 Okay, hello and welcome. It's Friday the 8th of October and Piers and I are back So many thanks to mr. Eddie don mess for covering us last week did a great job So I hope you enjoyed that episode and actually I was off for the whole week and One of the things I was doing was a little bit of research actually about podcasting And found out some interesting facts and you know for me You know we we've we've really done this podcast because people are asking for it A lot of the students were saying it'd be really great It's much easier for us to listen to it in a way that would fit around our lifestyle And yeah, sure with absolutely give it a go and actually I don't know about you, but I've really enjoyed podcasting Yeah, it's a lot. I agree. It's such an interesting format I guess You know, there's the trend on the one hand towards short and shorter and shorter and shorter and shorter content clips and you know the Instagram and Snapchat Sort of generation, but this obviously flips to exactly the opposite sort of idea So yeah long format. Yeah, it just means you can properly get Get get stuck into the topics and that's where you find the interesting stuff Yeah, for sure. And you know, one of the other things I was kind of trying to unearth was how these algorithms work in the background behind Now, how do you how do you top these charts in this podcast game? Yeah, if you're gonna take part you're in it to win it, right? So let's go. Let's go I want I want top of the table. How do we get so one of the things I was I was listening to in reading was about Ratings and reviews. So rather than just pure downloads and listens and streams Definitely for the Apple algorithm. That's how it's driven. And so I know we've got an amazing community and I would love for everyone to just step up to To the plate and we've currently got 61 Ratings on Apple podcast at the moment. I'm gonna put a target out there for us to hit by Christmas. So Go on Christmas. I was gonna say, can you pause the podcast right now and go and give us a rating that then come back? Brilliant. Yeah. So we should have beat we should have broken 61 or sorry, 100 already, right? Yeah, that's a timely drop at the beginning there. I see what you did there. So But yeah, if you well, welcome back to the podcast. But yeah, help us give us a bump. Get us to 100. It's a fairly ambitious target. Let's see if we can hit 100. How do you do it on Spotify? Well, that's why it doesn't have a rating system. So all you can do is subscribe. And the subscribing is what drives that algorithm. So I think we normally sit in top 20 of the business charts, which is which is great. But definitely want to want to make some headway. So yeah, Top 20. Top 20. That's not top one, is it? So we got in the UK business charts. Okay. All right. Well, it's room to move higher. So come on. Listen, get involved. This is this is team effort. Okay. Well, so in this podcast, then we're going to talk a little bit about, well, not a little bit, because we've got a lot about Facebook. It's been a It's been a real tricky week for Mr. Zuckerberg and the crew at Facebook. So we're going to talk about two real main sides of that conversation, one being something that I think pretty much. Well, they did half the world experienced, which was actually I did run the numbers actually at the time on Monday when all this happened and And so looking at users that they have. So there was around three and a half billion at monthly active users. And I was thinking to myself, okay, so that sounds like what half the world. But then actually I was thinking about how many people in the world actually have access to the internet or smartphone. Right. And actually, I was looking at the numbers in that way and you're talking more like 75 80% rather than the half It's insane. So yeah, it is just mind blowing. I mean, their shares on Monday fell about 5% was the biggest drop since November of 2020. I did see a lot of people and I really hate it when they do this. They do it with Elon Musk. They do it with Bezos and they do it with Zuckerberg one bad day in the market and they start spitt coining the headlines. Zuckerberg's just had 6 billion shaved off his personal wealth and you're like, really? Is that really news? So yeah, I mean, he lost 6 billion and money doesn't exist. Yeah, then more importantly, how much money did the company lose? 60 million dollars. I mean, 60 million dollars for a downtime of several hours. I thought was way smaller than I thought. Well, you mean, so you must mean they're so lost advertising revenue because the platform switched off, right? 60 million. Is that all? 60 million dollars in six hours? Yeah, I'm not sure I believe that. You know, this is the problem with Facebook because that's stat. Well, progressively, this is becoming the problem. Do you believe what they're saying anymore? I mean, three and a half billion monthly active users. I don't use Facebook on a, I don't use it. I wouldn't be considered as a monthly active user or I shouldn't be and I know loads of people that don't use it. So I'm actually now very skeptical about that three and a half bill monthly active user number. But yeah, 60 million strikes me as a very small amount of money. One thing I don't know actually is what actually constitutes an active user, a daily active user? I mean, what do you have to do to fall in that category? That's a good question. I mean, is it I just literally turn the app on and then I don't even look at it. Is that am I active because I've clicked I've engaged with the app or do I need to spend a lot of time on the app? Because they need I need to be on the app to be engaged for them to show me the advert, right? Not just me to switch it on and that's it and that's I never look at it. Or the only thing I the only interaction I have with Facebook is I get spammed with loads of emails when apparently someone's done something on Facebook that I should be aware of according to Facebook. I should be aware of it. So I only get emails, which I never open. But I wonder if you get sent an email, are they kind of going that's an active user in which case? Yeah, because you've got to imagine they pump the numbers as much as they can for sure. One of the things that you and I have obviously suffered off on with Instagram is fake you and me's. I mean, the world's a depressing place when people want to pretend to be me. I mean, I'm really not that interesting or popular. I wish I was, but well, you should have seen some of the comments I got during the morning briefing when you were off. You know, as there were people crying, hearts would be broken because Anthony Chung was not on their screens every morning. It's this, you know, being mixed race, I got a big fan base out in the Far East. That's that's all I'm saying. But yeah, so I mean, talking, let's move away from that side of things because I think there's actually a much more important and a much more deeper concern of Facebook. And this is to do with the kind of titled Facebook files, which is this whistleblower that's come out a former employee of Facebook leaking documents that basically prove Facebook repeatedly prioritized growth over safety. And there's a few different elements of this. And I've just picked out a few kind of lines out of articles I've been I've been reading and research for this podcast and revelations included documents that showed celebrities, politicians and high profile Facebook users, such as yourself, were treated differently by the company. The leaks revealed that moderation policies were applied differently, or not at all to some accounts, depending on who they were with preference to those types of people. Internal Facebook research found that Instagram was impacting mental health of teenagers specifically, but did not share its findings when they suggested that the platform was toxic place for many youngsters. And I know you were talking to me earlier this week about this particular element about young people and the usage and some of the stats of why this is an interesting area for Facebook's future. Yeah. And I mean, it's difficult because that article you were referring to there, what's really interesting about the media, and actually something that's just a problem for Zuckerberg going forwards is that article stated that basically Instagram makes one in five American teenagers feel worse. Okay, so then, well, we kind of know that or anybody's got teenagers, I guess not many people listening maybe do have, but I've got a teenage daughter and I can definitely see the kind of negatives of Instagram or even Snapchat type social media and the impact it has on them and their mental health. But that article said one in five American teenagers feel worse. The article also said two in five American teenagers feel better about themselves. By the way, that same article. Yeah, we don't need to mention that. I'm just saying it's quite interesting. This is kind of, it's almost confirmation bias this, right? When you have something in your mind about something, then you're going to latch on to the information that supports your view and you'll tend to kind of discount or even sometimes subconsciously ignore information that kind of opposes that. But anyway, that's a minor point. I mean, I'm definitely in the camp from what I see with my kids that social media, fine, it carries a lot of benefits. But for sure, I'd say overall, it's made their social interaction, I'd say less healthy. But one thing that's interesting on the Facebook side is that ultimately, I mean, my kids don't use Facebook ever. They don't have any, so my daughters have actually turned 15 to give you context here. My son is 12. And they have no Facebook whatsoever. But my daughter definitely has Instagram and definitely has Snapchat and definitely has TikTok. WhatsApp, yeah, not really. So it's definitely for her is that it's Insta and Snapchat and TikTok. Facebook's got nowhere. And actually, one in these whistleblower files that got leaked, I thought one of them, actually not one of, the most interesting item in there was the idea that Facebook are concealing a decline in its young American users. And apparently, if this decline is as large as they're suggesting, and my experience backs up that it is as that large in terms of my daughter and her generation. But if it is, if it is such that if the decline is at that rate, then American users could drop by 45% within the next two years. Wow. That's incredible. Yeah. Now, that's worrying. Well, worrying for who? It's worrying for Zuckerberg and it's worrying for people who own Facebook shares. Is it worrying for me? Well, it is on the one hand where I run a business. And so part of our business is, you know, we have advertising where we're trying to raise awareness of what we're trying to do and our mission and so on. And one channel from a business point of view for advertising is Facebook. And actually, I'd say, you know, Google and Facebook, and of course, Instagram is owned by Facebook, obviously. So it's all, you know, they're the really big two channels from an advertiser's point of view. So actually, from a business trying to reach an audience perspective, then actually losing Facebook. If Facebook does, I'm not saying it will, but let's say this is peak Facebook. And from here on out, Facebook is now in terminal decline. Then actually, yeah, we're going to need to find another major channel as a business to try and reach our audience. Right. And so for Facebook, the challenge comes then off because I know I haven't read a great deal about it, but I know they were looking at a children Instagram app. So I don't know what difference that that would be in terms of safeguarding measures and stuff like that. But also then how can Facebook diversify away from its dependency on, say, a space that is becoming increasingly more competitive, like TikTok and Snapchat and so on that you mentioned. Yeah. And I remember, what was it? It must be about two, three months ago, and they brought forward that new virtual reality meeting space product. I mean, it's gone awfully quiet since the thing came out, but presumably it still exists. And actually looking in the review mirror seems to make a bit of sense now how they're trying to diversify out. You can imagine if behavior has changed and many workplaces are going to have a hybrid system, if not work some entirely remotely, depending on industry, then actually having these are more usable, orculus headset interact in a virtual reality environment could be a business tool, right? Yeah. Rather than something you would game on necessarily and do other things like that. So it'd be interested to see what they can do then. I mean, two years though, it seems, you know, when it comes to the product R&D and development and these sorts of things, I mean, two years is no time at all. Yeah. I think the problem with, I think the adoption of things like Zoom during lockdown was so massive. And it was massive because Zoom's right there. It's available. It's super cheap. It's on your device already. Just download it and use it. And actually you can use it for free if you're having meetings that are less than 40 minutes and so on. It's just like, bang, the problem with Facebook, they're a bit early on the virtual reality goggles front because these devices cost a lot of money. We're talking two, three, 400 quid per device. So if you want to have a meeting, let's say there's four of you, five of you, let's have a board meeting. Well, every single person needs one and fine. That locks together and great. I'm sure it'll be an amazing experience, way more elevated over and above what Zoom are producing. But, you know, we years away from that. And as you say, if the Facebook user numbers start collapsing, then it can collapse far faster than the cost of that, you know, virtual reality technology can become affordable. Yeah. And then for Facebook, I mean, there's other risks that our company faces, protection of user privacy, combating misinformation, which you've kind of touched upon. I did see some interesting intel about the algorithm changes that happened internally in 2018 that prioritized posts from friends and family and down plays then professional publisher posts. And so this is that whole echo chamber and what people talk about and how more divisive content is more engaging. They know this. And so it goes against their business interests to make it a more safer algorithm in terms of having it more diverse and spread, but to channel almost the messaging in that way. So there's a couple of different things there. And I guess ultimately why I'm asking is, is there a regulatory consideration here as well for Facebook? What does that look like now? Yeah. Well, I think that, I mean, just to give Facebook a little bit of, cut them a bit of slack here. I know that's contrarian this week. But two things, right? We go back to that children and there is an age limit, by the way. There's a recommended age limit for things like Instagram. Do you know what it is? Do you know what the age, the minimum age? It's 13. Yeah. So you're not supposed to, that's the guidance on the app store, if you like. It's 13 plus. Okay. But there's no law forcing that. And actually Facebook, they could do with a bit of help from the government and the policy setters to try and be a little bit more forceful in forcing that through. That's one thing. But the other side is you've got that real problem between upholding free speech and minimizing harm from whatever that speech is and whoever's seeing that speech. And there's your classic trade-off, right? Because you've got people in, you've got really angry, very vocal people in both camps. And I'm not sure how you, I don't know where the compromise is there. Facebook have made some steps to try and tackle this. They've set up what they call their oversight board. And quite hilariously, do you know who actually set that up? Who did Facebook employ? Not Cleggie. It's a real random one. Nick Clegg. Yeah. The ex-head of the UK lived-in party, the ex-head of deputy prime minister in the Cameron coalition. I actually had a look. I had to. How much he gets paid? Ah, yeah. I don't know that. Go on. Well, let me guess. He gets paid in dollars, I assume, right? Right. So to give a bit of context to any US listeners, a MP, let's say a parliament, British parliament, of which he was in government as a coalition, as a conservative several years ago. He would have been banking about $100,000 a year if you were talking US. It's about 60K, 65K sterling. Yeah. Yeah, they don't get paid much as politicians. The idea is they cash in when they kind of write their memoirs and all that kind of stuff. Okay. So what I reckon he would be, because he's got quite a senior job, apparently his office is like next to Zuckerberg's. And he very much got brought in to really change the way that Facebook interact with the government and their messaging that they're putting out. And so I'm going to say $500,000. Okay. So I did read an article that stated $500,000. But such is what you've talked about misinformation. I also read another article that said he gets paid two and a half million US dollars. Okay. So neither of which really surprises me because, yeah, I mean, yeah, they click. But when it comes to, yeah, it's one of the weirdest hires I can think of. Can you think of a weirder hiring event? Maybe we'll think about that and talk about some on the podcast. Maybe someone knows. Maybe there's some sort of like family connection here to Zuckerberg where he was like, oh, uncle Nick is coming around. But from the regulatory risk point of view, obviously, one of the things is around this thing right where hang on, Facebook are now preventing free speech. They're controlling the dialogue to the masses and hang on here. They're now straying into territory where this is where governments and policy setters are operating. And so they're very much becoming powerful. And so that's one issue. But America, particularly, I mean, obviously, China, I've got a different way of going about these problems as we've seen as they're tackling with their tech sector and indeed their education sector and so on. But with the US, they got a real problem here because the antitrust laws, which is designed to tackle monopolies and monopolies, you know, controlling a market, these are called antitrust laws. And they're so outdated that the current antitrust laws, they're nowhere in terms of trying to deal with this problem. The antitrust laws are set up so that if you prove that a company has a monopoly, then fine, the government can break up. If they pass the bill, they can break up that company. But how do you prove they've got a monopoly? Well, normally it's on normally in the past, a company with a monopoly can control price. And then they can raise the price and benefit from that monopoly, right? But of course, here in this day and age with social media, well, Facebook's free. Instagram's free. WhatsApp's free. So they haven't gained a monopoly to drive price higher for their own gain. They've gained a monopoly to drive price lower, which is great for the consumer. However, do they have a monopoly? And here's the problem that the Justice Department's claim that Facebook is a monopoly basically rests on them being able to define the market such that it's excluding most of the other social networks. Because how do you prove Facebook's got a monopoly? A monopoly on what? And here's their big problem. And so they can't... So at the moment, from that regulatory risk point of view, although Zuckerberg gets wheeled in front of Congress periodically, gets shouted at by old people, apart from that happening, they're nowhere in terms of actually the legal process of kind of getting this kind of issues kind of dealt with. And legal process aside, Congress in itself is formed to two different parties in the House and the Senate, and the Senate is split and the Dems are likely to lose the Senate come to midterms. So there's a lot to play for timing-wise. We're in the back end now of 2021. It's almost like a year from now we'll have the midterms. They're not going to agree on any of these issues anytime soon. So I guess Zuckerberg's probably got a pretty thick skin these days and he just has to do what he has to do. And yeah, interesting what you say. I always think if you're not paying for it, you are the product. Right, well, right. But maybe one last thing on this. I think this... I'm going to say it. I'm going to put my neck on the line. I think this is peak Facebook. And I think what's happening here is actually now it's not necessarily the external world's opinion of Facebook deteriorating, which it is. But I actually think the bigger concern for Zuckerberg is actually on the inside. Because when you get a workforce that suddenly gets detached from the company's mission, or they start to doubt what... Why did I join Facebook? Why did I join this company? Well, I wanted to connect the world. And I wanted to make the world a better place. And I don't think you can argue that Facebook is doing that anymore. Maybe it was back in the day. But I think you're getting a lot of these probably Facebook employees who tend to be quite left leaning may well now be kind of doubting the mission. And then if you're not quite as on board with the mission, if you're not quite as engaged as an employee, then you're not as focused. Then mistakes happen. So what happens when mistakes happen? Well, this faulty configuration change led to a six hour blackout. I mean, when did that ever happen? This is crazy for a company like that to have such a schoolboy sort of error. And I think that's a reflection on this whole issue. And I think Zuckerberg is really possibly just losing just losing control here, both internally and externally. And without a new... It was fine before, right? Facebook, fine. People aren't using as Facebook as much when you're younger. Fine, I'll just buy Instagram. I'll just buy WhatsApp. But who's he going to buy now? So now capture the new generation coming up. And then he's too late because he can't buy Snapchat and he can't buy TikTok. So he's kind of lost the game of refreshing the app that the youth are most engaged with. Yeah, no, it's really interesting points. And I think you're right, the engineers, they're the most sought after people in any job right now. It's just hot. Like news and working in a startup, the mentality is different. And that's what it's all about, that creative ability, flexibility. The bigger this beast comes, the more oversight there is, the less ability there is to do that. And so I think it was Elon Musk who once said it about Apple, because there's always the switching of very advanced or senior people. And so, for example, they'll pinch the head of the automated car driving systems from here, from Ford. The Apple guy went to Ford a few weeks ago, for example, a big win for Ford. I think Musk said about Apple. That's basically if you're a developer, an engineer, that's where you go to die. It's the graveyard. Yeah, on that note, let's shift off Facebook. Let's talk a little bit about the other big topical thing, which has of course been energy prices. And oil, as far as US oil is concerned, just having a look on the charts in front of me here, we're basically at a seven-year high right now. Futures markets just topped 80 bucks in fact. So highest level since 2014. It would mark then the seventh weekly gain that we've had. That's the longest streak up since December. It meant then that the US Energy Department came out just 48 hours ago, the Energy Secretary, and said, actually, given what's happening, oil, gas prices, this crisis that we're in, we are willing to tap something called the Strategic Petroleum Reserve, the SPR, which is this kind of facilities that are held in salt cabins, if you can imagine, in across the Gulf of Mexico, that basically howls strategically oil away from, let's say, if in historical times that the US was going to come under direct attack and things like that, they basically got a month or so's worth of supply that they can survive on without any new supply coming to market. And this all came at the beginning of the week, and then 24 hours after, they then say, oh no, no, no, we don't have any plans at this time to tap the SPR. And that just so happened, what happened in the middle section was someone called Vladimir Putin came out and said his country, Russia, was prepared to stabilize the soaring energy prices that we're seeing, and the state-owned Gazprom may increase supplies to help Europe avoid a full-blown energy crisis. So just really wanted to get your take on what's been quite an incredible week for the energy market, and also the implications that this obviously has had for inflation expectations, which have broken out to the upside at the start of this week, and the kind of implications of that. There's a few angles here, for sure, and those emergency reserves, by the way, they were set up in the early 70s, as you know, and that was actually after the Arab oil embargo that basically the Arab world said, look, we're not going to sell you any oil anymore. And that actually actually led to a recession in the US as a result, because they were so dependent on oil coming from that region. And anyway, they set up these reserves. But look, I think let's talk politically first, from the US's point of view. And then obviously, there's inflation angles. And then there's the question as to how, for how long a price is going to stay high? And is it a problem longer term for inflation? Is it a problem longer term for the economy? But look, just thinking about the political side of it first, why did the US sort of government, why did Biden's government kind of come out and say, look, we're going to look to tap that? Because I thought that was a really weird, very strange thing to say. That stuff there, that's for emergencies, proper emergencies. Not, oh, the price has tipped up for seven weeks in a row. Right, let's tap into our emergency supply. 2011, the last time they actually did it. So it was 10 years ago. And also, JP Morgan ran a model that came out earlier this week, and they were basically calculated that basically stocks could handle $130 oil without any issues. But I must stress JP are like perma balls on the US equities. So yeah, book a bit. Yeah, I'm not sure about that last point. But yeah, I mean, so look, they can't just start tapping. Yeah, 2011, by the way, that was the Arab Spring. And that's where we really genuinely had concerns that there would be a supply shock that turned out to not be, but price did go up super sharp. Like WTI went up to $115, for example, we're currently sat below $80, right, just below or on $80. So we're miles off the 2011 kind of prices. And back then in 2011, you know, we had, we were still in a super kind of depressed economic situation following the financial crisis, we're right in the heart of the Eurozone debt crisis. Economically, we were in worse shape. I know we just had COVID, but look, we're in a sharp rebound from COVID at the moment, right? So it's different. But yeah, so I think it was a weird thing to say in the first place. So you think, well, okay, why did they do that politically? And I think as you were saying earlier in the week, you know, it's about trying to deflect blame, obviously for Biden. And you can see it going down the years. What's a real negative for any sitting president is gasoline prices at the pump going up, because this is what consumers care about. They're filling up their car every week if you can find any fuel in London, but they're trying to fill up their cars, right? And if prices jump, I think they're like 50% higher now. And they're like, well, this is crazy, because, you know, because they're driving everywhere and they're generally their fleet of cars is a lot less efficient than let's say Europe. Anyway, it's a political nightmare if gas prices go up, right? So this is perhaps the Biden administration saying, well, look, it's not our fault. You know, we might tap into our reserves, but you know, this is more about OPEC. You know, it's more about Russia. And so there's that. I think that's probably the political angle they were looking for. The big problem, though, for Biden is if they tap the other thing is about, I guess supply is on the supply side from a production point of view. And so do does the administration support shale gas getting ramped back up, you know, to try and bring prices back down to to make the electorate more happy. But then of course that flies right in the face of one of their key cornerstone policy objectives, which is about green energy and supporting that move to green energy. So Biden has got a real problem here, because if price, if oil prices stay really high, if gasoline prices at pumps stay really high, it's going to hurt him big time in the midterms next year. But if he makes a move to do something about it, well, what can he do other than supporting an increase in production of things like shale oil? And that, as I said, conflict. So I think he's got, I don't think, well, I honestly don't know what he can do. And I don't think he knows, hence why the communication cock up this week, about tapping that emergency supply. And then the following day, hang on, though, we're not going to tap it. And I think it's a bit of a mess and they're not sure how to handle it. Yeah, the other factor here was we had an OPEC meeting. These happen monthly, nowadays in his in history, they tend to happen every six months, but giving how fluid the COVID recovery is, they're having their monthly meetings. And I think there was quite a few people looking for OPEC to respond in some way. OPEC already returning slightly more barrels of oil per day to the market in a very graduated fashion as the recovery takes hold. But they didn't, basically, they didn't play ball to what perhaps the pressure that Biden was trying to put on them. So I guess, like you say, what can Biden do? I mean, I think it was maybe 10 podcasts ago, we're talking about him playing some games around what they're going to do with Iran and the relationship with Saudi, these sorts of things to try and put the pressure on. The other thing, of course, is no peck. No peck tends to come out of the woodwork in these types of situations, which is the no oil producing and exporting cartel act, which is obviously a play on OPEC themselves. As a congressional bill, it's not like I've not made this up. And it was enacted in 2007. And it's a move, basically, to remove the state immunity shield and to allow the international oil cartel OPEC and its national oil companies to be sued under what you were talking about earlier US antitrust law for anti competitive attempts to manipulate the world's oil supply, essentially. So yeah, that will never see the light of day, I'm afraid. But yeah, and the problem here, I think back in 2007, I think the US were producing around about four and a half million barrels of oil per day. The problem is, since then, they've jumped to become one of the biggest producers producing north of 10 million barrels a day. So unfortunately, in terms of again, back to that idea of can you prove they've got a monopoly? Unfortunately, the US production trajectory is kind of making that proof a lot, lot, lot more difficult. But there's something else longer term I wanted to put on the table. And it's kind of because so let's get back to 2011, because that's the last time we had like a big spike in oil prices I'm talking now. And in 2011, prices went smashed up through 100 bucks went up to $115. And what happened then was the higher price meant that being a producer of oil suddenly became a lot more profitable profit margins dramatically increased. Okay, then there was a big chase for money. So there was a massive move to of investment coming into the oil industry. This is why the shale boom happened, by the way, because price went above 100 bucks, shale production at that time was actually relatively really expensive and economically unviable. But it was suddenly economically viable and profitable when price went above $100, mass investment into the industry, massive increase in production. And this is that shale boom. Okay, so fast forward now 10 years. And here we are in 2021. And by the way, sorry, final point on 2011, a few years later, that big production increase finally led to prices coming back down. Okay, the prices dropped and they dropped. And all right, there's a whole story around how OPEC behaved. But anyway, prices dropped. And indeed, of course, they went negative briefly in 2020. Right. So but now here we are in 2021. Here we've got another price spike. Okay, now it's the same going to happen. It is money now going to flood into the energy sector, investment money to now increase production to take advantage of this higher profit margin, and then naturally increase supply and naturally bring prices back down again. Is this cycle going to repeat again like it has repeated through the decades? And there's an argument to suggest that actually right now, this cycle is going to break. And it's not going to repeat. And the reason it's not going to repeat is because investors are no longer eyeing up the energy sector as a great long term investment for growth. And that's because we're now on this green wave. And it's all about renewable energies. And so actually, I believe maybe that cycles off the table here. So one thing about inflation, we'll talk about inflation in the short term in a minute, but long term, our energy price is going to come back down. And I think there could well be a strong argument say they won't. And oil prices won't come back down because there's been a chronic lack of investment in the energy sector for five years now as price dropped. So that's one reason why prices are on the up because long term supply dynamics are looking really bad. And we need lots of investment into the industry to get production back on an upward trajectory. I just don't think they'll get the investment. So I think we're stuck now with prices being high. And this will then force an acceleration towards the more renewable pathway. And actually, that's the only way we're going to get to a green economy. In the end, you're going to have to force people there because of price. And this might be the beginning of that kind of final sort of acceleration on that proper green highway. You sound like one of these annoying people when I was queuing up trying to get a petrol for my vehicle in your electric one waving at me. Were you one of those people? I'm loving this fuel crisis. I'm literally the most smug man in Southwest London. So you literally took delivery of an electric vehicle what, two days before it all kicked off? No, no, no. I've had one since 2019. Okay. So there's a change up. Yeah. So I'm loving this petrol crisis, other than the traffic that it's creating. But yeah, I haven't I haven't filled up a petrol station in nearly two years. I never will again. And I'm very happy about that. Yeah. I actually saw a headline the other day, UAE, the UAE has just announced a net zero target by 2050. Right. And so, yeah, I mean, yeah, this is it. So we're talking about inflation, right? Because obviously this that comes into maybe payrolls, because we've had payrolls this afternoon. We'll get the stats on that. But they're obviously one of the big topics has been inflation and transitory. And is it not transitory? And now the Fed and Central Bank getting more hawkish. And obviously the energy price surges have been right at the front of that push on inflation higher. And people talking, right, well, how long will energy prices remain higher? How long will they continue to have an inflationary impact? Is it going to be long enough for actually it to really hurt the economy? Because consumers are spending more now on fuel and therefore less on on the high street. So will it damage retail sales? Will it lead to the economic momentum slowing? All these kind of arguments all sewn up. But but yeah, I mean, I think the energy price spike may well not come back down. And I think that'll create a problem maybe. Yeah. And then I was then looking geographically UK, Europe, and the US. And one of the things I was reading was the UK is seen as more vulnerable to record gas prices. Now, I know you spoke about this before, but just to remind listeners, some the UK is seen as more vulnerable to some European countries because of our very limited storage capacity means that we're reliant on this kind of so called just in time system domestic production imports from pipelines, seaborn cargoes and so on. Here's a stat for you. And then I want to get your take on how does the Bank of England deal with this? Because this is a real point of contention that the markets are wrestling with at the moment. We spoke about this I think last week. Will the Bank of England pull the trigger and raise rates before even touching QE, which would be different as a process? And will they do it as markets are pricing markets are now even moving even closer than February last time we spoke, which just a few weeks ago. So the vast majority of UK homes are heated with natural gas. The country has shut more of its coal fired power stations are adding renewables such as wind farms, which I know you're a keen wind enthusiast. You have some good stats on that. And on still days when wind power generation is lower, gas can make up more than 50% of all electricity generation. And then there was reports obviously you must have read, I think everyone did earlier this week, the UK consumers going to get hit with a potential 30% price rise gas electricity bills going into 2022. So yeah, what what can the Bank of England do in this type of scenario? Well, gas, they shouldn't rate they shouldn't gear their policy around gas pricing. Because no matter what they do, they have zero influence over the price of gas. Right. This is all a supply side issue in terms of the gas price spike. The whole thing about monetary policy, the whole thing about interest rates is controlling inflation. But you can only control inflation that's driven from the demand side. So if you raise interest rates, borrowing becomes more expensive. The whole idea is that people then borrow less, because it's now more expensive. So then if they borrow less, they spend less. So it dampens demand, which then dampens prices. Okay, what we have here on the gas front, it's got nothing to do with demand at all. It's purely a supply side thing. So the Bank of England should not be gearing policy around gas prices. And look, having said that, though, they may be thinking the other thing, which is, if gas prices do remain this high, and gas and particularly in the UK, the spike has been off the scale. So when I said earlier, energy prices might they've spiked and they'll stay high. I don't necessarily kind of meant more oil rather than UK gas prices. I mean, it's kind of insane, right? But so I think hopefully those prices might come back down a little bit, but that might be dependent on supply coming out of Russia. But as you say, we're particularly vulnerable here in the UK, because of our just in time kind of style. So we have less kind of storage. And then as you say, on the wind front, the wind over the last couple of months has been really low, which has just exacerbated this problem even more. But yeah, will it will prices and look, the other issue is the energy companies in the UK. I mean, when you say energy prices are going to have to go up 30%, well, there's come there's energy companies going out of business every week. I've lost count now, there's like 10 to 15 energy suppliers that have now gone bankrupt. The point being, they have to pass on the price spike because if they don't, they'll die. And the ones that are going bankrupt are the ones that have offered fixed prices, fixed price gas for like two years. But of course, now that's really hitting them in the face because they're having to buy a much higher rate, but deliver a much lower and they're taking a huge loss. So is a solution here not with the gas providers, because they can only do what they can. This is with the government now that has to step in again, spend some more money and basically backstop a commitment of multi billions of pounds worth to say we'll pick up some of the time. Yeah, but that that being obviously politically, I mean, there's different angles to that from that, what that would mean for public perception. So what you mean, the government starts buying gas and then selling it a subsidized rate to the consumer. Is that what you're saying? Either that or they put a cap on what could be charged to a consumer and then they pick up the shortfall deal with dealing directly with the gas providers. Right. Yeah, I mean, that's the they can't go. They can't go down the path of solving the supply issue by investing and producing more because of that whole green argument. So that that really is what what you're describing is the only solution apart from apart from there's one other one. Vlad, come on. Come on, Vlad. Let's get Nord Stream 2. Let's turn the tap on. Come on, son. Yeah, so we're sorry we didn't invite you to all those parties over the years. Look, we'll you know, we'll roll out the red carpet. You're the man. Yeah. I mean, Putin is loving this. And by the way, so Putin said, as you know, guys, we can deal with this. We can just release more supply into the market. So that got me thinking, well, hang on a minute, because and then the IEA confirmed that they do have excess supply to put into the market. And then I'm thinking, well, hang on a minute, price is this high? Why aren't they selling these excess reserves already on the spot market at these crazy prices? So Putin is definitely he's sitting back. He's sitting back. It's just was just a question of when it's just sitting there with his button. Not yet, not yet, not yet now. And it's for maximum, maximum political influence. And he's played, he's played a blinder. Fair play. Yeah, he's going to have a long list for Santa Claus to send to Western European heads of state of what he wants for Christmas. I'm sure. All right, well, look, to wrap it up, we've just had US non-farm payrolls. We won't spend too much time on this because quite frankly, I don't think it's made a great deal of difference. But to just go by the numbers, the headline changing non-farm payrolls for September was 194,000. Expectations were for 500,000. So this is the second consecutive lowball month that we've had. The bottom end of the estimates on the street today was 235,000. So it was even worse than that on the headline figure. However, average hourly earnings advanced 0.6%, strongest monthly advances, April, the unemployment rate fell to 4.8% from 5.2, a much sharper fall than what was expected at 5.1. I guess the biggest question here is, well, from a market reaction point of view, equities did nothing. The initial Niger reaction was the algo-led first in, first out type response, which was, oh my goodness, 194,000 tapering is off, dollar tanked, yields tanked. And so gold spiked, the pairs spiked, T-notes spiked. But then all of that's been reversed. We're pretty much back to where we were. So I guess the biggest thing is, what does this mean for tapering? Does it mean anything at all from what the markets expect, which is the commencement in November the next meeting? It means nothing. I think you've got the report there that, all right, the headline, everyone looks at first and fine, really bad. And it was bad. It's very rare that you get a figure that's below the low end of expectation range. And it's the worst number since December last year. So again, it's definitely a bad figure. And all right, a bit upward revisions to previous months, so I'll set it a little bit. But to flip all of that is you've got a great beat on the unemployment rate, which has just been falling like a stone. And you've got a massively high average hourly earnings. And that's the inflationary kind of element of this report. So again, a real conflicting set of numbers like we had last month. And in the end, it means nothing in terms of Fed taper timing. That's locked in. It's happening. And it's going to announce it in November. And this really will just, and perhaps one thing, to one caveat will be, and I think I mentioned this last time, but I'll repeat it because it's an important one. And that is when they announce tapering, they will go out of their way to stress the point that the speed of taper can accelerate and decelerate as economic conditions unfold. And so they can very much stop tapering in February, in March, if the inflationary element is dissipating, or if growth momentum really sharply drops. So they'll go out of their way to stress that yes, tapers startling, but we can ratchet up or down that speed as we go along. Yeah. And just three points I wanted to quickly add was you mentioned about how the information channel can get very narrow with social media as the algorithm kicks in. One of the things is, what was the last time you heard about COVID cases? And the reason for that is the news has no interest in reporting declining COVID cases. Right. Certainly not in the Western world in nearly all publications. I mean, yes, there's other stuff going on. There's a gas spike. That's bigger news right now for markets, at least that is not downplaying the seriousness of COVID. But I was looking at the charts because I was giving a lecture to university yesterday. And so I got an update of the US COVID case charts because I hadn't looked at it for a week or so. And I was looking at it because we were going through a period of kind of COVID increases in a number of states through the summer, particularly in those low unvaccinated areas, Republican leaning, as we know, but the case rate is coming down and it's looking in a heading in a good direction right now. And high frequency data points. So when we start looking at things like restaurant dining, hotels, travel, these types of things, high frequency data is increasing. And also, two other points here, the federal government funded benefits ended. And also, as well, we're going into a period where we normally tend to see hiring at retailers any way increased as we go into the holiday season. So a couple of factors there as well, which is why I think the market's been fairly, you know, non plus by this weak report on the headline, because overall, I think there's enough evidence there to support they need to get the taper show on the road. Yeah, agreed. All right, so we'll wrap it up there. That's it for today's episode. As I said at the beginning, would hugely appreciate it if you could just jump on. If you're on Apple, leave a rating and a review. It really helped. We're going to try and see if we can get the community to bump us up to 100 reviews by year end. We're on 61 at the time of recording. So everyone counts get involved. And thank you very much for listening and have a great weekend. Thanks, Piers. Cheers out. See you next week. All right, take care everyone.