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