Latest / The SME Stream / Andrew Bascand: We've seen the bottom of the rate cycle

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Andrew Bascand: We've seen the bottom of the rate cycle · The SME Stream

0:05
Speaker 1: You're listening to the Weekend collective podcast from News Talks.
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Speaker 2: I'd be and that lovely piece of music is sort
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Speaker 2: of Christmas the music from Love actually, which is actually
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Speaker 2: it's a gorgeous little piece of music, isn't it. And
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Speaker 2: it's because it's the choice of my guest in the
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Speaker 2: studio now for smart Money, because he's actually also in Auckland.
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Speaker 2: He used to do the show and down the line
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Speaker 2: from Offenham, Wellington, but he's an awk little bit more
0:30
Speaker 2: because he's a granddad again. And Andrew beskcan Andrew, how
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Speaker 2: you doing super?
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Speaker 3: Isn't it great? This time of the year it is
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Speaker 2: years do we watch it every year? And comes up
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Speaker 2: and you're like, sit down for love? Actually?
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Speaker 3: Yep, last Sunday night, that's what happened.
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Speaker 2: school showed the movie and forgot that there's a couple
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Speaker 2: of moments where this surprising nudity and she suddenly had
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Speaker 2: to very quickly reached for the fast forward like, oh,
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Speaker 2: forgot about that, but anyway, a lovely movie. Anyway, Andrew,
1:07
Speaker 2: how's your year been?
1:08
Speaker 3: By the way, Well, it's a bit of a surprise year,
1:10
Speaker 3: isn't it. I Mean, who would have thought we sit
1:12
Speaker 3: here this time of the year and things are feeling
1:14
Speaker 3: a little bit better?
1:15
Speaker 2: You know, Well, that's what's going to dig into. So
1:17
Speaker 2: last week we had the Reserve Bank they dropped the
1:20
Speaker 2: twenty five basis points. Gosh, it's something. It's an expression
1:23
Speaker 2: everyone knows you those days, isn't it. And we've dropped
1:25
Speaker 2: the ocr twenty five basis points to two point twenty five.
1:29
Speaker 2: They've adopted a hawkish tone. Has it got there? I
1:34
Speaker 2: don't know whether we've seen the bottom of the rate cycle,
1:36
Speaker 2: but we're hoping we've seen the bottom of Have we
1:40
Speaker 2: seen the worst of it? And you will have a
1:46
Speaker 2: point of view of it because you are in touch
1:48
Speaker 2: with things as opposed to what the average key is
1:51
Speaker 2: in touch with who a lot of people are thinking.
1:52
Speaker 2: I'm not sure have we seen the worst of it?
1:54
Speaker 2: But anyway, what do you make of the year and
1:56
Speaker 2: where we've got to and where we're going.
1:58
Speaker 3: Yeah, if we had have started thinking about what this
2:01
Speaker 3: year is going to look like about this time, we
2:04
Speaker 3: would have said, going to we would have had a
2:05
Speaker 3: bit of a pickup in the economy happening, you know,
2:08
Speaker 3: in the first half of this year, and it was
2:10
Speaker 3: feeling a little bit better, and in fact that didn't happen.
2:12
Speaker 3: The first half of this year was still pretty miserable,
2:15
Speaker 3: like for everyone. Maybe a couple of provinces farmers were okay, uh,
2:19
Speaker 3: and the economy sort of felt really pretty awful in winter.
2:23
Speaker 3: Then we've had the sequence of interest rate cuts, and
2:26
Speaker 3: we've had eggin comes go okay. We coped a whole
2:30
Speaker 3: lot of bad news globally, and it seems right now, however,
2:35
Speaker 3: the sequence of good news is running well. And speaking
2:37
Speaker 3: of you know, this interest rate cut, let's think about that.
2:40
Speaker 3: We've been cutting interest rates.
2:41
Speaker 2: For a while.
2:42
Speaker 3: We're five and a half now they're half that quarter, and.
2:46
Speaker 2: It's quite a big deal. Actually, it's quite a big
2:48
Speaker 2: deal right now.
2:49
Speaker 3: I mean, they could go lower, but they could. This
2:51
Speaker 3: could be it. And the thing that the story about
2:53
Speaker 3: last week, if we if we just hang on for
2:55
Speaker 3: that for a second, Actually we cut interestrates by quarter
2:58
Speaker 3: and no one said too much, which indicates to us
3:00
Speaker 3: we are probably at the end of that rate cutting cycle, well, they.
3:05
Speaker 2: Say this is did they say this is the last one?
3:08
Speaker 3: Pretty much gave some optionality to cut again, but don't
3:12
Speaker 3: play on it too much. And what we've seen is
3:13
Speaker 3: though you know, those two year mortgage rates haven't changed.
3:16
Speaker 3: I think that's the signal for borrowers out there, that
3:20
Speaker 3: we cut interest rates the two and a quarter at
3:23
Speaker 3: the two year rate, it's still for four and a half.
3:25
Speaker 2: I think there were a lot of people who a
3:27
Speaker 2: bit disappointed about that because they saw a chop and
3:28
Speaker 2: they're like, oh, I'm going to be able to refix them.
3:30
Speaker 2: What do you mean, hang on, nothing's changed. The banks
3:33
Speaker 2: were ahead of it. Yeah.
3:35
Speaker 3: Well, the thing is not just the banks, but the
3:37
Speaker 3: whole interest rates structure. Is that a bank at a
3:40
Speaker 3: bit off shore, it's a bit longer term. And we
3:43
Speaker 3: expected a quarter of a point to come off. We
3:47
Speaker 3: expected that twenty five basis points. And so if you
3:50
Speaker 3: expect it, well that's it.
3:53
Speaker 2: Because so we had. Interestingly, the new governor, I'm inclined
3:58
Speaker 2: to like her because she's from Scandinavia. Probably, I don't know,
4:02
Speaker 2: it's sort of you always think the Europeans, they seem
4:04
Speaker 2: to have stuff, and every time we have something a
4:08
Speaker 2: comment about politics and what they do, it's always well,
4:11
Speaker 2: in Sweden, you know, they do this in Sweden, they
4:13
Speaker 2: do this in Finland. Scandinavia seems to be the sort
4:16
Speaker 2: of talkback model, like, oh if we can only be
4:17
Speaker 2: like those countries, and we've got our own person from Scandinavia.
4:22
Speaker 2: But she fronted the Finance and Expenditure Select Committee, didn't.
4:29
Speaker 2: We were sort of all eyes on this.
4:30
Speaker 3: Normally it wouldn't be the thing we tune into, right,
4:32
Speaker 3: but here's our first chance of actually getting the body
4:34
Speaker 3: language and the read. And there's some pretty tricky and
4:37
Speaker 3: difficult questioning from you know, all different interested political parties
4:41
Speaker 3: around the corner. You've probably watched one of these before.
4:45
Speaker 3: It's probably my first for a week while, and we
4:47
Speaker 3: were all pretty much glued to it. And actually really
4:50
Speaker 3: good account of herself, I thought, I mean quite honestly,
4:53
Speaker 3: you know, coming here obviously well briefed, but pretty open
4:58
Speaker 3: to thinking about her her job and next year he
5:01
Speaker 3: actually looking back, she said, you know, we've done a
5:04
Speaker 3: pretty pretty good job.
5:05
Speaker 2: And was she nice to us?
5:07
Speaker 3: Yeah, she pretty well, given the hard time we've had
5:10
Speaker 3: in terms of I think she was pretty nice to us, really,
5:14
Speaker 3: But when I think about what she was talking, I'm
5:16
Speaker 3: really excited because you're talking about transparency. We're going to
5:19
Speaker 3: see more of the inner workings.
5:21
Speaker 2: And in fact, she's even said that. And again, I
5:24
Speaker 2: can't believe how far we've got into these sorts of
5:27
Speaker 2: things about the vote. But it was five five to one,
5:30
Speaker 2: five one for the reduction by point two five. Somebody
5:33
Speaker 2: wanted to keep it the same. But I think she's
5:35
Speaker 2: indicated we're going to know who's voted what.
5:41
Speaker 3: If you're watching and listen to what she said, she
5:43
Speaker 3: didn't exactly say that, but she said I'm open to
5:46
Speaker 3: more transparency, and she was questioning exactly, well, exactly what
5:50
Speaker 3: you said.
5:50
Speaker 2: She was asked.
5:50
Speaker 3: She said, I still haven't discussed this with my staff
5:53
Speaker 3: and my people. I'm open to more transparency. She repeated
5:56
Speaker 3: that line, which is fine.
5:57
Speaker 2: Can I ask you, hmm? Is I mean this is
6:03
Speaker 2: not something necessarily slated to talk about it. But if
6:05
Speaker 2: I was to give my quick reckon on that, I'm
6:08
Speaker 2: not sure that having transparency on who voted what on
6:12
Speaker 2: that committee is necessarily desirable because it acts as a
6:17
Speaker 2: sensor to doing what, you know, what I mean, you
6:20
Speaker 2: don't want all of a sudden somebody might be somebody
6:24
Speaker 2: on that committee who's making that decision about the interest
6:26
Speaker 2: rate is wondering how they are going to look or
6:29
Speaker 2: could do because I don't know. I sort of like
6:32
Speaker 2: the fact that it maybe should be anonymous how they're voted.
6:35
Speaker 2: What do you think Two of.
6:36
Speaker 3: The comments from the ministers and the contributors to the
6:40
Speaker 3: FEC actually made that exact point. It is a committee,
6:43
Speaker 3: but we still want more transparency, So could you sort
6:45
Speaker 3: of sort out how we don't how do we spotlight
6:47
Speaker 3: on someone, but give us more transparency?
6:49
Speaker 2: So tell me what. So we don't know how they voted,
6:51
Speaker 2: but we know what they said before they voted, or
6:53
Speaker 2: said afterwards perhaps or.
6:56
Speaker 3: But the story really is this is something she's obviously
7:01
Speaker 3: thinking about, and we'll find out what the story is.
7:04
Speaker 3: She likes all the defied opinions around the table. Good.
7:06
Speaker 3: I'm sure that's always been the case. But that's one
7:09
Speaker 3: thing I took. The other thing I took out of
7:10
Speaker 3: it is how important it is. It's always been important
7:13
Speaker 3: to be strongly connected internationally, and she is obviously.
7:17
Speaker 2: Yeah, what does that mean for what does that mean
7:19
Speaker 2: for her? Role in the as governory the Reserve Bank.
7:22
Speaker 3: He I think there are two things you'd be worried about,
7:25
Speaker 3: global stress points in the financial system, So you're really
7:28
Speaker 3: worried about financial crises and how they might filter through
7:31
Speaker 3: to our economy well connected, really well connected, and then
7:35
Speaker 3: thinking about how global patterns of growth will impact eventually
7:40
Speaker 3: upon our economy. And I think she'll be forward looking.
7:42
Speaker 3: I think that to be truthful, My view would be
7:46
Speaker 3: the Reserve Bank has been very forward looking, but I
7:48
Speaker 3: think she strengthens that framework.
7:50
Speaker 2: Can I just by the way, I'm probably going to
7:52
Speaker 2: ask a few non sequit questions out of note. I
7:55
Speaker 2: do remember that there's a guy as Michael Roddell who
7:57
Speaker 2: writes about the Reserve Bank on his blog. But he
8:01
Speaker 2: a while ago, it might have been a year or
8:03
Speaker 2: two even was quite critical of the people who are
8:06
Speaker 2: on whatever boards and things like that. Now that was
8:11
Speaker 2: that's different his criticisms of certain personnel and their expertise.
8:15
Speaker 2: I think there were people from the arts community or something.
8:17
Speaker 2: Has this to do with the Board of the Reserve Bank,
8:19
Speaker 2: but the Monetary Policy Committee itself, who are the people
8:23
Speaker 2: who you know, who are the people on that in
8:25
Speaker 2: terms of their They're all hardcore monetary policy experts, aren't they?
8:31
Speaker 2: Is that right? If I asked you a curve ball
8:32
Speaker 2: of a question, I might google that and I'll come
8:34
Speaker 2: back with small substances.
8:35
Speaker 3: I think sorry about I think we touched on this
8:38
Speaker 3: topic about three months ago, and I think I wisely
8:41
Speaker 3: avoided to answer, Oh.
8:43
Speaker 2: I've forgot I've got a very short men. You're looking
8:45
Speaker 2: at me, going have we talked about this before? Okay,
8:48
Speaker 2: let's move on. So what we liked there was the
8:53
Speaker 2: signal the rates rates might have bottomed, inflation is well anchored,
8:57
Speaker 2: and the economy looks better in twenty twenty six. What
9:01
Speaker 2: are the things that you I see the economy looks
9:06
Speaker 2: better in twenty twenty six. I'll just be honest. I
9:08
Speaker 2: think most people are took to go, well, I don't
9:09
Speaker 2: feel it. When do you think we'll feel it? That's
9:12
Speaker 2: absolutely right.
9:13
Speaker 3: So most people would feel an economy getting better with
9:16
Speaker 3: quite a leg because they feel it getting better in
9:19
Speaker 3: their annual pay cycle. So I got a bit of
9:21
Speaker 3: pay rise, they feel it and there's oh, there's more
9:23
Speaker 3: opportunity for me to maybe think about changing my job
9:27
Speaker 3: or lift what I'm doing. And they feel it in
9:30
Speaker 3: terms of oh, my friends and colleagues, there's plenty of
9:33
Speaker 3: other jobs out there. They're not losing their jobs, and
9:35
Speaker 3: it just takes time for that capacity to run through.
9:39
Speaker 3: At the moment, the economy is still running a fair
9:43
Speaker 3: gap to its capacity. That means we've got a lot
9:45
Speaker 3: of spare capacity in the economy and it takes some
9:47
Speaker 3: time for that capacity to be utilized before we start
9:51
Speaker 3: really getting the employment cycle going, so most people won't
9:54
Speaker 3: be exactly feeling that pick up for some time.
9:58
Speaker 2: Isn't it amazing how quickly things did change. Remember when
10:01
Speaker 2: there was a time where it's talk about, you know,
10:02
Speaker 2: you have to pay your staff more and everything because
10:04
Speaker 2: people so many choices and there was this fluidity and
10:07
Speaker 2: the employment mark, and all of a sudden it's like,
10:09
Speaker 2: whatever job you've got, you better hang on to it. Yeah,
10:10
Speaker 2: I think amazing.
10:11
Speaker 3: I think that's a bit like the Canterbury Northwest. You
10:13
Speaker 3: know that following a big northwester coming in, you know
10:15
Speaker 3: there's a sutherly coming but then following that subtly, you
10:18
Speaker 3: know the way that's going to improve. There's always that
10:20
Speaker 3: fluctuation happening. And here the legs are quite long. What
10:24
Speaker 3: we know right now is coming from a position of
10:27
Speaker 3: the economy going backwards in that dune quarter September is going.
10:29
Speaker 2: To be a good quarter.
10:31
Speaker 3: December right now, the current indicators are December quarter could
10:35
Speaker 3: be one of our best for maybe two or three years,
10:37
Speaker 3: and it feels like going into twenty twenty six, the
10:39
Speaker 3: world economy is backing us a bit and we have
10:42
Speaker 3: a better outlook.
10:44
Speaker 2: Can you explain this to me? This described as an
10:47
Speaker 2: all important wholesale bank two year swap rate, which even
10:51
Speaker 2: just saying that makes my head kind of a little dizzy.
10:54
Speaker 2: Lifted by about zero point two percent, that's twenty basis points.
10:58
Speaker 2: Is it is? That? How it goes a little post anyway?
11:02
Speaker 2: What's that all about? So what that's all.
11:04
Speaker 3: About is the banks have when they lend money for
11:07
Speaker 3: two years to be able to borrow money on a mortgage,
11:10
Speaker 3: they have to get that money somewhere, and principally they
11:12
Speaker 3: fund that through term deposits. That's fine, but at the
11:15
Speaker 3: margin they're funding that out of the wholesale markets. They're
11:17
Speaker 3: funding that from global institutions and local institutions, and the
11:22
Speaker 3: swap rate is one of the indicators of the cost
11:24
Speaker 3: of their financing at the margin has gone up a
11:28
Speaker 3: little bit, so that I mean for some of their
11:30
Speaker 3: balance sheet, some of their funding, it's got a little
11:33
Speaker 3: bit more expensive, and that makes it tougher for them
11:36
Speaker 3: to react to an interest rate gap.
11:38
Speaker 2: Does that?
11:38
Speaker 1: Ah?
11:39
Speaker 2: So that also points towards maybe a stabilizing of interest
11:42
Speaker 2: rates for a slightly longer term than what they might
11:45
Speaker 2: be used to that one year and two year level.
11:48
Speaker 2: And so mortgages haven't moved for the one and two year.
11:50
Speaker 3: Now we're still sitting four point four five, four point
11:53
Speaker 3: five a couple of specials beneath that. But that's where
11:56
Speaker 3: we're at.
11:57
Speaker 2: So when okay, so we're going to FI, do you
12:01
Speaker 2: think we'll feel at most with the job market coming
12:05
Speaker 2: more fluid? Because actually there was something else I want
12:07
Speaker 2: to Oh, that's right. So mortgage rates are one thing,
12:09
Speaker 2: but the other thing is council rates. How much have
12:13
Speaker 2: they affected just in your sort of just estimate broad
12:18
Speaker 2: estimation the way people feel because you get your rates bill.
12:20
Speaker 2: I mean, some people are paying another fifteen hundred bucks
12:22
Speaker 2: a year, another you know, or significantly another couple of
12:25
Speaker 2: thousand or something. The rates rises have been in some
12:28
Speaker 2: places quite hefty, haven't.
12:30
Speaker 3: They haven't just happened one year, have happened two three
12:33
Speaker 3: years in a row, and they've come on top of
12:35
Speaker 3: higher insurance costs, higher costs for utility bills such as electricity,
12:40
Speaker 3: and so have had this cost of living rise that's
12:42
Speaker 3: been not really actually perfectly influenced by by the strength
12:49
Speaker 3: of the economy, but influenced by the cost of actually
12:52
Speaker 3: councils having to lift infrastructure which the under spent on
12:56
Speaker 3: for a very long time.
12:57
Speaker 2: I mean, you probably avoid political questions like this, so
12:59
Speaker 2: you can just give me the look of like, don't
13:01
Speaker 2: ask me that term. What do you think of the
13:03
Speaker 2: idea of the capping the rates rises? And actually, even
13:06
Speaker 2: regardless of what you think of it, does that have
13:10
Speaker 2: any effect on just the whole financial sort of outlook
13:15
Speaker 2: on it all the way the way things sort of
13:18
Speaker 2: the way that the there's an expression I can't think
13:21
Speaker 2: of what it is, the way the chips fall, I
13:24
Speaker 2: guess comes.
13:26
Speaker 3: I mean, clearly, I'm not perfectly in favor of the
13:29
Speaker 3: enforcement of an artificial range of two to four, but
13:32
Speaker 3: I guess on application you can counsels, if it was enforced,
13:36
Speaker 3: could could could break through the top end of the
13:39
Speaker 3: four if they needed to differ infrastructure reasons. However, we
13:42
Speaker 3: have had in some areas these year on year double
13:47
Speaker 3: digit rate rises that have been running through and to me,
13:50
Speaker 3: at some point you've got to ask our rate pays
13:53
Speaker 3: clearly getting value for money, and that's the question that
13:56
Speaker 3: I think is being asked.
13:57
Speaker 2: More of a political question, of course, But anyway, look,
14:00
Speaker 2: we're gonna we're gonna be We're joined by Andrew Bascan.
14:03
Speaker 2: He is from Harbor Asset Management. Were been grateful for
14:05
Speaker 2: your support right throughout the year, Andrew, but we're going
14:07
Speaker 2: to be back talking about housing because as we know,
14:10
Speaker 2: you know, there's always you know, for a long time
14:12
Speaker 2: was guaranteed the housing market was always going to be
14:15
Speaker 2: moving in one direction that all of a sudden it
14:17
Speaker 2: was in the other. But what is the long term
14:18
Speaker 2: outlock for housing? We're going to dig into that shortly,
14:21
Speaker 2: in just a moment. But we'll take your calls if
14:23
Speaker 2: you want to offer your reckons, because apparently the worst
14:28
Speaker 2: is over, what will it take. Are you feeling that
14:31
Speaker 2: the worst is over emotionally or just you've reading the
14:33
Speaker 2: headlines and you go, yeah, I agree with it. Sounds
14:35
Speaker 2: like the worst is over. What is it going to
14:37
Speaker 2: take for you to think, yeah, look the worst is over.
14:39
Speaker 2: Things are looking out. Will it be a new job,
14:41
Speaker 2: will it be a pay rise? Will it be oh
14:43
Speaker 2: e one hundred and eighty ten eighty, You're welcome to
14:45
Speaker 2: join us. We'd love you too. And but meanwhile, we'll
14:48
Speaker 2: be back in just a moment with Andrew Baskin from
14:50
Speaker 2: Harbor Asset Management. It's twenty two minutes past five news Talk,
14:53
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15:02
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15:07
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16:05
Speaker 1: Insightful Entertaining and always Old Points. Tim Beverage on the
16:09
Speaker 1: weekend Collective News Talks be macus.
16:11
Speaker 2: It's funny when I was I was looking at some
16:14
Speaker 2: online deposit rates because we're here we are with Andrew
16:17
Speaker 2: Baskin from Harbor Asset Management, and I looked at something
16:20
Speaker 2: on the rabo or something. I was like, what one
16:22
Speaker 2: and a half percent? I was thinking, I've got to
16:24
Speaker 2: go to the Harbor Asset Fund anyway, Hey, Andrew. Now
16:30
Speaker 2: the housing outlook look, I host a property are and
16:36
Speaker 2: I've become suspicious of headlines because you know, you see
16:40
Speaker 2: a couple of good sales and oh massive result, unexpected result,
16:43
Speaker 2: and there's a lot of headline hyperbole about where the
16:46
Speaker 2: market might go and it I've spoken to other people
16:49
Speaker 2: who just still think the housing markets long term sort
16:52
Speaker 2: of overvalued and it's very expensive. And I have a
16:56
Speaker 2: suspicion that the housing market may have had a bottom.
17:03
Speaker 2: But as to you know, the implication that, oh it's
17:07
Speaker 2: at the bottom now, it's all buckle up, I don't
17:11
Speaker 2: feel that myself. But I'm no expert. So it does
17:15
Speaker 2: look like it's going to lift. But without you know,
17:18
Speaker 2: the experts, some experts, oh even me saying we'll rise
17:22
Speaker 2: without big price gains. Why is that? Oh sorry, let
17:26
Speaker 2: me turn your mic on. There we are help.
17:29
Speaker 3: Let's roll back ten fifteen years ago. Ten to fifteen
17:32
Speaker 3: years ago, most Kiwis would think if I had a
17:35
Speaker 3: lot of money, the next best thing I could do
17:38
Speaker 3: with it was actually buy a rental property, right.
17:41
Speaker 2: Leverage the hell out of it. Let's go, let's go,
17:43
Speaker 2: let's go.
17:43
Speaker 3: And actually, even thirty years ago that could have been
17:46
Speaker 3: a thing, but certainly fifteen years ago that was the
17:49
Speaker 3: psych of the New Zealand saver. Lots of money, go
17:52
Speaker 3: buy a rental property. Now I actually think we've broken that,
17:54
Speaker 3: and we've broken that for good reasons.
17:56
Speaker 2: We have. Oh, that's an interesting way you put that.
17:58
Speaker 2: For good reason. We yeah, But when you say you've
18:01
Speaker 2: broken that, have we broken it deliberately or it has
18:04
Speaker 2: just become or who cares?
18:06
Speaker 3: I think there must be a recognition amongst the next
18:08
Speaker 3: generation that actually, we can't just build our way to
18:14
Speaker 3: success for the next generation just by building rental properties
18:17
Speaker 3: and renting them out. And having been this country of
18:20
Speaker 3: landlords by landlords. I percent of us are landlords and
18:24
Speaker 3: the rest are just renting.
18:25
Speaker 2: Right.
18:27
Speaker 3: The way to build a country sustainably in terms of
18:31
Speaker 3: growth for the long term, of course, has have this
18:33
Speaker 3: diversified portfolio of companies that are doing great things, and
18:35
Speaker 3: we're exporting and creating jobs. Right, That's what we wanted it, right,
18:38
Speaker 3: So that I reckon we're fortunately, I think we've broken
18:42
Speaker 3: that psyche. Now now then this question, where's the housing
18:46
Speaker 3: market today?
18:47
Speaker 2: That psyche's broken?
18:50
Speaker 3: I think there's still good reasons to be building social housing,
18:53
Speaker 3: to be building infrastructure for housing. We need housing.
18:56
Speaker 2: Chriss Bishop was singing that tune too.
18:58
Speaker 3: We are absolutely housing and it's happening. You can see
19:01
Speaker 3: social housing being built regionally, step by step.
19:05
Speaker 2: Terrific.
19:05
Speaker 3: When I'm not saying it's not an investment opportunity for
19:09
Speaker 3: broad funds.
19:09
Speaker 2: It is.
19:10
Speaker 3: But as for what mum and dad should do next,
19:14
Speaker 3: just personally, I think that PSICH has collapsed, and I
19:17
Speaker 3: think it probably ought to stay that way.
19:20
Speaker 2: I think you're right. I could get a property guest
19:24
Speaker 2: to beyond who'd be like age. But it does feel
19:29
Speaker 2: it's you know that just the conversations around the coffee
19:32
Speaker 2: table and things like that, you know, with people who
19:34
Speaker 2: have been that was seen to be I don't mean
19:36
Speaker 2: that they get rich quick thing, but there were a
19:38
Speaker 2: lot of people. Well, there was some people making a
19:40
Speaker 2: lot of money very quickly because of the capital gains.
19:43
Speaker 2: But it just feels that, you know, the equations changed.
19:45
Speaker 2: We've seen rents having to slide and you know, to
19:48
Speaker 2: meet the market and look, you never nothing's forever.
19:52
Speaker 3: Yeah, construction costs going up, costs of doing remediation or.
19:56
Speaker 2: Population behore, you know. So, but there's this.
19:59
Speaker 3: Bat where are we now? A year and a bit ago,
20:02
Speaker 3: the housing market only sold seventy two thousand houses and
20:05
Speaker 3: we headed seventy two thousand sales of houses. Now, that
20:08
Speaker 3: was a pretty low point, so it felt pretty ugly
20:10
Speaker 3: in terms of turnover in the market. By March this year,
20:13
Speaker 3: that lifted to eighty two thousand, and the last reading
20:16
Speaker 3: is around ninety thousand houses have turned over or sold.
20:19
Speaker 3: Now that is a healthy thing. We want the housing
20:21
Speaker 3: market turning over so first home buyers can come in,
20:25
Speaker 3: those that are onto their second home can move forward,
20:27
Speaker 3: and we can move through a life cycle of people's
20:31
Speaker 3: ownership of houses to eventually, of course, people moving out
20:33
Speaker 3: of housing into h GF facilities. When the housing market
20:37
Speaker 3: locks as it did, it feels horrible for everyone in
20:41
Speaker 3: that chain. So I think my gap feeling is we're
20:45
Speaker 3: mostly through a very large correction or adjustment where now
20:50
Speaker 3: in a phase where the housing market has some lubrication again.
20:54
Speaker 2: It's working, which is and that's a good thing. Without
20:57
Speaker 2: the runaway I guess the thing is people who own
21:00
Speaker 2: property they don't mind the runway prices.
21:03
Speaker 3: But here's another sign of health across New Zealand. First
21:07
Speaker 3: home buyers were thirty percent of that turnover.
21:10
Speaker 2: That's quite a lot and we.
21:11
Speaker 3: Want that because we want people. Get the affordability number
21:16
Speaker 3: right again, let's get back into it.
21:17
Speaker 2: How much does so it goes back to our first
21:20
Speaker 2: part of the conversation. About the cash rate. How much
21:24
Speaker 2: does that figure in the Reserve banks consideration, Because you know,
21:27
Speaker 2: we saw what happened when we incredibly cheap money and
21:30
Speaker 2: the market went ridiculous. Funny thing is, I'm not sure
21:34
Speaker 2: we would have quite the same reaction if the money
21:36
Speaker 2: did get cheap. But it would be a problem if
21:38
Speaker 2: money got too cheap, wouldn't it.
21:39
Speaker 3: So let's look across to Australia. House prices have continued
21:43
Speaker 3: to go up. They've just introduced these prudential limits on
21:48
Speaker 3: certain parts of the housing market DEBTA and comes sort
21:51
Speaker 3: of radiating couragios, and it doesn't feel like affordability is
21:56
Speaker 3: great in Australia. Many parts of Aussie it's gone the
22:00
Speaker 3: other way. In New Zealand. I think we've got this region,
22:02
Speaker 3: we've had this correction, house prices, housing markets lubric I
22:05
Speaker 3: think it's turning over again, and we've got first home
22:07
Speaker 3: buyers for the most part able to at least go
22:11
Speaker 3: and have a conversation with a bank again. Yeah, talk
22:14
Speaker 3: can we get in? So why is Australia sort of
22:18
Speaker 3: going well, let's talk about Ossie economy has been strong
22:21
Speaker 3: if they haven't had this doubled up recession situation in AUSI.
22:25
Speaker 2: Yeah, it's a funny one, isn't it. So, I mean
22:27
Speaker 2: their economy is going strong, but the property is going.
22:30
Speaker 3: Interest rates didn't go to five and a half percent.
22:31
Speaker 3: In Australia. They didn't go as high. They haven't come
22:33
Speaker 3: down as far, but they didn't go as high, so
22:35
Speaker 3: they didn't constrain the whole situation. So those are the
22:37
Speaker 3: two things mainly.
22:38
Speaker 2: So well, I'm okay, if our economy suddenly really picks up,
22:43
Speaker 2: why is that not going to be a problem for
22:44
Speaker 2: the property market?
22:45
Speaker 3: Game Buster, you need immigration to pick up significantly as well.
22:48
Speaker 3: I'm not sure that we're no, we're not there on
22:51
Speaker 3: board that. In fact, the opposite sort of dampling down.
22:53
Speaker 3: And actually interest rates it's still four and a half
22:56
Speaker 3: percent from a mortgage, which means actually you do a
22:58
Speaker 3: stress test of another two percent on top of that,
23:01
Speaker 3: so you've got a test being able to pay six
23:03
Speaker 3: and a half or maybe a bit more. So it's
23:05
Speaker 3: not free money, Rightah?
23:08
Speaker 2: What about? Actually, can I run something past you? I
23:11
Speaker 2: had a caller on my talk back show who I'm
23:16
Speaker 2: not sure where I can tie this into the conversation.
23:18
Speaker 2: It's amos going to toss it in there. He was
23:20
Speaker 2: talking about you know where they're talking about the population
23:22
Speaker 2: growth what we want to see in New Zealand, and
23:25
Speaker 2: there have been people who think we need to be
23:26
Speaker 2: up to ten million by twenty whatever it is, I
23:29
Speaker 2: can't remember what it was, but he was saying that
23:33
Speaker 2: the population growth is a challenge unless we can build
23:36
Speaker 2: the economy in terms of our exports, because how does
23:41
Speaker 2: how much how he was worried that we are, for instance,
23:44
Speaker 2: Fonterra still make cheese and everything, but they've got rid
23:48
Speaker 2: of the brands and we send our logs off for
23:52
Speaker 2: other people to do things with them. And his point
23:55
Speaker 2: was we need to be doing more in New Zealand
23:58
Speaker 2: to be able to support a large population. You know,
24:00
Speaker 2: there's an economic question which went beyond my C plus
24:02
Speaker 2: at Itaga University.
24:05
Speaker 3: Casey plus is fun, right, You've got to m I mean,
24:10
Speaker 3: the truth is you've got to do a whole lot
24:11
Speaker 3: of things to make an economy work. Exporting is part
24:13
Speaker 3: of it, but the other part of it, if you
24:15
Speaker 3: want to have a high population base, is a heap
24:17
Speaker 3: of infrastructure we don't have today. Let's start with health, schooling, roading, ports, airports.
24:24
Speaker 3: There's a whole lot of infrastructure you need if you
24:26
Speaker 3: want to have a population growing more rapidly than what
24:29
Speaker 3: we've got, and you've got to fund that. And so
24:31
Speaker 3: we know those are constraints. Now how do you fund that?
24:34
Speaker 3: You fund that partly through attracting global capital, but partly
24:36
Speaker 3: those are public assets you've got to fund through having
24:40
Speaker 3: a tax space. And so I think that the key
24:43
Speaker 3: question there is you've got to have great companies then
24:45
Speaker 3: to be able to be profitable, and those companies are
24:48
Speaker 3: partly local and partly global. I'm not so pessimistic on
24:53
Speaker 3: the growth of our economy in terms of exports and trading.
24:58
Speaker 3: I think we're a very competitive economy. The technology sector
25:01
Speaker 3: alone is the second largest sector in museum people forget
25:03
Speaker 3: about that, but we export a lot of pretty good
25:06
Speaker 3: tech and it's not all about just exporting agg So
25:10
Speaker 3: you just put that out there. But we do have
25:13
Speaker 3: a funding problem right in front of us. If we
25:16
Speaker 3: want to have a larger population base.
25:19
Speaker 2: What do you think what are the areas that New
25:21
Speaker 2: Zealander is going to continue you're talking about technology. Is
25:24
Speaker 2: that going to continue having an upward spiral from for
25:27
Speaker 2: what we are producing?
25:29
Speaker 3: Or we look for some reason MW Zealand over indexes
25:33
Speaker 3: and creating great innovative companies that make it on the
25:35
Speaker 3: world stage and over indexes.
25:39
Speaker 2: We we are.
25:40
Speaker 3: I mean, it's absolutely case and you can run through
25:42
Speaker 3: them all. I mean not just unicorns. Some of these
25:44
Speaker 3: companies in Unicorn being worth more than a billion dollars.
25:47
Speaker 3: There are companies that have gone on and be worth
25:49
Speaker 3: a lot more than that. I mean, Zero is still
25:51
Speaker 3: growing at thirty percent New Zealand company even though it's
25:54
Speaker 3: the list, the disease of Rocket Labs. Similarly, but there
25:56
Speaker 3: are other companies hold up, we can carry on that
25:59
Speaker 3: are truly you know, have gone from fifty million to
26:02
Speaker 3: one hundred million, to bigger companies employing kiwis and through
26:06
Speaker 3: that wage bill, creating domestic economies.
26:10
Speaker 2: Let's talk about let's move on to I mean, with
26:11
Speaker 2: the talking about zero well and and the technology side
26:15
Speaker 2: of things global AI. So AI is it's everywhere these days,
26:23
Speaker 2: isn't it. I Mean everyone uses AI sometimes even if
26:26
Speaker 2: you don't know now you're using it. But last week,
26:28
Speaker 2: you know, Nasdak hit a high, a three week high.
26:33
Speaker 2: But there's a lot going on. So what is going on?
26:35
Speaker 2: Because it's completely beyond me, I see the numbers, and
26:38
Speaker 2: I just look back and go, oh, that would have
26:39
Speaker 2: been good to buy that stock then and watch that
26:42
Speaker 2: invest in that activity. But what is going on with
26:44
Speaker 2: global AI and the volatility?
26:46
Speaker 3: I mean clearly a year ago, even a year before
26:49
Speaker 3: that AI came on to the seventy year ago, we
26:51
Speaker 3: were all talking about it, thanking goodness, what what are
26:53
Speaker 3: we going to do with this AI? It all going
26:54
Speaker 3: to work? Is Actually, if you ask me my Christmas
26:58
Speaker 3: reading list, it's a book called The Thinking Machine. Yeah,
27:02
Speaker 3: biography of Jinsen Huang. Yeah, seriously, very readable.
27:07
Speaker 2: Everyone's thenking would just the Thinking Machine thinking, and it
27:10
Speaker 2: about AI or about the investments of aiol.
27:12
Speaker 3: It's about Jinsen Huang and I came him growing up.
27:15
Speaker 3: But then the development of Nvidia. Okay, so we're talking
27:18
Speaker 3: about in video.
27:19
Speaker 2: Because they were their their share price went bonkers for
27:22
Speaker 2: a while.
27:22
Speaker 3: It has for two decades, honestly. Yeah, it's a two
27:25
Speaker 3: decade stock. It's not just didn't just happen overnight, right, Yeah,
27:28
Speaker 3: So what does in Vidia do? It creates the key
27:32
Speaker 3: global chip that these AI models use have been trained on. Okay,
27:37
Speaker 3: So the concept is you've got to make a chip,
27:40
Speaker 3: you've got to train your AI model and you've got
27:43
Speaker 3: to have data centers and distribution other things to go
27:46
Speaker 3: with it. So in Nvidia absolutely had the chip, the
27:49
Speaker 3: black World chip. It now is that ninety percent of
27:52
Speaker 3: these models have been trained on, so it dominates, right,
27:55
Speaker 3: But what happened around about the beginning of November along
27:59
Speaker 3: walks in alphabet or Google and says, oh, actually we've
28:02
Speaker 3: got a way of doing this as well with something
28:04
Speaker 3: called TEA. You use tensor processing units, and actually we've
28:08
Speaker 3: got a model called Gemini or Gemini three, and actually
28:13
Speaker 3: that everyone does all the analytics on this, and it
28:15
Speaker 3: turns out that it's just as good as GPG five,
28:18
Speaker 3: which is one of the AI models, just as good
28:19
Speaker 3: as these Blackwell chips. So competitions in the game, I
28:22
Speaker 3: think it's a Formula one race. Think about a Formula
28:24
Speaker 3: one race. For many seasons you have Ferrari at the top,
28:28
Speaker 3: and then suddenly they've got a new they've got a
28:31
Speaker 3: new braking system or a new hybrid engine or something,
28:34
Speaker 3: and one over takes the other. And right now the
28:39
Speaker 3: sheer market is saying, perhaps Google has overtaken.
28:44
Speaker 2: Well, it's Nvidia and it's I mean, it's not like
28:47
Speaker 2: you're talking about a bit player, is it. I mean,
28:48
Speaker 2: you're talking about Google, which has.
28:50
Speaker 3: Four trillion dollar giants here right now, not Wow, And
28:54
Speaker 3: they're battling it out around this racetrack, and you're worried
28:57
Speaker 3: about the next corner or the next race, and then
29:00
Speaker 3: you're worried about your driver. Whatever one likes is they
29:02
Speaker 3: like the driver in Nvidia, gents and one. Everything is good,
29:06
Speaker 3: but they're worried right now that maybe it's not a one,
29:09
Speaker 3: one car race anymore.
29:10
Speaker 2: Yeah, And so what we had when video was down
29:13
Speaker 2: ten there would have been a few people sick about
29:15
Speaker 2: that ten percent a month.
29:17
Speaker 3: Yeah, I mean it's been up. You know, it's tripled
29:19
Speaker 3: in the last four or five years, right, Yeah, I
29:21
Speaker 3: don't feel bad, but that volatility is typical of what
29:24
Speaker 3: we are going to see in markets at an individual level.
29:29
Speaker 3: But investors here shouldn't really worry. The diversified global portfolios.
29:32
Speaker 3: There will be winners and losers. But if you're reading
29:34
Speaker 3: the latest headline, you might see an over indexing of
29:38
Speaker 3: negative news on one company, but they won't report about
29:41
Speaker 3: that other stuff that's happening over here.
29:43
Speaker 2: I mean that I mean, is that why if you
29:47
Speaker 2: if you believe that tech is the future, then you
29:50
Speaker 2: just invest in a broad sort of portfolio or what
29:52
Speaker 2: are the actual indexed funds you can buy? Because there's
29:55
Speaker 2: S and P, there's in terms of the tech stocks,
29:58
Speaker 2: there's a selection of ways you can invest broadly in
30:02
Speaker 2: the tech industry, isn't there? I'm cluding through you guys,
30:04
Speaker 2: I think absolutely.
30:05
Speaker 3: But I mean then the question is if you're just
30:08
Speaker 3: investing passively in an index And this is the question
30:11
Speaker 3: that people need to resolve. Am I just over indexing
30:15
Speaker 3: and things that have done really well recently? Because then
30:17
Speaker 3: Desey's working the way of if you've done really well,
30:20
Speaker 3: I buy more of the stuff that's done really well.
30:22
Speaker 3: And that's actually been a great strategy for the last
30:24
Speaker 3: year or so. Yeah, for who all investors have just invested.
30:29
Speaker 2: It's been pretty good.
30:30
Speaker 3: It's been a pretty good strategy.
30:31
Speaker 2: Okay, hey, look we're going to dig into this a
30:33
Speaker 2: bit more. God's fascinating all this stuff, isn't it? Anyway? Right,
30:35
Speaker 2: We're going to be back in a moment with Andrew
30:37
Speaker 2: Bascan from Harbor Asset Management. It is twenty to six already, goodness, mate,
30:42
Speaker 2: backsone Yes News talk said b We're with Andrew Bascan
30:45
Speaker 2: from Harbor Asset Management, and actually just before we're going
30:48
Speaker 2: to talk about key, we say about Andrew, and before
30:50
Speaker 2: we do, there was just another point where we're talking
30:52
Speaker 2: about in the break about you can talk about stocks
30:54
Speaker 2: and all sorts of things, but the whole tech and
30:56
Speaker 2: the AI thing does tie into basic minerals, doesn't it,
30:59
Speaker 2: because tell us about what's happened with copper.
31:01
Speaker 3: When you think about AI, data centers require huge, huge
31:05
Speaker 3: amount of power. This is the one bottleneck in the
31:08
Speaker 3: whole development I think of AI. The amount of power
31:11
Speaker 3: that goes into develop what called each token, and it's
31:15
Speaker 3: the key measure of productivity, amount of power each AI
31:19
Speaker 3: model uses to develop data centers. You've got to be
31:22
Speaker 3: on the grid obviously, or we're got to be connected
31:24
Speaker 3: to some form of electric power generation. And combined with
31:33
Speaker 3: generalized growth, the additional demand for copper has seen the
31:38
Speaker 3: copper price rise dramatically over the last year. In fact,
31:41
Speaker 3: it's broken through to a level of like eleven five
31:43
Speaker 3: hundred dollars a ton, with most analysts in the last
31:46
Speaker 3: two or three weeks now calling it for to go
31:48
Speaker 3: to thirteen or forteen thousand. Now that's not advice, but
31:51
Speaker 3: I've got to say that the when you think about
31:54
Speaker 3: AI and the growth in that area in sector, it's
31:58
Speaker 3: having effects beyond, well beyond into the mining sector, well
32:04
Speaker 3: beyond where you would think of technology growth vector.
32:07
Speaker 2: To me, do many people see this stuff coming and
32:10
Speaker 2: we're there be somebody's sitting smugly back. Yeah, I've invest
32:13
Speaker 2: in ages Ago and new Copple was going to go gangbusters.
32:15
Speaker 3: It's intriguing how many how many investors in the tech
32:18
Speaker 3: sector have been thinking about, my goodness, that's data centers.
32:21
Speaker 3: I need grad Therefore I might need Solar, I might
32:24
Speaker 3: need Wind, I might need long term contracts for power. Actually,
32:28
Speaker 3: this is what our own homegrown company Infratol is really
32:33
Speaker 3: been really good at phenomenal created a whole lot of
32:36
Speaker 3: wealth for key investors and their key we saver Once.
32:40
Speaker 3: I'm not an advertisement for Infantol, but truly we have
32:43
Speaker 3: homegrown talent here who have spotted this trend coming a
32:46
Speaker 3: long time ago.
32:48
Speaker 2: Now let's move because time is rushing by, but key
32:51
Speaker 2: we saber changes are coming. We assume voluntary contributions rise
32:56
Speaker 2: into three and a half and percent and twenty twenty six,
32:59
Speaker 2: and there's talk of moving towards six plus six six
33:01
Speaker 2: percent for the employee and six percent apparently for the
33:05
Speaker 2: employer who probably just build it into the contracts. Are
33:07
Speaker 2: you're really paying like Australia, What does it mean for savers?
33:12
Speaker 2: Do you think your key point there is like Australia
33:15
Speaker 2: who are moving to twelve percent? Right, So I think
33:18
Speaker 2: this is the view.
33:19
Speaker 3: What is an appropriate level of saving if you and
33:21
Speaker 3: I are saving independently voluntarily for our retirement. I'm sorry,
33:25
Speaker 3: the number somewhere between ten and twelve percent if you're
33:27
Speaker 3: going to retain the same form of income that you
33:30
Speaker 3: had in your time, that's over how many years actually
33:33
Speaker 3: does that apply to? Yeah, somewhere around at thirty thirty
33:35
Speaker 3: five years. Doesn't have to be the whole forty but
33:37
Speaker 3: thirty thirty five years as a sort of general number
33:39
Speaker 3: and a balanced book volio, that's what you need. And
33:43
Speaker 3: so here's it. Imagine we went to that world. So
33:47
Speaker 3: Australia four point five trillion dollars of capital in there
33:51
Speaker 3: super today, that's something around one hundred and sixty percent
33:54
Speaker 3: of their GDP or their economy. Our key we save
33:58
Speaker 3: a pool today at one hundred and thirty bill is
34:00
Speaker 3: something around thirty percent of economy steal, So the Aussie
34:04
Speaker 3: super scheme it's five times larger in terms of the
34:07
Speaker 3: size of their economy than ours. It's it's been an
34:10
Speaker 3: important part of their growth story.
34:12
Speaker 2: It's one thing. I mean, we've had a bit of
34:14
Speaker 2: a chat about not you and I, but it has
34:15
Speaker 2: been a bit of a talkback topic about the growth
34:19
Speaker 2: of the contributions and with many people concluding it's going
34:22
Speaker 2: to be fine if you can afford that, but we haven't.
34:25
Speaker 2: People are not feeling it goes back to our first
34:28
Speaker 2: our first part of the conversation about just the economy
34:31
Speaker 2: about who's going to pay for, you know, to put
34:33
Speaker 2: that those those contributions up, and a lot of people concluding, well,
34:38
Speaker 2: it's fine if you're a middle upper income or wealthy
34:41
Speaker 2: because you can afford to take a bit more and
34:43
Speaker 2: shoved into retirement, whereas the average savor that's going to
34:47
Speaker 2: be It's not money that's going to get conjured out
34:49
Speaker 2: of any out of thin air, is it.
34:51
Speaker 3: It's half a percent per annum increase. It's at a
34:54
Speaker 3: reasonable pace. You know it is coming, and employers know
34:58
Speaker 3: it is coming as well. When you think about annual
35:01
Speaker 3: salary increases in line with productivity and inflation. It is
35:06
Speaker 3: a meaningful and meaningful number. It's a half a percent
35:08
Speaker 3: maybe on three three and a half percent salary rises. Okay,
35:11
Speaker 3: but if you know it's coming, you can build it
35:15
Speaker 3: into your thinking. The alternative is to think about this,
35:19
Speaker 3: what if we do nothing? And when is the best
35:22
Speaker 3: time to plant a tree?
35:23
Speaker 2: Well?
35:24
Speaker 3: Today, right, so let's do nothing. Let's imagine we do nothing.
35:28
Speaker 2: Yeah yeah, I mean analogy.
35:31
Speaker 3: Thirty years time, our debt to GDP in New Zealand
35:34
Speaker 3: will be unsustainable because we can on most projections, if
35:38
Speaker 3: we do nothing, we will have one hundred and twenty
35:41
Speaker 3: percent debt GDP if we do nothing. So doing nothing
35:46
Speaker 3: is not the right story.
35:47
Speaker 2: The debt to GDP.
35:49
Speaker 3: Sorry, that's how much we'll have to borrow to continue
35:52
Speaker 3: to fund our help. Here a superannuation. That's the story. Now,
35:56
Speaker 3: that's a medium projection done and by independent people. It's
36:00
Speaker 3: not a doomsday scenario. I campaign a doomsday scenario. I
36:03
Speaker 3: don't want to do that because that's unfair. But that
36:06
Speaker 3: is a redramatic scenario. It's just a scenario that's worth
36:10
Speaker 3: while thinking about.
36:11
Speaker 2: What do you I mean, where do you see the
36:14
Speaker 2: growth of New Zealand economy over the next few years? Really?
36:17
Speaker 2: I mean because we you know, as we've said, the
36:19
Speaker 2: worst is apparently behind us.
36:22
Speaker 3: But do you know, I said, as an optimist on
36:24
Speaker 3: the spectrum, I love it and I think once again
36:27
Speaker 3: kV companies highly innovative. We're focused on doing good. By
36:33
Speaker 3: doing good, we're actually producing stuff people want in the world,
36:37
Speaker 3: and we've been doing it for a very long time frame.
36:40
Speaker 3: I think we're back on the road of thinking about
36:41
Speaker 3: how we get everyone involved in this economy. It's going
36:45
Speaker 3: to take time. You don't build that in a year
36:47
Speaker 3: or two. You build it over a generation. I think
36:49
Speaker 3: we're back on that road. There's another reading book I
36:52
Speaker 3: want people to think about that.
36:53
Speaker 2: What was it? Remind us what the other one was called.
36:55
Speaker 2: It was The Thinking Thinking Machine.
36:57
Speaker 3: The Thinking Machine by Stephen Witt, The biography of Jensen Huang.
37:00
Speaker 3: He's the guy which is going to the world here,
37:02
Speaker 3: but he's the Nvidio guy. Came from Thailand when he
37:05
Speaker 3: was ten, went to a boarding school. He had nothing,
37:07
Speaker 3: complete poverty. It's quite amazing, complete body. It's a great story.
37:10
Speaker 3: People have heard me talk about this book before it's
37:12
Speaker 3: called progress by Johann Norman's progress. It sits there looking
37:17
Speaker 3: back in time, thinking, in decades have we added to
37:22
Speaker 3: our technology? Are we better off today than we were
37:24
Speaker 3: a decade ago? Now, if you do that in one
37:27
Speaker 3: year slices, it doesn't look great, right, we always remember
37:30
Speaker 3: one year slice. But there is some truth to the fact.
37:33
Speaker 3: I remember when we had black and white TV.
37:37
Speaker 2: Sadly I do. We talked about this the other night,
37:40
Speaker 2: but it is true. So you cast.
37:42
Speaker 3: Forward, what do you think New Zealand will be? Yeah,
37:45
Speaker 3: and we have choices. We could go back to a
37:48
Speaker 3: black and white TV. It's unlikely, right.
37:53
Speaker 2: Yeah, actually fitly enough, this is a completely random thing.
37:56
Speaker 2: But somebody reminded me when there was some talk about
37:59
Speaker 2: black and white TV. Do you remember those those screens
38:02
Speaker 2: you could attach to the front of your back and
38:04
Speaker 2: white tea? It was it was a blue strip at
38:10
Speaker 2: the top. It was a green and a sort of beige,
38:13
Speaker 2: and people fell for that. Anyway, let's let's get back
38:15
Speaker 2: to Q saving. Let's imagine this world. Let's imagine this world.
38:18
Speaker 2: We have slowly gone to the six plus six world.
38:22
Speaker 2: I sadly think it'll be more like not everyone contributing
38:26
Speaker 2: because some people have to holiday. That's what I mean.
38:28
Speaker 3: My modeling will be. It will be a nine nine
38:31
Speaker 3: and a half.
38:31
Speaker 2: And a four and a half. It sort of will.
38:34
Speaker 3: But even that is better than where we are. I
38:36
Speaker 3: am aspirational twelve. But let's say it's that sort of
38:39
Speaker 3: Do you think that's going to be a team world?
38:41
Speaker 2: Do you think it's going to be accompanied by a
38:42
Speaker 2: change in the retirement age as well?
38:44
Speaker 3: I do not, because I don't think it then becomes necessary.
38:47
Speaker 3: I'm not going to get political, but I think there's
38:49
Speaker 3: other ways of solving that issue.
38:51
Speaker 2: There are other ways of solving that.
38:52
Speaker 3: Shue Now, there are other ways of solving that issue.
38:56
Speaker 3: And the answer is, yes, it probably ought to rise
39:00
Speaker 3: through time. Well shield it ought to because you and
39:02
Speaker 3: I are going to live to one hundred, so absolutely
39:05
Speaker 3: ought to. But you can you imagine how that's that's
39:09
Speaker 3: not the easiest thing to get through.
39:10
Speaker 2: But let me think you'll tell you what. We'll come
39:12
Speaker 2: back with the closing thoughts in just a moment, because
39:14
Speaker 2: I have to steal a break you do otherwise to
39:16
Speaker 2: get in trouble, and Tyra gets quite grumpy and you
39:18
Speaker 2: don't want to see that we'll be back in just
39:20
Speaker 2: a moment. It's eight minutes to see and yes, right.
39:22
Speaker 2: Final thoughts from Andrewbaesque and of Harbor Raccic Management. Andrew, Yeah,
39:26
Speaker 2: it looks been a terrific hour. I'm just hoping people
39:29
Speaker 2: are going to have a great Christmas and they're going
39:31
Speaker 2: to run into it worth a bit more joy than
39:33
Speaker 2: they did last year. I think that joy is going
39:34
Speaker 2: to come from the fact that the economy generally is
39:37
Speaker 2: going to feel better even even next year than it
39:41
Speaker 2: is right now, which I think it's feeling a bit better.
39:44
Speaker 3: So that's the first point. Second point, you know, I
39:46
Speaker 3: think I think the housing market it's stabilized. I think
39:49
Speaker 3: for people to know that it stabilized and it's okay,
39:51
Speaker 3: it feels okay. But that's not where I would place
39:54
Speaker 3: my next on it being a race horse. Yeah, correct,
39:57
Speaker 3: not race AI. It is a race horse. Don't worry
39:59
Speaker 3: about that. It's fine. It's it's it's not not a
40:01
Speaker 3: destructive influence. It's a positive influence. But there's going to
40:05
Speaker 3: be a lot of noise in that sector, I think.
40:07
Speaker 3: And finally, this key we saver changes that are coming.
40:10
Speaker 3: They're not frightening, it's what we need for the productive
40:13
Speaker 3: capacity of our economy and our people in a generation's time.
40:17
Speaker 2: Excellent Christmas, looking forward to it. You've got a book
40:21
Speaker 2: sorted out.
40:22
Speaker 3: Yeah, I'm going to continue looking forward to continue reading
40:26
Speaker 3: the Jensen Wang biography. I've nearly finished it, and then
40:29
Speaker 3: I'll find a next one. It's going to be busy
40:30
Speaker 3: with three grandchildren.
40:31
Speaker 2: Yes, lovely. Oh, you're going to have a wonderful Christmas. Andrew,
40:34
Speaker 2: thank you so much for being on the show and
40:36
Speaker 2: your team appearing on the show during the course of
40:38
Speaker 2: the air and your support of it. We really appreciate it.
40:41
Speaker 2: And have a merry Christmas. Mate. We'll catch you next weekend.
40:51
Speaker 1: For more from the Weekend Collective, listen live to News
40:53
Speaker 1: Talk said Be weekends from three pm, or follow the
40:57
Speaker 1: podcast on iHeartRadio.