Is Bitcoin the next sub-prime?

Adam: [00:00:24] 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: [00:00:37] Yeah. Good, Adam, how ya doing?

Adam: [00:00:39] Pretty well, thank you. Now, don't forget, we announced our partnership with the A6 to participate in the share market game they're running. So we did a bonus episode released last Thursday. It was. So if you haven't heard that one, go and check it out. We had Bryce and Alec from Equity Mates, who are also going to be joining us. So a lot of hosts from across Equity Mates media joining in and taking part in the ASX share market game. And you can too. So we should link to the show notes. I think again in this episode, we'll get them up somewhere a bit more central, but make sure you go on, go and sign up. Join in. I think it's going to be a lot of fun and I think ultimately we all just want to beat Thomas. So hey, if that happens, then we'll consider it a success. If it doesn't, then we'll never speak of it again. All right. But Thomas, we got a big show coming up. We're going to again check in with Phillip Balls of Steel Lowe and see why he reckons literally everyone else is still wrong. Mark Zuckerberg has now hit rock bottom following Facebook share market crash. He's down to his last billions. And things are looking grim. We'll take a look at what's going on a Facebook or Metta as it were. Scotty from marketing has said that he thinks he can get unemployment with a three in front of it. We'll find out if he's talking high 30s or low 30s. Either way, that doesn't sound like a good target to me. People are looking to reinvent themselves. Apparently, Thomas, which is an opportunity for brands and advertisers. My best friend at school wanted to be a tree when he grew up, so I wonder if that's it. Maybe more good news for Wesfarmers fertiliser business, I suppose, if people wanting to become trees post-COVID. But first, Thomas, we all remember the subprime crisis. Well, it's been reimagined and updated it for 2022, and this subprime crisis will be using blockchain technology. I'm told. Tell us is is bitcoin the new sub-prime crisis? Yeah, there's 

Thomas: [00:02:41] a bit a bit of chatter in the press this week saying that the question is bitcoin the next subprime? Yet bitcoin's been a bit of a crash lately. It's down below thirty three thousand USD. Now it's half of what it was trading at in November. Pretty much cryptos across the board, bleeding red. There's more and more than a trillion dollars has been lost in this crash so far. Wow. So substantial amount of money.

Adam: [00:03:05] Okay, so so before we get too into it, so when we say subprime, what do we mean? Is it? It's not. It's not. Optimus Prime's underachieving little brother transformed into a taxi. What was the subprime crisis? I don't think so. The standard, which I'm pretty sure a lot of other people were 

Thomas: [00:03:23] so subprime, is what triggered the GFC. So when you hear the subprime, we're talking about the GFC. So Paul Krugman, who's a very famous economist, I think, is a columnist at the New York Times. Now he's saying that bitcoin could potentially be the next subprime. So that means he's saying it could be the next trigger for the GFC. OK, so what subprime is referring to is the way all the ninjas that got loans in the housing market in America before the GFC?

Adam: [00:03:52] All the ninjas. Hmm.

Thomas: [00:03:54] So no income, no jobs. No assets? Right? So the idea is that lending got super loose prior to the GFC, and a whole bunch of people who probably shouldn't have got large mortgages got large mortgages. And then when inevitably, as they were always going to, they couldn't repay them, then that started the crash that triggered the GFC. Sort of the thing that happened is that those those ninja loans were then bundled into residential mortgage backed securities and then on sold onto other financial institutions. And that sort of how the contagion spread through the financial system and Lehman Brothers, the bank, the collapse. They were particularly exposed to residential mortgage backed securities. And so those subprime borrowers, that's what they say triggered the GFC is when when they all those subprime borrowers went bad, that's when the GFC happened. 

Adam: [00:04:43] Okay, so that's so this subprime. We're effectively talking about the borrowers in that case. Mm-Hmm. So people are borrowing money, is that that's already a bit of a difference? Isn't that from bitcoin or are we talking about that? There's been a lot of people borrowing money to buy crypto. 

Thomas: [00:05:01] The point that Paul Krugman makes is that the crypto bear market is going to disproportionately affect the more vulnerable people in society. That's his words, and that is pointing to the stat that 55 per cent of crypto investors do not have a college degree. Yeah, and then I don't, but I don't think I think it is a bit of a stretch that I don't think typically people aren't leveraging into crypto. I do not. A guy who mortgaged his house and put it into crypto, but I don't know that it's it's that common or common enough to sort of contribute like the kind of financial contagion that triggered the GFC. Hmm. 

Adam: [00:05:37] Nothing against people without college degrees, either. I haven't got one of those and managed to navigate crypto, but now I'm thinking I should move them all into NFTs because I can see what's happening in the crypto space. I don't want to be left holding the tokens. I'm moving it into artworks and NFT JPEGs stabbings.

Thomas: [00:05:56] It's been an interesting time for cryptos in a sense, because it's clear now that they're a risk asset in the sense that they've crashed with the share market once once the sort of narrative shifted. And we're talking about tide of money that's triggered a sell off in cryptos so that the idea that crypto is a safe haven that now seems to like it's very hard to argue that you lose, you know, 50 percent in volatile times. That's not what a safe haven asset should do. It's not functioning as a functional currency, because as far as I'm aware, very few transactions are actually being transacted in bitcoin is still largely speculative trading. And so it's a bit like, well, this is kind of proof, isn't it, that it's largely a speculative asset and people say, Well, you know, look, but look beyond adoption, mass adoption coming and all of that. But it's like, yeah, but right here and now, it's clearly a speculative asset. 

Adam: [00:06:49] Well, El Salvador did adopt it as legal tender. Mm-Hmm. And if I'm not mistaken, the IMF came out the International Monetary Fund and said, We think maybe you should narrow the scope is what they said. You should narrow the scope of and basically saying, don't make it legal tender anymore. Like, that's not narrowing the scope. Let's just stop using it. Because when we say narrow the scope, we're really saying we don't think you should use it for anything anymore, ever. 

Thomas: [00:07:21] But I think when they try to issue bonds backed by bitcoin, we'll say no. Yeah, I mean, but the thing about what's happened in El Salvador now, like they were encouraging people to be legal tender, it's now fallen 50 percent in value. Yeah. Ouch. 

Adam: [00:07:37] Ouch. Yes. Comprehensive economists analysis of it. It's a bit out for people in El Salvador. So you you've you've been a long term crypto bear. So this is good news for you. I guess it's a bit of a vindication to you.

Thomas: [00:07:54] I mean, to it to an extent. I mean, I do certainly feel that you look at what's happening in NFTs. Like to me, it looks pretty clearly detached from reality. People dropping 20 million on a JPEG like, yeah, is is really gets harder 

Adam: [00:08:09] and pretty good jpeg that you say that. It's amazing. All right, Thomas. The RBA came out this week or Phil Lowe was at the National Press Club, and he reiterated the official cash rate will likely remain on hold next year. Seem to be a chorus of people saying that probably not the case, but that film feels back in himself in again. What's your take? 

Thomas: [00:08:34] Yeah, yeah. As we flagged in the last show, so the RBA came out and they ended the bond buying programmes that ended money printing that year is now closed. And so the question now got moves to rate hikes are when a rate hikes coming. We also got updated forecasts from the RBA, particularly for inflation and unemployment, both now stronger or better than they were previously. Phil Lowe did seem to bring forward the rate hike guidance, though, before he was saying It's sort of late 2023 at the earliest, so probably 2024 that's now been brought forward to 2023. So saying that's when he expects this to start hiking rates. Markets still don't believe him, so they they he they they pressed them at the at his speech. And the first question is, can can rates go up in 2022? And he said that is now a plausible scenario that rate hikes could come around in 2022. If we. Things are much stronger than we expect. So saying like, it's not, it's not. It's not out of the question that we could get rate hikes in 2020 to the financial press seem to take that as a vindication of their lack of faith in Phil Lowe's forecasts. 

Adam: [00:09:50] Why doesn't anyone believe what he's saying? He's the governor of the RBA. He's he's in. He's is he in control of the situation is like, does he have knowledge that I was down? Is he kind of going, Look, I'm telling you and everyone's like, I just don't understand this kind of scenario where we've got the governor of the RBA, who should be in the know around what's happening with rates, saying This is the plan, this is when it's likely to happen and everyone going again, that's not happening. But the markets have said alright timing the. Markets have said four rate hikes this year. Yes. Yeah. Yeah. We're in February already, so that's like one every two and a half months. And he's got not none.

Thomas: [00:10:35] Yeah, I mean, four does seem like he made this point. You're saying like people are talking about the markets now, expect four rate hikes in the US as well. So you sound like you're looking you're looking at the same rate hike pace as the US. Inflation in the US is currently running at seven percent. So like how in what world are we on the same rate hike trajectory as the US, where inflation is at seven percent trimmed, mean inflation's at 2.6 percent here, so will a vastly different economic situations. But markets are pricing in the same rate hike cycle. And you say not that this kind of just that sort of bit hard to understand. So that's a that's a one on one side. But on the other hand, the RBA has been consistently since Covid hit. Its forecasts have consistently undershot what's actually happened with inflation. So each quarter, they they they update their forecasts. Those forecasts have consistently undershot what's actually happened with inflation in quite a substantial way. I've got a nice chart. I'll share it to the to the

Adam: [00:11:33] Instagram at CV podcast guys who are searching for it. Yeah. 

Thomas: [00:11:37] So that's what markets are looking at saying. Like, Yeah, you consistently missing on your forecasts that you've just you've just updated your forecasts. We don't believe those either, either. We think inflation's going to come back stronger than the RBA reckons. We think unemployment's going to go lower than the RBA reckons. We think wages are going to come back stronger than the RBA reckons and so on. All of that, we just don't buy what you're saying. 

Adam: [00:11:57] And was Phil Lowe's defence? Yeah, but I'm an economist, which it is forecasting. 

Thomas: [00:12:05] It did, and I did say forecasting is very difficult, notoriously difficult. 

Adam: [00:12:12] What's his? What's his track record like? Like I say, is it I'm trying to work out, is he right or wrong? Like and or is it just going to be that classic economists? Kind of. We don't know what's going to happen, but once it does, we'll be all over. It will tell exactly like, you know, you know why you're eating dirt right now. That's because inflation turned out to not be transitory. Anyway, enjoy. You don't need it all at once. But yeah, because he's banking on transitory inflation, right? He's saying this is do this this this inflation shall pass. 

Thomas: [00:12:44] Yeah, that's still the story he hasn't seen, and it needs to translate into wages pressure that we haven't seen that yet. We get get the sense that it might be coming. The other thing, though, is the the RBA has undershot the inflation target for seven years in a row to believe the markets. You've got to believe that the RBA has undershot inflation for seven years. For a row, it jumps back into the middle of the target band for one quarter, and then they start hiking rates to try and hit it off at the pass. That seems a little aggressive given how long they've undershot, it seems seems more likely to me to let it run a little hot for a little while to make sure it is that inflation is going to hold and not get pushed lower because it still seems to me that there are some still some structural factors pushing inflation down, and a lot of it is really just coming out of the Covid shock and awe this disruption to the supply chains. And once those move through the system, it's not clear what you're left with at the end of that without strong wages growth. And that's sort of what it swings on from here, I think. 

Adam: [00:13:45] Right. So let's say we back way back, fill in and we say he's on it. The markets have got it wrong. How do we how do we profit? So what are we because the markets are effectively working off these four four rate hikes, pricing that into the market? If I want to just back fill in here first name basis, main view what are we looking at? 

Thomas: [00:14:10] Yeah, assuming you're not an institutional bond trader, yes.

Adam: [00:14:14] Yes, I have to assume. I think Tom is that most of our listeners are the institutional bond traders. 

Thomas: [00:14:22] What would it mean? It would mean that rates they lower for longer. We open up more of a wedge between US inflation, assuming that the outlook for the US rate hike cycle is correct. That opens up a wedge between US rates and Aussie rates. That puts downward pressure on the Aussie dollar because US dollars and more than Aussie dollars in that scenario, so that pushes pushes the Aussie dollar down. That's typically good for your exporters miners, you know, because they just a lot of their revenue swings on on what current currency movements. So lower Aussie dollar is good for your miners, good for your agricultural exporters, potentially not so good for your domestic producers that reliant on overseas goods because they become more expensive. So if you got lucky a tech manufacturers or something relying on chips from China, that their costs go up. So maybe there's some plays there.

Adam: [00:15:14] Alright, some typically vague advice there from Thomas getting none of the rest. He calls it a profit thanks to Dollars. All right. Thomas Scott Morrison came out and he's said that an unemployment target of three per cent or something in the 30s is achievable. Is that is that right? Is that possible? Yeah, that's 

Thomas: [00:15:38] that's what he said. I believe we can now achieve an unemployment rate with a three in front of it this year. Our goal is to achieve this in the second half of 2022. We have not seen this in Australia for almost half a century. This is a once in a lifetime opportunity. So he's come out and said himself a high bar, saying it's going to be a three. This is going to be after the election. He's going to deliver this, by the way. Right? Going to put a three in front 

Adam: [00:15:59] of it, vote one ScoMo. Mm hmm.

Thomas: [00:16:04] Yeah. I mean, it's sort of interesting given that the unemployment rate sort of heading that way anyway. And right now, you know, we could get a we could get a three in front of it any day now or any month now. So it's like it sounds great to have a three in front of it and it is a good outcome. But it's also a little bit cheap to say that the government is going to be this. We're going to deliver this because it's not so much what you're going to do in the next few months. It's going to create that right.

Adam: [00:16:29] It's more of a it's more of a this thing's happening, whether we whether we like it or not. Whoever wins could make labour might just come out and go, we'll deliver that to the green. Yeah, yeah, we can deliver that. Everyone's like, Yeah, yeah, what's your unemployment policies? Three, three ish. Yeah, we're all good. We're all over that. All right. So what's what's driving it and what? Why is that all? Why is it heading that way?

Thomas: [00:16:55] Well, this is this is what's really interesting, and there was a bit of a conversation that followed this. So Sally McManus, who's the head of the ACTU, she came out and tweeted afterwards. And the reason why unemployment rates are low is because the borders are closed. It has nothing to do with the Morrison government's economic management. As soon as the election is over, they will rush to return to huge levels of wage theft and exploitation of visa workers, right? And so so she's sort of making the point that it's really a border story and. That it's about closed borders that sort of reduced the size of the labour pool, which means that there's just more jobs given for the same number of people or for a smaller number of people, and then that's what's pushed down the unemployment rate. 

Adam: [00:17:37] And is she right? Is it because of the closed borders? 

Thomas: [00:17:40] Yeah, it's kind of interesting. So the people picked up on on her statement and there's a bit of a pile on. So the Grattan Institute's Henry Cheryl, Kallum Pickering from indeed. Jason Murphy, they all said that's not true. It's not. Borders have nothing to do with it. But then Stephen Koukoulas, the kook, he came out and he agreed with her, said, It's right and you kind of look at the numbers and it feels like it. Mathematically, it must be true. So you look at total employment, total employment is only fractionally higher than where it was pre-COVID and well below the trend where you would have expected it to be if Covid hadn't happened. So the unemployment rate is not lower because we've gone out and created a lot more jobs. We've created less jobs than you would have expected if Covid hadn't happened. It's also the case that unemployment is not lower. The unemployment rate is not lower because people have left the labour force. This is something else that can drive the unemployment rate lower, so the employment to population ratio that's as high as it's ever been. People are people are so active in the labour market, they're participating. And so it must follow that kind of mathematically, the unreason unemployment rate lower is because the total number of people in the labour force has gone down. And then that's what's pushed the unemployment rate down. So it does seem to be true to my reading. 

Adam: [00:18:54] Well, okay. So yeah, so that that stacks up number was what else, what also was interesting there and you said there's more people in the labour force than ever. That doesn't support the whole myth around the great resignation or the thought process around that all these people are quitting their jobs post-COVID and and going to live in the jungle or whatever, you know, get back to their roots. 

Thomas: [00:19:15] That's right. No. The great resignation doesn't seem to have played out the ABS payrolls data. They track this and yeah, follow what happens to people. And yeah, there hasn't been people leaving, leaving the workforce retiring. That doesn't seem to have been a thing. 

Adam: [00:19:30] Turns out, we all still need money to live. Yeah. Covid or no Covid still need some income. Groundbreaking stuff. All right. Why don't we? Why don't we pause there? We'll get a quick word from our sponsor for this week and be back with more. Comedian vs. economist right after this. Welcome back here and comedian versus economist, don't forget, you can send us an email Covid Equity Mates dot com or on the website Equity Mates dot com forward slash CV. And of course, you can stay up to date with us on social media, on Facebook and Instagram at Covid podcast. So Thomas, last week we saw Mettre, formerly Facebook's stock price drop 30 per cent, which is equivalent to more than $230 billion. It sent analysts scrambling to rewrite the tech giant. Now what's what's going on there? What can we what can we learn from this? At the big picture level. So I mean, if you want to listen more about what's happening in store in Facebook and what's driven that the market drop, then of course, Equity Mates are all over it. But I'm curious to know, Thomas, how does this translate into into a bigger picture understanding?

Thomas: [00:20:43] Yeah, it was interesting. So Facebook got smashed. Yeah, they signed $230 billion, which interestingly, the stat I love is that that 230 billion is larger than the market cap of over 460 of the S&P 500. There's only 40 companies in America, bigger than the amount Facebook lost on a single day. It's crazy how skewed the market is. So it's interesting. Interesting. In the FIR, immediately the news was like, OK, this is the this is the quantitative tightening crash that these tech stocks have got have run ahead of themselves because there was too much easy money. Now the narrative has shifted, money is tightening, they're going to get punished and particularly they have a have a bad result, a pretty ordinary result. And it was a pretty ordinary result for Facebook of a meta sorry. And then then they got, then they got pummelled.

Adam: [00:21:36] I'm not ready to call them meta yet, by the way, let's just call them Facebook for a while. Yeah, sure. Sorry, Mark. But no, it's not. I'm not there yet. 

Thomas: [00:21:45] Yes. So if Facebook got hammered, we also in the same weeks as reporting season over the US, you're getting a lot of news like this paper also got smashed. They're down 24 percent had that earnings got slashed on competition and slower consumer spending. So, so they're getting pummelled. And that was that was the early reaction to those stories. But then Amazon came around and said that and pumped it. They got 13 and a half per cent jump on the biggest one day gain since 2015. Their revenues were up on on cloud business revenue and markets like their plans to raise their Prime subscription fees. So Amazon had a great result and jumped 13 and a half percent. Snap, they they jumped 58 percent and I got they had a scorcher. Hmm. Yeah. So it's kind of you're getting these mixed results and it's kind of I think it kind of speaks to how volatile the times are and how. While the quantitative tightening narrative is important and is in effect and is probably driving the downside results that when, when, when companies do publish bad results, they get really punished for it. You still need to look through that and look to the company specific results and, you know, 13 and a half percent for Amazon. You know, already already a monster, that's a huge result. 

Adam: [00:23:04] So Amazon's a different business, too. And I think that's is that a takeaway here as well, where we often I think certainly the last 12, maybe 24 months, I've got very comfortable thinking of Fang as like it was almost one company. Like, if I'm going to invest, I'm thinking I might invest in in Fang, which is Facebook, Amazon, Netflix, Google, Microsoft in there too. But I guess this is a stark reminder that Facebook is not the same as Amazon is not the same as Google is not the same as Netflix. Like, yeah, they're all different companies, right? 

Thomas: [00:23:37] Yeah, that's right. Yeah, I think I think this result really brings that home. There's just how different those companies are, like completely different products can completely different markets, completely different approaches. Hmm. Yeah. I think it really, really brings it home. And the other interesting thing is the one of the key, the key things for for Metters or Facebook that hammered their result was Apple's new privacy policy, which allowed users to block advertisements and stop Facebook tracking them. Yeah, and that hammered their earnings, apparently. 

Adam: [00:24:05] I think I think that's actually hammering a lot of people like I think Peloton got caught up in it as well. Peloton's the home fitness company. So I mean, they've been struggling of late anyway, and I don't think it's it's solely attributed to Apple, but to Apple. Apple has this thing called App Tracking Transparency, which is a privacy feature within the latest versions of AI, of operating systems for iPhones, iPads. And essentially, what it does is it allows that it gives the the user or the person who's the owner of the phone the choice to to tell an app not to track them. And when it says when, if you say, don't track me, it means you're not giving that app access to things like your location data from your phone to your health data from. Your phone, so you sleep cycles, your your number of steps you're doing in the day. It doesn't have access to your browser history. It doesn't have access to other things beyond that, within that, within your phone, within your mobile device or the sensors and everything else that's in your device. It doesn't give that app. In this case, though. Facebook, the Facebook app can now not see all of that data that it was up until, you know what, 12 months ago it was able to get all of that and then sell all of that. So that's Facebook's model, right? They go. We're going to take all of this data and we're going to build up a profile or a picture of of each person, and we're going to sell that to advertisers. So once Apple came out and said, we're going and we're going to give people the choice. And people went. Have overwhelmingly adopted. I saw a stat of 96 percent of of iPhone users have now basically said every app that asked them whether they'd like to be tracked or not. They're choosing not to track. I saw another stat was a bit. I was like 84. 

Thomas: [00:25:55] I mean, the language, though, like, who said, Do you want to be tracked? It's like it makes you feel like you're a bear being tracked in the woods. 

Adam: [00:26:02] It's funny. Like there's different, different companies trying to come up with different ways of phrasing it so that it's still truthful. But be it sounds like it's a good thing. So Facebook initially came out with kind of a scare tactic, you know, like help help keep Facebook free of charge. Like, it's like if you don't give us your data, then we can't keep giving you Facebook free. And it sounds like everyone just kind of went mad. Final days, OK, is tik-tok. So that didn't work. And then they like your data will be used to deliver better ads to you. Like, who cares? I don't know that anyone is like the NBA took a similar angle and I was like, Your data will be used to deliver a better and more personalised ad experience. Who is thinking about the ad experience? Like, if I'm watching TV, that's that's totally unknown. Adds, I think look at them any more or less. Well, at least I don't think I do that just ads like, I don't need to tailor my ad experience. So that's all I've got. That's the only way they can sell. This privacy tracking thing is you get better ads. The other thing I like about this story is that I've read that analysts are now scrambling to to, like, rewrite Facebook and the price, and they're all adjusting their target prices on the stock. Hmm. And I don't think like they're slashing their target price now by 30 percent like a face. Facebook Facebook dropped 30 percent. Now, analysts are adjusting their target price down 30 percent. What are we paying these analysts for? So you had a price target of $100 a share. The company tanks 30 percent may come out. I've got a new price target $70. Like you know, analysts tell me your price target of $70 before the market tanks. That would be useful.

Thomas: [00:28:03] The other was interesting, too. Charlie DeLillo is, uh, an analyst is saying that Facebook is now trading at 17 times earnings. That's compared to the twenty three times for the S&P 500, so the average earnings is about twenty three times earnings for the S&P 500. So on that measure, Facebook is cheap. But you're saying like last year, like two months ago, people were willing to to pay 30 times earnings for Facebook. Now, no one wants to touch it at 17. So it seems like maybe it's maybe it's maybe it's been oversold. 

Adam: [00:28:33] Bargain stock up, load up. I'm all in maths. Thomas Finally, apparently people are overwhelmingly looking to reinvent themselves following Covid create a new me, you know, not just go back to the status quo. This other, to be honest, this is the worst news I've heard this way. Didn't we say we already have enough kind of like self-righteous virtuoso kind of. Now we have to listen to all these people, explain how they've reinvented themselves. Like, can't we just what was wrong with the status quo? Be happy with yourself, like you don't have to reinvent yourself. And if you do, I don't want to hear about it on this. Don't tell me about it. 

Thomas: [00:29:16] You don't to hear from influences and you think you need to get off Facebook. There's some research from the Australian aid agency Leo Burnett, and they're trying to understand how people are looking at the looking post-COVID and how they're going to behave after that and what they're saying. What they found is that 60 percent want to use the end of code Covid as a moment to create something new to go into to a new thing, whereas only 25 per cent want to go back to the way things were. And this is sort of interesting because, like a lot of the political narrative is about building getting back to back. To normal, but saying that people don't people the normal wasn't really working for the overwhelming amount number of people in the Australian population, and they're looking for Covid the end of Covid to then deliver something new to reinvent themselves and to change things up. And I think it's interesting, like has a financial markets analogy analogy here because one of the things that really shocked me in the early days of Covid when their stock market was down like 30 percent. Google searches for how to buy stocks were exploding like it went through the roof. And so I think people and you saw this a lot that people in Covid and all the hectic ness of it would be like, I've got to sort my financial situation. I don't need to to get things sorted. I need to get into the markets. I need to get active. This is the time in this disruption. I don't want to just get back to normal, only use this to transform and and sort out all these problems in my life. So I'll come out the other side stronger. And I think you see that in the fight in with personal finance. But I think you're also going to see this is what a Leo Burnett research is showing that that's going to be that's going to drive consumer spending as well, that they're going to look for. Yeah, the messaging that's going to resonate with people is stuff that talks about a new vision of the future, not about getting back to the old, the old normal. 

Adam: [00:31:08] What does what does it mean for us? I mean, how is that? How are they sort of reframing it then? Is this around advertising? This is all around advertisers kind of taking a different path, right? 

Thomas: [00:31:17] Yeah. Yeah, this is this is what their research ties into saying. So they're saying that it's sort of talking to two avatars and talking to the motivations that people have and positioning your brand and your product in line with those those motivations and saying there's four modes they're looking at, one's making up for lost time. Revelling in the moment so actually enjoying life throws a new me, creating a new version of myself and for is creating a new world and creating a better world and saying that companies that speak to those companies should look for to sort of tie those products into each of those modes to to be able to connect with consumers. 

Adam: [00:31:56] Yeah. Well, I like I read that like, you sent me the article and apparently they said they want to. I want brands to make them laugh, give them some enjoyment because they've stood still for the last 18 months. Like, Is this really what we want from brands like? That's what I want from my friends. I want I want comfy footwear and energy drinks from my brands like I want Red Bull to give me wings. Not I'm not light-hearted entertainment. Like, Yeah, they 

Thomas: [00:32:25] don't have any friends, and I have been in isolation for 18 months.

Adam: [00:32:29] I would really hope that we're overstating the importance of brands and like I get, that's an advertising psychology thing that they need to be thinking about. But I hate to think that they're we're looking towards towards brands and products and services to make us happy, like it's Covid tourism. Nothing like can't we just be surrounded by friends and go like, This is great. I love my friends and I love sitting around having a good time, whether I'm wearing Crocs or Birkenstocks or whatever I've got on my feet, it doesn't. That shouldn't be what's important. 

Thomas: [00:33:04] They call them Campfire Brands, so brands that people feel warm around that would enjoy having around the campfire they call campfire brands. 

Adam: [00:33:11] So they go with friends. That's that's they all enjoy having around the campfire. 

Thomas: [00:33:16] But this this this is how marketing works, right? Like, it takes an existing drive within the individual and then tries to position a product which is probably completely irrelevant to that drive, but tries to position it alongside that drive. So people go like, Yeah, I just want to reconnect with my old friends and enjoy good times and a coke. Yeah, sure, that's for sure. That's the that's the play to sort of sneak a coke in there when you're trying to think about who you want to have around a campfire.

Adam: [00:33:47] They highlighted Qantas as one of the great uses of the campfire brand's theory with their latest COVID 19 vaccination campaign. The last thing I want to be thinking about when I'm flying Qantas is a fire. That's just all right. That does it for this week. Thank you once again, so much for joining us on comedian versus economist. We really love being out to bring you the show every week. Don't forget to also check out the ASX share market game Equity Mates getting right behind that as the content partner, Thomas is going to be putting together some, some written material or some other material. We're all going to be playing the game and we hope that you'll join us. Of course, you can check out lots of other great shows from Equity Mates Media Get Started Investing feed Equity Mates Investing podcast. You're in good company. Talk money to me and crypto. Curious, I should say a lot going on in the crypto space now, so be a good time to join that one. Thomas, thank you for your company once again. Thank you, and we'll be back next week with more comedian versus economist. We'll talk to you then.