The 5 Mega-trends of 2021

Adam Keily: [00:00:54] Hello and welcome to comedian versus economists, we demystify the world of money and help you get a handle on the bigger picture. My name is Adam and I'm joined, as always by my older brother and genuine real life economist Thomas. Welcome Thomas. [00:01:09][15.0]

Thomas Keily: [00:01:09] Oh, thanks, Adam. You've got a genuine in there this week. That's exciting. [00:01:12][2.1]

Adam Keily: [00:01:17] I do not adjust your sets. My voice is a bit worn out today. It's a bit husky, so maybe grab yourself a nice glass of red and put on some smooth, some smooth tunes and very quiet in the bedroom and listen to really try to understand economics. But I was down on the beach all weekend yelling at kids, so. Well, that sounds bad, doesn't it, down on the beach yelling at kids, get off my beach. I should qualify that. Our surf lifesaving coach and I was trying to it was really windy. And just so the kids could hear me, I had to yell. So I wasn't just down there abusing children on the beach. Let it be known. [00:02:00][42.8]

Adam Keily: [00:02:02] We are at episode 10 or perhaps even season two, episode one. So we've finished our intro series, which was the first nine episodes. So if you are just tuning in for the first time, if you want a good grounding in economics, macroeconomics, some of the key themes and foundational pieces, I'm going to go back and listen to it, I reckon, because I'm still not convinced that I understand fairly large chunks of it. So, yeah, if you if you do want a good grounding before we kick off, then I would encourage you to go and listen to the first nine episodes and what we call an intro series or maybe even season one to be confirmed. But this is definitely the next episode. So welcome back. And we have been getting some some listener questions through the email, Thomas, which is exciting, right? [00:02:49][46.7]

Thomas Keily: [00:02:50] Yeah. [00:02:50][0.0]

Adam Keily: [00:02:51] Um, we had an email from Toby and Toby asked following the last two episodes that we did, which were largely focused on modern monetary theory, Toby wanted to know, are there any good books to read on modern monetary theory? And he did qualify, which I thought was unnecessary. He said for someone with as much or as little knowledge as Adam, which time I'm not sure we needed to go there. I think what he meant was maybe an introductory sort of thing book for modern monetary theory. But yeah, sure. Let's go with it. Someone like me. Thomas, what's a good book for someone like me to understand MMT? [00:03:31][40.2]

Thomas Keily: [00:03:31] Yes, they're talking for you. I think Spot's big book of intermediate finance [00:03:37][5.2]

Adam Keily: [00:03:38] for one of those. Lift the flap. Yes, there. Look at spot print money print spot print. Oh, I can't wait to open the door on the Reserve Bank. What is it, the money printing machine? Um, yeah, probably. [00:03:57][18.6]

Thomas Keily: [00:03:58] In terms of the theory, I'm not really sure. Probably the defining book at the moment is Stephanie Chilterns the deficit myth. And probably in the sense it's probably the most important book because she was Bernie Sanders's economic campaign advisor. And so that's really set the ground for MMT and and driving a lot of it. I haven't actually read the book, though, to be honest. [00:04:23][24.8]

Adam Keily: [00:04:27] I got the gist just in case you thought you were getting economic advice from an expert. I got you read it. [00:04:35][8.0]

Thomas Keily: [00:04:35] No, I watched I watched the YouTube video on it and got the gist. [00:04:38][3.1]

Adam Keily: [00:04:39] says every conspiracy theorist in the world, I some recent video, it did some. Right. [00:04:49][9.7]

Thomas Keily: [00:04:49] You did your own research. It's key. That's the key. I did my own research on the Internet site. [00:04:54][4.8]

Adam Keily: [00:04:54] You're where do you get your your knowledge of MMT from then? [00:04:59][4.9]

Thomas Keily: [00:04:59] I read widely. [00:05:00][0.8]

Adam Keily: [00:05:01] You read widely. Yeah. You're just looking at Facebook and articles on the Internet. Is that. [00:05:07][5.5]

Thomas Keily: [00:05:07] Yeah, no, not Facebook. And I go to Facebook for my economics. No it's not. I mean my job means I got to like I've got to read a lot. So I like stuff going and going out in the air far or a lot of analysts are sort of publishing stuff all over the place. There's a lot out there if you want to, the equity markets discussion board. I find it's a fantastic place [00:05:26][18.6]

Adam Keily: [00:05:26] to go on Facebook. Yeah, you idiot. All right. I'm with the show, um, [00:05:36][10.0]

Adam Keily: [00:05:37] episode ten, Season two. I don't know where we're up to, but we're talking we're kicking off a kind of a new chapter really now. And we thought a really good place to start, given that it is still early in 2021. There's a lot going on we thought that we would start with. What we're calling the five megatrends that will define 2020 won, fair to say they're largely your megatrends. I'm just along for the ride, so why don't we get started at number one? And this one's a pretty interesting one, especially, I think if you're a mortgage holder like me. Negative interest rates, Thomas. [00:06:12][34.2]

Thomas Keily: [00:06:12] Hmm. Yeah, negative interest rates. I don't think we're going to see negative interest rates this year. That's very unlikely to happen. [00:06:19][6.7]

Adam Keily: [00:06:19] But it's a terrible title then. Five megatrends for 2021. Yeah. We don't think it's going to happen this year. [00:06:25][6.3]

Thomas Keily: [00:06:26] I think I think, I think the key to Ren what I what I'm trying to point to there is we used to think up until covid hit that interest rates had a floor that once the Reserve Bank, once the official cash rate hit zero point twenty five percent, that was it. There was no more rate cuts to be had. Yeah, we now know that that's not true. The RBA has come up with a funding source for banks, that they're pumping money into the banks so long as the banks go out and lend it. And they're doing that at the moment. They're giving banks money at zero points one percent, um, which is, you know, sweet F.A. in a technical term, [00:07:04][38.3]

Thomas Keily: [00:07:13] Right. And as long as banks go out and lend that to customers, then they can access that funding. Um, okay. But this is sort of that right. That zero point one percent, that's not bound by anything that could there's no theoretical limit on what that number could be and it could be negative. And in some countries around the world, it is negative really. Yeah. [00:07:37][23.7]

Adam Keily: [00:07:37] So are consumers and people like me getting that negative rate, like are we can we expect to see that in the Australian economy? Will we see negative rates? [00:07:48][10.4]

Thomas Keily: [00:07:48] Not as I said, not this year. It's very unlikely. So, um, [00:07:52][3.8]

Adam Keily: [00:07:53] but you think that you think the RBA will go negative this year? [00:07:57][3.8]

Thomas Keily: [00:07:58] I think there's a good chance. I think there's a good chance, particularly if covid covered, kicks on, lasts a bit longer than we thought. We still you know, the damage from covid, we're still talking about five to 10 percent of the economy of GDP. We still haven't made that up yet. So we're still talking about an economy that's struggling under the weight of covid. Um, it's it's definitely not the case that policymakers have done in terms of trying to stimulate the economy and help it recover. And so it's probably not the case that monetary policy is done. And that to me, it seems quite likely. And the RBA has set up the infrastructure to make this happen for rates to go negative and for banks to be able to access money at negative rates, which they can then pass on to [00:08:44][46.0]

Adam Keily: [00:08:45] because RBA, the RBA did say that they had a floor previously. This was not long ago, maybe six months ago. They said the floor was a point to five, as you mentioned. So is there a new floor now or now that they're just kind of admitting they're like, well, now we went through the floor, [00:09:01][15.6]

Speaker 3: [00:09:02] we don't really know what's after the floor because now we're [00:09:07][5.2]

Adam Keily: [00:09:07] now we're obviously can't set a new floor because that would just make ourselves look a bit foolish. [00:09:13][5.7]

Thomas Keily: [00:09:13] Yeah, that's probably not the exact thinking at Martin Place, but yeah, there yeah. Once you sort of like open up the to the realms of negative interest rates and then, you know, it's infinite. You could go to negative infinity like theoretically now. So that also probably not going to happen. [00:09:37][24.3]

Adam Keily: [00:09:37] Good news, good news for mortgage holders, or their way to negative infinity. Oh, man. I'm really annoyed that I listen to you to fix my home. I write it back when they were positive. Two points. [00:09:52][14.7]

Thomas Keily: [00:09:55] No, but I think I think the key thing is monetary policy is not done. It's not out of the game. And if the economy doesn't recover rapidly and, you know, this is making a good fist, things are on track, we're doing pretty well, particularly compared to the rest of the world. But, you know, outbreaks keep popping up. And so it is possible that we will see rate cuts this year. And that and that means, you know, it's not hard to get a mortgage rate with a two in front of it, like, sorry, with a one now like that. That's possible with a one in front of it. I think we could possibly see low ones by the end of the year. And mortgage rates potentially, potentially the way for that is open. Now, I think this is quite a big topic. It might be worth just may be going into it next week. Maybe we should do an episode on it. [00:10:41][46.1]

Adam Keily: [00:10:42] Yeah, I think that'd be good, especially for people like me who got a mortgage and want to know what maybe that means. I think especially in terms of, you know, the. Common thinking, at least, that I understood was you should try and pay off your mortgage as quickly as possible. And so, you know, we start talking negative interest rates or zero rates or whatever it is, then maybe that doesn't make sense. Like money's so cheap. Why would you try and pay it? Like, wouldn't you be better off assuming you made good investments, you know, investing that money that you would otherwise be pumped into your mortgage, just pump it into the share market? [00:11:17][35.3]

Thomas Keily: [00:11:18] Yeah, it's true. Like if you're getting paid to have a mortgage like one, I just have as many mortgages as you can of a portfolio of mortgages for mortgages, please. All right. Well, yeah, maybe if that's something you want to hear, actually, then send us an email cve@equitymates.com or equitymates.com/cve on the web. Yeah, I think that is there probably is more in that and we could do a whole episode on it rather than just one of our top five megatrends that will define t2021, 2022 and 2023. [00:11:51][33.1]

Adam Keily: [00:11:58] All right. So moving on, number [00:11:59][1.4]

Adam Keily: [00:12:00] two of the megatrends are money printing. So we talked about that obviously quite a lot of in detail last week and the one before. Yeah, a couple of different sorts of angles on it. But you're saying what about money printing in 2021 [00:12:15][15.0]

Thomas Keily: [00:12:15] when it's going to happen? [00:12:16][0.7]

Speaker 3: [00:12:17] Right. It's a big goal here. [00:12:19][1.5]

Thomas Keily: [00:12:20] Yeah, no, I mean, the RBA is earmarked 100 billion over six months. They go to print. Yeah, they print. They're buying government bonds. Government. The government's got like looking at a budget deficit of 10 percent of GDP. Where that money goes is really interesting. So whether that goes into infrastructure spending that might, you know, that might support companies in the infrastructure sector if it goes as direct household payments, that might support the retail sector. You know, Premier Investments, Solomon Lew's company that posted record profits a few weeks ago. So. [00:12:56][36.3]

Adam Keily: [00:12:57] Yeah, and that needs some help. [00:12:58][0.9]

Thomas Keily: [00:12:59] Yeah, well, no, I say no. I mean, that's on the back of our head of the household sector. That's quite flush with cash at the moment on the back of all the job, shopkeeper payments, and all that sort of thing. So retail spending and the household sector are holding up very well at the moment. And if the economy continues to lag, that's potentially a good injection point of stimulus into the economy and might help out companies in that sector. So there's a lot of government money earmarked to come in. Where it comes in is going to be an interesting question and is something for investors to watch. But, yeah, as you're saying, we covered this in the last couple of episodes a bit on the mechanics of it. So go check that out if you want to want more detail. [00:13:36][37.3]

Adam Keily: [00:13:37] Is there any relationship between money printing and negative interest rates? Like do they can they start to I don't know, like can they go negative because they can print money or like yeah. [00:13:49][12.6]

Thomas Keily: [00:13:50] Let's say yes and pick it up next week. [00:13:52][2.0]

Adam Keily: [00:14:03] I feel like I've asked a good question and you're like not let's not talk about that now. [00:14:08][4.1]

Thomas Keily: [00:14:08] All right. It is a good the question, but it's like it's a can of worms. [00:14:12][3.3]

Adam Keily: [00:14:12] Well, let's you acknowledge that. That's good. All right. So number three, we're talking about a trade war with China. Is that's happening to some extent already? What's happened? What's going to happen in the next 12 months? [00:14:25][13.0]

Thomas Keily: [00:14:26] Yeah, it seems pretty clear that China's not happy with the run of things we've been getting in Australia. So most of our exports, you know, China has very quickly become our major trading partner, our major export destination, um, and in quite a serious way. So the Australian economy has become quite reliant on the Chinese market and selling to the Chinese market. Um, it looks like China is trying to leverage that dependency into a more compliant politics out of Australia. So not happy about I mean, in fact, effectively, I think after covid there was a sort of a clear break where Australia had been trying to walk the line between being friends with two major strategic rivals in the US and China and kind of trying to have it both ways. And yeah, yeah, we're best buddies with the US and all of our military sort of dependencies with the US, but we really want to sell to China. So we're best buddies with China, too. Once those two powers started going at it, they kind of looked at us like you can't really have it both ways. You can't be China's sheriff in the Pacific and getting rich on the Chinese market. Well, yeah, and China's still pressuring, pressuring Australia and then doing that through a number of trade bans and, you know, a range of. Commodities are sort of getting tied up in and the Chinese, the reason [00:15:56][90.0]

Adam Keily: [00:15:57] is that a bit dependent then on the US-China relationship, like if US China relations improve, then presumably they we can say, well, it's okay that we're friends with the US again now because you guys are friends? Like, what is it? The friend of the enemy of my enemy is my friend or something like that and I like it. Is that and now that because now Trump's gone and so Biden's in just I think they got him in and they had to delay it few time of practice goes. [00:16:30][33.7]

Adam Keily: [00:16:32] But now that Biden's in, are we thinking that relations will improve or is that too, too simplistic? [00:16:39][7.6]

Thomas Keily: [00:16:41] I think it's unlikely. It's going to I mean, I'm not a geopolitical political expert, but I'm so disappointed. I'm going to can't answer that question. We'll talk about it next week. Now, you're not an expert now. [00:16:56][15.6]

Adam Keily: [00:16:57] I understand. [00:16:57][0.0]

Thomas Keily: [00:16:57] Yeah. I mean, I think [00:16:58][0.7]

Adam Keily: [00:16:59] it's either a mind, so I guess we're even. [00:17:00][1.5]

Thomas Keily: [00:17:03] geopolitical experts that I'm reading for like this would say that this guy's got an awesome YouTube channel, talks a lot about it. [00:17:12][9.2]

Thomas Keily: [00:17:13] No, I like I think we're going to have a different policy, like a different stance out of the US with Biden. But I don't think we're not going back to the way things were. And I don't think that was ever really, really going to last. And I think I think the US and China will still are going to remain strategic rivals for a while. That might there might be some trade sort of fungibility at the edges of that. And that might be a bit of giving and take. But I think there's a recognition that there are strategic rivals now and that has implications for the interconnectedness of the strategic rivals economy, and that includes ours. And so it's a not to not letting Chinese companies run our security networks or telecoms networks, you know, like. Yeah. This kind of decision, I don't see that's not going to change under Biden. Right. And I think that's there for the long run. And I think and it does seem like China is setting Australia up as a bit of a test case in economic coercion. [00:18:16][63.1]

Adam Keily: [00:18:17] I wonder that and away from big enough to sort of fight it out with them. I mean, like, I feel like I don't know, I feel like we're sort of, you know, bringing a water pistol to a gunfight here, like, [00:18:26][9.1]

Thomas Keily: [00:18:27] ah, yeah. I mean, like militarily not no way, but. [00:18:31][3.9]

Thomas Keily: [00:18:31] Oh, no, I don't mean like listening. China not suggesting that we're going to we should go to war [00:18:38][7.3]

Adam Keily: [00:18:39] now and even economically, you know, like can we impose, I don't know, our own sanctions or anything that's going to kind of [00:18:46][7.3]

Thomas Keily: [00:18:47] it's a very one-way relationship that we export to China. And, um, yeah, we and we're dependent on China. And the bond that Australia's got in is that we let our export markets become very, very heavily tilted towards China. And so that requires some unwinding of that dependency. But the thing that Australia has in its favor is we're a commodity exporter and commodities are fungible. So if say, for example, that if China says we're not going to buy Australian iron ore, they've still got to buy iron ore from somewhere. So maybe they buy it from Brazil or something. But that means that Brazil is now certainly selling to China. They're not selling to someone else. So that's someone else. Whoever still needs iron ore. And iron ore is just iron ore. So they just buy Australian iron ore. [00:19:33][46.6]

Adam Keily: [00:19:34] But that assumes that supply and demand thing, though, isn't it? Like assumes that Brazil can't meet the demand of everyone. Like, what if Brazil goes? Yeah, we can accommodate your needs. China, as well as supplying everyone who we're already selling to. [00:19:46][11.7]

Thomas Keily: [00:19:46] No, no, no, no, no. That's not how the iron ore market works. I shake your head. That went away. No, no, no, no, no, no, I don't. Do you know anything about iron ore exports? No. [00:20:05][18.7]

Thomas Keily: [00:20:08] Yeah, no, that's not what it's not what determines iron ore production, right? Yeah. No, no, [00:20:15][6.9]

Adam Keily: [00:20:16] you're not a geopolitical expert, but it turns out you're an iron ore export. Yeah. You might be surprised to know [00:20:22][6.2]

Thomas Keily: [00:20:23] we're not at the level of expert knowledge right now. They're very good. [00:20:30][7.4]

Adam Keily: [00:20:30] I think. I think I need a break just now. So why don't we just take a quick pause, get a word from our sponsors if they are if they're sponsors, and we'll come back and we'll finish off our top five megatrends for 2021. [00:20:44][13.5]

Thomas Keily: [00:20:45] Banking with Virgin money has never been more rewarding. Earn rewards on your everyday spending and pay zero monthly. Fees with the Virgin Money Go transaction account and with points, perks, and epic experiences tailored to you, you can manage your money easily on the go smashers savings goals, get money for it, and be rewarded for it. Back to your own beat virgin money terms and conditions and monthly criteria apply. Now let's get into the show. [00:21:11][25.8]

Adam Keily: [00:21:14] Welcome back here on comedian versus economist. I'm Adam. This is Thomas, and we are going through our top five megatrends for 2020. One economics, megatrends, I guess. Number four, we're up to Thomas and we're talking work from home and regional rotation, so what's regional rotation? First of all, [00:21:35][21.4]

Thomas Keily: [00:21:36] I think we're going to see a shift of the economic balance away from the capital cities and towards the regions. Not not not completely like the Australian economy is very you know, I don't know. It's like 90 percent of economic activity happens in the capital cities where a very centralized economy is in that sense. And so I think we're going to see a bit of a shift away and a bit of a movement towards the regions, I think work from home. You know, it started as a bit of crisis response, a temporary it was a sort of a stopgap measure just to sort of get us overcovered. But it's sort of dragging on, you know, like I think it's going to be here with us at least until the middle of the year, maybe probably the end of the year. So that's sort of like almost two full years where companies have had to live with work from home. And so that's starting I think we're starting to see that shift from being, you know, companies seeing that as a temporary response to just actually it actually changing the way that they do business. And once they get all their systems set up and they become more permanent, then there's a sort of, you know, inertia there. And it'll be it'll take a while to shift back, if at all. And so I think initially I was thinking work from home was just wasn't going to have a huge impact because I expected it to be a temporary measure and that companies would soon call their workers back into the office. But more and more, I'm seeing companies and even public sector agencies position themselves to be to make work from home an ongoing reality. [00:23:04][88.2]

Adam Keily: [00:23:05] Yeah, it's definitely happening more like from what I've seen, you know, around Adelaide where I live and people that I know more and more are saying that their employers are just making it a permanent move or setting up a hybrid type arrangement or even a, you know, sort of an optional thing was like, well, we've got this office space in the city, but you only need to come in one or two days a week. You can come in more because I think that's the big challenge. Work from home is really attractive to some people, but then other people, maybe not so much. And you mentioned, you know, regional rotation, people may be moving out to the regional areas. Do you reckon part of that is that is going to be a need to upsize your house like people who want to spend more time working from home if you're living in, you know, in the inner suburbs of Sydney or in the city, you know, maybe for, you know, Sydney prices, you might be able to get a one-bedroom apartment for three million. You know, obviously not accurate, but, you know, you don't if you're in a one bedroom apartment, you don't have space to set up an office. And a you know, it's then that's given, you know, it's a mood lighting or whatever you need to to create that office space. So do you reckon that's going to drive some of the regional move as well? [00:24:21][76.6]

Thomas Keily: [00:24:22] Yeah, I reckon a must be the case. I mean, once you once you take away the work, like I think a lot of people aren't you know, they're not emotionally connected to living in the city. Look like I'm in Byron Bay and it is just packed right now. Like there are so many people here. The rental market's just ridiculous. Yeah. So many people looking to get out of the cities and get to the regional areas. Well, at this particularly. But I hear it happening all up the coast of New South Wales. Yeah. But I think it's it's probably a factor because I think working from home is fun. If you if you if you really well set up for it, so I work in a coworking space because I don't want to working from home with kids and is a drag and I don't really have a room for it. I don't want to work at the kitchen table. [00:25:12][49.8]

Adam Keily: [00:25:13] Yeah. [00:25:13][0.0]

Thomas Keily: [00:25:14] So, yeah, I think. I think I think yeah. There's that there's going to be a lot of shifts like this taking place. I think there's [00:25:20][6.3]

Adam Keily: [00:25:20] a long there's a lot to play out though. I think like there's still are I and even now there's a novelty factor. But I think people are starting gradually to miss the office a little bit. They're missing. You know, people will complain forever about having to go into the office, being dragged into the office. But I reckon people are starting to miss the social elements if if they aren't already, you know, going into the office. I think there's a lot of other reasons to go to the city, too. And I was actually listening to this podcast the other day. Do you know Tim Ferriss is the author of the Four Day Work Week and some other books he was interviewing for? [00:25:56][35.4]

Adam Keily: [00:25:56] That's what I said. For that, I work with him as a visionary who set the bar a bit higher. But I went well, he was interviewing this bloke, Neil deGrasse Tyson, the astrophysicist fellow, and he was talking about how we're going slightly off-topic here. I was talking about how he's being raised in the city was really important for his development. His parents used to take him out to to go and see, like, expert in their field, whether it was in the in theater or to a Yankee game or whatever it was to go and see, you know, museums and art galleries and and all the best stuff. And that all still happened in the city. And he was saying the issue with families that moved out to regional areas or as he said, even to the suburbs, that stuff didn't kind of exist there. And so, you know, his parents wanted to do it to expose him as a child to as many things as they could so that he could then make his own mind about what he wanted to do when he grew up. And so I think there's a kind of there's an argument still, and this will still ring true for a long time. Is the city's city still need a hub? You know, like you still need a place where things happen, big events happen and, you know, a place to put your art gallery and your museum and you live, you know, huge, huge libraries and university or the regional campuses now. But so, yeah, I think there's still a lot to be said for the city. I don't know that maybe from a commercial aspect we're going to lose out on commercial properties, but that might not be a bad thing anyway. [00:27:33][97.3]

Thomas Keily: [00:27:35] Yeah, yeah. I mean, yeah, it's interesting. I think it's interesting looking at what value there is in a city that's beyond purely the work story. Yeah. I mean, it's interesting. I mean, I don't I don't feel culturally deprived where I live at all. Like, it's humming here, but yeah. I think yeah. Maybe some people. [00:27:54][19.4]

Adam Keily: [00:27:55] Nah. Yeah, absolutely. And different. I mean, you know, culture takes many, many forms so. Yeah. No, I'm not suggesting that you would be but yeah I think there's still a case for the city that I need to make it. [00:28:07][12.6]

Thomas Keily: [00:28:09] Yeah. You're living in Adelaide. It's practically a country town. I'm twenty minutes from everywhere. Uh, so. [00:28:18][8.6]

Adam Keily: [00:28:18] All right, let's crack on the number five. Let's bring it home. Number five, the truth is dead. This sounds very controversial. What are we talking about here? The truth is dead. [00:28:26][8.0]

Thomas Keily: [00:28:28] I think this is pointing here to the way the media's changed over the last probably only five years. There hasn't been very long. We sort of thing we've really seen an almost like a Balkanization, a splintering into thought bubbles. People live in media thought bubbles. They get a particular you get to get exposed to particular ideas and they start to reinforce and they live in totally different universes. And I think you look at what I think America is sort of the strong example of that. The people right now in America, you just can't even understand. Trump supporters can't understand how anyone could vote for a monster like Biden. Biden supporters can't understand how anyone would vote for a monster like Trump. And they can't understand each other because they're just tuned into completely different movies. They're watching completely different things play out. And I think this is it's a really interesting problem for liberal democracies is how do you build consensus to make stuff happen, whether that's, you know, a pandemic response or meeting the challenges of climate change or rebuilding an economy, these things that we have to do collectively, how do you build a consensus when people don't even have a shared description of what the problems are? They're seeing totally different problems [00:29:52][84.0]

Adam Keily: [00:29:52] because your news feed used to just be the newspaper. [00:29:55][2.7]

Thomas Keily: [00:29:56] Yeah. And everyone had the same. News feed, and now everyone's got a different news feed, everyone's got a curated news feed to their own set of biases and tastes and whatever, I heard a good talk with someone out there wants to make a website. I reckon a good website would be if you couldn't build like I'm giving away a killer idea here. If you make money out of it, shoot me some cash now. [00:30:22][26.5]

Speaker 3: [00:30:23] But I reckon if [00:30:23][0.6]

Adam Keily: [00:30:24] you could build a website that took all of your biases that they currently use to display news and advertisements to you, if you could just flip that and display the opposite, the counter-arguments and the counterstories and every kind of if you're a Trump-supporting kind of guy, then you visit this site and it gives you lots of positive news articles about Biden and why Biden is a good guy. Just somewhere you could go and check into every now and then to get the opposite view to yours. So it's still a curated, tailored news feed, but it's like the opposite of what would resonate with you and just go and see kind of what the other half sees for a bit, or just find a friend who, like you, don't really get on with and asked to swap news feeds this time swap Twitter creds or something for a while. [00:31:15][51.3]

Adam Keily: [00:31:17] Don't do that. Share your password. [00:31:18][1.0]

Thomas Keily: [00:31:21] I mean, I think is interesting where the media finds itself in this reality. And I think, you know, they start there's a self reflection happening. Twitter and a few other platforms have been Trump. They're starting to take some responsibility for some of the stuff that's getting shared on their platforms. They're not seeing themselves as neutral. I think there's a recognition that the way they've set up the algorithms has created a sort of a force that they need to take responsibility for. And so where we come out at the other end of that, I don't know. I mean, and it's interesting, like, I wouldn't know I wouldn't be sort of advocating for the good old days of centralized media where, you know, everything we came we got came through Rupert Murdoch's filter. But yes. But it's like. [00:32:09][48.1]

Adam Keily: [00:32:09] But what I did enjoy the comics. [00:32:11][1.3]

Thomas Keily: [00:32:14] So think I think we've gone from like a highly centralized meta media to a completely decentralized media where you're only seeing user-generated opinions where anyone can have a crack and give you whatever. And there's no sort of like authority or legitimacy built into what you're seeing or any need for legitimacy. Yes. So what does [00:32:34][20.6]

Adam Keily: [00:32:35] that just quickly, so what does that do economically then? Like what are the ramifications of such a kind of divided I don't want to say society. I don't think we're divided as a society. But, you know, like if such division, at least politically, and it does that, does that play out into economics as well? Somehow? [00:32:55][20.8]

Thomas Keily: [00:32:57] I think I think particularly with the pandemic response and where the money goes, I think is going to be really challenging, you know, like so I think like something like job keeps it like you could imagine things that are universally popular across the political spectrum. Job keeping seems to be an example of that. I deduce corporate profits, you know, perhaps a little more than was necessary. But generally, people have been pretty happy with that. But, you know, as I know like a vaccine rollout, like, you know, markets are still expecting, you know what to me, looks like a really ambitious vaccine rollout schedules. They're talking about, you know, 90 percent of the developed world being vaccinated by the middle of the year. Like, to me, that seems to me that seems incredibly ambitious and requires like, you know, requires [00:33:46][50.0]

Adam Keily: [00:33:48] everyone has a pipe dream. [00:33:48][0.0]

Thomas Keily: [00:33:49] Sorry, that's not happening. [00:33:50][0.8]

Adam Keily: [00:33:52] That's Goldman Sachs, which is are, you know, with some of the news feeds that I've seen, you know, people are buying into conspiracies and all sorts of stuff and 5G being injected into people's schemes. And like there's not a and it's just I think there's genuine nervousness, too, around the vaccine. And we're probably well out of our area of expertize here. But I think that you know, people are hesitant because it feels like it's been rushed. And, you know, I don't know personally, I'm going to I'll take it. It's, you know, a ABAC science, so I'm having it. But, um, but, you know, just I think there's still some concern and whatever. So, yeah, I think ninety percent we couldn't. How many people do we need to install the covid Seyfarth. [00:34:38][46.1]

Thomas Keily: [00:34:40] Yeah, right. Did we need to get 60 percent or so until we didn't? We definitely did until we stopped talking about it. We couldn't get that. So that was much easier than a needle in the arm. It was, yeah. [00:34:56][16.0]

Thomas Keily: [00:34:57] A bunch of chemicals under the skin. Yeah, exactly. Yeah. I don't know. I mean, and I think it's I mean, it's a real challenge for liberal democracies like China doesn't have this problem. China says we're doing a vaccine. We're locking down the state in China. China tested nine million people in one province. There was a cold outbreak. They tested nine million people in a weekend. Hmm. You know, like they don't have to deal with this. They don't have to deal with the population that's like that that can splinter along some of these political lines. What becomes more become politicalized lines are not necessarily political would be, begin with. But they become political like it's a challenge for liberal democracies, like how you build consensus to get stuff done and we still need to get stuff done collectively. Yeah, I think that's going to be one of the challenges of the year, and the tools that we developed to build that consensus aren't there right now but are badly needed. And I think that's going to be really interesting to watch how that plays out. [00:35:57][60.2]

Adam Keily: [00:35:58] All right. And that's one. So quick recap, five megatrends for 2021. Number one, we had negative interest rates, maybe not this year, but maybe next year. The money printing train is just going to keep on rolling on. That was number two. Number three, we had a trade war with China. Might get better before it gets worse. I get worse before it gets better. Is that fair to say? [00:36:20][22.3]

Thomas Keily: [00:36:20] Yeah. Yep. Maybe we saw that. [00:36:22][1.4]

Adam Keily: [00:36:22] And then number four, working from home and regional rotation is going to keep continuing and maybe expanding a number five. The truth is out there, [00:36:32][9.4]

Thomas Keily: [00:36:33] but it's dead. So what was it? X Files reference. Watch the skies. [00:36:43][10.6]

Adam Keily: [00:36:47] Well, that's not far from where we're at anyway, as far as territory feels like in twenty, twenty one. But we do hope you're happy keeping you keeping well out there and keeping safe. And thanks very much for listening to comedian versus economist. As we mentioned. Don't forget, you can email us any time, as lots of people are doing now, which really is really amazing to see you coming through. So thanks for all your emails so far. You can e-mail us cva@equitymates.com Or check out the website equitymates.com/cve. Thanks again to equity markets. If you're after some really good investing knowledge and information, then be sure to check out the Equity Markets Investing podcast. Those guys are doing some amazing stuff over there. So yeah, that's it for this week. We'll be back again next week and we'll look forward to your company then. Let us thank you. All right there. [00:36:47][0.0]

[2025.1]