Here’s what you need to know today

• Donald Trump and Xi Jinping have agreed to a one-year trade war truce on a call that follows their trade summit last month. Trump described the call as “very good”. Beijing will hold off on export controls on rare earth minerals and critical minerals in exchange for Washington’s stay of export controls over Chinese entities. (FT)
  
  

• Rep. Alexandria Ocasio-Cortez and the White House may not have much in common, but both agree that there will be no federal bailout for major AI firms in the event of a crash. White House advisor David Sacks stated “there will be no federal bailout for AI… If one (major AI firm) fails, others will take its place.” However, OpenAI and other leading AI firms have entangled themselves into the federal government, raising questions about the industry’s political leverage. (Quartz)
  
  

• Bendigo and Adelaide Bank’s troubles have gone from bad to worse. Already down 13% for November, the regional bank announced today that an internal review found potential money laundering and terrorism finance concerns. Notably, the bank elected to go public with these findings rather than wait for a regulator to find the shortcomings on their own. The markets responded as expected: shares plummeted 7% on Tuesday. (AFR)
  
  

• ASX rollercoaster DroneShield is back on the move as the company announced a new $5.2 million contract with an existing customer. The Australian defence tech firm will supply its anti-drone technology to an unnamed European military, boosting shares by over 7%. This is welcome news for shareholders that have seen shares drop 73% since early October after the CEO sold all of his shares. (AFR)
  
  

• After three years on the market, Walkabout Creek Hotel has sold to a young local family for an undisclosed amount. The 120-year-old McKinlay pub came to fame in Crocodile Dundee and is the central hub for McKinlay’s 120 residents. The pub is full of film memorabilia and is a must-see for tourists in the area. (ABC)
  
  

• Novo Nordisk and its blockbuster weight-loss drug Ozempic have been dealt a blow. Two studies found that the pill version of the drug failed to slow the progression of Alzheimer’s disease, a possibility that had previously been considered. Novo Nordisk’s shares fell over 10% within 30 minutes of the news as investors lost hope of a potential new use for the drug. (Guardian)
  
  

• Retail investors’ diamond hands have been tested as Bitcoin and other crypto tokens have shed over US$1 trillion of value since peaking in October, but there is an unexpected backstop. The crypto slide may have been buffered by buy-and-hold institutional investors who have taken major positions in crypto and are less likely to exit them as quickly as retail investors. As described by Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, “(Crypto) is no longer a hobbyist asset class.” (NYT)
  
  

• A major merger is set to rock Indonesia’s economy, creating a US$24 billion south-east Asian super app. GoTo, the company behind the beloved Gojek ride-hailing service, and food delivery giant Grab are expected to merge after GoTo’s anti-merger CEO has stepped down. The combined entity would control 90% of Indonesia’s ride-hailing and food delivery market. (FT)
  
  

• Cbus Super has been hit by a $23.5 million fine from the Federal Court of Australia for delayed insurance payments. Last year, ASIC stated that over 10,000 Cbus customers were impacted by death and disability payments taking over 90 days to process, causing financial losses of roughly $20 million. Cbus claims it has paid compensation to almost all affected members and families and that it has overhauled its claims system. (Capital Brief)

What the…?

The Bureau of Meteorology (BoM) has infuriated Australian politicians and voters alike by announcing its website redesign will cost taxpayers $96.5 million. This massive cost is mostly due to a $78 million contract to Accenture Australia, a major tech consulting firm. BoM CEO Stuart Minchin defends this expenditure as a full rebuild and test of BoM systems.

This criticism comes in the wake of the PwC scandal and increased scrutiny of government spending on major consulting firms. The federal government signed consulting contracts worth nearly $1 billion last year, a 48% increase from the prior year, in spite of new rules intended to police outsourcing.

The BoM website cost overrun has drawn particular frustration from South Australia, where the newly overhauled BoM systems failed to detect a major storm that rocked the town of Port Pirie. (ABC, Guardian)

Investing is a lifelong journey

Here’s what you can learn today

Chris Kohler tells us How They Get You

This is an extract from our conversation with Chris Kohler on the most recent Equity Mates Investing episode. (Apple | Spotify | YouTube)

Chris Kohler is an Australian finance journalist with a knack for relatable and accessible short-form social media content on all things finance and economics. He is the finance editor across the Channel Nine Network. He recently published How They Get You, a critique of tactics used to drain money out of everyday Australians and how to fight back.

Alec: Let’s start with the big question: Who are “They”?

Chris: It varies chapter by chapter, but the idea really, and of course a lot of people will be aware that how they get you is kind of a catch-cry and has existed for a long time, but the idea is that it is a large institution, a big business one, that can set the rules and dictate the terms, and we as consumers just have to play by those rules and those terms.

I mean it sort of changes and varies, but yeah, how they get you, I mean, it might be that the bank sets you up with a whole lot of fees over a pretty crappy term on the mortgage or a 0.05% interest rate on your deposits, those sorts of things. I mean that's the idea of how they get you is that it's really up to you. You're just getting got.

Alec: Yeah, it is interesting. It's like there's such a wide range of people that are getting us in this sense from the banks, supermarkets, but also it's not just large institutions, it's like fake reviews and stuff like that. I don't know if it's like we're a low trust society or regulations are too lax, but somehow there's a lot of different actors that find ways to get an extra dollar or two.

Chris: I think you're really right. And one of the things I've been really keen on not doing in the book is assigning blame to individuals or small groups of people because I think the reality is for a lot of the people who are hopefully reading this book, they're going to be a consumer in most of their lives, but when they go to work, they put on their work hat and maybe they do work for a bank or maybe they do work for a gambling agency or whatever. It doesn't make them a bad person for doing their job. I think the issue that I'm taking here is that in our economy there's all these different incentives playing out large scale incentives to operate a certain way to separate people from their cash in perhaps some dubious ways.

 Listen to the full episode on Spotify or Apple or watch it here on YouTube.

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