How do soccer matches affect market liquidity?

Adam: [00:00:25] Hello and welcome to Comedian versus Economist. We demystify the world of money and help you get a handle on the bigger picture. My name's Adam and we're joined, as always, by my little older brother and real life economist. Thomas. Hi, Thomas. 

Thomas: [00:00:38] Yeah. Good. Adam, how are you going? 

Adam: [00:00:40] I'm doing very well, thank you. Thomas, have you even bought me a present yet? This year for Christmas. You'll be here before you know it. 

Thomas: [00:00:48] Right? Yeah, I should get onto that. Thanks for the reminder. 

Adam: [00:00:53] Well, if you are looking for a present service for a loved one, i.e. me or you, just a nice stocking feel or even a treat for yourself. Then check out the Equity Mates Get Started Investing feed book. It is available online at BookTopia and at all good bookshops. So perhaps keep that in mind when you're shopping. Thomas It's not much I don't know. I don't know the price, but I think I'm worth it. 

Thomas: [00:01:17] Yeah, and as reasonable, I mean, you don't read those or whenever audible versions. 

Adam: [00:01:22] This is true. But I do often have things that I need to raise up slightly, so it will definitely come in handy. And it is at a good rate. It is a good rate, definitely. I recommend that one massive show comes up as we bid who through to Deliveroo, customers are left wondering just who their next meal is coming from. The UK had another mini budget. Did the Prime Minister survive this one? Who even is the Prime Minister anyway? And the FIFA World Cup in Qatar is having an impact on liquidity. And I'm not just talking about the lack of beer. But first, Thomas, we've got pages of wages. What did we learn? 

Thomas: [00:02:05] Well, it comes in three stages. 

Adam: [00:02:10] And this goes on for ages. Yeah. All right. 

Thomas: [00:02:14] Yeah. Now, we went to data points last week from the labour market, the two big ones, real unemployment rate and our quarterly look at wages. Hmm. Unemployment rate dip back down to 3.4% in October. So total jobs up 32,000, which was a decent result. But yeah, basically, I mean the monthly labour force data chokes around a bit. So the story is you are holding it 3.4%. 

Adam: [00:02:38] Do we have a target band for unemployment like we have for inflation? 

Thomas: [00:02:41] I don't. We don't. We don't. 

Adam: [00:02:43] It wouldn't be a good look for the 950. Does it have a target band tag? You really want to see around 10% of the country unemployed. That's when we'll be happy. We're doing everything we can. We're pulling out all the stops to get rid of jobs. 

Thomas: [00:03:01] Suddenly the labour market remains very tight. I sort of another interesting data point where it looked at the number of job openings as a percentage of the labour force, and typically that's around 1 to 1 and a half percent. But since COVID has jumped up to around three and a half percent and it's been holding there. Yes. A lot of a lot of open jobs. Right. A lot of jobs are going. Not a lot of people fill them. The basic story there. So, yeah, very tight still. 

Adam: [00:03:25] So you have to question what the 3.4% of people are doing there. So many jobs open there. That's what we say. 

Thomas: [00:03:33] No, no, no. The number of vacancies as a share of the labour force is at three and a half. 

Adam: [00:03:37] Oh, as a share of the labour force, yeah. 

Thomas: [00:03:39] Oh yeah. But 3.4% of people are unemployed. 

Adam: [00:03:43] Yeah. 

Thomas: [00:03:43] Yeah. Well, it takes a while to find a job. 

Adam: [00:03:47] I'm just trying to get you to say something controversial. Now, I understand. It's. Some of these jobs are. Yeah, well, we get a lot of job openings for doctors. As much as Barrie. I'd love to give it a crack. I'm not sure that's where we need to be as a society.

Thomas: [00:04:10] The labour market's been very tight for most of the year but wages for the September quarter, they came out at 1% in the quarter which was higher than expected, 3.1% over the year, a bit higher than expected as well. First time annual wages are above 3% since 2013. So that was seen as a pretty strong number. But isn't all that strong? It's not. 

Adam: [00:04:36] No, I was going to say because inflation is what seven seven. 

Thomas: [00:04:40] Mm. 

Adam: [00:04:42] So it's kind of, it's never going to be anything we can talk about it being a strong number of wages growth. 

Thomas: [00:04:47] And if your wages. 

Adam: [00:04:49] Are trailing then yeah, it's trailing inflation by 8%. I mean like cracking numbers if this is ten years ago, great job.

Thomas: [00:04:56] Either. Yeah, semester. Yeah. 

Adam: [00:05:03] We're on point. We're right on track with inflation. A two 3/% target band. We got wages roughly 3% by just killing it. RBA But. Near and. 

Adam: [00:05:12] Without what the RBA got to do with wages, anything. They've just got interest rates. 

Thomas: [00:05:18] Yeah, they think about it a lot. They think about, well, I mean, good. The thing is, so the RBA reckons that you can have wages growing at sort of around 3.75 to 4%. That is consistent with inflation in the target band of 2 to 3%. So wages growth above up to 4% isn't a problem as far as the RBA is concerned. So wages at 3.1 is definitely not a problem. So it probably means that there's nothing there that the RBA is going to be worried about at all. And the other thing is that September was really the quarter where you would have expected wages to pop because you had the Fair Work Commission had the minimum wage review and that handed down a pretty big number, 4.6 to 5.2% depending on where you were in the spectrum. So that was big and that's in this data. So that should have shown up. The immigration's only just starting to come back through this quarter's just come back and that's kept the labour market tight. Like there's, I think it was sort of like this that the labour force is 430,000 people smaller than it would have been if the pandemic hadn't interrupted immigration. Right. So it's a big, big drop in the labour force, which is why the labour market is so tight, that extra extra work for an expanded workforce would put downward pressure on wages. So, yes, so that's when immigration starts to come back. That should help the labour market soften. But that hasn't started just yet. The obvious rate hikes hadn't really taken effect in the September quarter. They're just sort of starting to work their way through the system. Right. And September quarter is normally your busiest quarter for wage adjustments. It's normally when a lot of awards roll over and that flows through to other sectors. And typically, yeah, September is when most companies I don't know about most, but that's a busy quarter for wage adjustments. So you really should have seen a big number if you've got if you're going to see a big number in wages, it would have been this quarter. Hmm. But we didn't see 3.1%, which is whatever. So I like the idea that suggests there's no evidence of a wage price spiral in Australia, like wages are not getting out of hand, wages are not feeding through into inflation. We don't need to be worried about wages driving up inflation. It's just there's just no evidence of that in the data. 

Adam: [00:07:49] Okay. So does that mean that inflation then is out of hand? Like it's just a runaway doing its own thing. 

Thomas: [00:07:57] Little bit more means it's still mostly driven by supply shocks and energy prices. Right? That's that's what it is. And so it's not it's not it's not self-perpetuating yet. Hmm. And that's that that's the worry that the central banks have, is that you say if they leave it for too long, it becomes self-perpetuating. And then it just goes and goes and goes, hmm. On this data with wages at 3.1%, as soon as those supply shocks work through the system, inflation should just come straight back down. 

Adam: [00:08:26] Yeah, maybe. 

Thomas: [00:08:27] That's what that means. Yeah. Which then means that there's no real need to stomp on demand by jacking up interest rates. 

Adam: [00:08:34] Right. 

Thomas: [00:08:35] That makes sense.

Adam: [00:08:36] Yeah. That feel to not to the interest rates. Yeah, we know you live, right. So you write you thinking like the next RBA meeting that they won't raise rates. Is that or is it going a little bit longer to play out. 

Thomas: [00:08:51] Yeah, I think they're probably a bit committed, but I probably reckon one more in December and then possibly done right. 

Adam: [00:08:58] Possibly done.

Thomas: [00:08:59] Possibly done. Yeah. Yeah. Because you also got so sick, you know, the job agencies seek. Yeah, they publish an advertised salary index and that's rolled over. So that was up around like 4.4, 4.5. That's now 3.7. So it's clearly rolled over. 

Adam: [00:09:19] What is that, 4.4, 4.9% of the job? Is that the job openings? 

Thomas: [00:09:25] No, that's the salary index. So the advertised salary index. So they take all the salaries and pay the pay scales advertised on the jobs on the platform. Yeah. And create an index. 

Adam: [00:09:36] I just have no reference for the number like 4.4, 4.4%. 

Thomas: [00:09:42] That's a growth rate. That's what they're saying. 

Adam: [00:09:44] Oh, I got you. Okay. That's what I'm missing. 

Thomas: [00:09:47] Yeah, right. So, are you all right? Yeah. Go back to ignoring you. 

Adam: [00:09:53] Well, in this case, it's inside percent. So I was like, I didn't know if it was just a number that you could come up with. Maybe they had an index of some kind like I get. 

Thomas: [00:10:04] Yeah. For. 

Adam: [00:10:05] For jobs available and. 

Thomas: [00:10:10] There's no wage pressure. It's not a story it doesn't look like. So in that sense, you know, you feel like we're kind of back to sort of something neutral like everyone's worried about recession in 2023 if that's the worry. Like let's ease off the rate hikes and just see what see how it flows. 

Adam: [00:10:28] Yeah, right. Because like, that sounds like we're headed towards smooth sailing, but everyone's still talking about recessions. So, like, the way you're sort of framing it and, you know, the way I'm hearing it is like we're good now. We're like, you know, wages are kind of about where we want to be. Inflation's higher, but it's going to start coming down like we're kind of soft landing now.

Thomas: [00:10:55] I think I think on this data at least, it suggests that we're kind of looking to nail that soft landing.

Adam: [00:11:01] Where we land this baby on an aircraft carrier where we're going skinny little, skinny little dirt dirt road in a field 200 metres long touchdown. 

Thomas: [00:11:15] We might land that soft landing. But the real question, the real problem, I think for the Australian economy is like when does wages ever grow? You know, if you got unemployment at 3.4%, inflation in the sevens and wages are growing at 3.1%. When do you ever get decent wage growth? Like if it's not now, then when is it? And so I think there's something I don't know structurally wrong with the way the labour market is constructed at the moment. And maybe it's you know, I think, yeah, it's just Labour's bargaining power has been eroded over the years to a point now which I think is, is kind of problematic. It means we're seeing big falls in living standards. 

Adam: [00:11:55] Hmm. 

Thomas: [00:11:55] Yeah. Real household incomes are going to have the biggest fall since the 1990s recession based on the budget projections, because the real tax inflation's eating into that spending plus real wage. Real wages are going down. Yeah. Yeah. It's worse than the 1990s recession in terms of household disposable income. Like that's not a great outcome. Like that's if that's, there's, there's something problematic there that needs, needs addressing. 

Adam: [00:12:18] All right. Can you turn that into a chant on the, you know, in the protest march, like if not now, when, you know, that kind of core response, like, you know, get out there. What do we want? Wages growth, if not now, when you. Yeah, that kind of. Yeah. Oh I'll be there. I'll be well. I'll probably live stream it, but you have my support. All right, Thomas. What happened to Deliveroo? 

Thomas: [00:12:52] Yeah. Deliveroo is Deliveroo today. 

Adam: [00:12:55] Yeah, I can do parts two deliveries. Good. Yeah. 

Thomas: [00:13:00] Another Australian operation has gone into voluntary administration, so they're just, they're just winding it up. There's 120 staff getting laid off, 15,000 riders that work and 12,000 restaurants have become infected by it. 

Adam: [00:13:15] So they were all it was. It was all boxed, wasn't that Deliveroo?

Thomas: [00:13:19] Yeah, yeah, I think so. 

Adam: [00:13:20] Mostly like where, you know, I, they just had lots of petrol powered bikes roaming the cities there.

Thomas: [00:13:26] That's the images. Yeah, I think that's right. Yeah, definitely. Oh there you know the images of them are of people on big bikes with big. 

Adam: [00:13:33] Boxes can make it tough when it comes to selling off the assets. And it's not a lot of money and second hand bikes with big boxes and boxes. 

Thomas: [00:13:46] Yeah. Well, only I didn't realise I thought. I always thought Deliveroo was an Australian company. But then they set up in London, backed by Amazon, listed on the London London Stock Exchange. 

Adam: [00:13:57] Yeah. 

Thomas: [00:13:57] Just cashing in on the Australian image. Kangaroo. 

Adam: [00:14:01] Yeah. Like coats of arms, animals no less. That's it. They've gone right to the top. Yeah. 

Thomas: [00:14:06] We should get a licensing fee from them in the double. Yeah. Yeah. 

Adam: [00:14:09] Mhm. Yeah. If you are going to use our national national emblem animal. Mm. You know what's next. Delivery. You see where that's at. So is this England like what? 

Thomas: [00:14:22] Are they going to do it? Live a badger. Not a lot of inspiring animals in the UK. 

Adam: [00:14:31] Since it came out TV at Equity Mates. Don't call you to come out with an inspiring English animal. We're getting into the World Cup now, so I'm starting to get excited and get a bit patriotic and a bit sort of, you know, very much as I did when the Cricket World Cup was on two weeks ago and as I will for the next sporting World Cup anyway. Well, we're going to run. So. So what happened to Deliveroo? 

Thomas: [00:14:56] The global company just pulled the pin on the Australian operations. Right. In Australia, it accounts for 3% of the company revenue. 

Adam: [00:15:04] And.

Thomas: [00:15:05] We're just saying it's not worth it. I mean they've done this as well in Germany, Taiwan, Spain and the Netherlands just shut down. Operations is saying it's not working to make the Australian business financially viable, it required a big investment and the risk reward just didn't stack up. It just wasn't going to work and. And must mostly because it's just become really competitive. Like you've now got UberEats, Menulog, DoorDash and Deliveroo all competing for a pie that is shrinking pretty quickly with the end of COVID. 

Adam: [00:15:37] Yeah. 

Thomas: [00:15:38] Like all of these sort of these delivery businesses made sense and stacked up when we had COVID and everyone at home. I think you had two factors driving this. You had COVID and everyone at home as big, big uptick in demand for this service. Plus, you had super cheap money and a lot of money flowing to tech. And so it was easy to do something like Deliveroo to go, Yeah, like we're a tech player, we've got good systems and everyone's second at home and we've got easy access to cheap cash. Yeah. Now, you know, the market, the total market size is shrinking. I think they're getting slapped around by Uber eats. Uber eats 56% of the market in Australia. All right. So they're far and away the most dominant player. Yeah. 

Adam: [00:16:24] And not to mention they might be getting beat out a bit by walk to the shops which, which in times of high inflation, you know, sometimes, sometimes, you know, I prefer instead of getting Uber eats or DoorDash to just walk to the shops and buy my food. Yeah, it's crazy. It's kind of, you know, it's kind of retro, but. Right. Yeah. But is inflation a thing here too? Like, say, is, you know, discretionary spending. It's one thing to get takeaway. It's probably another thing to go, well, I'm going to get it delivered to my house for an extra fee. 

Thomas: [00:17:03] You know, when inflation is higher, the typical sort of rule of thumb I think about when inflation is higher and it's eating into household budgets, which we know that it is, that there's a bit of a pivot away from readymade meals and fast food to Woolworths and Coles. It's why those like consumer staples tend to be a bit recession proof in a sense, because they pick up extra demand as people cut back their discretionary spending. Hmm. They've still got to eat. You can't get around that. But you either spew this. Yeah. Drop a lot of money on a takeaway meal delivered or you go and make something from the shop. So yeah, that's what's happened to them. So yeah. Like, yeah, the market share is shrinking people. Yeah. Because people are getting out and about and they've got less disposable income and it's just a really competitive market. So, Deliveroo is gonna know it's just not worth it. We can't make it work. Mm. We're out. 

Adam: [00:17:58] So what happens to because I know Deliveroo had, they've had a few issues in the past, not the least of which was did you catch their April Fool's gag this year where they sent a fake invoice to all of their customers going, Oh, we just thought you just ordered 30 pizzas. It was pretty much a phishing attack. And then people took to Twitter and everything just completely outraged, going, Why have you billed me for 30 pizzas? I didn't know that. And not like April Fools. What do you guys say? 

Thomas: [00:18:37] The least creative April Fool's Day joke I could imagine doing with. 

Adam: [00:18:41] Like. Yeah, like a fake invoice. 

Thomas: [00:18:43] A fake invoice that's pretty. 

Adam: [00:18:45] Like a fake. 

Thomas: [00:18:46] Not even not even clever. I was like, wow. 

Adam: [00:18:49] Yeah. Maybe they thought, like, the opposite would be like, you've won free pizza, click here too. And then you've got the disappointment of finding out you haven't won free pizza. So maybe they thought, Well, why don't we start low? We'll start with the disappointment of you've accidentally ordered 30 pizzas. And then people would be like, What? I didn't order 30 pizzas. Excellent. And today their marketing team may have had some answers. There's been a lot of industry pressure and it's not just on delivery but on everyone hasn't they're like around wages and whether they're the the riders or the whatever are actually employees or if they're not and what kind of awards and pay. Like that's got to take its toll on all of these organisations too isn't it. Yeah. 

Thomas: [00:19:38] Well I mean Uber Uber's getting on the front foot with this so that Uber and I think Menulog I have to take that. Definitely Uber signed an agreement with the Transport Workers Union to sort of push forward and try to bring some sort of. Yeah. Certainty to the gig, work, gig economy work. And I'm like, yeah, it's flexible work. It's designed to be that, but doesn't mean you can be without protections. So they're going to Frankfurt. Deliveroo hadn't done that. They've been tied up in courts because they fired someone a couple of years ago because he wasn't delivering fast enough and they just cut him out of the apps and not your app. And, you know, man, I'm kind of for all intents and purposes, I am an employee. I wear your jacket, a ride, your bike. You tell me where to go.

Adam: [00:20:23] Where you come. Pretty uniform. Sorry, I can't see. I don't know how you got the idea that you work for us. Just cause you've got a delivery helmet on and you're wearing a Deliveroo jacket and Deliveroo, and you're riding a bike that says Deliveroo. Yeah. I'm going to roll up your instructions to say hi. I'm from Deliveroo. I mean, when you see. Fine, you have to say Deliveroo. Gerard speaking. Yeah, right. We're not independent contractors. I mean, the court ruling on it was just stupid. Like the. 

Thomas: [00:21:06] Judge handing down judgement said like, obviously for all intents and purposes, they are employees and they act like employees. But the High Court says that we should not look at that. We should only look at the contract. And based on the contract, they're subcontractors, they're independent contractors. So that's where it ends. Hmm. So that's what happened to that guy, which through the Transport Workers Union was like, this is ridiculous. 

Adam: [00:21:29] Yeah, yeah, yeah. 

Thomas: [00:21:30] So. So that was sort of happening. And Uber got on the front foot on that. Deliveroo was a bit behind the bull. They did say that that wasn't a factor in deciding. It was more that they'd just got the competition too hot and they couldn't handle it. I didn't point the fingers at that, but a pub in this pub possibly would have been a. 

Adam: [00:21:47] Nice surprise that either got their first. They're driving car deliveries. All right. Why don't we? Why don't we pause here and grab a word from this week's Fun to be? Back with more comedian versus economist right after this. Welcome back here on Canadian versus Economist. We'd love it if you gave us your rating and left to review wherever you get your podcasts. If you've enjoyed the show this year, then think of it as your Christmas gift to us. It would really help us out, Thomas. We're talking about UK inflation and they had a mini budget. What's going on with a mini budget this time? Who lost their job this time around?

Thomas: [00:22:26] No, I think it's gone down okay and gone down okay. You know, The Economist magazine said it wasn't a great budget, but at least it was sane.

Adam: [00:22:36] Right. So sorry. 

Thomas: [00:22:38] That's the benchmark in the UK now, you know Deliveroo saying. 

Adam: [00:22:41] I. Think this is this is a bit of a trend because it's a bit like when Joe Biden came in, he couldn't kind of lose if he just stayed sane. You know what I mean? Like, as long as he just kind of went, you know, I'm just going to be a normal president and I'm just going to do normal presidential things. Then even if his policies weren't totally spot on, it was still better than what had just happened. So I think after chaos, if you can just come in and be a bit normal. 

Thomas: [00:23:15] You know, I'm not going to overthrow democracy. That's the central plank of my platform not to do anything else. I'm just. Yeah. Overthrow democracy. 

Adam: [00:23:25] I thought about inciting a riot or and taking and storming the steps of. Of the White House. But then I thought, no. Yeah. 

Thomas: [00:23:41] I definitely learnt from experience. The Tories in the UK. So yeah. The Chancellor of the Exchequer, Jeremy Hunt, he's the new Treasurer, handed out a mini budget. Wasn't a mini budget, it was an Autumn statement. 

Adam: [00:23:55] Oh, an autumn statement. Yes. Yeah. So he's decent. So he's distancing himself already from the mini budget because. Yeah. I mean it's a bit ridiculous. Yeah. Two mini budgets in three months. Yeah. So it's the Autumn Statement. Mm. Yeah. 

Thomas: [00:24:11] So open with. Aren't the leaves lovely this time of year? 

Adam: [00:24:15] The autumn colours. What was in his autumn statement. 

Thomas: [00:24:19] Well whereas the last, the last mini budget that the Qs Liz Truss the prime ministership they were that was promising to lift spending and cut taxes this one went. So you see where they went wrong? We're going to lift taxes and cut spending. 

Adam: [00:24:38] Okay. Yeah. 

Thomas: [00:24:40] Yeah. £25 billion worth of higher taxes and cuts to government programmes of 30 billion. Right. Bit of a shift in tone is this. 

Adam: [00:24:48] I've heard the phrase austerity budget getting bandied around. Is this an austerity budget? And what is an austerity budget? Well, you. 

Thomas: [00:24:55] Now, the austerity budget is a budget that cuts back on spending when it's not really a good time to cut back on spending. So it's a little interesting in the UK at the moment. It seems that the UK is already in recession. Yes. What Jeremy Hunt said when he made this statement saying yet we've already had one quarter. It looks like we've got a second quarter baked in. We're in recession. Hmm. So typically, like the, you know, the Keynesian school of thinking around that is like when when there's a fall in demand, when you go to recession, you want your government to step in and sort of like prop it, prop things up a bit and spend a minute money and get things going again. Hmm. And an austerity budget. So this is like, you know, that doesn't matter. It doesn't matter. Like, you think it's like the classic Greece in recent history, like when the Greek debt crisis happened, then they had austerity budgets imposed upon them. Even though the economy was tanking and it was down, GDP was down 20%. There they were being forced to sell off all their assets and raise taxes and yet cut spending. 

Adam: [00:25:58] Right. 

Thomas: [00:25:59] And it's controversial because it's hard to see where austerity budgets have really worked well, particularly in a crisis like by the time you're in a crisis and austerity budget doesn't and it hasn't. There's no historical precedent, we say yet, that really worked to help that economy get out of trouble. So that's what we've got in the UK at the moment. I mean the other part of that story is inflation's running at 11.1%, so inflation's very high and something needs to be done to get that under control. You do have the Bank of England raising rates. There are 75 basis points at their last meeting at the beginning of the month. Yeah. Eight increases in a row now for them. So yeah. So they attack, they're trying to tackle inflation but. Yeah. Hmm. I mean, that's it. It was very like it was, you know, it was clearly with an eye to the markets and avoiding getting pummelled by it. 

Adam: [00:26:52] How did the markets react ? Did they like it? Fun, whatever. Oh, we got a knee reaction from the markets. Yeah, yeah, yeah. Because we've all had it. What? And. All right. Right now we go. Right. I'll add that to the list and. Yeah. Right. Didn't care. 

Thomas: [00:27:11] Yeah. I mean, because there wasn't really much in it. Like, I mean, it sort of basically just came out and said we care about the budget position. Like whereas the previous budget came out and said we don't care about the budget position, we're going to keep spending and we're going to keep borrowing. And even though it seems like a really dumb idea to keep doing that, given that inflation's already off the hook, we're just going to keep doing it. And Marcus went, Wow, what are you guys even doing? Mm. This one's like, it's sort of, it's what you'd expect the government to be doing and with the current settings. 

Adam: [00:27:41] Yeah. Okay. 

Thomas: [00:27:42] Not so many surprises then. Yeah. Hmm.

Adam: [00:27:45] What we're talking about is that we got our cash and sent us a message on a TV podcast on Instagram. He's got a couple of questions and I thought this would be a good time to bring them in. He's just asking another one. The whole world is facing the risk of recession. So in the past couple of years, didn't a single leader think of doing things differently? And that's the second question as well. Same question is common knowledge. I think the money loses its value if handed out almost free, and yet all the central banks kept doing it. In the last few years, not a single central bank boss thought about the repercussions, so I kind of combined those two into the same sort of thing, I think. And so no leader sort of saw all of this coming. I mean, we've talked about MMT in the past. 

Thomas: [00:28:33] I mean, you gotta you gotta put yourself back where where we were in March 2020 and those early days, like. Like the chief medical officer was coming out and saying that Australia should prepare for 50,000 dead from good. You know, we haven't even come close to that. So it really looked like things would be collapsing at at a rapid pace. And so governments are on the fiscal side, governments really stepped in and went like, okay, let's, let's prop this, let's fill this this gap like job keep here in Australia and all of that. In hindsight, with the benefit of hindsight, we they overclocked it, you know, it was too much given that the shock. But the shock was much less than we were expecting based on the medical advice. I mean, you know, everyone was doing their best. We just didn't know what was said, you know, in the whole news story. You know, the governments tried to rush in and and plug that gap in demand and they overclocked it. But it was probably proportionate to the the shock that we were expecting. We didn't get that shock. But compared to what we were expecting, it was probably about right. 

Adam: [00:29:36] It continued on for a fair while into it. They didn't like it. Once we did, we got a sense that the shock wasn't as bad as we thought. Yet governments still kept printing money and they still kept giving out money. I think our cash is also making the point that it sounds like a scheme that was hatched by top leaders of the world to give free money to big businesses. Um, but it did have that feel at various stages throughout the I don't know that I necessarily agree with that, but. 

Thomas: [00:30:06] Yeah, I mean, I think it is I mean, it is part of the mix. I think it was probably because we're trying to save the economy. And if that ends up giving big business lots of money, then yeah. Well, well we were okay with that. 

Adam: [00:30:20] Yeah. 

Thomas: [00:30:20] And, and it's like. 

Adam: [00:30:22] If anything, like it was like, yeah, we're just going to give it out without really asking for anyone to tell us how they're spending it or how it's benefiting anybody. They just kind of. 

Thomas: [00:30:30] Give it was completely unaccountable was yeah like yeah, pretty gross. Yeah but like I said this and then also like I only inflation side like with the central banks like kind of as we're saying like it's still like in Australia inflation's all about supply shocks and energy prices. It's not that they're in demand yet it's not there and wages are getting out of control. So it's not it's not clear to me that the inflation that we've got right now is money printing driven, right. You know, like it probably is to some degree and sort of the cash handouts and that sort of thing. But it is not clear to me that it's a demand problem, you know, and what it seems like. 

Adam: [00:31:06] What about the UK that 11% is that is that energy crisis or energy prices. Prices.

Thomas: [00:31:14] Yeah, definitely think it's part of it is probably Brexit in there as well. Pushing up costs.

Adam: [00:31:19] Oh yeah. Right. That's still going.

Thomas: [00:31:21] Yeah it's doing that. Still playing out now. Right. Yeah. So yeah it's transitioning. Right. Yeah. I don't, I don't know enough about it but I think, I think it's a reasonably common story and it's definitely, it's part of the mix, but it's not like in terms of like did the central banks massively move it up?

Adam: [00:31:41] Hmm. 

Thomas: [00:31:41] I don't think so. I think it was, you know, given the shock that we were expecting, I think it was proportionate. And it's also not clear to me how much of the current inflation that we've got is due to that excess money printing versus how much is due to the supply shocks. And I because I think it's good because once you once you whack energy prices energy is a cornerstone commodity of the entire economy. He's through everything. So it's definitely you know, it's an empirical question about how that breaks down. Like, you know, our 7%, how much of that is demand driven and how much of it is supply shocks? But I would think the bulk is supply. That would be my feeling. 

Adam: [00:32:16] All right. All right. A fun fact the other day, and I'm not sure don't quote me on this. I'm not sure if it's true. But given the energy prices, the return on investment on solar now is down to like three years instead of ten or whatever it was before. Like it's significantly come down because we've been humming and our thing about solar ages and then yeah, I read that the other day. Maybe that's not the worst thing to buy at the moment. Yeah. Yeah. I don't know. That's just my, my musings on it now is of many sun to come out and that'd be nice. It's only halfway through November and still feels like winter here. And I let the rest of the country go. Well, hopefully that's answered caches. Question. Yeah. Feel free to send us a message at a TV podcast on Instagram and Facebook. All right. Finally today, Thomas, apparently the World Cup has an impact on liquidity. What are we talking about here?

Thomas: [00:33:12] Yeah. So were the World Cups kicked off in Qatar? 

Adam: [00:33:17] The soccer World Cup, that is. Soccer was not aware. FIFA World Cup. Yeah. Mm. I'm not sure if we're even allowed to say these words. Like, I think that, like, sponsorship deals are so tight that you need a licence just to utter the words FIFA World Cup. Really? Soccer World Cup? Yeah. You probably call it like right now we're still talking about the big football festival happening in the Middle East still. Yeah. Go after FIFA. What do you get? You're in trouble at the moment. Yes. So, yeah. 

Thomas: [00:33:52] But there's some research out of Monash University that looked at what happens to equity markets when the World Cup's on during trading hours. Well, I did a big study, looking at 95 matches across 24 markets. Hmm. And what they found, probably not super surprisingly, is there's a lot less trading during the game. So 29%. So trading is 29% trading volumes 29% below average during a game. Right. But then they spike in the halftime break and also in the half hour before Kick-Off, half hour before Kick-Off, they're up 22% as people try to fill their trades before the game begins. I mean. 

Adam: [00:34:31] We often talk on this show and if you listen to Equity Mates at all, investing is not like gambling. But this does sound a hell of a lot like getting your bets on before kick off and maybe maybe a cheeky halftime full time wager or something. This only affects the markets of the country. Who's involved or is it any World Cup. 

Thomas: [00:34:58] Yeah. You know, so in the country that's competing in the game. Right. So like if France is playing and the French share market is open, I. 

Adam: [00:35:07] Didn't catch anyone trying to trade on the Quito stock exchange in Ecuador last night. So that's gold. The Ecuadorian stock exchange is the Guido's Stock Exchange. 

Thomas: [00:35:19] Right. Sounds like a Pokémon. Yes, I can watch out for that. Liquidity dries up a bit during the games. If we do have to worry about Australia. I don't think I've got any games happening inside trading hours of the ASX. 

Adam: [00:35:33] No, in fact I think Australia will be playing as this podcast is released. So Wednesday morning, about 530 my time as far as it, I will be definitely getting up for that. But yeah. So yeah, six won't be open slackers probably watching the game. So. Okay. So what does it mean? How can we profit from this, this newfound knowledge? 

Thomas: [00:35:58] The guy heading up to study. We've lost his name now, but he was saying that. 

Adam: [00:36:06] Sure. Yeah. And he's put in like 12 months worth of research and hard work. You do it. This is what crowning achievement this study is going to put me on the map for the first podcast about it. I forget his name. Anyway, he did study, but now. 

Thomas: [00:36:24] They say like with the bump in liquidity at the start. So if you got a big trade that you're trying to unwind and you don't want to, you know, knock the price down with your big trade, you can disguise it in that jump in liquidity at the start. Right. It's one way you could use it to your advantage or the saying like if people are selling during the game, it means they might, you know, be willing. They probably need to sell. So you might be able to pick yourself up a bargain buy cheap. 

Adam: [00:36:53] They need to sell because they really dropped the gorilla on the suckers. So you said there was a spike in trading volume during. Half time as well. 

Thomas: [00:37:03] Yeah, yeah, yeah, yeah. 

Adam: [00:37:05] There might be people enjoying the corporate package as well, the lunch in between, because they're the only ones who can get the beers, too. Did you say that Qatar's banned selling beers at the stadium? 

Thomas: [00:37:16] Yeah. And ban Budweiser is like the FIFA sponsor. 100 odd million dollar deal to be the sponsor. And now that.

Adam: [00:37:24] Budweiser is the official contracted beer supplier to FIFA at all of its official FIFA events, and two days before the World Cup kicks off, the Qatar Organising Committee, whoever it was, came out. Well, by the way, we're not going to sell alcohol at the stadiums anymore. So it's going to be beer free at the stadiums. Mhm. There will be riots there. Mark words. I don't know if you've seen the fan, the fan zones where they do sell beer, there's fan zones which are still under construction as people are arriving early. Yeah I imagine. Yeah. Oh yeah. Again, I don't want to hang shit on the English, but once the English go there are no beers. So I was talking about the rise and fall of football and I was a bit sad. Like on one hand, like it's pretty frustrating because it's two days before kick off and then you announce that like some people have booked their tickets, have already made their travel plans and accommodation. They're going there with certain expectations. And I know that it's you know, I think it's one of the one of the sheikhs who's in charge was kind of like, now this goes against is not culturally this is not what we do here in Qatar. It doesn't align with our values. And, you know, you can respect that. But I think two days before kick off, after you said to FIFA, who said to Budweiser, yeah, imagine ordering kegs and kegs for you, for your party, and then your mom and dad, you know, for the 18th birthday, I was around Dallas. Sorry, we got to have service. Let's get Johnno. 

Thomas: [00:39:08] To take it back. I'll take it back. 

Adam: [00:39:11] Yeah. But it's, it's also kind of sad because like, I think we should be able to host a sporting event without alcohol. Like, it shouldn't need to have alcohol. Like I went to, I actually went to England versus India here at the Adelaide Oval for the semi-final of the T20 World Cup and set amongst the Indian fans and by and large weren't drinking at all like that. They, there was barely a drink between them and the atmosphere and the fun was just like it was infectious. It was just like everyone was having a great time and it wasn't because they were all drunk. I mean. Yeah, and I was having a great time. Admittedly, I was as drunk as ten men, but I wasn't. 

Thomas: [00:39:53] But I'm going to do it. 

Adam: [00:39:54] Some heavy lifting here. I just said. Okay. So shoulders from carrying everybody. Yeah. So but now I think yeah, it be it would be maybe it'll be like a revelation. Maybe at the end of it it'll be like, wow, that was actually really good and really a really positive thing. And maybe a change of future is. 

Thomas: [00:40:21] But who knows? It is soccer, though. You do It. 

Adam: [00:40:28] Come on, man. Because soccer kicks off in literally less than two days. You got to get on board it. All right. You can still get but zero. They're going to try and sell zero alcohol, beer inside the stadiums instead. I don't think I don't know. Not sure. That's the other thing that's going to placate the hordes of travelling English as they arrive. So. Okay, let's go to zero. Yeah. Terrible English accent. All right. Why don't we leave it there? That does it for this week. Thank you so much for tuning in. I hope you enjoy the show. I hope you enjoy all the shows. I look forward to talking to you again next time. Bye for now.