 Hello and welcome to episode 60 of the market maker podcast and going to run through the main highlights of the week. But before I begin, just wanted to say to any students who do listen to the podcast to check out our amplify me YouTube channel because I've been dropping two times per week, some catch up conversations I've been having with our alumni and it's been not only really great to catch up with them and see what they've been up to, but to hear just some of the, the incredible difference of their stories. There was one, one chap I didn't quite realize I knew he was a really keen sportsman didn't quite realize he was a pro swimmer. And so chose to go to Loughborough, actually switched from swimming to then join the GB rowing team. Obviously, obviously, but then the pandemic hit, and he had to kind of rethink because I couldn't train. And that was a real kind of disruption to his entire plan is actually pivoted still at Loughborough uni, and is now going to be joining lasard on an investment banking internship, which I thought was just great. So that switch yeah and then going from another one this this will speak to your heart peers chaper spoke to last week, and he, he obviously was with us in the summer of 2021 to train mechanical engineering. And now he's going to be joining trading role HSBC. I did see that on. Was it on your market maker email. The kind of subject line was mechanical engineering to HSBC. Did you think that was going to be you. I thought it was going to be all about me. So then I opened it up really excited to just read about myself, and I'm not mentioned at all. Cheers. So just a recap for, for anyone who's just joining episode 60. You were a mechanical mechanical engineering right mechanical engineering student. Yeah. And then moved into strength finance with HSBC. So, yeah, trot that path. Yeah, I knew, I knew not it was a lot it's a lot you know we're talking 20 years ago. You know I guess there's similarities right in that you know you're going from a non finance background into the world of finance I mean. These days though it's the landscape is way different, I would say for youngsters coming through now just in terms of. Well the knowledge you've got to have or the experience. You need to have gained to kind of bridge that that gap between non finance and I'm trying to get a role in finance. Unless mainly because I guess this, I guess, you know content information is so much more readily available than back in my day. So I think you know the bar has been raised right so there was there was no internet back in your day right. Hang on a minute. Although I will say this is going to properly age me and people listening to this and getting a what. My first ever email address, I didn't have email until I started university. And that that's just because it didn't really exist. I mean I started university. October 1997. And so yeah, my literally my first email address and I didn't have a phone. I think it's probably, it might be in the second year university, I got a phone and only because no one else had one. I got the first phone and only because it was my, my dad's, my dad was traveling, traveling a lot for work he was on the road a lot so he had one. He was like an early adopter, let's call it and so he was changing handsets. I mean I say handsets. I needed some kind of heavy lifting equipment to take this thing around so I had this brick it was nicknamed the brick by my mates but yeah I had a mobile phone in year two, when no one else did. And then like the Nokia Revolution. So it all makes sense now it's completely clear to me because how long have you been married for this. I've been married for seven coming up 17 years. Okay so and you didn't so me quickly running the math. So you probably met your wife soon when the brick came out. You are, you are nail on the head I was rocking a mobile phone and I was the coolest guy on campus. Just locked it in first year bang. So cool. I want to call your mum and dad on the brick. Absolutely. Anyhow, well I don't want to make you feel any older so we'll move on and you by the way you can take off your Dyson zone. I have phones with your air purifier mask by the way. Oh my God did you see the pictures of that. Yeah. Yeah I'm not don't buy that. No one's ready for that. Are you sure that's I mean you know it's the first of April today. I did think that yeah. It's not going to be an April Fool's joke. Well it can't be an April Fool's note not on April Fool's surely. Well this this is true. All right. Yeah strange one. Let me just do a quick fire through some of the the week's major news and absolutely feel free peers to jump in. If you've got your two pence dad but Vladimir Putin. He said that Russia would continue supplying gas to Europe, even as it demands customers pay in rubles and you're you might have clocked that he was having a lot of conversations or Russia were with India. I just find that whole situation just so fascinating on the geopolitics, whilst the West is taking very stern kind of position in a unified way. But at the same time we definitely want to embed ourselves with India and China for the long term. Yeah, India having complete conversations directly because I was reading about it the amount of military equipment that Russia provide to India. And then basically the Indians saying okay yeah we'll we'll find some way of circumventing the swift ban, so that we can continue propping up and purchasing oil and paying in rubles. Yeah, but yeah, but how's that how's that going at the minute. Well I was just going to say, you know we were talking about Ray Dalio is kind of, you know long to changing world order and the kind of super long term kind of cycle where you get superpowers coming and going we were talking about that the other day but you know this is another, definitely another sort of chapter in that story is where actually the West and their power and control is waning, because you've got India talking to Russia about, well I will have to, but the thing about it is because of the pandemic, there's some around the planet in severe debt, right, so that they're financially incredibly strained, and then the oil price spikes, right and if India, I mean they're not. What's the Cold War to them, right, it's, it's, it's nothing right in the short term, so they're financially strained oils gone through the roof. And Russia going look we can actually sell you some oil below market prices and they're like yep, because all India got a big problem in that they don't produce much of their own own oil is pretty much all imported so they're in for India this all price price spikes of a nightmare. So yeah any kind of avenue to try and, you know find cheaper prices well, they're going to take it and who can blame them to be honest like in the short term so yeah it's just another sign that yeah the West, and they're kind of control over the global political situation is definitely on the way, but yeah with the ruble. Yeah just caught my eye. Obviously the room we were talking about a few weeks ago when the invasion began and the ruble got absolutely slammed record all time ever lows against the dollar. And obviously the invasion has been ongoing and maybe Russia are getting pegged back and you know sanctions are obviously still fully in force and you know even will we get more sanctions, we don't know yet but I guess what I'm saying is all of the reasons as to why the ruble collapsed are still there. Yet the ruble is now almost made a full recovery. It's just it's actually as of pretty much this morning it's 4% off a full rebound from the entire cell off that we saw when they invaded. And actually, in the short term it looks like some of Putin's tricks are actually doing a job I mean there were some pretty aggressive policies that he put in place to try and kind of hope the collapse of the currency of the central bank raised interest rates from from nine and a half percent to 20% in one meeting. They're then imposed a 30% fee on purchases of foreign exchange. Right so just making it just you know just too expensive to bother trying to convert your rubles into something else. Then actually I didn't realize this one but exporters so those you know selling oil and gas they were mandated to convert 80% of their foreign exchange to rubles. So when Rothsneff is selling their oil to whoever and getting euros back they have to switch up 80% of that into rubles all of this like helping to prop up the currency and it's actually almost made a full recovery of course this is it it collapsed because the West you know put you know lots of sanctions around swift but then also kind of you know locking down their 650 billion dollar kind of foreign exchange reserves that Russia have and so on and so forth so on the face of it in the short term it looks wow okay rubles recovered it great well done Vlad. However, if you look a little bit further out and the futures curve. What that's telling you is actually this short term round sorry this rally in the rubles actually probably short lived because of those short term functions and actually if you look further out then actually the in I think it's the 12 month forward it's trading 110 against the dollar. So just to give you an idea it's kind of traded back to 80 against the dollar at the moment right the ruble. But the one year forward is trading at 110 so that means the ruble will then while they're expecting the ruble to devalue again and actually if you look at the black market. The ruble is trading anywhere between 135 and 250 against the dollar so basically it looks like in the short term, some of these kind of capital control policies by Putin has propped up the currency but it probably is the case that more medium term that it's going to be a temporary bounce. It's interesting because like when you think about that situation and the immediacy of what has to happen now from the authorities where the government led or central bank, and then repercussions over let's say a more medium term horizon say 12 to 18 months. It's interesting from a central banking rate point of view to tackle inflation from a Biden oil flood the market point of view to inflation is it recurring theme across the broader landscape at the moment. If you're an investor, I'm not talking a fund manager I'm not talking I'm just talking. You're a person investing in markets as a as a as a normal consumer. What is the best strategy here. Like, you're not institutional so I'm not looking at some sophisticated structured product of hedging myself and excellent. Just is cash better at this point and then you're looking later to deploy once there's more that time depends on your risk profile or risk appetite. So defensive is good. I guess the sensible thing is to use most of your capital and deploy it in a defensive way, but with a small amount of your capital, maybe go after some of these shorter term large fluctuations, because there's some huge opportunity. But it's just super high risk, because the speed and distance some of these markets are moving it's just just savage. And if you get on the wrong side of it, then you're very vulnerable to, you know, the psychology of, you know, letting losses get out of control. And so that's why if you do want to go after some of these short term plays, you've got to do it in a way where the amount of capital you're deploying on those kind of strategies is relatively very low to the amount of capital you've got to to invest overall, you know. So that's kind of how I play it. And then secondly, you know, whilst you're, I know for stuff like oil and we'll talk about it in detail a minute in a minute with Biden's kind of move but I think with oil. Yeah, I mean, I think a lot of people listening maybe kind of playing a long term sort of strategy with oil that might be centered around the kind of the longer term, you know, lack of infrastructure and the longer term supply demand imbalances and it might be that, you know, it's been obviously all prices have gone up dramatically but they've blipped quite sharply lower yesterday. And I guess this is a test of your metal. It's a test of your, your conviction over your trade right all these kind of episodes are trying to knock you knock your confidence they're trying to, this is what markets to me. It just feels like they're trying to do everything to get you out of your position to scare you out of the market. And, you know, I think it's, you know, you've got to stand firm and you've got to play, you know, noise that I guess the amplitude of the noise at the moment is huge. And so it's never been harder to kind of stay true and have and stick to your conviction. So, yeah, it's always interesting to what you said like working with the retail traders over the years. It's almost like they're one two lots. And they feel like, Yeah, the market knows about my one or two lot position and they're coming after me. But yeah, as you said, totally psychological in that way but well let's let's move on there's plenty of other headlines to quickly touch on for the week. The other were a growing number of US institutions becoming more bearish on China. So namely Morgan Stanley they cut back so did city their gross forecast for China. They were citing strict adherence to its non tolerance policy expected to stay in the coming months this comes with their outbreak at the moment as bad as bad as it has been. I think it was this week, wasn't it Shanghai. They're going on a two part lockdown in different parts of the city. But of course, this is going to be a much more longer drawn out thing, as just mentioned the zero tolerance policy and what we have seen earlier this week Chinese manufacturing service PMIs both dipped below 50 into contraction territory is that's the first time that's happened since the onset in Wuhan of the initial COVID outbreak in in Feb of 2020 so definitely keeping an eye on that. Later today we've got non farm payrolls so we're recording this on Friday morning later this afternoon that is coming out. It's meant to be a good report. And the market probability at the moment is at 69% for a 50 basis point rate hike. So that has come off a bit. I think it was up around 80 at one point. But today's number expected to support the narrative for that move. And then we got flipping over to Bitcoin and the crypto space. Bitcoin getting close to knocking on the 50 K marker again. I can see in the futures market which I look at the Bitcoin future, having run up to that point has faded back down to around 45. As of as of right now but any thoughts on the crypto. Yeah, I mean these these crypto fans they've been finally, you know, a bit of respite finally, you know people looking at their crypto accounts and you know just enjoying having the position on again. I think it's been a very painful few months right and it's been one where I guess what I came coming back to psychology right if you've got your you've got your crypto wallet or your crypto account or whatever it is then I think for a few months now people have really been looking at their account right they haven't been going on their phone and it's just just checking in on how much we up today because it was always down and down again and 10% down and 25% down. I'm just going to ignore it. So you just kind of delete the app kind of thing. Right. So that's when markets start going back up you're there checking every like every five minutes it's gone up another percent. Oh wow, another saying great you know you feel good about your position again but so it's been a it's been a very big move to the upside across the crypto space. It's technical. I mean, we've had we have the downtrend that started beginning in November and kind of now we know bottom down in when was it kind of mid or yeah towards the end of January right and for Bitcoin that was a move from 60. Well it's 67,000 down to sort of 35,000 right so big sell off and then we kind of chop sideways for a bit and we kind of broke the downtrend and what's happened this week is actually Bitcoin's made a new high for the year. So it's broken out of its consolidation range having had a big sell off sideways consolidation range now it's broken to the upside. So for Bitcoin that was kind of anywhere around the sort of $44,000 level right and it's broke that we've had a really strong pop to the upside similar technical for similar technical sort of situation for most of these coins. And so you've seen this strong technical push to the upside Bitcoin's pulling back today to test 45,000. So this is like now you've broken up above the range and now I'll pull back and it'll be interesting to see if we now get support on the top side of that previous range but so a lot of it's technical. And of course, I guess the macro side of things. We haven't had much new negative. I mean obviously the Ukraine Russia thing still ongoing but it hasn't, I guess you would maybe describe it from an investors point of view it hasn't re-escalated. I think maybe there's a maybe the macro side of things has just calmed down and that's enabled the technicals to kind of kick in and that's mainly it's a technical sharp break to the upside. So yeah, people enjoying looking at their crypto accounts. Do you know who's enjoyed or being the biggest kind of payoff from the crypto crypto space this week. Elon football player. Yes, messy. Let me sign a $20 million. Just $20 million. Three a deal to promote a new crypto fan token platform. So yeah, back himself an extra 20 mil. Yeah, well, you know, he's got to find work, you know, because he's going to be retiring from his day job soon. So you know, he's got to find some avenue to keep, you know, keep his lifestyle going. 20 mil. How long for how many years is that three year. So he's got to promote that for three years. Yeah, that's all right. Isn't it. That's a decent gig. Well, let's hope he's filing his tax returns. Let's have a look elsewhere then. I mean the UK. One of the major things you're likely to read today, the first of April is your energy bills are going to get a heck of a lot more expensive. This isn't unforeseen. It was always going to come comes as part of off gems cap increase, just given the wholesale price increases that we've had customers on a default tariff could see gas costs go up 81% let just see prices 36% comes at a point where living standards are falling at their fastest pace, at least 66 years at the moment in the UK at the same time, looking at UK economy house prices. Got to be falling right. It's funny, isn't it. I mean, I don't know when that conversation has started for you. Perhaps the first few years when you started working people saying appears you should get on the housing ladder and you probably saying at the time is a bubble, they shouldn't be buying at these levels. The UK house prices have risen at a fastest pace in 18 years, annual growth has hit 14.3% price to earnings ratio, as you would imagine is now all time high. I couldn't actually find the figure but last time I looked I mean it's just frightening disproportionate to people's wages at this point in time so yeah the housing market just isn't stopping it seems at this point. Some of it by the way, can I just add in a slightly different angle here because obviously people look at house prices and they. It's always about, well, well supply and demand I guess like any financial asset right, the price is driven by supply and demand. However, there is quite a big, you know unusually large external element to come in here which is inflation. Because the cost of building a house now has gone through the roof. I did that, but so there's you know stuff like lumber costs, you know, it's actually been right up at the top end of the scale of these commodity inflation spikes and actually this was pre pre Russia Ukraine. So the cost of building a house is feeding down in so that's obviously new supply, right, the new housing stock coming on the market is having to be sold at a higher price because the builders just don't have the margin anymore and that's having a filter that connects to the secondary market of existing housing stock so there is that inflation element that's playing an unusually large role, you know, across the housing spectrum. Another to cover off the more of a corporate finance theme global deal making has fallen to its lowest level since the start of the pandemic first quarter this year, 23% lower than the same period of last year. Spacks, the smack attack is over. They're pulling back it's down 78% but the firms are deploying their cash they've had their strongest ever start to the year. The big deal that came out this week was RBC wealth management agreeing to buy a Bruin dolphin. All cash deal 1.6 bill. Yeah. So there's still activity happening. It's quite interesting what you said there so M&A deals generally are down, what did you say 25% down year on year 23. So the private equity space are having this their strongest ever quarter in terms of volume of investment. Yep. So that FT this morning. Yeah that's an interesting divergence there isn't it I guess the thing about P. Certain certain pots of money that these P firms have to invest are on the side here in the UK at least there's this thing called VCT it's like venture capital trust money and basically the government have huge tax invent incentives for investors to invest their money and that's because they want investors to kind of be investing in entrepreneurs and you know investing in you know economic growth essentially in the end right so there's a lot of tax benefits however there's a time limit. So these PE firms have got to deploy the capital within a certain period of time and if they don't they've got to give it back. So that P is slightly unusual in that the clock is ticking. And it's almost like right we've got to go for these deals. So maybe there's an element of that. Well yeah I mean the article itself does talk about the vast cash piles accumulated during the pandemic and number numbers wise the buyout groups backed 288 billion dollars worth of deals. So that's the 1% rise compared to the first three months of 21. If you remember the first three months of 21 that was when we had quite a severe. We went into a full lockdown wasn't it in the UK at that point. Yeah that's right. So I guess on a comparable basis you can understand why the numbers are probably looking like that. Yeah, like for like but yeah arguably though the biggest news of the week wasn't in financial markets. I'm sure everyone has seen with the Oscars on. Yeah well the Oscars on. Yeah, you could be right and saying that that I'm sure everyone's seen it will Smith, giving the slap down to Chris rock live on TV and and the little kind of verbal sparring that you can see it in suit thereafter but it's just just crazy watching that I woke up in the morning and this is why I normally do my routine is I put out like a morning note that I circulate on Twitter on my Twitter account. I was looking at market news, but when I go on Twitter, I can see the trending trending hashtags or trending words on Twitter, and it was, and it was like coming up with Will Smith and then someone left a video on a comment on a video I did the day saying, Oh no mention of Will Smith, and I was talking about markets and I was like what's going on. How to look, watched it, the clip, the full clip, and I was just like, This is like half six in the morning you're thinking, Have I woken up yet? Yeah, is this real? Well right. Yeah. But yeah, me saying is this real? Was it real? Was it real? Well, let's let's just let me ask you a question. Let's just for one second. So it is, it was genuine. Yeah. Was he right? Or was it was he in the right or in the wrong? Will Smith. Okay. Yeah, I'm not going to skirt the issues in the wrong. He should be, he should give his Oscar back. He should be banned from the Academy. He should be dropped by any sponsorship deals. It's wrong. Don't sit on the fence. No. But what about, all right, I'm going to play the other side of that then. Shouldn't he be standing up for standing up for his wife and his family shouldn't he, what about you know standing up against bullies? You know, so is that so let's say a guy in a bar says something to me, when my wife so I should just go punch him in the face, and then it whole party ensues, his friends hit my we have big bar crawl, big bar fight, like that's that's not, that's not the way. If you want to, let's say shed light on alopecia and all these other things and protect your family, there's other means of doing that than doing that. Yeah. I think you're right. What in hindsight what he should have done was stand up and walked out and right that not be there when he's announced as the winner. You know, that would have been and then he then if he would have gone because obviously it's his first Oscar, if he would have gone, take that. I'm not part of this. That would have been incredibly long lasting, powerful a moment that would have been he would have been recognized for a long time. Absolutely. That's the way to do it, but he let his emotions get away from it. Well, have no fury than a woman scorned and her face, if that was my wife and she pulled that face, I'd go up and slap him. So I don't know where that feeling comes from, because I'd rather not be on the wrong side of my misses so. But a couple of stats there. 40 million Americans used to routinely watch the Oscars through the 90s. This is live 40 40 through the 90s and the noughties Sunday show clocked in at 17. Oh wow. And it's been on the on the on the decline for consecutive years, actually, and they did a poll of the actual movies. And, you know, recently there's been Korean movies and some other small more budget type films that are getting airplay. Actually, the majority of Americans is poll found only heard of two of the 10 best picture nominees. Wow. But that's a problem, right? Because if you look at Netflix and streaming services, a lot of it is foreign film. Yeah. And if I remember that to the 90s when I was a kid, it was all Hollywood. Yeah, but it wasn't it wasn't anything else than Hollywood. Yeah, that's right. And then so there's the big releases in the cinema. And, you know, every couple of weeks there's a new release and like everyone trots down and we all watch it. But yeah, there's so many different sources of this content that coming left right and center and you know if you don't have a Netflix account, well then yeah you won't have heard of it or obviously not seen it. Yeah, it's a problem they need to evolve the Oscars. Yeah, they need to evolve like the industry has evolved and well so this comes full circle back to the first point was it staged. Oh yeah, I mean you look at those numbers and you do think. Because I'm probably going to tune in and watch next year. Just in case, right. Well Smith is front row. Let's get into one of the we got two topics we're going to discuss in just a bit more detail. One being the announcement of the US to tap the SPR to historical amount and then we're going to talk probably coincides with this to dovetail the US your curve inversion which we had at the beginning of the week. So to start with the US will release roughly a million barrels of oil a day from its reserves for six months beginning in May. This is a historic drawdown aimed at combating obviously rising inflation there's a few different angles here I guess on timing the rationale the implication and so forth. It's not the first time the US have done this of course they've done two other large releases of oil during the pandemic in the past six months 50 million barrels in November 30 million came in March. After the Russian invasion as well, but this was a total of 180 million. So he's definitely ramping it up. And yesterday's price movement was pretty severe. I mean we saw a sizable sell off. We have seen quite aggressive bounce actually this morning. But we were trading pre announcement around a 108 handle in front months WTI futures we got down we actually broke 100 in the overnight Asia pack session. Initial thoughts peers on what's happened. So many different angles to the story. I'm not quite sure where to start. Let's start with the political angle. Let's get first. So Biden's got midterms, November, and obviously he's getting slammed his ratings are down and you know, and the one of the issues is the petrol pump, the, the cost of fuel at the pump. Okay, so this is his immediate strategy, let's get the fuel at the pump cost down. Yeah, some, some context, the average of polls at the moment Biden's approval ratings down at 41.5% but break that down and NBC poll showed that only 33% approved of his handling of the economy and 38% blame him for inflation going up. Right. So his immediate strategy is I've got to try and turn this around before November. One thing people really care about that is day in their day to day life the electorate in their day to day life they're filling up their car with petrol and my God this is expensive who's in control here. The hell's going on at the top right so he's got to address that fuel pump cost at the moment is so it's bro it broke above $4 and this is, I guess one of the key thing to give you an idea this is $4 a gallon. Okay, now in the US, and that's a record, by the way. So in the US if you take the last sort of 20 years, like in the noughties, it kind of trended from about $1.5 a gallon up to kind of top out at about $3 right. Then we had an oil spike in 2008 where oil hit $150 a barrel in 2008 the petrol pump cost got up to $4. Okay, then it came back down sharply and basically ever since then ever since 2008. Petrol pump costs have been in the range of $2 to $4 per gallon. Okay, and in recent years since in the last seven years it's been two to $3 per gallon. Now Russia Ukraine's kicked off. And now it's broken up above $4 and everyone's shang screaming about it. Okay, so it's initial reaction is got to get this price down how am I going to do it. And there's two parts to this strategy. We will talk about the risks more medium term in a minute but it's two part strategy is, let's flood the market with excess supply let's add a million barrels more per day from our emergency reserves. Second part, he's trying to persuade Congress to implement a what he's described as a use it or lose it policy towards oil producers and particularly shale oil producers and basically what he wants is Congress to introduce a new law where operators forfeit leases on federal hands if they do not opt to drill on them. He's trying to force us shell producers to drill more oil at the moment us production is at 11.6 million barrels per day. That's compared to the high, which is 13 million barrels per day so in theory there's about 1.4 million barrels per day of excess capacity there right but what all the oil firms are doing. The price of oil is not through the roof is they're paying back the investors who've been panicking through COVID, because oil dropped and collapsed obviously in 2020 and so all the investors are getting the money back again dividends there buybacks going on and Biden's going I stop that use that money to actually increase production so his plan is, if I can just for this 180 days I'll flood the market with my oil to give you lot time to ramp up production so that then your oil will continue to do the job. This is I thought Biden was green. I thought that was the whole campaigning. There's an election to win. Who cares about the environment. Who cares about what I said to get elected. So, yeah, the other the other layer on with this as well as that the whenever big political announcement comes out this in in a some way unscheduled. It's never by real surprise from a strategic point of view from whoever's saying it in this case administration, because they came out and made this announcement right in the middle of the monthly OPEC meeting. Like, literally, this and not even that they drip fed the source out in the overnight session, where in European time, then before the OPEC meeting, and then they then confirmed it in the middle of the OPEC meeting. That's just like a middle finger up to Saudi who aren't actually prepared to give Biden any face. And that's because, I guess, few reasons but number one Biden when he came into office was quite aggressive about Saudi and the Khashoggi incident and wanting to, you know, stand up against that number two. The US are desperate to do a nuclear deal with Iran to try and get more oil back into the market and obviously Saudi do not want the US to do a deal with Iran. And so, you know, the Saudis are like screw you, you know so when Biden's desperately trying to say to say look ramp up production ramp up production buy more accelerate your increase in production Saudi like whatever. So, yeah, he's had to go it alone. Well, the added benefit or upside for him is that he looks like he's being protective and assertive of American interests. And that's where he's trying to spin but look I don't want to sound like we're, we're talking down Biden too much so just before anyone starts going oh you sound like Trump guys. And even the score a little bit because I was thinking, I'm sure Trump sat there on the sidelines of watching all this thinking about what's my next move. And I was just had a look, because this week I saw the stats behind the downloads for his truth app, which obviously hasn't been out that long. Do you know how many app downloads his he gets a day on truth social what do you reckon. Downloads per day. Well, I know we had some very punchy forecasts in terms of active users by year end but how long has it been following on social as well. How long has it been available for this app like maybe a month or something. Anyway, I think let's say a day I'm going to say it's got to be it's got to be 100,000 a day for him to really be gathering some momentum. 8000. Ouch. And when he initially, yeah the initial launch of the app, it hit 170,000, but it's slowly declining to the point now it's got to 8000. There's a number of daily active users on Apple devices over the past week. So DA use the closely followed metric that you look out for these types of kind of software I guess usage 513,000. To give you a bit of context, daily active users at Twitter, 217 million, and he's clocking in at half a mile. Yeah, because and launching any new kind of social platform like that momentum is absolutely everything. And looks like he's lost it. So, could die on its face. Yeah the digital world acquisition corp that was his back if you remember merging the Trump media tech group. 31% of its value since it hit the peak in February, so only a few weeks ago. Well he's going to have to run for election again. Yeah, because he's going to need some marketing airtime for his app. And the best way to do that is to try and run for a second term in the White House. Yeah, I guess for for nothing else than other than your own personal game. That's the only reason it differs. I know it's for the love of the country. Yes. But guys, just to conclude on the oil situation then. One of the things that people talk about a lot is this structural deficit and one of the other things I saw was about market rebalancing the fact that the markets short of Russian crude. The actual implication so I guess my question is, the price of oil has come down in the 24 hour period since this announcement has happened. So, this is going to happen over a six months period. What is the longer term impact of this I mean, is this going to work or not. But it for sure increases the risk and uncertainty ahead. I'm just to start with talking about the strategic petroleum reserve, the US have the largest reserves in the planet on the planet these reserves are a great cushion against any kind of dramatic scenario where the supply of oil, you know sharply drops it's an incredibly important buffer. Right. And it's, and it's been sat there and actually, if you look back over the last 20 years right the amount of oil in the reserves has been the lowest until now the price was about 550 million barrels and that was back in the year 2001. Then it climbed to about 700 million barrels by 2005 and then it sat 700 million barrels then, all the way through to about 2018. It's been drifting a little bit lower since then. But Biden's talking about taking this from, let's just say 650 million barrels down to 300. And what is it 375 million I think something like that right. Well as of as of March 25, their stockpile was at 568. I don't get why that's because he's already tapped it a couple of times. So it's already on the down but my point is, it's going to now sharply drop this this really important global buffer is going to have in size and actually I didn't realize but the International Energy Agency, they've got these kind of, I guess member states of the IEA of which the US is a member state have to have at least 90 days of net oil imports in their reserves at all times. Okay, now this move by Biden takes will take the oil reserve actually I got the number here it'll take the US reserve down to 353 million. Okay, 90 days of imports is 315 million. This is cutting the buffer to just 38 million barrels right now. That is fine. If Congress passed this bill and US oil producers start ramping up production because then his plan is to start buying oil back to replenish the reserve. Okay, two problems with that. Number one, will Congress be able to get this bill through. Don't know at the very best it takes forever to get bills through Congress, especially when you're hitting into an election, by the way, and the and the price is very divided and so chances of that I think are probably limited in the in the near term. Secondly, you got, you got banks and traders actually spinning this on its head and saying actually, this is bullish for price, medium term, because if we look at futures pricing now in like 2023 is they're on the up, because what they're seeing that what they're going now is what we've, we for sure got guaranteed increased demand in 2023, because the US are going to have to be replenishing. The big buyers in the market replenishing their stock. So, and obviously the biggest risk of all is if the Russia Ukraine thing escalates further, if more Russian crude comes offline, or then our buffer has vanished. So my point at the start the risks have ramped higher. The risk of oil spiking. I don't know to whatever price you can think of 250. The risk of that is increased, not saying it'll happen, but the risk is will increase if some of these kind of ducks don't fall into the market. So he's playing a very dangerous game here, I would say, one saving grace maybe if the global economy does turn over and go into a recession, and then the demand side dampens. That would help the situation from purely an oil price point of view but yeah this is a dangerous tightrope. So this is about the economy rolling over a lot of the conversation earlier in the week was about the US Treasury your curve inverted on Tuesday, first time that's happened since 2019. The stats being that the curve is inverted before each recession since 1955 for the recession following between the range of six to 24 months. It's only provided a full signal once over that period. So if you read into that I know there's always this kind of history repeating itself but is this time any different there are circumstances that are a little bit different in terms of the monetary situation. I mean what I'd say first is that that kind of. Yeah, it's the best recession indicator. Which means from a human behavioral point of view. It's almost like now for insured that it will continue to be the best just because when it happens when the yield curve inverts which is when long term yields drop below short term yields. Okay. When it happens. Well it's all over the press. Why oh my God recession. Indie. Oh my God we're going to have a recession and of course this then shapes behavior. And it shapes behavior on all levels of the economy right yes at the investor level. But then if you think about I don't know if you're running a business. Okay and you're thinking about long term budgets for the next 12 months right how much am I going to invest in growth and you're seeing a recession indicator flashing up all over the press. Alternatively that's probably going to put you on the back foot and you'll be a bit more defensive right so influence investment, which then has a negative impact on growth and so it's like a self fulfilling scenario right so that's just one thing to say. However this time round. I mean, and every time round, there's always elements and arguments that people spin my hand on this time different. You've got an argument this time as well, whether it's going to play out or not I'm not sure but obviously there's one big player in the US bond market or the biggest player has just stepped away from the table. So the biggest player is the US central bank. And they've been the biggest buyer of US government bonds. Well, off and on but you know for the last 12 years since the financial crisis in 2008 and 2009. They've just stepped away from the table they're done they're cashing their chips, we're at QE is done they are no longer buying in the market. Okay, and more than that. Given how hawkish Biden is not Biden Powell is, they're actually starting to talk about reducing their balance sheet that means they're going to turn from net buyers to net sellers. And this is having a distorted effect on the market pricing across the curve right so short term yields are really high, because rates are now growing up and look we're pricing in back to back 50s. Right, so the short term yields are really high. So what's happening on the long end of the yield curve, well, there's a lot of volatility now. And actually there's a bit of, and actually the volatility levels on, let's say the US 10 year bond volatility levels are the highest, apart from the corona virus crisis hitting in Q1 of 2020 apart from that, the volatility levels in treasuries are the highest they've been for like decades. Okay, and this is because the Fed have stepped out so liquidity has dropped. The volatility have dropped because the biggest buyer, the stepped out of the market. Number two, we're also seeing a hangover from the kind of regulations that were brought in after the financial crisis the capital tier one regulations and the banks the primary dealers are really important members of these markets have actually stepped back and aren't buying as much. That gap got filled by hedge funds and high frequency trading firms but what happens with those guys is any hit a trouble will they back off straight away. So all of a sudden now you've got a big drop in buyers and sellers, which means a big drop in liquidity, which means the price spikes are much the volatility levels ramp higher so you're seeing this happen particularly out on the kind of 10 year but normally the recession risk is because short-term rates are higher because the feds hiking but people believe they're hiking too fast and a recession is coming so they're buying long duration safe haven bonds buying bonds means dropping yields right so you got yields on the short end going up because of rate hikes people think it's an error they're buying safe haven which is forcing yields down on the longer end that's your inversion and that's why it's called this recession barometer so and just for people who are let's say not as sophisticated looking at buying bonds in the long end they're just looking at that or just long only equity exposure just to be clear the the signal firing doesn't mean that's it equities just start dropping right yeah I mean the I mean this is where the theory kind of I guess gets undermined because whilst it is a recession barometer you know each time the yield curve is inverted we get a recession the amount of time between inversion and the actual recession beginning as you said is anywhere between six months and 24 months so this does undermine the theory so I wish I could get that kind of wiggle room on any projects that I work on exactly so but if you add in all the other kind of macro themes then I mean I don't think we need the yield curve to tell us there's a recession risk right I mean it's almost like it's almost like why why is it taking you so long yield curve to invert because hang on we'll be worried about recession for months now given the inflation situation and you know Russia Ukraine and and all the rest of it so I don't think it's the biggest surprising news oh my god wow let's start panicking it's just another piece of news that adds to the kind of building evidence that yeah economies are maybe in a bit of trouble as we move into the second half of the year okay well on that bright note let's wrap up the the episode for today thank you peers as ever for sharing your insights and yeah I'll see you next week yep all the best have a good weekend