Latest / What the Flux / RBA's big rate cut | Bendigo & Adelaide Bank run out of cheap money | The New York Times' AI backflip

Transcript

RBA's big rate cut | Bendigo & Adelaide Bank run out of cheap money | The New York Times' AI backflip · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Wednesday, the nineteenth
• 0:09
  Speaker 2: of February.
• 0:10
  Speaker 1: Boy, we knew about the proposed match made in the
• 0:12
  Speaker 1: Heavenly Skies between Virgin Australia and Qatar Airways, but this
• 0:16
  Speaker 1: was subject to a Triple C approval, and although the
• 0:18
  Speaker 1: A Triple C hasn't given the all clear one goal
• 0:21
  Speaker 1: just yet, they've again hinted that this deal could be
• 0:23
  Speaker 1: good for consumers and Virgin and Guitar are licking their lips.
• 0:26
  Speaker 2: European fliers also licking their lips. B Man, fus Man.
• 0:30
  Speaker 2: You have most certainly probably heard about the RBA's cash
• 0:33
  Speaker 2: rate update from yesterday, and if you have, we have
• 0:35
  Speaker 2: it all covered in the Flux out what happened, why
• 0:38
  Speaker 2: it happened, and what you should be doing right now
• 0:40
  Speaker 2: given the RBA's big decisions. Make sure to download the
• 0:43
  Speaker 2: Flux app to check it all out and win it money.
• 0:45
  Speaker 1: Three impactful stories today, Juzzy boy, let's do it for
• 0:48
  Speaker 1: our first, the Reserve Bank of Australia has cut the
• 0:51
  Speaker 1: cash rate for the first time since twenty twenty.
• 0:54
  Speaker 2: This is big news for Ossie homeowners and kind of
• 0:56
  Speaker 2: picked the banks as well, be man, So tell me
• 0:58
  Speaker 2: what's going on here.
• 0:59
  Speaker 1: Well, we know that the rb has been sitting on
• 1:01
  Speaker 1: its hands for a very long time. Yeah, thirteen of
• 1:03
  Speaker 1: the last fourteen meetings have seen eight bars on the
• 1:06
  Speaker 1: cash rates. In fact, the last time we saw a
• 1:08
  Speaker 1: rate cut was in November twenty twenty, back when Wap
• 1:11
  Speaker 1: by Cardi B was the hottest track on the radio.
• 1:14
  Speaker 2: And the Wap Dance was the hottest and most inappropriate
• 1:16
  Speaker 2: trend on TikTok.
• 1:17
  Speaker 1: But does wait. With inflation figures trending in the right direction,
• 1:20
  Speaker 1: the RBA has decided to cut the cash rate by
• 1:23
  Speaker 1: zero point two five percent, and.
• 1:24
  Speaker 2: That means the cash rate is now sitting pretty at
• 1:26
  Speaker 2: four point one percent.
• 1:28
  Speaker 1: And the big news is that the big four banks
• 1:29
  Speaker 1: all agreed to pass on the cash rate to their customers.
• 1:32
  Speaker 2: Watching the BN man Michelle Bullock, who's the RBA governor,
• 1:35
  Speaker 2: wants Ozzie to cool their jets.
• 1:38
  Speaker 1: Yep, she reckons the cash rate was a line ball decision,
• 1:41
  Speaker 1: so don't go expecting big cuts over the next few months.
• 1:43
  Speaker 1: What is the key learning here?
• 1:45
  Speaker 2: The RBA is walking a financial tightrope and one wrong
• 1:48
  Speaker 2: step can cause inflation chaos all over again.
• 1:50
  Speaker 1: On the one hand, the RBA wants to provide financial
• 1:53
  Speaker 1: relief to borrow is by cutting the cash rate.
• 1:55
  Speaker 2: On the other hand, it needs to ensure the stability
• 1:57
  Speaker 2: of the Australian economy.
• 1:58
  Speaker 1: Largely by ensuring inflation remains in Chair and b Man.
• 2:02
  Speaker 2: While the inflation number is trending in the right way,
• 2:04
  Speaker 2: there are still a number of concerning factors. We've got
• 2:06
  Speaker 2: a tight labor market, We've seen retail spending increase for
• 2:09
  Speaker 2: the first time in two years. There is uncertainty around
• 2:12
  Speaker 2: Donnie T's tariffs as well or which could lead to
• 2:15
  Speaker 2: higher inflation.
• 2:16
  Speaker 1: So jazzy boy. This is why the RBA governor expressed
• 2:18
  Speaker 1: pretty directly that we are unlikely to see another cut soon.
• 2:22
  Speaker 2: But be man, that ain't stopping the big four banks
• 2:24
  Speaker 2: from predicting more rate cuts in the future.
• 2:26
  Speaker 1: That is true. A and Z reckons will see one
• 2:28
  Speaker 1: more this year. CommBank reckons we'll see two more rate
• 2:30
  Speaker 1: cuts this year. And NAB and Westback are excited. They
• 2:33
  Speaker 1: reckon we'll see three more rate cuts this year.
• 2:36
  Speaker 2: In total, down a whole one percent.
• 2:38
  Speaker 1: For our second story, Bendigo and Adelaide Bank has seen
• 2:42
  Speaker 1: at share price drop by more than fifteen percent if
• 2:44
  Speaker 1: you don't mind. And that's just for this week after
• 2:46
  Speaker 1: it ran out of cheap money invests.
• 2:49
  Speaker 2: Unanngry be Man. They're just disappointed and let me tell
• 2:51
  Speaker 2: you that stings a lot more so tell me what
• 2:53
  Speaker 2: happened here.
• 2:54
  Speaker 1: Well a bit of boutground. Bendigo and Adelaide Bank is
• 2:56
  Speaker 1: the sixth biggest bank in Australia based on market value,
• 2:59
  Speaker 1: and Bendio Bank has.
• 3:00
  Speaker 2: Been around the bush literally.
• 3:02
  Speaker 1: Yeah, it's been around since eighteen fifty eight and specialized
• 3:05
  Speaker 1: in being the biggest quote community bank as it calls itself.
• 3:08
  Speaker 1: Now b Man Bendigo Bank merge with Adelaide Bank in
• 3:11
  Speaker 1: two thousand and seven when it became Bendigo and Adelaide Bank.
• 3:14
  Speaker 1: It's quite huge and it also happens to be the
• 3:16
  Speaker 1: owner of UP after fully acquiring UP in twenty twenty one.
• 3:19
  Speaker 2: But now be Man Bendigo and Adelaide Bank has announced
• 3:22
  Speaker 2: that its deposits group over five percent in the last half.
• 3:25
  Speaker 2: That's good. It's residential lending also increased over five percent
• 3:28
  Speaker 2: in the last half.
• 3:29
  Speaker 1: Very good.
• 3:29
  Speaker 2: But before you're too excited, Bendigo and Adelaide Bank, so
• 3:32
  Speaker 2: it's net interest margin dropped by point six percent.
• 3:35
  Speaker 1: Wow. So what does this all mean, Juzzi boy.
• 3:37
  Speaker 2: Well, it received too much demand for loans, which meant
• 3:40
  Speaker 2: it needed to use expensive wholesale funding.
• 3:43
  Speaker 1: But investors were not happy with this and its share
• 3:45
  Speaker 1: price dropped by more than fifteen percent.
• 3:47
  Speaker 2: So what is the key learning here?
• 3:49
  Speaker 1: Too much demand for loan is a bad thing when
• 3:51
  Speaker 1: you don't have enough cheap money lying around.
• 3:53
  Speaker 2: You see, b Man banks typically fund their home loans
• 3:56
  Speaker 2: in two ways.
• 3:57
  Speaker 1: Firstly, they fund it through deposits from their retail customers.
• 4:01
  Speaker 2: For example, when you put money in a savings account,
• 4:03
  Speaker 2: the bank will lend a portion of your funds to someone.
• 4:05
  Speaker 1: Else and does it wait. Retail deposits are generally the
• 4:07
  Speaker 1: best source of funding.
• 4:08
  Speaker 2: The bank may give you four percent interest and lend
• 4:11
  Speaker 2: out your money at six percent.
• 4:12
  Speaker 1: The other way that banks fund their home loans is
• 4:14
  Speaker 1: through wholesale funding.
• 4:15
  Speaker 2: That's money borrow from big investors, from superfunds and other
• 4:18
  Speaker 2: financial institution.
• 4:19
  Speaker 1: Which is often more expensive for a bank.
• 4:21
  Speaker 2: So when banks don't have enough retail deposits to fund loans,
• 4:24
  Speaker 2: they have to turn to wholesale funding.
• 4:26
  Speaker 1: Now, for Bendigo, this became a problem because loan demand
• 4:29
  Speaker 1: grew beyond what its deposits could handle.
• 4:32
  Speaker 2: Which meant they had to rely on wholesale funding, which
• 4:34
  Speaker 2: increased its costs.
• 4:35
  Speaker 1: And squeezed margins.
• 4:36
  Speaker 2: And next minute, it's cash profits fell ten percent lower
• 4:39
  Speaker 2: than the previous half out for our third.
• 4:42
  Speaker 1: And final story, The New York Times has given the
• 4:45
  Speaker 1: all clear one goal for its staff to use AI
• 4:48
  Speaker 1: tools to write social copy and even editorial ideas.
• 4:52
  Speaker 2: Interesting update from The New York Times. B Man never
• 4:54
  Speaker 2: one eighty. I'm sniffing around, so tell me more.
• 4:56
  Speaker 1: Well. The New York Times is an American daily newspaper
• 4:59
  Speaker 1: that was founded in eighteen fifty one, and since then
• 5:02
  Speaker 1: it's become the most read newspaper in the whole world,
• 5:04
  Speaker 1: with more than eleven million subscribers. We'd be talking latest news,
• 5:08
  Speaker 1: opinion pieces, games, Hello wordle podka, Hello the Daily Now
• 5:11
  Speaker 1: does it wait?
• 5:12
  Speaker 2: Back?
• 5:12
  Speaker 1: In December twenty twenty three, The New York Times sued
• 5:14
  Speaker 1: open ai and Microsoft for copyright infringement.
• 5:17
  Speaker 2: They claimed that open ai was using its stories to
• 5:20
  Speaker 2: train its chatbots, and it.
• 5:22
  Speaker 1: Was stealing billions of dollars worth of work that was
• 5:24
  Speaker 1: done by hard working journalists.
• 5:26
  Speaker 2: And this is a major lawsuit taking a stand for
• 5:29
  Speaker 2: traditional media.
• 5:30
  Speaker 1: But now the same New York Times has given its
• 5:33
  Speaker 1: editors and staff the all clear to use its new
• 5:36
  Speaker 1: AI tool named Echo.
• 5:38
  Speaker 2: They're allowed to use this AI tool to develop editorial ideas,
• 5:41
  Speaker 2: brainstorm interview questions, or even help with research. So what
• 5:45
  Speaker 2: is the key learning here?
• 5:46
  Speaker 1: If you can't beat them, sue them and then join them.
• 5:49
  Speaker 2: Media companies are stuck in a love hate relationship with
• 5:52
  Speaker 2: AI yep.
• 5:53
  Speaker 1: On the one hand, from a business perspective, they understand
• 5:55
  Speaker 1: the value of AI.
• 5:56
  Speaker 2: It can help with ideation of articles, research, even summarizing
• 5:59
  Speaker 2: long end the jazz Boy.
• 6:00
  Speaker 1: On the other hand, the New York Times has built
• 6:02
  Speaker 1: its empire on quality and integrity.
• 6:05
  Speaker 2: So I've got a question for you, b Man, How
• 6:06
  Speaker 2: does The New York Times maintain that while giving AI
• 6:09
  Speaker 2: a key to the news room.
• 6:10
  Speaker 1: Well, having thought about that Jazzy Boy, we know that
• 6:12
  Speaker 1: a number of other media outlets have already made deals
• 6:15
  Speaker 1: with AI companies. For example, NewsCorp has encouraged its staff
• 6:18
  Speaker 1: to use AI and even has AI journalist producing more
• 6:22
  Speaker 1: than three thousand articles a week wow in its local papers.
• 6:25
  Speaker 1: So b Man, time will tell whether the New York
• 6:27
  Speaker 1: times will lean further into AI while also sewing open
• 6:29
  Speaker 1: AI for everything they've got flex am. If you're a
• 6:32
  Speaker 1: homeowner app, you might be very excited.
• 6:33
  Speaker 2: By the RBA's cash right cast, but what does it
• 6:35
  Speaker 2: actually mean for you and what should you be doing
• 6:38
  Speaker 2: right now? Well, in the Flux app, we've got a
• 6:40
  Speaker 2: whole list of things you should be looking at right
• 6:41
  Speaker 2: now if you want to capitalize on the ray casts.
• 6:44
  Speaker 2: So make sure to check out the Flex app to
• 6:45
  Speaker 2: learn some of the steps that homeowners can take during
• 6:48
  Speaker 2: a raate cut.
• 6:48
  Speaker 1: Thanks for listening, and we'll see you on Friday.