KEY POINTS:
How has the credit crunch changed your world?
Dramatically and very publicly! The failure of PGG Wrightson (PGW) to be able to complete the first stage of settlement of the Silver Fern Farms transaction was the first real reminder to New Zealand that what was happening internationally
would have very real effects here as well.
Our timing couldn't have been worse, although I'd have to say that it has had the benefit of forcing PGW to focus very early on the changes that it needs to make to benefit from the opportunities that will be abundant in a couple of years from now.
Wherever possible I'm trying to help the companies I'm involved in prepare for those effects - it is a case of only the fittest surviving.
This usually means being far more rigorous about taking cost out of the business - even to the point of being prepared to lose some business where margins won't be sustainable over the next couple of years.
Importantly cash is king - more so than at any time in this generation - so crunching working capital and rationing investment capital is critical.
How serious is the current downturn in a historical context?
'Downturn' is too soft a word.
Liquidity is the oxygen of capitalism. There hasn't been a crisis of this proportion since the Great Depression.
The past decade of rampant expansion of credit - whether it be for individuals or companies - is over.
While most companies have already started to experience the effects, the credit crunch is only just starting to affect individuals and the real effects won't be seen in the domestic economy until mid 2009.
In that regard the impact will be far greater due to the fact that we've now got a generation that doesn't understand the scourge of unemployment.
Generation Y is about to find out what the difference between a want and a need really is.
What helps you put it in perspective and stay positive?
I'm always one to take a long-term view.
The source of the rampant liquidity growth of recent years was unsustainable, whether it be in the mathematics behind the financial derivatives or the impact on the world's resources.
While I think there's still a significant amount of bad news to emerge, history may well come to view this period as a necessary correction to an out-of-control society.
As companies and individuals we need to take our medicine.
Those that take enough of it early enough will come out of this period well placed to take advantage of low asset prices and much more rational investment opportunities.
And there's always a couple of immutable truths to remember - the sun came up again today and it will again tomorrow. And it will be agriculture that again leads this country out of the crap!
