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Speaker 1: This is what the Flux.

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Speaker 2: I'm Brett and I'm justin As Wednesday, the sixth of November.

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Speaker 1: Juzzy boy. Optus have been through the PR wars over

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Speaker 1: the past couple of years, between major outages and cyber attacks.

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Speaker 1: You think it was all over now, but the age

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Speaker 1: riple see is still coming for Optus. It's taken Optus

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Speaker 1: to court for exploiting hundreds of vulnerable people by pushing

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Speaker 1: sales of phones and internet services even when OPTAs had

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Speaker 1: no coverage in the.

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Speaker 2: Area of this has really got to do something about

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Speaker 2: his PR here man, Uh huh. But Sam, As we

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Speaker 2: tick over to the new month of November, it means

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Speaker 2: a brand new chance to check your credit score and

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Speaker 2: see if it's gone up, if it's gone down. We've

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Speaker 2: got it all covered in the Flux app, including what's

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Speaker 2: impacting your score they shot it. Download the app and

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Speaker 2: check out your credit score to kick off.

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Speaker 1: November, three meaningful stories today, juzzy boy, Let's do it

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Speaker 1: for our first. Westpac has announced an annual profit of

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Speaker 1: seven billion dollars, which is actually a three percent drop

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Speaker 1: from last year. As mortgage competition ramps up.

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Speaker 2: To me like mortgage repayment pressure is ramped up, b Man.

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Speaker 2: So what is the story here?

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Speaker 1: Well, Jussie boy, we know Westpac once known as the

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Speaker 1: Bank of New South Wales a long time ago. It's

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Speaker 1: the third largest lender in all of Australia by market value,

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Speaker 1: and Westpac is constantly jostling with the other big banks

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Speaker 1: for new retail and business banking customers.

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Speaker 2: And now b Man. Westpax announced a net profit of

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Speaker 2: seven billion bukkaroonies for the past twelve months.

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Speaker 1: Which is actually a three percent drop this year compared

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Speaker 1: to last year.

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Speaker 2: And be man, the biggest drop in earnings came from

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Speaker 2: Westpac's consumer division. Yes, Jusi boy.

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Speaker 1: Westpac said that its revenue actually went down six percent

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Speaker 1: thanks to tough mortgage competition.

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Speaker 2: And its net interest margin fell to one point ninety

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Speaker 2: six percent.

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Speaker 1: Now do boyd? Despite weaker results for old Westpac, it's

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Speaker 1: crossing its fingers and toes that loan demand will jump.

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Speaker 2: And even though the RBA paused the cash rate yesterday,

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Speaker 2: they're hoping the RBA will start to lower the cash

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Speaker 2: rate in the coming months.

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Speaker 1: Wow, So what is the key learning here?

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Speaker 2: When the Reserve Bank changes its cash rate, the banks

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Speaker 2: will follow suit.

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Speaker 1: Most of the time you see Jusi boy. The cash

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Speaker 1: rate is the interest rate that banks pay to borrow

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Speaker 1: money from other banks.

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Speaker 2: So when the cost of borrowing goes up, the banks

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Speaker 2: like Westpac, they pass on that cost jump to consumers.

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Speaker 1: Yep. In twenty twenty three, the RBA up the cash

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Speaker 1: rate by zero point two five percent. In feb and

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Speaker 1: March and May and June and November and be.

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Speaker 2: Man, all four big banks increase the interest rate to

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Speaker 2: borrows by the same amount in the same months.

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Speaker 1: Now, Josey woy Oussie homeowners holding their very breadths for

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Speaker 1: the RBA to cut the cash rate early next year.

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Speaker 2: And they're holding their very breaths even more for the

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Speaker 2: banks to follow the RBA and give homeowners a little

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Speaker 2: bit of mortgage relief.

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Speaker 1: But of course, there's no guarantee that when the RBA

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Speaker 1: finally does cut the cash rate, the banks like Westpac

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Speaker 1: will actually mirror that move.

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Speaker 2: In fact, be Man back in twenty twenty when the

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Speaker 2: RBA dropped the cash rate from point five percent to

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Speaker 2: point one percent between March and November, the average variable

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Speaker 2: rate for homelans stayed at four point five two percent.

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Speaker 1: So we'll have to wait and see if once the

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Speaker 1: RBA starts reducing rates, the banks actually follow suit.

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Speaker 2: For our second story, Google has been fined two undercillion

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Speaker 2: rubles or twenty bacillion US dollars by a Russian court

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Speaker 2: after blocking Rush state media channels on YouTube.

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Speaker 1: Suddenly my ninety two dollar parking fine is put into perspective.

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Speaker 1: Boyfair to say, So, what's going on here?

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Speaker 2: Okay? So, back in March twenty twenty two, Google stopped

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Speaker 2: serving ads to use in Russia that believe was exploiting

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Speaker 2: Russia's war in Ukraine.

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Speaker 1: Indeed, Google blocked more than one thousand YouTube channels in

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Speaker 1: over five and a half million videos.

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Speaker 2: And now Russia has come back and find Google twenty

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Speaker 2: decillion US dollars.

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Speaker 1: But here's the thing, Jazzy boy, twenty dacillion US dollars

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Speaker 1: is more money than there is in the entire world.

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Speaker 1: But if Google does not pay the fine in the

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Speaker 1: next two hundred ninety one weeks, then the penalties will

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Speaker 1: increase to one Google.

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Speaker 2: Which is oh one, followed by one hundred zeros.

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Speaker 1: And z boys. Pretty obviously, Google couldn't even pay this

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Speaker 1: fine if they tried, But Russia's hoping that this fine

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Speaker 1: so big you can't even pronounce it will push Google

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Speaker 1: to lift destrictions on these channels.

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Speaker 2: So what is the key learning here?

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Speaker 1: Global tech giants and national governments can often find themselves

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Speaker 1: in a complex power struggle.

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Speaker 2: Yeah. On the one hand, countries recognize that big tech

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Speaker 2: that ribe innovation and provide jobs, and.

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Speaker 1: They contribute to their economies and sometimes they even paid

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Speaker 1: tax donavoy. Many governments are also looking for greater control

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Speaker 1: over big tech company. So the first time we've seen

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Speaker 1: battles between big tech and governments around the world. Well,

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Speaker 1: there was and still is the media bargaining battle between

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Speaker 1: Meta and the Australian government and media.

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Speaker 2: There was and still is the battle between TikTok and

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Speaker 2: the US government and whether it will be banned in

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Speaker 2: the US.

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Speaker 1: And then of course there's Russia's twenty Decilian fine of Google.

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Speaker 2: But man, it's pretty clear that Google has been wary

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Speaker 2: of operating in Russia for quite a few years now.

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Speaker 1: Yep. In twenty twenty one, Google made around one point

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Speaker 1: three billion US dollars in Russia, but.

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Speaker 2: In twenty twenty two it may just two hundred and

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Speaker 2: forty five million US dollars. So, b man, all this

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Speaker 2: fine could technically bankrupt Google, it doesn't seem like investors

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Speaker 2: are too concerned about them actually coughing it up.

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Speaker 1: For our third and final story, Peloton, the connected fitness company,

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Speaker 1: has seen a chair speed up twenty two percent after

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Speaker 1: its first quarter results smashed expectations thanks to a pretty

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Speaker 1: key pivot talking.

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Speaker 2: About going up a gear or three for Peloton. Be man,

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Speaker 2: so tell me what's going on.

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Speaker 1: Peloton is the fitness company known for that super fancy

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Speaker 1: exercise bike and.

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Speaker 2: Then it's super fancy treadmill.

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Speaker 1: Started way back in twenty twelve with a two hundred

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Speaker 1: and fifty thousand dollars Kickstarter campaign.

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Speaker 2: But Beman, it was during COVID when Peloton really made

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Speaker 2: a name for itself.

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Speaker 1: Yeah, Peloton was absolutely booming. Its market valuation jumped to

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Speaker 1: just under fifty billion US dollars, were all completely.

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Speaker 2: Nuts, and it became the at home bike of slabs

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Speaker 2: like Lizzo, Roger Federer, even mister Worldwide Pitbull.

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Speaker 1: Then vaccines hit the world and Peloton came hurtling back

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Speaker 1: down to earth.

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Speaker 2: Yep the bee Man. After struggling for the past few years,

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Speaker 2: Peloton could be gearing up for another comeback.

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Speaker 1: Yep, It's results exceeded guidance on all metrics. We're talking profitability,

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Speaker 1: we're talking growth, and it reduced its ad spend as well.

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Speaker 2: And be man, that's largely because Peloton pivoted like a

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Speaker 2: pro cyclist.

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Speaker 1: And now it's mainly focused on selling the subscriptions.

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Speaker 2: So what is the key learning here?

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Speaker 1: When you own the supply chain from end to end,

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Speaker 1: you stand to gain the most, but you also stand

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Speaker 1: to lose the most.

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Speaker 2: You see, be man. When Peloton launched, factured all of

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Speaker 2: its bikes and its treadmills in the US of A.

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Speaker 1: On top of that, the company also produced all of

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Speaker 1: its own content and its app, and it sold all

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Speaker 1: of its.

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Speaker 2: Own products directly through its website and nowhere else.

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Speaker 1: But doze boy. That meant that when times are good,

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Speaker 1: Peloton was peddling to glory.

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Speaker 2: When things got tough, they were left with over one

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Speaker 2: point four billion dollars worth of unsold bikes and treadmills.

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Speaker 1: That's a lot more than nineteen million dollars they were

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Speaker 1: sitting on just two years ago. Talk about a bumpy right,

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Speaker 1: So boy, Peloton has de risked his business by outsourcing

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Speaker 1: its production to Taiwan.

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Speaker 2: And outsource its distribution by selling through Amazon and.

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Speaker 1: Costco, and now it's focusing on nailing its subscription offering

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Speaker 1: plucks down. Did you know if you changed your electricity,

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Speaker 1: your gas, or even your phone fields that could impact

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Speaker 1: your credit score the micro app at microcown and so

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Speaker 1: many changes can happen each and every month. That's why

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Speaker 1: we've got the Flux Credit Score feature where you can

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Speaker 1: check what's happened in the last month, and it's all

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Speaker 1: within the nifty Flux app, So make sure to download

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Speaker 1: the app and check out your.

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Speaker 2: Credit score for the month of November.

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Speaker 1: Thanks for listening and we'll see you on Friday.