December 7, 2025 • 40 mins
Last week the Reserve Bank dropped the OCR 25 basis points to 2.25%, but their tone was a bit more hawkish than usual.
Some analysts are thinking it's a signal that rates have gone as low as the RBNZ is willing to drop them - and the new Governor may be wanting to turn a new leaf in 2026.
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Episode Transcript
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Speaker 1 (00:05):
You're listening to the Weekend collective podcast from News Talks.
Speaker 2 (00:09):
I'd be and that lovely piece of music is sort
of Christmas the music from Love actually, which is actually
it's a gorgeous little piece of music, isn't it. And
it's because it's the choice of my guest in the
studio now for smart Money, because he's actually also in Auckland.
He used to do the show and down the line
from Offenham, Wellington, but he's an awk little bit more
(00:30):
because he's a granddad again. And Andrew beskcan Andrew, how
you doing super?
Speaker 3 (00:35):
Isn't it great? This time of the year it is
out of us? Gives it back to right?
Speaker 2 (00:40):
Yeah, actually, it's funny. I love Actually, I still don't
think I'm sick of that movie yet. And how many
years do we watch it every year? And comes up
and you're like, sit down for love? Actually?
Speaker 3 (00:48):
Yep, last Sunday night, that's what happened.
Speaker 2 (00:51):
I gather actually one of the teachers at my daughter's
school showed the movie and forgot that there's a couple
of moments where this surprising nudity and she suddenly had
to very quickly reached for the fast forward like, oh,
forgot about that, but anyway, a lovely movie. Anyway, Andrew,
how's your year been?
Speaker 3 (01:08):
By the way, Well, it's a bit of a surprise year,
isn't it. I Mean, who would have thought we sit
here this time of the year and things are feeling
a little bit better?
Speaker 2 (01:15):
You know, Well, that's what's going to dig into. So
last week we had the Reserve Bank they dropped the
twenty five basis points. Gosh, it's something. It's an expression
everyone knows you those days, isn't it. And we've dropped
the ocr twenty five basis points to two point twenty five.
They've adopted a hawkish tone. Has it got there? I
don't know whether we've seen the bottom of the rate cycle,
(01:36):
but we're hoping we've seen the bottom of Have we
seen the worst of it? And you will have a
point of view of it because you are in touch
with things as opposed to what the average key is
in touch with who a lot of people are thinking.
I'm not sure have we seen the worst of it?
But anyway, what do you make of the year and
(01:56):
where we've got to and where we're going.
Speaker 3 (01:58):
Yeah, if we had have started thinking about what this
year is going to look like about this time, we
would have said, going to we would have had a
bit of a pickup in the economy happening, you know,
in the first half of this year, and it was
feeling a little bit better, and in fact that didn't happen.
The first half of this year was still pretty miserable,
like for everyone. Maybe a couple of provinces farmers were okay, uh,
(02:19):
and the economy sort of felt really pretty awful in winter.
Then we've had the sequence of interest rate cuts, and
we've had eggin comes go okay. We coped a whole
lot of bad news globally, and it seems right now, however,
the sequence of good news is running well. And speaking
of you know, this interest rate cut, let's think about that.
(02:40):
We've been cutting interest rates.
Speaker 2 (02:41):
For a while.
Speaker 3 (02:42):
We're five and a half now they're half that quarter, and.
Speaker 2 (02:46):
It's quite a big deal. Actually, it's quite a big
deal right now.
Speaker 3 (02:49):
I mean, they could go lower, but they could. This
could be it. And the thing that the story about
last week, if we if we just hang on for
that for a second, Actually we cut interestrates by quarter
and no one said too much, which indicates to us
we are probably at the end of that rate cutting cycle, well, they.
Speaker 2 (03:05):
Say this is did they say this is the last one?
Speaker 3 (03:08):
Pretty much gave some optionality to cut again, but don't
play on it too much. And what we've seen is
though you know, those two year mortgage rates haven't changed.
I think that's the signal for borrowers out there, that
we cut interest rates the two and a quarter at
the two year rate, it's still for four and a half.
Speaker 2 (03:25):
I think there were a lot of people who a
bit disappointed about that because they saw a chop and
they're like, oh, I'm going to be able to refix them.
What do you mean, hang on, nothing's changed. The banks
were ahead of it. Yeah.
Speaker 3 (03:35):
Well, the thing is not just the banks, but the
whole interest rates structure. Is that a bank at a
bit off shore, it's a bit longer term. And we
expected a quarter of a point to come off. We
expected that twenty five basis points. And so if you
expect it, well that's it.
Speaker 2 (03:53):
Because so we had. Interestingly, the new governor, I'm inclined
to like her because she's from Scandinavia. Probably, I don't know,
it's sort of you always think the Europeans, they seem
to have stuff, and every time we have something a
comment about politics and what they do, it's always well,
in Sweden, you know, they do this in Sweden, they
(04:13):
do this in Finland. Scandinavia seems to be the sort
of talkback model, like, oh if we can only be
like those countries, and we've got our own person from Scandinavia.
But she fronted the Finance and Expenditure Select Committee, didn't.
We were sort of all eyes on this.
Speaker 3 (04:30):
Normally it wouldn't be the thing we tune into, right,
but here's our first chance of actually getting the body
language and the read. And there's some pretty tricky and
difficult questioning from you know, all different interested political parties
around the corner. You've probably watched one of these before.
It's probably my first for a week while, and we
were all pretty much glued to it. And actually really
(04:50):
good account of herself, I thought, I mean quite honestly,
you know, coming here obviously well briefed, but pretty open
to thinking about her her job and next year he
actually looking back, she said, you know, we've done a
pretty pretty good job.
Speaker 2 (05:05):
And was she nice to us?
Speaker 3 (05:07):
Yeah, she pretty well, given the hard time we've had
in terms of I think she was pretty nice to us, really,
But when I think about what she was talking, I'm
really excited because you're talking about transparency. We're going to
see more of the inner workings.
Speaker 2 (05:21):
And in fact, she's even said that. And again, I
can't believe how far we've got into these sorts of
things about the vote. But it was five five to one,
five one for the reduction by point two five. Somebody
wanted to keep it the same. But I think she's
indicated we're going to know who's voted what.
Speaker 3 (05:41):
If you're watching and listen to what she said, she
didn't exactly say that, but she said I'm open to
more transparency, and she was questioning exactly, well, exactly what
you said.
Speaker 2 (05:50):
She was asked.
Speaker 3 (05:50):
She said, I still haven't discussed this with my staff
and my people. I'm open to more transparency. She repeated
that line, which is fine.
Speaker 2 (05:57):
Can I ask you, hmm? Is I mean this is
not something necessarily slated to talk about it. But if
I was to give my quick reckon on that, I'm
not sure that having transparency on who voted what on
that committee is necessarily desirable because it acts as a
(06:17):
sensor to doing what, you know, what I mean, you
don't want all of a sudden somebody might be somebody
on that committee who's making that decision about the interest
rate is wondering how they are going to look or
could do because I don't know. I sort of like
the fact that it maybe should be anonymous how they're voted.
What do you think Two of.
Speaker 3 (06:36):
The comments from the ministers and the contributors to the
FEC actually made that exact point. It is a committee,
but we still want more transparency, So could you sort
of sort out how we don't how do we spotlight
on someone, but give us more transparency?
Speaker 2 (06:49):
So tell me what. So we don't know how they voted,
but we know what they said before they voted, or
said afterwards perhaps or.
Speaker 3 (06:56):
But the story really is this is something she's obviously
thinking about, and we'll find out what the story is.
She likes all the defied opinions around the table. Good.
I'm sure that's always been the case. But that's one
thing I took. The other thing I took out of
it is how important it is. It's always been important
to be strongly connected internationally, and she is obviously.
Speaker 2 (07:17):
Yeah, what does that mean for what does that mean
for her? Role in the as governory the Reserve Bank.
Speaker 3 (07:22):
He I think there are two things you'd be worried about,
global stress points in the financial system, So you're really
worried about financial crises and how they might filter through
to our economy well connected, really well connected, and then
thinking about how global patterns of growth will impact eventually
upon our economy. And I think she'll be forward looking.
(07:42):
I think that to be truthful, My view would be
the Reserve Bank has been very forward looking, but I
think she strengthens that framework.
Speaker 2 (07:50):
Can I just by the way, I'm probably going to
ask a few non sequit questions out of note. I
do remember that there's a guy as Michael Roddell who
writes about the Reserve Bank on his blog. But he
a while ago, it might have been a year or
two even was quite critical of the people who are
on whatever boards and things like that. Now that was
(08:11):
that's different his criticisms of certain personnel and their expertise.
I think there were people from the arts community or something.
Has this to do with the Board of the Reserve Bank,
but the Monetary Policy Committee itself, who are the people
who you know, who are the people on that in
terms of their They're all hardcore monetary policy experts, aren't they?
Is that right? If I asked you a curve ball
(08:32):
of a question, I might google that and I'll come
back with small substances.
Speaker 3 (08:35):
I think sorry about I think we touched on this
topic about three months ago, and I think I wisely
avoided to answer, Oh.
Speaker 2 (08:43):
I've forgot I've got a very short men. You're looking
at me, going have we talked about this before? Okay,
let's move on. So what we liked there was the
signal the rates rates might have bottomed, inflation is well anchored,
and the economy looks better in twenty twenty six. What
are the things that you I see the economy looks
(09:06):
better in twenty twenty six. I'll just be honest. I
think most people are took to go, well, I don't
feel it. When do you think we'll feel it? That's
absolutely right.
Speaker 3 (09:13):
So most people would feel an economy getting better with
quite a leg because they feel it getting better in
their annual pay cycle. So I got a bit of
pay rise, they feel it and there's oh, there's more
opportunity for me to maybe think about changing my job
or lift what I'm doing. And they feel it in
terms of oh, my friends and colleagues, there's plenty of
other jobs out there. They're not losing their jobs, and
(09:35):
it just takes time for that capacity to run through.
At the moment, the economy is still running a fair
gap to its capacity. That means we've got a lot
of spare capacity in the economy and it takes some
time for that capacity to be utilized before we start
really getting the employment cycle going, so most people won't
be exactly feeling that pick up for some time.
Speaker 2 (09:58):
Isn't it amazing how quickly things did change. Remember when
there was a time where it's talk about, you know,
you have to pay your staff more and everything because
people so many choices and there was this fluidity and
the employment mark, and all of a sudden it's like,
whatever job you've got, you better hang on to it. Yeah,
I think amazing.
Speaker 3 (10:11):
I think that's a bit like the Canterbury Northwest. You
know that following a big northwester coming in, you know
there's a sutherly coming but then following that subtly, you
know the way that's going to improve. There's always that
fluctuation happening. And here the legs are quite long. What
we know right now is coming from a position of
the economy going backwards in that dune quarter September is going.
Speaker 2 (10:29):
To be a good quarter.
Speaker 3 (10:31):
December right now, the current indicators are December quarter could
be one of our best for maybe two or three years,
and it feels like going into twenty twenty six, the
world economy is backing us a bit and we have
a better outlook.
Speaker 2 (10:44):
Can you explain this to me? This described as an
all important wholesale bank two year swap rate, which even
just saying that makes my head kind of a little dizzy.
Lifted by about zero point two percent, that's twenty basis points.
Is it is? That? How it goes a little post anyway?
What's that all about? So what that's all.
Speaker 3 (11:04):
About is the banks have when they lend money for
two years to be able to borrow money on a mortgage,
they have to get that money somewhere, and principally they
fund that through term deposits. That's fine, but at the
margin they're funding that out of the wholesale markets. They're
funding that from global institutions and local institutions, and the
swap rate is one of the indicators of the cost
(11:24):
of their financing at the margin has gone up a
little bit, so that I mean for some of their
balance sheet, some of their funding, it's got a little
bit more expensive, and that makes it tougher for them
to react to an interest rate gap.
Speaker 2 (11:38):
Does that?
Speaker 1 (11:38):
Ah?
Speaker 2 (11:39):
So that also points towards maybe a stabilizing of interest
rates for a slightly longer term than what they might
be used to that one year and two year level.
And so mortgages haven't moved for the one and two year.
Speaker 3 (11:50):
Now we're still sitting four point four five, four point
five a couple of specials beneath that. But that's where
we're at.
Speaker 2 (11:57):
So when okay, so we're going to FI, do you
think we'll feel at most with the job market coming
more fluid? Because actually there was something else I want
to Oh, that's right. So mortgage rates are one thing,
but the other thing is council rates. How much have
they affected just in your sort of just estimate broad
(12:18):
estimation the way people feel because you get your rates bill.
I mean, some people are paying another fifteen hundred bucks
a year, another you know, or significantly another couple of
thousand or something. The rates rises have been in some
places quite hefty, haven't.
Speaker 3 (12:30):
They haven't just happened one year, have happened two three
years in a row, and they've come on top of
higher insurance costs, higher costs for utility bills such as electricity,
and so have had this cost of living rise that's
been not really actually perfectly influenced by by the strength
of the economy, but influenced by the cost of actually
(12:52):
councils having to lift infrastructure which the under spent on
for a very long time.
Speaker 2 (12:57):
I mean, you probably avoid political questions like this, so
you can just give me the look of like, don't
ask me that term. What do you think of the
idea of the capping the rates rises? And actually, even
regardless of what you think of it, does that have
any effect on just the whole financial sort of outlook
on it all the way the way things sort of
(13:18):
the way that the there's an expression I can't think
of what it is, the way the chips fall, I
guess comes.
Speaker 3 (13:26):
I mean, clearly, I'm not perfectly in favor of the
enforcement of an artificial range of two to four, but
I guess on application you can counsels, if it was enforced,
could could could break through the top end of the
four if they needed to differ infrastructure reasons. However, we
have had in some areas these year on year double
(13:47):
digit rate rises that have been running through and to me,
at some point you've got to ask our rate pays
clearly getting value for money, and that's the question that
I think is being asked.
Speaker 2 (13:57):
More of a political question, of course, But anyway, look,
we're gonna we're gonna be We're joined by Andrew Bascan.
He is from Harbor Asset Management. Were been grateful for
your support right throughout the year, Andrew, but we're going
to be back talking about housing because as we know,
you know, there's always you know, for a long time
was guaranteed the housing market was always going to be
moving in one direction that all of a sudden it
was in the other. But what is the long term
(14:18):
outlock for housing? We're going to dig into that shortly,
in just a moment. But we'll take your calls if
you want to offer your reckons, because apparently the worst
is over, what will it take. Are you feeling that
the worst is over emotionally or just you've reading the
headlines and you go, yeah, I agree with it. Sounds
like the worst is over. What is it going to
take for you to think, yeah, look the worst is over.
(14:39):
Things are looking out. Will it be a new job,
will it be a pay rise? Will it be oh
e one hundred and eighty ten eighty, You're welcome to
join us. We'd love you too. And but meanwhile, we'll
be back in just a moment with Andrew Baskin from
Harbor Asset Management. It's twenty two minutes past five news Talk,
said b We're with Andrew Baskin. Sorr. I was busy
gas bagging to Andrew off air there just before and
it's almost missed the coming out of the break. But
(15:02):
first before we do that, are you worried about funding
a comfortable retirement? Well you're not alone because the cost
of living crisis is hitting home for a lot of people.
So it's no surprise people are looking for ways to
make the most of their savings and to get a
little bit more income to supplement the New Zealand super
and One interesting solution is to invest in an income
fund like the Harbor Income Fund. It works by holding
(15:25):
a mix of interest paying securities and shares that have
been designed to generate a steady and sustainable income. No
matter the market. The Harbor Income Fund is actively managed
and currently it pays a distribution of four point five
percent per annum after fees and taxes paid out in
monthly installments. To find out more about Harbour's Income Fund,
(15:48):
just head to their website or speak with your financial advisor.
This is not intended as personalized advice. The product Disclosure
Statement for Harbor Investment Funds issued by Harbor Asset Management
is available at Harbor Asset dot co dot nz.
Speaker 1 (16:05):
Insightful Entertaining and always Old Points. Tim Beverage on the
weekend Collective News Talks be macus.
Speaker 2 (16:11):
It's funny when I was I was looking at some
online deposit rates because we're here we are with Andrew
Baskin from Harbor Asset Management, and I looked at something
on the rabo or something. I was like, what one
and a half percent? I was thinking, I've got to
go to the Harbor Asset Fund anyway, Hey, Andrew. Now
the housing outlook look, I host a property are and
(16:36):
I've become suspicious of headlines because you know, you see
a couple of good sales and oh massive result, unexpected result,
and there's a lot of headline hyperbole about where the
market might go and it I've spoken to other people
who just still think the housing markets long term sort
of overvalued and it's very expensive. And I have a
(16:56):
suspicion that the housing market may have had a bottom.
But as to you know, the implication that, oh it's
at the bottom now, it's all buckle up, I don't
feel that myself. But I'm no expert. So it does
look like it's going to lift. But without you know,
(17:18):
the experts, some experts, oh even me saying we'll rise
without big price gains. Why is that? Oh sorry, let
me turn your mic on. There we are help.
Speaker 3 (17:29):
Let's roll back ten fifteen years ago. Ten to fifteen
years ago, most Kiwis would think if I had a
lot of money, the next best thing I could do
with it was actually buy a rental property, right.
Speaker 2 (17:41):
Leverage the hell out of it. Let's go, let's go,
let's go.
Speaker 3 (17:43):
And actually, even thirty years ago that could have been
a thing, but certainly fifteen years ago that was the
psych of the New Zealand saver. Lots of money, go
buy a rental property. Now I actually think we've broken that,
and we've broken that for good reasons.
Speaker 2 (17:56):
We have. Oh, that's an interesting way you put that.
For good reason. We yeah, But when you say you've
broken that, have we broken it deliberately or it has
just become or who cares?
Speaker 3 (18:06):
I think there must be a recognition amongst the next
generation that actually, we can't just build our way to
success for the next generation just by building rental properties
and renting them out. And having been this country of
landlords by landlords. I percent of us are landlords and
the rest are just renting.
Speaker 2 (18:25):
Right.
Speaker 3 (18:27):
The way to build a country sustainably in terms of
growth for the long term, of course, has have this
diversified portfolio of companies that are doing great things, and
we're exporting and creating jobs. Right, That's what we wanted it, right,
So that I reckon we're fortunately, I think we've broken
that psyche. Now now then this question, where's the housing
market today?
Speaker 2 (18:47):
That psyche's broken?
Speaker 3 (18:50):
I think there's still good reasons to be building social housing,
to be building infrastructure for housing. We need housing.
Speaker 2 (18:56):
Chriss Bishop was singing that tune too.
Speaker 3 (18:58):
We are absolutely housing and it's happening. You can see
social housing being built regionally, step by step.
Speaker 2 (19:05):
Terrific.
Speaker 3 (19:05):
When I'm not saying it's not an investment opportunity for
broad funds.
Speaker 2 (19:09):
It is.
Speaker 3 (19:10):
But as for what mum and dad should do next,
just personally, I think that PSICH has collapsed, and I
think it probably ought to stay that way.
Speaker 2 (19:20):
I think you're right. I could get a property guest
to beyond who'd be like age. But it does feel
it's you know that just the conversations around the coffee
table and things like that, you know, with people who
have been that was seen to be I don't mean
that they get rich quick thing, but there were a
lot of people. Well, there was some people making a
(19:40):
lot of money very quickly because of the capital gains.
But it just feels that, you know, the equations changed.
We've seen rents having to slide and you know, to
meet the market and look, you never nothing's forever.
Speaker 3 (19:52):
Yeah, construction costs going up, costs of doing remediation or.
Speaker 2 (19:56):
Population behore, you know. So, but there's this.
Speaker 3 (19:59):
Bat where are we now? A year and a bit ago,
the housing market only sold seventy two thousand houses and
we headed seventy two thousand sales of houses. Now, that
was a pretty low point, so it felt pretty ugly
in terms of turnover in the market. By March this year,
that lifted to eighty two thousand, and the last reading
is around ninety thousand houses have turned over or sold.
(20:19):
Now that is a healthy thing. We want the housing
market turning over so first home buyers can come in,
those that are onto their second home can move forward,
and we can move through a life cycle of people's
ownership of houses to eventually, of course, people moving out
of housing into h GF facilities. When the housing market
locks as it did, it feels horrible for everyone in
(20:41):
that chain. So I think my gap feeling is we're
mostly through a very large correction or adjustment where now
in a phase where the housing market has some lubrication again.
Speaker 2 (20:54):
It's working, which is and that's a good thing. Without
the runaway I guess the thing is people who own
property they don't mind the runway prices.
Speaker 3 (21:03):
But here's another sign of health across New Zealand. First
home buyers were thirty percent of that turnover.
Speaker 2 (21:10):
That's quite a lot and we.
Speaker 3 (21:11):
Want that because we want people. Get the affordability number
right again, let's get back into it.
Speaker 2 (21:17):
How much does so it goes back to our first
part of the conversation. About the cash rate. How much
does that figure in the Reserve banks consideration, Because you know,
we saw what happened when we incredibly cheap money and
the market went ridiculous. Funny thing is, I'm not sure
we would have quite the same reaction if the money
did get cheap. But it would be a problem if
(21:38):
money got too cheap, wouldn't it.
Speaker 3 (21:39):
So let's look across to Australia. House prices have continued
to go up. They've just introduced these prudential limits on
certain parts of the housing market DEBTA and comes sort
of radiating couragios, and it doesn't feel like affordability is
great in Australia. Many parts of Aussie it's gone the
(22:00):
other way. In New Zealand. I think we've got this region,
we've had this correction, house prices, housing markets lubric I
think it's turning over again, and we've got first home
buyers for the most part able to at least go
and have a conversation with a bank again. Yeah, talk
can we get in? So why is Australia sort of
going well, let's talk about Ossie economy has been strong
(22:21):
if they haven't had this doubled up recession situation in AUSI.
Speaker 2 (22:25):
Yeah, it's a funny one, isn't it. So, I mean
their economy is going strong, but the property is going.
Speaker 3 (22:30):
Interest rates didn't go to five and a half percent.
In Australia. They didn't go as high. They haven't come
down as far, but they didn't go as high, so
they didn't constrain the whole situation. So those are the
two things mainly.
Speaker 2 (22:38):
So well, I'm okay, if our economy suddenly really picks up,
why is that not going to be a problem for
the property market?
Speaker 3 (22:45):
Game Buster, you need immigration to pick up significantly as well.
I'm not sure that we're no, we're not there on
board that. In fact, the opposite sort of dampling down.
And actually interest rates it's still four and a half
percent from a mortgage, which means actually you do a
stress test of another two percent on top of that,
so you've got a test being able to pay six
and a half or maybe a bit more. So it's
not free money, Rightah?
Speaker 2 (23:08):
What about? Actually, can I run something past you? I
had a caller on my talk back show who I'm
not sure where I can tie this into the conversation.
It's amos going to toss it in there. He was
talking about you know where they're talking about the population
growth what we want to see in New Zealand, and
there have been people who think we need to be
up to ten million by twenty whatever it is, I
(23:29):
can't remember what it was, but he was saying that
the population growth is a challenge unless we can build
the economy in terms of our exports, because how does
how much how he was worried that we are, for instance,
Fonterra still make cheese and everything, but they've got rid
of the brands and we send our logs off for
(23:52):
other people to do things with them. And his point
was we need to be doing more in New Zealand
to be able to support a large population. You know,
there's an economic question which went beyond my C plus
at Itaga University.
Speaker 3 (24:05):
Casey plus is fun, right, You've got to m I mean,
the truth is you've got to do a whole lot
of things to make an economy work. Exporting is part
of it, but the other part of it, if you
want to have a high population base, is a heap
of infrastructure we don't have today. Let's start with health, schooling, roading, ports, airports.
There's a whole lot of infrastructure you need if you
(24:26):
want to have a population growing more rapidly than what
we've got, and you've got to fund that. And so
we know those are constraints. Now how do you fund that?
You fund that partly through attracting global capital, but partly
those are public assets you've got to fund through having
a tax space. And so I think that the key
question there is you've got to have great companies then
to be able to be profitable, and those companies are
(24:48):
partly local and partly global. I'm not so pessimistic on
the growth of our economy in terms of exports and trading.
I think we're a very competitive economy. The technology sector
alone is the second largest sector in museum people forget
about that, but we export a lot of pretty good
tech and it's not all about just exporting agg So
(25:10):
you just put that out there. But we do have
a funding problem right in front of us. If we
want to have a larger population base.
Speaker 2 (25:19):
What do you think what are the areas that New
Zealander is going to continue you're talking about technology. Is
that going to continue having an upward spiral from for
what we are producing?
Speaker 3 (25:29):
Or we look for some reason MW Zealand over indexes
and creating great innovative companies that make it on the
world stage and over indexes.
Speaker 2 (25:39):
We we are.
Speaker 3 (25:40):
I mean, it's absolutely case and you can run through
them all. I mean not just unicorns. Some of these
companies in Unicorn being worth more than a billion dollars.
There are companies that have gone on and be worth
a lot more than that. I mean, Zero is still
growing at thirty percent New Zealand company even though it's
the list, the disease of Rocket Labs. Similarly, but there
are other companies hold up, we can carry on that
are truly you know, have gone from fifty million to
(26:02):
one hundred million, to bigger companies employing kiwis and through
that wage bill, creating domestic economies.
Speaker 2 (26:10):
Let's talk about let's move on to I mean, with
the talking about zero well and and the technology side
of things global AI. So AI is it's everywhere these days,
isn't it. I Mean everyone uses AI sometimes even if
you don't know now you're using it. But last week,
you know, Nasdak hit a high, a three week high.
(26:33):
But there's a lot going on. So what is going on?
Because it's completely beyond me, I see the numbers, and
I just look back and go, oh, that would have
been good to buy that stock then and watch that
invest in that activity. But what is going on with
global AI and the volatility?
Speaker 3 (26:46):
I mean clearly a year ago, even a year before
that AI came on to the seventy year ago, we
were all talking about it, thanking goodness, what what are
we going to do with this AI? It all going
to work? Is Actually, if you ask me my Christmas
reading list, it's a book called The Thinking Machine. Yeah,
biography of Jinsen Huang. Yeah, seriously, very readable.
Speaker 2 (27:07):
Everyone's thenking would just the Thinking Machine thinking, and it
about AI or about the investments of aiol.
Speaker 3 (27:12):
It's about Jinsen Huang and I came him growing up.
But then the development of Nvidia. Okay, so we're talking
about in video.
Speaker 2 (27:19):
Because they were their their share price went bonkers for
a while.
Speaker 3 (27:22):
It has for two decades, honestly. Yeah, it's a two
decade stock. It's not just didn't just happen overnight, right, Yeah,
So what does in Vidia do? It creates the key
global chip that these AI models use have been trained on. Okay,
So the concept is you've got to make a chip,
you've got to train your AI model and you've got
(27:43):
to have data centers and distribution other things to go
with it. So in Nvidia absolutely had the chip, the
black World chip. It now is that ninety percent of
these models have been trained on, so it dominates, right,
But what happened around about the beginning of November along
walks in alphabet or Google and says, oh, actually we've
got a way of doing this as well with something
(28:04):
called TEA. You use tensor processing units, and actually we've
got a model called Gemini or Gemini three, and actually
that everyone does all the analytics on this, and it
turns out that it's just as good as GPG five,
which is one of the AI models, just as good
as these Blackwell chips. So competitions in the game, I
think it's a Formula one race. Think about a Formula
(28:24):
one race. For many seasons you have Ferrari at the top,
and then suddenly they've got a new they've got a
new braking system or a new hybrid engine or something,
and one over takes the other. And right now the
sheer market is saying, perhaps Google has overtaken.
Speaker 2 (28:44):
Well, it's Nvidia and it's I mean, it's not like
you're talking about a bit player, is it. I mean,
you're talking about Google, which has.
Speaker 3 (28:50):
Four trillion dollar giants here right now, not Wow, And
they're battling it out around this racetrack, and you're worried
about the next corner or the next race, and then
you're worried about your driver. Whatever one likes is they
like the driver in Nvidia, gents and one. Everything is good,
but they're worried right now that maybe it's not a one,
one car race anymore.
Speaker 2 (29:10):
Yeah, And so what we had when video was down
ten there would have been a few people sick about
that ten percent a month.
Speaker 3 (29:17):
Yeah, I mean it's been up. You know, it's tripled
in the last four or five years, right, Yeah, I
don't feel bad, but that volatility is typical of what
we are going to see in markets at an individual level.
But investors here shouldn't really worry. The diversified global portfolios.
There will be winners and losers. But if you're reading
the latest headline, you might see an over indexing of
(29:38):
negative news on one company, but they won't report about
that other stuff that's happening over here.
Speaker 2 (29:43):
I mean that I mean, is that why if you
if you believe that tech is the future, then you
just invest in a broad sort of portfolio or what
are the actual indexed funds you can buy? Because there's
S and P, there's in terms of the tech stocks,
there's a selection of ways you can invest broadly in
the tech industry, isn't there? I'm cluding through you guys,
(30:04):
I think absolutely.
Speaker 3 (30:05):
But I mean then the question is if you're just
investing passively in an index And this is the question
that people need to resolve. Am I just over indexing
and things that have done really well recently? Because then
Desey's working the way of if you've done really well,
I buy more of the stuff that's done really well.
And that's actually been a great strategy for the last
year or so. Yeah, for who all investors have just invested.
Speaker 2 (30:29):
It's been pretty good.
Speaker 3 (30:30):
It's been a pretty good strategy.
Speaker 2 (30:31):
Okay, hey, look we're going to dig into this a
bit more. God's fascinating all this stuff, isn't it? Anyway? Right,
We're going to be back in a moment with Andrew
Bascan from Harbor Asset Management. It is twenty to six already, goodness, mate,
backsone Yes News talk said b We're with Andrew Bascan
from Harbor Asset Management, and actually just before we're going
to talk about key, we say about Andrew, and before
we do, there was just another point where we're talking
(30:52):
about in the break about you can talk about stocks
and all sorts of things, but the whole tech and
the AI thing does tie into basic minerals, doesn't it,
because tell us about what's happened with copper.
Speaker 3 (31:01):
When you think about AI, data centers require huge, huge
amount of power. This is the one bottleneck in the
whole development I think of AI. The amount of power
that goes into develop what called each token, and it's
the key measure of productivity, amount of power each AI
model uses to develop data centers. You've got to be
(31:22):
on the grid obviously, or we're got to be connected
to some form of electric power generation. And combined with
generalized growth, the additional demand for copper has seen the
copper price rise dramatically over the last year. In fact,
it's broken through to a level of like eleven five
(31:43):
hundred dollars a ton, with most analysts in the last
two or three weeks now calling it for to go
to thirteen or forteen thousand. Now that's not advice, but
I've got to say that the when you think about
AI and the growth in that area in sector, it's
having effects beyond, well beyond into the mining sector, well
(32:04):
beyond where you would think of technology growth vector.
Speaker 2 (32:07):
To me, do many people see this stuff coming and
we're there be somebody's sitting smugly back. Yeah, I've invest
in ages Ago and new Copple was going to go gangbusters.
Speaker 3 (32:15):
It's intriguing how many how many investors in the tech
sector have been thinking about, my goodness, that's data centers.
I need grad Therefore I might need Solar, I might
need Wind, I might need long term contracts for power. Actually,
this is what our own homegrown company Infratol is really
been really good at phenomenal created a whole lot of
(32:36):
wealth for key investors and their key we saver Once.
I'm not an advertisement for Infantol, but truly we have
homegrown talent here who have spotted this trend coming a
long time ago.
Speaker 2 (32:48):
Now let's move because time is rushing by, but key
we saber changes are coming. We assume voluntary contributions rise
into three and a half and percent and twenty twenty six,
and there's talk of moving towards six plus six six
percent for the employee and six percent apparently for the
employer who probably just build it into the contracts. Are
you're really paying like Australia, What does it mean for savers?
(33:12):
Do you think your key point there is like Australia
who are moving to twelve percent? Right, So I think
this is the view.
Speaker 3 (33:19):
What is an appropriate level of saving if you and
I are saving independently voluntarily for our retirement. I'm sorry,
the number somewhere between ten and twelve percent if you're
going to retain the same form of income that you
had in your time, that's over how many years actually
does that apply to? Yeah, somewhere around at thirty thirty
five years. Doesn't have to be the whole forty but
thirty thirty five years as a sort of general number
(33:39):
and a balanced book volio, that's what you need. And
so here's it. Imagine we went to that world. So
Australia four point five trillion dollars of capital in there
super today, that's something around one hundred and sixty percent
of their GDP or their economy. Our key we save
a pool today at one hundred and thirty bill is
(34:00):
something around thirty percent of economy steal, So the Aussie
super scheme it's five times larger in terms of the
size of their economy than ours. It's it's been an
important part of their growth story.
Speaker 2 (34:12):
It's one thing. I mean, we've had a bit of
a chat about not you and I, but it has
been a bit of a talkback topic about the growth
of the contributions and with many people concluding it's going
to be fine if you can afford that, but we haven't.
People are not feeling it goes back to our first
our first part of the conversation about just the economy
about who's going to pay for, you know, to put
(34:33):
that those those contributions up, and a lot of people concluding, well,
it's fine if you're a middle upper income or wealthy
because you can afford to take a bit more and
shoved into retirement, whereas the average savor that's going to
be It's not money that's going to get conjured out
of any out of thin air, is it.
Speaker 3 (34:51):
It's half a percent per annum increase. It's at a
reasonable pace. You know it is coming, and employers know
it is coming as well. When you think about annual
salary increases in line with productivity and inflation. It is
a meaningful and meaningful number. It's a half a percent
maybe on three three and a half percent salary rises. Okay,
but if you know it's coming, you can build it
(35:15):
into your thinking. The alternative is to think about this,
what if we do nothing? And when is the best
time to plant a tree?
Speaker 2 (35:23):
Well?
Speaker 3 (35:24):
Today, right, so let's do nothing. Let's imagine we do nothing.
Speaker 2 (35:28):
Yeah yeah, I mean analogy.
Speaker 3 (35:31):
Thirty years time, our debt to GDP in New Zealand
will be unsustainable because we can on most projections, if
we do nothing, we will have one hundred and twenty
percent debt GDP if we do nothing. So doing nothing
is not the right story.
Speaker 2 (35:47):
The debt to GDP.
Speaker 3 (35:49):
Sorry, that's how much we'll have to borrow to continue
to fund our help. Here a superannuation. That's the story. Now,
that's a medium projection done and by independent people. It's
not a doomsday scenario. I campaign a doomsday scenario. I
don't want to do that because that's unfair. But that
is a redramatic scenario. It's just a scenario that's worth
(36:10):
while thinking about.
Speaker 2 (36:11):
What do you I mean, where do you see the
growth of New Zealand economy over the next few years? Really?
I mean because we you know, as we've said, the
worst is apparently behind us.
Speaker 3 (36:22):
But do you know, I said, as an optimist on
the spectrum, I love it and I think once again
kV companies highly innovative. We're focused on doing good. By
doing good, we're actually producing stuff people want in the world,
and we've been doing it for a very long time frame.
I think we're back on the road of thinking about
how we get everyone involved in this economy. It's going
(36:45):
to take time. You don't build that in a year
or two. You build it over a generation. I think
we're back on that road. There's another reading book I
want people to think about that.
Speaker 2 (36:53):
What was it? Remind us what the other one was called.
It was The Thinking Thinking Machine.
Speaker 3 (36:57):
The Thinking Machine by Stephen Witt, The biography of Jensen Huang.
He's the guy which is going to the world here,
but he's the Nvidio guy. Came from Thailand when he
was ten, went to a boarding school. He had nothing,
complete poverty. It's quite amazing, complete body. It's a great story.
People have heard me talk about this book before it's
called progress by Johann Norman's progress. It sits there looking
(37:17):
back in time, thinking, in decades have we added to
our technology? Are we better off today than we were
a decade ago? Now, if you do that in one
year slices, it doesn't look great, right, we always remember
one year slice. But there is some truth to the fact.
I remember when we had black and white TV.
Speaker 2 (37:37):
Sadly I do. We talked about this the other night,
but it is true. So you cast.
Speaker 3 (37:42):
Forward, what do you think New Zealand will be? Yeah,
and we have choices. We could go back to a
black and white TV. It's unlikely, right.
Speaker 2 (37:53):
Yeah, actually fitly enough, this is a completely random thing.
But somebody reminded me when there was some talk about
black and white TV. Do you remember those those screens
you could attach to the front of your back and
white tea? It was it was a blue strip at
the top. It was a green and a sort of beige,
(38:13):
and people fell for that. Anyway, let's let's get back
to Q saving. Let's imagine this world. Let's imagine this world.
We have slowly gone to the six plus six world.
I sadly think it'll be more like not everyone contributing
because some people have to holiday. That's what I mean.
Speaker 3 (38:28):
My modeling will be. It will be a nine nine
and a half.
Speaker 2 (38:31):
And a four and a half. It sort of will.
Speaker 3 (38:34):
But even that is better than where we are. I
am aspirational twelve. But let's say it's that sort of
Do you think that's going to be a team world?
Speaker 2 (38:41):
Do you think it's going to be accompanied by a
change in the retirement age as well?
Speaker 3 (38:44):
I do not, because I don't think it then becomes necessary.
I'm not going to get political, but I think there's
other ways of solving that issue.
Speaker 2 (38:51):
There are other ways of solving that.
Speaker 3 (38:52):
Shue Now, there are other ways of solving that issue.
And the answer is, yes, it probably ought to rise
through time. Well shield it ought to because you and
I are going to live to one hundred, so absolutely
ought to. But you can you imagine how that's that's
not the easiest thing to get through.
Speaker 2 (39:10):
But let me think you'll tell you what. We'll come
back with the closing thoughts in just a moment, because
I have to steal a break you do otherwise to
get in trouble, and Tyra gets quite grumpy and you
don't want to see that we'll be back in just
a moment. It's eight minutes to see and yes, right.
Final thoughts from Andrewbaesque and of Harbor Raccic Management. Andrew, Yeah,
it looks been a terrific hour. I'm just hoping people
are going to have a great Christmas and they're going
(39:31):
to run into it worth a bit more joy than
they did last year. I think that joy is going
to come from the fact that the economy generally is
going to feel better even even next year than it
is right now, which I think it's feeling a bit better.
Speaker 3 (39:44):
So that's the first point. Second point, you know, I
think I think the housing market it's stabilized. I think
for people to know that it stabilized and it's okay,
it feels okay. But that's not where I would place
my next on it being a race horse. Yeah, correct,
not race AI. It is a race horse. Don't worry
about that. It's fine. It's it's it's not not a
destructive influence. It's a positive influence. But there's going to
(40:05):
be a lot of noise in that sector, I think.
And finally, this key we saver changes that are coming.
They're not frightening, it's what we need for the productive
capacity of our economy and our people in a generation's time.
Speaker 2 (40:17):
Excellent Christmas, looking forward to it. You've got a book
sorted out.
Speaker 3 (40:22):
Yeah, I'm going to continue looking forward to continue reading
the Jensen Wang biography. I've nearly finished it, and then
I'll find a next one. It's going to be busy
with three grandchildren.
Speaker 2 (40:31):
Yes, lovely. Oh, you're going to have a wonderful Christmas. Andrew,
thank you so much for being on the show and
your team appearing on the show during the course of
the air and your support of it. We really appreciate it.
And have a merry Christmas. Mate. We'll catch you next weekend.
Speaker 1 (40:51):
For more from the Weekend Collective, listen live to News
Talk said Be weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend collective podcast from News Talks.
Speaker 2 (00:09):
I'd be and that lovely piece of music is sort
of Christmas the music from Love actually, which is actually
it's a gorgeous little piece of music, isn't it. And
it's because it's the choice of my guest in the
studio now for smart Money, because he's actually also in Auckland.
He used to do the show and down the line
from Offenham, Wellington, but he's an awk little bit more
(00:30):
because he's a granddad again. And Andrew beskcan Andrew, how
you doing super?
Speaker 3 (00:35):
Isn't it great? This time of the year it is
out of us? Gives it back to right?
Speaker 2 (00:40):
Yeah, actually, it's funny. I love Actually, I still don't
think I'm sick of that movie yet. And how many
years do we watch it every year? And comes up
and you're like, sit down for love? Actually?
Speaker 3 (00:48):
Yep, last Sunday night, that's what happened.
Speaker 2 (00:51):
I gather actually one of the teachers at my daughter's
school showed the movie and forgot that there's a couple
of moments where this surprising nudity and she suddenly had
to very quickly reached for the fast forward like, oh,
forgot about that, but anyway, a lovely movie. Anyway, Andrew,
how's your year been?
Speaker 3 (01:08):
By the way, Well, it's a bit of a surprise year,
isn't it. I Mean, who would have thought we sit
here this time of the year and things are feeling
a little bit better?
Speaker 2 (01:15):
You know, Well, that's what's going to dig into. So
last week we had the Reserve Bank they dropped the
twenty five basis points. Gosh, it's something. It's an expression
everyone knows you those days, isn't it. And we've dropped
the ocr twenty five basis points to two point twenty five.
They've adopted a hawkish tone. Has it got there? I
don't know whether we've seen the bottom of the rate cycle,
(01:36):
but we're hoping we've seen the bottom of Have we
seen the worst of it? And you will have a
point of view of it because you are in touch
with things as opposed to what the average key is
in touch with who a lot of people are thinking.
I'm not sure have we seen the worst of it?
But anyway, what do you make of the year and
(01:56):
where we've got to and where we're going.
Speaker 3 (01:58):
Yeah, if we had have started thinking about what this
year is going to look like about this time, we
would have said, going to we would have had a
bit of a pickup in the economy happening, you know,
in the first half of this year, and it was
feeling a little bit better, and in fact that didn't happen.
The first half of this year was still pretty miserable,
like for everyone. Maybe a couple of provinces farmers were okay, uh,
(02:19):
and the economy sort of felt really pretty awful in winter.
Then we've had the sequence of interest rate cuts, and
we've had eggin comes go okay. We coped a whole
lot of bad news globally, and it seems right now, however,
the sequence of good news is running well. And speaking
of you know, this interest rate cut, let's think about that.
(02:40):
We've been cutting interest rates.
Speaker 2 (02:41):
For a while.
Speaker 3 (02:42):
We're five and a half now they're half that quarter, and.
Speaker 2 (02:46):
It's quite a big deal. Actually, it's quite a big
deal right now.
Speaker 3 (02:49):
I mean, they could go lower, but they could. This
could be it. And the thing that the story about
last week, if we if we just hang on for
that for a second, Actually we cut interestrates by quarter
and no one said too much, which indicates to us
we are probably at the end of that rate cutting cycle, well, they.
Speaker 2 (03:05):
Say this is did they say this is the last one?
Speaker 3 (03:08):
Pretty much gave some optionality to cut again, but don't
play on it too much. And what we've seen is
though you know, those two year mortgage rates haven't changed.
I think that's the signal for borrowers out there, that
we cut interest rates the two and a quarter at
the two year rate, it's still for four and a half.
Speaker 2 (03:25):
I think there were a lot of people who a
bit disappointed about that because they saw a chop and
they're like, oh, I'm going to be able to refix them.
What do you mean, hang on, nothing's changed. The banks
were ahead of it. Yeah.
Speaker 3 (03:35):
Well, the thing is not just the banks, but the
whole interest rates structure. Is that a bank at a
bit off shore, it's a bit longer term. And we
expected a quarter of a point to come off. We
expected that twenty five basis points. And so if you
expect it, well that's it.
Speaker 2 (03:53):
Because so we had. Interestingly, the new governor, I'm inclined
to like her because she's from Scandinavia. Probably, I don't know,
it's sort of you always think the Europeans, they seem
to have stuff, and every time we have something a
comment about politics and what they do, it's always well,
in Sweden, you know, they do this in Sweden, they
(04:13):
do this in Finland. Scandinavia seems to be the sort
of talkback model, like, oh if we can only be
like those countries, and we've got our own person from Scandinavia.
But she fronted the Finance and Expenditure Select Committee, didn't.
We were sort of all eyes on this.
Speaker 3 (04:30):
Normally it wouldn't be the thing we tune into, right,
but here's our first chance of actually getting the body
language and the read. And there's some pretty tricky and
difficult questioning from you know, all different interested political parties
around the corner. You've probably watched one of these before.
It's probably my first for a week while, and we
were all pretty much glued to it. And actually really
(04:50):
good account of herself, I thought, I mean quite honestly,
you know, coming here obviously well briefed, but pretty open
to thinking about her her job and next year he
actually looking back, she said, you know, we've done a
pretty pretty good job.
Speaker 2 (05:05):
And was she nice to us?
Speaker 3 (05:07):
Yeah, she pretty well, given the hard time we've had
in terms of I think she was pretty nice to us, really,
But when I think about what she was talking, I'm
really excited because you're talking about transparency. We're going to
see more of the inner workings.
Speaker 2 (05:21):
And in fact, she's even said that. And again, I
can't believe how far we've got into these sorts of
things about the vote. But it was five five to one,
five one for the reduction by point two five. Somebody
wanted to keep it the same. But I think she's
indicated we're going to know who's voted what.
Speaker 3 (05:41):
If you're watching and listen to what she said, she
didn't exactly say that, but she said I'm open to
more transparency, and she was questioning exactly, well, exactly what
you said.
Speaker 2 (05:50):
She was asked.
Speaker 3 (05:50):
She said, I still haven't discussed this with my staff
and my people. I'm open to more transparency. She repeated
that line, which is fine.
Speaker 2 (05:57):
Can I ask you, hmm? Is I mean this is
not something necessarily slated to talk about it. But if
I was to give my quick reckon on that, I'm
not sure that having transparency on who voted what on
that committee is necessarily desirable because it acts as a
(06:17):
sensor to doing what, you know, what I mean, you
don't want all of a sudden somebody might be somebody
on that committee who's making that decision about the interest
rate is wondering how they are going to look or
could do because I don't know. I sort of like
the fact that it maybe should be anonymous how they're voted.
What do you think Two of.
Speaker 3 (06:36):
The comments from the ministers and the contributors to the
FEC actually made that exact point. It is a committee,
but we still want more transparency, So could you sort
of sort out how we don't how do we spotlight
on someone, but give us more transparency?
Speaker 2 (06:49):
So tell me what. So we don't know how they voted,
but we know what they said before they voted, or
said afterwards perhaps or.
Speaker 3 (06:56):
But the story really is this is something she's obviously
thinking about, and we'll find out what the story is.
She likes all the defied opinions around the table. Good.
I'm sure that's always been the case. But that's one
thing I took. The other thing I took out of
it is how important it is. It's always been important
to be strongly connected internationally, and she is obviously.
Speaker 2 (07:17):
Yeah, what does that mean for what does that mean
for her? Role in the as governory the Reserve Bank.
Speaker 3 (07:22):
He I think there are two things you'd be worried about,
global stress points in the financial system, So you're really
worried about financial crises and how they might filter through
to our economy well connected, really well connected, and then
thinking about how global patterns of growth will impact eventually
upon our economy. And I think she'll be forward looking.
(07:42):
I think that to be truthful, My view would be
the Reserve Bank has been very forward looking, but I
think she strengthens that framework.
Speaker 2 (07:50):
Can I just by the way, I'm probably going to
ask a few non sequit questions out of note. I
do remember that there's a guy as Michael Roddell who
writes about the Reserve Bank on his blog. But he
a while ago, it might have been a year or
two even was quite critical of the people who are
on whatever boards and things like that. Now that was
(08:11):
that's different his criticisms of certain personnel and their expertise.
I think there were people from the arts community or something.
Has this to do with the Board of the Reserve Bank,
but the Monetary Policy Committee itself, who are the people
who you know, who are the people on that in
terms of their They're all hardcore monetary policy experts, aren't they?
Is that right? If I asked you a curve ball
(08:32):
of a question, I might google that and I'll come
back with small substances.
Speaker 3 (08:35):
I think sorry about I think we touched on this
topic about three months ago, and I think I wisely
avoided to answer, Oh.
Speaker 2 (08:43):
I've forgot I've got a very short men. You're looking
at me, going have we talked about this before? Okay,
let's move on. So what we liked there was the
signal the rates rates might have bottomed, inflation is well anchored,
and the economy looks better in twenty twenty six. What
are the things that you I see the economy looks
(09:06):
better in twenty twenty six. I'll just be honest. I
think most people are took to go, well, I don't
feel it. When do you think we'll feel it? That's
absolutely right.
Speaker 3 (09:13):
So most people would feel an economy getting better with
quite a leg because they feel it getting better in
their annual pay cycle. So I got a bit of
pay rise, they feel it and there's oh, there's more
opportunity for me to maybe think about changing my job
or lift what I'm doing. And they feel it in
terms of oh, my friends and colleagues, there's plenty of
other jobs out there. They're not losing their jobs, and
(09:35):
it just takes time for that capacity to run through.
At the moment, the economy is still running a fair
gap to its capacity. That means we've got a lot
of spare capacity in the economy and it takes some
time for that capacity to be utilized before we start
really getting the employment cycle going, so most people won't
be exactly feeling that pick up for some time.
Speaker 2 (09:58):
Isn't it amazing how quickly things did change. Remember when
there was a time where it's talk about, you know,
you have to pay your staff more and everything because
people so many choices and there was this fluidity and
the employment mark, and all of a sudden it's like,
whatever job you've got, you better hang on to it. Yeah,
I think amazing.
Speaker 3 (10:11):
I think that's a bit like the Canterbury Northwest. You
know that following a big northwester coming in, you know
there's a sutherly coming but then following that subtly, you
know the way that's going to improve. There's always that
fluctuation happening. And here the legs are quite long. What
we know right now is coming from a position of
the economy going backwards in that dune quarter September is going.
Speaker 2 (10:29):
To be a good quarter.
Speaker 3 (10:31):
December right now, the current indicators are December quarter could
be one of our best for maybe two or three years,
and it feels like going into twenty twenty six, the
world economy is backing us a bit and we have
a better outlook.
Speaker 2 (10:44):
Can you explain this to me? This described as an
all important wholesale bank two year swap rate, which even
just saying that makes my head kind of a little dizzy.
Lifted by about zero point two percent, that's twenty basis points.
Is it is? That? How it goes a little post anyway?
What's that all about? So what that's all.
Speaker 3 (11:04):
About is the banks have when they lend money for
two years to be able to borrow money on a mortgage,
they have to get that money somewhere, and principally they
fund that through term deposits. That's fine, but at the
margin they're funding that out of the wholesale markets. They're
funding that from global institutions and local institutions, and the
swap rate is one of the indicators of the cost
(11:24):
of their financing at the margin has gone up a
little bit, so that I mean for some of their
balance sheet, some of their funding, it's got a little
bit more expensive, and that makes it tougher for them
to react to an interest rate gap.
Speaker 2 (11:38):
Does that?
Speaker 1 (11:38):
Ah?
Speaker 2 (11:39):
So that also points towards maybe a stabilizing of interest
rates for a slightly longer term than what they might
be used to that one year and two year level.
And so mortgages haven't moved for the one and two year.
Speaker 3 (11:50):
Now we're still sitting four point four five, four point
five a couple of specials beneath that. But that's where
we're at.
Speaker 2 (11:57):
So when okay, so we're going to FI, do you
think we'll feel at most with the job market coming
more fluid? Because actually there was something else I want
to Oh, that's right. So mortgage rates are one thing,
but the other thing is council rates. How much have
they affected just in your sort of just estimate broad
(12:18):
estimation the way people feel because you get your rates bill.
I mean, some people are paying another fifteen hundred bucks
a year, another you know, or significantly another couple of
thousand or something. The rates rises have been in some
places quite hefty, haven't.
Speaker 3 (12:30):
They haven't just happened one year, have happened two three
years in a row, and they've come on top of
higher insurance costs, higher costs for utility bills such as electricity,
and so have had this cost of living rise that's
been not really actually perfectly influenced by by the strength
of the economy, but influenced by the cost of actually
(12:52):
councils having to lift infrastructure which the under spent on
for a very long time.
Speaker 2 (12:57):
I mean, you probably avoid political questions like this, so
you can just give me the look of like, don't
ask me that term. What do you think of the
idea of the capping the rates rises? And actually, even
regardless of what you think of it, does that have
any effect on just the whole financial sort of outlook
on it all the way the way things sort of
(13:18):
the way that the there's an expression I can't think
of what it is, the way the chips fall, I
guess comes.
Speaker 3 (13:26):
I mean, clearly, I'm not perfectly in favor of the
enforcement of an artificial range of two to four, but
I guess on application you can counsels, if it was enforced,
could could could break through the top end of the
four if they needed to differ infrastructure reasons. However, we
have had in some areas these year on year double
(13:47):
digit rate rises that have been running through and to me,
at some point you've got to ask our rate pays
clearly getting value for money, and that's the question that
I think is being asked.
Speaker 2 (13:57):
More of a political question, of course, But anyway, look,
we're gonna we're gonna be We're joined by Andrew Bascan.
He is from Harbor Asset Management. Were been grateful for
your support right throughout the year, Andrew, but we're going
to be back talking about housing because as we know,
you know, there's always you know, for a long time
was guaranteed the housing market was always going to be
moving in one direction that all of a sudden it
was in the other. But what is the long term
(14:18):
outlock for housing? We're going to dig into that shortly,
in just a moment. But we'll take your calls if
you want to offer your reckons, because apparently the worst
is over, what will it take. Are you feeling that
the worst is over emotionally or just you've reading the
headlines and you go, yeah, I agree with it. Sounds
like the worst is over. What is it going to
take for you to think, yeah, look the worst is over.
(14:39):
Things are looking out. Will it be a new job,
will it be a pay rise? Will it be oh
e one hundred and eighty ten eighty, You're welcome to
join us. We'd love you too. And but meanwhile, we'll
be back in just a moment with Andrew Baskin from
Harbor Asset Management. It's twenty two minutes past five news Talk,
said b We're with Andrew Baskin. Sorr. I was busy
gas bagging to Andrew off air there just before and
it's almost missed the coming out of the break. But
(15:02):
first before we do that, are you worried about funding
a comfortable retirement? Well you're not alone because the cost
of living crisis is hitting home for a lot of people.
So it's no surprise people are looking for ways to
make the most of their savings and to get a
little bit more income to supplement the New Zealand super
and One interesting solution is to invest in an income
fund like the Harbor Income Fund. It works by holding
(15:25):
a mix of interest paying securities and shares that have
been designed to generate a steady and sustainable income. No
matter the market. The Harbor Income Fund is actively managed
and currently it pays a distribution of four point five
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(15:48):
just head to their website or speak with your financial advisor.
This is not intended as personalized advice. The product Disclosure
Statement for Harbor Investment Funds issued by Harbor Asset Management
is available at Harbor Asset dot co dot nz.
Speaker 1 (16:05):
Insightful Entertaining and always Old Points. Tim Beverage on the
weekend Collective News Talks be macus.
Speaker 2 (16:11):
It's funny when I was I was looking at some
online deposit rates because we're here we are with Andrew
Baskin from Harbor Asset Management, and I looked at something
on the rabo or something. I was like, what one
and a half percent? I was thinking, I've got to
go to the Harbor Asset Fund anyway, Hey, Andrew. Now
the housing outlook look, I host a property are and
(16:36):
I've become suspicious of headlines because you know, you see
a couple of good sales and oh massive result, unexpected result,
and there's a lot of headline hyperbole about where the
market might go and it I've spoken to other people
who just still think the housing markets long term sort
of overvalued and it's very expensive. And I have a
(16:56):
suspicion that the housing market may have had a bottom.
But as to you know, the implication that, oh it's
at the bottom now, it's all buckle up, I don't
feel that myself. But I'm no expert. So it does
look like it's going to lift. But without you know,
(17:18):
the experts, some experts, oh even me saying we'll rise
without big price gains. Why is that? Oh sorry, let
me turn your mic on. There we are help.
Speaker 3 (17:29):
Let's roll back ten fifteen years ago. Ten to fifteen
years ago, most Kiwis would think if I had a
lot of money, the next best thing I could do
with it was actually buy a rental property, right.
Speaker 2 (17:41):
Leverage the hell out of it. Let's go, let's go,
let's go.
Speaker 3 (17:43):
And actually, even thirty years ago that could have been
a thing, but certainly fifteen years ago that was the
psych of the New Zealand saver. Lots of money, go
buy a rental property. Now I actually think we've broken that,
and we've broken that for good reasons.
Speaker 2 (17:56):
We have. Oh, that's an interesting way you put that.
For good reason. We yeah, But when you say you've
broken that, have we broken it deliberately or it has
just become or who cares?
Speaker 3 (18:06):
I think there must be a recognition amongst the next
generation that actually, we can't just build our way to
success for the next generation just by building rental properties
and renting them out. And having been this country of
landlords by landlords. I percent of us are landlords and
the rest are just renting.
Speaker 2 (18:25):
Right.
Speaker 3 (18:27):
The way to build a country sustainably in terms of
growth for the long term, of course, has have this
diversified portfolio of companies that are doing great things, and
we're exporting and creating jobs. Right, That's what we wanted it, right,
So that I reckon we're fortunately, I think we've broken
that psyche. Now now then this question, where's the housing
market today?
Speaker 2 (18:47):
That psyche's broken?
Speaker 3 (18:50):
I think there's still good reasons to be building social housing,
to be building infrastructure for housing. We need housing.
Speaker 2 (18:56):
Chriss Bishop was singing that tune too.
Speaker 3 (18:58):
We are absolutely housing and it's happening. You can see
social housing being built regionally, step by step.
Speaker 2 (19:05):
Terrific.
Speaker 3 (19:05):
When I'm not saying it's not an investment opportunity for
broad funds.
Speaker 2 (19:09):
It is.
Speaker 3 (19:10):
But as for what mum and dad should do next,
just personally, I think that PSICH has collapsed, and I
think it probably ought to stay that way.
Speaker 2 (19:20):
I think you're right. I could get a property guest
to beyond who'd be like age. But it does feel
it's you know that just the conversations around the coffee
table and things like that, you know, with people who
have been that was seen to be I don't mean
that they get rich quick thing, but there were a
lot of people. Well, there was some people making a
(19:40):
lot of money very quickly because of the capital gains.
But it just feels that, you know, the equations changed.
We've seen rents having to slide and you know, to
meet the market and look, you never nothing's forever.
Speaker 3 (19:52):
Yeah, construction costs going up, costs of doing remediation or.
Speaker 2 (19:56):
Population behore, you know. So, but there's this.
Speaker 3 (19:59):
Bat where are we now? A year and a bit ago,
the housing market only sold seventy two thousand houses and
we headed seventy two thousand sales of houses. Now, that
was a pretty low point, so it felt pretty ugly
in terms of turnover in the market. By March this year,
that lifted to eighty two thousand, and the last reading
is around ninety thousand houses have turned over or sold.
(20:19):
Now that is a healthy thing. We want the housing
market turning over so first home buyers can come in,
those that are onto their second home can move forward,
and we can move through a life cycle of people's
ownership of houses to eventually, of course, people moving out
of housing into h GF facilities. When the housing market
locks as it did, it feels horrible for everyone in
(20:41):
that chain. So I think my gap feeling is we're
mostly through a very large correction or adjustment where now
in a phase where the housing market has some lubrication again.
Speaker 2 (20:54):
It's working, which is and that's a good thing. Without
the runaway I guess the thing is people who own
property they don't mind the runway prices.
Speaker 3 (21:03):
But here's another sign of health across New Zealand. First
home buyers were thirty percent of that turnover.
Speaker 2 (21:10):
That's quite a lot and we.
Speaker 3 (21:11):
Want that because we want people. Get the affordability number
right again, let's get back into it.
Speaker 2 (21:17):
How much does so it goes back to our first
part of the conversation. About the cash rate. How much
does that figure in the Reserve banks consideration, Because you know,
we saw what happened when we incredibly cheap money and
the market went ridiculous. Funny thing is, I'm not sure
we would have quite the same reaction if the money
did get cheap. But it would be a problem if
(21:38):
money got too cheap, wouldn't it.
Speaker 3 (21:39):
So let's look across to Australia. House prices have continued
to go up. They've just introduced these prudential limits on
certain parts of the housing market DEBTA and comes sort
of radiating couragios, and it doesn't feel like affordability is
great in Australia. Many parts of Aussie it's gone the
(22:00):
other way. In New Zealand. I think we've got this region,
we've had this correction, house prices, housing markets lubric I
think it's turning over again, and we've got first home
buyers for the most part able to at least go
and have a conversation with a bank again. Yeah, talk
can we get in? So why is Australia sort of
going well, let's talk about Ossie economy has been strong
(22:21):
if they haven't had this doubled up recession situation in AUSI.
Speaker 2 (22:25):
Yeah, it's a funny one, isn't it. So, I mean
their economy is going strong, but the property is going.
Speaker 3 (22:30):
Interest rates didn't go to five and a half percent.
In Australia. They didn't go as high. They haven't come
down as far, but they didn't go as high, so
they didn't constrain the whole situation. So those are the
two things mainly.
Speaker 2 (22:38):
So well, I'm okay, if our economy suddenly really picks up,
why is that not going to be a problem for
the property market?
Speaker 3 (22:45):
Game Buster, you need immigration to pick up significantly as well.
I'm not sure that we're no, we're not there on
board that. In fact, the opposite sort of dampling down.
And actually interest rates it's still four and a half
percent from a mortgage, which means actually you do a
stress test of another two percent on top of that,
so you've got a test being able to pay six
and a half or maybe a bit more. So it's
not free money, Rightah?
Speaker 2 (23:08):
What about? Actually, can I run something past you? I
had a caller on my talk back show who I'm
not sure where I can tie this into the conversation.
It's amos going to toss it in there. He was
talking about you know where they're talking about the population
growth what we want to see in New Zealand, and
there have been people who think we need to be
up to ten million by twenty whatever it is, I
(23:29):
can't remember what it was, but he was saying that
the population growth is a challenge unless we can build
the economy in terms of our exports, because how does
how much how he was worried that we are, for instance,
Fonterra still make cheese and everything, but they've got rid
of the brands and we send our logs off for
(23:52):
other people to do things with them. And his point
was we need to be doing more in New Zealand
to be able to support a large population. You know,
there's an economic question which went beyond my C plus
at Itaga University.
Speaker 3 (24:05):
Casey plus is fun, right, You've got to m I mean,
the truth is you've got to do a whole lot
of things to make an economy work. Exporting is part
of it, but the other part of it, if you
want to have a high population base, is a heap
of infrastructure we don't have today. Let's start with health, schooling, roading, ports, airports.
There's a whole lot of infrastructure you need if you
(24:26):
want to have a population growing more rapidly than what
we've got, and you've got to fund that. And so
we know those are constraints. Now how do you fund that?
You fund that partly through attracting global capital, but partly
those are public assets you've got to fund through having
a tax space. And so I think that the key
question there is you've got to have great companies then
to be able to be profitable, and those companies are
(24:48):
partly local and partly global. I'm not so pessimistic on
the growth of our economy in terms of exports and trading.
I think we're a very competitive economy. The technology sector
alone is the second largest sector in museum people forget
about that, but we export a lot of pretty good
tech and it's not all about just exporting agg So
(25:10):
you just put that out there. But we do have
a funding problem right in front of us. If we
want to have a larger population base.
Speaker 2 (25:19):
What do you think what are the areas that New
Zealander is going to continue you're talking about technology. Is
that going to continue having an upward spiral from for
what we are producing?
Speaker 3 (25:29):
Or we look for some reason MW Zealand over indexes
and creating great innovative companies that make it on the
world stage and over indexes.
Speaker 2 (25:39):
We we are.
Speaker 3 (25:40):
I mean, it's absolutely case and you can run through
them all. I mean not just unicorns. Some of these
companies in Unicorn being worth more than a billion dollars.
There are companies that have gone on and be worth
a lot more than that. I mean, Zero is still
growing at thirty percent New Zealand company even though it's
the list, the disease of Rocket Labs. Similarly, but there
are other companies hold up, we can carry on that
are truly you know, have gone from fifty million to
(26:02):
one hundred million, to bigger companies employing kiwis and through
that wage bill, creating domestic economies.
Speaker 2 (26:10):
Let's talk about let's move on to I mean, with
the talking about zero well and and the technology side
of things global AI. So AI is it's everywhere these days,
isn't it. I Mean everyone uses AI sometimes even if
you don't know now you're using it. But last week,
you know, Nasdak hit a high, a three week high.
(26:33):
But there's a lot going on. So what is going on?
Because it's completely beyond me, I see the numbers, and
I just look back and go, oh, that would have
been good to buy that stock then and watch that
invest in that activity. But what is going on with
global AI and the volatility?
Speaker 3 (26:46):
I mean clearly a year ago, even a year before
that AI came on to the seventy year ago, we
were all talking about it, thanking goodness, what what are
we going to do with this AI? It all going
to work? Is Actually, if you ask me my Christmas
reading list, it's a book called The Thinking Machine. Yeah,
biography of Jinsen Huang. Yeah, seriously, very readable.
Speaker 2 (27:07):
Everyone's thenking would just the Thinking Machine thinking, and it
about AI or about the investments of aiol.
Speaker 3 (27:12):
It's about Jinsen Huang and I came him growing up.
But then the development of Nvidia. Okay, so we're talking
about in video.
Speaker 2 (27:19):
Because they were their their share price went bonkers for
a while.
Speaker 3 (27:22):
It has for two decades, honestly. Yeah, it's a two
decade stock. It's not just didn't just happen overnight, right, Yeah,
So what does in Vidia do? It creates the key
global chip that these AI models use have been trained on. Okay,
So the concept is you've got to make a chip,
you've got to train your AI model and you've got
(27:43):
to have data centers and distribution other things to go
with it. So in Nvidia absolutely had the chip, the
black World chip. It now is that ninety percent of
these models have been trained on, so it dominates, right,
But what happened around about the beginning of November along
walks in alphabet or Google and says, oh, actually we've
got a way of doing this as well with something
(28:04):
called TEA. You use tensor processing units, and actually we've
got a model called Gemini or Gemini three, and actually
that everyone does all the analytics on this, and it
turns out that it's just as good as GPG five,
which is one of the AI models, just as good
as these Blackwell chips. So competitions in the game, I
think it's a Formula one race. Think about a Formula
(28:24):
one race. For many seasons you have Ferrari at the top,
and then suddenly they've got a new they've got a
new braking system or a new hybrid engine or something,
and one over takes the other. And right now the
sheer market is saying, perhaps Google has overtaken.
Speaker 2 (28:44):
Well, it's Nvidia and it's I mean, it's not like
you're talking about a bit player, is it. I mean,
you're talking about Google, which has.
Speaker 3 (28:50):
Four trillion dollar giants here right now, not Wow, And
they're battling it out around this racetrack, and you're worried
about the next corner or the next race, and then
you're worried about your driver. Whatever one likes is they
like the driver in Nvidia, gents and one. Everything is good,
but they're worried right now that maybe it's not a one,
one car race anymore.
Speaker 2 (29:10):
Yeah, And so what we had when video was down
ten there would have been a few people sick about
that ten percent a month.
Speaker 3 (29:17):
Yeah, I mean it's been up. You know, it's tripled
in the last four or five years, right, Yeah, I
don't feel bad, but that volatility is typical of what
we are going to see in markets at an individual level.
But investors here shouldn't really worry. The diversified global portfolios.
There will be winners and losers. But if you're reading
the latest headline, you might see an over indexing of
(29:38):
negative news on one company, but they won't report about
that other stuff that's happening over here.
Speaker 2 (29:43):
I mean that I mean, is that why if you
if you believe that tech is the future, then you
just invest in a broad sort of portfolio or what
are the actual indexed funds you can buy? Because there's
S and P, there's in terms of the tech stocks,
there's a selection of ways you can invest broadly in
the tech industry, isn't there? I'm cluding through you guys,
(30:04):
I think absolutely.
Speaker 3 (30:05):
But I mean then the question is if you're just
investing passively in an index And this is the question
that people need to resolve. Am I just over indexing
and things that have done really well recently? Because then
Desey's working the way of if you've done really well,
I buy more of the stuff that's done really well.
And that's actually been a great strategy for the last
year or so. Yeah, for who all investors have just invested.
Speaker 2 (30:29):
It's been pretty good.
Speaker 3 (30:30):
It's been a pretty good strategy.
Speaker 2 (30:31):
Okay, hey, look we're going to dig into this a
bit more. God's fascinating all this stuff, isn't it? Anyway? Right,
We're going to be back in a moment with Andrew
Bascan from Harbor Asset Management. It is twenty to six already, goodness, mate,
backsone Yes News talk said b We're with Andrew Bascan
from Harbor Asset Management, and actually just before we're going
to talk about key, we say about Andrew, and before
we do, there was just another point where we're talking
(30:52):
about in the break about you can talk about stocks
and all sorts of things, but the whole tech and
the AI thing does tie into basic minerals, doesn't it,
because tell us about what's happened with copper.
Speaker 3 (31:01):
When you think about AI, data centers require huge, huge
amount of power. This is the one bottleneck in the
whole development I think of AI. The amount of power
that goes into develop what called each token, and it's
the key measure of productivity, amount of power each AI
model uses to develop data centers. You've got to be
(31:22):
on the grid obviously, or we're got to be connected
to some form of electric power generation. And combined with
generalized growth, the additional demand for copper has seen the
copper price rise dramatically over the last year. In fact,
it's broken through to a level of like eleven five
(31:43):
hundred dollars a ton, with most analysts in the last
two or three weeks now calling it for to go
to thirteen or forteen thousand. Now that's not advice, but
I've got to say that the when you think about
AI and the growth in that area in sector, it's
having effects beyond, well beyond into the mining sector, well
(32:04):
beyond where you would think of technology growth vector.
Speaker 2 (32:07):
To me, do many people see this stuff coming and
we're there be somebody's sitting smugly back. Yeah, I've invest
in ages Ago and new Copple was going to go gangbusters.
Speaker 3 (32:15):
It's intriguing how many how many investors in the tech
sector have been thinking about, my goodness, that's data centers.
I need grad Therefore I might need Solar, I might
need Wind, I might need long term contracts for power. Actually,
this is what our own homegrown company Infratol is really
been really good at phenomenal created a whole lot of
(32:36):
wealth for key investors and their key we saver Once.
I'm not an advertisement for Infantol, but truly we have
homegrown talent here who have spotted this trend coming a
long time ago.
Speaker 2 (32:48):
Now let's move because time is rushing by, but key
we saber changes are coming. We assume voluntary contributions rise
into three and a half and percent and twenty twenty six,
and there's talk of moving towards six plus six six
percent for the employee and six percent apparently for the
employer who probably just build it into the contracts. Are
you're really paying like Australia, What does it mean for savers?
(33:12):
Do you think your key point there is like Australia
who are moving to twelve percent? Right, So I think
this is the view.
Speaker 3 (33:19):
What is an appropriate level of saving if you and
I are saving independently voluntarily for our retirement. I'm sorry,
the number somewhere between ten and twelve percent if you're
going to retain the same form of income that you
had in your time, that's over how many years actually
does that apply to? Yeah, somewhere around at thirty thirty
five years. Doesn't have to be the whole forty but
thirty thirty five years as a sort of general number
(33:39):
and a balanced book volio, that's what you need. And
so here's it. Imagine we went to that world. So
Australia four point five trillion dollars of capital in there
super today, that's something around one hundred and sixty percent
of their GDP or their economy. Our key we save
a pool today at one hundred and thirty bill is
(34:00):
something around thirty percent of economy steal, So the Aussie
super scheme it's five times larger in terms of the
size of their economy than ours. It's it's been an
important part of their growth story.
Speaker 2 (34:12):
It's one thing. I mean, we've had a bit of
a chat about not you and I, but it has
been a bit of a talkback topic about the growth
of the contributions and with many people concluding it's going
to be fine if you can afford that, but we haven't.
People are not feeling it goes back to our first
our first part of the conversation about just the economy
about who's going to pay for, you know, to put
(34:33):
that those those contributions up, and a lot of people concluding, well,
it's fine if you're a middle upper income or wealthy
because you can afford to take a bit more and
shoved into retirement, whereas the average savor that's going to
be It's not money that's going to get conjured out
of any out of thin air, is it.
Speaker 3 (34:51):
It's half a percent per annum increase. It's at a
reasonable pace. You know it is coming, and employers know
it is coming as well. When you think about annual
salary increases in line with productivity and inflation. It is
a meaningful and meaningful number. It's a half a percent
maybe on three three and a half percent salary rises. Okay,
but if you know it's coming, you can build it
(35:15):
into your thinking. The alternative is to think about this,
what if we do nothing? And when is the best
time to plant a tree?
Speaker 2 (35:23):
Well?
Speaker 3 (35:24):
Today, right, so let's do nothing. Let's imagine we do nothing.
Speaker 2 (35:28):
Yeah yeah, I mean analogy.
Speaker 3 (35:31):
Thirty years time, our debt to GDP in New Zealand
will be unsustainable because we can on most projections, if
we do nothing, we will have one hundred and twenty
percent debt GDP if we do nothing. So doing nothing
is not the right story.
Speaker 2 (35:47):
The debt to GDP.
Speaker 3 (35:49):
Sorry, that's how much we'll have to borrow to continue
to fund our help. Here a superannuation. That's the story. Now,
that's a medium projection done and by independent people. It's
not a doomsday scenario. I campaign a doomsday scenario. I
don't want to do that because that's unfair. But that
is a redramatic scenario. It's just a scenario that's worth
(36:10):
while thinking about.
Speaker 2 (36:11):
What do you I mean, where do you see the
growth of New Zealand economy over the next few years? Really?
I mean because we you know, as we've said, the
worst is apparently behind us.
Speaker 3 (36:22):
But do you know, I said, as an optimist on
the spectrum, I love it and I think once again
kV companies highly innovative. We're focused on doing good. By
doing good, we're actually producing stuff people want in the world,
and we've been doing it for a very long time frame.
I think we're back on the road of thinking about
how we get everyone involved in this economy. It's going
(36:45):
to take time. You don't build that in a year
or two. You build it over a generation. I think
we're back on that road. There's another reading book I
want people to think about that.
Speaker 2 (36:53):
What was it? Remind us what the other one was called.
It was The Thinking Thinking Machine.
Speaker 3 (36:57):
The Thinking Machine by Stephen Witt, The biography of Jensen Huang.
He's the guy which is going to the world here,
but he's the Nvidio guy. Came from Thailand when he
was ten, went to a boarding school. He had nothing,
complete poverty. It's quite amazing, complete body. It's a great story.
People have heard me talk about this book before it's
called progress by Johann Norman's progress. It sits there looking
(37:17):
back in time, thinking, in decades have we added to
our technology? Are we better off today than we were
a decade ago? Now, if you do that in one
year slices, it doesn't look great, right, we always remember
one year slice. But there is some truth to the fact.
I remember when we had black and white TV.
Speaker 2 (37:37):
Sadly I do. We talked about this the other night,
but it is true. So you cast.
Speaker 3 (37:42):
Forward, what do you think New Zealand will be? Yeah,
and we have choices. We could go back to a
black and white TV. It's unlikely, right.
Speaker 2 (37:53):
Yeah, actually fitly enough, this is a completely random thing.
But somebody reminded me when there was some talk about
black and white TV. Do you remember those those screens
you could attach to the front of your back and
white tea? It was it was a blue strip at
the top. It was a green and a sort of beige,
(38:13):
and people fell for that. Anyway, let's let's get back
to Q saving. Let's imagine this world. Let's imagine this world.
We have slowly gone to the six plus six world.
I sadly think it'll be more like not everyone contributing
because some people have to holiday. That's what I mean.
Speaker 3 (38:28):
My modeling will be. It will be a nine nine
and a half.
Speaker 2 (38:31):
And a four and a half. It sort of will.
Speaker 3 (38:34):
But even that is better than where we are. I
am aspirational twelve. But let's say it's that sort of
Do you think that's going to be a team world?
Speaker 2 (38:41):
Do you think it's going to be accompanied by a
change in the retirement age as well?
Speaker 3 (38:44):
I do not, because I don't think it then becomes necessary.
I'm not going to get political, but I think there's
other ways of solving that issue.
Speaker 2 (38:51):
There are other ways of solving that.
Speaker 3 (38:52):
Shue Now, there are other ways of solving that issue.
And the answer is, yes, it probably ought to rise
through time. Well shield it ought to because you and
I are going to live to one hundred, so absolutely
ought to. But you can you imagine how that's that's
not the easiest thing to get through.
Speaker 2 (39:10):
But let me think you'll tell you what. We'll come
back with the closing thoughts in just a moment, because
I have to steal a break you do otherwise to
get in trouble, and Tyra gets quite grumpy and you
don't want to see that we'll be back in just
a moment. It's eight minutes to see and yes, right.
Final thoughts from Andrewbaesque and of Harbor Raccic Management. Andrew, Yeah,
it looks been a terrific hour. I'm just hoping people
are going to have a great Christmas and they're going
(39:31):
to run into it worth a bit more joy than
they did last year. I think that joy is going
to come from the fact that the economy generally is
going to feel better even even next year than it
is right now, which I think it's feeling a bit better.
Speaker 3 (39:44):
So that's the first point. Second point, you know, I
think I think the housing market it's stabilized. I think
for people to know that it stabilized and it's okay,
it feels okay. But that's not where I would place
my next on it being a race horse. Yeah, correct,
not race AI. It is a race horse. Don't worry
about that. It's fine. It's it's it's not not a
destructive influence. It's a positive influence. But there's going to
(40:05):
be a lot of noise in that sector, I think.
And finally, this key we saver changes that are coming.
They're not frightening, it's what we need for the productive
capacity of our economy and our people in a generation's time.
Speaker 2 (40:17):
Excellent Christmas, looking forward to it. You've got a book
sorted out.
Speaker 3 (40:22):
Yeah, I'm going to continue looking forward to continue reading
the Jensen Wang biography. I've nearly finished it, and then
I'll find a next one. It's going to be busy
with three grandchildren.
Speaker 2 (40:31):
Yes, lovely. Oh, you're going to have a wonderful Christmas. Andrew,
thank you so much for being on the show and
your team appearing on the show during the course of
the air and your support of it. We really appreciate it.
And have a merry Christmas. Mate. We'll catch you next weekend.
Speaker 1 (40:51):
For more from the Weekend Collective, listen live to News
Talk said Be weekends from three pm, or follow the
podcast on iHeartRadio.
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