Latest / What the Flux / Fortescue & BHP spike after China's announcement | Visa's in hot water | The hidden costs of chocolate

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Fortescue & BHP spike after China's announcement | Visa's in hot water | The hidden costs of chocolate · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
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  Speaker 2: I'm justed and I'm harsh Steeve and it's Monday, the
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  Speaker 2: thirtieth of September.
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  Speaker 1: Actually, we know coals and woolies have had a very
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  Speaker 1: rough week last week after the discounting scandal. But now
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  Speaker 1: a government funded report are shown that coals and woollies
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  Speaker 1: are actually thirty percent more expensive than Audi on a
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  Speaker 1: standard basket of groceries. They are being whacked from pillar
• 0:25
  Speaker 1: to post.
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  Speaker 2: Couldn't have described it better myself, does fluxpam. As another
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  Speaker 2: month rolls over, another month of subscriptions gets direct debited
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  Speaker 2: We use AI to help identify your upcoming subscriptions and
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  Speaker 2: the total spend. So make sure to download the Flux
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  Speaker 2: app and check it out.
• 0:52
  Speaker 1: Three highly intelligent stories today, let's get into it for
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  Speaker 1: our first. The share price of Australia's biggest mining companies
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  Speaker 1: have jumped more than thirteen percent over the past week
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  Speaker 1: after a major stimulus announcement from China.
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  Speaker 2: Buzzy miners clinking their iron field glasses, Jazz, tell me
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  Speaker 2: what's going on here?
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  Speaker 1: Okay, So, as you know, HG, some of Australia's largest
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  Speaker 1: companies happen to be in the mining sector.
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  Speaker 2: We're talking BHP Group, Fordescue and Rio Tinto, whoever combined
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  Speaker 2: market cap of three hundred and thirty six billion dollars
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  Speaker 2: on the ASX alone.
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  Speaker 1: And actually the value of these companies is always huge,
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  Speaker 1: largely depends on the demand for their natural resources.
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  Speaker 2: Think copper, iron ore, coal and lithium.
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  Speaker 1: And a she This year, the price of iron ore
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  Speaker 1: has dropped by more than thirty five percent due to
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  Speaker 1: lower demand from the Chinese property market.
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  Speaker 2: But late last week, the Chinese government announced some major
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  Speaker 2: plans to stimulate their economy.
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  Speaker 1: Yeah, the Central Bank of China lowered interest rates and
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  Speaker 1: hinted more cash rate cuts to come.
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  Speaker 2: And then the Chinese government announced their dish out support
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  Speaker 2: to property developers and homeowners.
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  Speaker 1: We're talking over one hundred billion dollars worth of financial stimulus.
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  Speaker 2: Next minute, Fortescue, Rio Tinto and BHP all saw their
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  Speaker 2: shares more than thirteen percent, which is.
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  Speaker 1: A huge percentage growth when these companies are so big
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  Speaker 1: just to start with.
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  Speaker 2: So what's the key learning here?
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  Speaker 1: When China sneezes, Australia's miners catch the flu. But in
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  Speaker 1: this case it's a much needed dose of financial medicine.
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  Speaker 2: You see, China accounts for nearly half of the copper
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  Speaker 2: demand in the world.
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  Speaker 1: On top of that, China buys nearly seventy five percent
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  Speaker 1: of all of the global iron ore.
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  Speaker 2: So when the Chinese government announces plans to increase the
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  Speaker 2: development of property, it means it will need more building resources.
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  Speaker 1: Things like steel, which is made from ironore.
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  Speaker 2: Which is mined out of these Australian owned mines.
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  Speaker 1: Next minute, the price of iron ore jumps.
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  Speaker 2: And Ossie miners are rejoicing.
• 2:37
  Speaker 1: For our second story, Visa is being sued by the
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  Speaker 1: US Justice Department for allegedly and monopolizing the debit card
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  Speaker 1: market illegally.
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  Speaker 2: Justice Department coming after Meta Apple and Visa taking down
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  Speaker 2: the goliaths. What's going on here?
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  Speaker 1: Does we know Visa the global payments behemoth the process
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  Speaker 1: nearly fifteen trillion US dollars in twenty twenty three.
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  Speaker 2: It was founded back in nineteen fifty eight and has
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  Speaker 2: since exploded into a five hundred and thirty two billion
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  Speaker 2: US dollar business.
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  Speaker 1: Now, actually, Visa has found itself in seriously hot water
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  Speaker 1: with the US Justice Department.
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  Speaker 2: Yeah, Visa is being sued for allegedly monopolizing the debit
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  Speaker 2: card market illegally. The regulators reckon that Visa has used
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  Speaker 2: anti competitive pricing that penalizes merchants who looked for alternative
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  Speaker 2: payment methods.
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  Speaker 1: On top of that, Visas allegedly been paying potential competitors
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  Speaker 1: to stay out of the market overall, which is highly illegal.
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  Speaker 2: We're talking major plays in the payment space like PayPal.
• 3:31
  Speaker 1: Apple and Block and at she. After this news from
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  Speaker 1: the Department of Justice, visas share price sunk by over
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  Speaker 1: five percent out.
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  Speaker 2: Now, this illegal pricing apparently began back in twenty twelve,
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  Speaker 2: after the US passed new laws that required banks to
• 3:44
  Speaker 2: offer at least two debit networks to customers.
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  Speaker 1: And since then it seems like Visa's been using different
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  Speaker 1: tactics to maintain its market power.
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  Speaker 2: So what's the key learning here?
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  Speaker 1: When you try too hard to hold onto your power,
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  Speaker 1: you can risk losing it.
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  Speaker 2: All, you see, does since the US passed those laws
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  Speaker 2: to increase competition Visa has been scrambling to protect its dominance.
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  Speaker 1: We're talking getting merchants to sign agreements with tough anti
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  Speaker 1: competitive terms.
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  Speaker 2: And signing deals with the likes of Haypal, Apple and
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  Speaker 2: Block to prevent them from competing with Visa.
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  Speaker 1: And actually it was these deals that raised red flags
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  Speaker 1: in the regulator's eyes.
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  Speaker 2: You mean the deals Visa signed to protect itself from
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  Speaker 2: future threats that may or may not eventuate, me exactly.
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  Speaker 1: And Visa's not the only company that's faced legal trouble
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  Speaker 1: for being overprotective of its market power.
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  Speaker 2: Yeah. Just last month, Google was charged for paying twenty
• 4:28
  Speaker 2: six billion US dollars to companies to ensure that they'd
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  Speaker 2: keep its search engine as their default.
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  Speaker 1: So it she Sometimes the harder you try to cling
• 4:35
  Speaker 1: to control, the quicker it can slip through your fingers.
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  Speaker 2: For our third and final story, chocolate may become a
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  Speaker 2: whole lot more expensive in twenty twenty five, as the
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  Speaker 2: price of coco has jumped rapidly this year.
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  Speaker 1: Do not get between me and my Wittikers, has Zella,
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  Speaker 1: Chocolate Block, won't even try tell me what's going on here.
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  Speaker 2: Witterkers, Cadbury, Lind name your guilty pleasure jars. They all
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  Speaker 2: have one thing in common.
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  Speaker 1: I believe it's that coco is the main ingredients.
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  Speaker 2: That's right, But I've got some tough news to break
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  Speaker 2: to you. Cocoa prices have skyrocketed by ninety percent since
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  Speaker 2: the start of twenty twenty four.
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  Speaker 1: And now a new report from Rubbobank warns that chocolate
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  Speaker 1: is about to get a whole lot price.
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  Speaker 2: Heut, And what's the reason for this jump and cocoa prices?
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  Speaker 1: Well, Actually, cocoa producers have struggled with the double ammy
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  Speaker 1: of intense heat and intense rain over the past two years.
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  Speaker 2: And this has led to the lowest cocoa stocks in
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  Speaker 2: twenty two years, or the cocoa crunch as.
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  Speaker 1: We like to call it. So what is the key
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  Speaker 1: learning here?
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  Speaker 2: When the price of raw materials like cocoa goes up,
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  Speaker 2: it ripples through the entire supply chain.
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  Speaker 1: We've all heard of a chain reaction, a series of
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  Speaker 1: events where each is caused by the previous one.
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  Speaker 2: You see jazz. Seventy percent of the world's cocoa is
• 5:40
  Speaker 2: harvested in West Africa.
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  Speaker 1: And given the poor harvest last year, it's that to
• 5:44
  Speaker 1: cocoa prices jumping to a fifty year high.
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  Speaker 2: So the poor harvest impacts the cocoa farmers in West Africa,
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  Speaker 2: who then pass the cost onto factories of your favorite
• 5:52
  Speaker 2: chocolate brands.
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  Speaker 1: And then it gets passed along until it lands sadly
• 5:56
  Speaker 1: in your grocery basket.
• 5:57
  Speaker 2: So Jazz that Wiker's Block might be becoming and luxury
• 6:00
  Speaker 2: treats soon.
• 6:01
  Speaker 1: Yeah, am Netflix, Spotify your local gym Stan. Every single
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  Speaker 1: knowing it, and seventy seven center Flux users don't even
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• 6:12
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• 6:15
  Speaker 1: subscriptions in one spot in under thirty seconds. Make sure
• 6:17
  Speaker 1: to download the Flux out to check it all out.
• 6:19
  Speaker 1: HG a big, big thank you for an amazing effort
• 6:22
  Speaker 1: on the podcast over the last few weeks.
• 6:23
  Speaker 2: It's been a lot of fun, but I'm sure Brett's
• 6:25
  Speaker 2: really looking forward to coming back.
• 6:27
  Speaker 1: We'll definitely speak to you very soon on the pot
• 6:28
  Speaker 1: as well, So thanks so much for all your effort
• 6:30
  Speaker 1: at the last couple of weeks.
• 6:31
  Speaker 2: Yes, keen to be back again soon. Send us at
• 6:33
  Speaker 2: Thanks for listening, and we'll see you on Wednesday.