The Mike Hosking Breakfast

Paul Conway, the BNZ’s new chief economist, he reminds me of the Australian Reserve Bank’s deputy governor a number of years back who famously said, upon the country entering a recession, that recessions can be good because it shakes out the shonky companies that weren’t up to much any way.
Conway, speaking to the NZ Herald, used an economist’s term: creative destruction. While you’re there look up the story of the brewery owner on the West Coast who has to sell after his quote-unquote “year of hell” due to the closed borders.
And in the two stories is the collision of theory vs reality.
Conway is right on several fronts: it’s always darkest before the dawn. And this country is in real trouble right now and too many don’t see it yet because of the Ardern fawning that’s gone on due to the singular trick that was pulled off a year back of locking the country up.
By the time they did that and then instilled enough fear in enough people, some tragically genuinely believed the fact they weren’t dead is the entire prize they needed.
The fact that tens of thousands were having their lives tipped upside down was secondary to the fear ridden pedalling the mantra that lives were saved.
The cost of the health obsession is now being played out economically, and this crunch time that Conway talks of will be seen in the GDP figures in at least two quarters to come.
We are stuck; we are treading water at best, slowly sinking more likely. It’s quite possibly a recession.
But - big but - the creative destruction Conway talks of is not shabby businesses that never really should have existed, it’s not fringe traders barely getting by.
Its guys like the brewery owner that - here’s the key - through no fault of their own got destroyed. Borders aren’t their fault; their predicament has been foisted upon them.
These weren’t all touch and go operations; these were viable successful growing businesses with bright futures. There is never any good reason to see good businesses go down.
There is nothing creative about their destruction in this case, especially as time goes on and things like bubbles don’t get under way, and we are still yo-yoing in and out of lockdown having not changed our Covid procedures one jot.
You could argue it political mismanagement; it’s an incompetence wrecking ball that’s doing them in.
The grit of structural change, as Conway puts it, is way worse because of the people who made the decisions were not being up for it, and as a result, some poor bloke on the West Coast is done for and he is part of a very long and growing line.

Ashley Campbell is the daughter of the late, great Glen Campbell - who died of alzheimers in 2017.
He's sold more than 45 million records worldwide, and released 64 albums.
And Ashley, his youngest daughter, has followed in his footsteps - joining her Dad on his farewell tour a decade ago and releasing her own albums.
Ashley Campbell joins Mike Hosking from Nashville.
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Tinder is getting a tick of approval for its latest attempt to improve the safety of users.
It's trialling a new vetting system in the United States, allowing users to check if a person has a criminal record or restrictions like a restraining order.
It follows several high-profile incidents, including the death of UK backpacker Grace Millane on a Tinder date in Auckland in 2018.
Women's Refuge chief executive Dr Ang Jury told Mike Hosking apps can tick off legal boxes - but relationship will not always be so black and white.
Consent is a "moving thing", she said, and people can withdraw it after they have given it.
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One thing was certain after Team New Zealand retained the America’s Cup on Wednesday: beaten Italian challenger Luna Rossa will be back to try again.
The team has twice reached the America’s Cup match and on both occasions — 20 years apart — has lost to the defender, Team New Zealand, in the waters around Auckland.
On the first occasion in 2000, it lost 5-0 in a best-of-nine race series. On Wednesday, its latest pursuit of the America’s Cup ended when it was beaten 7-3 by Team New Zealand in the 36th America’s Cup match, a best-of-13-race series.
While there was an immediate sense of disappointment when Team New Zealand crossed the line to win the deciding race by 46 seconds to retain the Cup, there didn't appear to be any dejection within the Italian team. Instead, there were nascent signs of a new determination to challenge again, whether it be in three or four years time, in New Zealand or elsewhere.
The first step will be to keep together the nucleus of the team and retain the support of its principal backer, the Prada fashion magnate Patrizio Bertelli, who has followed many other wealthy people in being captured by the lure of the Cup.
“I can say it’s not finished and I’m sure Luna Rossa and Mr. Bertelli will try again,” Luna Rossa co-helmsman Francesco Bruni said. “We were so close. We learned so much. I really wish we have another chance. We demonstrated we are a great team.
“Losing is never fun, but I think the spirit of the team was the best thing. It’s been a great campaign, a great campaign.”
Luna Rossa skipper Max Sirena was more confident.
“Luna Rossa will keep going for sure,” Sirena said. “That's what Mr. Bertelli told me.”
From the seventh race, when Team New Zealand pulled off the first pass of the series — and perhaps before — Luna Rossa knew the defender had a faster boat. That may be the worst experience an America’s Cup sailor can have: to know no matter what the crew does, if they make no mistakes and sail to the limits of their ability that they likely will still lose.
“To be honest it felt like we were taking a knife to a gun fight,” co-helmsman Jimmy Spithill said, adding that Team New Zealand “did an incredible job, developed an incredible tool and package.”
“All you can do is tip your hat, just say ‘really well done’ to them,” he said. "Champion team and really deserving champions.”
Bruni agreed.
“We made some mistakes but we were against a very strong team, a very strong boat,” Bruni said. “We squeezed every centimeter from our boat but it was not enough. Congratulations Team New Zealand.”
Spithill said Luna Rossa “just refused to give up," going back the racecourse over six days with the confidence they could win races and stretch the match further.
“Everyone on board and the guys ashore, every day we believed we could win races and take it one at a time," he said. "But at the end of the day the better team won.”
Spithill indicated his involvement with the America's Cup is not over, that his future may be with Luna Rossa, which had embraced the Australian sailor as one of a few non-Italians in the team.
“I love a fight, I live competing,” he said. “That’s my fourth Cup final in a row. Two wins, two losses, I can’t leave it there. I just have to tip it the right way.”

THE BEST BITS IN A SILLIER PACKAGE (from Thursday's Mike Hosking Breakfast) Even If It Isn't Actually a Cup/The Two Tales of the Post Covid Economy/Getting Your Head Around AfterPay

There are so many facets to the Team New Zealand's America's Cup success.
Yes, it’s a contest, a competition, and someone wins.
But what made the America's Cup such a gripping prospect for me all those years ago in Fremantle, when I first got gripped, was the big picture.
I'm not a yachtie, I'm not even a big fan of the water, but what the America's Cup has always been about, especially for a country like ours, is what we can do with it, how we leverage it, and what we make of it.
Through all the dramas, tantrums, and egos over the years ultimately, it's about technology. It's about aspiration. It's about dreaming. It's about wanting to be bigger and the best. The fact it's got yachts involved is secondary to the real story.
Auckland and its viaduct were packed yesterday as it has been a number of times over the years. And it looks the way it does because of the America's Cup. A city's waterfront was transformed because of the dream.
The industry that’s grown as a result of it. Our heritage and passion for the water has made this country billions in design and technology and super yacht refits.
Every single day, bar one, in this regatta the sky was blue. And the pictures sent to the world were greater than any marketing campaign Tourism New Zealand ever came up with. This country, visually, is a showstopper.  
We're the little guy battling the super heavyweights. INEOS Team UK, look them up, study who they are, look at their size. They had Mercedes on board, and they had Airbus on board. Luna Rossa had Pirelli. Say whatever you like about Italy, but the industrial capacity of the Italians is never to be underestimated.
We face and beat industrial giants with pocketbooks we can only dream off. We did it this time, and we've done it before. We e have changed the face of the sport. We have made boats fly. We have made foiling the norm, and the future.
Every time this happens, I hope that just a few more of the doubters finally get it. How many wins and success before the doubters close up shop and go home convinced?
Another great day for Team New Zealand, another great day for this country, another reminder that in an age and time of hardship, uncertainty, and some angst, great minds, big dreams, and ambition when executed well beat everything.

First, France abruptly halted AstraZeneca vaccinations. Now, the French prime minister wants to get one as soon as he can.
With the virus rebounding from Paris to Budapest and beyond, European governments that rushed to suspend use of AstraZeneca vaccines after reports of blood clots are realising the far-reaching impact of the move. And they suddenly seem eager for any signal — or fig leaf — that allows them to resume the shots.
That could come as soon as Thursday, when the European Medicines Agency releases initial results of its investigations into whether there is a connection between the vaccine and the blood clots. So far, the EMA and World Health Organization have said there’s no evidence the vaccine is to blame.
But experts worry that the damage already has been done. The suspensions by Germany, France, Italy, Spain and others have fueled doubts about the oft-maligned AstraZeneca vaccine, and vaccination efforts in general, as the world struggles to vanquish the pandemic.
“There are thousands of new cases in Germany, France, Italy, etc. every day. If you are halting vaccination during this ongoing pandemic, you know that people will die,” Michael Head, senior research fellow in global health at the University of Southampton, told The Associated Press.
While stressing the importance of investigating potentially dangerous side effects, he said, “It’s totally possible to investigate the signals without stopping the vaccine rollout.”
Some countries are sticking to the AstraZeneca vaccines. India vowed Wednesday to continue vaccinations, hours before Brazil’s health minister celebrated the first doses of AstraZeneca bottled in the country.
New coronavirus cases grew 10% globally last week, driven by surges in Europe and the Americas, the WHO reported Wednesday, urging continued vaccinations.
“The disease is turning the corner in the wrong direction, and we need to get that under control," said Dr. Michael Ryan, the WHO emergencies chief. “We’re going to fall behind the virus again.”
Even before Thursday's announcement by Europe's medicines watchdog, the president of the European Commission made it clear that the AstraZeneca vaccine will remain a pillar of the EU’s vaccine strategy.
“I trust AstraZeneca, I trust the vaccines,” Ursula von der Leyen said.
Instead of addressing the vaccination suspensions that have divided the EU, von der Leyen focused on the drug company’s supply problems and revived talk of export bans on vaccines made in the EU.
“AstraZeneca has unfortunately under-produced and under-delivered, and this painfully, of course, reduced the speed of the vaccination campaign,” she told reporters. She said the EU still aims to vaccinate 70% of all adults by September.
But the suspensions of AstraZeneca shots in a cascading number of countries have served another setback to the EU’s vaccination drive, which has been plagued by shortages and other hurdles and is lagging well behind the campaigns in Britain and the U.S. More than half of the EU’s 15 million AstraZeneca doses so far are still in storage because of prior problems.
Almost as soon as France’s president froze the vaccinations Monday, top French officials started worrying about the impact on public opinion in a country where many already viewed the AstraZeneca vaccine as second-class and where vaccine skepticism is broad.
The government now hopes to announce resumed vaccinations as soon as Thursday. The Paris region is facing new lockdown measures this week as more contagious, more damaging virus variants have pushed intensive care units beyond capacity and sent infections resurging, despite a 6 p.m. nationwide curfew and the long-term closure of restaurants and many businesses.
French Prime Minister Jean Castex, who at age 55 and with no known underlying health problems is not eligible yet for a vaccination, said on national television Tuesday night that “it would be wise...

Economists are focusing on the big picture, even if the country records another drop in GDP this morning.
Stats NZ is releasing GDP figures for the three months to December, later this morning.
Some economists are predicting a modest fall in GDP, while others are expecting a slight increase.
Infometrics senior economist Brad Olsen told Mike Hosking we need to keep an open mind.
He says we're currently going through a roller-coaster period for the economy.
Some are predicting 0.3 drop for the last three months of 2020, while others are predicting a 0.5 percent rise.
Brad Olsen says it's really anyone's guess.
"There's the potential for economic activity to have edged ahead, but it's so volatile it could go either way."
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A man who sailed on two victorious America's Cup boats is adamant the event should stay in New Zealand.
40,000 people descended on Auckland’s waterfront to celebrate last night's victory.
Sailor and former coach, Joe Allen, told Mike Hosking we should keep it here and it should be sailed in the same boats.
He says it worked incredibly well and surprised a lot of old yachties.
"A lot people had their doubts about it, but it really was a breathtaking event."
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The voice of the America's Cup says yesterday will go down as one of the great days in the America's Cup history.
There was jubilation around the country yesterday when Team New Zealand kept the Cup out of the hands of Luna Rossa, with a resounding 7-3 win.
Peter Montgomery says the hometown support was amazing.
He told Mike Hosking the atmosphere on Auckland's Viaduct was electric.
PJ Montgomery says he couldn't believe the sea of faces that went back forever to the Maritime Museum.
"Yesterday was a very special day, the hometown support made it one of the great days of America's Cup racing."
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