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Speaker 1: Australia's bank bosses tell MPs their customers are under significant strain,

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Speaker 1: concerts profits slow as the post lockdown travel boom eases,

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Speaker 1: and Berkshire Hathaway hits a one trillion US dollar valuation

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Speaker 1: just in time for Warren Buffett's ninety fourth birthday. Welcome

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Speaker 1: to Fear and Greed. Daily business news for people who

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Speaker 1: make their own decisions. It is Friday, the thirtieth of

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Speaker 1: August twenty twenty four. Are Michael Thompson and Good morning, Adam.

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Speaker 2: Lang Well, Good morning Michael, Adam.

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Speaker 1: The main story this morning. The boss of Australia's biggest

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Speaker 1: homelander has warned politicians that its customers have experienced quote

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Speaker 1: extreme shocks in recent times following pandemic lockdowns, rapid interest

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Speaker 1: rate rises and a surgeon demand. And there's concerns that

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Speaker 1: many Commonwealth Bank customers are really struggling with the cost

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Speaker 1: of living.

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Speaker 2: Yes, Michael, and I think many of us can relate

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Speaker 2: to this. Commonwealth Bank Chief Executive Officer Matt Common was

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Speaker 2: in Canberra yesterday. He was appearing at the House of

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Speaker 2: Representatives Economics Committee, and he said that customers aged thirty

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Speaker 2: five to forty four Michael, is that you?

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Speaker 1: Oh it is me. It's okay, I'm smack bang in

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Speaker 1: the middle of right.

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Speaker 2: Will pay close attention.

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Speaker 1: Go on, I'm all he is, now right.

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Speaker 2: Customers age thirty five to forty four have the largest

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Speaker 2: share of mortgage balances and are exposed to higher interest rates.

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Speaker 2: He added that customers in general are spending much more

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Speaker 2: essentials and far less on discretionary items, and savings are

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Speaker 2: being quickly depleted. Michael, can you relate to any of that.

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Speaker 1: Tick tick tick tick everywhere? All the way along there?

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Speaker 1: Matt Common has spot on with this.

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Speaker 2: All right, Well, let's see if you think this is

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Speaker 2: still spot on. He also called for tax reform focusing

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Speaker 2: more on wealth taxes than income taxes to improve productivity

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Speaker 2: and prosperity. But he wasn't having a single bit of

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Speaker 2: Adam Bant's Robin Hood proposal for higher corporate taxes, and

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Speaker 2: we covered that on you yesterday's show. He said it

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Speaker 2: was quote unquote insidious populism. How's that for a whack?

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Speaker 1: Oh, that is a decent whack. And as we've discussed

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Speaker 1: on the Fear and Greed Weekend edition on many occasions, Adam,

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Speaker 1: you are an extraordinary enthusiast for any kind of tax reform.

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Speaker 1: So I can imagine you hearing Matt Common talking about

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Speaker 1: tax reform yesterday. He would have needed a cigarette.

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Speaker 2: Think. I stood and applauded. No one else was around,

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Speaker 2: but I stood in applaud it.

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Speaker 1: I just he's speaking your language, isn't it now? Westpac

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Speaker 1: CEO Peter King was fronting the committee as well. Did

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Speaker 1: he have similar reflections? Was he on the reform train

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Speaker 1: as well?

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Speaker 2: Well? Funnily enough, Michael he was. And Peter King also

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Speaker 2: supported tax reform, saying there was too much reliance on

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Speaker 2: income taxes and insufficient focus on consumption and perhaps even

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Speaker 2: wealth taxes. But he said good luck to the parliament

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Speaker 2: in terms of trying to tackle it. He understands how

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Speaker 2: reform can be very, very challenging. One of the themes

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Speaker 2: that both bank bosses raised over the day was concerns

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Speaker 2: over scams. They are investing heavily and scammed to tear,

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Speaker 2: but they're seeing a big problem with nefarious social media

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Speaker 2: players ripping off Australians and they want a whole of

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Speaker 2: ecosystem approach that includes the tech giants and telecommunication companies.

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Speaker 1: Adam is just worth quickly mentioning on the topic of scams.

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Speaker 1: Our interview today is worth sticking around for. It is

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Speaker 1: a chat with Shaq Johnson, who is the head of

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Speaker 1: customer protection at A and Z about Scams Awareness Week.

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Speaker 1: It is basically about the efforts that are being made

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Speaker 1: by A and Z in particular, but these are really

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Speaker 1: kind of efforts made across all of the banks and

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Speaker 1: there's a great deal of cooperation between the banks on this.

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Speaker 1: But the very first question that Sean put to Shaq

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Speaker 1: in this interview is who's winning? Is a scammers winning

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Speaker 1: or a customer's winning? And Shaq was was very directing, well,

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Speaker 1: at the moment, it is the scammers. They are winning,

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Speaker 1: and really it's going to take a united effort from

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Speaker 1: all of the banks and a lot more awareness from

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Speaker 1: customers as well as to what to look out for

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Speaker 1: because with the advances in technology with AI, these scams

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Speaker 1: are getting so much more advanced, so much more clever,

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Speaker 1: and so much more deceptive. So it is a really

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Speaker 1: really important interview to listen to. It is coming up

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Speaker 1: after the show. Sorry I interrupted you to there's really

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Speaker 1: a public service announcement there, Adam.

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Speaker 2: Yeah, well done, Michael and I endorse it and I'm

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Speaker 2: absolutely thrilled to know that someone with the name Shaq

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Speaker 2: Johnson is head of consumer protection at A and Z.

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Speaker 2: I'm going to listen to that interview very aware. It's

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Speaker 2: a great one, and Michael, back to that House of

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Speaker 2: Representatives Economics Committee. We also have aan ZED and NAB

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Speaker 2: CEOs there in Canberra for more hearings later today, and

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Speaker 2: i'd encourage any listeners interested to tune into our afternoon

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Speaker 2: edition and we'll update you on any developments.

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Speaker 1: Now checking local markets, Adam. The S and PA SX

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Speaker 1: two hundred closed down zero point three percent yesterday to

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Speaker 1: eight and forty five points after a pretty rocky day

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Speaker 1: of earnings.

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Speaker 2: Really yeah, it was, Michael. We're still over that eight

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Speaker 2: thousand mark and that's significant. The sector that performed best

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Speaker 2: over the day was financials, with the banks all posting

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Speaker 2: modest gains. Pretty Much everything else slumped, including significant slides

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Speaker 2: for energy, consumer discretionary staples, and resources. Mineral Resources was

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Speaker 2: leading the decline in that space and it was down

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Speaker 2: eight percent. It was a pretty flat trading day for industrials,

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Speaker 2: health care and information technology. Online fashion seller Setire had

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Speaker 2: a tough day at the Office after missing estimates and

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Speaker 2: posting a thirty four percent profit drop. Its share price

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Speaker 2: fell by twenty percent. Perth based Minor Read five was

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Speaker 2: one of the worst performers. It was down more than

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Speaker 2: ten percent after they reported a loss after tax and

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Speaker 2: five point four million dollars and guidance for gold sales

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Speaker 2: to be below expectations in twenty twenty five. And Michael,

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Speaker 2: one of the standouts for the day was Biga Cheese.

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Speaker 2: It was up ten percent. But Quantus and West Farmers

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Speaker 2: had mixed results. And we'll discuss those shortly.

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Speaker 1: Yeah, we will. Indeed. Now thanks to blue chip Communication,

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Speaker 1: the experts helping financial services companies market, communicate and grow.

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Speaker 1: Is a blue chip communication dot com dot au checking

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Speaker 1: international markets, Adam and all the talk has been about

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Speaker 1: in Nvidia earnings, good results, but investors have become used

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Speaker 1: to spectacular with promises of more spectacular to come.

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Speaker 2: Yeah, that's right, Michael. The Nvidio earnings will continue to

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Speaker 2: ripple across the markets as investors digest the results. Despite

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Speaker 2: reporting revenues for the second quarter up fifteen percent at

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Speaker 2: thirty US billion dollars, and that's one hundred and twenty

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Speaker 2: two percent up year on year. It was all about

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Speaker 2: the third quarter guidance. It expects that these revenues will

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Speaker 2: be around US thirty two and a half billion, within

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Speaker 2: a two percent range plus or minus. Analysts were expecting

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Speaker 2: US thirty one point nine billion on average. That's pretty close,

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Speaker 2: but there were some expectations for almost US thirty eight billion,

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Speaker 2: so you can see how wide the expectation range goes.

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Speaker 2: And this hasn't been the end of the frenzy on

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Speaker 2: Nvidia yet. While investors sold off the stock after the results,

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Speaker 2: it's worth noting that Innvidia stock double this year, and

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Speaker 2: the last quarter was widely considered hugely successful. Another US

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Speaker 2: tech company, Salesforce customer management software business, has also posted

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Speaker 2: results worth mentioning its operating margins ended the quarter at

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Speaker 2: record highs, and it flagged that it's more expensive product

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Speaker 2: tiers that embrace AI are helping with revenue growth at

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Speaker 2: a low level. It's expecting revenues of between US thirty

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Speaker 2: seven point seven billion and thirty eight billion over the

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Speaker 2: financial year. These are massive numbers, Michael.

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Speaker 1: Yeah, they certainly are. All right, we have a lot

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Speaker 1: to cover today. Adam will be back in a moment

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Speaker 1: with the rest of the day's business news. Adam Qantas

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Speaker 1: reported two point zero eight billion dollars in earnings for

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Speaker 1: the twenty twenty three to twenty four financial year, and

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Speaker 1: while that was down eighteen percent over the year, there

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Speaker 1: was a bit of news that will excite plenty of shareholders.

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Speaker 1: The airline is due to resume paying dividends in the

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Speaker 1: second half next year for the first time since twenty nineteen,

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Speaker 1: when they were dropped as the pandemic sent airlines globally

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Speaker 1: into turmoil.

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Speaker 2: We're talking airplanes. Did your heart just flutter? Yes?

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Speaker 1: Yes, Actually, you know what, I instantly just thought, this

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Speaker 1: is bad. Now I associate everything with Sean Aylmer. We

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Speaker 1: talk about planes, and I like an picture as Sean

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Speaker 1: heading off on this holiday. Now it's you know when

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Speaker 1: you've worked with someone too long and then like you

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Speaker 1: start dreaming about them. It feels like I'm at that

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Speaker 1: point now. Normally I'd get excited just about a quantas story,

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Speaker 1: and now it's ruined by the thought of Sean drinking

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Speaker 1: kind of premium wines in business class. I'm assuming you

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Speaker 1: fives business.

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Speaker 2: Even when he's away. You may even be finishing his sentences. Michael.

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Speaker 1: Probably we're in sync.

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Speaker 2: Let's get back to Quantus. Margins were a miss on

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Speaker 2: local and offshore operations, but we all know Quantus has

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Speaker 2: had some heavy lifting to do recently after a turbulent

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Speaker 2: period that's left its brand in tatters. This includes spending

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Speaker 2: big on adding new planes to the portfolio to help

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Speaker 2: improve capacity and other customer service initiatives. The end result

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Speaker 2: was a net profit of one point twenty five billion,

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Speaker 2: down from last year's record profit of one point seven

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Speaker 2: to four billion. Jetstar actually had its best results yet

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Speaker 2: due to budget conscious travelers looking for lower cost flight options.

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Speaker 2: Corporate travel has been a lift. Overall international revenue is

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Speaker 2: expected to slow amid more global competition, but local revenue

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Speaker 2: will rise by two to four percent following the closure

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Speaker 2: of Regional Express's Capital city flights.

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Speaker 1: Air New Zealand also reported their earnings this week. Its

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Speaker 1: pre tax earnings for twenty twenty four had more than

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Speaker 1: halved down to two hundred and twenty two million dollars

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Speaker 1: as the economy over the Ditch struggles.

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Speaker 2: Yes, Michael, keep your interest flying high. For this one.

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Speaker 2: Air New Zealand cited weaker government and corporate spending and

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Speaker 2: operational issues as the reasons behind the compounding challenges. However,

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Speaker 2: some of it was expected, as there was a surge

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Speaker 2: of activity post lockdowns that was never likely to be

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Speaker 2: repeated on an ongoing basis.

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Speaker 1: This is an interesting one, Adam, Triple M and hit

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Speaker 1: radio station owner Southern Crossovers Stereo is putting its TV

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Speaker 1: network up for sale and canceling its dividend amid the

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Speaker 1: advertising slowdown.

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Speaker 2: Here, Michael, and this subject has been discussed for some years.

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Speaker 2: As we mentioned in yesterday's show, the TV ad market

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Speaker 2: has been a headache for major media businesses this earning season,

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Speaker 2: with nine also flagging challenges. Southern Cross CEO John Kelly

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Speaker 2: said he'd had active negotiations to sell their ninety six

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Speaker 2: TV stations. With revenue across the entire business down one

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Speaker 2: percent to four hundred and ninety nine point four million

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Speaker 2: an underlying profit down forty nine percent to eleven point

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Speaker 2: two million, one positive is that its digital audio platform, Listener,

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Speaker 2: is now profitable and growing.

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Speaker 1: Now, Adam, we don't talk about Bega Cheese enough on

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Speaker 1: this podcast. Oh, I agree, Michael, given that they are

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Speaker 1: behind some of our favorite products like Vegimke, which is

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Speaker 1: not really actually that's not really your favorite product. So

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Speaker 1: you can't eat begimke, can you.

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Speaker 2: Well, there is a gluten free version, is there? Yes?

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Speaker 1: And I am a fan, so you don't just have

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Speaker 1: to eat marmite because marmite was always the traditional clidate

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Speaker 1: gluten free alternative.

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Speaker 2: There's a special jar in the cupboard for me too, Michael.

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Speaker 1: Ah, Oh, well done, Biga Cheese. Anyway, we finally found

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Speaker 1: a way to squeeze Biger Cheese into the show because

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Speaker 1: it was one of the top performing stocks yesterday on

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Speaker 1: the ASX after swinging to a statutory profit of thirty

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Speaker 1: point five million dollars over the last financial year.

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Speaker 2: Yeah, we say three cheers for Bigger Cheese, Michael. Its

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Speaker 2: share price is up about fifty percent over the last

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Speaker 2: twelve months, and the turnaround is after a two hundred

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Speaker 2: and thirty million dollar statutory loss in the twenty twenty

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Speaker 2: three financial year. Bigger declared a dividend of four cents

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Speaker 2: a share, bringing the total dividends to eight cents a share.

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Speaker 2: Bigger customers, including those Vegemite fans, should expect to see

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Speaker 2: more branded product growth now.

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Speaker 1: West Farmers has posted a three point seven percent lift

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Speaker 1: in profit over the financial year to around two point

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Speaker 1: five to six dollars, but some interesting comments from managing

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Speaker 1: director Rob Scott is warned about a challenging year ahead

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Speaker 1: amid slowing home building, volatile commodity prices and significant cost

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Speaker 1: of living pressures really weighing on consumers.

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Speaker 2: Michael. West Farmers is a fascinating company and looking under

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Speaker 2: the hood at the different brands West Farmers owns reveals

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Speaker 2: some really interesting consumer stories. Take Kmart. It has crushed

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Speaker 2: it with sales recently as its own label Ancho, which

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Speaker 2: is a budget line, continues to be a hit with

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Speaker 2: the public and deliver solid earnings. It's sales re up

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Speaker 2: four point four percent. Office Works was up two point

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Speaker 2: three percent. It also has a health division including Price

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Speaker 2: Line and Silk Lazer Clinic, with revenues up five point

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Speaker 2: nine percent. Bunning sales were up two point three percent,

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Speaker 2: but there's a slowdown coming for the hardware business, with

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Speaker 2: growth already down a notch in the second half of

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Speaker 2: last year, and that's from softening building activity. As part

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Speaker 2: of the story. Sales for the first eight weeks of

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Speaker 2: this fiscal year have also been slow at Kmart group,

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Speaker 2: including Target.

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Speaker 1: Yeah and we spoke last month to Goro of Sodi

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Speaker 1: from Intelligent Investor, and we talked to him about Wes Farmers,

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Speaker 1: because you're right, it is a fascinating business with a

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Speaker 1: lot of different components. But in particular we talked about

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Speaker 1: Kmart and the boom of the Anko home brand and

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Speaker 1: about how really Kmart's turnaround has been entirely built off

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Speaker 1: the back of this Anko brand, to the point that

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Speaker 1: the toys that they produce, it is now like the

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Speaker 1: biggest toy brand in Australia is Anko, with forty percent

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Speaker 1: of the country's toys in our Anco and twenty percent

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Speaker 1: of the clothing in Australia now carries the Anko brand name,

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Speaker 1: which is just kind of which is staggering when you

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Speaker 1: think about the bigger picture and the fact that it

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Speaker 1: wasn't that long ago that Anco didn't even exist and

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Speaker 1: now it is actually reaching this point of kind of

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Speaker 1: market saturation. It is a remarkable success story.

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Speaker 2: Yeah, I agree, Michael, and I understand that you and

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Speaker 2: your family have done some research into Anko.

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Speaker 1: I think anyone with young kids has done plenty of

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Speaker 1: research into Anko that they do actually produce some really

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Speaker 1: cool toys. Anyway, it is not my self interest driving

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Speaker 1: their story. I just find it fascinating. Now a question, Adam,

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Speaker 1: and I don't know whether it's actually a question that

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Speaker 1: you will be able to answer. The question is how

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Speaker 1: many Australians will be driving an electric car in ten

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Speaker 1: years time. It is the puzzle that the Energy Market

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Speaker 1: Regulator is trying to work out, and it now thinks

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Speaker 1: that it's not electric cars but hybrid cars that Australians

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Speaker 1: are more likely to flock to over the next decade.

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Speaker 2: The Australian Energy Market Operator has slashed its forecast to

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Speaker 2: four million electric vehicles by twenty thirty four, and that

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Speaker 2: is down from seven million that it previously estimated. It's

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Speaker 2: keeping a close eye on this shifting consumer behavior because

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Speaker 2: it affects how much pressure the grid will be under.

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Speaker 2: Increasingly the signals that we favor petrol electric hybrids here,

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Speaker 2: but there are a range of experts whose to the

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Speaker 2: Financial Review and they warned that this could turn quickly.

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Speaker 2: The dynamic could change if cheaper Chinese EV models catch

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Speaker 2: on or fuel standards change. The Energy Regulator is alive

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Speaker 2: to this though, and has a bunch of other forecasts

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Speaker 2: in mind just in case the situation doesn't pan out

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Speaker 2: as expected and that includes EV's growing to six million

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Speaker 2: over the next decade. So our estimates verse seven down

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Speaker 2: to four but could be six.

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Speaker 1: So somewhere in that range. All right, International News time.

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Speaker 1: China's commercial buildings are going through a bit of a makeover.

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Speaker 1: One of the challenges they're experiencing is a very high

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Speaker 1: commercial real estate vacancy rate as work from home kind

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Speaker 1: of kicks off post pandemic. And it's the famous Hilton

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Speaker 1: Worldwide Holdings brand leading the push.

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Speaker 2: Yeah, Michael Hilton has found an opportunity here and according

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Speaker 2: to Bloomberg, it is converting these empty and unused office

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Speaker 2: buildings into hotels and taking advantage of a boom in

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Speaker 2: tourism activity it has. It's just marked its seven hundredth

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Speaker 2: property in Greater China and is continuing to expand, with

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Speaker 2: plans to add another one hundred towards portfolio in the

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Speaker 2: region over the next few years, with about a quarter

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Speaker 2: of those to come online in eighteen months. As for

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Speaker 2: the future of the office sector in China, it's weight

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Speaker 2: and see right now, office vacancy rates there are around

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Speaker 2: fifteen percent.

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Speaker 1: Now this next one. Executives around the world will be

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Speaker 1: watching it closely. I suspect the founder of the messaging

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Speaker 1: app Telegram, Pavel Durov, has been charged in France in

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Speaker 1: relation to alleged illicit activity on the app. He's also

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Speaker 1: been stopped from leaving the country.

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Speaker 2: Yeah, Michael, and I think you'd agree. It's uncommon for

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Speaker 2: police to aim to hold company executives personally liable for

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Speaker 2: user activity on their services, but that is precisely what

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Speaker 2: is happening here. There's a big debate in France at

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Speaker 2: the moment about the role of technology companies and their responsibilities.

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Speaker 2: Durov was detained over the weekend, so everyone expected this

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Speaker 2: to escalate further. He was being investigated for complicity in

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Speaker 2: managing a place form that enabled illegal transactions, as well

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Speaker 2: as complicity in crimes as serious as enabling child abuse

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Speaker 2: material to be distributed, as well as fraud and drug trafficking. Now,

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Speaker 2: part of the concern from prosecutors has been a lack

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Speaker 2: of response to requests for cooperation from Telegram when major

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Speaker 2: criminal cases were brought to its attention. At the heart

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Speaker 2: of the issue is the line between freedom of speech

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Speaker 2: and the responsibility of the platforms to help law enforcement.

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Speaker 2: According to The New York Times, this case could come

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Speaker 2: with a sentence of ten years if Duroff is found responsible.

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Speaker 1: Last one, Adam. It is a very happy birthday today

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Speaker 1: to Warren Buffet, legendary investor Warren Buffett, who is turning

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Speaker 1: ninety four and just in time for the celebrations as

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Speaker 1: news that Berkshire Hathaway is now worth more than one

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Speaker 1: trillion US dollars, joining the likes of Apple, Alphabet, Amazon, Meta,

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Speaker 1: Microsoft and Nvidia. Seeing a bit of a theme there

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Speaker 1: amongst those companies to surpass evaluation.

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Speaker 2: Yeah, Michael the Oracle of Omaha is earning his title

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Speaker 2: yet again. Berkshire saw its cash and equivalent such as

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Speaker 2: US Treasury bills, surged to US two hundred and seventy

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Speaker 2: six point nine billion on June thirty. There has been

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Speaker 2: a big stock sale focus, with Buffett selling down more

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Speaker 2: than half of its Apple shares this year. He is

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Speaker 2: the sixth wealthiest person in the world right now, and

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Speaker 2: this is the first time that a US company that

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Speaker 2: isn't in the tech sector has reached the thirteen figure milestone.

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Speaker 2: Congratulations Warren Buffett.

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Speaker 1: Yes, indeed, all right. Up next is the Fear and

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Speaker 1: Greed Business Interview. Today. We're speaking with Shaq Johnson, head

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Speaker 1: of Customer Protection at A and Z about Scams Awareness Week.

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Speaker 1: It is a cracker of an interview. It is up

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Speaker 1: next in the Fear and Greed playlist on your podcast

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Speaker 1: platform or at Fearandgreed dot com dot au and don't

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Speaker 1: forget as well to check out the new episode of

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Speaker 1: How Do They Afford That, which is our sister podcast

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Speaker 1: that comes out every Wednesday. This week's episode was all

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Speaker 1: about money myths. It is about the ten money myths

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Speaker 1: that are out there and we bust them. We just

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Speaker 1: go through work quite kind of a logical process, one

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Speaker 1: to ten and just bust them one at a time,

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Speaker 1: and really I think we are quite effective in doing so. Adam.

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Speaker 2: Yeah, Michael, of course I listened. I love listening to

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Speaker 2: you and encounter every week and the myth Busters episode

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Speaker 2: was a cracker.

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Speaker 1: Yeah, we had fun doing it and you can find

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Speaker 1: How to They Afford That wherever you listen to podcasts.

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Speaker 1: I'll put a link in today's show notes as well.

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Speaker 2: Thank you very much, Adam, Thank you Michael.

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Speaker 1: It is Friday, the thirtieth of August twenty twenty four.

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Speaker 1: Make sure you're following the podcast and please join us

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Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael Thompson,

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Speaker 1: and that was fear and greed. Have a great day.