There aren’t many people with their finger on the global pulse like CNN’s Richard Quest.
The host of ‘Quest Means Business’, Richard Quest consistently at the top of the game when it comes to analysing the global economy, international business and tourism.
New Zealand’s not the only country having issues in this sphere, and Quest joined Mike Hosking to give his insight into the seething geopolitical ocean.
When it comes to the global economy in the wake of the 2020 Covid pandemic, Quest believes we’re just about fine.
“Some countries will grow more than others, but you know, the fact that we have proven we can get rid of inflation?”
In Quest’s opinion, the biggest concerns have to be the war in Ukraine, the expansion of the war in the Middle East, the conflict in the Taiwan Straits, and the conflicts with China.
“Those have the serious potential to just completely, literally, blow us out of the water.”
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
In a troubled and busy world. Good and science and
valuable of course. So let's get about the place, the States,
to Europe, to China, to the war. A little bit
of plain spotting maybe to boot Richard Quist of Quist
means business in Quist's world of wonder on seeing in
is with us from New York. Very good morning to you.
Speaker 2 (00:14):
A very good morning or good afternoon, I should say,
from New York.
Speaker 1 (00:17):
I want to cover a bunch of bases with you
this morning if we could. The great Fed debate what's
your feel? What's the feel of the FID when they move?
Had they lifted too late, had they managed the soft landing?
What's your call?
Speaker 2 (00:30):
Yeah, that is a big question. The fact that they're
going to move in September, I think is beyond doubt.
If they did not move, then firstly they should all
be fired because they have led us down the garden
path believing that a rate cut of either certainly a
quarter possibly a half percent is on its way. And
(00:52):
the one rule is you don't lull the markets and
invest it into a false sense of security. So the
Fed has pretty much set the stage for a rate
cut later this month. Whether they've left it too late
will be only something we can judge in the rear
view mirror it started. I mean, if you look at
(01:14):
PMI numbers, you look under the hood of the economic data,
there is strong suggestion that it is late, and that
I mean a technical recession. Who knows, but people are hurting,
whether it's from inflation or a rise in unemployment which
is going up faster than they fed would like. Now,
(01:35):
there was a fine balance to be done, and it
is not clear that they got it entirely right.
Speaker 1 (01:42):
When I look at the markets on a daily basis,
and no one's looked looking closer than you. How much
of what's going on in the markets at the moment
of the fundamentals of the American economy reflected by the
global economy, and how much of it's just weird behavior
around things like nvideo.
Speaker 2 (01:57):
Well, you say weird behavior around in but the Nvidia
has become the bell weather for tech and AI and
therefore the ramp up in a video it's still not
well thane percent the share price this year. The issue
(02:17):
within Vidia and with all those stocks is whether the
economic conditions, the trading conditions, can justify those lofty valuations,
putting it crudely, Mike, Are we back to good old
fashioned earnings per share? The share price is a metrics
of future earnings. Are we back to good old valuations?
(02:41):
And what is happening is not a crisis allah global debt,
or allah pandemic or the Great Recession. It's not that crisis.
This is the market doing its proper due diligence and saying,
you know, we thought in Vidia, Cisco, Intel, we thought
(03:04):
the chip makers were going to do better. The evidence
is suggesting they'll still do well, but not well enough
to justify these prices. And where this is a long
way yeah, go ahead.
Speaker 1 (03:17):
Now, I was going to say, well, where did the
geopolitics of all of this fit into this? When I
look at a place like China, Canada, Canola Royal this week,
back and forth, the geopolitics and the uncertain nature of
the world, where do they fit into wall with this, Well, they.
Speaker 2 (03:31):
Fit into it in creating the economic landscape by which
everybody's trading again put on the left side of the
garden fence, put tech and in Nvidia on the right side.
Put a potential bigger slow down than was expected. In
the US, put problems and protectionism with China. Put a
US election where there will be tariffs. Whoever gets elected
(03:55):
put problems in Europe and within the EU. Now that
creates a slow down, which again means that you can't
justify these share prices. And it implicates the tech because
suddenly companies are not going to invest in tech and
AI like we thought they will. It's not it's not
(04:16):
a crisis, and it's not a very fast moving downward spiral.
But they are feeding into each other and that's why
there is this unease, this worry that's out there.
Speaker 1 (04:29):
You mentioned tariffs in the election. Generally speaking, where does
the election fit in.
Speaker 2 (04:34):
Good question? We know that tariffs are coming regardless of
who wins. If it's Donald Trump, they'll be broad based.
There will be a you know, across the board, and
they will be deep and painful. If it's Kanla Harris,
they will be more targeted against China. They'll be more
tip related, they'll be more tech related, they'll be more
protectionists in the sense, in a sort of a tighter sense.
(04:59):
And remember Joe Biden did not remove most of Donald
Trump's former tariffs that he puts in place, or former
president tax on the economic front. We just don't know
how either of them are going to pay for their plans.
We don't know how Donald Trump is going to pay
for his tax cuts. We don't know how Kamala Harris
(05:19):
is going to pay for her increased social spending. Not
to be blunt, do we have any idea about the
ability the proprietary the simple common sense of her price
gouging policies which seem to make no sense whatsoever.
Speaker 1 (05:37):
Deedan will look forward to the debate tomorrow afternoon, right Richard.
The wars, the complexity of them ties in with the elections.
Of course, America's approach to the wars, the funding of
the equipment, the cost of all of the rising dit
what changes if there's a change of president. With Europe
and the Middle East.
Speaker 2 (05:53):
I think the Middle East less. So Ukraine's going to
be the big one because if Donald Trump is elected,
then his ability and capacity to continue to support Ukraine
is very much in doubt now to a certain extent,
though US still will it's a NATO the US will
and NATO still will do, but it will be a
(06:16):
lot more painful for Ukraine. And there are we serious
questions on Gaza and the Middle East. If if Kamala
Harris is elected. Well, then of course you've got problems
of the progressive left within the Democrats economically, because I
think that's what you're talking about, no real changes and
less as an exogenous event that would cause oil prices
(06:38):
to rise or supply lines to become disrupted. We are already,
Mike adapting. I was talking to the CEO of Mirth
and they are already adapting to the fact that the
Red Sea might be out of operation for quite some
time to get from Asia through up until Europe longer term.
If there's an exousous event, if the wars get worse,
(07:02):
if oil and other supply lines become endangered, then I
think you're looking at some really serious economic problems.
Speaker 1 (07:10):
And then, Richard, what about Europe and what we've seen
in Germany and whether what we've seen in Germany is
reflected more broadly in Europe And if it is, what
then for Europe.
Speaker 2 (07:18):
Well, let's just look at this. And you're talking of
course about the AfD and sort of the shift to
the right, and we saw it in Italy with the
line Eders. It's a couple of years ago and we've
seen it. Of course, we've seen Victor Auban holding onto power,
although that is certainly less so. But then you have
Poland where Donald Tusk came back. The European election, the
(07:43):
parliamentary results has given pause for thought. How President vonder
lyon and the new President of the Council, And you
know it's a measure of just you could ask most
people in Europe who the new President of the Council
is and even I can't remember his name just at
(08:04):
the moment, where without looking it up to just remind myself,
you've got to ask yourself what role this is all
going to play, particularly if Europeans are angry.
Speaker 1 (08:16):
Do you see a reap fact.
Speaker 2 (08:18):
In fact in Fama. In fact, let me just point out,
you say, the the the haven of stability at the moment,
despite all the problems in the UK economy, might be
written because the election is out the way, Kirstarmer is
is in number ten and is likely to be with
a very strong majority. So we've seen US bonds guilts
(08:42):
rally quite sharply because the and in fact, the demand
for guilts in the last bond auction dramatically dramatically outstripped
supply because people want to hold where there is perceived
to be stability.
Speaker 1 (08:56):
I was just going to ask about Takios Stama. I
can't work out what I'm seeing here. On one Handy's
cutting heating to patroners, which seems a very conservative sort
of thing for a liber government to do because they
haven't got any money. And then on the other hand,
he's wandering into the back of the pub garden telling
you you can't smoke, which is a very progressive liber
sort of thing. What sort of government are they?
Speaker 2 (09:13):
I think I would say, Secure has got you exactly
where he wants to be, exactly. He would say, I'm
a you know, I have policies and they are pragmatic
policies that I will follow as necessary with certain values.
(09:33):
For instance, the British government has today got to increase
pensions by more than the rate of inflation because they
have signed onto and adhere to the so called triple lock.
That's very expensive for them. Does it make sense to
remove the winter fuel allowance economically? Probably does. Most pensioners
didn't need it. Why not make it means tested? But
(09:57):
it had become part of the fabric of winter pensioners,
and for a labor government to take it away it
was just. It was sordid and a little bit sleazy.
Speaker 1 (10:08):
Exactly, just an overarching thing to end. Richard, as an
observer of all of this for an extended period of
time and expert in the field, do you find the
world particularly interesting, weird and unusual at the moment or
are we sort of just getting a bit excited and
it's always been this way if you.
Speaker 2 (10:24):
Look economically, I think we're fine economically being a moment
where we came from in twenty twenty with the pandemic,
I think we're just about fine. Some countries will grow
more than others. You know, the fact that we have
proven we can get rid of inflation. Arguably we should
never have had it. We should have been more careful,
blah blah blah. You know, could I should have, would have.
But the biggest worry has to be the war in Ukraine,
(10:47):
the potential worsening of the Middle East and expansion of
the Middle East war and the Taiwan Strait and the
battle within you know, the battles that will happen in
Asia with China. Those have the serious potential to just
completely literally blow us out of the water. Wider issues
(11:11):
might if I give you one sort of post summer
here as you thought, wider issues, how we're going to
deal with social media and AI. You know, how do
we teach a generation that what they see might not
be accurate and fair and true, what they hear might
not be the real thing to their ears, and what
(11:34):
they're being told they're going to have to take with
a pinch of salt. How do we tell people who
are skeptical, cynical, and downright disbelievers to believe Mike Hoskins
because he's been doing it more years than he's honest.
He knows what he's talking about, and to believe rich
request because he does know what he's talking about, and
they are not just shills if you will, of Corporate
(11:57):
America or New Zealand or whatever.
Speaker 1 (12:00):
You get the answer, let us know and we'll award
you the no Bell.
Speaker 2 (12:04):
But I got the answer. I'm keeping it to myself.
Speaker 1 (12:07):
Nice to catch up Richard Quest out of CNN.
Speaker 2 (12:10):
For more from the Mic Asking Breakfast, listen live to
news talks.
Speaker 1 (12:13):
It'd be from six am weekdays, or follow the podcast
on iHeartRadio.
In a troubled and busy world. Good and science and
valuable of course. So let's get about the place, the States,
to Europe, to China, to the war. A little bit
of plain spotting maybe to boot Richard Quist of Quist
means business in Quist's world of wonder on seeing in
is with us from New York. Very good morning to you.
Speaker 2 (00:14):
A very good morning or good afternoon, I should say,
from New York.
Speaker 1 (00:17):
I want to cover a bunch of bases with you
this morning if we could. The great Fed debate what's
your feel? What's the feel of the FID when they move?
Had they lifted too late, had they managed the soft landing?
What's your call?
Speaker 2 (00:30):
Yeah, that is a big question. The fact that they're
going to move in September, I think is beyond doubt.
If they did not move, then firstly they should all
be fired because they have led us down the garden
path believing that a rate cut of either certainly a
quarter possibly a half percent is on its way. And
(00:52):
the one rule is you don't lull the markets and
invest it into a false sense of security. So the
Fed has pretty much set the stage for a rate
cut later this month. Whether they've left it too late
will be only something we can judge in the rear
view mirror it started. I mean, if you look at
(01:14):
PMI numbers, you look under the hood of the economic data,
there is strong suggestion that it is late, and that
I mean a technical recession. Who knows, but people are hurting,
whether it's from inflation or a rise in unemployment which
is going up faster than they fed would like. Now,
(01:35):
there was a fine balance to be done, and it
is not clear that they got it entirely right.
Speaker 1 (01:42):
When I look at the markets on a daily basis,
and no one's looked looking closer than you. How much
of what's going on in the markets at the moment
of the fundamentals of the American economy reflected by the
global economy, and how much of it's just weird behavior
around things like nvideo.
Speaker 2 (01:57):
Well, you say weird behavior around in but the Nvidia
has become the bell weather for tech and AI and
therefore the ramp up in a video it's still not
well thane percent the share price this year. The issue
(02:17):
within Vidia and with all those stocks is whether the
economic conditions, the trading conditions, can justify those lofty valuations,
putting it crudely, Mike, Are we back to good old
fashioned earnings per share? The share price is a metrics
of future earnings. Are we back to good old valuations?
(02:41):
And what is happening is not a crisis allah global debt,
or allah pandemic or the Great Recession. It's not that crisis.
This is the market doing its proper due diligence and saying,
you know, we thought in Vidia, Cisco, Intel, we thought
(03:04):
the chip makers were going to do better. The evidence
is suggesting they'll still do well, but not well enough
to justify these prices. And where this is a long
way yeah, go ahead.
Speaker 1 (03:17):
Now, I was going to say, well, where did the
geopolitics of all of this fit into this? When I
look at a place like China, Canada, Canola Royal this week,
back and forth, the geopolitics and the uncertain nature of
the world, where do they fit into wall with this, Well, they.
Speaker 2 (03:31):
Fit into it in creating the economic landscape by which
everybody's trading again put on the left side of the
garden fence, put tech and in Nvidia on the right side.
Put a potential bigger slow down than was expected. In
the US, put problems and protectionism with China. Put a
US election where there will be tariffs. Whoever gets elected
(03:55):
put problems in Europe and within the EU. Now that
creates a slow down, which again means that you can't
justify these share prices. And it implicates the tech because
suddenly companies are not going to invest in tech and
AI like we thought they will. It's not it's not
(04:16):
a crisis, and it's not a very fast moving downward spiral.
But they are feeding into each other and that's why
there is this unease, this worry that's out there.
Speaker 1 (04:29):
You mentioned tariffs in the election. Generally speaking, where does
the election fit in.
Speaker 2 (04:34):
Good question? We know that tariffs are coming regardless of
who wins. If it's Donald Trump, they'll be broad based.
There will be a you know, across the board, and
they will be deep and painful. If it's Kanla Harris,
they will be more targeted against China. They'll be more
tip related, they'll be more tech related, they'll be more
protectionists in the sense, in a sort of a tighter sense.
(04:59):
And remember Joe Biden did not remove most of Donald
Trump's former tariffs that he puts in place, or former
president tax on the economic front. We just don't know
how either of them are going to pay for their plans.
We don't know how Donald Trump is going to pay
for his tax cuts. We don't know how Kamala Harris
(05:19):
is going to pay for her increased social spending. Not
to be blunt, do we have any idea about the
ability the proprietary the simple common sense of her price
gouging policies which seem to make no sense whatsoever.
Speaker 1 (05:37):
Deedan will look forward to the debate tomorrow afternoon, right Richard.
The wars, the complexity of them ties in with the elections.
Of course, America's approach to the wars, the funding of
the equipment, the cost of all of the rising dit
what changes if there's a change of president. With Europe
and the Middle East.
Speaker 2 (05:53):
I think the Middle East less. So Ukraine's going to
be the big one because if Donald Trump is elected,
then his ability and capacity to continue to support Ukraine
is very much in doubt now to a certain extent,
though US still will it's a NATO the US will
and NATO still will do, but it will be a
(06:16):
lot more painful for Ukraine. And there are we serious
questions on Gaza and the Middle East. If if Kamala
Harris is elected. Well, then of course you've got problems
of the progressive left within the Democrats economically, because I
think that's what you're talking about, no real changes and
less as an exogenous event that would cause oil prices
(06:38):
to rise or supply lines to become disrupted. We are already,
Mike adapting. I was talking to the CEO of Mirth
and they are already adapting to the fact that the
Red Sea might be out of operation for quite some
time to get from Asia through up until Europe longer term.
If there's an exousous event, if the wars get worse,
(07:02):
if oil and other supply lines become endangered, then I
think you're looking at some really serious economic problems.
Speaker 1 (07:10):
And then, Richard, what about Europe and what we've seen
in Germany and whether what we've seen in Germany is
reflected more broadly in Europe And if it is, what
then for Europe.
Speaker 2 (07:18):
Well, let's just look at this. And you're talking of
course about the AfD and sort of the shift to
the right, and we saw it in Italy with the
line Eders. It's a couple of years ago and we've
seen it. Of course, we've seen Victor Auban holding onto power,
although that is certainly less so. But then you have
Poland where Donald Tusk came back. The European election, the
(07:43):
parliamentary results has given pause for thought. How President vonder
lyon and the new President of the Council, And you
know it's a measure of just you could ask most
people in Europe who the new President of the Council
is and even I can't remember his name just at
(08:04):
the moment, where without looking it up to just remind myself,
you've got to ask yourself what role this is all
going to play, particularly if Europeans are angry.
Speaker 1 (08:16):
Do you see a reap fact.
Speaker 2 (08:18):
In fact in Fama. In fact, let me just point out,
you say, the the the haven of stability at the moment,
despite all the problems in the UK economy, might be
written because the election is out the way, Kirstarmer is
is in number ten and is likely to be with
a very strong majority. So we've seen US bonds guilts
(08:42):
rally quite sharply because the and in fact, the demand
for guilts in the last bond auction dramatically dramatically outstripped
supply because people want to hold where there is perceived
to be stability.
Speaker 1 (08:56):
I was just going to ask about Takios Stama. I
can't work out what I'm seeing here. On one Handy's
cutting heating to patroners, which seems a very conservative sort
of thing for a liber government to do because they
haven't got any money. And then on the other hand,
he's wandering into the back of the pub garden telling
you you can't smoke, which is a very progressive liber
sort of thing. What sort of government are they?
Speaker 2 (09:13):
I think I would say, Secure has got you exactly
where he wants to be, exactly. He would say, I'm
a you know, I have policies and they are pragmatic
policies that I will follow as necessary with certain values.
(09:33):
For instance, the British government has today got to increase
pensions by more than the rate of inflation because they
have signed onto and adhere to the so called triple lock.
That's very expensive for them. Does it make sense to
remove the winter fuel allowance economically? Probably does. Most pensioners
didn't need it. Why not make it means tested? But
(09:57):
it had become part of the fabric of winter pensioners,
and for a labor government to take it away it
was just. It was sordid and a little bit sleazy.
Speaker 1 (10:08):
Exactly, just an overarching thing to end. Richard, as an
observer of all of this for an extended period of
time and expert in the field, do you find the
world particularly interesting, weird and unusual at the moment or
are we sort of just getting a bit excited and
it's always been this way if you.
Speaker 2 (10:24):
Look economically, I think we're fine economically being a moment
where we came from in twenty twenty with the pandemic,
I think we're just about fine. Some countries will grow
more than others. You know, the fact that we have
proven we can get rid of inflation. Arguably we should
never have had it. We should have been more careful,
blah blah blah. You know, could I should have, would have.
But the biggest worry has to be the war in Ukraine,
(10:47):
the potential worsening of the Middle East and expansion of
the Middle East war and the Taiwan Strait and the
battle within you know, the battles that will happen in
Asia with China. Those have the serious potential to just
completely literally blow us out of the water. Wider issues
(11:11):
might if I give you one sort of post summer
here as you thought, wider issues, how we're going to
deal with social media and AI. You know, how do
we teach a generation that what they see might not
be accurate and fair and true, what they hear might
not be the real thing to their ears, and what
(11:34):
they're being told they're going to have to take with
a pinch of salt. How do we tell people who
are skeptical, cynical, and downright disbelievers to believe Mike Hoskins
because he's been doing it more years than he's honest.
He knows what he's talking about, and to believe rich
request because he does know what he's talking about, and
they are not just shills if you will, of Corporate
(11:57):
America or New Zealand or whatever.
Speaker 1 (12:00):
You get the answer, let us know and we'll award
you the no Bell.
Speaker 2 (12:04):
But I got the answer. I'm keeping it to myself.
Speaker 1 (12:07):
Nice to catch up Richard Quest out of CNN.
Speaker 2 (12:10):
For more from the Mic Asking Breakfast, listen live to
news talks.
Speaker 1 (12:13):
It'd be from six am weekdays, or follow the podcast
on iHeartRadio.
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