A deal for major cryptocurrency exchange FTX collapsed this week, raising serious doubts about the business model for all crypto assets.DADO RUVIC/Reuters
Getting caught up on a week that got away? Here’s your weekly digest of The Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Panic at the crypto: FTX crumbles
The crypto carnage continues. A deal for major cryptocurrency exchange FTX collapsed this week after its rival Binance pulled out from a proposed acquisition. FTX was once seen as a trustworthy oasis in a sketchy industry, and now its uncertainty has sent the prices of multiple cryptocurrencies plummeting and raising serious doubts about the business model for all crypto assets, Tim Kiladze reports. Since the FTX news broke, the prices of bitcoin and ether, the two most popular cryptocurrencies, have dropped significantly, and are now both down 76 per cent over the past year. Additionally, it’s sending shockwaves through Canadian investors including the Ontario Teachers’ Pension Plan, which has a US$95-million stake in FTX that they’re now at risk of losing.
Calling all millionaires: The Ottawa Senators are up for sale
Got an extra US$655-million? Consider taking a shot at buying an NHL team. After the two daughters of Ottawa Senators’ late owner Eugene Melnyk formally put the franchise up for sale last week, a number of potential bidders have emerged, including Vancouver-born celebrity Ryan Reynolds. As Andrew Willis reports, transport billionaire Michael Andlauer is the early favourite, with a proven relationship with NHL commissioner Gary Bettman and team owners as a minority partner in the Montreal Canadiens. The founder and chief executive of Andlauer Healthcare Group Inc. will face off with a number of billionaires who want control of the ice.
Finally, the price of used vehicles is falling
About a year ago, due to strong demand and supply disruptions, the price of used cars and trucks was up 45 per cent from the year before and accounted for one-third of the jump in core inflation. As Jason Kirby reports, that’s no longer the case. In October, used-vehicle prices declined for the fourth straight month, a sign that overall inflation has turned a corner. And even though price tags on used vehicles are still well above 2019 numbers, the annual price change has almost returned to its prepandemic flatline rate.
Lowe’s exit from Canada signals hardware industry shakeup
Canada’s hardware landscape appears headed for a shakeup after U.S. hardware giant Lowe’s announced last week that it was selling its Canadian retail operations – about 450 stores that operate under the Lowe’s, Rona, Reno-Depot and Dick’s Lumber banners – to New York private-equity company Sycamore Partners. According to Nicolas Van Praet, rival groups are already positioning themselves to sign on Rona dealers who decide to cut ties with the investment company. After a two-year period during which the hardware industry in Canada benefited from a surge in home renovations during the COVID-19 pandemic, retailers are now resetting sales forecasts and bracing for a recession.
More Canadian homeowners have mortgages longer than 30 years
A growing share of mortgage loans made by major Canadian banks now have amortization periods of more than 30 years, James Bradshaw and Rachelle Younglai report. With every interest-rate hike by the Bank of Canada, the cost to service a variable-rate mortgage rises. At most banks, however, the borrower’s monthly payment doesn’t increase right away. Instead, the amortization period – the time it takes to pay the loan off in full – gets longer. When the loan’s term comes up for renewal, the amortization has to snap back to its original length, which means a sudden increase in monthly payments. At RBC, BMO and CIBC, the percentage of mortgages with an amortization of more than 30 years recently doubled in a three-month span, which is one of the clearest indicators that stress is building on variable-rate mortgage holders, who are increasingly paying more interest and less principal on their loans.
Newer to Canada? Here’s how to raise your retirement pension
Old Age Security (OAS) pensions are something that nearly all Canadians count on for their retirement. The maximum monthly payout at age 65 is currently $685.50 and this increases every quarter in line with rises in the consumer price index (CPI). But not everyone is eligible for a full payout, which is reached after 40 years in Canada, after age 18. To even be eligible for an OAS pension, you need to have lived in Canada for at least 10 years after age 18. If you lived in Canada for between 10 and 40 years after age 18, your OAS pension at age 65 would be reduced proportionately. However, as Frederick Vettese points out, there’s nothing in the rules that says you can’t count years of residence after age 65. Here are two ways retirees who haven’t lived in Canada as long can increase their OAS pension.
Illustration by Erick M. Ramos
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Now that you’re all caught up, prepare for the week ahead with The Globe’s investing calendar.
Michelle da Silva