If Evergrand defaults as expected, will the global economy go belly up? Why did Australia ditch France for its submarines? How did Canva becoming an Australian tech legend and what happens now that Facebook knows that Instagram is toxic? All this and more on this week’s CvE.
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Adam: [00:01:50] 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 is Adam and we're joined, as always, by my little older brother and real life economist, Thomas.
Thomas: [00:02:03] Yeah, gday Adam.
Adam: [00:02:04] I am pretty good, thanks. I just want to extend a warm welcome to you out there as well. And perhaps if you're tuning in for the first time or indeed a welcome back, of course, if you're a regular listener, we do love you tuning in, as always. A big show coming up today. Lots to unpack that might help you with your investing decisions or maybe just make you seem like a well-informed adult at your grand final barbecue this weekend. Either way, lots to get through, starting with. Why did Australia give France the flick and what are they building with the US and UK? Hint it's submarines. Why is Canada different to other unicorns in Australia? What does it do to Facebook's business model if they know it's bad for people? And AFL Grand Final this week, Thomas will have a quick look at what that means to the good old state of WA. But first, that all sounds ever good, but let's start with ever grand. If we call it last week's episode, we touched briefly on the collapsing Chinese property developer. Ever grand. Well, if you're listening to this when it's released, today is the day. It's D-Day. Thomas, what's going on?
Thomas: [00:03:13] Yeah, today is the day that evergrowing goes bust, apparently. So they've got every every grand. So every grand of the biggest property developer in China. The Chinese construction industry accounts for a fifth to a quarter of the Chinese economy. So the construction industry's massive within that massive industry. Evergreen is the biggest fish in the pond, Buckby, a substantial way, and they're about to go bust. So there are 330 billion US dollars in debt. There's eighty three point five million of interest coming on.
Adam: [00:03:45] How many how many billion dollars in debt?
Thomas: [00:03:48] 313.
Adam: [00:03:49] 313 billion dollars in debt. Hmm. Yeah, that's going to leave a mark. Yeah.
Thomas: [00:03:55] Yeah, probably. Behrouz, I think that one. Yeah. So there's 83 million dollars worth of interest coming due on Wednesday and no one thinks they're probably going to pay it, which will technically put them in default, right? Yes.
Adam: [00:04:10] And then then what does it mean? What does that? Is it just Evergreen's shareholders that are going to lose out?
Thomas: [00:04:16] Yeah, well, that's that's probably guaranteed now. No one wants to buy their equity or their bond. So people with with equity and bond with Evergreen are kind of stuck with them. No one's willing to buy them because they're about to go bankrupt. Yeah. So that's so so that's that's the first round of problems. But there where it goes from there is kind of where it gets interesting and what everyone's worried about. So their liabilities is equal to two per cent of the country's GDP. Those liabilities go to more than 128 banks and over 121 nonbanking financial institutions. Right. It spreads right out through the Chinese economy. So so there's sort of people talking about it being a Lehman Brothers moment. So Lehman Brothers was the bank that collapse that sparked the whole global financial crisis. Some people are worried that this could be the start of that, like it's a massive player. For a long time, it's been considered too big to fail. But now the Chinese government seems to be willing to let them fail. And there's a lot of banks that are exposed to every grand. Right?
Adam: [00:05:12] Is that is that why, like I saw today and this was recorded Monday about Australian share market, dropped about two per cent away, worried about this situation as well?
Thomas: [00:05:20] Yes, definitely weighing on markets. The idea now, I mean, it's been around for a little bit. I think we first talked about on the show here maybe two or three months ago. And it's and for that whole time, most of the investment banks, the Goldman's, those guys have been saying, look, I it's it's a bit of a problem. It's going to be it's going to suck for Evergreen's shareholders, but it'll be alright. It's not going to be a big drama, but it's escalated each week. It's escalated more and more. And now the now the crash, like it's hit this crisis point much earlier than people were expecting. And because it's so, so many so much of the financial sectors exposed to ever grand, no one really knows how it plays out, how it's going to play out. You can't really predict unless there's too much complexity in the story because you have the direct contagion through through the banks that have lent money to epigram. We also have the property sector itself. So a lot of the a lot of immigrants peers and are struggling to raise money. You've got 65 million empty apartments in China. 21 per cent of homes in urban China are vacant. It's like the highest vacancy rate in the world because I just went and built back massive amounts of apartments to sort of urbanise their population. But that sort of they sort of built ahead of that that process. And so there's a massive glut of empty apartments in China. They are evergreen itself employs four million people. Yeah. Construction's a fifth or a quarter of the Chinese economy. 60 per cent of seaborne iron ore demand comes from the Chinese construction sector.
Adam: [00:06:43] I was going to say, like, I presume a lot of that building happened using, you know, Aussie on.
Thomas: [00:06:48] We built we built those apartments. That's right. Was Aussie, Aussie Iron or Aussie or an Aussie and I was down to ninety dollars a tonne now, like it was back at 240 back when we were debunking the commodity supercycle myth. Yes. It's now down to ninety dollars. Yes. And I think it's how do
Adam: [00:07:04] I get it that cheap. I was chatting to a mate today about the price of iron ore amongst other things. You can't even get like like some gravel delivered to your house for
Adam: [00:07:16] ninety dollars a tonne. If we are going to
Adam: [00:07:18] get like refined dirt for that amount, how do I how they how can they dig it up in the middle of nowhere and ship it all around the world at ninety dollars a
Thomas: [00:07:26] tonne. I think it's scale.
Adam: [00:07:28] Yeah that's
Adam: [00:07:29] impressive. Isn't really the scale. Yeah. Scales well mining
Adam: [00:07:33] which you wouldn't think it would because it's heavy, you know, like it's industrial sort of processing and shipping and everything. You know, like if I order a package from Amazon
Adam: [00:07:43] it's like 20 bucks shipping. If it's going to come from the
Thomas: [00:07:46] US in the Amazon, see what price you can
Adam: [00:07:48] get. Hey, Alexa ordered me some iron ore.
Adam: [00:07:52] So that's that's what hit the iron ore price.
Thomas: [00:07:54] I think so. Yeah, definitely. Part of that seems to be sort of weighing on sentiment now that growing realisation that this is actually a pretty big story and an unpredictable story. I think that's what markets don't like, unpredictable and that this is what everyone is because it's it's escalated much more quickly than people expected. It's tentacles run deep into the Chinese economy. The Chinese economy props up most of Asia and Australia. Delta still, you know, wreaking havoc in Australia. It's lifting in China as well. So now, you know, China, the Chinese economy itself looks quite fragile in the back of this. The sounds out of the Chinese government is that they're willing to let the recession run and and the property sector have a shakeout because it's been quite unproductive for a while. So it doesn't seem like there's a lot of government support coming, that it really changes the global the global outlook significantly. If this sort of crash gets legs.
Adam: [00:08:48] What I do just like sell, sell, sell, sell.
Adam: [00:08:51] Yeah, good cash, good to cash. I mean, is that the play?
Thomas: [00:08:55] It could it could be a thing. It could not be a thing as it's just hard to know. Brilliant.
Adam: [00:09:00] That's why the people trading toys, they get that sound guidance and you take that to the bank in either cash or non-cash.
Thomas: [00:09:12] I mean I think I think I think the road ahead for miners is going to be a bit rocky anyway. Like, I think the commodity super cycle hype got a bit overblown that that was sort of shaking out already. You add this to the mix. I think the outlook for miners is a bit it's going to be a bit of a struggle through the rest of the year. That'll weigh heavily on the ASX 200 if you invested in the index funds.
Adam: [00:09:34] I'm getting that. I'm getting that itchy feeling again, that when the Covid hit and I started that, as has been well-documented when I started day trading my super, I'm starting to get that get that twitch again. The old you know why it just
Adam: [00:09:48] slides and stuff to safer water.
Adam: [00:09:50] Well, I guess, yeah. If you're tuning in today on Wednesday, what will be the 22nd. So we're going to go down. I might even want to play like the Super Bowl, take the day off and just watch it. Just watch what happens, because it could be it could be spectacular or it could be nothing, as you seem. All right. We'll find out. And yeah, check back here next week. I'm sure it if it does, it does all blow up. There'll be more to say. Yeah, that's for sure. I did actually see some footage. Speaking of blowing up, they're actually blowing up buildings that are unoccupied in China. Yeah, they're just demolishing them. They're just going well you didn't finish it and now Evergreen's collapsing. Yeah. You're not going to finish it rather than leaving these dangerously sort of half buildings lying around, just blow them up. They're like seventy percent done. Yeah. Yeah. And they're just going well there's no one to buy them so.
Thomas: [00:10:40] Yeah it's, it's unreal footage isn't it.
Adam: [00:10:42] Yeah it's crazy. All right. Well speaking of building things, we've decided in Australia we're going to build some things. Thomas, big news this week was an announcement from President Biden. Prime Minister Boris Johnson and Prime Minister Screamo announced that they're going to join up and build submarines.
Adam: [00:11:01] Hmm.
Thomas: [00:11:03] Yeah, it was a shock announcement took that the whole world by surprise.
Adam: [00:11:06] It does explain the nuclear reactor they were building next door to my house here in Adelaide. Turns out I've been lying to me. It wasn't really to power the grow lights in the community
Adam: [00:11:14] garden after a failed submarine.
Adam: [00:11:21] They got to be nuclear submarines. They're not not nuclear weapons. I've been told it's just nuclear powered subs to make make them go. Yeah, yeah, yeah. Right. So what does all this mean?
Thomas: [00:11:30] Well, there's a few interesting things. So the submarine announcement goes hand in hand with the announcement of an agreement sort of that what they call the I think it's orcas is they using that as an accurate. Yeah. Orcas. Yeah. So that's about it's not just the nuclear submarines, but there's also a long range missile. Cyber security, artificial intelligence and quantum computing that just sort of get this thing, let's get into bed together and build a sort of united front against China, and that's sort of where that's coming from. And well,
Adam: [00:11:59] that didn't in fairness, they didn't say against China. They were very careful to say we're secure in the Asia Pacific region and making it safer for its occupants,
Thomas: [00:12:10] though, doesn't it come out afterwards? I do think we should prepare for more aggressive behaviour from China after this, right?
Adam: [00:12:18] Yeah. So the big thing is
Thomas: [00:12:19] that there was was a contract for submarines with France, with the French constructors, and that got canned. And that was a.
Adam: [00:12:27] Well, yeah. You talk about aggressive behaviour. France is not happy. We're very mad.
Thomas: [00:12:32] Yeah, I think I think, in fact, Warchus is French for awkward or.
Adam: [00:12:38] Well, France is
Adam: [00:12:39] France is having a I've had a bit of a tantrum. They pulled the Australian ambassador out. So he's had to go home.
Thomas: [00:12:46] And the Washington
Adam: [00:12:47] ambassador, they even cancelled a gala party they were throwing in Washington. The party's off. And I get how anger is an emotion that a country can have. And I associate anger with like private school
Adam: [00:12:59] and private school kids, parents
Adam: [00:13:01] and the Hulk, but not with a country like it seems kind of. Can you have angry countries?
Thomas: [00:13:07] Yeah. And I think they're angry because, like, you can't call a nuclear submarine that unless it's made in the nuclear region of France,
Adam: [00:13:16] otherwise it's a sparkling submarine. Didn't the Beatles invent the submarine? So you can imagine
Adam: [00:13:22] I don't know what I don't understand what the attraction of submarines is anyway.
Thomas: [00:13:25] I think they're hard to hit in a context of missiles flying around through the air like you hide them underwater.
Adam: [00:13:31] They've got sea missiles now. I've had them know
Thomas: [00:13:35] that you can't launchers. I don't think you can launch a sea missile from the Chinese mainland and hit something a kilometre underwater.
Adam: [00:13:42] Oh, I don't know about that. And this is what I mean. Like, it feels like submarines are already kind of old technology. Like, I feel like the submarine belongs with the tanks and the infantry. Somewhere in the 1940s and in 2021, we've announced we're going to build some submarines. We've struck up a partnership with two of the biggest superpowers in the world and we're going to build six submarines. This is like when we announced we're going to build the national broadband network using an ageing copper backbone.
Adam: [00:14:17] Is this is this is the NBN of the military. Mark my words, by the time these things are
Adam: [00:14:27] built, we're going to stand around and go, why do we need submarines?
Adam: [00:14:30] The war has moved online.
Adam: [00:14:32] It's cyber espionage. It's like if you want to take out a city, then surely you're like hacking the power grid and knocking out the entire city. That way you're not, you know, sailing a ship. Is it just all posturing and and showing off our military might?
Thomas: [00:14:48] Yeah. And I think you have these sort of like indirect conflicts is sort of how tensions go. Like old wars go hot is sort of like with us in Afghanistan and Russia. When back in the Cold War, there was a lot of flashpoints where there were sort of proxy wars going on, where US back forces were fighting Russian backed forces while the US and Russia were pretending that they weren't in war with each other. But they kind of secretly were.
Adam: [00:15:11] That's good. That means jobs for a start, doesn't it?
Thomas: [00:15:15] Potentially, potentially let the old French I mean, this is what the French are sort of a little bit angry about this and like, well, you never told us anything wrong with the contracts. We opened our communications. You know, just get on the phone. We're happy to chat. If you had any problems, you know, they didn't you know, there's no heads up. Just suddenly Swiss things to
Adam: [00:15:31] the French ambassador didn't have a contract. He he didn't he say, you know, we had a deal like a gentleman's agreement. It was all done with a handshake. And yet. Well, we're good to go. I don't think there was ever anything signed. I think it was just like,
Thomas: [00:15:44] oh, no, no, no. There was stuff going, that's it. Up in Adelaide and company and stuff. But we spent two point four billion dollars on it already.
Adam: [00:15:51] It's nothing to
Adam: [00:15:53] billion. It made
Thomas: [00:15:54] 90 billion projected projected cos we spent two point four,
Adam: [00:15:58] two point four billion just setting out the demountable on the side.
Adam: [00:16:02] That is a couple of portaloos last night, a man of honour, not a second one brand spanking new demountable set up the the Yeah. What do you call the chairman's office or whatever it is.
Thomas: [00:16:19] Well I mean this is this is so the initial contact with the French construction company had a sixty per cent local construction mandate to sixty per cent had to be built in Australia. The announcement of that came at the time that the Adelaide motor plants were being shut down. And so it was seen as a bit of a fob to get Christopher Pyne re-elected is to get some submarines built in Adelaide. That's why it ended up being an Adelaide thing. And so 60 per cent had to be built in Adelaide. But the. This new agreement only mandates 40 percent local content, so right, potentially less, and we don't know how much it's going to cost and
Adam: [00:16:56] well, we haven't got a good history of building submarines. The last ones we promise to build for the French a few years ago.
Adam: [00:17:01] Yeah, we have trouble delivering that mandate at 60 percent. The previous deal, how many we built,
Adam: [00:17:08] we built none. We've got nothing. So so I said, well, 40
Adam: [00:17:12] percent is Dr. Peter Dutton
Thomas: [00:17:14] saying that in the interim, because it's not going to hit the water till 2040, but in the interim, we're going to we're going to rent some submarines from Britain and the US. Right. So we're going to move into some more of a submarine as a service
Adam: [00:17:26] model says that's delivering. Yeah. Which kind of makes more sense.
Adam: [00:17:32] Like, it totally makes sense. Like we don't we do. We need to own submarines as a nation. Is that was that what we need to buy and own?
Thomas: [00:17:40] Well, this kind of thinking got us into trouble during World War Two because we just thought, you know, our fortunes were hitched to Britain and then all the forces went to Britain and then the war came to us and Maryla or all or all of our stuff's in the European theatre. We can't defend Singapore. We're in a bit of trouble. But I think I think the reality is if the US China war went hot, you know, we're on the US side like I don't think there's any we've got to we've got to accept that reality. I think this agreement reflects that reality.
Adam: [00:18:08] You sound disappointed that you want to be on the other side. No, no, no, no. I think yeah, if that's good to know, I'll be I'll stay where I. Thanks. But it's interesting that you would all be fighting against each other.
Thomas: [00:18:23] But I think I think I think like a lot I feel like a lot of the commentary about about this doesn't clock how much the geopolitical landscape has changed in the past three or four years and particularly particularly since covid. It's the reality we sort of got to accept. I think that, you know, this sort of tension between the US and China is not going away anytime soon. It's not tenable for Australia to try and walk the middle path and be friends with everybody, which is, you know, for most of the 2010s, we're trying to have our cake and eat it, too, like we're selling iron ore and, you know, metals to China, you know, hot war. Those things get turned into tanks and missiles like the US is never going to be okay with that. You know, one of its allies selling minerals, those things to China. So at some point, we had to choose sides as long as China and the US in this strategic rivalry, we've got to choose sides. We don't there's there is no luxury as part where we don't have to choose. And I think this is sort of this choice becoming manifest. And it's a bit of a shock to people, but I'm kind of surprised that most people are as shocked as they are.
Adam: [00:19:24] All right. Well, I guess I mean, it's going to unfold agonisingly slowly, as you say, when the submarine. June 2014.
Thomas: [00:19:31] Yeah, yeah, yeah, yeah.
Adam: [00:19:32] Should be really handy, but I don't imagine
Thomas: [00:19:36] a lot more sea around by then. I think
Adam: [00:19:38] that's true. Yeah. Melting ice caps, submarines all over themselves. All right.
Adam: [00:21:27] But for now, Thomas, has cancer become Australia's most successful tech Start-Up ever? Hmm.
Thomas: [00:21:33] Yes, there's going great guns. So last week they announced that raised us two hundred million dollars and that puts their valuation now at us 40 billion or 55 billion Aussie dollars, which puts it on par with Telstra and the iron ore giant Fortescue Metals
Adam: [00:21:50] on par with Telstra. Yeah, that's huge. I mean, you know, I assume unless Telstra
Thomas: [00:21:55] has the slide is massive, it's massive. They're saying this. I know it's got 60 million active monthly users, 700 million annualised revenue, exceeding one billion by the end of 2021. More than 500000 paying teams, including know American Airlines Zoome, Skyscanner Intel, seven billion designed since launch. Cannava has helped create 120 new designs created every second year, right? Yeah, it is is massive.
Adam: [00:22:24] For those of you who might not know what can canvas essentially like a I don't know, to borrow a really old term, probably now like a graphic design company. So you can really easily make your own fairly swish looking designs, whether that's for presentations or social media posts or whatever. We actually use it here for community investors. Economists we know not particularly well, it's fair to say, but it is interesting. It's kind of like I guess it's an easy way of making some of the some of the designs used to have to know your way around Photoshop or something to make really fancy looking things. But now I kind of like that a lot easier, which is presumably why it's been so popular.
Thomas: [00:23:05] Yeah, yeah. The democratised graphic design effectively. Yeah. Covid chief executive Melanie Perkins says visual communication has emerged as a universal need. Yeah, it's up there with water and housing and I guess she means their
Adam: [00:23:22] water, housing and maybe. All right. Yeah. So yeah.
Thomas: [00:23:28] So that puts it so there there a unicorn. So unicorns having a one billion dollar valuation, their unicorn 55 times over, but they're now the biggest Aussie back tech start up by a country mile. I think so, yeah. There's 20 Aussie backs, tech start ups worth one billion or more. Kember's worth 55 billion. The other 19 combined are worth thirty two billion. So it's Canada and pretty much nothing else. Probably the exception there is Atlassian because Atlassian got was backed by overseas investors, by US investors early on. So it wasn't wasn't on Aussie back start up still. Yeah. Yeah. And I think they're going great. Yeah. The other thing I love about these guys is that they've they've pledged to give 30 per cent the stake in the company to a foundation to fund charitable works.
Adam: [00:24:13] Right.
Thomas: [00:24:14] And so the idea is that the foundation will hold that stake in the company and that they use that as a sort of a motivation tool for their employees, saying, look, if we do really well and the valuation of the company improves, that helps directly fund charitable work. If that's true, that would make them one of the biggest charitable foundations in the country.
Adam: [00:24:31] So you sent me a message during the week saying this is potentially like a new capitalism.
Thomas: [00:24:36] Well, this is what they're sort of talking about for doing, you know, that sort of triple bottom line kind of investing doing for the social good. Yeah, I think so. I mean, I have heard that said about it. And that's sort of the ethos that's driving these guys. I mean, the young kids out of Perth, I think, doing awesome stuff.
Adam: [00:24:57] They weren't cool, by the way, until they made like until they set up this 53 billion dollar.
Adam: [00:25:02] Everyone looks about happens with got Afterpay.
Adam: [00:25:05] However, they're always young, cool people when you see them, when they're in the
Adam: [00:25:09] AFAS or something like where these young cool people have made it again.
Adam: [00:25:13] But when they're starting out
Adam: [00:25:14] like, you know, it runs as large as next year
Adam: [00:25:19] goes to show respect nerds.
Thomas: [00:25:21] Yeah, but I don't know if this is going to save capitalism or save society is like like Elon Musk this week announced he was giving fifty million dollars to a children's hospital in the US and everyone's like, oh, Elon Musk, that's awesome.
Adam: [00:25:32] And it's like, yeah, but
Thomas: [00:25:34] like, do we really want to rely on billionaires to sort of prop up crumbling health infrastructure? Like is that is that really the solution?
Adam: [00:25:42] We'd probably rather that they just paid their tax. Yeah, yeah. Like I pay my taxes and no one's no one's celebrating me for saving a children's hospital, even though I'm maybe I did. Maybe my taxes went towards, you know, Women's and Children's Hospital here in Adelaide or something. Whereas, you know, and I'm not not calling Elon Musk a tax Dodger, but, you know, companies of. His ilk have had a history of, I guess, minimising tax, shall we say, or avoiding it altogether. So although in time like Bill Gates, his foundation has done some pretty good work over the years.
Thomas: [00:26:14] Yeah, yeah. Again. But it's sort of like they retain the ownership of where where that goes. So, like, you know, in theory, you know, I mean, governments and democracies have their problems. But in theory, democracy is the collective will of the people and that's the best way to democratically decide where money should go. In theory, there are big there are big problems with that in practise, obviously. But, you know, I like I know the principle of letting billionaires decide which which horses to back in the charity race is really a great outcome, as you've seen, feels more like a symptom of the problem than a solution.
Adam: [00:26:49] I'm just thinking of vessels flying the space in a rocket, right? That was his decision. He thought about what his best years were for 50 billion dollars and decided, no, no, no, for you to hospital, I'm going in the wrong place.
Adam: [00:27:09] Well, yeah, I thought there was I heard something about that. Even their investors in Canada, you had to sort of apply to invest in Canada like he couldn't, you know, not just sort of taking money anyway. You had to sort of demonstrate that you were a good human before Canada would sort of take your money. So seemingly at least the company who's walking the talk, not just kind of not just giving lip service to that stuff. So you and crushing it.
Thomas: [00:27:36] Thanks for joining us on the programme. And a little Aussie battlers,
Adam: [00:27:39] rather not an ad, by the way, just in hindsight, thinking about that conversation, is that a lot like an ad or a cash
Adam: [00:27:49] for Covid type affair? But generally. Well, speaking of billionaire companies and billionaires and Mark Zuckerberg of the world, it's been reported that Facebook knows that Instagram is toxic for teenage girls. It is,
Thomas: [00:28:00] yeah. Your journal broke a report last week saying that they had internal research showing that Instagram is harmful for teens, teen girls, body image and well-being, but decided to sit on those findings and not share them until The Wall Street Journal
Adam: [00:28:16] does not clear at all. Was literally invented sharing the slide that they have, sort of like the legs on the platform themselves. Yeah, but yes, I
Thomas: [00:28:33] mean, it's interesting because there have been a lot of peer reviewed academic research papers that have shown exactly the same thing that, you know, Instagram use is correlated with worse, you know, overall sense of well-being, self-esteem, life satisfaction, mood and particularly body image in young girls. So that was academic research, but this is their own internal research. So it sort of becomes impossible now for Facebook to claim ignorance or to claim that it's still B is still undecided, like tobacco for a long time was running with a line like, well, there is some circumstantial evidence that smoking causes cancer, but we don't know for sure, you know, try to run that line for as long as they could. You know, Facebook theoretically had been doing the same thing, going like, well, you know, there are some talk of negative impacts, but we don't know for sure. They can't really run that argument now, like, it seems pretty clear if that's what their own internal research is, is concluding.
Adam: [00:29:27] In fairness, the tobacco industry and in particular Philip Morris are trying to make good now so that I read that they're developing inhaler technology,
Adam: [00:29:37] which is nice to treat the diseases that they created, not actually stopping selling cigarettes that create those diseases, though. So talk about conflicts of interest. I think
Adam: [00:29:49] as smoking companies selling inhalers
Adam: [00:29:51] probably might
Adam: [00:29:52] be worth a look. Yeah.
Thomas: [00:29:53] So I don't know what the future is for social media. Like, it seems like there is this growing awareness that that it does create really bad outcomes for people. I mean, one, people themselves must start to recognise this at some point. I suppose when you're a teenager, maybe don't have enough world and life experience to sort of recognise that this sort of sense of, you know, sadness that you have is related to your social media use. But if you just always grown up with social media being there, you think, well, this is just life. But I feel like at some point people have tik-tok like actually I'm happier when I'm not on social media. So I wonder about its users. And then I wonder about the regulatory side, like how long do we go knowing that this is a problem that people are making? You know, people are getting sad. Some people are potentially, you know, driven to suicide through the worst impacts of it. You know, how long do we sort of tolerate that as a society? How long before the government steps in? Again, like, Ashleigh, we need to sort of need something like responsibility caps or something like, you know, like a like a poker machine. Like it's some system that that limits users engagement for like one hour a week or something.
Adam: [00:30:55] If you use gambling as an example, there are there's this concept now responsible gambling. So, you know, corporate bookies and things like that. They have those things like you can set deposit limits, you can set, you know, enforce time out. You can you know, and I don't know how successful those things are. At least that's those corporations kind of acknowledging, you know, what our product that we're offering here does does actually cause some harm. It's not good. It's not it it can be fun and it can be enjoyable, but it's not good and not not good for everyone. So we're going to provide some tools with which to kind of I don't I say regulate it or monitor that a bit. So, yeah, be interesting to see. I mean, and I guess they've successfully navigated it. Look at gambling companies and especially through Covid, you know, the profits are through the roof, so. Hasn't really hurt their business if they do more to try and look after people. Maybe that's where the Facebook, Instagram and stuff need to go.
Thomas: [00:31:55] Yeah, I mean, it's interesting. I mean, it's interesting also because, like, look, we know that marketing is based on making people feel a sense of lack and feeling some sort of sense of inadequacy and some deficit that they need to, you know, make up by buying a particular product like that. That's a very specific and well-worn marketing technique. And in Facebook's platform, potentially sort of amplifying that particular with Instagram, where it's so, so much comparison with with the visual and the filtered retouch reshaped the visual images. You know, is that the fundamental of their advertising model is that they offer their offer to the companies and saying, like, we we're helping people feel insecure and needy. So they're primed to to receive offers for your products. Like is that the actually their business model?
Adam: [00:32:44] I think there is some good on there. And I think I want to speak to broadly, but I think everyone would be a lot happier on Instagram if all they saw were just finance charts and the occasional one.
Adam: [00:32:55] So if you are looking for a break from advertising, it had to be focussed just just, you know, to look at some charts and zone out for a while and feel good about yourself. Look at the price of iron ore and just think, wow, I'm glad I'm not all.
Adam: [00:33:18] How much before we go AFL grand final this weekend. Who are you? Who are you backing?
Thomas: [00:33:24] Oh, don't ask me that. I don't know who's playing.
Adam: [00:33:27] Make me look like I'm out of touch. I got bad news for Melbourne and the
Adam: [00:33:35] Western Bulldogs are playing in the biggest game
Thomas: [00:33:37] of the Western Bulldogs. That's why they're out west and why.
Adam: [00:33:40] Yes, exactly. If their home ground game,
Adam: [00:33:44] no Western Bulldogs, both Melbourne teams. So, yeah, Asiaweek I can game actually, I reckon. But this is the first time the grand finals are being played at Opta Stadium in WA, the first time it's been played out in WA, only the second time it's been played outside of Melbourne. So last year it was played up at the Gabba because of the Covid situation in Melbourne. This year, things aren't really much better yet, although they're getting they're getting better. But this time it was Perth that won the right to host the grand final. So but what was interesting what's interesting about it is that they say it'll be obviously a significant economic lift for Perth. Right. Like you'd see a boost in, you know, as a result of hosting an event like this. And I found some stats. Apparently it's going to inject ten million dollars into their hotels industry. Wow. That's without interstate visitors, obviously, because of Covid. And it was a very hard line on letting people in 30000 plus visitor nights in a hotel on the Saturday of the AFL grand final.
Thomas: [00:34:46] It's 30000 people from outside Perth coming for the grand final.
Adam: [00:34:51] Yeah, 30000 people, which. Yes. And when you say outside Perth, what's
Thomas: [00:34:55] capacity of the stadium
Adam: [00:34:57] will put me on the spot, I reckon at 60000, about 60. That's a
Thomas: [00:35:00] half. The audience is from outside Perth. That seems unreal.
Adam: [00:35:04] Well, now, I don't know that they're just I don't know. They're outside from outside Perth there we some coming from the country, but I imagine there'll be some just from the suburbs who will just make it or not stay in the city. There's probably I don't know, in Adelaide, we've had some they call on great state vouchers. Here we go out of a hotel. I don't think I don't think at too many hotels will be offering discounted voucher stays during, you know, on grand final night. You wouldn't reckon if you if you got one of those, you'd be feeling pretty lucky because we paid one. We paid for one here. It was a dollar and we got a free bottle of wine. Wow. Yeah. Amazing.
Adam: [00:35:42] So you get tickets to the grand final AFL grand final and is staying in the hotel for a dollar with a free bottle of wine now.
Adam: [00:35:49] So I imagine it's it's like people from the suburbs who are, you know, thinking, well, just have a night out, stay in the city for taxi drivers, miss out again.
Adam: [00:35:56] Of course, I like Uber wasn't bad enough for them. You even driving home anyway. Anyway, just stay in the City
Adam: [00:36:04] Star Hotel, but still. Yeah, I thought that was interesting. So good luck to both teams in the in the AFL grand final. And any tip for Norm Smith.
Adam: [00:36:14] No, I nothing.
Adam: [00:36:16] All right, let's leave it there. Thank you once again for tuning in. We hope you enjoyed the show. We do appreciate you listening in. As I say, leave us a review on iTunes that does actually help us out or why not go and check out some of the other great shows across Equity Mates Media, Get Started Investing feed, Equity Mates Investing podcast. You're in good company Talk Money to Me, the brand new podcast from Equity Mates Media. If you haven't heard that, it's actually a really good one as well. So lots is around. Thanks once again for tuning in and we'll talk to you again next week.