Speaker 1: This is what the Flux.
Speaker 2: I'm Brettan, I'm justin and it's Wednesday, the second of April.
Speaker 1: Chusey boy, it's officially by by to Vintage Sellers and
Speaker 1: first Choice liquor or as calls like to say they've
Speaker 1: gone into retirement from April. They'll all co by some
Speaker 1: version of Liquor Land, which supposedly has much better brand
Speaker 1: awareness than the others. Seems like all liquor stores still
Speaker 1: battling against the all mighty Dan Daniel, Dan the Man Murphy,
Speaker 1: very true.
Speaker 2: Man buck mamma. We saw the Reserve Bank make a
Speaker 2: big call yesterday on the cash rate and we have
Speaker 2: it all covered in the Flux App, including a deep
Speaker 2: dive into what a thirty six straight mortgage might look like.
Speaker 2: So if you're interested in what that is and how
Speaker 2: potentially could come to Australia and make sure to check
Speaker 2: it out in the Flux app.
Speaker 1: Three truly inspiring stories today, Jessey boy, Let's do it
Speaker 1: for our first. The Reserve Bank of Australia has paused
Speaker 1: the cash rate at four point one percent because it
Speaker 1: doesn't want to make any big moves before Donald J.
Speaker 1: Trump's tariffs.
Speaker 2: The RBA are certainly a cautious lot b man, so
Speaker 2: this isn't that surprising, tell me all.
Speaker 1: Well, juzzy boy. The RBA is obviously Australia Central Bank,
Speaker 1: which sets the cash rate.
Speaker 2: That's the interest rate that thanks lend to each other
Speaker 2: for borrowing.
Speaker 1: So when the RBA's cash rate goes up, the interest
Speaker 1: rate on your home loan typically goes up, and when
Speaker 1: the cash.
Speaker 2: Rate goes down, the interest rate typically goes down.
Speaker 1: Now, in feb the RBA cut the cash rate by
Speaker 1: zero point two five percent, down to four point one percent.
Speaker 2: And homeowners were shook us in a good way because
Speaker 2: the first cash rate cut they'd enjoyed since November twenty twenty.
Speaker 1: And now, Juzzy boy, the RBA crew have met once
Speaker 1: more with some new members and made their big call
Speaker 1: for April.
Speaker 2: And despite the date being April Fool's Day, the RBA
Speaker 2: were not clowning around.
Speaker 1: I can confirm there were no stand up routines or
Speaker 1: whoopy cushions on the chairs.
Speaker 2: And no, we've dropped rates to zero percent. Just kidding, nah.
Speaker 1: They decided to sternly and seriously pause the cash rate
Speaker 1: at four point one percent.
Speaker 2: The main reason they wanted to wait until Donald Trump's
Speaker 2: global tariffs are in iplemented before making any big decision.
Speaker 1: Yep, Trump's tariffs are supposed to come into effect.
Speaker 2: Today, or, as he calls it, Liberation Day.
Speaker 1: The biggest fear for many economists is that these huge
Speaker 1: tariffs could lead to global stagflation.
Speaker 2: So what is the key learning here?
Speaker 1: Stagflation is when a country suffers from stagnant economic growth
Speaker 1: and high inflation at the very same time.
Speaker 2: It's called the terrible two yes ce juz boy.
Speaker 1: When wages aren't rising and jobs are not booming, you'd
Speaker 1: expect economic growth to slow down.
Speaker 2: Because when the economy isn't doing well, people and businesses
Speaker 2: tend to spend less.
Speaker 1: But during stagflation, prices keep rising despite a slow economy.
Speaker 2: The man Right now, global markets are spooked by the
Speaker 2: potential impact of Trump's tariffs.
Speaker 1: And investors fear that Trump's tariffs will make that nightmare real.
Speaker 2: And then, man, we've already seen the caution in the
Speaker 2: share market, with the NAZDAK one hundred down more than
Speaker 2: eight percent so far.
Speaker 1: This year, and even the ASX two hundred has been
Speaker 1: down nearly three and a half percent this year so far.
Speaker 2: So the man holding rate steady gives the RBA more
Speaker 2: time to see how this plays.
Speaker 1: Out, especially with a wildcard like the US in the mix.
Speaker 2: For our second story, Woolies has slashed the price on
Speaker 2: its groceries last month to close the gap on AUDI
Speaker 2: and deflect atension from AAAK and the election campaign.
Speaker 1: Nothing to legislate here, folks. Just a community serving, small
Speaker 1: supermarket chain is what we are. What is going on here?
Speaker 2: Okay? So we know that Woolies is Australia's largest supermarket
Speaker 2: chain with nearly thirty seven percent of the grocery market.
Speaker 1: And jusiboy, there's a Woolwortz or a Woolies Metro on
Speaker 1: almost every single corner of this great land.
Speaker 2: In fact, be Man Woolarts has over eleven hundred stores
Speaker 2: across Australia. That is more than there are makers.
Speaker 1: And while Woolies has been steadily increasing their grocery prices
Speaker 1: over the last year or so, March was a totally
Speaker 1: different story.
Speaker 2: Yeah, Woolies cut their prices in March significantly. According to
Speaker 2: JP Morgan.
Speaker 1: The goal has been to bring the grocery price gap
Speaker 1: with AUDI to its lowest point in two years.
Speaker 2: Be Man Let's be honest, the timing is suspiciously convenient.
Speaker 1: Yeah, Both Woolies and Coals are under pressure from the
Speaker 1: AH Triple c's ongoing investigation as well.
Speaker 2: As polics being in full crackdown on greedy corporate's mood
Speaker 2: ahead of the election.
Speaker 1: In particular, Woolies and colls have heard threats about legislating
Speaker 1: against price gouging in supermarkets.
Speaker 2: So what is the key learning here?
Speaker 1: Supermarkets know the biggest threat to their empires isn't cheaper
Speaker 1: toilet paper, it's tighter regulation.
Speaker 2: And right now, be man, Woolies and coals biggest fear
Speaker 2: is legislation that will stop them from growing market share
Speaker 2: and growing profit margin.
Speaker 1: There are already laws banning price fixing between supermarkets, there
Speaker 1: are laws to ban predatory pricing that wipes out smaller competitors,
Speaker 1: and there are also laws to stop misleading price signage.
Speaker 2: But there's no laws stopping a supermarket from just jacking
Speaker 2: out prices to make more profit.
Speaker 1: That's what the government is calling price gouging. So juzzy boy,
Speaker 1: it's no surprise that as these threats come in, Woolies
Speaker 1: and Coals are dropping prices.
Speaker 2: Yeah, they're now only seven point eight percent and eight
Speaker 2: point five percent more expensive than Audi, respectively.
Speaker 1: Down down from eleven percent plus just last year. That's
Speaker 1: according to JP Morgan.
Speaker 2: So now it's all about the optics for the supermarkets,
Speaker 2: keeping things look in friendly fair.
Speaker 1: For our third and final story, open ai has announced
Speaker 1: that it's closed the largest round of capital ever raised
Speaker 1: by a private company, pocketing a tasty forty billion US dollars.
Speaker 2: Wow, they've raised more than the whole value of Telstra
Speaker 2: in just one afternoon, b Man, so tell me more well.
Speaker 1: Open Ai launched in twenty fifteen as a nonprofit research
Speaker 1: lab that focused on exploring AI and ensuring it benefited
Speaker 1: all of humanity.
Speaker 2: In twenty twenty two, b Man open Ai launched its
Speaker 2: now famous chatbot, chatchapt, which revolutionized how everyone did things
Speaker 2: like applying for jobs, like getting travel tips, like writing
Speaker 2: university essays. In fact, be Man chatchpt became the fastest
Speaker 2: growing consumer app ever, hitting one hundred million users in
Speaker 2: just two months.
Speaker 1: And now chatchpt has more than five hundred million weekly
Speaker 1: users and open ai has become a household name.
Speaker 2: So now open AI's raised forty billion US dollars, which
Speaker 2: values the company at three hundred billion US dollars.
Speaker 1: And Jullie Boyd. This has become the largest ever round
Speaker 1: of capital raised, more than triple the previous record.
Speaker 2: But be Man. Because of the unique structure of open
Speaker 2: ai as part four profit and part nonprofit, the shares
Speaker 2: are expected to be issued as convertible notes.
Speaker 1: So what's okay learning here?
Speaker 2: A convertible note is essentially a load that can be
Speaker 2: converted into shares of the company at a later date.
Speaker 1: There are specific events that cause the convertible note to
Speaker 1: convert into equity. In this case, the condition is when
Speaker 1: open ai converts into a four profit structure, which must
Speaker 1: happen by the end of twenty twenty five.
Speaker 2: In fact, be Man, open Ai will only receive ten
Speaker 2: billion US dollars.
Speaker 1: Up front, and if they're unable to convert to a
Speaker 1: for profit structure, this forty bill may end up being
Speaker 1: just twenty bill.
Speaker 2: Just twenty bill. Flexam, have you ever heard about the
Speaker 2: thirty year fixed strate mortgage? It is very hot in
Speaker 2: the US, but it doesn't exist in Australia yet. We
Speaker 2: break it down in the flux app what it is,
Speaker 2: how it's used, and why it might be useful to
Speaker 2: have in Australia as well. To make sure to download
Speaker 2: the Flux app to check it out.
Speaker 1: Thanks for listening and we'll see you on Friday.