This week we’re going to keep on pricking bubbles with a fellow cynic of the sycophants and stenographers. Here to help us is David Trainer of New Constructs, whose company makes “robo-adjustments” to the reported accounts of 1000s of listed companies and tries to unearth the real financials behind the content marketing from company investor relations teams.

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

(Times below correspond to the episode without considering any inserted advertisements.)

In this episode of Bubble Trouble, guest David Trainor, the founder of New Constructs, delves into his background in economics and statistics, his time at Credit Suisse, and his perspective on market bubbles and financial accountability. The discussion ranges from the detrimental effects of rapid, superficial analysis and reporting pervasive in today's investment industry, to the importance of rigorous fundamental analysis in discerning true business value. The conversation also touches on companies' strategic overstatement of profits, the ill-effects of unchecked capital allocation, and the role of artificial intelligence in future financial analytics. As the founder of New Constructs, David highlights how his company is helping investors uncover the real financial situation behind companies' reported accounts.

00:00 Introduction

00:57 Part One

01:02 Guest Introduction: David Trainor

01:26 Understanding New Constructs

02:22 The Cynicism in Wall Street

03:02 David's Backstory and the Tech Bubble

04:11 The Role of Accounting in Business

05:37 The Reality of Wall Street

07:42 The Boy Who Cried Wolf: A Market Perspective

08:27 The Intentionality of Market Bubbles

15:44 The Impact of Algorithmic Trading

18:28 The Difference Between Investing and Speculating

23:49 The Challenge of Limited Company Disclosure

26:12 Part Two

27:34 Discussing the Spectrum of Corporate Ethics

27:42 Highlighting Notorious Corporate Scandals

28:05 Elon Musk: Genius or Snake Oil Salesman?

28:46 The Reality of Earnings Distortion

29:09 The Unsettling Truth About CFOs and Wall Street Analysts

29:40 The Role of Investor Relations Firms

30:37 The Problem with Superficial Analysis

33:43 The Art of Investing: A Touchy Feely Approach

35:55 The Role of AI in the Future of Financial Analysis

47:18 The Dangers of Overstating Profits and Zombie Stocks

50:57 Closing Thoughts and Future Predictions

50:59 Credits

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So let's look forward and prepare you for the next big sexy blockbuster tech IPO, you’ve read all about it - that’s right. Reddit is going to ring the bell.

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

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Reddit's IPO Adventure: A Deep Dive into Valuations, Trends, and Future Prospects

In this episode of Bubble Trouble, hosts Richard Kramer and Will Page dissect Reddit's impending IPO, examining its valuation, user base, and revenue streams. The podcast begins with a discussion on the evolution of Reddit and its business model, focusing on the challenges it faces as a business primarily driven by advertising revenue in a competitive digital advertising landscape. Kramer and Page delve into the nuances of Reddit's user engagement and its niche position in the internet culture, juxtaposing it against giants like Meta and Google. They critically analyze the hype surrounding tech IPOs, emphasizing Reddit's $800 million revenue and its struggle to become profitable amidst a sprawling digital advertising world. The episode also covers the broader implications of down rounds and the valuation bubbles that tech companies often face. Through expert insights and a candid conversation, the episode offers a comprehensive view on Reddit's IPO, the tech industry's valuation practices, and what the future holds for user-generated content platforms.

00:00 Welcome to Bubble Trouble: DeepFakes and Bubbles

01:02 Part One

01:06 The Fascinating Shift from Hong Kong to Singapore

02:52 Reddit's Upcoming IPO: A Deep Dive

03:25 Exploring Reddit's Niche and Financials

06:04 The Cultural Impact and Controversies of Reddit

08:58 Reddit IPO Strategies and User Dynamics

10:43 Inside Reddit: Culture, Compliance, and Future Prospects

16:00 Part Two

16:00 South by Southwest Festival Insights

20:04 Back to Reddit: IPO Details and Expectations

21:22 Technical Difficulties and Starting Off

21:24 Exploring Down Rounds: A Deep Dive

23:48 The Reality of Valuations and Market Corrections

24:42 Tech Companies' Valuations Post-Pandemic

25:41 Reddit's Revenue Diversification and Data Deals

27:15 The Creator Economy: Expectations vs. Reality

29:48 Reddit's IPO: A Case Study in Market Dynamics

34:49 Smoke Signals for Future IPOs

38:21 Reflecting on Reddit and the IPO Landscape

40:20 Credits

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This week we talk with Linda Yueh, author of the book The Great Crashes. Since America's Wall Street Crash of 1929, the global economy has weathered the most tumultuous century in financial history. From the currency crises of the 1980s, to Japan's housing meltdown, the dot com boom and bust, the global financial crash and the COVID pandemic, crash after crash has sent shockwaves through our world. The Great Crashes tells the stories of ten of these historic financial events. They serve as a series of cautionary tales, each with their own lessons to be learnt. With clear-eyed analysis, renowned economist Professor Linda Yueh uses these meltdowns to extract a critical three-step framework to help recognise the early signs of a crash, mitigate the effects and even prevent them in the future. There is very little that is certain in economics, except for this: there will be another financial crisis. [Repeat from March 2024]

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

(Times below correspond to the episode without considering any inserted advertisements.)

Understanding Economic Bubbles and Crises: Insights from Linda Yu

This episode of Bubble Trouble features Richard Kramer and Will Page in conversation with Linda Yu, the author of 'The Great Crashes', discussing lessons from historical economic downturns and ways to prevent future crises. Yu shares her unique perspectives drawn from her experiences in journalism, academia, and having been a witness to several economic crashes. The conversation covers the dynamics of bubbles, the role of banks and debt in triggering financial crises, regulatory challenges, the impact of policy decisions on economic inequality, and the specific case of China's impending financial instability. Throughout, the importance of understanding human nature's role in financial markets and the necessity for credible crisis management strategies are underscored.

00:02 Introduction

00:47 Part One

00:47 Introducing Linda Yu: From BBC to Authorship

01:34 Linda Yu's Journey: Academia, Books, and Economic Crashes

02:06 The Making of 'The Great Crashes': A Deep Dive into Economic Meltdowns

06:04 Understanding Crises: The Three Phases of Economic Downturns

08:47 The Role of Banks in Economic Crises: A Critical Examination

15:12 Regulatory Challenges and the Shadow Banking System

22:06 Educational Insights: The Importance of Economic History

26:52 The Eurocrisis and Bail-Ins: A New Approach to Banking Failures

29:58 Part Two

30:10 Preview of Part Two: Further Explorations into Economic Crises

31:16 Exploring Economic Festivals and the Humor in Economics

32:06 The Serious Side of Economic Crime in China

32:14 Navigating the Iceberg: China's Economic Challenges

33:07 The Next Great Crush: Predicting China's Economic Future

33:39 The Intricacies of China's Banking System and Property Bubble

34:56 China's Influence on Global Markets and Emerging Economies

35:30 China's Unique Approach to Big Tech Regulation

39:25 The Consequences of Financial Penalties on Banks

41:03 Preventing the Next Great Crash: Policy Levers and Their Effectiveness

46:13 The Unintended Consequences of Economic Policies

55:10 Crisis Management and the Importance of Credibility

59:19 Final Thoughts and the Future of Economic Crises

01:00:30 Credits

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Today, we welcome back Feargal Sharkey, who visited Bubble Trouble last summer and dropped a (water) bomb on our privatized utilities. He’s fought the noble fight to expose Thames Water as profiteering polluters. Nine months later we have a massive credit bubble bursting, dumping toxic sewage in both debt laden shell companies and the real shit floating in our rivers and seas, while private equity owners took out £78bn of dividends since privatization kicked in. A warning: this conversation should make everyone angry, whether you draw a drink, go for a wild swim, or just watch your rising water bill - asking how this utility privatization bubble caused so much trouble. [Repeat from April 2024}

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

(Times below correspond to the episode without considering any inserted advertisements.)

This episode of Bubble Trouble features hosts Richard Kramer and Will Page, with return guest Fergal Sharkey, discussing the failing state of privatized water companies in England. Highlighted are the issues of excessive dividends extracted by private equity owners, the massive debt incurred by water companies, regulatory failures, and the environmental costs of pollution. Sharkie shares his firsthand experiences with water pollution and regulatory battles. The episode delves into the implications of privatization on public resources, the potential for nationalization, and the urgent need for systemic reform in water management amidst mounting public outrage and the looming crisis of water scarcity in London. The conversation encapsulates the complexities of privatization, the financial engineering driving the water industry's woes, and the palpable need for political and regulatory intervention.

00:00 Introduction

00:55 Introducing Repeat Guest Fergal Sharkey: A Deep Dive into Water Industry Woes

00:59 Part One

01:28 Fergal Sharkey's Journey: From Fly Fishing to Fighting Water Privatization

03:27 The Alarming State of England's Privatized Water Industry

06:47 Investigative Journalism and the Mainstream Media's Role

07:44 Exploring the Nationalization Debate and Its Complexities

11:06 Regulatory Failures and the Environmental Catastrophe

14:27 The Financial Quagmire: Debt, Dividends, and the Dire State of Infrastructure

22:00 Addressing the Bondholders: A Call for Accountability

27:12 Part Two

27:12 Looking Ahead: Solutions and the Future of Water Privatization

31:49 The Inefficiency of Global Success

32:11 System-Level Solutions for Water Management

33:14 The Looming Water Crisis in London

34:01 Government's Role in Managing the Water Industry

34:42 The Financial Challenge of Securing London's Water Supply

35:27 Reforming the Water Industry: A Shift in Earnings and Management

35:59 Empathy for the Regulator and the Need for Investment

41:10 Nationalizing the Water Companies: A Strategic Move

47:04 Political Pressure and Regulatory Challenges

49:42 Privatization's Failures and Future Directions

55:20 Concluding Thoughts and the Public's Role

57:34 Credits

Hosted on Acast. See acast.com/privacy for more information.

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

In this milestone 100th episode of Bubble Trouble podcast, hosts Richard Kramer and Will Page converse with former Enron CFO, Andy Fastow, discussing the downfall of Enron, financial regulation, the financial crisis, and the manipulation of financial statements. Fastow delves into the fine line between legal and illegal practices in finance, highlighting how business leaders can inject more risk than they realize when operating within the 'gray areas' of business and finance. He also shares his insights into public pension liabilities, the potential tipping point for public finances, and how the perception of different companies can drastically change based on financial reporting and assumptions. [Repeat from December 2023]

0:00 BT 101 In Conversation with Former Enron CFO Andy Fastow Part Two

00:00 Introduction to Bubble Trouble

00:42 Part One

19:03 Exploring the Role of Technology in Financial Crises

22:20 Understanding the Impact of Government Accounting

29:09 Enron's Advisory Board and Structured Finance Deals

30:11 Reflections on Enron's Financial Practices

30:41 Government's Financial Engineering

30:58 Imputed Rent and Government Statistics

32:25 Part Two

32:25 Inflation and its Impact

32:25 Inequality and Low Interest Rates

32:40 The Role of Analysts and Ethics in Finance

33:34 The University of Colorado Case Study

49:29 Closing Thoughts on Ethics and Reciprocity in Finance

52:59 Credits

Hosted on Acast. See acast.com/privacy for more information.

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

In this 100th episode of Bubble Trouble, hosts Richard Kramer and Will Page discuss the inner workings of business and financial markets, shedding light on their truths via conversations with their guest, former CFO of Enron, Andy Fastow. They discuss the key factors that led to the downfall of Enron, including the exploitation of accounting 'loopholes' and the destructive impact of mark-to-market accounting and how it leads companies into a risk-laden gray area of business. They also cover the issues surrounding operating leases, addressing the ethical debate of 'genius' vs 'evil'. Furthermore, they delve into insightful examples of business mishaps and financial irregularities including the collapse of the Silicon Valley Bank. Fastow expresses his regret and responsibility for Enron's downfall, highlighting the difference between technically following the accounting rules and creating misleading financial impressions of a company. [Repeat from November 2023]

0:00 BT 100 In Conversation with Former Enron CFO Andy Fastow Part One

00:02 Introduction

00:02 Introduction and Overview of Bubble Trouble

00:15 Reflecting on Past Episodes and Topics

00:41 Unpacking the Enron Scandal

01:23 Part One

01:25 Interview with Andy Fastow, Former CFO of Enron

08:33 Understanding the Role of Auditors and Attorneys

10:59 Exploring the Concept of Loopholes

13:46 The Reality of Operating in the Gray Area

25:46 The Distinction Between Different Types of Fraud

27:19 The Conflict of Interest in Financial Analysis

28:53 Part Two

28:53 Continuation of Conversation with Andy Fastow

30:43 Enron's Acquisition and Financing Strategy

31:14 The Use of Operating Leases in Enron

32:46 The Legal Hurdles and Creative Solutions

35:56 The Impact of Financial Innovation

38:11 The Dangers of Mark to Market Accounting

41:53 The Role of Incentives in Financial Reporting

46:56 The Case of Silicon Valley Bank

53:42 The Role of Analysts and Banks in Financial Misrepresentation

54:54 Closing Remarks and Preview of Part Two

55:31 Credits

Hosted on Acast. See acast.com/privacy for more information.

This week, we freeform on two topics: summer music festivals and the stock markets. Will has identified a very interesting bubble this summer, which is the rapid cancellation of music festivals. Perhaps because supply got ahead of demand or perhaps because of extraneous factors, we wanna look into why so few people want to be standing out in their field or outstanding in their field. We're also gonna talk a little bit about the way in which random comments from politicians are roiling the stock markets.

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

(Times below correspond to the episode without considering any inserted advertisements.)

In this episode of Bubble Trouble, economist Will Page and independent analyst Richard Kramer discuss the rapid cancellation of music festivals amidst the backdrop of a post-pandemic economic squeeze and over-supply of events. They detail the impact on the live music ecosystem, examining how financial constraints and shifting consumer choices are reshaping the market. Additionally, they delve into how random political comments are affecting the stock markets, with a specific focus on a recent market wobble triggered by remarks from Donald Trump and the narrowing breadth of tech stock support. The episode links the volatility in both the live music industry and financial markets, providing a comprehensive analysis of the current economic landscape.

00:00 Introduction to Bubble Trouble

00:58 Part One

00:58 The Decline of Music Festivals

02:09 Supply and Demand in Live Music

04:14 Economic Factors Affecting Festivals

07:29 The Impact on the Music Ecosystem

08:38 Dynamic Pricing and Ticketing Issues

15:44 The Future of Live Music and Festivals

20:33 Part Two

21:10 Market Turmoil: What's Happening?

22:39 The Fragility of the Market

23:37 Political Impact on Markets

24:12 Investor Reactions and Strategies

29:56 Global Market Contagion

33:23 The Tech Sector's Wild Ride

34:40 Political Volatility and Market Uncertainty

41:44 Credits

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Today we’ve got a guest who's been doing our job for decades. Andrew Orlowski is a writer who has followed the technology industry for two decades, so he’s see the hype cycle peak and trough many times.

For more on Bubble Trouble, including transcripts of the show, visit us online at http://bubbletroublepodcast.com

You can learn more about Richard at https://www.linkedin.com/in/richard-kramer-16306b2/

More on Will Page at: https://pivotaleconomics.com

(Times below correspond to the episode without considering any inserted advertisements.)

In this episode of Bubble Trouble, hosts Richard Kramer and Will Page are joined by veteran technology journalist Andrew Orlowski. They delve into the recurring market bubbles and dissect the relentless hype surrounding AI and machine learning. Orlowski discusses his track record in identifying technology bubbles and shares his skepticism about the transformative claims made about AI, comparing it to historical overhyped innovations like the metaverse and cryptocurrency. The discussion also touches on the implications of AI on productivity, labor markets, and the economy at large, highlighting the disconnect between policy elites’ expectations and real-world applications. Throughout, the panel emphasizes the broader societal impacts and the role of critical scrutiny in understanding technological advancements.

00:00 Introduction to Bubble Trouble

00:44 Part One

00:49 Meet Andrew Orlowski

01:43 The Origins of Bubble Trouble

02:06 Spotting Bubbles: Andrew's Track Record

02:39 Google's Market Manipulation

07:00 The AI Hype Cycle

12:08 AI's Economic Impact and Skepticism

19:10 The Future of AI and Technology

26:13 Debunking the Efficiency Myth in Tech Companies

26:39 The Role of AI in Financial Markets

28:10 AI Skepticism and the Hype Cycle

28:20 Part Two

29:02 The Future of Chatbots and Machine Learning

30:06 Public Skepticism vs. Elite Optimism

35:54 The Nature of Work and Productivity

42:13 The Middle Class Advantage in the Modern Workplace

45:40 The AI Bubble and Its Implications

49:01 Smoke Signals: Red Flags in the AI Industry

51:19 Conclusion and Final Thoughts

51:51 Credits

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