ZM's Fletch, Vaughan & Hayley - Fletch, Vaughan & Hayley's Lil Bitta Pod - 16th November 2024

Episode Date: November 15, 2024

On Today's Lil Bitta Pod; Bad News Brad joins us to talk interest rates, pre-Covid prices, Cyrpto and more!See omnystudio.com/listener for privacy information.

The ZM Podcast Network. Fleshborn and Hayley's Little Bit of Pod. Treat yourself to McCafe coffee with my Macca's rewards. Welcome to A Little Bit of Pod. And just a reminder, our Christmas cocktail special, our shout outs. It's going to be happening. We're going to be recording this early December. So you've got till the 4th of December to get your Christmas cocktail special shout out in.

You can go to zmonline.com slash cocktail special. Or if you're in New Zealand, you can text one word cocktail special to 9696 and we'll send you back a link. But right now, let's shout out the fourth member of our team right now. Bad news, Brad in studio. Thank you. Chief executive and principal economist at Infometrics. Nailed it. Did I nail it?

You did nail it. I know, because every time I'm like, did I get that right? Is it senior or is it principal? Now, Brad, obviously we love talking to you, but on air we could talk to you forever. But, you know, we don't have all the time. Off air we're going to go have brunch, because we're friends. We're genuine friends. I think you can hear it when we talk to Brad.

I think it comes through. I think it comes through. Does it? Does it? It's Brad. I think it comes through. I think it comes through. Does it? Yes. Does it? It's okay. Good to know. We asked the other day when we had you in, because we did touch on mortgage rates and the state of things at the moment.

We said, look, if you've got a question for Brad, send it through on Instagram, and we've got a bunch of questions that we're going to ask you now, and we can take our time because it's the podcast. Yeah. This is the good form. This is the good stuff, and you can swear, Brad. Wellad well this is always necessary but also i've got my laptop up there are two spreadsheets in

front of me uh you know so i've got i've got a few things i'm coming with the receipts here he's ready gosh first question comes from anna and she said will everything uh will everything ever return to pre-covid prices or do i need to accept that this is the new norm okay a lot of the time it is probably going to be the new norm uh we are i think trying to find like the goldilocks zone because previously right you go back sort of pre-pandemic the prices that we had obviously were a lot nicer on almost everything but uh we were also like for interest rates almost like too low and and i think like abnormally low we were coming out of a period where like after the gfc china had been producing so much that like just everything was real cheap and now maybe not so

much so most prices will be higher but again have done some homework there are eight items of about 120 or so that stats nz uh looks at at the supermarket uh that are currently cheaper in october 2024 than they were in october Oh, only five years down the track. Only eight. Yeah, but those were the golden days, to be fair. I remember when we talked to you like a year or so ago, and you said, yeah, but things don't get cheaper. Not normally.

No, they don't really settle back down to how we knew it. I'm really surprised. I mean, some of them are because they're produce or other bits and pieces, and that sort of will fluctuate. If you get a good growing year, then things come back through. I'm noticing a lot of asparagus in the supermarket. It's asparagus season, though. Oh, my God, yes.

The stinkiest of wheeze, the loveliest of vegetables. Asparagus is not on my list. Okay, give us your list. I've got eight. Well, do you want to have any more guesses? Oh, wait. Onions. There's four.

Not chocolate. No, chocolate's expensive. Onions. There's four. Not chocolate. No, chocolate's expensive. Olive oil, also very expensive. Onions, rather, is the number one. Oh, shit. Damn, that was good. Thank you. Did we have a bad season in 2019 for onions?

It wasn't the best growing, I don't think, at that time. But at the moment, prices are $1.57 apparently For a kg of onions Down to 23% Man I fucking love onions I fucking love them I fucking love onions Remember all the floods

And the onions are like Floating down the river Yeah In the street Yeah You're like it's a French onion soup Down the street So versatile

I know You've got to chuck them in everything Anything savoury We can have garlic and onions Yeah Everything savoury Roast them Barbecue them

There's a few like that So avocados Cauliflower and celery's a few like that so avocados cauliflower and celery also cheaper than in 2019 avocados we went too far yeah

we grew too many people yeah people in the Bay of Plenty were like it's great to grow avocados here we're having a bit of a and then all these dairy farmers were like

well I want something that doesn't involve getting up at 4 in the morning I'll plant avocados well I think also Australia had done the same thing and so all of a sudden it was just like avocado palooza morning, I'll plant avocados. Well, I think also Australia had done the same thing, and so all of a sudden it was just like Avocado Palooza,

but also... I fucking love avocados, though. Does that mean that house prices are cheaper? Who is headlining at Avocado Palooza? Oh, my God. Coriander. Corn chips and coriander are headlining. Oh, yeah, great stuff.

Oh, yum guac. The others, though, these are a bit weird. Clover honey, apparently, is a bit cheaper. That's your cheap honey. That's trash honey. Where is that manuka stuff? You're always giving me that. They put the manuka stuff behind the locked cabinets at the supermarket.

Yeah, yeah, yeah. You've got to go ask for the swiping. It's trying to run off with honey. Winnie the Pooh. You don't get those magnet things. Tea bags, flavoured or herbal tea bags, are apparently a bit cheaper. Cheaper. Well, that's good.

I love herbal tea. So coffee's getting more expensive. Tea's getting cheaper. Cocoa's also up. All the stuff we love, though. All the stuff we love. Biscuits, chocolate, lollies. Chops.

Chops. All up. Flour is down. And the other one, and this one really surprises me, sports drinks, apparently. Sports drinks? I don't know if that's true. It's like Powerade. Yeah, I haven't seen a tea Powerade in a while.

I only have a Powerade if I've really overdone it the night before. Yeah. I'm not going to lie, just because I hate myself, I've gone to the end of the list. Olive oil and eggs are the two things that are most expensive relative to it. Yeah, it's insane. That's when you know, if you pop into the groceries to do just a couple of little things,

but you get a bottle of olive oil because you've run out, you're like, how did I get to a hundy? But we're not cooking with olive oil. No, no, no, we're not. It's got a high smoke point. You can cook with it. You don't cook with olive oil. Why are you so anti-cooking with olive oil?

Go with your, like, rapeseed or avocado. It's rice bran. No, don't fucking rice bran. It's rice bran. Rice bran. Very high smoke point. Minimal taste incursion. Okay, next time we do the book, can we just go out to Vaughan's place

and he can just, like, cook us? I'll show you the table. He asks us all the time. He doesn't want us to come around because we make too much noise and drink all of the Chardonnay. I have three. Case in point, Your Honour.

I've got three fat steaks sitting on the bench. Next question for Brad. Or do you have more, Brad? Oh, no, I was just going to say I've got a free afternoon after this. All right, let's barbecue. Steaks on. What is the best option for fixing interest rates?

How long should you fix for? Yeah, a very good question and a very common one. Again, not personal advice. Go and talk to your financial advisor and all that. But you personally advise me a lot on my decisions around my mortgage, Brad. Renovate, Hayley. Buy the reno. You said it. I went back to my

messages the other night actually and had a read back through. And I was like, damn, I gave some good advice and look what she did. And she didn't listen. And look what she blames me for now. I know, I know. I don't know if this is a friendship or if this is sort of just like Stockholm Syndrome. You're my scapegoat. Yeah, a little bit.

Okay, interest rates. So, no, good question. Because I think at the moment when they're coming down, a of people are going, well I'll just take the shortest possible period Because surely if it goes down Then if I take a short period Then I refix on to that lower rate sooner Which is why we've got about 20 odd percent Of people that are floating

That's pretty normal, just because floating's quite expensive But a lot of people I'm getting like the evil eyes Yeah I know Brad You want me to show you mine? Six months though is quite popular at the moment A lot of people... I'm getting like the evil eyes from over in the corner here. You want me to show you mine? Six months, though, is quite popular at the moment. Sort of between 30% and 40% of people who are getting a new mortgage opting for that very short six-month period.

However, you actually sometimes might be better on a one year. It's a little bit longer, of course, but actually your interest rate is a fair bit lower. At the end of October, the latest official data we've got from the Good Reserve Bank of New Zealand said that the average six-month interest rate, special interest rate, so if you've got a good enough deposit on that, was 6.5%. If you took a one year, you had 5.96%. Yeah, shit, that's quite big, eh? So I think the thing here is just because it's shorter doesn't mean it is definitely the best option. It might still be a good option for you,

but have a look at those gaps because sometimes you're getting some good specials around there. What is interesting is a couple of weeks back we saw some of the banks start to lift their longer-term interest rates. Now, not many people are fixing four to five years, but it does just say if you're starting to lift your three-, four-, five-year rates, maybe we're getting closer to the bottom of where interest rates might eventually get to. So don't hang the house on it definitely continuing to crater.

I wish I'd fixed for five years in 2021. How great would that have been? Three point something percent. I just Googled the history of the rates. The Reserve Bank of New Zealand has a good graph going back to 2005. something percent. I just googled the history of the rates. The Reserve Bank of New Zealand has a good graph going back to 2005. Where do you think the new bottom will be?

It's interesting looking back over there because people have short memories, don't they? They think that post-COVID that it's going to go back to 2%. It's never been that low. That was just a little party. And again, if it ever does get back to 2%, it's never been that low. That was wild. That was just a little, that was like a little party. And again, if it ever does get back to that point,

what has gone so wrong in the economy that we need to have it? Yeah, everything else is fucked. Yeah, totally. So, look, I think probably low fives, high fours is probably the place. So, 2010 to 20, where's that, 2019, they were kind of all hovering on the late fours to fives. Yeah, sort of rough. I mean, it did go sort of up and down at points And you know, I remember in 2019 there was like a bit of a rally where interest rates came a bit lower

But yeah, I feel like that's sort of the right Goldilocks zone And this is genuinely the thing, we're trying to figure out in the economy We came into COVID sort of at normal speed, okay Hit COVID, things went to shit. We immediately sort of dropped them because economic speed dropped massively as well. Then inflation got too high, so we ramped up interest rates. Now we're trying to drop them back. We're not actually trying to

stimulate the economy, almost. We're just trying to not stop the economy. So we're trying to go from really hot inflation to not so hot. We've done that. Now it's like, what is normal for interest rates? And again, I don't think we've been here before. So yeah, Goldilocks zone, I think low fives, high fours.

I also think with the one year thing, sometimes with this budgeting, with everything else being so expensive, it's better the devil you know. You know what you're paying for a year. You can plan for the year. And then if it changes, then you've missed out a little bit. But also, this is always, because everyone's always like,

I should have done this, should have done that. And okay, to be fair, five years back in 2020, understandable. That would be so good. Hindsight's wonderful. But we were being greedy. We were being greedy. But why did, because everyone was like, actually I was still getting a good deal there.

So yes, it's a bit painful now, but I also think people shouldn't beat themselves up too much. Professionals in the market don't get these ones right often, including myself. So, like, you know, no one's going to be able to be perfect and pick the market. Just, yeah, have that confidence that you can sort of see it through longer term is more important. Agreed. Beautifully said. Very good. Next question.

Nathan's question is, why has petrol gone up so much this month? Oh, probably because of fighting in the middle east i mean look oil prices and and i know i mean this oil prices and food prices are two things that people ask the most about alongside their mortgage rates i'm not looking at anyone in particular because those are the givens though we've got to move around and we've got to eat well and also and they change the most like you the price of i don't know like guttering or whatever if you're doing reno's like doesn't actually shift hugely whereas your fuel price does change, geez, just about hour by hour sometimes. The big one at the moment that we're trying to figure out with oil prices

and what's sort of moving it up and down is one, supply. If there's lots of oil being produced globally, then that's generally good and prices will come down. If people are worried that there won't be enough oil supplied, then prices go up. So the minute you start to see lots more fighting in the Middle East, where a lot of the oil comes from, everyone goes, well, am I going to be able to get the shipment of oil that I expected to? If I'm worried, then I start to bid the price up, because I want to make sure I've got a few other options out there. The other one is around demand.

If everyone's driving around here and across the world, then oil prices are going to go up, because there's a lot more demand and not necessarily an immediate amount of oil that comes in. But at the moment, the Chinese economy's been going quite poorly, and so we've seen that, yes, there might have been a spike in the last couple of weeks, but actually fuel prices at the moment are still quite a bit lower than they were at the start of the year. So they're not cheap, but they're cheaper just a touch. And then what's going to happen, we touched on this a little bit the other day

with Trump now coming in, and I mean, who knows, there could even be more fighting in the Middle East shipments can't even get through let alone Exactly, well I mean he did say that he was going to stop all the wars and like you know Oh did he? That's great! Oh my god thank god. I don't know how. It's weird that no one's been trying. He doesn't know how.

We should have done that ages ago actually. I don't know why anyone thought of it. Just stop it. But if that, I mean look if he manages to do it, then great, although you sort of ask how he might go about it. But yeah, I mean, we are, I think, a little bit concerned, a little bit risk averse there on the new Trump administration, just because if you look at some of his policies,

we think that maybe he actually stimulates more inflation than before and that could lift interest rates. Or that there's big tariffs on all of our stuff. So the minute we try to send some good old New Zealand steak overseas for the Americans to eat, they're having to pay 20% more, then they don't have as much money to buy more meat again. So all those sort of challenges. I'm just looking at the top oil-producing nations.

Kuwait, Brazil, United Arab Emirates, Iran, Iraq, Canada in at five. Yeah. China in at four. Russia, Saudi Arabia, United States. All, I would say, if you'll excuse the pun, countries in some turmoil. Yeah. Yes. And the United States is the biggest by miles.

It produces 14.8 billion barrels, each barrel equating for 160 litres. Well, they've turned it on in the last few years, haven't they? It's been a lot of production coming through, which is sort of, that has sort of meant that the market's not as volatile because previously when it was very concentrated out of the Middle East,

everyone was sort of looking there. And the minute that like anyone popped off or even thought about or talked about it, everyone was like running for the hills. Whereas i think with the us producing a bit more everyone's a bit like oh you're a bit more self-sufficient like even if everything else goes bad maybe you can look after yourself a bit more um the thing for new zealand though right like we don't do any of that we don't have a lot of oil even if the taranaki oil fields were coming out it's it's still not our best option what is quite cool though is that uh we've got a very high

level of renewable energy here in New Zealand. So that's actually not too bad. Yeah, okay, there was a bit of a spike in the middle of the year, but there's now water in the lakes. We've got, you know, sun coming through over summer. There's wind coming through. Wind, yeah. That stuff's good. That did limit just how exposed we were when the Russian invasion of Ukraine happened.

So, like, again, can't win them all, but we're in a good enough place sometimes for what we've got. Some good news from Bad News Brad. Yeah. That was pretty good. I did want to touch on the Trump thing because he is, obviously there's a lot of people around him like Elon Musk who love Bitcoin. A lot of tech bros that have his ear now and are going to be in the White House. What does that mean for the future? Because people are saying Bitcoin's going to be like... That was actually one of our questions crypto's taken off right over the last month is

this a good investment you're right it has i mean to be fair trump has appointed uh elon musk to a new department he's called i can't remember the entire name but doge is the department of government expend or government efficiencies but i i did see the doge to start with and i was like wow does trump realize what he's done here or someone just giving him a bit of paper and being like i don't think you'll really read this and then be like oh my gosh it actually happened yeah but yeah i mean okay is it a good investment well i mean sure if you had it before and now it's gone up you'll be feeling pretty flush i do think the challenge here is is why is it just because tech bros are in the white house or is it because you fundamentally think that this stuff is going to make more money?

My issue, my concern a little bit with those sort of investments is always that they aren't necessarily driven by something as fundamental. Like if you're investing in, say, an airline and the airline says, we think there's more tourism going on, therefore we have to put on more flights. You do the numbers in your head and you go, okay, more flights probably means more activity, more money coming in, that's probably better for the business I'm investing in. Why has crypto gone up? Because some bros on Twitter have been talking about it more. I go, is there anything actually fundamental underpinning that?

So look, for some people it will be a worthwhile investment. I just think it's important to say it is much higher risk. It'll be one of the higher risk ones because of how volatile it can be. It can go up massively in a couple of days or a couple of hours or a couple of seconds. It can go down just as quickly, sort of not driven by much more than someone spouting off on Twitter. So if it's your sort of investment, you're happy with a real high-risk profile, then maybe it's the sort of thing you do look into. But I don't know if it would be the thing that I was putting my retirement savings all into right here right now. Oh god no.

God that put the fear of God on me. People just doing that. That's something else. So again think about that risk profile. If you've got like a spare 20 bucks and you want to have a bit of fun maybe. Again life savings probably. I wouldn't put my life savings into any one thing totally. I'd spread my risk around because that's what you should do.

Emus. Emus. Emu Farms. I'm just looking at my shares and seeing how that's going. Oh, is that still going okay? It should still be going up, generally. Oh yeah, it's gone up. Like KiwiSaver, all the managed funds ever since Trump was announced have gone insane. Why?

Because the view is that Trump will, one, deregulate a bit more stuff in the US and so businesses won't have to go through as much red tape, maybe a bit more economic activity. And they like that, don't they? Oh, yeah. I mean, no one wants to do red tape.

I mean, you guys know this. Who likes to do paperwork? Well, you love dealing with councils. Famously. Me too. Famously, I love it. Hayley's had absolutely no problems with councils. No, I love it.

I live next to a beach, apparently. At all. But there are... Don't ask. It's a swamp, Brad. It's a swamp. I do remember the swamp. But I'm coastal.

Please replace all those screws that we told you to do with marine grade. With marine grade stainless steel screws. But there is red tape there for a reason, right? We needn't look back that far in our history to realise that there's a building code in this country because there was a whole bunch of houses that fucking leaked and ruined and rotted. They're still leaking. I know. Yeah.

So, totally. I mean, and you look at the US, one of the reasons that the GFC came through is everyone said, like, banks, no one needs to look at those. They're fine. They just hold money. They can't be that important, right? Oh, God, they've all gone to shit.

They're too big to fail. Oh, my God, they're failing. They're failing, yeah. And I think the thing there, right, is that, like, both outcomes are bad. Either you let the banks fail and then people lose all their money and like, well, should have looked at that a bit closer. Sorry we didn't do it for you as the government. Or you go, well, we'll just bail everyone out, in which case you're like, how do I find

the billions of dollars I need to do this? So again, you're right. Regulation is there for a purpose. I do think, I mean, geez, you go over to the US sometimes and the amount of forms and the number of people that work in the federal government and that does sometimes seem insane. So I can understand a bit of that. But I think the other big one is Trump wants to bring through some tax cuts. And again, tax cuts, less tax being paid by a business or a person

means more money that they can spend. So all of that sort of helped stimulate a bit more activity coming forward. But again, maybe inflationary. And if that's the case, maybe not as many interest rate cuts next year. So look, in economics, I thought about this the other day and I realised that I feel like in this game the reason that I'm possibly never happy is because you sort of take with one hand and you give with

the other. Yeah. You're damned if you do, you're damned if you don't. Everything is bad, but it's like, what's the least bad? Yeah, communism. Highlight the good. No, no, wrong answer. What's the least bad? Communism. Communes. Maybe communes. Communes would be fun. Yeah, communism. Highlight. No, no, wrong answer. What's the least bad? Communism. Communes. Communes. Maybe communes. Communes would be fun. Vegetable gardens.

Religious cults and communes. We could start a religious cult. This is like the time that you guys were like, we're all going to make money here by going on OnlyFans or starting to sell feed pics. Hey, don't poo-poo it as an idea. I'm about to get a pedicure. Exactly, it has not been, you make it sound like that was an idea of the past. It is an ongoing investigation.

We're all actively happy to blow up a balloon with our butt or something to make some money. With the crypto stuff, when they talk about deregulating or new regulations, what do they mean by that? Is it so that it becomes used more by government departments or it becomes more of an official currency? I think it is just trying to broaden it out a bit like i remember at one point when elon musk uh came out this was a couple years back and was like tesla will now allow you to pay for a tesla car with bitcoin everyone was like whoa i couldn't do that before no no big car owner was taking my money in bitcoin i had to pay in cash so uh that accessibility and usability of uh platforms like bitcoin and other sort of cryptos

and that that does help i think also though it's uh there has been quite a view in a lot of developed countries where everyone is like crypto is too risky they worry that you know the government worries that people get too involved too quickly without understanding the risks and so they're trying to put a few more uh sort of stop goes uh in place so that people do think about it and sort of go through their mindset if that's taken away if it's a bit more easier and freer

to just jump straight in and sort of run with it that would of course help crypto activity but yeah it's where you put the guide rails and I think

like you think of when you go to bowling right like if you have the guard rails that mean that you can't go in the gutter at all and you're always getting a strike it's lovely but like honestly

it's not that fun it's not that fun it's not fun that's what I tell them I say put the ramp away Vaughn you don't need that put the ramp away pick up the heavy ball

and put the gutters down I use my man strength to really get the roll going I know on the ramp and the gutters out you're the person that also like

every now and then accidentally hits the screen above with the scores yeah throw it throw it yeah

that's how bowling works should we be buying monkeys you know the the pictures of the monkeys? I was like, I think that's illegal in New Zealand. Fletcher's telling me off because I'm drawing on the desk. I thought it was because he didn't like the monkeys idea. What were they called?

NFTs? Non-fungible? Oh yeah, NFTs. Fungible tokens? Tokens? Yeah. Where have they gone? I don't know, because you just screenshotted them and then I owned it too for free.

Haha. It was weird. It was stupid. It was weird. Any more questions, Vaughn? No, we kind of covered them. There was the crypto one, and the interest rates. Will anything that happens in the US cause higher interest rates in New Zealand? We've kind of covered our...

Can I just say, because again, I get this awful name all the time with the bad news, Brad, which I must say is said very endearingly. Yeah, no, it is. It is, definitely. But better things to come next year. Those interest rates coming down. Yep, we've started to see just a very small change even in the last two months in spending.

Of course, Black Friday sales, you know, going on at the moment. We're in the lead up to Christmas. I think it's still tough out there. It's still challenging. I totally get that. But I do feel that we're starting to see those greener shoots showing through. So 2025, better things to come. So on a scale of one to bad,

ten being bad, one being, oh my god, this is so great. Until we get to Trump's World War 3, how are we? If you could give it a number. I feel like we're sort of, you mean right here, right now today. Right here, right now. Sort of more a five or a six.

That's okay. I'm okay with that. That's just the economy. Just the economy. Not speaking for a range of other six. That's okay. That's okay. I'm okay with that. That's just the economy. That's just the economy. Just the economy. You're not speaking for a range of other issues. No. Oh, no, of course. Just economically.

Oh, no, there's a lot of other shit. There's a lot of other shit. Some things are teams, some are ones. Now, what number would you give Vaughan's mortgage? Let me just bring up mine. I'll show you the number. 5.96% on a one-year rate. I told my parents my actual amount of money I owe the bank the other day

and they were so worried for me. Can you write it down on a bit of paper for me? Are you comfortable doing that? I'll just mute the microphone temporarily and I'll tell you how much money I owe the bank. Okay. Wait, mute the mic, mute the mic. There you go, there's mine.

Yours are nice, Erwin. To be fair, you've both got nice properties. You have got nice properties. Don't try to make it better. Your fucking face just told us exactly what the shit we're in. What the fuck are you going to do? That's what I'm over here. What are you going to do?

I'm not actually going to pay it back. I'll die. No, I'm just going to die. It's going to be somebody else's clean up. Banyan's brand, always a pleasure. I'm a little bit lost for words. Don't worry about it. You don't have to worry about it your you don't have to worry about it

you don't have to worry about it I'm well aware this is why I don't have a mortgage I'm quite comfortable looking at my you know different accounts I'm like

fuck you Fletch I don't have a mortgage I don't have a mortgage but he also owns where he lives fuck you Fletch