1 00:00:06,540 --> 00:00:09,570 Michael Thompson: Super funds are set for a bumpy year despite a 2 00:00:09,570 --> 00:00:13,678 Michael Thompson: slight hiccup last month, ASIC puts banks on notice for 3 00:00:13,679 --> 00:00:16,800 Michael Thompson: making it too hard for struggling customers to get help, 4 00:00:17,160 --> 00:00:20,070 Michael Thompson: and the world's super rich club has a new record 5 00:00:20,070 --> 00:00:25,440 Michael Thompson: with 15 members now with fortunes over $ 100 billion each. 6 00:00:25,680 --> 00:00:28,320 Michael Thompson: Welcome to Fear & Greed, daily business news for people who 7 00:00:28,320 --> 00:00:31,020 Michael Thompson: make their own decisions. It is Monday the 20th of 8 00:00:31,020 --> 00:00:35,010 Michael Thompson: May, 2024. I'm Michael Thompson, and good morning, Adam Lang. 9 00:00:35,190 --> 00:00:36,090 Adam Lang: Good morning, Michael. 10 00:00:36,570 --> 00:00:39,810 Michael Thompson: Adam, Sean will be back this afternoon with the afternoon 11 00:00:39,810 --> 00:00:41,640 Michael Thompson: report and then he'll be back in the studio again 12 00:00:41,640 --> 00:00:46,080 Michael Thompson: tomorrow morning, but if anyone happens to be missing the 13 00:00:46,080 --> 00:00:49,080 Michael Thompson: sound of his voice, stick around after the show this 14 00:00:49,080 --> 00:00:51,598 Michael Thompson: morning for an interview that he's done with Gaurav Sodhi, 15 00:00:51,598 --> 00:00:54,810 Michael Thompson: who is from Intelligent Investor. It is all about lithium. 16 00:00:55,200 --> 00:00:58,620 Michael Thompson: Last year the lithium price came down something like 80%, 17 00:00:58,650 --> 00:01:01,980 Michael Thompson: but Australia's got some big resources in this space, and 18 00:01:01,980 --> 00:01:04,979 Michael Thompson: Gaurav talks about what to expect in the sector, what 19 00:01:04,980 --> 00:01:08,219 Michael Thompson: it means for the companies who mine lithium, and really 20 00:01:08,219 --> 00:01:12,209 Michael Thompson: for investors more broadly, it is fascinating. I'm assuming that 21 00:01:12,209 --> 00:01:13,260 Michael Thompson: you'll be listening, Adam. 22 00:01:13,680 --> 00:01:17,430 Adam Lang: Oh, absolutely. Lithium is such a spectator sport, an integral 23 00:01:17,430 --> 00:01:20,340 Adam Lang: part of the green energy transition, so this is a 24 00:01:20,340 --> 00:01:20,970 Adam Lang: great interview 25 00:01:21,270 --> 00:01:22,889 Michael Thompson: And of course, don't forget to sign up to the 26 00:01:22,889 --> 00:01:27,599 Michael Thompson: newsletter as well. Head along to fearandgreed.com.au, and it'll be 27 00:01:27,599 --> 00:01:30,329 Michael Thompson: coming out on Wednesday morning, full of Sean's opinions on 28 00:01:30,330 --> 00:01:32,790 Michael Thompson: a whole bunch of stories, the big business stories of 29 00:01:32,790 --> 00:01:35,400 Michael Thompson: the week. It is not to be missed. In the 30 00:01:35,400 --> 00:01:37,950 Michael Thompson: meantime though, Adam, on with the main story this morning, 31 00:01:38,190 --> 00:01:41,219 Michael Thompson: superannuation funds are set for a bit of a bumpy 32 00:01:41,219 --> 00:01:44,490 Michael Thompson: year in terms of member returns, with the median growth 33 00:01:44,490 --> 00:01:48,450 Michael Thompson: fund expected to provide an 8% lift for this financial 34 00:01:48,450 --> 00:01:51,960 Michael Thompson: year, and that's after a 9% bump in 2023. 35 00:01:52,410 --> 00:01:54,810 Adam Lang: Michael, it is terrific to start off with some great 36 00:01:54,810 --> 00:01:58,559 Adam Lang: news and this story is exactly that. Superannuation is proving 37 00:01:58,559 --> 00:02:00,479 Adam Lang: to be a very smart place to put your money, 38 00:02:00,750 --> 00:02:03,240 Adam Lang: or at least it has been. While the median growth 39 00:02:03,240 --> 00:02:06,660 Adam Lang: fund on average went backwards last month, the performance for 40 00:02:06,660 --> 00:02:09,060 Adam Lang: the financial year so far in the face of so 41 00:02:09,060 --> 00:02:12,330 Adam Lang: much economic and political uncertainty is impressive. And this is 42 00:02:12,330 --> 00:02:15,629 Adam Lang: according to research house Chant West. A growth fund has 43 00:02:15,630 --> 00:02:20,579 Adam Lang: between 61% and 80% in growth assets. That's things like equities, private 44 00:02:20,580 --> 00:02:23,879 Adam Lang: debt, property, private equity and things like that. At this 45 00:02:23,879 --> 00:02:27,960 Adam Lang: point it looks like five straight months of positive returns. 46 00:02:28,050 --> 00:02:31,650 Adam Lang: Now, there was a 1. 7% decline in April and 47 00:02:31,650 --> 00:02:34,859 Adam Lang: then another positive return this month. So if this lasts, 48 00:02:34,860 --> 00:02:38,610 Adam Lang: the return for patient, long- term investors in super over 49 00:02:38,610 --> 00:02:42,419 Adam Lang: two years will be a very impressive 18%. Over the 50 00:02:42,419 --> 00:02:46,080 Adam Lang: longer term, superannuation funds continue to meet their return and risk 51 00:02:46,080 --> 00:02:49,350 Adam Lang: objectives, and according to Chant West are set to post 52 00:02:49,350 --> 00:02:53,370 Adam Lang: a 13th positive year out of 15 years. High growth 53 00:02:53,370 --> 00:02:56,279 Adam Lang: funds have posted a 10% return over the past year, 54 00:02:56,549 --> 00:03:01,049 Adam Lang: while more conservative balanced funds have 6.3% on average. 55 00:03:01,470 --> 00:03:06,570 Michael Thompson: Adam, compulsory super, which was introduced in 1992, and I'm 56 00:03:06,570 --> 00:03:07,740 Michael Thompson: sure you remember it well- 57 00:03:07,740 --> 00:03:07,771 Adam Lang: I do. 58 00:03:07,771 --> 00:03:12,029 Michael Thompson: ... has proven a real success, hasn't it? Not just 59 00:03:12,030 --> 00:03:15,450 Michael Thompson: because people have to save for retirement, but also because 60 00:03:15,450 --> 00:03:18,000 Michael Thompson: super products have actually provided good returns. 61 00:03:18,119 --> 00:03:21,150 Adam Lang: Yeah, Michael, I think it's changed the financial texture of 62 00:03:21,150 --> 00:03:24,630 Adam Lang: the country. And since the introduction of compulsory super, the 63 00:03:24,630 --> 00:03:28,590 Adam Lang: median growth fund has returned 7. 9% per year, and 64 00:03:28,590 --> 00:03:31,830 Adam Lang: that's according to Charge West as well. The annual inflation 65 00:03:31,830 --> 00:03:35,520 Adam Lang: increase over the same period is 2. 7%. So you balance 66 00:03:35,520 --> 00:03:38,339 Adam Lang: those out and you get a real return of 5. 67 00:03:38,340 --> 00:03:41,790 Adam Lang: 2% per year, and that's well above the typical 3. 68 00:03:42,060 --> 00:03:45,389 Adam Lang: 5% target. Even looking at the past 20 years, and 69 00:03:45,389 --> 00:03:49,259 Adam Lang: that includes three massive share market downturns that was the 70 00:03:49,259 --> 00:03:55,890 Adam Lang: GFC in 2007 to 2009, COVID-19 in 2020, and the high inflation and rising 71 00:03:55,890 --> 00:04:01,380 Adam Lang: interest rates of 2022, superannuation funds have returned 7.2% per 72 00:04:01,380 --> 00:04:05,310 Adam Lang: annum. Super is all about long- term and patient investing. 73 00:04:05,429 --> 00:04:08,458 Adam Lang: And Michael, as we've seen in this report, it's working. 74 00:04:09,299 --> 00:04:13,860 Michael Thompson: I was six when compulsory super came in, Adam. I 75 00:04:15,300 --> 00:04:17,729 Michael Thompson: don't remember our year one teacher talking about it a 76 00:04:17,730 --> 00:04:20,909 Michael Thompson: huge amount that year, but I'm sure it was a 77 00:04:20,910 --> 00:04:21,930 Michael Thompson: big year, obviously. 78 00:04:22,139 --> 00:04:26,190 Adam Lang: Yeah, Michael, I'd just done an economics degree in 1992 79 00:04:26,190 --> 00:04:28,110 Adam Lang: and it was great news. 80 00:04:28,859 --> 00:04:33,720 Michael Thompson: And as someone who is enthusiastic, a passionate supporter of 81 00:04:33,720 --> 00:04:35,190 Michael Thompson: any kind of reform- 82 00:04:35,250 --> 00:04:36,661 Adam Lang: Still enthusiastic, you bet. 83 00:04:36,661 --> 00:04:40,139 Michael Thompson: ... compulsory superannuation kind of fits squarely into that category, 84 00:04:40,139 --> 00:04:40,530 Michael Thompson: doesn't it? 85 00:04:40,559 --> 00:04:42,899 Adam Lang: It does, Michael, and look at, these results are one 86 00:04:42,900 --> 00:04:45,540 Adam Lang: of the many reasons why I'm so pro reform. This 87 00:04:45,540 --> 00:04:48,270 Adam Lang: was a profound change for the country and we're in 88 00:04:48,270 --> 00:04:49,320 Adam Lang: much better shape for it. 89 00:04:50,160 --> 00:04:52,740 Michael Thompson: It's definitely worth mentioning if you haven't listened. If you 90 00:04:52,740 --> 00:04:56,010 Michael Thompson: don't normally listen to the Fear & Greed weekend edition, give 91 00:04:56,010 --> 00:04:57,990 Michael Thompson: it a go. Either listen to the one that's just 92 00:04:57,990 --> 00:05:00,599 Michael Thompson: gone or stick it in your calendar to listen this 93 00:05:00,599 --> 00:05:05,070 Michael Thompson: coming weekend because it's usually me versus Sean. We each 94 00:05:05,070 --> 00:05:07,589 Michael Thompson: nominate a big story of the week and our favorite 95 00:05:07,589 --> 00:05:09,510 Michael Thompson: business story, all these kinds of things, and Adam is 96 00:05:09,510 --> 00:05:13,950 Michael Thompson: the adjudicator and this passion for reform just seeps through 97 00:05:13,950 --> 00:05:16,320 Michael Thompson: so many different things and really, you can learn to 98 00:05:16,320 --> 00:05:18,659 Michael Thompson: play the judge quite effectively if you pick any story 99 00:05:18,660 --> 00:05:19,409 Michael Thompson: about reform. 100 00:05:19,559 --> 00:05:22,320 Adam Lang: Michael, I was at dinner with some friends on Saturday 101 00:05:22,320 --> 00:05:25,650 Adam Lang: night and many of whom are listeners and I was 102 00:05:25,650 --> 00:05:30,390 Adam Lang: absolutely lobbied by them for the weekend edition. And look, 103 00:05:30,390 --> 00:05:32,219 Adam Lang: I got a lot of feedback, shall I say, over 104 00:05:32,220 --> 00:05:33,390 Adam Lang: my judging performance. 105 00:05:33,839 --> 00:05:36,000 Michael Thompson: Excellent. That is good because this is the kind of 106 00:05:36,000 --> 00:05:39,659 Michael Thompson: environment where it is okay to provide very, very, very 107 00:05:39,690 --> 00:05:42,000 Michael Thompson: direct kind of encouragement. 108 00:05:42,059 --> 00:05:44,190 Adam Lang: Constructive feedback always, yes. 109 00:05:44,250 --> 00:05:47,610 Michael Thompson: Indeed. All right, checking markets now, Adam, the local share 110 00:05:47,610 --> 00:05:53,428 Michael Thompson: market closed down naught 0. 9% on Friday to 7, 814 points, ending 111 00:05:53,428 --> 00:05:56,460 Michael Thompson: a pretty topsy- turvy week really. For the full week, 112 00:05:56,460 --> 00:05:57,450 Michael Thompson: the market was almost 1%. 113 00:05:58,379 --> 00:06:01,890 Adam Lang: Michael, it was an absolute rollercoaster. Tech stocks, healthcare and 114 00:06:01,890 --> 00:06:05,010 Adam Lang: property companies were sold off hardest on Friday while the 115 00:06:05,010 --> 00:06:09,659 Adam Lang: material sector did best. WiseTech Global, CSL, Wesfarmers, QBE and 116 00:06:10,020 --> 00:06:13,799 Adam Lang: REA Group were among the worst performers. Commonwealth Bank, Macquarie 117 00:06:13,799 --> 00:06:16,888 Adam Lang: and Woodside also fell sharply. The big miners were the 118 00:06:16,889 --> 00:06:19,950 Adam Lang: best performers on the back of solid iron ore prices 119 00:06:19,950 --> 00:06:23,070 Adam Lang: and that was reflecting hopes that the Chinese government will 120 00:06:23,070 --> 00:06:25,680 Adam Lang: do more to help their country's struggling property sector. 121 00:06:26,099 --> 00:06:29,820 Michael Thompson: And in international markets, thanks to BlueChip Communication, the experts 122 00:06:29,820 --> 00:06:34,080 Michael Thompson: helping financial services companies market, communicate and grow, visit bluechipcommunication. com. 123 00:06:35,400 --> 00:06:37,830 Michael Thompson: au, Adam, a big milestone for Wall Street. 124 00:06:37,980 --> 00:06:41,220 Adam Lang: That's right, Michael. The Dow Jones Industrial Average closed above 40, 125 00:06:41,250 --> 00:06:44,820 Adam Lang: 000 points for the first time over the weekend. All 126 00:06:44,849 --> 00:06:48,360 Adam Lang: three major US indices set records last week, although in 127 00:06:48,360 --> 00:06:52,650 Adam Lang: the final session, the S&P 500 closed up just 0. 1%, and 128 00:06:52,650 --> 00:06:55,950 Adam Lang: the tech heavy Nasdaq slipped by the same amount. Both 129 00:06:55,950 --> 00:06:59,400 Adam Lang: recorded their fourth straight week of gains. They were, of 130 00:06:59,400 --> 00:07:03,059 Adam Lang: course, fueled by growing expectations of interest rate cuts by 131 00:07:03,059 --> 00:07:05,969 Adam Lang: the Federal Reserve this year following the better than expected 132 00:07:05,969 --> 00:07:08,820 Adam Lang: inflation numbers on Thursday. It was a good week elsewhere 133 00:07:08,820 --> 00:07:12,720 Adam Lang: too and markets in Japan, Europe and Canada, climbing near 134 00:07:12,720 --> 00:07:15,840 Adam Lang: the historical peaks. And Michael, gold is trading around 2, 135 00:07:15,840 --> 00:07:19,710 Adam Lang: 420 US dollars an ounce. Crude oil is sitting at 136 00:07:19,710 --> 00:07:22,860 Adam Lang: about $ 80 US a barrel, and we start the week 137 00:07:22,860 --> 00:07:26,160 Adam Lang: with the Aussie dollar trading just a touch under 67 138 00:07:26,160 --> 00:07:26,909 Adam Lang: US cents. 139 00:07:27,299 --> 00:07:28,739 Michael Thompson: All right, we have a bit to get through this 140 00:07:28,740 --> 00:07:30,660 Michael Thompson: morning. We'll be back in a moment with the rest 141 00:07:30,660 --> 00:07:41,520 Michael Thompson: of the day's business news. Adam, corporate regulator ASIC has 142 00:07:41,520 --> 00:07:45,390 Michael Thompson: put Australia's banks on notice, saying that some lenders, quote, " 143 00:07:45,599 --> 00:07:49,590 Michael Thompson: effectively abandoned customers who are struggling with the cost of 144 00:07:49,590 --> 00:07:53,490 Michael Thompson: living crisis." ASIC says some home loan lenders have made 145 00:07:53,490 --> 00:07:58,200 Michael Thompson: accessing financial assistance so hard that more than one in 146 00:07:58,200 --> 00:08:01,710 Michael Thompson: three Australians actually dropped out of the application process at 147 00:08:01,710 --> 00:08:02,490 Michael Thompson: least once. 148 00:08:02,849 --> 00:08:06,570 Adam Lang: Michael, this is pretty alarming. ASIC reviewed 10 large home 149 00:08:06,570 --> 00:08:10,590 Adam Lang: lenders, including the big four banks, Macquarie, Bendigo and Adelaide, ING and 150 00:08:10,590 --> 00:08:13,080 Adam Lang: a couple of non- bank lenders and found that they 151 00:08:13,080 --> 00:08:16,110 Adam Lang: should be doing more to support Australians struggling to meet their 152 00:08:16,110 --> 00:08:19,799 Adam Lang: repayments. The report also found that 40% of customers who 153 00:08:19,799 --> 00:08:23,400 Adam Lang: receive hardship assistance through a reduction or deferral of payments 154 00:08:23,850 --> 00:08:27,600 Adam Lang: fell into arrears again right after the assistance period ended. 155 00:08:27,900 --> 00:08:30,810 Adam Lang: And there are more customers needing help. In the last 156 00:08:30,810 --> 00:08:34,108 Adam Lang: quarter of 2023, there was a 54% increase in the 157 00:08:34,110 --> 00:08:37,259 Adam Lang: number of people contacting their lenders about having difficulty making 158 00:08:37,259 --> 00:08:40,949 Adam Lang: their home loan repayments. And Michael, ASIC actually warned lenders 159 00:08:40,949 --> 00:08:43,830 Adam Lang: last year that they needed to meet their obligations to customers 160 00:08:43,830 --> 00:08:48,390 Adam Lang: experiencing financial hardship before even conducting the review. Chair Joe 161 00:08:48,390 --> 00:08:51,510 Adam Lang: Longo has once again put lenders on notice saying that, 162 00:08:51,570 --> 00:08:55,348 Adam Lang: where appropriate, ASIC will not hesitate to take enforcement action. 163 00:08:55,920 --> 00:08:58,949 Michael Thompson: And Adam, I thought it was also interesting the reasons 164 00:08:59,010 --> 00:09:02,910 Michael Thompson: that customers gave for being in home loan hardship. The 165 00:09:02,910 --> 00:09:05,429 Michael Thompson: top five reasons in the 18 months to the end 166 00:09:05,429 --> 00:09:12,240 Michael Thompson: of December were overcommitment, reduced income, medical unemployment and separation 167 00:09:12,240 --> 00:09:15,389 Michael Thompson: of a relationship. But really, the fact that overcommitment was 168 00:09:15,389 --> 00:09:17,429 Michael Thompson: number one, and then of course, if you are kind 169 00:09:17,429 --> 00:09:20,309 Michael Thompson: of stretched to the absolute limit on your mortgage and 170 00:09:20,309 --> 00:09:22,650 Michael Thompson: then these rates are climbing and climbing and climbing across 171 00:09:22,650 --> 00:09:26,069 Michael Thompson: that 18 months, really you can see why people would've 172 00:09:26,070 --> 00:09:28,619 Michael Thompson: been going to their bank saying, " Look, I need help." 173 00:09:28,619 --> 00:09:31,919 Adam Lang: And Michael, as you mentioned those things, it really adds 174 00:09:31,920 --> 00:09:35,369 Adam Lang: texture to what cost of living pressure looks like for 175 00:09:35,369 --> 00:09:38,130 Adam Lang: every individual. There can be different reasons behind them. 176 00:09:38,610 --> 00:09:41,250 Michael Thompson: And another interesting point that I saw in the report, 177 00:09:41,520 --> 00:09:43,679 Michael Thompson: Adam, was the fact that a lot of households are 178 00:09:43,679 --> 00:09:47,129 Michael Thompson: able to withstand one incident. So say it's a two- 179 00:09:47,130 --> 00:09:50,910 Michael Thompson: income household and it drops back to one income for 180 00:09:50,910 --> 00:09:53,099 Michael Thompson: a period, then a lot of households are actually able 181 00:09:53,100 --> 00:09:55,530 Michael Thompson: to weather that kind of storm. But you add in 182 00:09:55,530 --> 00:09:58,650 Michael Thompson: another factor, the cost of living crisis, and all of 183 00:09:58,650 --> 00:10:01,290 Michael Thompson: a sudden it is just too much for a household 184 00:10:01,290 --> 00:10:03,569 Michael Thompson: to bear and that is the trigger for them reaching 185 00:10:03,570 --> 00:10:04,140 Michael Thompson: out for help. 186 00:10:04,440 --> 00:10:07,679 Adam Lang: Yeah, it's like there's no margin for error, no buffer 187 00:10:07,889 --> 00:10:10,800 Adam Lang: there, and you can understand how that pressure manifests itself. 188 00:10:10,949 --> 00:10:13,800 Michael Thompson: Yeah, it was a really, really interesting report from ASIC 189 00:10:13,800 --> 00:10:16,319 Michael Thompson: on this one and fascinating that they're putting the banks 190 00:10:16,320 --> 00:10:19,920 Michael Thompson: on notice. Adam, it was a very soft weekend for 191 00:10:19,920 --> 00:10:22,439 Michael Thompson: auctions. We love looking at the auction clearance rate. The 192 00:10:22,440 --> 00:10:26,009 Michael Thompson: lowest preliminary clearance rate so far this year equal, in 193 00:10:26,009 --> 00:10:30,509 Michael Thompson: fact, to the Easter long weekend, CoreLogic reported the clearance 194 00:10:30,510 --> 00:10:33,120 Michael Thompson: rate across the capital cities came in at 71. 1%. 195 00:10:33,750 --> 00:10:35,730 Michael Thompson: That's down one and a half percent on last week. 196 00:10:35,820 --> 00:10:38,699 Adam Lang: Yeah, Michael. And there were actually fewer auctions held this 197 00:10:38,700 --> 00:10:43,020 Adam Lang: weekend, with 2, 086 properties going under the hammer nationwide. That's 198 00:10:43,020 --> 00:10:46,409 Adam Lang: down about 250 properties on last week, but up on 199 00:10:46,410 --> 00:10:49,169 Adam Lang: the same time last year. And taking a quick look 200 00:10:49,170 --> 00:10:52,110 Adam Lang: at the capitals, Sydney's preliminary clearance rate came in at 201 00:10:52,110 --> 00:10:56,130 Adam Lang: 74.9 and that's the city's lowest percentage in four weeks. 202 00:10:56,340 --> 00:11:01,589 Adam Lang: Melbourne had 68. 4%, Brisbane, 69. 6, almost 80% in 203 00:11:01,590 --> 00:11:05,789 Adam Lang: Adelaide and just 57.1 in Canberra, and that's the lowest 204 00:11:05,789 --> 00:11:06,419 Adam Lang: since February. 205 00:11:07,260 --> 00:11:12,000 Michael Thompson: Westpac will require salaried workers earning up to $ 140,000 a 206 00:11:12,000 --> 00:11:15,960 Michael Thompson: year to fill out time sheets, but it isn't apparently 207 00:11:15,960 --> 00:11:18,689 Michael Thompson: to check on the employees, but to make sure that 208 00:11:18,690 --> 00:11:22,319 Michael Thompson: the bank itself is not underpaying staff when they work 209 00:11:22,320 --> 00:11:23,280 Michael Thompson: excessive hours. 210 00:11:23,549 --> 00:11:25,410 Adam Lang: Michael, do you reckon it's like the old Bundy clock, 211 00:11:25,410 --> 00:11:26,280 Adam Lang: they clock in and clock out? 212 00:11:26,280 --> 00:11:26,490 Michael Thompson: Yes. 213 00:11:26,520 --> 00:11:29,310 Adam Lang: Or is there a digital form of keeping these records? 214 00:11:29,400 --> 00:11:31,350 Michael Thompson: Yeah, it's fascinating, isn't it? 215 00:11:31,410 --> 00:11:34,468 Adam Lang: It is. It's like one from another age. The bank 216 00:11:34,469 --> 00:11:37,650 Adam Lang: told staff about the time cards for employees that earn 217 00:11:37,650 --> 00:11:41,490 Adam Lang: salaries between 90 and $ 140,000, and that's including all payment 218 00:11:41,490 --> 00:11:44,370 Adam Lang: and conditions. They want the staff to record their actual 219 00:11:44,400 --> 00:11:48,238 Adam Lang: hours worked and ensure they receive the right entitlements. It's 220 00:11:48,240 --> 00:11:51,330 Adam Lang: part of a broader change across the sector, following concerns 221 00:11:51,330 --> 00:11:55,500 Adam Lang: that large amounts of unpaid overtime, meaning employees pay risks 222 00:11:55,500 --> 00:11:59,218 Adam Lang: dipping below the minimum hourly rates. The Australian Financial Review 223 00:11:59,219 --> 00:12:01,920 Adam Lang: is reporting that other banks and firms are either considering 224 00:12:01,920 --> 00:12:05,070 Adam Lang: or already require salaried staff to record their hours. The 225 00:12:05,070 --> 00:12:08,789 Adam Lang: Finance Sector Union, which is seeking further safeguards on overtime 226 00:12:08,790 --> 00:12:11,968 Adam Lang: in negotiations for a new agreement with Westpac, they welcome 227 00:12:11,969 --> 00:12:12,720 Adam Lang: the bank's move. 228 00:12:13,320 --> 00:12:16,949 Michael Thompson: Lendlease Chairman Michael Ullmer will step down after more than 229 00:12:16,949 --> 00:12:19,679 Michael Thompson: 10 years in the role as the company continues to 230 00:12:19,679 --> 00:12:23,550 Michael Thompson: battle investors and the tax office. Lendlease has been a 231 00:12:23,640 --> 00:12:27,300 Michael Thompson: very poorly performing company for a long time with strategic 232 00:12:27,300 --> 00:12:31,590 Michael Thompson: overhauls seemingly not working and large investors have been after 233 00:12:31,620 --> 00:12:32,850 Michael Thompson: Mr. Ullmer for a while. 234 00:12:33,389 --> 00:12:36,270 Adam Lang: Yeah, Michael, The Financial Review is reporting that Mr. Ullmer 235 00:12:36,270 --> 00:12:38,940 Adam Lang: is expected to announce his departure at a briefing this 236 00:12:38,940 --> 00:12:41,640 Adam Lang: month when Lendlease is due to update the market on 237 00:12:41,640 --> 00:12:45,088 Adam Lang: its strategy. A spokesman for Lendlease said the board renewal 238 00:12:45,090 --> 00:12:48,569 Adam Lang: process was underway and well advanced. Mr. Ullmer, a former 239 00:12:48,570 --> 00:12:53,129 Adam Lang: KPMG partner, was National Australia Bank's Deputy Chief Executive and 240 00:12:53,129 --> 00:12:55,320 Adam Lang: sat on its board. He's also been a director at 241 00:12:55,320 --> 00:12:58,199 Adam Lang: Woolworths and Foster's Group and was appointed to the board 242 00:12:58,200 --> 00:13:01,710 Adam Lang: of Westpac in April last year. Lendlease's shares are down 243 00:13:01,710 --> 00:13:06,120 Adam Lang: nearly 50% over the past five years. Pressure intensified last 244 00:13:06,120 --> 00:13:09,690 Adam Lang: week when it said it had received a $ 112 million 245 00:13:09,990 --> 00:13:13,110 Adam Lang: bill from the Australian tax office relating to the sale of its 246 00:13:13,110 --> 00:13:16,710 Adam Lang: retirement business. Meanwhile, on Friday, Lendlease said it had agreed 247 00:13:16,710 --> 00:13:19,468 Adam Lang: to a deal to sell its life sciences interest in 248 00:13:19,470 --> 00:13:21,208 Adam Lang: Asia for $ 147 million. 249 00:13:22,080 --> 00:13:25,799 Michael Thompson: Another quick one from Friday, Adam, regional lender Bendigo Bank's 250 00:13:25,799 --> 00:13:29,819 Michael Thompson: share price jumped 8% even though profit was lower for 251 00:13:29,820 --> 00:13:31,319 Michael Thompson: the 10 months to the end of April. 252 00:13:31,500 --> 00:13:34,380 Adam Lang: Yeah, Michael, the good news is that credit expenses remain 253 00:13:34,380 --> 00:13:37,108 Adam Lang: at low levels and its net interest margin, and that's 254 00:13:37,110 --> 00:13:39,509 Adam Lang: the difference between what it earns on loans and pays 255 00:13:39,510 --> 00:13:43,468 Adam Lang: on deposits is 1. 87% and that's higher than some of 256 00:13:43,469 --> 00:13:45,779 Adam Lang: the big four banks. And while their margins are being 257 00:13:45,780 --> 00:13:50,790 Adam Lang: squeezed, Bendigo's has expanded. Also, the suspension of Star Entertainment's 258 00:13:50,790 --> 00:13:54,660 Adam Lang: Queensland casino licenses has been lengthened until December. 259 00:13:55,380 --> 00:13:59,608 Michael Thompson: Adam, dairy group Fonterra has put its Australian business, which 260 00:13:59,610 --> 00:14:01,980 Michael Thompson: accounts for much of the national milk supply up for 261 00:14:01,980 --> 00:14:05,340 Michael Thompson: sale as part of an overhaul of operations. This is 262 00:14:05,340 --> 00:14:09,210 Michael Thompson: a New Zealand headquartered company with brands including Western Star 263 00:14:09,210 --> 00:14:14,040 Michael Thompson: Butter, Mainland Cheese, and Perfect Italiano cheese, one of your favorites. 264 00:14:14,280 --> 00:14:17,160 Adam Lang: Absolutely. And Michael, as you may know, it has eight 265 00:14:17,190 --> 00:14:22,169 Adam Lang: manufacturing sites across Victoria and Tasmania, employing about 1, 600 people 266 00:14:22,350 --> 00:14:26,580 Adam Lang: and collects about 1. 4 billion liters of milk annually from 267 00:14:26,580 --> 00:14:30,000 Adam Lang: hundreds of Australian farmers. The sale of the Australian operators 268 00:14:30,000 --> 00:14:33,360 Adam Lang: is part of a divestment of its Oceania division. Now, 269 00:14:33,360 --> 00:14:36,780 Adam Lang: it is also considering selling its Sri Lankan business. The 270 00:14:36,780 --> 00:14:39,779 Adam Lang: company wants to focus on its core business of supplying 271 00:14:39,780 --> 00:14:41,370 Adam Lang: high value dairy ingredients. 272 00:14:42,090 --> 00:14:43,740 Michael Thompson: I love the fact that you just rolled with it 273 00:14:43,770 --> 00:14:46,230 Michael Thompson: when I said that Perfect Italiano cheese was one of 274 00:14:46,230 --> 00:14:47,191 Michael Thompson: your favorites, and you just said, absolutely. 275 00:14:47,191 --> 00:14:47,701 Adam Lang: I do love it. 276 00:14:48,270 --> 00:14:51,240 Michael Thompson: I have got absolutely nothing to base that on except 277 00:14:51,240 --> 00:14:53,309 Michael Thompson: for the fact that you're one of those odd people 278 00:14:53,309 --> 00:14:56,250 Michael Thompson: that will happily order cheese for dessert at a restaurant. 279 00:14:56,370 --> 00:14:57,149 Adam Lang: Oh, yes. 280 00:14:58,289 --> 00:15:00,750 Michael Thompson: I just assumed therefore that, hey, if it's cheese, it's 281 00:15:00,750 --> 00:15:01,979 Michael Thompson: going to be your favorite. But anyway. 282 00:15:01,980 --> 00:15:04,500 Adam Lang: Well it is, and look, even now, Michael, I'm thinking 283 00:15:04,500 --> 00:15:04,890 Adam Lang: about it 284 00:15:05,610 --> 00:15:08,400 Michael Thompson: At this hour of the morning, you're salivating for cheese. 285 00:15:08,550 --> 00:15:08,880 Adam Lang: Yep. 286 00:15:08,910 --> 00:15:11,520 Michael Thompson: Okay. All right. Learn something new about Adam Lang every 287 00:15:11,520 --> 00:15:14,790 Michael Thompson: time we do this show. Turning to international news now, 288 00:15:15,089 --> 00:15:17,490 Michael Thompson: this story, I suppose fits into the follow the money 289 00:15:17,639 --> 00:15:20,670 Michael Thompson: category that we talked a bit about on the podcast, 290 00:15:20,670 --> 00:15:22,830 Michael Thompson: and Sean wrote about it last week in the newsletter, 291 00:15:23,340 --> 00:15:28,200 Michael Thompson: Warren Buffett's Berkshire Hathaway has revealed a $6. 7 billion stake 292 00:15:28,230 --> 00:15:32,790 Michael Thompson: in insurer Chubb Limited. There's been months of speculation over 293 00:15:32,790 --> 00:15:35,699 Michael Thompson: Berkshire's mystery position in a financial firm, but it was 294 00:15:35,699 --> 00:15:37,770 Michael Thompson: finally disclosed last week. 295 00:15:38,160 --> 00:15:41,130 Adam Lang: Yes, Michael. The conglomerate has been building the stake since 296 00:15:41,130 --> 00:15:45,420 Adam Lang: 2023, but it hadn't previously been reported. Berkshire has been 297 00:15:45,420 --> 00:15:48,450 Adam Lang: building equity stakes in banks, insurance and finance company in 298 00:15:48,450 --> 00:15:52,199 Adam Lang: recent quarters while pulling back in other industries including consumer 299 00:15:52,199 --> 00:15:55,860 Adam Lang: products. Mr. Buffett, of course, is considered the best investor 300 00:15:55,860 --> 00:16:00,600 Adam Lang: of his generation, and Berkshire shares have gained 20% compound 301 00:16:00,630 --> 00:16:04,830 Adam Lang: on average every year since 1965. Amazing. 302 00:16:05,250 --> 00:16:08,160 Michael Thompson: That is amazing. Also amazing is the thought of you 303 00:16:08,160 --> 00:16:14,129 Michael Thompson: having to say Berkshire shares 20 times fast. Lucky this is 304 00:16:14,310 --> 00:16:17,910 Michael Thompson: a recording. I think we found ourselves a new financial 305 00:16:17,910 --> 00:16:20,700 Michael Thompson: tongue twister. All right. Just like Sean trying to say 306 00:16:20,700 --> 00:16:23,940 Michael Thompson: preliminary clearance rates, it just gets me every time. Just 307 00:16:24,570 --> 00:16:26,640 Michael Thompson: always love a good laugh at someone else's expense. 308 00:16:26,700 --> 00:16:28,169 Adam Lang: That's why you script it in. 309 00:16:28,230 --> 00:16:31,380 Michael Thompson: Yep, that's right. Finally, Adam, how about this one? We 310 00:16:31,380 --> 00:16:33,720 Michael Thompson: mentioned this at the top of the show. The world's 311 00:16:33,720 --> 00:16:38,730 Michael Thompson: super rich club now has 15 members with fortunes over 312 00:16:38,730 --> 00:16:41,429 Michael Thompson: a hundred billion dollars each. This is the most on 313 00:16:41,429 --> 00:16:45,299 Michael Thompson: record and it's largely thanks to artificial intelligence, luxury goods, 314 00:16:45,299 --> 00:16:49,800 Michael Thompson: and geopolitical shifts. The combined net worth for these people 315 00:16:49,800 --> 00:16:56,610 Michael Thompson: is up 13% this year to $ 2.2 trillion. According to 316 00:16:56,610 --> 00:16:59,880 Michael Thompson: the Bloomberg Billionaires Index, much higher than the pace of 317 00:16:59,880 --> 00:17:03,660 Michael Thompson: inflation and the broader stock market between them. Between them, 318 00:17:03,870 --> 00:17:06,810 Michael Thompson: they hold nearly a quarter of the wealth of the 319 00:17:06,810 --> 00:17:09,148 Michael Thompson: world's 500 richest people. 320 00:17:09,630 --> 00:17:13,680 Adam Lang: It's incredible. These numbers are staggering, aren't they? L'Oreal heiress 321 00:17:13,680 --> 00:17:18,659 Adam Lang: Francoise Betancourt Meyers, Dell Technologies Founder Michael Dell and Mexican 322 00:17:18,660 --> 00:17:21,990 Adam Lang: billionaire Carlos Slim have reached the milestone in the past 323 00:17:21,990 --> 00:17:25,290 Adam Lang: five months. Betancourt Meyers became the first woman to reach 324 00:17:25,290 --> 00:17:28,680 Adam Lang: the mark after shares of the luxury cosmetics company jumped. 325 00:17:29,010 --> 00:17:32,280 Adam Lang: Now, the 70- year- old ranks 14th on the index, 326 00:17:32,520 --> 00:17:36,299 Adam Lang: with a net worth of $ 101 billion. The top three 327 00:17:36,300 --> 00:17:40,170 Adam Lang: haven't changed. Number one is LVMH Founder and Chief Executive 328 00:17:40,170 --> 00:17:44,910 Adam Lang: Officer Bernard Arnault, Amazon Founder Jeff Bezos is second, and 329 00:17:44,910 --> 00:17:48,720 Adam Lang: at number three is Tesla's inimitable CEO Elon Musk. 330 00:17:49,230 --> 00:17:51,928 Michael Thompson: And Elon Musk is not far from us at the 331 00:17:51,929 --> 00:17:53,909 Michael Thompson: moment. When I say not far from us, he's in 332 00:17:53,910 --> 00:17:57,840 Michael Thompson: Indonesia. He's in Bali at the moment to inaugurate the 333 00:17:57,960 --> 00:18:04,320 Michael Thompson: Starlink system that they're going to be launching, making available to Indonesia. And 334 00:18:04,320 --> 00:18:06,600 Michael Thompson: he's in Bali for that at the moment. So when 335 00:18:06,600 --> 00:18:08,820 Michael Thompson: I say he's near us, he's closer to us now 336 00:18:08,820 --> 00:18:10,380 Michael Thompson: than he is when he is at home in the US. 337 00:18:10,410 --> 00:18:11,490 Adam Lang: He's in the hemisphere. 338 00:18:11,580 --> 00:18:16,138 Michael Thompson: Yes. Yeah, we'll claim that, won't we? Anyway, just thought 339 00:18:16,138 --> 00:18:18,479 Michael Thompson: I'd toss that one in there as a little bonus story. 340 00:18:18,480 --> 00:18:21,359 Adam Lang: Will you be watching the skies for Starlink, Michael? 341 00:18:21,450 --> 00:18:24,958 Michael Thompson: I watch the skies every time I'm outside, Adam. I 342 00:18:24,960 --> 00:18:27,210 Michael Thompson: just, every time. And you will be amazed at the 343 00:18:27,210 --> 00:18:29,940 Michael Thompson: number of satellites that you will see cruising by in 344 00:18:29,940 --> 00:18:33,839 Michael Thompson: the International Space Station and, if you are lucky, you 345 00:18:33,839 --> 00:18:37,320 Michael Thompson: might see a Starlink chain cruising over and it really is- 346 00:18:37,320 --> 00:18:38,550 Adam Lang: It's pretty cool, isn't it? 347 00:18:38,609 --> 00:18:40,830 Michael Thompson: Yeah. No matter what you think of Elon Musk, it 348 00:18:40,830 --> 00:18:42,360 Michael Thompson: is a spectacular thing to see. 349 00:18:42,390 --> 00:18:44,400 Adam Lang: Oh yeah, the technology's amazing. 350 00:18:44,460 --> 00:18:47,070 Michael Thompson: Indeed. All right, up next is the Fear & Greed Daily 351 00:18:47,070 --> 00:18:50,760 Michael Thompson: Interview, and today Sean Aylmer is speaking with Gaurav Sodhi 352 00:18:50,790 --> 00:18:54,180 Michael Thompson: from Intelligent Investor. Terrific look at lithium and the Aussie 353 00:18:54,240 --> 00:18:56,070 Michael Thompson: companies in that space, as well as a few other 354 00:18:56,070 --> 00:18:58,710 Michael Thompson: resources like nickel. It is a great one for investors. 355 00:18:58,710 --> 00:19:01,920 Michael Thompson: And after that, Adam, check out Fear & Greed, The Week 356 00:19:01,920 --> 00:19:05,250 Michael Thompson: Ahead with our resident economist, Stephen Koukoulas, who had a 357 00:19:05,250 --> 00:19:08,099 Michael Thompson: massive week last week, a relatively quiet week this week 358 00:19:08,670 --> 00:19:12,688 Michael Thompson: now coming on the economics front, but he gives us 359 00:19:12,719 --> 00:19:15,119 Michael Thompson: his full take on everything that happened last week from 360 00:19:15,119 --> 00:19:17,609 Michael Thompson: the budget to the labor force figures and the inflation 361 00:19:17,609 --> 00:19:20,160 Michael Thompson: data out of the US. It is a great listen, 362 00:19:20,160 --> 00:19:20,760 Michael Thompson: as always. 363 00:19:21,179 --> 00:19:24,270 Adam Lang: Absolutely. And Stephen really explains it so well. 364 00:19:24,509 --> 00:19:27,000 Michael Thompson: Yeah, he certainly does. Both of those are up next 365 00:19:27,000 --> 00:19:29,430 Michael Thompson: in the Fear & Greed playlist on your podcast platform or 366 00:19:29,430 --> 00:19:31,650 Michael Thompson: at fearandgreed. com. au, which is where you can sign 367 00:19:31,650 --> 00:19:33,720 Michael Thompson: up for that Fear & Greed newsletter that I've mentioned now 368 00:19:33,720 --> 00:19:35,638 Michael Thompson: I think three times. Thank you, Adam. 369 00:19:35,940 --> 00:19:36,870 Adam Lang: Oh, thank you, Michael. 370 00:19:37,020 --> 00:19:40,379 Michael Thompson: It's Monday, the 20th of May, 2024. Make sure you're 371 00:19:40,380 --> 00:19:44,668 Michael Thompson: following the podcast and please join us online on LinkedIn, Instagram, X, TikTok, 372 00:19:44,670 --> 00:19:47,550 Michael Thompson: and Facebook. I'm Michael Thompson and that was Fear & Greed. 373 00:19:47,879 --> 00:19:48,539 Michael Thompson: Have a great day.