 Hello and welcome to episode 65 of the Market Maker podcast where at the end of every week here's the co-founder of Amplify and Head of Trading and myself get together to talk about some of the major news and themes in markets of this week, of which of course we'll update you on what's been happening in crypto land. It's been a pretty tough one, quite brutal, not just in crypto, but also for the broader global market. So we'll look to quantify as well the kind of magnitude of some of the sell-off that we've seen in global equity, still very much the tech names in focus as well as some of those growth names getting here. I think I saw Piers Peloton, I think from its high down about 95% or so, which I'm sure we'll get to the stats because I know you've got a few lined up for me. But before that, a couple of shout outs as per usual at the beginning of every episode. So thanks very much to Finn Panton, Eric Dye, and Thomas Taylor at Oxford University for sourcing out a really great event at the uni. Earlier this week, Eddie and I were there in person, which was nice to get away from the desk and out of London for a change. Also great to meet Alfie Charlton from my old high school. He must be 16 going 17 and just talking about what he wants to do in a very precise terms with his career, which from someone coming from my high school, that's a pretty exceptional thing because most people are too busy either playing football or just generally fooling around to be quite honest at that age, or certainly maybe I'm just speaking about myself. I think you're speaking from the vast majority of 16-year-olds. But yeah, great to meet him in person. And then final shout out to Aziz Adorento, who is dominating our referral program for our daily newsletter, The Market Maker. He's got his one-to-one CV review. He's got his access to his online masterclass industry speaker series. He's got his mug. He's got his t-shirt. He's got his bottle. He's got more Amplify merch than I have. I'm not sure that's right. Yeah, for Aziz, I just wanted to say, yeah, huge thank you for sharing the love. Super appreciate that. How do you get an Amplify hoodie then? So when you refer 75 people to just subscribe to our free newsletter that we put out every day. So what I'll do if anyone, if there's any people who listen to this podcast every single week, I mean, first of all, that's amazing. Thank you. And Alfie even said, there's your episode about Portia when you explained about the IPO. Used that in a conversation. Actually, he's got some work experience over the summer, based on a lot of the stuff that you were going over at that time. Excellent. But yeah, if I'll drop a link in the show notes for this episode, and if you're not part of the daily newsletter, you can sign up for that. Hopefully it's super useful. It's aimed at just helping just on the career side, as well as your commercial awareness about global markets, not just global markets, but M&A, IBD, these types of things as well. So hopefully it's all geared to making it super useful for students to shortcut a lot of time because I do know that you're all in the middle of exams at the moment. So yeah, I feel your pain, but it'll all be over soon. But yeah, let's get straight to it then. Let's talk about, before we get into the crypto specifics, just a broader market movements that we've seen. I know there's been some pretty seismic moves continuing on from where we were at the end of last week. So where are we at at the moment? Yeah, I mean, for sure, the, well, the risk off continues, right? So risk off that general kind of term that we use when you're getting riskier assets selling off broadly. I mean, what's interesting about, I guess, the sell off this year is, I mean, I'm not sure, actually, it's not really being called a risk off, is it? And actually, there's probably a good reason for that. And that's because actually, even stuff like bonds are selling off, which is supposed to be the safe stuff that people rotate into. Normally, when we have risk off, you get a kind of inverse correlation between stocks and bonds. So people sell stocks, that's the riskier asset. And with that money, they then buy bonds. And so you tend to get that inverse direction. But yeah, you're getting everything coming off. So I guess it's not particularly risk off. It's just very, you know, it's it's stagflation. And we've been using the word a lot for weeks. And it's coming, right? And that's just as a reminder, this is the, you know, the high inflation, slowing growth and rising interest rates. And that combination is continuing to lead markets to the downside. So further extensions lower across the space. I mean, now just thinking in broader terms across the whole year now, the Nasdaq on its low, I mean, and I always, I guess I, I guess I point to the Nasdaq first and, and perhaps the media do as well, just because that's the one that sold off the most, right, in terms of the big indices. And so when you're trying to frame a story that you're telling, you often, you know, you go for the big kind of the biggest, best example. And so the Nasdaq is that in this context, the Nasdaq's down 28% on the year now. So, you know, well into bear market territory, the S&P's better off in that it's down only 19%. So the S&P, we go in kind of 10% kind of in terms of terminology, 10% down is a correction, 20% down is from the recent high is a bear market. So the S&P's just, it's avoided a bear market so far. But it's inevitable, I would say the key thing about the S&P it broke the 4,000 level this week. And obviously that's a quite a big kind of psychological level. So from a technical point of view, you're certainly seeing technicians say, right, you know, this isn't over. And there's more downside and the S&P will go into bear market territory. And I guess what's driving the exaggerated move, let's say on the Nasdaq, I mean, you pointed to it, you know, there's those, I guess it's the, the way this has worked, right, it's the COVID stocks that went first. So that's, that's your pelotons, it's your zooms, it's your Robin Hoods, your, I don't know, Coinbase, if you like, right, these are the COVID stocks. So peloton, as you mentioned, is down well over 90% from its high zooms down 85% from its, I mean, we're on zoom, right? Here's, here's the interesting thing about markets. We're on zoom, we as a company use zoom, a huge amount. And pre COVID, we didn't use it at all or hardly, right? Now we use it huge amount. And with, so we use it more than ever, yet their share price has dumped 85%. And so this is an interesting thing about value, right? And market behavior, you know, is, is zoom as a business worth what its current market cap is, which is determined by the share price. And that's 85% less than it was back in 2020, right? And also where is actually the value? And often the share price, there's often a lot of irrationality that goes into, you know, determining what the share price is at any moment in time. And you'd certainly say that back in 2020, 2021 it was overvalued. I know it's very easy to say that now it's 85% down, but it was overvalued. You could certainly argue now it's undervalued, right? What was zoom trading? I don't know if you have access to it. What was it prior to the pandemic? And what price are we trading as of today? Right. So zoom was that and the high actually came one second. The high we had during COVID was 500, let's round it, 560 bucks, okay? And that peaked in October 2020, 550 bucks. It now trades below 85. So, and that's where, you know, we were trading 85 before COVID. But I would argue that zoom's revenue, and it is certainly much larger than it was before COVID. So I'd argue maybe it's undervalued now, but the problem is, the problem is in these markets, whilst I might be right, and the zoom share price now at 85, I don't know, should be 150, just pulling a number out of thin air there. The problem in these markets is at the moment, it's not rational. We're panicked about stagflation, right? And I guess we're not only panicked about stagflation, I guess people, I guess during COVID, investors were over exaggerating, over inflating the revenue growth that a company like zoom might have. Now they're doing the opposite, right? They're depressing, over depressing, perhaps, what the future outlook is. But then I guess this comes down to this thing called SaaS. So SaaS is software as a service, and it's one of the, you know, prime time kind of investor things to pick up. And that's because it's so scalable. That's where a company is providing a service, software as a service. And it means that taking on new customers costs the business hardly anything, right? So for all the revenue pickup you get, it's almost all of it dropping down onto the bottom line profit. And it's usually scalable, Zoom's perfect example, right? But if we do get a nightmare scenario of a big recession here, then businesses start to cut costs, or they start to lay people off, right? And when it comes to the cost base, you start to kind of get out your, I guess your SaaS list, what are you spending money on? What software are you spending money on as a business? And I don't know, maybe, like, you know, we spend money on lots of bits of software, right? I don't know, there's maybe 20 SaaS products we spend money on. And so you start to go, well, actually, we probably don't need five of those. You know, you can, as the business is growing and the economy is doing, well, you tend to bolt things like, oh, yeah, that looks great. Let's buy that. And then I think when the downturn comes, you then do the opposite. And that's why some of these SaaS things may well see their revenues decline. But will that happen to Zoom? I don't know. And in terms of market conditions right now, there is evidence to suggest that that very thing is happening. Because last week, Andrew Challenger, which not many people know, but Andrew Challenger is basically the name behind Challenger job cuts, which is a monthly employment indicator. And if you actually look at job cuts in the US, they're going up, actually, because one of the pillars of a strong US economy has been, well, the labor force has been pretty effective at this point. However, initial jobless claims went up to the highest level since Feb 11th this week. Last week, the Challenger number, basically the comments from this chap, he said that job cut plans appear to be on the rise. And the reason, particularly as companies assess market conditions, inflationary risks, and capital spending. Right. Which is basically the summation of what you just described. Yeah. And normally for a company, normally, the biggest cost is salaries, right, staff costs. And, but the problem is to cut your workforce takes time and is expensive. It's not a quick win from a cost point of view. You know, you've got to go through a whole legal exercise, there's, you know, redundancy payments and packages, right. But if you take SAS, I mean, you literally can switch it off. I mean, you might be in a month by month rolling contract, right. But with a SAS product, you can switch it off, but it depends on how integrated that product has become in the day-to-day functioning of your business. There's no way we could turn off Zoom. I don't know, we use things like Slack as well, right. There's no way we could turn off Slack. In this high world of hybrid working, our company wouldn't function without Zoom and Slack. So, you know, there are certain SAS products that I think are very sticky and will make it through. There's definitely some men that aren't and that are a little bit of a luxury and aren't kind of critical to the functioning of the business. And it's those companies that are really at risk and perhaps getting slammed and will remain getting slammed, right. So, listening to you over the last few podcast episodes, talking about recurring software revenues, talking about cloud technology, you're talking about my Microsoft book again. I mean, please continue. It's fine if you want to do that. But so, there's one person that the press love to, I say love, they love to love and they love to hate and that's Kathy Wood. And so, my question to you is, so for those who don't know, Kathy Wood is kind of the brains behind ARC innovation and they focus on investing in disruptive technologies. These would include things like AI, DNA sequencing, gene editing, robotics, EV, energy storage, these types of things. Now, she was like the hero of the pandemic. Obviously, she's feeling some great pain right now. How does someone like, how does a fund like that quell concerns of their investors to the point where they remain invested on the belief of the longer term picture? Any thoughts on that? Wow, very, very, very, very difficult because fine, she was the darling of the COVID crisis, but I'm just, I just went on to their website now, Arc-Funds.com, right front and center homepage, year to date return minus 50%. Assets under management. Hang on, it doesn't say assets under management. But look, minus 50%, that's year to date. If you go back a little bit further, it's well over 50% down. I think I'm actually not sure. It depends. She's got different funds as well within her overall kind of ARC vehicle. And some of the funds are packed full of the pelotons and are down 70, 80%. Right. And I guess there's two ways, if you're an investor in that fund, there's two ways of operating. One's very emotional. And that is, well, I can't, I mean, I can't get out now because I've lost, I'm not going to take that loss. It's down so much that actually I might as well just leave it there. That's the cut. And this is something called prospect theory. When your losses become so huge, you kind of just disassociate yourself. You almost like disown it and go, well, that's now a long-term trade then, isn't it? Because you don't want to pull the money out and take the loss. And I think most people will probably operate under that. It's gone down so much that I think people will operate mostly under that potence. The other way is to just cut it, right? But cut it well before it kind of craters to the levels you're seeing now. I guess, if you're invested in Peloton, should you, and you were kind of in it from the beginning and you rode it to the highs and now you're still in it, well then, yeah, I think that's bad investing because you've been a victim of your emotions rather than rationally understanding the macro climate and how it impacts individual companies. But there's a lot of emotion that goes into this. But yeah, it's an incredibly difficult one for Kathy Wood. I guess it's about long term, right? Some of these companies will survive and become the giants of the decades to come, right? It's just a lot of them will die. And that's the difficulty. It's, can you cherry pick the ones that will make it through? And if you can, then happy days. But there's huge, huge risk. And actually, just on the broad sell-off, there's some quite interesting stats just comparing it to the financial prices. So in 2008 and 2009. So since November 2021, which is basically when we hit the top for markets, this whole sell-off has actually now destroyed $35 trillion of wealth globally, that is, right? That's just through asset values dropping. The global wealth has dropped $35 trillion, which is 14% of global wealth. In the great financial crisis, top to bottom, only 9% of global wealth was wiped out. So actually, and I guess the difference is that this sell-off we found in the last six months, everything's sold off, like including bond markets. Whereas back in 2009, it wasn't everything selling off. I mean, bonds were certainly going through the roof, right? But also the sell-off was a little bit more selective. It was banks, bank stocks, it was a financial crisis. It was mortgage back securities were getting killed, some credit markets were getting killed, fine. But all right, there was a broader market sell-off as well, but that broader sell-off wasn't as big. So this sell-off's much broader based. But look, I'm not pretending that the world should be crying about this because when stock markets sell off, it's the rich that lose their money, right? To start with, who owns these stocks when it's the rich? But the problem is, if we get a recession, well, the problem is we have inflation that's super high and that's overly impacting the poor at the same time. And then you're probably going to see a recession with businesses laying people off cutting costs. And so in the end, this all kind of winds up to be the perfect store. I did see an S&P stat as well to finish on the numbers. This was about two days ago. So obviously, things have changed a little, but the S&P 500 has returned 10% annualized since 1928, with an average entry year drawdown of 16.3%. And at the moment this year, it's about 17%. An average entry year drawdown of 16%. But on average during the year, it drops 16% at some point, albeit on average net gaining 10% across the year. I'll send you the graphic. I tweeted the graphic and I shared it on LinkedIn earlier this week. But yeah, it makes more sense when you see the numbers. But what the point that they were making was there's no upside without downside, no reward without risk. Well, absolutely. And I guess that's where people... I think actually a lot of people in this selloff are discovering that for the first time. Because I think you've had obviously with the Robin Hood revolution, you've seen, I say the rich are owning these assets. But I think for the first time in history, or not the first... Well, yeah, maybe. You've got a much broader base of people that are owning these types of assets. And I include crypto in this. Let's just say you've got people lower down the income bracket and the wealth bracket are now accessing and owning these types of assets. And they were riding the wave. And of course, now that wave's crashed. And so they're probably for the first time. A lot of people for the first time are experiencing this. And it's a really, really difficult, really difficult place to be in when you're... That sense of you're just... You have no control over what's happening to you. And it's super painful. And this is where you've got to just be super disciplined. I mean, maybe it's too late for some, but you shouldn't be investing more money than you can afford to lose. Right? I know it's easy to say that and perhaps easy to say that now, but yeah, you've just got to be super careful with this stuff. Yeah, I did see a report out of Glassnode who do some data metrics in crypto. And this can lead us into some of the crypto discussion. And they were talking about Bitcoin. I mean, again, this was early in the week when Bitcoin was off nearly 55% from its November peak. 40% of its holders are now underwater on their investments. During that, the sell-off over the last week, over 3.15 billion in value moved off of exchanges in terms of a US dollar amount. And that's the largest amount since the market hit its all-time high in November of 2021. I think there's also, as well, a shift in some of the options activity as well, which was quite telling. But yeah, there's definitely been a big sea change in the crypto space and in fact, some terrifying moves, one could say. So why don't you explain to us why the price of Bitcoin has fallen below $26,000? I mean, it has bounced. I must stress by the time we're recording this Friday morning, back to $30K. But it did hit its lowest level in 16 months. Ether also had dropped below $2,000. What's created this, I know that that's been caught up in this risk-off mood, but there's also been some more technicality to it. Right. So for sure, Bitcoin, remember last year or the year before, or maybe even the year before that now, there was this whole movement to suggest that Bitcoin was a safe haven. Do you remember that? Anyway, it doesn't matter. I mean, obviously it isn't for sure. So it's been selling off like everything else. And the correlation between Bitcoin and just the broader stock market is incredibly high. And Bitcoin broke that key technical level, which was the 2021 low, around $30,000. And it's kind of back up testing that now. But yeah, as you say, 16.5. So yeah, firstly, all crypto is selling off because of the macro environment. Okay. But obviously this week, a certain terror kind of hit the headlines. And this is about stable coins. But look, just maybe let's take a quick step back because what is terror? Firstly, well, it's a blockchain. But I guess everyone's heard of Bitcoin for sure. And that was kind of the first, right? So Bitcoin is the crypto coin that's used for blockchain. Then you had Ethereum. So I'd say these days, probably most people have heard of Ethereum now. So Ethereum is a kind of another blockchain, right? And Ether is the kind of crypto. And so they have the two giants in the crypto space, okay, Bitcoin and Ethereum. Then you've got these what are probably called third generation blockchains that are all being developed to try and overcome some of the issues that we have with Bitcoin and Ethereum. So a simple example is energy efficiency, right? So trying to create a blockchain that's energy efficient. Anyway, of these third generation blockchains, there's Solano, there's Cosmos, Cardano and terror, right? Probably the big four. So these are like the next generation blockchains, okay? Terror and they're all different. These third generations, they're all kind of specifically pinpointing a certain service. So for terror, this is about transactions. It's about, I guess you could say, they're trying to win the market share of Stripe and PayPal, right? And they're trying to do this. Basically, it's a financial settlement network on a customer basis. So this is like B to C. Like when you're using, I don't know if anybody, like, you know, if you handle a few process payments, you know, like we do, like most companies do, right? You use, you know, we use Stripe, we use Shopify. And what typically happens is that they charge you a fee, right? For a transaction. So they charge 3%. So Stripe, for example, charges 3% for the pleasure of you receiving money from your customer. Okay. And then it normally takes at least a day, if not two, for Stripe to actually give you your money. So the customer basically pays Stripe. Stripe keep the money for a couple of days. Then Stripe give you the company the money and they charge you a 3% fee. What terror is trying to do is disrupt all of that by A, making the cost of the transaction way cheaper to the business. So instead of paying 3%, terror charge 0.5%, let's say. Okay. And then also to make the transaction process much quicker. So instead of taking two days, you the company, you might get the money in like one hour, or it might even be less. It could be minutes, I guess, in the end, we'll get to seconds, right? So they're trying to disrupt this kind of payments system. So that's what terror is as a blockchain. And that's the service it's trying to provide. Okay. Now then, so how does terror work? Well, terror, the blockchain uses two tokens. So one is terror UST. And the other one is Luna. So terror is earth and Luna is moon, right? And they're supposed to be these kind of equal and opposite counterbalancing forces, because what terror are saying to have a functioning transaction payment system that a company is going to want to use, you need a stable currency. And this is the whole problem with crypto currencies. They're not stable. And for them to be a unit of transaction, they need to be stable, right? So this is where stable coins come from. So terror is the biggest that these stable coins are trying to give the user all the benefits of blockchain without the risks of crypto coin volatility, right? So terror is trying to genuinely offer you a payment system that is cheaper and faster, but also has a stable unit of currency, right? So this system is used where basically you've got terror UST, which is currencies, and they've created a few different terrors. So there's terror USD, there's terror CNY, there's terror JPY, there's terror GBP, right? There's a terror for each of the big kind of global currencies. Okay. And the idea is that all these currencies are pegged to the base currency. Let's take terror USD, it's pegged to the dollar, right? But it's not pegged actually physically to the dollar. And this is where the difference is between terror and something like Tether. Tether is actually pegged to the physical currency, the dollar. Terror isn't, it's what's called an algorithmic stable coin. And the way this works is Luna is the stabilizing equilibrium force for all these terror USD coins. And the way it works is that if the value of terror goes up, well, then they start, if there's demand for terror, right? And people are buying terror and it goes up, well, then they're burning Luna. Luna is the equal and opposite. And so you've got these two, I guess, let's put it maybe in slightly simpler terms. You've got two assets that are linked in value, okay? When one goes up, the other one goes down and it seesaws and it creates these arbitrage opportunities. Because as long as you think terror should be worth one, as soon as terror is worth 0.999, we should buy it, right? Because it has to go back to one and you'll make a little profit. And when it goes back to one or maybe it goes... This sounds like a disaster in the waiting when it comes to this time arbitrage game. Well, this is how, but this is, this is how it's all built for algorithmic stable coins. This is how it's built. It's built on this sort of, this idea, right? And as, and it works as long as people believe that the idea works. And what we saw this week is people lost faith in the idea. So there's algorithmic trading systems that try and arbitrage and essentially they're providing the job of keeping it paid to one, okay? But what happened this week was it all kind of unraveled because people lost faith in it. And they started selling, they're basically just, it's a run on the bank, right? They're just, I just want out and I will sell everything to get out and I'll sell my USTs and I'll sell my Lunas. So the two counteracting forces that are supposed to stabilize this, people were selling both of them simultaneously in huge volumes. And so both went down. And in the end, the whole thing, and as soon as it starts, you know what I've run on the bank is, as soon as there's even a hint that this thing's going to collapse, then it just exacerbates and accelerates the collapse. Because as soon as someone panics, everyone panics, everyone's out and the whole thing just dumped. So the value of terror or sorry, terror, UST dropped. Well, what's it trading at now? It's down. So remember, it's supposed to be $1. It's trading at 0.015, right? So it's off 99%. So it's dead, essentially. Now what's, so that's just terror, right? The bigger coin. So I guess the question here is, oh, look, crypto across the space fell off the back of this news. Now stuff has stabilized. So Bitcoin's up 6% today. You know, Solana got slammed. It's actually, that's up 18% today. It's still massively off, by the way. So these are small bounces, even though it's an 18% bounce. It's still only recovering a small portion. But I think what you've got to look more closely at here is Tether. That's the big giant stablecoin. And Tether, during this whole episode, dropped from $1. And it's worse. It got down to basically 0.97. So it dropped 3%. Today, it's back up to 0.9981. So Tether has almost recovered everything. Remember, Tether is underpinned. That's pegs of the physical dollar. So it's a slightly different ballgame. You can't collapse the house of cards when one of the assets that you would need to collapse in value is the United States dollar, right? That's the big difference here. But I guess what this is, the terror thing has shed light on the fact that there's no regulation in this stablecoin system. And now it's got so big. And look, Janet Yellen was talking about this this week. Before the terror collapsed, or as terror was collapsing, I think by the time she started talking about it, it dropped 70% to $0.3, right? Then puked all the way down to basically 0. But she was saying, look, this is entirely unregulated. It's now an 80, I think it's an $80 billion market now, just stablecoins, right? And look, we need some regulation here. There's so many stablecoins. I'm sure a lot of them are kind of on this kind of tricky house of cards thing. Some might not be like Tether. But look, we're definitely in need of some regulation here. And Janet Yellen, for anyone who doesn't know who that is, she was the former head of the Fed prior to Jerome, who's currently there. And her role in, I can't even remember now, her role in the government administration, she's the Treasury Secretary. So it's funny how quickly you forget when, yeah, the Treasury Secretary through all the periods in the past, I remember it was like such a crucial figure. But I guess, as you already said earlier, this is different from a financial crisis, like with Paul, Hank Paulson at the time was instrumental, because it was a very specific financials that were at the core of the problem. This is much more economic. Yeah, right. In that way. But just finally on this kind of terror thing, I think, obviously, anybody who's owned this stuff, it's just in such a bad place right now. And I think it's a specific collapse of terror, but it's kind of quest, it's brought huge question mark over stable coins. And then it's brought a huge question mark. This is fuel to the crypto skeptics, like massive fuel. This is evidence why it's never going to work or and then there's a lot of conspiracy theories come up, but people want people who are who are believers, they need to find some reason as to why this happened. They need to be able to explain it to themselves and the skeptics and to justify that this blockchain and crypto thing is here to stay. And there's plenty of crypto kind of, I mean, I posted on LinkedIn about this and yeah, I started to get some comments about how, well, hang on, what are you talking about? It's basically BlackRock and Citadel on purpose, collapsed the market in order to rob all these crypto traders of their money. It's like the establishment against the little guy. And I just think, and I was like, hang on, where the hell did this conspiracy theory come from? So I started digging into it because I definitely don't buy into this theory in any way. I started digging into it and digging into it. And do you know where it came from? Do you know the source of this theory that it was BlackRock and Citadel that on purpose manipulated and collapsed the market? The source was a guy called Charles Hoskinson who happens to be the chief Cardano developer. So Cardano, the blockchain that's one of these kind of third generation blockchain. So obviously it's very much in his interests to make sure that the world believes this was just a one-off attack rather than it being something more fundamentally flawed in this kind of this system. So yeah, I mean, with BlackRock and Citadel, I mean, look, when any good asset manager or hedge fund or trader, if you hit limit down, you've got risk limits. And if you hit them, well, you get out. Simple as that. These big boys are selling because, hang on a minute, we felt our stop-loss. I'm out before I lose way more money. But of course, if you get the big boys selling, then obviously that just accelerates the drop. But they're selling because they were hitting their stop-losses. They weren't manipulating and purposely collapsing the market is my opinion. Well, you're going to make a lot of people upset with that. You're not fighting for the little man. Sorry. That's my opinion. Okay. Well, talking about collusion and market manipulation, let's talk about cartels. Because I know your buddy, Super Mario, has been quite vocal. I think what was he meeting with President Joe Biden? The two as per all politicians are having a bit of an inflationary issue right now. And tell me what Super Mario has come up with as a possible solution. Well, yeah. I mean, look, obviously there's a cost of living crisis. And that's driven by many factors, but certainly energy costs are probably top of a lot of people's lists. And the problem there is from an economic point of view, that hits everyone. Everyone. It doesn't matter your income level. The whole spectrum, you all need to turn on the lights. You all need to heat your house or run your air conditioning or go go somewhere in a car or a vehicle. So it hits everyone. And therefore, obviously it's incredibly negative from an economic point of view if your economy is driven by consumer consumption. Because if you're spending more money to heat your house, that's less money to spend on the high street. So you've got this cost of living crisis. So these politicians are under huge pressure because who do you blame? If you're a person and an individual in this society or in this economy and your life has suddenly got a lot harder, who do you blame? Well, you blame the people who are running the show. And so the prime ministers and the presidents, the chancellors of this world are under huge pressure right now. And they're going to get slammed in the midterm elections because of it. And so they're trying to come up with either excuses where they're blaming others. That's Joe Biden's tactic. Just blame Russia, blame the Saudis, blame the Chinese. Tap into your emergency oil reserves to try and sort it out. It's all failed. All efforts have failed. The Saudis aren't listening. They're not increasing production faster. So anyway, they're coming up with these kind of ideas. So Draghi, who's the Italian prime minister, former ECB president, of course, former legends, maybe, has come up with this idea. In principle, I quite like it. I mean, in practice, it won't work. But we've always lived with this idea of OPEC. And we call OPEC the oil cartel. And this is the group of major oil producing nations who together form an alliance and together make decisions on whether to increase or decrease production. And because they control so much of the global production, they basically control price. And they can dial it up and down at will. So that's on the producer's side. What Draghi's proposing here this week is actually why don't we have a buyer's cartel? Not our producers. Why don't we sit on the other side? Why don't Europe and America, who are the big buyers, surely can't we club together and can't we from the opposite direction control price? The best example of this working is supermarkets. So supermarkets are the big buyers. And they squeeze the farms and the producers on price. And basically, supermarkets are a buying cartel that kind of works, right? So this principle, I guess, on paper works. It's just that probably in practice, it probably won't. I guess it's the so what could happen had you operate as a buying cartel? Well, you go, well, right, Saudi, what your price of all is at $105. We're not prepared to buy that at that price. We'll buy it for 80, take it or leave it. That's what the supermarkets do, right? With your chicken farmer who's selling eggs, you know, we're going to buy a million eggs. And we're not going to pay whatever I don't know how much an egg costs individually from a wholesaler. But let's just say we're not going to pay 10 pence. We're going to buy a million. And I'm only prepared to pay seven pence. How do you feel about that? And the farmer goes, oh, God, all right, fine. Because he's got no choice, because the farmer doesn't have that kind of access to kind of sell the eggs on mass direct to the market themselves. Okay. But if Saudi go, if the US said to Saudi, look, we'll only buy 80, they'll probably they'll just go no. Yeah, but if I was Saudi, I'd go, oh, hang on, my other phone's going off. Let me pick it up. Oh, hi, G. How's it going? Yeah, you say you want some more oil? Oh, yeah, sure. No problem. Right, I guess the point here is the product that is being bought and sold. The problem is the buyer is so dependent on it. Yeah. It is so dependent on it that the seller's got all the base cards, like with eggs. All right, if Tesco goes to the farmer that will buy a million eggs, we're only prepared to pay seven pence and the farmer goes, no, Tesco, all right, fine. Our customers just won't be able to buy eggs for a bit. And then the farmer will basically go out of business until the farmer comes calling back and go, all right, fine, seven pence. Great. Do the deal. Eggs back on the shelf. But people aren't going to lose their lives for not having eggs, but they might if they haven't got oil, right? So here's the problem with Draghi's proposal. The buyers are too dependent on the product to have any real. You know what I think this is? This is Draghi being the intellectual in the room, coming up with engineering a slightly more complex way of addressing a key issue at the electorate. And if he gets the US on board, that gives him a good relationship appearance with the US and they club together. I think it's just, you know, he knows that this is flawed for the reasons discussed, but that's not what the objective of Draghi is. Yeah, he's a very clever man. And you're absolutely right. But I would say there's obviously a long-term shift away from fossil fuels to green energy for sure. And I think this whole episode is accelerating that shift. But look, we're talking about multi-year, multi-decade shift here, and it's accelerating a little bit. But I think the way, the perhaps the way it is just re-concentrating the minds of politicians in charge is like energy dependency. We never want to be energy dependent on a third-party country ever again. You know, certainly the US very much thinking those terms Europe needs to, and that's why all of this green stuff initiative needs to be domestic, right? Basically all these countries now operating off the premise that we need to be green and self-sufficient. And that's the kind of direction of travel for the years to come. Cool. All right, well look, we'll wrap it there. Thanks as ever, Piers, for your thoughts and insights. And thanks everyone for listening. If you enjoyed the episode, please do leave us a rating, whether it's on Spotify or Apple, and share the podcast with a friend. It really does help. The more you do that, the more the algo shares it, and the better it is to spread the word. So I'd really appreciate that. Now you've said that. That reminds me of something earlier in the year. We didn't hit the target. We didn't. Disappointing. Our loyal listeners will know what I'm talking about. Anthony Chung was going to shave his head live on the podcast if we reached a certain target on the Spotify ratings. I think I said 250. It was rising rapidly. And I took a bit of a page out of the Elon Musk book and just went big with a big promise. And obviously, Mr. Target, just like Elon did. And talking of Elon and talking about car targets, the rate of which their Shanghai, their main production facility, is operating of this week, 200 cars a day. Yeah, I did read this. And it's supposed the target, what is it? 2,600 should be by Monday. And obviously, that is just not going to happen because overnight, they've even intensified the wording around the restrictions again. So they're at 10% government. They're at 10% of capacity. But do you know what I do? It's such the way of which he operates. Do you know what he said to counter at this? And we'll finish with this. He said he was an FT, the future of car event. I think it was a Wednesday, Thursday. And he said, knowing full well, he knows the situation. Demand is exceeding production to a ridiculous degree. He hinted at a new idea and he about temporarily cutting off new orders. He said, we're actually going to probably limit that. We're going to just stop taking orders for anything beyond a certain period of time. The way he tries to just take it is avoiding the demand is that exceeding production because production has collapsed. But anyway, I thought you were going to say his comment was, it doesn't matter to me anymore because I sold the top. Yeah. And by the way, I've just got off another four and a half billion. Yeah, it doesn't matter now. Sorry, what? Tesla, what? No, no. I'm social media now. Okay. On that note, have a great weekend, everyone. And peers, take care and see everyone next week. They like that.