Rod Duke admits 2008 - 2010 Recession the worst

In a Share Investor Q & A out tomorrow morning on Rod Duke, CEO of Briscoe Group Ltd [BGR.NZX], Rod gives some very interesting answers to my questions to him. We cover aspects of his business life, retailing in general and the Briscoe Group specifically and some other topics thus far not broached by other interviewers.

One answer that really interested me was the answer to the following question:

SI - Is this the worst recession you have experienced in terms of retail and/or personally?

RD - Yes, Yes

Dumb that I didn't ask him if he thought it was over but revealing in the sense that here is a man at the cutting edge of retailing in New Zealand, with years of experience in retail and in business and he says that this is the worst ever recession he has experienced. This would include the decade of low growth in the 1990s, the aftermath of the 1987 stockmarket crash and the oil lead recessions of the early and late 1970s.

Pretty big call to say that the period 2008 - 2010 (I think we will experience a longer term of recession) is the worst of economic times since the depression (I know others have said this but Rod has been very direct and succinct while others on the economic coal-face like him have often waivered in their opinions) but that how Rod has called it and he is old enough to know.

Rod even quotes Warren Buffett at one stage!

My favourite Share Investor Q & A thus far and he completed it in a couple of days. Shame his mate Ian has been dragging the chain.

Sorry Ian just kidding!


Disc I own BGR shares in the Share Investor Portfolio


Share Investor Q & As

Briscoe Group CEO Rod Duke
Ryman CFO Gordon Macleod
Ecoya's Geoff Ross
Xero's Rod Drury
Mainfreight MD Don Braid
Burger Fuel Director Josef Roberts
Sky City CEO, Nigel Morrison


Briscoe Group @ Share Investor

Share Investor Q & A: Put Questions to Briscoe Group CEO Rod Duke
Long Term View: Briscoe Group Ltd
Briscoe's Cash worth looking at
Whats on Rod Duke's shopping list?
Why did you buy that stock? [Briscoe Group]
Rod Duke's Pumpkin Patch gets bigger

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c Share Investor 2010

But wait there's more!

The New Zealand election is over, we have got the desired result(for most of us anyway) so it is back to writing on my first love; money, business, finance and all that jazz.

Naturally my first piece back from writing at Political Animal is tinged with more than a little politics.

Sorry!

If you think New Zealand has seen the worst of its economic slowdown think again.

Currently New Zealand is suffering a recession brought on by profligate spending by our previous Finance Minister, Michael Cullen. Problems related to the credit squeeze have only just started to hit us and will reach their worst probably sometime mid 2009.

Some of the symptoms of the outgoing Labour Governments spending so far are; higher inflation, rising unemployment, a massive public deficit, lower spending on every level of consumer goods, high interest rates, low productivity, lower property prices, higher mortgage defaults and business failures, amongst other things.

These factors are set to get worse as we move into the New Year, save the higher interest rates, and clearly this is going to have a highly negative effect on the New Zealand stockmarket.

With the current NZX index at 2800, it is likely to go below 2000 points before it starts to get any better, probably towards the end of 2009 to early 2010.

Of course all the finer points of timing for recovery and or a worsening of the scenario outlined above hinge on what responses John Key's new Government makes to the current recession and whether it looms for longer or deeper.

The economic situation for our trading partners is also an important factor for any export led recovery and obviously the seriousness or otherwise of the global slowdown will have an impact and that impact we have largely yet to see.

Wasteful spending clearly needs cutting back in all areas of Government and the savings returned to taxpaying citizens via more tax cuts, this way the economy will be stimulated over and above any initiatives to speed the economy up via Government attached incentives or direct spending by them.

More of what we had from the Labour Party just isn't going to cut the mustard. Economies are best stimulated directly by citizens rather than by bureaucrats or politicians looking to spend taxpayer dosh on their favourite business charity.

Government spending on essential infrastructure is one notable exception.

New power stations, motorways in Auckland-another harbour crossing, a motorway through Mt Albert to finish the city's motorway system-and some decent school buildings would be a good start.

Any continuation of what got us in this mess in the first place will simply drag out out the recession for several years, rather than the likely 18 months or so.

Particular importance should placed on the speed and timing of the building blocks that must be put in place for us to start to grow the economy again.

A quick response is the best response and any impediment to economic development must be put aside so as to assist an economy that could get alot worse.

This means a fast tracking of a relaxing of the Resource Management Act and the immediate rescinding of the Emissions trading scheme, which will hamper economic growth by piling unnecessary cost into the economy when we least need it.

New Zealand finally has an administration that has the expertise to negotiate their way through financial management for the good and bad times.

New Zealand has made a choice by electing a new Government and our elected leaders must make the right economic choices, some of them difficult, in order for us to prosper again, sooner rather than latter.

The alternative is a continued slide down the economic ladder which will be extremely difficult to extricate ourselves from.


c Share Investor 2008