The Canadian Investor - Blockbuster Canadian Deals & U.S. War on Crypto

Episode Date: June 15, 2023

In this episode we talk about the Senators being sold by a group led by Canadian Billionaire Michael Andlauer. We then talk about the most recent Bank of Canada rate hike, the Reddit strike and finish the episode by discussing the Securities and Exchange Commission crackdown on Crypto. Symbols of stocks discussed: CNR.TO, CP.TO Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  TCI meetup registration Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense. Braden’s LinkedinSee omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. This is the Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Bélanger. The Canadian Investor Podcast. Today is June 13th, 2023. My name is Brayden Dennis, as always joined by the distinguished Simon Bélanger. How you doing, bro um i'm fired up for these episodes because there's lots of good news that like has unfolded in the last like i want to say 48 hours that's and it's not boring news it's it's

it's fun news so i think that's why i'm fired up yeah yeah i'm doing well i mean i think there's definitely let's just i don't know if it's positive or not for some of the news i'll be talking about but definitely interesting nonetheless and i agree with you a lot of stuff happened in the last 48 hours and we you know i do my notes a bit in advance but i always leave room in case something comes up like it happened the last couple days uh before we do that some administrative things uh i am hiring a canadian developer full stack developer. If you want to work for me full time on the Stratosphere product and the FinChat product, be with our awesome team in the ecosystem. My LinkedIn is in the show notes. My LinkedIn will have a job there. It's my most

recent post as well. And the reason i'm not connecting just the job post because uh if you're listening to this and we've taken it down but you still want to reach out because we want to hire for other roles as well uh you can just reach out on linkedin so send a connection so go to the show notes uh see what did you watch the canadian open i don't know if you're a golf guy but did you did you watch the canadian open i only watch when tiger woods plays but uh no i didn't watch it but i definitely watch what you're gonna be talking about yeah nick taylor has has finally done it uh canadian has not won the canadian open the Canadian Open golf tournament in 69, nice, years. And Nick Taylor broke the spell with a 72 foot putt in a historic fashion to have a Canadian at the top of the leaderboard at the end of the day on Sunday. So congratulations, sir. It was drama filled and know felt like a Canadian heritage moment watching it because it's been

so so long and the crowd was super fired up so it's always good to see Canadians compete well in sports on the global stage yeah no and I the only thing I need to watch on YouTube so I saw his pot his putt but I need to watch a video of his buddy getting like sacked or something by security yeah i heard it was pretty epic it was brilliant so adam hadwin is a professional golfer who who finished 10 under in the tournament so he was like tied for seventh or eighth uh he was in the top 10 and so he had a brilliant tournament as well and you know all the canadian guys are up on the 18th tee watching this playoff. So, you know, you got Mike Weir, you got Corey Connors, you got Hadwin there. And they're just, to spray it on him and a security guard out of like left field just drills him like, like perfect, perfect tackle. And the NFL like clipped it up and like saying like that this guy needs to be drafted because it's like perfect tackle it was just amazing like uh and and adwin took it

obviously well not like he wasn't a baby about it he took it well he knew it was funny and it was yeah how bad do you think the security guard felt after that he must have like apologized like 15 times to the guy like oh man i'm so sorry he must have felt bad but at the end of the day like he was just doing his job like like adamant came screaming out of there like with a bottle of champagne like who is this guy uh meanwhile he like just finished top 10 in the tournament it's like hilarious um in canadian business and sports news breaking, as of like an hour or two ago, we got a group led by Canadian businessman Michael and Lauer has reached an agreement to buy the NHL's Ottawa Senators. The team announced Tuesday that the group will purchase 90% from the Melnick family. The daughters will retain 10%.

And the deal is reportedly worth nearly $1 billion. Maybe they're valuing at $1 billion and they're buying that stake for $900 million, which is what, quote, give or take, end quote, what Commissioner Gary Bettman expected the team in Canada's capital to be worth. What are your thoughts? I mean, it's about time. I think from what I was hearing, I think Bruce Garriott from the Ottawa Sun was following the whole thing pretty quickly. And just a couple of days ago, I was listening to a clip from him on a radio show, and he was saying that it sounded like the Melnick family had overplayed their hands a little bit because you had some of the top bidders that were starting to back out and I mean I think they finally you know were able to come to an agreement

I think one of the sticking point was the equity that their daughters would keep not every group was kind of on board with that and the also the uncertainty for those not familiar with Ottawa you know where the Sens play right now, the Canadian Tire Center, it's a pretty shitty area to play in, I'll be very honest, it's not, you know, Kanata's a suburb, it's not, it's a nice place, don't get me wrong, it's just on the west end, right, so Ottawa's a pretty spread out city, so if you live on the east end, you're literally having to drive like an hour, an hour and a half just to get there, maybe even two hours in traffic and then back and forth after the game.

So I think big part of the hang up is those groups. There were some real estate developers in there, right? The real estate component was really important and being able to secure kind of a new area to build the arena downtown. And Michael and Lauer, I think he was able to get a pretty good team along with him. And the last thing I'll say, he's going to have Donovan Bailey. Really? OK, he's part of that deal.

But Lauer will have to sell. So he's a minority owner in the Montreal Canadiens. So he owns 10 percent of the team. So, oh, yeah. So he's going to have to sell that. But 10 percent of the Montreal Canadiens, I he's gonna have to sell that but uh 10 of the montreal canadians i think that's probably worth a couple hundred millions a couple hundred million at least right yeah wow that's that's that's a big piece too so i i guess yeah you can't own both no i guess it

would be like conflict of interest right because you know yeah you're the owner you could like if you like one team more than the other you're kind of you know not giving the same kind of support to one team versus the other so i think that's the reasoning behind it yeah i think it makes sense to block that quote michael represents everything we could have hoped for coming to this process a passionate owner who's committed to ottawa uh and 10 percent madrid we believe it is a momentous day for the national capital region uh the melnick daughters of the late former eugene melnick will retain 10 percent uh stake in in the in the ottawa senators and um yeah so to me it's all about the arena, right? Like, cause you just hinted at it. I have buddies who live in Kanata.

I've been to Kanata, great region, some wonderful wildlife out there, but not a good spot for Ottawa's hockey arena. It's too far. It makes very little sense given, you know, people want to go to the game and like, you know, do stuff after and go to the game and like you know do stuff after and go to the entertainment district have some drinks and uh that falls apart really quick when

you have to drive over an hour to get there so i think it all falls on that all right uh big news from the bank of canada late last week what do So, I mean, if you've been living under the rock, the Bank of Canada raised rates again. So, they raised its overnight interest rate by 25 basis point to 4.75%. It was the first time they raised a benchmark interest rate since January. The Bank of Canada said that they would pause interest rate to take time and assess what the impact of the rapid rates would do to the Canadian economy as a whole because there's you know notoriously there's a lagging effect they also said that they would make further decision based on data and a lot of people I think were kind of surprised by this move maybe a week or so beforehand, the market starting putting this almost around 50-50.

But, you know, just maybe a few months ago or a month ago, a lot of people weren't thinking that they would actually go ahead and raise again. Most people were thinking that it would stay stable or potentially rate cuts towards the end of the year. And it was, I think, a wake up call for a lot of people. I did a Twitter space with Dan from our real estate podcast. And for those who haven't been to one of Dan's spaces, there's a lot of people in the real estate industry, including mortgage brokers

and realtors. And one thing that I was interested, I had asked a question. So what are they seeing from their clients who had low fixed mortgages that are coming up for renewal in the next year or two? And for the most part, it sounds like it's a mix. Some people are prepared, but some it's really sticker shock when they're seeing those new rates and those increased payments. And, you know, it's something to keep in mind because at the end of the day you can't really control what the Bank of Canada is doing and a lot of people were making assumptions we saw the real estate market even tick up with I think people getting used to these higher rates and just thinking it could not go higher and I also took the time to listen to Paul Beaudry, who's the deputy governor of the Bank of Canada.

He did a speech a few days after the hike was announced. And essentially, they did that move because economic data came in stronger than expected. So services and good inflation has been ticking higher, which was not what they expected, primarily due to higher than expected demand. Unemployment is still at historical lows, and they still think the headline inflation is trending towards 3% this year, but it's mainly driven by lower energy prices and that core inflation is stickier than they expected. So, you know, I think at the end of the day, it's important to keep in mind, we really don't know where the Bank of Canada will go. And I think it's clear that they will be

data dependent here. And it's, I think it's just for a lot of people is just, you know, not trying to make assumptions, especially if you're trying to make some big decisions going forward. And, you know, making sure that you purchase things or if you have a business that you invest, but you invest within your means and you have also a margin of safety. And the last thing I'll mention here is CPI data came out today for the US. And from the headlines I saw, most people were pretty excited seeing 4% headline numbers. But if you dig in through the data, a lot of it was because of lower energy prices and core CPI is closer to 5%. So I still think, unfortunately, there's going to be some inflation pain and potentially some more rate hikes in the future. You just used a really good word, sticker shock.

Yeah. I haven't heard anyone use that word in so long. And usually, I hear that word, you go buy something and they're like, oh, that's way more than I thought it was. That's a really good word for when people are buying houses and the rates are a lot higher than the all-in cost of buying the house with rates where they are rates are a lot higher than or like you know the all-in cost of buying the house with rates where they are today is a lot higher so that's a good word a sticker shock i like that no so i i have nothing more to add i agree with everything that you said here good overview um yeah it's no and it's too bad because during this space there was a few comments too that were interesting.

And someone responded like, oh, yeah, my realtor was telling me that rates would be cut by the Bank of Canada by the end of the year for sure. And now I'm seeing that. So I'm kind of rethinking what my realtor was telling me. And someone responded like, why are you listening to your realtor for interest rate predictions? And it's kind of it's kind of true. And you have to remember too where people are coming from. Some people may have, no pun intended, but interest in telling you a certain story, right? They're dependent, their income's on that. They may think they're right, but at the end of the day, you just have to be careful. And these are things out of your control. And I think for me, and I think you're the same as well, just plan for the worst. And that way, worst case scenario doesn't happen,

you're just better off and you can decide what you do with that extra money. You bring up a good point. And we know a lot of realtors listen to the show, like there's tons of realtors in Canada, just based on statistics. I love you guys. But for everyone listening, understand incentives. And the realtors know this too. Understand the incentives of human beings. It will help you so much in your life, in business, and in friendships, and in everything. Because if you understand the incentive that they make commission from selling homes, what are they incentivized to do? To make you want to buy homes and sell homes. They make you transact more. They will build notification systems into the product so that you will panic sell or FOMO buy into certain stocks. Why? Because they are incentivized to encourage transactions, to encourage trading. More shares that go from Joe's hands to Sally's hands on their platform,

the more money they make. So just understand incentives, especially in the financial industry, and you'll understand why people act the certain way that they do. And then you can make your own decision from that, right? You have to factor in. Yeah. And their intentions might be good, right? They might actually think that rates will go down and the markets will pick up. And if you don't buy right now, you will regret it. But at the end of the day, you know, it's also keeping in mind that the bank, central banks don't even know what they'll do in terms of interest rates. So trying to predict it as a fool's, I don't know what this thing is, but fool's errand. Yeah, there you go. Yeah, that's why you'll never see me try to predict rates here because I'm just smart enough to know that I don't know and that no one else will either.

The same way no one can tell you what the broader stock market is going to do in the next 6 to 12 months. It is a fool's errand, as you suggested. Questrade is Canada's number one rated online broker by MoneySense, and with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. That is questtrade.com.

Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at Airbnb.ca forward slash host. That is Airbnb.ca forward slash host. That is airbnb.ca forward slash host.

Okay, Reddit. Have you been up to date on the Reddit drama or is this new to you? There's a lot of drama on the internet. Yeah, I've seen some headlines. Isn't that they'll start charging for third party using their APIs? Is that it? Something like that? That is yes you you're you're on the money so today is day two of a two-day reddit blackout

or a site-wide protest uh against the company for charging uh egregious pricing to third-party applications for their API. I'm going to get to what that is if you're new to the concept of an API. But, Simone, the first rule of protesting, all right? You never state when you're done your protest. The first rule of protest is never say, this is a two-day protest, because then you'll never get what you want. If I'm boycotting something and I'm like, I am boycotting this for 48 hours,

then the person being boycotted are like, oh, okay. So in 48 hours, you're going to be done your temper tantrum and we can go back to work. That's how these things get treated. So the first rule of protesting my friends on the internet don't state your end date you say internal further notice until we can come to a conclusion reminds me of remember etsy sellers when they were protesting these uh the higher seller fees seller fees yeah it kind of reminds me of that a little bit. Yeah, a little bit, right? It's like this happens anytime you have a two-sided marketplace or a social network, right? Like the users know that the platform relies on you to make their marketplace and to have that network effect.

their marketplace and to have that network effect. So the people who are moderators of Reddit know that Reddit relies on their basically free labor to moderate the website. So I mean, and it's fair enough. The only thing that I'll say is like, they do have a lot of power, like willingness here, because these people are just doing it for volunteer for whatever reason. I guess they really like that community, but every other social platform has droves and floors of people who do content moderation on Instagram and stuff. But anyways, let's get to the core of this. So more than 7,000 subreddits have gone private or read only in response to the API pricing, which is forcing developers of apps to shut down at the end of the month if they cannot afford the new pricing. This all started apparently from Christian Selig, who's the founder of the app Apollo, which to my knowledge is the most commonly used third-party application

for viewing Reddit. And so they posted that the app would have to be shutting down because they can't possibly pay this much for the API calls. So what is an API? I'll explain this like I'm five, like a good, like if I'm on Reddit. And to use an API means you simply are tapping into the technology or tapping into the infrastructure, tapping into the data of some other company or open source. So I'll use the example of Reddit. Say I wanted to build an app, Simone, which aggregates posts just on Canadian finance. So I'm going to make an app. I'm going to make a wrapper around it, make it look nice.

And it's going to bring in a feed of Canadian finance content from Reddit. And I'm going to tap into their API to do it so that it will come on to the app. I'm going to call it Credit, Canadian do it so that it will come on to the app. I'm going to call it Credit. Canadian Finance Reddit. You heard it here first. Brilliant name. Typically, an API will cost money to use. Every API that I subscribe to for Stratosphere, my companies,

we have contractual agreements, usually between thousands to hundreds of thousands of dollars per year to use an API. These are usually large business to business enterprise type contracts. And it costs money for the company to allow them to hit the API infrastructure. So if the API is free from Reddit and my little Canadian finance Reddit app can use it for free and charge money, I say I charge 10 bucks a month to use it, Reddit's getting, they're getting screwed out of this deal. All of a sudden viewers are not going on their platform because now they're not collecting that advertising revenue.

They're using their content and monetizing it off platform. Now, this is very, very common to allow people to use it for a cost, like for a fee. So apparently a bunch of people are users of this Apollo app and now protesting it. I personally never even heard of it before this, but I'm not a Redditor person. So I already see enough people arguing about politics on Twitter, just enough amount. So I'm good. I don't need to also go to Reddit. The problem here is the pricing is the unit economics fall off apparently because Apollo makes 500K in revenue, they disclosed, and the API will cost them around $20 million a year. So it's completely unfeasible from a business perspective. So perhaps the API needs to dramatically come down in price, but I don't think Reddit cares. Look, in my view,

this is a 48-hour protest from users of the platform because they're going to start charging third-party apps for Zabit free. No one cares. No one cares. It's such a mob mentality from these users of people who probably don't care at all. In two days, Reddit's going to be back to normal. Everyone who says they care about this API that they didn't even know they had, they don't care about third-party apps because they just go on Reddit anyways. They're going to go back to doom-scrolling Reddit in two days or two weeks. That's it. Done. Silly. Next story. It's funny watching the internet mob that is Reddit. I don't think this is,

I think this is going to be nothing in two weeks. And I'm almost positive I'm right on this one. Yeah, I was browsing and just having a look at what the Apollo app is. I think it's just a nav that taps into all of Reddit, basically, and it's just a different way to browse it. It's just a different UX and UI. Yeah, exactly.

I think the users think it's a better interface. So if I was that guy, I'd just sell it to Reddit. So apparently he tried. Oh, okay. This is where it gets kind of juicy, all right? So he tried to sell. He said, look, millions of people use my app because they like the UI better than what you guys have built. So why don't we just work together on a deal? If I'm not going to be able

to use this anymore, maybe you can buy us for a reasonable price and use this UX UI. And then you don't lose the like 15 million active users that only use Apollo versus Reddit and they basically shot that down and Reddit shot that down and he recorded the call and made it public and I don't know if that's legal um I don't know. Yeah, I'm not, you know, if any lawyer is, whether that's legal or not, I'm assuming the US. So let us know. Yeah. It might be state by state.

I don't know if that's legal. So I don't know if this guy just like completely sewered himself or not. But I don't think the this guy just like completely sewered himself or not, but I don't think the millions and millions of people who are protesting online give two shits about third party apps and their API. They probably just heard about it two weeks ago when this all or three days ago when this all spun out.

If you're going to protest, guys, you can't set an end date. This is the most elementary rule of protesting. Yeah, no, that was interesting. Like I said, I heard about it, but it's nice to get the breakdown here. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer

myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot

of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. I guess we'll move on to something we had alluded last week. So touch on it quickly. But the SEC, which is the Securities and Exchange Commission, the US, they are suing Coinbase, but also Binance, and they've also sued a bunch of other crypto exchanges. So it's not, for those who are following this a little bit,'ll probably know this it's not that much of a surprise for coinbase mainly because the sec what they do is those do send a wells notice

and they did so a couple months ago for coinbase and a wells notice is just a formal notification from the sec that it is considering bringing enforcement action against an individual or entity now the sec there's kind of three main points here I'll try to break it down so the SEC alleges that 13 coins or tokens or shit coins whatever you want to call them listed on Coinbase are considered securities and should be registered as such. They allege that Coinbase staking program is also a security offering. Staking is just a way to validate transaction on certain blockchains such as Ethereum. It's proof of stake now. And in return, you get a reward or a yield. And Coinbase really set it up in a way that they thought would comply with securities laws because

it was essentially a pass-through for users. So what the user would get would be whatever reward was associated with that staking minus just a fee from Coinbase, where other staking or yield programs that were being offered, they were essentially taking the user's money or assets and then using their discretion to try and get higher yield. So that's kind of different practices here. get higher yield. So that's kind of different practices here. And third, the SEC alleged that Coinbase wallet service count as a brokerage and is operating without being registered. This one is really weird because Coinbase is offering access to decentralized protocol. It has no control over through its wallet. And basically, the SEC is alleging that if you offer a wallet that lets user access decentralized protocol, you are in effect issuing the assets that are associated with that protocol. So it's really weird. Brian Armstrong, which is the CEO from Coinbase, tweeted after that. He gave an overview of the complaint and basically where they stand. One of the things that I had

mentioned is it's kind of funny that they're doing this now when they had allowed Coinbase to go public. And if they had issues with Coinbase, they could have voiced those issues or prevented them to even go public at that point but it's pretty clear at this time at this point that gary gensler who's the chair of the sec um that is definitely going after a lot of these crypto exchanges in the u.s they also sued binance and i won't go into much detail about binance because this one's a there's some similarities but it's different as well so there are some actions that are against specifically the ceo of binance cz um but the last thing here in terms of fallout is that the news came this whole sec action it actually led

robin hood which also has some crypto trading on its platform to announce that they would be delisting the coins that were named in the scc lawsuit against coinbase and binance and as a result i saw it etoro which is another global one is doing the same thing yeah yeah so essentially i mean what's happening in a nutshell is really, I mean, yeah, it's kind of weird what's happening in the US because there's no laws that are targeted towards crypto assets. this way um and we're gonna put some enforcement actions and coinbase is the first firm and they probably have they're the only ones that have the resources to do so most likely that are fighting against the scc because most of the time it's been settlements and agreeing to delist certain tokens or coins or stop certain services so exchanges exchanges have agreed to that with the SEC as a settlement. But Coinbase is basically saying, well, we'll bring you to court and we'll let the

courts decide whether you're interpreting that correctly or not. And they're also hoping that U.S. legislators will actually come out with legislation that is, you know, fair for cryptocurrency and addresses the differences between that and the traditional financial system. This is such a shit show. It's unbelievable. Yeah, unfortunately. Well, it's also one thing that's pretty interesting and has its own set of issues. But since the US is clear or the SEC, I would say, has clearly shown that they're cracking down on it. China has actually been changing its stance. So now they're allowing in Hong Kong, which is oftentimes a test ground for China.

So it's not mainland China, but it's also, you know, pretty much controlled by the Chinese government, even though it's like a special, you know, independent. the Chinese government, even though it's like a special, you know, independent, it's just very convoluted. But essentially, they are loosening rules in Hong Kong, which could be a prelude of what will be happening in mainland China, which they had banned crypto a few years ago. So it seems it almost seems like China, anything that the US does, it's trying to fill the gap counter position, exactly counter position i'm not saying that's a good or bad thing because as we know with china um they can definitely rug pull people they've done it before whether it's crypto whether it's traditional investing in stocks or you know or debt whatever it is i mean that's the reality when investing in China is that you don't have the

check-in balances that you have over here. This is what seems like a gray area in the law as it sits today. Both sides, the SEC. From the research I've done, both sides have very valid points on the same law, which is what makes this so confusing for pretty much everyone, including the people on both sides of this lawsuit, Coinbase and the SEC. Armstrong saying, look, you buffoons, you guys allowed us to go public in 2021. You reviewed our business. You know, we went public in the US via the SEC, now the same entity who wants to sue us, or is, should I say. And the rules are not clear, to Brian's point. They're not clear. It seems like they're open to interpretation. Both parties seem to be right, which is also confusing. clear and what I do I do know where this goes is they are Gensler's making their stance that this is un-American to have a competing currency right and everyone who's in that ecosystem

will not be handled nicely too and and and uh you know we talked about this on the last episode. If you think, if you thought the US will be friendly to a competing currency, you are off your rocker. That's my take. And I think we're seeing that play out in real time. Yeah. But what's funny in all of that is bitcoin is the one that's considered like a commodity and not a security so it's very that's right yeah it's very that's why it's you're right it's very confusing the stands are taking and uh you know i'm definitely obviously pro crypto for the most part but just watching some of the videos put out by g Gensler there there's definitely a lack of clarity right like you you would want him to be clear and even like kind of

seeing some clips of when he went in front of Congress and in you know different lawsuits with the SEC lawyers it's just very confusing their stance on it but like you said hopefully I mean to me as long you know it's law it's lawmakers right it's in their camp they need to you know agree and try to get to some kind of law pass that makes everyone i guess somewhat unhappy that way you know it's a good law. That's right. Yeah. No, I think you're right. And I am not a lawyer. I hate reading legal documents. It's like my, I'm allergic to legal documents and, uh, which sucks as a startup because I have to review a lot of legal and work with a lot of lawyers all the time. So it's, uh, that's, that's probably my least favorite part about my job.

So reading all of this stuff is like reading a completely different language to me. It's literally legalese for a reason. Yes. So far from my knowledge. I do think the SEC is right to point out that their mandate is to protect investors. That's their mandate, right? We can all agree on that mandate. That's the one that they are set out to do.

There have been a cesspool of bad actors in what I'll call crypto, which is basically what I think everything is outside of Bitcoin in all the other coins. The only thing I don't pull in there is Bitcoin because I think it has so much more utility and so much better than all of them combined. Everything else that's crypto, every project that's come out, 99.9% have gone to zero. They've been a tar pit of investors losing money, bad actors, scammers, and rug pullers. To protect investors, I will say investors in air quote, from losing money into these assets is probably a good thing. Now, what their actual motivations are behind that, I don't know. But there does need to be something done about the millions and hundreds of millions of dollars that have been scammed from what I'll say crypto over the past two years. And frankly, it's not cool. It's not cool at all seeing people lose their money, seeing people try to gamble

their hard-earned money and lose it all on very highly speculative assets that are backed by nothing with no utility. The world could do with a lot less of that. And if the SEC needs to get into in there to do that, I think that that's not such a bad thing. Again, this is just my interpretation. just yeah no i mean i get that point of view i mean obviously there's if you yeah i always kind of not flinch but um you know i'm always critical a little bit about the investor protections because you know there's frauds and scams just in the traditional stock market too uh maybe not to the same extent that's fine that's you know. But, you know, let's just remember the SPACs, right? Not saying they were all scams, but there was definitely some fishy ones where investors lost money. And at the end of the day, you know, people that invest are grown adults.

And you have to, you know, in a free market, you have to also allow people to decide what they invest in. So it's a very, I'm not saying that there doesn't need to be regulation. Don't get what I'm not saying, but I think there's a very fine line between, you know, trying to control what people invest in versus protecting them. And I think that's where there needs to be more clarity. Yeah, certainly. If you've been listening to the show for quite some time now and have not left us a review on your podcast player, ideally, if you're listening on Apple Podcasts, you can rate it five stars and then leave a little review. It'll take you all of the next 15 to 30 seconds from now. I'll start my timer. And that helps us quite a lot uh it really does so if you can go on there write something write something nice you know make us feel good get the endorphins bumping every time we read those and then you can also smash the five star thing on spotify all right

simone you have one more quick piece of news here uh which is looks canadian as well yeah it's canadian so um there's a new inter-switching law that will be coming into effect it's currently sitting with the senate it's gone through the house and obviously in parliament and um the the basically the law is gonna affect canadian national rail and cp or CPKS, but I'll refer to them as Canadian Pacific CP here. And the law targets inter-switching, which is essentially just when railroads from different companies meet. So if you look at a map of railroads across North America, you'll see that, you know, you'll see all different kinds of colors. Some will be, you know, you'll see all different kinds of colors. Some will be, you know, Canadian National Rail, CPKS, you also see Union Pacific and all these different other

companies. And when they meet, this inter-switching is currently set at a maximum of 30 kilometers, where, for example, Canadian National Rail could continue up to 30 kilometers on CP's rail, National Rail could continue up to 30 kilometers on CP's rail, but they would need authorization to do so. Now, what the new law that would be set to come into effect once this passes the Senate is that it would increase that 30 kilometers to a maximum of 160 kilometers. So that's a pretty significant difference. It's no surprise that the two railroads are pushing back saying it will increase shipping times and could make costs higher and that it is really solving a non-existent problem and that it would allow U.S. railroads to potentially expand operations into Canada. On the other hand, proponents of this new law,

including various grower associations, obviously we have a lot of, you know, various farmer associations in Canada, say that it would help competition and reduce prices. Now, apparently there was something similar done for a three year period in 2014, and the result was only a very, very tiny fraction of the grain transported was interchanged within that 160 kilometer span. So I own Canadian National Rail and I'd be more than happy to own CPKS if the valuation would come down a little bit. And from my perspective, I mean, I think it would be a good thing for competition obviously as an owner um i you know i guess it's good for cnr and cp for which hat am i wearing exactly but let's be fair i mean they're clearly pushing back because they have duopolies in canada like i won't you know i think it's uh yeah i'm kind of divided on that because i i personally think it's probably not a bad thing i think cnr and cp are probably overstating the impact that it would have on them and at the end

of the day i think i saw a quote they said well i mean if they think it's gonna increase competition they can always just you know where their price is why why would moving the inter-switching range from 30 kilometers to 160 kilometers introduce competition i i'm not understanding well it would for example when you have the railways that are meeting on the u.s border for example so it would just allow another carrier to use your rail for an extra 130 kilometers which would provide them additional revenue and you'd be i'm assuming i'm not 100% sure how it works but i'm assuming probably you know if they use cnr's 160 kilometers worth of rail cnr probably gets a tiny cost or a tiny fee for that but nothing compared if they were actually using their own rails so i think that's the logic behind it is

that extra 160 kilometer basically another company can just come and have a better price and use the the railways that aren't theirs right and i guess like context like industry context would would be very helpful because i'm just trying to picture like you know how far i can go with 160 kilometers just in my car i mean yeah i don't think it's it's it's significant but like i'm like thinking like pretty big countries yeah yeah like 160 kilometers in canada is like you know nothing yeah you don't even get from Ottawa to Montreal, like, basically. Yeah, yeah. That's, you know, like a fourth of a tank of gas. Like, it's – but I don't know.

Like, I don't have the domain knowledge to say, like, oh, that's going to, you know, drop a bunch of competition for stuff. No, and I mean, look, I think at the end of the day, it'll probably have a little bit of an impact but it won't change anything it'll still remain a duopoly in canada and obviously these two companies love having a duopoly um i mean it's good for business that's that's why i like railways because there's not much competition. And clearly that would. And no incentive for new competition.

Exactly. And that would just, I mean, maybe I'm wrong. And if someone's a railroad expert, they can let us know. But, you know, to me, I think it would just be incremental. But they're probably afraid that if this goes through, then potentially could be increased in the future. Right. probably afraid that if this goes through then potentially could be increased in the future right so they're probably like thinking a few steps ahead and say well if we if this goes through then it's opening a can of worms and things could get worse in the future so sometimes companies act like that right they they're not necessarily they're playing defense and against future

potential increases very interesting thank you so much for listening to the podcast simone uh you you did uh macro and real estate and crypto it's like you're like how can we make every topic that brayden has nothing useful to add into in one episode. I mean, yeah, yeah. The macro, I mean, I kind of talked a little bit of,

of real estate. You're like, how can we expose Brayden? Thanks so much for listening to the podcast. We really appreciate you. Um, we'll see many of you guys in less than a month the tickets are sold out as they are as i promised you yes i i think you know it's funny

as i think that there's 99 of 100 so i think that's actually not true i think there's like literally but you know like it could have been sold in this in this talk already uh nope not on the email i'm like nope uh but you know for all intents and purposes uh i told you guys it'd sell out so um maybe we'll open a couple more but highly unlikely but uh stay tuned for that if you still want to want to make it out we appreciate appreciate you listening. We'll see you in a few days. We're here Mondays and Thursdays. Again, timer end. Switch off the timer. Have you rated the show yet? If not, I can reset the timer. It's going to be 15 to 30 seconds if you're on Apple Podcasts to smash that. If you're in the car, right when you get out of the car, don't do this while

driving. That's just not safe. But after that, you're going to car, right when you get out of the car. Don't do this while driving. That's just not safe. But after that, you're going to want to leave us a little review and smash the five stars. Thank you so much. We'll see you in a few days. The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.