0:00

Hello, I'm James Thompson, Senior

0:02

Chanticleer Columnist at

0:04

the AFR.

0:12

Welcome to our weekly news breakdown of all things

0:14

business, finance and markets.

0:21

With me today, as always, is my Chanticleer

0:23

colleague, the man who always wins both

0:26

hearts and minds. It's Anthony McDonald.

0:28

How are you, Anthony? I'm great, thanks. Straight

0:30

from the stonely gaming

0:32

town, James. Fantastic.

0:38

Well, this week we bring you some of the inside

0:40

stock tips from the Stone Hearts and Minds Conference.

0:43

We ask why war's broken out among

0:45

the big banks, and we look ahead to

0:47

the showdown at Origin Energy.

0:52

But first, Anthony, we've grabbed you in the

0:54

lunch break at the Stone Hearts and Minds

0:58

which is being held today at the iconic Sydney

1:00

Opera House. Now, for those of you who don't

1:02

know, this is a big annual event

1:04

that brings together investors and investment

1:06

bankers and billionaires and company directors

1:09

and associated hangers on

1:11

to hear fund managers pitch a

1:13

stock idea. And of course, there's lots of

1:15

other guest speakers and colour and movement.

1:18

Anthony, you've spent the morning down at the Opera House. What's

1:21

the vibe been like down there? Anyone

1:25

amongst the great and the good worried about the

1:27

rising interest rates or

1:29

the surging cost of living? James,

1:32

I did not hear one mention of housing crisis,

1:35

interest rates, cost of living, inflation,

1:38

oil prices, any

1:40

of that. It is truly the 1% getting

1:43

together and talking about how to make

1:46

more money together, I guess. But yeah, it was pretty,

1:48

it was pretty buzzy down there.

1:49

Great. And we should say, Anthony, that

1:51

they aren't just talking about how to make money for

1:54

each other and themselves. Just Sown Hearts

1:56

and Minds is a charitable event.

1:58

It's raised. tens of millions

2:01

of dollars for all sorts of medical research

2:03

and mental health research. It

2:05

really is perhaps

2:08

the greatest single giving event in Australian

2:10

financial markets at the moment. Yeah, 60

2:13

million bucks. I think they said they'd raised.

2:15

But just to give you a picture, Solomon

2:18

Luz down there, the billionaire retailer,

2:20

you've got fund managers like Patrick Hodgins

2:22

from FireTrail and Jeff Wilson from Wilson Asset

2:24

Management saw them in the crowd. So yeah,

2:26

it was a full house.

2:28

Yeah. Well, Anthony, let's get down to what

2:30

the listeners really want to hear about and have some

2:32

stock picks.

2:33

What ideas have we heard so

2:36

far? Mate, we had a bit of everything. We had a bit

2:38

of US stocks, a bit of Australian stocks, a bit

2:40

of emerging markets. Mate,

2:42

we have resources, tech, like you name it.

2:44

Turns out there's a lot of ways people think you can make

2:46

money. So if we just go through

2:48

a few of them. Short

2:51

cannon. So you know, cannon, which makes

2:53

printers. Short sell, it shares. Apparently,

2:56

we're not printing as much anymore now that we're working from home

2:59

and makes 55% of its revenue

3:01

from printing. So short

3:03

cannon. The same stock picker also

3:05

gave us something that we should buy. And that was

3:07

Ashland Group Holdings, which is an American industrial

3:10

chemicals company. An Australian one, Telix,

3:13

which is a cancer

3:15

diagnosis and treatment, I

3:17

guess you call it a tool. Yeah, super interesting

3:20

company. Yeah. I've been working on

3:22

this since listing in 2017. But IFM

3:24

investors and Australian fund manager reckons

3:27

it's going to get much bigger than that as it expands

3:29

beyond prostate cancer and into other

3:31

types of cancers. We've got

3:34

long uranium. So there's a stock called NexGen,

3:36

which is listed in Canada. I think it's got a secondary

3:39

listing here as well in Australia, which

3:42

is actually run by an Australian, a former Rio Tinto

3:44

guy that I met a few years ago. Anyway,

3:47

apparently, with the energy transition,

3:50

one way to play it is through uranium. So

3:53

Charo Capital was talking that up.

3:56

We got something a bit

3:58

different out of Asia. Pacific,

4:00

which owns a place in Cathay Pacific,

4:03

the airline, a US bottling

4:05

business, but mostly it's

4:08

a property play in Hong Kong and China. Hong

4:11

Kong and China property is enough to scare most

4:13

people away. So it

4:16

will not surprise you to hear this thing trading at

4:18

a massive discount to book value, and

4:21

it's one for the value fund managers. So

4:24

yeah, I mean, Bath and Body Works in the US,

4:27

Miniso Group, which is listed in Hong Kong,

4:29

apparently a way to play the tick tock generation

4:31

of luxury retailers. But

4:35

yeah, heaps of ideas down there.

4:37

You've had quite the tour of the investment world

4:39

there. Just in one morning. The

4:42

guest speaker was a guy called Dan Loeb, who's

4:44

a legend on Wall Street amongst

4:46

the hedge fund community, famous

4:49

for his big bets on

4:51

stocks, but also his big bets against stocks.

4:54

He loves to go short. He

4:57

was banged into the Opera House.

4:59

You know, it's funny, James, like this, our

5:02

world, these financial markets and

5:04

this conference, I mean, it's all about

5:06

trust and, you know, handshakes

5:09

and pats on the back and, you know, everyone working

5:12

together. And that's kind of what keeps the market

5:14

going. Yeah. But it's funny how they

5:16

all stop to listen to the one guy that

5:19

is the bomb thrower, you know, like

5:21

when he came on to stage, he was

5:24

beamed in via New York, but when he came on,

5:26

like you could tell he had everyone's

5:29

attention. Yeah. Like he's just become

5:31

a real sort of icon of markets for

5:34

not just telling the truth or finding

5:37

out the truth, but also the way he goes about it. And

5:39

that's, you know, throwing spears at management

5:42

teams, boards, threatening spills, all

5:45

that sort of stuff. Dan

5:47

Loeb told his story. I mean, he started his fund in 1995

5:49

with $3.2 million in his fund, of which $300,000 was his.

5:56

And he just, you know, from family and friends, plenty

5:58

of people have tried to. do over the years and

6:02

now he's turned into big name of Wall Street, $11

6:04

billion in US dollars

6:07

that they have invested and

6:10

sounds like he's got an awesome art collection in

6:13

his houses, contemporary

6:17

art collection. But basically he said

6:19

when he started out, he used to be quite

6:22

go pretty hard at companies and

6:24

their CEOs and management teams use

6:27

quite derogatory language

6:29

to describe them in letters. Even

6:31

though he's the sort of guy that doesn't do media interviews,

6:33

those letters always created a splash

6:35

on CNN or Bloomberg or

6:38

whatever. They found their way out there. But

6:40

he said he sort of had to tone it back a bit

6:42

over the years just as he went after bigger

6:44

targets and made bigger bets. Perhaps

6:47

he matured a little bit or something. So

6:50

now he still goes companies and strategies

6:52

and whatnot but it's kind of less personal

6:55

in their attacks. When he turns

6:57

up these days, companies know who he is. So

7:00

instantly they're flooded with

7:03

lawyers and bankers and whatnot telling them

7:05

how to react. I actually

7:07

spoke to him afterwards after his appearance

7:10

on the phone and I asked him, does

7:12

it sadden you that there's this whole

7:15

industry created around how to

7:17

defend against Dan Lobe and the

7:19

activists? Yes. And he said,

7:22

no, it doesn't sadden him. He understands

7:24

that's all part of the market. But

7:27

he said companies do overreact.

7:30

You turn up and they

7:33

instantly sort of freak out when

7:35

sometimes you just want to have

7:37

like a sensible conversation. Yeah.

7:40

But they instantly assume it's

7:42

nuclear. But he said

7:45

he often wields the carrot and stick,

7:48

I think he called it, of proxy

7:50

fights and board spills and that but

7:52

he hasn't had to actually pull it in a

7:54

while. So I think

7:56

his targets kind of get the message.

7:59

that gives you a bit of a leeway.

8:02

Yeah, yeah, I mean, hopefully that gives you a bit of color.

8:05

James, this afternoon we've got Kathy Wood,

8:08

who's another big name in markets for completely

8:11

different reasons. It looks like you had a really good

8:13

chat to her yesterday. What was she

8:15

like?

8:16

Yeah, Kathy Wood is, I

8:18

reckon she's the most divisive figure

8:21

in financial markets. She is

8:23

famous for predicting

8:26

growth stocks are gonna go to extraordinary levels.

8:29

Bitcoin's gonna surge, she loves Tesla.

8:34

And she's had a sort of spectacular rise

8:36

and then an equally spectacular fall. I think in 10

8:39

months, her ETF back

8:41

in 2021 was up 325%, 10 months.

8:46

It's since fallen about 75%. So

8:49

look, she's as

8:52

sort of certain of the future as ever. Some

8:55

really interesting things to say about why

8:58

we're gonna enter a period of deflation and that'll

9:00

bring interest rates down really quickly. Why

9:03

Tesla's the biggest way to play

9:05

artificial intelligence because it's gonna get

9:07

to full self-driving relatively

9:10

soon. Still thinks Bitcoin

9:12

can jump, I think current

9:14

predictions that it's got Bitcoin jumping 40

9:17

fold basically because

9:20

it's really gonna be digital gold.

9:22

And then she had this sort of interesting

9:25

idea and she prefaced this by saying,

9:27

I know this will sound crazy. And I thought, fantastic.

9:30

I'm gonna get a classic Cathie Wood is

9:32

I'm here. And

9:35

she delivered. Her argument was

9:37

that we're all worried about what artificial

9:39

intelligence is gonna do to us and all

9:42

these catastrophizing predictions. She

9:44

says it could actually be good for humanity. There's

9:46

a lot of tests going on where artificial

9:49

intelligence is being used for companionship

9:52

for the elderly and even some younger people

9:55

to converse with them and

9:57

provide them some guidance, talk about the

9:59

top.

9:59

of the day. It

10:01

all sounds a little bit weird to me but

10:03

Kathy's point is that look,

10:06

you know, this is an AI

10:08

is not all as bad as it's cracked

10:10

up to be so

10:11

I guess we'll wait and see. You're telling

10:13

me James that when we're a bit older and in the nursing

10:15

home, the kids are going to have us talking to a robot.

10:19

Perhaps, perhaps. Maybe,

10:23

I think the greater fear is that there'll be two robots

10:25

doing this podcast. Let's wait and see. Now

10:30

James, well I've been at SONE. You've been watching the Senate

10:33

hearing into last week's Optus outage. What's

10:35

that been like? Yeah, so the Optus CEO

10:38

Kelly Baier-Rosmarin was dragged

10:40

before the Senate

10:42

inquiry led by the Greens into

10:45

the network outage last week.

10:47

Now this is happening in

10:49

record time. Once upon a time, you know,

10:52

company would stuff up. It might take months

10:54

or months to get

10:56

the CEO in front of the parliamentary committee. This

10:59

has been a week. So there's something

11:01

to be said there about the thirst. Politicians

11:04

have figured out that smashing a

11:06

CEO who's in

11:09

a bit of trouble

11:10

is a pretty good sport, pretty good for TV

11:12

time.

11:13

Baier-Rosmarin, she did

11:15

an okay job actually, you know, given

11:17

that

11:18

her sort of interrogators were out for some

11:20

a bit of blood, I thought she handled it pretty well.

11:23

The big problem though was Optus

11:25

was asked, had you planned

11:27

for, had you done scenario planning around

11:30

a mass outage like this? And

11:32

they said, oh, we've done some planning. But

11:35

basically their answer was we thought

11:37

an outage of this size and scale where

11:40

the fixed line network and the mobile

11:42

network and the data networks are

11:45

all taken out was basically impossible.

11:48

And so it was just unexpected. And I

11:50

think

11:51

that's the, that's going to be the thing that resonates

11:53

from this,

11:54

from everything else that everything else

11:56

falls out of that, I think, how I have

11:59

just hand or mishandled the communications,

12:01

there was lots about that. But it all

12:03

is going to come back to this question of, did

12:06

Optus plan enough, was their risk management

12:09

strong enough? And I

12:11

think they're the open questions that

12:13

will remain, but it was fascinating viewing.

12:16

So this appearance, I thought

12:18

it must have been something that was in the calendar and it's just a coincidence.

12:21

No. It literally came up in since that

12:23

attack, not the attack, since the outage last Tuesday,

12:25

Wednesday. Literally in a week. That's

12:29

scary for the CEOs. It was exactly

12:31

right. This is a scary precedent for CEOs.

12:35

You know, mistake made, dragged

12:37

before parliament within a week. That is a

12:39

really interesting precedent and there'll be

12:41

plenty of CEOs out there going, oh, I

12:44

hope that's not me one day. Absolutely.

12:46

Well James, let's move to the big news of the week and

12:48

that was the outbreak of some conflict between

12:50

two of our biggest banks, ANZ

12:53

and Commonwealth Bank. The week started

12:55

with ANZ chief executive Shane Elliott

12:57

declaring he would not apologize for

12:59

aggressive mortgage pricing that has

13:01

pushed down the profitability of home loans across

13:04

the sector. But just a day

13:06

later, Matt Common, the CEO of

13:08

CBA was accusing ANZ

13:10

of bewildering pricing that is basically

13:13

unsustainable. Now James,

13:15

the banks are usually very polite about each other,

13:17

at least as far as talking publicly

13:20

is concerned at least. But what happened

13:22

here?

13:23

Well, I think there's

13:26

a bit of pressure on Australia's big banks. Their

13:29

profitability is under threat. They

13:32

know that they're always in the public

13:35

gaze and I think we're seeing those

13:37

two things bubble to the

13:40

surface. So on Monday we had ANZ's

13:42

profit result, pretty good profit result over

13:44

the course of the year. But again,

13:47

the same story we've seen with all the banks, the second

13:49

half, which goes from March

13:51

to the end of September, very tough. And

13:54

so ANZ has been out there writing

13:56

some really cheap home loans. They want to gain market

13:59

share, fair enough.

14:00

But the

14:01

issue that they've found is that their margins

14:04

in the retail bank have really

14:07

plummeted. They've gone

14:10

down about 33 basis points, which

14:12

is a big fall. And their profitability

14:14

in the retail bank was down about 17% half on half.

14:18

So these are big numbers in

14:20

relatively large and stable banks.

14:23

The problem is that this isn't

14:25

just affecting ANZ. It's affecting everybody.

14:28

If you want to keep up with ANZ,

14:31

then all the other banks have to drop their pricing too.

14:34

And what we've seen with CBA is they've decided to take a slightly

14:36

different approach. They haven't dropped their pricing

14:39

as much, but as a result, they've lost

14:41

loan volume and a little

14:43

bit of market share for three months in a

14:45

row, which as CBA

14:47

is the biggest bank, the biggest home loan

14:49

bank, this is really unusual for them. So

14:53

Monday we have ANZ

14:56

CEO Shane Elliott come out and say, I'm not

14:58

apologizing for being aggressive. There's

15:00

a cost of living crisis out there.

15:02

I want to win business and I want my customers

15:04

to get a good rate.

15:05

You know, I'm not going to apologize for that. The

15:08

next day we've got Matt Common,

15:09

the chief executive of the CBA, who's under

15:12

a little bit of pressure for losing

15:14

market share and volume saying ANZ,

15:17

and he didn't name them, but he said one of our peers,

15:20

clearly. We knew who it was. The

15:22

Blue Bank. The Blue Bank. One of

15:24

our peers is writing mortgages that we think

15:26

are bewildering and unsustainable.

15:30

And he's described the drop

15:32

in margin at ANZ as the biggest

15:34

example of margin erosion in the history

15:37

of Australian banking. Wow.

15:39

So, I mean, as you say, usually

15:42

the banks are very polite with each other.

15:44

You know, they're always accused of acting as an oligopoly,

15:47

but it

15:51

is mortgage documents at 10 paces

15:53

in this sector at the moment.

15:54

Yeah, I remember Monday morning I was down

15:56

at the UBS conference, James, and I think you were probably at

15:58

the infrastructure summit. When we spoke

16:00

to Shane Elliott and he was absolutely

16:03

cock-a-hoop about that result He

16:05

said he said he said that six months

16:08

to September 30 was an absolutely

16:10

cracking six months It only looked

16:13

a little bit soft because the six months before

16:15

that had been even better He said that would be like the two

16:17

best six months periods in

16:19

the bank's history Yeah, he

16:22

was just on absolutely on cloud

16:24

nine and And when you

16:26

when you asked him about if he was worried

16:29

about pushing margins a bit down across

16:31

the sector I mean he was straight out on the front foot

16:33

saying yeah, he's not apologizing. He's doing

16:35

it for the customers and It

16:37

was really um, I don't know it

16:39

was fascinating conversation But what's

16:42

what's ANZ strategy here James? Like why

16:45

is it willing to be so aggressive? Knowing

16:48

like what it's doing to its margins. Oh,

16:50

I think that there's a bit of history here

16:53

Anthony ANZ had a really poor

16:55

pandemic. Yeah, you'll remember that

16:57

fixed rates were really low during

16:59

the pandemic and there's this wave of

17:02

Refinancing people jumping onto these

17:05

cheap fixed rate loans ANZ

17:07

wasn't ready for that They're processing times were

17:09

poor and they lost a lot of margin share So

17:12

in a way they're still in catch-up mode The other

17:14

thing going on here Anthony is you'll remember

17:17

that ANZ is trying to buy Suncorp's

17:19

retail bank The ACCC

17:22

has blocked that saying this would make

17:24

the industry less competitive

17:26

So there is a sense from ANZ's

17:29

rivals that ANZ is out there

17:31

saying Wanting to show the ACC

17:34

just how competitive the market really is at

17:36

the moment. Yeah Yeah, so

17:38

just just in terms of number C I think ANZ

17:40

at the moment has about 13% of the mortgages

17:42

market right CBA

17:45

is the biggest with about 25% Westpac 21% and

17:47

NAB 14 and

17:50

a half percent.

17:51

Yeah. Okay. Yep. Yep. So

17:53

Anthony the question here really

17:55

becomes I reckon What

17:58

do you think CBA does? Do they

18:00

blink and cut their home

18:02

loan prices so they stop the

18:05

volume and market share bleeding?

18:07

Well CBA has a big decision to make and it's

18:09

been brewing for a couple of months now. So

18:11

surely in the first month when this all became apparent.

18:14

So CBA switched off the cash backs in

18:16

May and by the time

18:19

it handed out its results in August, it told,

18:21

it was pretty open. Like look,

18:24

we're going to be in for a little bit of a soft time if you

18:26

look at the monthly statistics that come out of Attbro

18:28

that show up market share. And sure enough that's happened.

18:32

So when the first month of

18:35

negative growth, if that's a thing, first

18:38

month of going backwards came

18:40

out, analysts were like, oh that's interesting,

18:43

that's the first time in a while. Then the

18:45

second month it's like, well that's the first time two

18:47

months in a row for quite

18:49

a while. And now it's going to be looking at three months.

18:52

So that the longer it stays out, I

18:54

mean the bigger this decision comes. I

18:57

mean like I said, CBA's got

18:59

a fantastic franchise amongst

19:01

the retail customers in Australia. Like I

19:04

said, 25% of home loans, biggest

19:06

balance sheet, it's got the biggest deposit

19:08

book. Serving

19:12

the ordinary Australians is its bread and butter. It

19:14

always has been. We

19:17

think it always will be. But

19:20

if it wants to keep that up, it's going

19:22

to have to pull back in and get competitive

19:24

again. But Matt Common,

19:27

the COMBEX CEO, he's saying the

19:29

right

19:30

things I think. Like he's saying

19:32

this is a conscious decision between

19:35

market share and profit basically or shareholder returns.

19:40

And at the moment we're protecting

19:42

our shareholder returns and we're not just chasing market share

19:44

for the sake of it. But

19:47

the longer this fight goes on, the longer that ANZ

19:50

has its cashback there, the longer that

19:54

Westpac St George is in there as well fighting

19:56

for market share, the bigger that decision

19:58

comes. Yeah. Yeah. I

20:00

mean, do you think do you think they end up

20:03

getting aggressive again?

20:05

I don't think they'll necessarily

20:07

be a moment when, you know,

20:10

Matt Common stands outside the, um,

20:13

outside the Commonwealth Bank headquarters

20:15

in Sydney and yells out where backside is. Um,

20:18

but I think there could just

20:20

be, you know, I think there'll be scenario

20:23

planning game, wargaming all this out.

20:25

Can we tweak our pricing in some ways,

20:28

in some areas for some customers

20:30

to be more competitive? Um,

20:33

you know, how do we, how do we massage

20:35

this? So we try and fine

20:38

tune that balance. I don't think there'll be a sort of stake

20:40

in the ground moment, but I think behind

20:43

the scenes, see, be able to looking at everything

20:45

and saying, what do our competitors doing?

20:47

How do we react? How do we tweak the dials?

20:50

So if we are losing a little

20:52

bit of volume and market share, we're minimizing

20:54

those losses. But Anthony, what

20:56

are the other two banks doing here? Are they sitting

20:58

back with the popcorn, NAB and Westpac?

21:01

Well, it's, it's funny, like every, everyone sort of comes

21:03

and goes from this, uh, competition

21:05

fight, you know? So like, like NAB is not

21:07

playing as much at the moment, but you know,

21:10

it was going harder, I think six months

21:12

ago or towards the end of last

21:14

year. And it's the start of this year. Westpac

21:17

isn't playing as much with its core brand Westpac,

21:19

but like I said, it is going harder with

21:22

some of its other brands. So

21:24

everyone, everyone sort of dips in and out and,

21:26

um, and sort of plays when they

21:29

want to don't play when they

21:31

don't, you know, no one wants to be losing

21:33

market share over an extended period.

21:35

Yep. Um, I mean, we've been lucky enough

21:38

to speak to Westpac CEO and, uh,

21:40

NAB CEO in the past week or so

21:42

as well. And I mean, both

21:44

of them into the start of this year, Westpac

21:47

isn't playing as much with its core brand Westpac,

21:49

but like I said, it is going harder with

21:52

some of its other brands. Uh, so

21:54

everyone, everyone sort of dips in and out and,

21:57

um, and sort of plays when they

21:59

want to. Don't play when they

22:01

don't. No one wants to be losing

22:03

market share over an extended period.

22:07

I mean, we've been lucky enough to speak to Westpac

22:09

CEO and NAB CEO in

22:11

the past week or so as well. And,

22:14

I mean, both of them acknowledge

22:16

that it's highly competitive. And

22:19

Ross McEwen, the NAB CEO, I mean, he said it

22:21

was going to be competitive for another six or 12 months,

22:23

didn't he?

22:24

Yeah, that's right. I think Peter King, the Westpac

22:27

CEO, broadly thinks the same

22:29

thing. I mean, Anthony, to me, this comes

22:31

back, and I know I've been banging

22:33

on a little bit about this, but this all comes

22:35

back to the fact that the banks have essentially

22:37

given up the distribution

22:40

of their biggest product, which is mortgages.

22:44

Mortgage market is now controlled by brokers.

22:46

That is great for customers.

22:48

They get a great deal,

22:50

great response times. They get all the banks

22:52

and non-banks fighting for them. But

22:54

it's a problem for the banks that

22:56

they now have commoditized

22:58

this product. And when something's commoditized,

23:01

you can really only compete on price. So

23:04

I don't think this is a short-term issue. I don't think we're

23:06

suddenly going to see the

23:08

mortgage margins shoot back

23:11

up unless, I think, as

23:13

I said last week, one of the banks is prepared

23:15

to not pass on a full rate hike down

23:18

the track or do something radical like

23:20

that, which will come with lots of political heat. But

23:23

this is a long-term issue for banks and bank

23:25

investors that they've just got to sort of get this

23:27

right. Yeah, it should be good for customers. I

23:29

mean, maybe that's why there were so many smiles on faces

23:31

down at that, so everyone's getting a good deal

23:33

on their mortgage. Yeah, absolutely.

23:36

Well, Anthony, we'll come back after the break. It's finally

23:39

time for D-Day and a big takeover

23:40

of a hustle for Oregon Nation.

23:56

Welcome back. If you want to know more about what we're talking

23:59

about today and a whole lot more,

23:59

lot more. AFR subscribers can

24:02

sign up to the Chanticleer newsletter at

24:04

join.afr.com forward slash

24:06

Chanticleer. Every Friday the newsletter

24:09

pulls together the best Chanticleer columns from the

24:11

week and delivers them straight to your inbox.

24:14

Well Anthony, another big week looms, a couple

24:16

of interesting events to start

24:18

the week. ASIC has a summit down

24:21

in Melbourne on Tuesday and Wednesday. Our old

24:24

mate Tony Boyd, the former King

24:26

of the Chook hen house, is hosting

24:29

and wow he's got a good panel to start doesn't

24:31

he? Yeah mate, there's

24:33

a huge speaker lineup at this conference, like basically

24:36

all the all the government big dogs

24:38

you know Treasurer, ACCC boss, RBA

24:40

boss, ASIC etc.

24:42

Yeah I saw Tony Boyd last

24:45

night actually at some Telstra drinks. He looks

24:47

like he's going pretty well.

24:48

Excellent, I think his first panel that

24:51

day has got the head of ASIC, the head of

24:53

the ACCC, the head of the Reserve Bank and the head

24:55

of the Future Fund. I'll

24:57

be down there, there'll be a required viewing. On

25:00

Tuesday we also get the RBA minutes Anthony,

25:04

so it'll be interesting to see you know

25:07

was the decision to increase

25:09

interest rates a line ball one or more

25:11

clear-cut? Yeah hundred percent. I mean

25:14

it looked like a bit of a no-brainer decision but I mean

25:16

the RBA is not exactly going to use those

25:19

words but we'll need

25:21

to see what else they're sort of thinking about.

25:23

Yep and then 2 p.m.

25:25

Thursday in Sydney is the moment

25:28

we've been waiting for, the scheme

25:31

meeting to decide whether Brookfield

25:33

and EIG are going to get

25:36

to take over Origin Energy. Now

25:39

Anthony we're what, we're

25:42

six days out, five days out, what's

25:45

your sense? How's this going to play out? The

25:47

propaganda machine is in full

25:50

motion James.

25:53

How's it going to play out? Well I mean

25:55

Australian Super bought more stock this week so

25:58

it now owns $16. and a half

26:00

percent I think it is of Oregon. So

26:03

it's no vote has gotten bigger. No

26:06

one else is really speaking out about it but I

26:08

still think that that 16 and

26:10

a half percent along with

26:13

some other no's including

26:16

in the retail is going

26:18

to see this vote fail. Yep.

26:21

I mean and then the question is what happens from there

26:23

and I honestly don't know.

26:25

Yeah I mean are you coming to the scheme meeting James?

26:27

I'm coming. Oh yeah we're both going to be there. I can't

26:30

wait. It is absolutely

26:32

popcorn central.

26:35

What's fascinating

26:37

to me this week Anthony is just there's

26:39

been a little everyone

26:41

financial markets they sort of play

26:44

hard and you know they take sides but it's

26:46

almost done as though it's usually a

26:48

bit of a game I reckon because the next

26:50

deal they'll be on the same side or

26:53

you know things change so quickly.

26:55

This one's starting to get a little bit not

26:57

nasty but there's a little bit of frustration

27:00

boiling to the surface on both sides. You know

27:02

Brookfield's worked so hard on this deal Oz

27:05

Super believes that

27:08

it's in the best interest of its members over the next

27:10

four or five decades to the

27:13

origin to stay public. So you can

27:15

feel that sort of desperation

27:17

and frustration and exhaustion

27:20

I guess bubbling to the surface. So

27:23

that'll be interesting to see how that goes.

27:25

One of the big things that comes out of this James is

27:28

that it's a reminder to us that to

27:31

control or have significant influence

27:33

on a listed company you don't actually

27:35

need to own half or more. You know like Australian

27:38

Super's got a 16.5% stake. If that's enough to

27:41

help this deal get voted down

27:43

then that's huge sort of influence

27:45

and I'm not saying you know Australian Super's right or wrong

27:49

or any of that before everyone calls up and wants

27:51

to abuse me. I'm just saying like it's

27:53

interesting that you don't actually need to own

27:55

as much as you think to really

27:59

impact the outcome. outcome of something like this.

28:01

Yep. Yep. No, absolutely. Well, there'll

28:03

be plenty of coverage at AFR.com

28:06

and in the paper in the days leading up to

28:08

this meeting and both Anthony and I will be down

28:11

there on the floor of the meeting, getting

28:13

the taking the temperature

28:15

and seeing how it all plays out on Thursday. It's

28:17

going to be fascinating. And we'll, we'll

28:20

do a full post-mortem Anthony

28:23

on next week's podcast. Well,

28:25

we love getting questions here at the Chanticleer podcast.

28:27

And this week, our questions from Justin from

28:30

Brisbane.

28:30

If you've got a question you can, uh, that

28:33

you want to send in, you can email us at Chanticleer

28:35

at AFR.com. You can also

28:37

send us a question in audio form. Just

28:40

record a voice memo on your phone, include your

28:42

name and where you're from and email it through

28:44

us. So Justin asks the

28:46

string of interest rate rises is clearly causing

28:49

pain. It seems unfair that the pain is

28:51

being worn by the small portion of society.

28:53

That is a home loan. Indeed.

28:55

It's even worse. That is, this is the biggest part of

28:57

the pain being worn by people who've only

29:00

recently bought their house. Do

29:02

you think a better way to achieve taking

29:04

money and therefore demand out of the economy,

29:07

maybe a temporary say nine months

29:09

increase to the amount of compulsory

29:11

superannuation we all pay.

29:13

This will achieve the same as increasing

29:15

interest rates. That's taking money and demand

29:17

out of the economy, but would share the pain

29:20

more broadly and increase retirement

29:22

savings. What are your views? Is this stupid?

29:25

Thanks again for the podcast. Justin.

29:27

Well, it's not stupid, Anthony. Um,

29:29

this is, uh, that, that's, uh, you

29:32

know, a reasonably sensible way of taking

29:34

money out of the, out of the economy,

29:37

but would it work? Well, here's another way that

29:39

super could save the day, James. Um,

29:42

yeah, would it work? Uh, I don't

29:44

know. I've been two minds about this. I've been thinking

29:47

about it. Um, so if you take more money

29:49

out of the system, that's generally

29:51

a good thing if you're trying to cool, cool

29:53

everything, but who you're taking money off, you're

29:55

taking money off, off the workers. Um, I

29:59

mean, are they the same people? that are paying the

30:02

higher interest rates mostly, I mean probably

30:04

the ones that are out there spending. I

30:07

mean another way to do it maybe would just be

30:09

to tax more in interim but we're not really

30:12

asking for more tax hikes. So

30:15

I don't know, I mean maybe this one's big

30:17

for my brain James, what do you think? I

30:21

get the logic but I think

30:23

there's a few problems. One is some

30:26

people have an issue with compulsory super

30:28

anyway that it's compulsory. We're

30:30

mandated, forced

30:33

to do something with

30:36

our own money

30:37

that some people don't necessarily agree with.

30:39

So I think there is a sort of personal choice element

30:42

to here, to

30:42

this. I think compulsory

30:45

super is good and good for the country but

30:47

would it be good to use it as a sort of

30:49

pressure valve for the economy like this?

30:52

Don't know about that. I mean think

30:55

about it the other way. If the economy

30:57

was cold,

31:00

if the economy was running cold, would

31:02

we then reduce super

31:05

compulsory superannuation payments to

31:07

put a bit more money back in the economy, increase

31:09

spending? I don't think we

31:12

want to just play around

31:14

with the settings of super like it's some sort

31:16

of switch you can flick on and off. Imagine

31:19

the politics in that. Yeah, well and I

31:21

think imagine the politics in this generally. I

31:24

don't think this

31:27

would ever get up from a political point of view. I

31:29

think the other thing is it wouldn't, to

31:31

your point, it wouldn't hit everybody. Yes, it's

31:34

unfair that interest rates particularly

31:36

hit those who have taken out loans

31:38

recently, totally get that. The

31:41

same people who are escaping their higher interest

31:44

rates would also escape this move. That's the retirees

31:47

sitting there who

31:49

wouldn't have to contribute. I mean they'd be contributing

31:52

even less in this instance. So

31:55

I get the idea. I totally

31:57

understand that interest rates is a very,

31:59

very... blunt instrument but I'm

32:02

not sure that

32:05

every problem that we have in this society can

32:07

be answered by saying well what can we do with the super

32:09

system to make this work. Yeah I mean and that

32:11

money would still end up back in the system right because

32:13

if you give it to Australian Super, Australian Super is going

32:15

to use it to go and buy some data centres in Europe

32:18

or another 1% of origin you know. So

32:20

it still is out there. Yeah

32:24

that's very true. Anthony you've got a big afternoon

32:26

back at Zone. Thanks for sparing

32:28

us a bit of time and enjoy the rest of

32:31

the afternoon. I hope there's

32:33

a imported beer at the end of the week. Thank

32:35

you and have a great weekend everyone.

32:40

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