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.

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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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

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Our recent episode on Reddit was a surprise hit, as was the stock - temporarily - so we’ll be diving into that and much more. This week, a look at the volatile nature of financial markets with discussions around recent events, critiquing the creator economy, speculative frenzy in cryptocurrencies, and tech market overvaluation. 

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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In this episode of Bubble Trouble, hosts Will Page and Richard Kramer dive into discussions about financial market volatility and the phenomenon of market bubbles, touching on topics like the recent Reddit IPO and the cryptocurrency crisis exemplified by FTX’s fallout. They critically assess the risk and reality of investments, using illustrative examples to underline the often speculative nature of today’s financial markets. They also segue into discussions on the creator economy, the disruptive potential of AI and chips in the movie industry, and concerns around the instability of personal debt amidst rising interest rates. The episode concludes with recommendations for insightful reads, exploring themes from technological impacts on society to the resilience needed in today's challenging world.

00:02 Introduction

00:38 Part  One

06:17 The Reality of Stock Market Manias and Personal Debt

08:25 Exploring the Trump SPAC and the Fate of Cameo

12:45 The Crypto Conundrum: Skepticism Meets Reality

16:52 Part Two

16:52 Navigating the Creator Economy and Tech Innovations at SXSW

22:19 The Economic Impact of Data Centers

22:46 AMD's Influence in the Film Industry

23:31 The Challenges of AI in Hollywood

24:38 Chip Makers: The New Brand Ambassadors

25:31 Rethinking the Creator Economy

26:46 The Long Tail Dilemma in the Creator Economy

27:48 The Misconception of Loyalty in the Digital Age

31:49 Music Industry's Paradox: Growth vs. Sustainability

33:43 Inflation's Impact on the Music Industry

36:43 Easter Reading Recommendations

41:28 Closing Thoughts and Future Episodes

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This week we speak with Bill Raduchel, who has served as a high-level executive and strategic adviser for organizations such as Sun Microsystems, AOL Time Warner, Xerox, McGraw-Hill, and the Salvation Army. Over half a century working with systems, software, and networks, he has remained at the forefront of the technology revolution in media, education, and corporate governance including recognition at Sun as CIO of the Year and the top CFO in the computer industry and at AOL as CTO of the year. He holds more than fifty issued patents as well as a PhD in econometrics from Harvard, where he taught for five years with John Kenneth Galbraith. He has been writing software in some form since he turned fifteen years old in 1961. He is also the author of The New Technology State. This book is about society—how it has changed and what technology is enabling us to do to ourselves.

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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In this episode of Bubble Trouble, hosts Richard Kramer and Will Page engage in a deep dive conversation with guest Bill Raduchel, exploring his extensive 60-year career transitioning from chemical engineering to economics, and eventually into the tech and media industries. Raduchel discusses his views on conventional wisdom, the evolution of technology, and its implications on economics, suggesting that technology has outpaced neoclassical economic theories due to its scaling properties and the significance of information. He shares insights from his book and experiences, addressing issues like tech debt, government staffing challenges in the face of rapid technological advancements, and the potential impact of AI on the future of software development. The episode covers the dynamic between big tech companies, government regulation, and the inevitable challenges posed by significant shifts towards AI and increased power demands. Raduchel also presents intriguing ideas on innovating government structures and discusses the practicalities of managing a rapidly evolving tech landscape.

00:00 Welcome to Bubble Trouble: A Skeptical Conversation

00:46 A Journey Through Tech and Economics

06:23 The Evolution of Technology and Its Impact on Economics

08:02 The Writing Process and Insights into Bill's Book

11:21 Exploring the New Technology State and Government Challenges

17:43 The Intricacies of Tech Talent and Government Staffing

19:53 Tech Debt and the Challenges of Modernization

25:55 The Global Tech Landscape: Government and Private Sector Dynamics

25:55 Wrapping Up Part One and Teasing Part Two

25:55 Simplifying UK Government Websites: A Double-Edged Sword

25:55 The Dangers of Centralization and Cybersecurity

26:10 Big Tech, Government, and the Quest for Regulation

27:59 The Talent Gap in Government and Tech Regulation Challenges

29:15 Innovative Solutions andthe Power of Decentralization

30:15 The Role of Startups in Tech Innovation and Employee Motivation

31:59 Google's Management Revolution: Lessons in Innovation

34:45 The Complexities of Regulating Big Tech

40:05 Navigating the Future of AI and Government Regulation

42:19 Economics, Education, and the Future Workforce

44:56 Smoke Signals: Warning Signs in Tech and Regulation

50:06 Credits

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This week, we’re talking taxes. Don’t switch off, don’t fall asleep and please don’t hire an accountant as the next 45 minutes will defy the laws of gravity and make taxes sexy. Or make saxes testy…  

Mentioned in today’s show: Barbarians at the Gate: https://youtu.be/Z3HiONtjZSM?si=xZ64zb46sYIfSs5Z

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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In this engaging episode of Bubble Trouble, hosts Richard Kramer and Will Page explore the complex world of taxes with humor and depth. They discuss the UK's tax system, the incentives it creates, and its contribution to economic inequalities. The duo delves into the problems of the tax code, including issues surrounding tax avoidance by the wealthy, lack of public sector productivity improvements, and the inefficiencies within the HMRC. Kramer and Page critique the approach of privatizing public utilities and the potential problems with private equity in the public sector. They also touch on broader issues like the lack of investment in tax authority systems and propose using tax policies for positive changes, like encouraging the shift from petrol to electric cars in Denmark. Through their insightful conversation, Kramer and Page aim to demystify taxes and highlight their significant impact on society.

00:00 Introduction

00:46 Part One

00:51 The UK's Budget Week and Tax System Insights

01:48 Tax Evasion vs. Public Sector Productivity

02:46 The Inequality of Tax Codes: A Global Issue

04:03 Tax System Flaws and Their Impact on Society

07:22 VAT: The Taxpayer as Tax Collector

11:31 The Complexity of National Insurance

13:43 Simplifying Tax Systems: A Call for Transparency

16:28 Private Equity and Tax Systems: A New Challenge

22:39 Decoding the Fiscal Drag Queen

23:00 The Political Divide on Taxation

23:21 Economic Lecture: Tax Burden and Growth

25:07 The Impact of Fiscal Drag on Tax Bands

26:15 The Surprising Windfall from Fiscal Drag

27:22 Part Two

27:45 Exploring the World of Private Equity

28:51 The Tax Loopholes Fueling Private Equity

32:24 The Potential Bubble in Public Utilities

36:26 The Disconnect Between Tax Policy and Reality

43:58 A Positive Tax Example from Denmark

47:28 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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When looking at today's issues of privacy, social media, and AI, we can draw a lot from the battles of the browsers over the past 30 years. To explore this, we welcome a close friend onto the show, the father of JavaScript and a Silicon Valley legend, Brendan Eich. Brendan left the CTO role of Mozilla firefox years ago and embarked on a journey to scale up a privacy-first browser and search business that would reward the sites you visit with a token reflecting your attention and value. (Repeat from July, 2023)

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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Navigating the AI Hype: Lessons from a Tech Visionary

In this episode of Bubble Trouble, independent analyst Richard Kramer and economist-author Will Page engage in a rich conversation with Brendan Eich, the creator of JavaScript and a Silicon Valley legend. They delve into the intricacies of the tech industry, exploring AI developments, privacy issues, and the history of browser wars. Eich discusses his journey from Netscape to founding Brave, a privacy-first browser and search business, sharing insights on big tech’s strategies, the pitfalls of surveillance capitalism, and the nuances of rewarding creators in the digital age. Furthermore, the trio critiques current AI hype, discussing its implications for the tech ecosystem and underlining the interplay between technological innovation and user empowerment.

00:00 Welcome to Bubble Trouble

00:59 Part One

03:03 Tackling Surveillance Capitalism and the Creator Economy

06:24 Privacy, Policy, and the Power of User-First Philosophy

12:29 The Evolution of Browser Wars and the Role of Regulation

24:06 Part Two

24:10 AI's Potential to Disrupt Big Tech's Dominance

25:28 AI Models and Data Quality Challenges

26:24 The Impact of AI on Content Creation and Privacy

27:06 Economic Foundations and the Strategy Tax in Tech

30:55 The Power of Defaults and Consumer Choices

36:33 Regulating AI: Industry Perspectives and Challenges

39:07 The Future of Translation and AI's Role

44:00 Navigating the Hype: AI Investments and the Reality

47:10 Closing Thoughts on AI, Privacy, and the Future of Tech

47:48 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.

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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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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This week, Will is just back from Brussels after addressing the European parliament on media and technology and, well, he’s doesn't see too impressed with his first visit since Brexit. And given we’ve discussed super stocks last week, this week we want to explore if any of those super stocks are going to come from the European Union, and equally, dig into whether the stereotypes about the Old World still ring true.

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 delve into the current state of the European tech industry. Will, fresh from a visit to Brussels, shares his experiences and perspectives on the bureaucracy, inefficiencies, and regulatory struggles prevalent in the European Union and its tech scene. Addressing the European Parliament on media and technology, Will discusses the vast gap in entrepreneurship and tech innovation between the U.S and Europe, with the latter lagging significantly. He criticizes Europe's over-protectionism towards their tech industry, arguing that this approach does more harm than good. Furthermore, they discuss the digital markets act passed in Europe, labor markets, grandstanding politics, and tech nationalism. This episode concludes with the hosts scrutinizing the desperate need for productive economic reforms and forward-thinking policies in Europe's institutional systems and tech sector.

00:00 Introduction and Overview

00:48 Part One

02:39 Comparison of American and European Entrepreneurship

10:39 Insights on Tech Companies' Lifespan and Exit Strategies

18:22 Part Two

18:47 Addressing the European Parliament and Tech Concerns

21:14 The Digital Markets Act and its Implications

22:48 The Problem with Big Tech

23:52 The Impact of Regulations on Startups

24:41 The First Mover Advantage and Regulatory Catch Up

24:49 The Debate on In-App Purchases

25:18 The Frustration with Dysfunctional Systems

26:06 The Paralysis of Legislators

26:43 The Role of Regulation in Business

27:38 The Dilemma of Intellectual Property and AI

28:16 The Risk of Monopolizing AI Wealth

28:37 The Misguided Efforts in AI Legislation

33:30 The Issue with Job Security in Public Sector

38:33 The Problem with Regulatory Nationalism

40:04 The Struggles of Brussels

40:45 Closing Remarks and Future Plans

41:29 Credits

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This week Richard puts Will on the hot seat, and review all his amazing work on the economics of the music industry, something that is a lot smaller than everyone imagines, even if it touches all of us deeply.

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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Super Fans and Music: The Shape of the Music Industry

In this episode of Bubble Trouble, super skeptical analysts Richard Kramer and Will Page discuss the concept of 'super fans' in the music industry. They critique the idea that fans' increasing ability to interact directly with artists is reshaping the music industry. They draw a parallel between their industry and finance, highlighting the importance of algorithmic methods in both. They also delve into the thriving local music scenes in various countries due to streaming and direct artist-to-fan communication. Furthermore, they analyze the potential impacts of AI on the music industry, noting that AI-created music doesn't compete with human-made music and that major music platforms are making staff cuts due to market saturation and reduced growth. In Brussels, they signal plans to discuss policies against 'bad actors' on platforms, responsible AI, fair remuneration for authors, and transparency of algorithms. The episode wraps up emphasizing the value of user comments as a metric of audience engagement.

00:00 Introduction

00:36 Part One

01:06 The Super Fan Phenomenon

03:41 Understanding the Super Fan Economy

04:27 The Impact of User-Centric Models

08:39 The Power of Direct Communication with Fans

10:21 The Rise of Glocalization

17:25 The Influence of Algorithms in Music

19:23 Part Two

21:30 The Economics of Emerging Markets in the Music Industry

22:24 Understanding the Impact of Data Costs and Conversion Models

23:20 The Challenges of Operating in India's Media Market

24:08 The Music Industry's Growth Bubble and the Role of AI

25:17 The Limitations of Algorithms in Music Curation

26:21 The Impact of AI on Music Consumption and Creation

26:57 The Value of Human Curation in Music

28:03 The Role of Algorithms in Global Music Trends

28:54 The Intersection of Music and Finance

32:56 The EU's Approach to Music and Media Markets

36:14 The Power of Super Fans and the Resistance Factor

39:10 The Significance of Comments in Measuring Engagement

40:37 Wrapping Up: The Future of Music and Finance

41:33 Credits

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