VIDEO: Don Braid with Paul Holmes on the Economy

Q&A Interview

Paul Holmes discusses the economy with Mainfreight Ltd [MFT.NZ] managing director Don Braid,

Far North Mayor Wayne Brown and Economist Shamabil Yarkob today on Q & A.

Focus on what Don Braid says about the economy. His experience is that it is growing from exporting and his own company has grown in the last quarter, mainly from poaching market share off competitors.

He emphasizes that businesses that are surviving the current recession have done so by cutting back business fat: employees, removing poor business practices, economising where possible and that growth for New Zealand is going to be long and hard - something I have been saying for the last two years.

Don quoted this statistic:

From 2004 - 2010 the Public Admin and safety sector increased employment by 20% while the manufacturing, transport and warehousing sector dropped by the same amount.

Too many bureaucrats got us into this recession in the first place and we need to strangle off the clipboard carriers so we can grow businesses and the economy.

I interviewed Don late last year and he is very forthright and straight up with his answers. No bullshit and no bluster.

His take on the economy now and over the coming years I believe is an accurate place on where we are at present.


Disclosure I own MFT shares in the Share Investor Portfolio


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c Share Investor 2010

Xena Saves the Day: Back Down on Mining Turning Point in Economy

Ayiyiiyiyiyiyi !!! Xena and her elite acting mob roared and the politicians listened.

The decision not to open conservation land up to mining is a big loss to New Zealand Inc and a turning point in our long-term economic sustainability.

Hairy arm-pitted losers (HAPLs) like Lucy Lawless,Keisha Castle Hughes and Robyn Malcolm are not really the people we want to follow down the green path to loserville but nevertheless we apparently are.

New Zealand as a country is in a sad economic state and we needed a big boost to get our economy going again to help get it to some sort of sustainable level (in the true sense of the word not the greeny airy fairy meaning) so then progress and pay our bills on time and pay for some of the social spending that the HAPLs want us to spend on their fellow HAPLs.

Mining was one of the keys that would have led us back to something approaching prosperity. Every other country in the world mines its minerals to help pay their countries bills but we are going to be content as gormless hairy, smiling idiots at the bottom of the world with lovely green vistas but without the means to keep it in our own hands - is it any wonder why the Chinese can see an opportunity here, and good on them.

Lastly, to govern a country on the basis of which minority moron shouts the loudest (the majority of Kiwis who pay the majority of taxes want mining to help us out of the proverbial) is surely a recipe for meekness, mildness, bum stinging fence sitting and a future without a clear direction.

As I pointed out before the 2008 Election on Political Animal (which should be back soon with an explanation for its one year absence) John Key needed to make a stand on things, rather than make decisions based on political polls, because if he didn't then he would fall for anything.

Today he and his Government have apparently and we will be poorer as a result.

Greece is starting to look better everyday, at least it is warm.

See below for Lucy Lawless input on mining:




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c Share Investor 2010

Economy 2010: Taking the long way

Further to a post I made yesterday about opportunities to buy cheaper stocks, I touched briefly on the state of the economy.

Let me expand on that if I may today and we will forget it again for another 6 months, because I know it is easy to bitch and moan about this stuff as I have done on a number of occasions.

In my opinion the current economic downturn is going to take years to recover from. We have seen a relaxing of the fervour that started in September 2008, following the collapse of big financial institutions the world over and since then we have had an apparent lift in confidence due to trillions of dollars of borrowed and the printing of currencies (cheers China!) and a subsequent lift in various financial indicators; slow down in jobless growth, small GDP growth, global trade improving, etc, etc.

As I said above though, this move towards the positive is based on borrowed money and it has to be paid for, eventually.

As many of you will know, including myself, a mortgage like that can be hard to pay back when your income might now be less than it once was and while you are paying that back other forms of spending will be cut back and clearly that impacts on the economy. This huge unprecedented debt is going to constrain the economy in New Zealand and in every other country deep in debt. Even China, who is the lender, will be impacted because we wont be buying as much of their quality produce - only a hint of sarcasm there.

Most of us, but not all, will need to be prudent to survive the next 5 years. Cut back where we can and pay down debt if and when we get the chance. More debt taken on during this time will merely postpone the inevitable hounds at the door. It aint hard, it just takes some discipline.

While we are not in a 1930s depression era economic downturn, we are going to suffer, I think, economically for as long as those folk in the 30s did, in our own way. Constraint, low or no growth and inconsistent and unsustainable upturns will be the order of the day, until that debt is discharged.

There are also other shocks to come from the heady days of economic growth during the 20 years pre 2008. Complex derivatives failures and commercial property shocks look set to come and spoil what confidence we may have gotten back.

This is all part of the economic cycle however and is nothing new and there will be opportunities to buy as others must sell cheaply to pay down debt levels.

On that last positive note, for me anyway, I will bring an end to my gloomy outlook - see you back in 6 months for an update.


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c Share Investor 2010

Market Correction: Excitement Building!

Once again global stockmarkets are rightly nervous about the so-called economic recovery in the United States, with Obama acting like Robin Hood without an arrow and rumblings of credit clampdowns in China, the DOW has lost almost 5% in one week as a result.

It is bloody exciting!

I was getting sick of the disconnect between the reality of a debt led "recovery" and the fantasy of investors in stockmarkets like the DOW, who have pushed that particular market up by over 40% in less than a year -incidentally that is the largest bull run since the 1929 Wall Street crash and we know what happened after that particular market "recovery".

Yep 40%, does anyone think we are doing that much better now than we were this time last year?

Not this fellow.

I last bought stocks in July and haven't felt tempted yet until The Warehouse Group [WHS.NZ] shares took a dive recently, simply because some companies are overvalued compared to 12 months ago.

The excitement is building now for me as there looks like reality could have dawned on some and they could be rushing for the exits as I am happily ready to enter the market again at a better price.

One the economic outlook, there is anecdotal evidence on my part - I tend to trust that more accurately than what economic soothsayers are being paid to say - that the economy in New Zealand, while not completely buggered, is still hanging on a knife edge between growth and recession and it appears that any growth is going to be sporadic and a long time coming.

There just isn't any money out there.

A good time to buy assets if you do have some moola and the NZX is likely to take its lead from the US market where it dropped by over 200 points last Friday.

Happy buying.


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c Share Investor 2010