in I + (X-M), We know supply chain issues have worsened, and that current US activity is nearing pre-covid levels - so (X-M) must already be quite negative, and about to get worse as imports rise. The mystery is I Just a different assessment and POV. SD

The bond market is speaking very loudly - we just don’t want to hear the message. Confidence in central bank ability to manage the moving parts. The yield curve didn’t move up on rising inflation data; because a sudden new supply of money across the curve, offset the inflation impact. Supply > demand at all terms, dropped the interest rate at each term – by the change in the inflation rate i.e.: Central bank management. The only way there is minimal inflation impact is if CPI (Consumer) inflation is being offset by deflation in the I, G, or (X-M) of total demand. C is very large and growing at the CPI rate, G clearly isn’t shrinking – so there must be material deflation in both I and (X-M). Total deflation so large - that without a very inflated C+G, the yield curve could even be negative. Compare 12-month growth in totals today, against what they were a year ago. Both US refining demand and labour force capacity is essentially back to what it was pre-covid. Yet post covid recovery activity has barely started (travel, infrastructure, etc.), and US energy prices cannot be meaningfully contained without US exports essentially being discontinued. Further reducing (X-M). The mystery is I. At some point it will arrive with a vengeance, forcing the G and (X-M) to compensate. The central bank is expecting M (supply chains normalizing) and lower social net payments (G) to do most of the heavy lift. The takeaways? No reason to be overly concerned, re a pending market correction. CPI probably going higher, crude oil exports curtailed, widening WTI-Brent spread. Green infrastructure investment as soon as possible. SD

Nothing wrong with the logic. Change the island to El Savaldor, change the USD to Colon, and you have real life as it is today. Those without access to BTC use ever greater denominations of Colon to buy goods, against a supply of goods that continually gets cut back as nobody wants the toilet paper, pushing the Island into hyper inflation. Islanders need someone to blame, leadership gets permanently replaced, the currency resets to parity, and the process repeats itself. Those with BTC get whatever goods they want and at ever discounted prices - as too many sellers are competing for a declining demand paying in BTC. The result being that you get to live a very nice life, at the top of the social pyramid. SD

Most who do this have a foreign account, tied to their foreign address. i.e: A London brokerage account tied to a UK address. Used to be that you just called the foreign broker, and had them place the trade via your foreign account. Today, you just log onto their platform and place the trade yourself, same as you would do were you in NA. Modern twist on correspondent banking, and materially cheaper. SD

Crypto currency produces network inflation, which is somehat different. As Sunrider explains. I give you 60,000 USD, you give me 1 BTC. Simplified; if you got your 1 BTC via a 40,000 USD purchase from someone else - we're just exchanging USD with no impact on inflation. You're up 20,000 USD, but there is no change in the total 60,000 USD in circulation. However there were 2 transactions, and each of them generated a small new release of BTC to pay the miners who verified them. Until BTC hits the 21M cap, there is now more spendable BTC than there was, and inflation. The more activity the bigger the cummulative release of new BTC, and the more inflation. New token release/transaction is controlled, network volume is not. Most developers will immediatly spend any USD raised on development, raising the velocity of those USD in circulation. The more endemic/popular crypto becomes, the more USD raised, the more higher velocity money in circulation, and the faster the speed (spend it as fast as you can, before it stops). Network effect. It is uncertain as to what happens around stable coin where one leg is pegged to USD, other than its a developing grey rhino. If everything works as advertised there should be no effect, if there's a bad actor ...... Replace the stable coin with a US CBDC derisks the grey rhino. Not a popular view in the US, but a largely minority one. SD

Sure ... to the dinosour without much runway left (or a short investment horizon), it's a tulip. But .... If you're going to have to live with the underlying blockchain technology - it's a little bit different. BTC has a fixed limit of 21M token, after which the cost of the processing is paid directly by the buyer/seller vs a release of new coin. There are a variety of views on just how 'hard' the 21M cap actually is ..... most expect an 'adjusted' cap at around 23-24M, re all that coin tied up in accounts where the key has been lost. When you have to pay for your transaction and the cost is in the hundreds, is a BTC likely to still be trading at USD 60K+ ??? The more BTC ETF's the greater the possibility SD

Where you can, leave your money in the pension scheme/plan. The sponsor typically covers some of the ongoing costs, and most are not going to do better elsewhere. Some folks are just naturally very good at turning a profit; but they are almost all outlyers, street smart, and have been from a very young age. And whichever side of the law, the cream rises to the top. Boiler maker or silver spoon! Folks have to find their own path; almost always it's learn to trust your decisions, think independently, and think on your feet - then it's just fun! Look around you; including yourself, maybe 5-15% would make the cut? If it is > 50%, you are keeping the wrong company! SD

People have long been convinced that if you have a few bucks, you should 'invest' it. Once past the clothes, the car, the good time, the ETF seems a good idea. Buy ANY investment vs just spend the money, and you're ahead! Fees are not a consideration, the rest is just exploitation. Most people are financially illiterate; they can instantly google, tell you what everything is, and even how to apply it! but there is ZERO context. Very little if any consideration of relative risk, value-add, or alternatives - ZERO maturity. Most people have mortgages, credit lines, credit card debt, etc. While it may be obvious to us that simply applying the ETF capital directly against debt would produce a better result, to most it is just too much of a reach. Can't see the resultant lower monthly payments, resultant diminished stress, etc. SD

The tax thing is evolving. CBDC use grows at the expense of paper bills, which cut-out ability to track the money trail. Hence, the more an economy has to use CBDC, the more visble the entire underground economy becomes, and the ability to tax it - both domestically and internationally. The recent minimum global tax of 15% as recent evidence of future magnitude and direction. The downside is greater use of tax evasion via the physical goods route, vs the digital payments route. Supply chain can 'obscure' a great many things, and physical co-mingling is very difficult to seperate. It's pretty hard to seperate the blood gold out of your 1oz wafer, and there are a great many smugglers very good at both bribing and co-mingling. SD

Couple of add-on's to this. Outside of BTC and ETH, most of the 20-35 demographic have zero confidence in crypto coin. They are primarily in it to learn how they could use this, how de-fi platforms work; which are better for what, size/type of commissions paid, what volaltility actually means, how a CBDC (eKrona) is actually used, how a stable coin works, what a crowd fund actually is, how it works, why anyone would contribute, etc.. A few hunderd bucks in 'tuition', not much different to how most people 'learnt' how to use smart 'phones when they first came out. Time/money well invested. Very much a utility view, most see ETH as the 'operating' coin that you are going to run your NFT on, and BTC as the practical store of value in 2nd-3rd world apllications. Helps being able to talk directly with peers from these countries around store of value vs volatility. Stable coin viewed primarily as a mutual fund backed by 'whatever', and not as a currency peg. Most existing apps seen as 'OK, or utter sh1te', and in need of a lot of work - same as the early smart 'phones. Stong selection bias in the sample, this is the top 5-20% of the demographic, and they come at it entirely from the business side. There are very few if any coders. All students produce a white paper from scratch; either as a 'green field', or as an assessment of someone else's whitepaper under standardized criteria. Both require a solid understanding of blockchain mechanics, strong familiarity with the tech stack, and the bones of a strong business plan. Where possible, industry management makes guest appearances, and some of the 'green fields' are expected to potentially grow up into startups post graduation, via grants/incubators. 15-25%+ of undergrads go on to do a Master in Fintech at prominent business schools across Asia, India, and South America - against competitive entry. A good portion of the Masters students go on to become involved in policy &/or impementation work at prominent Canadian institutions. SD

Every initial roll-out includes dumb errors - that's why we have sounding boards. Obviously the concept is great, but design execution just needs a little work ... Apparently these things are not co-ed? It's OK to have large amounts of unfilled rooms, simply because the gender balance is off? ... Charlie, the waste! Something against windows? Keep the crazies down and there's a lot less 'wear and tear' .... Charlie, the incremental operating costs! The man hasn't lived in a household full of women??? .... Charlie, what the hell are you thinking! SD

As with dentists,we hire architects for a very good reason. We dont expect investing brilliance from an architect, and we dont expect architectural genius from an investor! SD

Amongst other things I teach a course in 'Introductory Fintech' at both the Master and Undergraduate level The mechanics of blockchain and smart contacts, the IT vs Busines view, the business integration of the new technology. 'Wealth Management' is one of the classes, and all students are routinely surveyed on if/when they would use de-fi apps, invest in crypto EFT's, and why. Similar classes in the apllication of NFT, cash/CBDC, etc. Popular course, most are in the 20-35 demographic, student mix is roughly 50/50 domestic/international, 60/40 male/female. Baba, Tencent, etc. are routine case studies. The 'trust' thing is largely irrelevant, whether that be the de-fi platform itself or the token bought on it. Most treat future crypto investment as a given, know the hack and volatility risk, and invest only small amounts to see how it works out; the objective is experience at both the platform and investment level. De-fi platforms complement traditional wealth management, and serve the vast bulk of everyday routine need. There is a great willingness to pay up for good financial advice, but not for simply order-taking or replicating what an app could do better. Wipes out the 'value add' of a great many financial advisors! 'This time it's different', because this time it really is different. The reality is that this technology did not exist a decade ago. Almost all with knowledge of the subject, unanamously recognize that going forward - the technology will fundamentally and materially change the plumbing of how most things will be done. Older folks just hear the platitude and mock, 'been there, and done that !!!!'. Dinosaurs, with zero recognition of the widespread generational shift taking place under their feet. Sure, if you are 'old' and your clients are 'old', you can probably ignore this. But you are a dying demographic, and there are fewer of you every year. Just a different POV. SD

The systemic risk is generational shift, that older folks just do not get. Simply look around you. Most folks < 35 look to apps (ie: a Wealth Simple) for their financial and investment advice (ie: a Robin Hood) - not an investment advisor. To them, doing anything without tech is wierd, this is most of the demographic buying crypto ETF's, and most wealth apps are quite adequate for the everyday transaction. Sure, young investors can still make stupid investments, and there is risk to being on the bleeding edge - but against the remaining runway? it's just not a big deal. You and I might rant that we'd never trust an app (ie: algo), or hold a token - but we're the dinosours. As long as we see lots of other dinosours around us, we are positive that things will never change! - yet totally miss that the glacier we are standing on is rapidly melting. Every chunk of glacier breaking off, a black swan event. SD

Not for everyone - but one of the safer alernatives is the 'cross mortgage' We have a UK source funding an internal 1-Yr CAD mortgage at a fixed rate; every maturity the mortgage either rolls over, or the capital repatriates. The expectation is that over time CAD appreciates (petro currency) and the pound depreciates (brexit); resulting in a material (pound denominated) gain upon repatriation. Interest rate differences between the two countries largely a non-consideration. About once every 7-10 yrs, the CAD/USD FX rate is at parity, and most would expect that post brexit - the pound slowly drifts downward against the Euro. Comes repatriation day (whenever it eventually happens) a net 25-40% tax-free FX gain is not unrealistic. SD

Most would go fixed - if only because it is virtually certain that over the next 5 years the floating rate wll rise by > 90bp. Obviously, the sooner the rise occurrs the greater the benefit to you. Most don't realize it, but for a fee - it is also possible to issue yourself a mortgage out of your own/closely related RRSP. Pay yourself the extra 90bp, and if you can't repay for some reason - the shortfall is taxable income. Lots of possibilities SD

Direct experience in this .... The fixed rate mortgage will amortize over 25-30 years, but reset every 5 years. The property will have 5 years of appreciation and principal repayments to offset the impact of higher rates at a rate reset - most times, it's not really a problem. To reduce the monthly payment, the mortgagee can also choose to amortise over a longer period - versus the now shorter 20 years. Most mortgages will either be insured or secured against equity at well > 20-25% of the property value, and all are recourse. In the event of collapse, the banker just keeps the properties off the market, and supports inflated property valuations by choosing not to foreclose in quantity. Doesn't become an issue until short-term mortgage rates get > 10-12%, and the properties are in provinces with foreclosure laws going back to the depression era (very few). Sched-A banks are forced to hold significant reserves against exactly this possibility. Net impact? It'll screw up your day, but otherwise - no big deal. SD

No dog in this, but a few observations .... Sauble Beach: More retirees, greater ability to WFH, and just more wealth. Sell your place in Toronto for 1M++. pay 800K to buy in Georgian Bay (Sauble Beach), and you will still pocket 500K ++, plus have a materially lower cost of living. More liquidity than you and the mrs could possibly spend in your remaining lifetime. Multi-family: Much of the big city in-fill housing, and the 1M++ housing is multi-generational, 'one family'. Same idea as the MURB; but each generation with its own floor in the same house, versus a string of smaller units next to each other. While still very new, de-fi platforms have also simplified the ownership process - buildings no longer owned as thousands of little units, but as 2-4 units owned by different family members. The de-fi thing is just an automation of some traditional european ownership practices. Holiday hotels traditionally split into 20, 5% ownership units that also require the owner to be present 1 week/year. Its just not common practice in the US. SD

Bond market thing ... The fundamentals clearly point to higher nominal rates. Furthermore, Liquity Prefernce Theory (LPT) has NOT been repealed, so there should be a steep rise across the curve as well. There are only 2-ways by which the yield curve can be where it is. 1) Real returns are stongly negative; ie: simplified, the -3% real + 5% inflation = the 2% nominal we see on the curve. 2) Flooded supply at each point along the cuve; ie: simplified, the cost of money at that term lowered via increasing supply through quantitative easing (QE). Central banks are tapering; most would agree that if uniformly applied, reduced QE supply, should raise interest rates across all points on the yield curve. The only way this doesn't become a problem (as central banks seem to expect), is if the real rate of return has materially worsened; in the example, the real rate is no longer -3%, it's -5%. The 5% inflation rate is 'main street', the real rate is 'wall street'. The result is lots of press simulaneusly talking about the higher cost of lliving, and the very real risk of asset deflation. However, most would expect that long term covid impacts, ESG transition, China transition, and growing supply chain shocks are indeed worsening the real return. So what? Pick your spots - simplify, and go long only the things that matter to main street; energy, food, etc. Different POV. SD

Just to build on this... All across Europe, Canada, Asia, etc - similar 2022 increases are being quietly discussed. Most indexing annually, with the announcement in the early part of the new year. Between now and then ... rising fuel/heating costs, and rising food costs from increasingly disrupted supply lines. Add 5.9% inflation to the US treasury yield curve, and nominal discount rates are 7%+. Even if the global 'average' inflation is only half this (or 3.0%), the nominal US discount rate is close to doubling within 3-4 months. Yet there's very little - if any, discussion about any of this in the financial press? All fixed income values should drop, equiity valuations should drop - the only folks making coin should be the drug dealers, and the unhedged energy producers Hopefully somebody has a plan .... And may we all wish him/her a successful execution! SD