This is what the Flux.
I'm Brett and I'm justin As Wednesday, the sixth of November.
Juzzy boy. Optus have been through the PR wars over the past couple of years, between major outages and cyber attacks. You think it was all over now, but the age riple see is still coming for Optus. It's taken Optus to court for exploiting hundreds of vulnerable people by pushing sales of phones and internet services even when OPTAs had no coverage in the.
Area of this has really got to do something about his PR here man, Uh huh. But Sam, As we tick over to the new month of November, it means a brand new chance to check your credit score and see if it's gone up, if it's gone down. We've got it all covered in the Flux app, including what's impacting your score they shot it. Download the app and check out your credit score to kick off.
November, three meaningful stories today, juzzy boy, Let's do it for our first. Westpac has announced an annual profit of seven billion dollars, which is actually a three percent drop from last year. As mortgage competition ramps up.
To me like mortgage repayment pressure is ramped up, b Man. So what is the story here?
Well, Jussie boy, we know Westpac once known as the Bank of New South Wales a long time ago. It's the third largest lender in all of Australia by market value, and Westpac is constantly jostling with the other big banks for new retail and business banking customers.
And now b Man. Westpax announced a net profit of seven billion bukkaroonies for the past twelve months.
Which is actually a three percent drop this year compared to last year.
And be man, the biggest drop in earnings came from Westpac's consumer division. Yes, Jusi boy.
Westpac said that its revenue actually went down six percent thanks to tough mortgage competition.
And its net interest margin fell to one point ninety six percent.
Now do boyd? Despite weaker results for old Westpac, it's crossing its fingers and toes that loan demand will jump.
And even though the RBA paused the cash rate yesterday, they're hoping the RBA will start to lower the cash rate in the coming months.
Wow, So what is the key learning here?
When the Reserve Bank changes its cash rate, the banks will follow suit.
Most of the time you see Jusi boy. The cash rate is the interest rate that banks pay to borrow money from other banks.
So when the cost of borrowing goes up, the banks like Westpac, they pass on that cost jump to consumers.
Yep. In twenty twenty three, the RBA up the cash rate by zero point two five percent. In feb and March and May and June and November and be.
Man, all four big banks increase the interest rate to borrows by the same amount in the same months.
Now, Josey woy Oussie homeowners holding their very breadths for the RBA to cut the cash rate early next year.
And they're holding their very breaths even more for the banks to follow the RBA and give homeowners a little bit of mortgage relief.
But of course, there's no guarantee that when the RBA finally does cut the cash rate, the banks like Westpac will actually mirror that move.
In fact, be Man back in twenty twenty when the RBA dropped the cash rate from point five percent to point one percent between March and November, the average variable rate for homelans stayed at four point five two percent.
So we'll have to wait and see if once the RBA starts reducing rates, the banks actually follow suit.
For our second story, Google has been fined two undercillion rubles or twenty bacillion US dollars by a Russian court after blocking Rush state media channels on YouTube.
Suddenly my ninety two dollar parking fine is put into perspective. Boyfair to say, So, what's going on here?
Okay? So, back in March twenty twenty two, Google stopped serving ads to use in Russia that believe was exploiting Russia's war in Ukraine.
Indeed, Google blocked more than one thousand YouTube channels in over five and a half million videos.
And now Russia has come back and find Google twenty decillion US dollars.
But here's the thing, Jazzy boy, twenty dacillion US dollars is more money than there is in the entire world. But if Google does not pay the fine in the next two hundred ninety one weeks, then the penalties will increase to one Google.
Which is oh one, followed by one hundred zeros.
And z boys. Pretty obviously, Google couldn't even pay this fine if they tried, But Russia's hoping that this fine so big you can't even pronounce it will push Google to lift destrictions on these channels.
So what is the key learning here?
Global tech giants and national governments can often find themselves in a complex power struggle.
Yeah. On the one hand, countries recognize that big tech that ribe innovation and provide jobs, and.
They contribute to their economies and sometimes they even paid tax donavoy. Many governments are also looking for greater control over big tech company. So the first time we've seen battles between big tech and governments around the world. Well, there was and still is the media bargaining battle between Meta and the Australian government and media.
There was and still is the battle between TikTok and the US government and whether it will be banned in the US.
And then of course there's Russia's twenty Decilian fine of Google.
But man, it's pretty clear that Google has been wary of operating in Russia for quite a few years now.
Yep. In twenty twenty one, Google made around one point three billion US dollars in Russia, but.
In twenty twenty two it may just two hundred and forty five million US dollars. So, b man, all this fine could technically bankrupt Google, it doesn't seem like investors are too concerned about them actually coughing it up.
For our third and final story, Peloton, the connected fitness company, has seen a chair speed up twenty two percent after its first quarter results smashed expectations thanks to a pretty key pivot talking.
About going up a gear or three for Peloton. Be man, so tell me what's going on.
Peloton is the fitness company known for that super fancy exercise bike and.
Then it's super fancy treadmill.
Started way back in twenty twelve with a two hundred and fifty thousand dollars Kickstarter campaign.
But Beman, it was during COVID when Peloton really made a name for itself.
Yeah, Peloton was absolutely booming. Its market valuation jumped to just under fifty billion US dollars, were all completely.
Nuts, and it became the at home bike of slabs like Lizzo, Roger Federer, even mister Worldwide Pitbull.
Then vaccines hit the world and Peloton came hurtling back down to earth.
Yep the bee Man. After struggling for the past few years, Peloton could be gearing up for another comeback.
Yep, It's results exceeded guidance on all metrics. We're talking profitability, we're talking growth, and it reduced its ad spend as well.
And be man, that's largely because Peloton pivoted like a pro cyclist.
And now it's mainly focused on selling the subscriptions.
So what is the key learning here?
When you own the supply chain from end to end, you stand to gain the most, but you also stand to lose the most.
You see, be man. When Peloton launched, factured all of its bikes and its treadmills in the US of A.
On top of that, the company also produced all of its own content and its app, and it sold all of its.
Own products directly through its website and nowhere else.
But doze boy. That meant that when times are good, Peloton was peddling to glory.
When things got tough, they were left with over one point four billion dollars worth of unsold bikes and treadmills.
That's a lot more than nineteen million dollars they were sitting on just two years ago. Talk about a bumpy right, So boy, Peloton has de risked his business by outsourcing its production to Taiwan.
And outsource its distribution by selling through Amazon and.
Costco, and now it's focusing on nailing its subscription offering plucks down. Did you know if you changed your electricity, your gas, or even your phone fields that could impact your credit score the micro app at microcown and so many changes can happen each and every month. That's why we've got the Flux Credit Score feature where you can check what's happened in the last month, and it's all within the nifty Flux app, So make sure to download the app and check out your.
Credit score for the month of November.
Thanks for listening and we'll see you on Friday.