 Hello, and welcome to episode 73 of the Market Maker podcast episode. We're a day early, the normal Thursday, the 14th of July, but Piers and I are otherwise engaged on Friday, but given everything that's happened in markets this week, we thought, got to jump on and discuss some of these major things. So quick announcement, I guess before I begin, as usual, we'd super appreciate it if you could leave us a review or rate the podcast, depending what platform you're on. It really does help us get this out to as many people as possible. It's super appreciated by the both of us and all of the team. It's super quick and easy. So just hit that five stars. If you don't mind, it would be amazing. But otherwise, let's just quickly review the week, and then I'll go into the three major topics that we'll talk about. So a couple of headlines, a quick whip around the markets. The inevitable happened. So the euro hit a 20-year low, it's hit parity. It's gone below that, in fact, briefly for one point in time. It comes amid all of the things Piers and I have talked about for many weeks, the economic situation, record high inflation, but also Russia and that critical gas pipeline, the Nord Stream 1 in a so-called maintenance period, has made people particularly anxious as well about what could happen next week. Does it come back on? What does that mean, then, to kind of stop the fire of inflation even further and the kind of downside consequence that could have on euro area growth? The other problem for Europe is your main man, Mario Draghi, is having a bit of a headache because Italy is at risk of imploding once again. Political instability, very common in Italy. Giuseppe Conti, the five-star leader, has said he no longer backs Super Mario's cross-party government. Italian stocks have underperformed against their European peers. If you're looking at bond-yield spreads, so the Italian bond, the BTP against the Bund, it's the widest in about a month at the moment, and there is a no-confidence vote happening right now, in fact. So probably you'll know the outcome of that by the time perhaps you listen to this. And then elsewhere, Biden, he's going to arrive in Riyadh tomorrow and Friday. It's being dubbed Mission Impossible. And the reason why is he's going for a two-pronged plan to bring down oil prices while still punishing Vladimir Putin. And big ask for many different factors. But yeah, big U-turn obviously from three years ago, I think Biden was quite feminine in calling out Saudi in terms of human rights and things like that. And here he is now as, of course, the consumer in America is feeling the pinch of high fuel prices. Then we've got US bank earnings there out this week. Just about to kick off actually any moment. So if we're still on the pod, I'll let you know the top-line figures, JP and Morgan Stanley are going to hit the tape shortly. I've got some of the others as well at the end of the week before it really ramps up. Overall, what are we expecting? Well, Q2 estimated earnings growth rate for the S&P stands at 4.3%. So for context, 4.3% might sound, well, OK, it's going up. But that level, in fact, would mark the lowest earnings growth rate reported by the index since Q4 of 2020. So when we were really feeling the brunt of the first most onerous lockdown that we had on COVID. And then finally on the weekly wrap, former Chancellor Rishi Sunak and the trade minister, Penny Morden have emerged as the front runners for the conservative leadership race. That was in the first round where they basically eliminate all the other candidates who throw their hats in the ring. Conservative MPs will reduce that number in a second round of voting today. And MPs must cut that field to two candidates by Thursday of next week. And then, yeah, the three major topics, though. They weren't even the big things. The big things were, of course, red-hot US inflation data. The Bank of Canada surprising the markets with an almighty 100 basis point hike over and above expectations. And then Elon Musk trolling Twitter on Twitter, no less. And so there are the three major things that we're gonna talk about. So we'll kick things off then with the US CPI report. We didn't catch it. Essentially, the latest figure came in at 9.1%. So on a year-on-year basis, pretty broad-based advance, the largest gain on the headline figure since the end of 1981, expectations in the market sat at 8.8%. So that 9.1 even busted the top end of the most kind of highest estimate on the street. Very quickly, the market moved to price and acceleration of Fed rate rises. Probability now of the Fed going 100 basis points in a Canada-esque way is now priced at 76% as of this morning. Hi, hi. Yesterday at overnight, Fed's Bostick. So it's always good to keep an eye on what the Fed speakers say in the aftermath of such new information. Bostick said, everything is in play in reference to combating price pressures. He's not a voter. Who is a voter? Mesta, she also spoke last night. She said, consumer price report was uniformly bad and that the central bank will need to go well beyond the neutral level of rates. What do you think? That's a kind of cocktail of bad news, isn't it? I mean, yeah, that report yesterday was exactly what the Fed didn't want is exactly what the whole of the US didn't want. It's exactly what everyone didn't want unless you happen to be super long the US dollar or short tech stocks or something. I mean, the point is that it was, not only was it higher than expected. I mean, that's obviously bad but it's just the idea that this uptrend in inflation is not only continuing, it's maybe even accelerated. So, and then you think, well, I think two things. Why that's so surprising and therefore alarming. The two things are, well, the rate hikes that we've already seen have done nothing, like literally nothing to tame this inflation beast. And all right, the Fed were a little bit late to the party, the rate hiking party, but look, they hiked in March, 25 basis points. They hiked in June, sorry, they hiked in May, 50 basis points. They hiked in June, 75 basis points. That's a lot of hiking and inflation is still ramping higher, right? That's number one. Number two, that court, so the headline inflation reading 9.1%, okay? So that means prices in June, 2022 were on average, 9.1% higher than they were in June, 2021. And in that basket of goods, when I say prices, it's the prices of all the stuff that we kind of buy on a day-to-day basis. One of the big components in the basket is energy. Now, when I go and have a look at things like the oil price, well, what happened in June? Well, actually the oil price went down. So you've got deflation from the energy, certainly from the oil side. For example, oil was trade, WTI crude was trading in a bag, let's just call it $112 at the start of June. By the end of June, it was trading more like 101. We're now down at 93, but that's been in the first two weeks of July, right? So energy price is down. You look at that gas, that came off even more sharply. I mean, that gas moved from like $8, let's just call it $8.5 by the end of June. It was down at five and a half. So energy prices really came off. Also, other commodities like wheat, wheat prices came off sharply. You got pretty, most commodities dropped in June is my point, right? And that's been one of the factors that's been driving this inflation problem. And yet, despite that, so despite rate hike since March, commodity energy prices particularly coming down, we've still got total headline inflation moving higher and the rate it's moving higher is getting faster. So this is why it's concerning because we just don't know, it makes the second half of 2022 just even more uncertain. I mean, what's gonna happen? I mean, is inflation gonna peak or not actually? Is it gonna continue to trend higher? Is it gonna accelerate even further? And so we're in this sort of environment where we just don't know what's gonna happen. We thought inflation might have peaked in March, April, but no. And so I guess this presents a real conundrum for the Fed and presents a massive risk for the economy. And yeah, so it's that uncertainty that's breeding the kind of market sentiment. So one of the comments then that the governor of the Bank of Canada said, and I guess we can bring that in because the two kind of, we can talk about in combination almost. Yeah. So the governor, Tiff Macklam, said the objective when he was in a statement kind of justifying the rationale behind why they were so forceful in that hike of 100 was to achieve a soft landing. And that's achieved by quote, front-loading interest rates now. We're trying to avoid the need for ever higher interest rates down the road. Yeah. So in normal monetary cycle, in normal interest rate cycles, historically going back, but if you wanna just strip it down to basics, the way it normally happens is that as the economy is growing and getting strong, this leads to demand for goods going up, right? Cause people have got jobs, they're getting pay rises, they're getting bonuses. So they're spending more money. So demand increases driving up inflation. So then the central bank comes in and tries to dampen demand to engineer more sustained growth because if you just let growth do its own thing and it gets out of control, that demand really ramps up, inflation shoots higher. And in the end, the inflation spike creates the recession cause people can't afford to buy as much anymore. Demand gets corrected lower and that creates a recession. That's that boom, bust cycle, right? And normally central banks, they're normally what we call behind the curve. They're behind the inflation curve. They normally act too late and then therefore don't actually achieve what they're trying to achieve which is contain inflation, okay? They normally act too late for two reasons. Number one, there's a lag between the interest rate hike and then that actually dampening demand. And it's hard to measure. Some people say it's about a six month lag which is maybe why my point earlier is a bit invalid where I say, well, hang on, the Fed have already been hiking rates and yet inflation is still going up. Well, yeah, there is a lag, right? So normally when they see inflation rising it's kind of too late. They start hiking but because of the lag effect inflation gets away. The other one is it's political. Rate hikes are not popular. It means costs more to borrow money, right? And so the electorate don't like that. So there tends to be a little bit of political pressure on the central bank to not hike. Anyway, so look, they're normally behind the curve, right? So I guess what the Bank of Canada are doing and what they said yesterday and what they did yesterday is really acknowledging this fact that normally we're behind the curve historically. So let's actually for once get out in front of this problem by raising interest rates way more rapidly. So that front loading idea and that will basically contain in the end it's like short-term pain for long-term less pain. I'm not gonna say long-term gain because we're gonna get a recession, right? So it's shorter term, larger pain. It's like, I guess one analogy might be, you know, when you've got a plaster on like you cut your arm or something, you put a plaster on, right? And then at some point you need to take the plaster off. It hurts taking a plaster off. So you can either try and try and just inch it off like centimeter by slice slowly peeling it off, right? And that's pain over a long period or you could just whip it off in one day. I guess the Bank of Canada just, they just ripped off the bandaid and they've gone for the big one. They've hiked by 1% 100 basis points and they're trying to get ahead of this inflation problem that they know they're behind. Yeah, to give that a bit of context, not only is that the largest rate hike by the Bank of Canada in 24 years, it's the first G7 country to move by that magnitude. So does have the Bank of Canada now done power of favor? They've opened the box now and does that make it easier then for him to shoe in if he wanted to 100 without disturbing markets because they can desensitize a fraction by the fact that this has already happened elsewhere. Is there any truth in that do you think? I think there is. I actually personally, I can't quite make up my mind yet. I need to digest this more about what the Fed do at their meeting at the end of July. So we're less than two weeks away from the Fed's meeting. Before yesterday, so there's two key things that happened yesterday just to repeat. Inflation in the US, the inflation figures were much higher than expected and then the Bank of Canada went and hiked by 100 basis points. If you go back the day before that, then what we were expecting from the Fed at the end of July was that they would hike rates by 75 basis points. That's what the Fed have been telling us. That's their forward guidance, right? Now, here we are 24 hours later and we're talking about, are they gonna hike now 100 basis points? Inflation's worse. Bank of Canada have opened the door to this idea. They've set a precedent now, 1%, actually doesn't that then grease the rails for the Fed to follow? But there is a, so that makes sense, but there is a one counter argument, which is how much of the Fed worried about their own credibility? Because the Fed have added, I'd say one of the worst years, if you take middle of 2021 to the middle of 2022, that 12 month period, I'd say the federal reserve had one of their worst years in my career, which spans 20 years, just in terms of just getting it wrong. They didn't recognize that inflation, they underplayed the inflation problem last year. And maybe, I don't know, are they overplaying it now? I don't know, we'll see. But I guess the point is that they've been guiding us to 75 basis points if they now go and do a hundred. Does that, I think in some quarters, people will further downgrade their respect and credibility for that central bank. However, I said, I can't decide because I think in other quarters, people will go, you know what? Actually, I think that's brave, check the inflation data, they should be more aggressive and actually take your hat off to the Fed. I agree, you should go a hundred basis points, you've got even more respect from me now. And I think there's a real divide between those kind of parties. But so I can't decide. I probably think the Fed should go a hundred now. That this inflation beast, it's clearly out of control. I guess one further point to make, what happens to him, just kind of put the Fed to one side, what happens to inflation back in the second half of this year, irrespective of interest rates, right? Commodity prices are dropping. So, does that naturally call a top to the inflation trend and inflation starts to decline? There's obviously risk against that. There could be another escalation in the Russia-Ukraine situation. I don't know, Putin could just turn off the tap to Europe in a retaliatory effect, which could lead to these commodity prices ramping back up again, right? But at the moment, they've just come off a little bit. Does then the consumer side, so remember you've always got two sides to price, the supply, and then there's demand, right? The two forces that drive price and obviously price change, that's inflation. So that supply side is talking about the Russia-Ukraine situation and what happens to the supply of energy and stuff. It's also going to be mindful of any flare-up of COVID again in China, where there may be another lockdown, right? These are unknowns that might or might not happen in the second half of the year. We've got to be mindful and keep an eye out, but we can't predict, right? So what you can maybe predict better is the demand side. And so far this year, the demand side certainly in the US has been surprisingly strong. Consumers are out there buying stuff, even though prices have gone up. And I think there's two reasons for that. Number one is they had a lot of savings through COVID. Number two, they had a big fat skinny check. The government's given them money, right? So they've gone out there and continued to buy. Secondly, I think it is a behavioral thing. Once you're used to a certain lifestyle, you want to maintain that lifestyle. And even if it means you're eating into your savings, you're going to get out there and you want to go out for dinner. You want to go to the movies. You want to go on holiday. I've been away for two years. You want to do these things. And yeah, it's more expensive. But you know what? I'm going to do it anyway. So that's been the attitude for the first six months. But what happens on the demand side in the second six months of this year will be super interesting. Will those savings dwindle to nothing? Will people actually have to start cutting back? And there's one stat that I want to bring to the table on this topic, which is the US consumer confidence figure. Which let me get it back up. It dropped to a level of 50 in the month of, this is for the month of June. And that is the lowest reading on record. That's actually a consumer confidence reading that is lower, way lower than COVID crisis. And in fact, it's lower than the financial crisis in 2008 and 2009. It's actually basically matching the levels seen in the 70s and the 80s when we had this disastrous economic stagnation situation. Consumer confidence says demand is going to weaken. Yeah, and just to make sense of this, this data sets called the University of Michigan consumer sentiment. And what it measures is how consumers feel about the prospects for their own financial situation, how they view the prospects for the general economy over the near term and their view of prospects for the economy over the long term. So this is a really bad state of mind. Yeah, and there is one thing to say though, what seems to happen though, even though, I mean, consumer confidence levels have been super low for a few months now. They're still trending lower, right? But even though it's very behavioral again, right? These consumers being surveyed and asked questions about their own economic situation now and then their future expectations, right? And when they're answering, they're obviously doom and clume. Oh, yeah, we're really worried about inflation and XYZ and this leads to a really low reading on that sentiment gauge, right? But then after they filled in the survey, they opened the front door, go down the high street and spend loads of money. So they're actually, they're behaving in, they're still behaving in a way that's different to what they're describing their feelings are. But that can't go on, that disconnect can't continue for long. So for me, the uncertainty is the demand side and how quickly does that unravel? And well, one of the other things I was looking at earlier this week and I was writing about was, we've obviously had Prime this week, Amazon Prime day, which isn't a day, it's two days, such as what retailers do to juice these consumer events. But I got thinking and I was thinking, I wonder if there's any analytics I could look at about the performance of 2022 Prime day, comparative to then trying to just see behavioral patterns because Prime's one of those days where people sit on the sidelines and wait, so what type of purchase behavior? And there was a company called Numerator and they're basically a real time data like shopping traffic analytics, essentially. And a couple of stats for you that kind of will probably help with context, this situation is of those who shopped both this Prime day and last, 27% spent more this year, 73%, obviously then spent less, the same or less. Inflation also impacted 83% of Prime day shoppers, 33% said they waited for the sale to purchase a specific item at a discounted price, 25% passed on a good deal because it just wasn't a necessity. Two of the most top five in-demand products for this Prime day, what do you reckon? Now you've put me on the spot here. I'm trying to think of some kind of products that you might need for an emergency kind of economic disaster, like tinned food to put in your bunker so that you can survive the disaster that's coming. No, go on, tell me. Dishwasher pods and Amazon basics trash bags. Wow. Tough times, these are tough times. They were the two most popular items. They placed on as two of the top five items. Right, so that is a consumer staple, right? Thin bags, I mean, all right, it's a first world problem, your dishwasher tablets, but these are like consumer staples, it's like stuff you need. So that's really telling, like stuff that you want, I don't need, that's more kind of consumer discretionary items and if they're not on the list and that's a classic, that right there tells you that the consumer confidence is now actually having an impact on consumer behavior, which means the demand side's weakening, which means the recession's coming and the final big question is, does the demand side collapse, deal with the inflation problem? Does inflation then come back down? If so, great, soft landing, the Fed can get back so they can hike into the end of the year and maybe even start cutting next year, right? The big, big, big disaster would be if we get the demand side collapsed and inflation doesn't come back down. And this might happen, I mean, you might think, well, how is that even possible? Well, just quickly, one thing would be check the labor market in the US, there's 10 million job openings still, record off the scale. The number of job openings, so that's the number of jobs that are being advertised but people aren't taking, right? And it was at 11.4 million, so it's come down. But you've got as particularly in like the hospitality sector, they're desperate, like airlines, there's flights getting canceled left, right and center, why they just can't hire people. So how do you solve that hiring problem as a company? Well, you're gonna have to increase the salary that you're offering. When eventually you increase it and increase it and increase it until eventually someone starts to bite. But that means wages go up super fast. That could lead to a force that continues to drive inflation higher. And that's this whole thing around inflation becoming entrenched. And that's the worst case scenario where we get straight up stagflation where growth declines away in a recession, demand side collapses, but inflation stays high because of that wage situation. And it just continues the lack of supply of goods. Yeah, and the inversion between the two year and the 10 year yields in the US, now the deepest since the year 2000. Yeah. People coin these all the time, the inversion and it's done it multiple times recently as we've gone through this latest episode, if you like of markets reacting to the inflation situation. Yeah, that whole, so yield curve inverting is as we've said a few times, it's like that classic recession alarm bell. So for the last 50 years, every single recession in the US, every single one bar none has been preceded by the yield curve inverting. Now there is a lag between the inversion and the actual recession happening. And I think it's, I think it's could be up to 15 months. I think it's just off the top of my head. But look, the fact that the curve has inverted by more than at any other point this century, definitely tells you that, look, it inverted earlier in the year, that's your alarm bell. It's just like now the alarm bell sirens are just glaring across the entire planet, right? They just alarm has just got louder. So I think that does signal an increased likelihood of a recession. And I think it just says maybe the recession's coming sooner, right? I think that deeper inversion just says markets are pricing for a recession to happen sooner now than perhaps we had previously thought. All right, well, let's move off the kind of top level macro and let's talk a little bit about Elon Musk who was called a bullshit artist by none other than the Donalds. I don't know if you saw that. Oh, wow, I didn't see that. Him and Donald had been having a ding-dong. Trump's been messaging on or posting on Truth Social and then he's been getting hounded then in response by Elon. Elon can't help but bite at these things. Hang on, can I, wait, wait, wait. Getting called what, what did Trump say, a bullshit? He called it, he called Elon a bullshit artist. Wow. Yeah. For all the people. And he was, I can't remember the string of text he said but it was something, I saw a picture of it and it was like, his cars, his autonomous cars crash, his satellites blow up, he's like, he had a whole string of like all the things. Then he said, when Elon was coming for his like credits of the US government for a handout, like a subsidy, he would have been on bended knee, like kissing my ass if I asked him to because it was his whole thing about whether he voted Republican in the past and so on and so forth. But look, we're talking of Elon, Twitter. Twitter filed a forceful complaint against Mr. Musk on Tuesday, alleging that he's treated the $44 billion offer for Twitter as an elaborate joke. The complaint accuses him of a long list of material contractual breaches, breaching financial obligations, misusing confidential information. The list is quite extensive. Musk's primary reason for walking away from the deal according to his lawyers, as we heard at the end of last week was that the company failed to provide enough information about the calculation of how many bots are there. And this has been quite openly discussed by Musk himself on Twitter using memes to troll the Twitter board no less. The two parties I was reading this morning could settle or negotiate a deal at a lower price than the $54.20 originally agreed. And where do we sit at the moment while shares have shed about a quarter of their value since this whole episode began. And they trade about 37% below the offer price at the moment. And if we cast our mind back to kind of peak pandemic, they were trading up at 77 bucks a piece for Twitter shares. And as I said, they're now trading, well, the last price print as of last night, Twitter shares was $36.75. Yeah, what's going on here? Like, what can you take away from Elon Musk? And I've talked about him a lot, but is this an elaborate joke? Is he gonna get penalized? I mean, he's got away with everything so far. He's paid what would be big sums for some people, but it's kind of chump change for someone like him. For tweets and inappropriate things he said about SEC filings and all the rest of it. Does he come a cropper this time or not? Well, I think he's in the most precarious position. He's been in to date. I think he's in a bit of trouble here, actually now whether best, I think best case scenario for him, well, maybe is that this all gets settled out of court where they agree on a lower share price and Musk goes ahead and executes the deal. So yeah, his original bid was a total of $44 billion, which was a share price of $52.40. That's the only, I'd say that's the best case scenario for Musk possibly, but the thing is, I mean, does he want it anymore? I mean, did he want it in the first place? I mean, there's that whole story we were kind of spinning earlier this year about just how can Musk get out of his Tesla holding because he's kind of locked in because if the founder and the cheerleader says, guys, I'm selling, then we'll have the whole market would sell and the share price would collapse and his fortune would kind of go with it. So then one of the conspiracy theories is he's engineered this entire sort of ruse not to buy Twitter, but just to providing an excuse for selling some of his Tesla shares. Cause yeah, guys, look, I'll raise money to go and buy Twitter. So, you know, that's why I'm selling nothing to do with Tesla. So he's gone ahead and I think he sold, what was it, eight and a half billion dollars worth of his Tesla shares. By the way, at a price that is way higher than where it's trading now, he started selling back in April, where is it $1,000 Tesla? It's now trading at 700. So you could say it's extreme, is one of the most genius exits in history, right? That's one extreme end of the conspiracy theory and he doesn't want Twitter at all. However, I mean, the problem he's got, I would say, is that, I mean, just to kind of quickly go back for those that have forgotten about the details, he's done, so Musk started to secretly build a Twitter shareholding kind of back in March, okay? And by the way, that's when the Twitter share price was trading even below still where it is today, by the way, so it was like in the kind of mid $30, right? He started building a stake secretly and he got up to 9.1%. So I think it was by the end of March, early April, he owned 9.1% of Twitter that he'd been building in the background, breaking regulations along the way because you're supposed to file and make the regulator aware that you're owning such a portion, he failed to do that, he missed the timeline, so he's in trouble anyway, right from the start. He then, and then he said to the board of Twitter, look, I've got such a large stake, I wanna see it on the board now, I wanna say in how this company's run and the board are like, well, no way. And he basically gave the board of Twitter three options, give me a seat on the board, or I'll take over your entire business, or I'm gonna start a competitor, you know, deal with it. So the board said, all right, fine, come and have a seat on the board, okay? So they gave him a seat on the board, only for them, for Musk to go, no, I don't want the seat on the board, thanks. Instead, I'm gonna buy you, and he set about a hostile takeover, okay? This brought the board to the negotiating table and here's Musk's problem because he very quickly put together a legal contract for this deal that they kind of signed off on and I mean, it looks like it was done pretty hastily and there's very little sort of exit ramps for Musk. And here he now finds himself, he's trying to pull out of the deal and Twitter are going, you can't do that, you're legally obligated to buy us at the agreed price. And probably one of the things that's come back to bite him is was his hastiness to draw up that purchase agreement without thinking too much about kind of trapdoors and exit strategies that he could have. So yeah, he finds himself now with a big fat chunky lawsuit. And I guess, yeah, I mean, this is where his tweets are also coming back to haunt him. Have you seen some of the tweets that Twitter in this lawsuit? I saw in the FT, they had some pictures of some of the pages from the filed suit and there's just pictures of his tweets saying, okay, point number 59, it's another tweet, 60, he tweeted this, he then tweeted that and when you actually look at it like that in the blind, cold of day and you see these lists of tweets, it's pretty damning. And so they, and the quote alongside some of the pictures of all of these memes and whatever, this is in the lawsuit. The lawsuit says, for Musk, it would seem Twitter, the interests of its stakeholders, the transaction must agreed on and the court process to enforce it all constitute an elaborate joke. So they're trying to paint this picture and with a huge amount of evidence that Musk is just playing this, richest man in the world just messing about having a getting a few kicks and giggles, but actually to the normal person, this is creating a huge amount of damage and legally Musk is not in a strong position here. I think one thing that I think would make Musk nervous is the fact that from the law firms that they've got involved, I think one of them is Quinn Emmanuel, I think it might be one of them, but these are, I mean, these are expensive lawyers. These are the best lawyers on the planet kind of level. The lawyers always win. One of the things that I was reading was around the idea that Twitter have been very confrontational with this response and they're for more complaint. Would they do that if they weren't crystal clear about the figures that if they come out in the future, if it was 20% like Elon has suggested, which is without substance, but would they pursue this at that level with this type of speed? I think you make a very good point. There's no way they would be this aggressive Twitter. If they didn't have solid evidence that the number of accounts that are bots is what they say it is, which is I think around about 5%, right? Musk tweeted another tweet that's in the lawsuit filing is that this was on the 17th of May, Musk tweeted, 20% fake slash spam accounts, while four times what Twitter claims could be much higher, this deal cannot move forwards. And apparently Twitter's position is we have provided plenty of evidence, all of the evidence that's needed to prove that bots are at 5%, Musk doesn't care, he's basically using this bot thing as a reason to pull out and it's a poor excuse. And basically what they're saying in the filing is and the legal technical here is that Musk has breached, this is Twitter's lawsuit, right? This all needs to be taken through court or not and proven or not, but Twitter is saying Musk has breached his obligation to do everything he could to secure financing for the deal. Basically, obviously as part of this bid for 44 billion, Musk had to come up with a financing structure, where are you gonna get the money from? There were lots of different elements of it. The part of it was right, I'm gonna sell some of my Tesla stock. And on the part was right, I'm gonna borrow money using my Tesla shares as collateral. But of course in the meantime, Tesla shares have collapsed. They've dropped 30%. So it's like Musk is now maybe thinking, no, I don't really, maybe I don't wanna sell Tesla. The banks are going, well, I don't wanna really use collateral that has a price that volatile. I'm not comfortable, like Morgan Stanley, I'm not comfortable with lending you money against Tesla shares anymore. So this whole financing thing has kind of unraveled a little bit. Maybe that's the real reason Musk doesn't want this now. And he's trying to get back out and he's trying to use the bot thing as the excuse. But one thing that you mentioned the lawyers, I mean, yeah, in the legal side of things that, you know, Musk is not in a strong position here. And interestingly though, while two things that are interesting, there's a precedent for this. So there was a company called DecoPak Holdings, which I'm sure no one's heard of. But there was a court case in March, 2020, where a company called Kolberg and Co, who had bid for DecoPak and then tried to pull out the court ruling in March, 2020, forced Kolberg to go ahead with the deal as it was previously agreed, okay? Now the judge that presided on that case, it's called Kathleen McCormick. And guess what? She's going to be on this case. Is this the Delaware thing? Yeah, right. Secondly, the lawyers that acted on behalf of DecoPak Holdings, who won that case, Musk has hired them. So Musk's lawyers were the winning lawyers on that precedent case, even though they won on the other side, they were representing the company that was being bought. Well, now Musk's hired them to represent him, the person who's trying to pull out of the deal. So this thing's amazing. This story just keeps on giving. So the one thing that I can't help but feel is that, you know, forget Twitter, Tesla, I can't see the evidence is so overwhelming to be long-term bearish on that stock. I just can't see it. Yeah. I mean, I know that this is a really divisive comment I'm making, but you cannot have someone who has shown the behavior of Elon Musk over the past six months have anything to do with a company of that magnitude, if that company is to have success in the future. Irrespective of the fact that at the moment, I mean, at the moment, they've got their back against the wall. They've cornered themselves by being so influenced by a singular individual, but they have to take some damage to get rid of him because he is a problematic person for any maturing, matured business if it wants to be successful in my eyes. And this is without even talking about the EV space and competition and all the rest of it. I just can't see it. Can't see the long-term how Tesla can survive with him involved. Well, yeah, I mean, I agree. I mean, it's interesting that look, Musk is a maverick. He's an out and out maverick. He's an inventor, he's a designer. He's an engineer. He's a genius on one level. It's just that as this Tesla thing has grown and grown and grown, it becomes less about having that genius maverick engineer and it becomes about the cool, hard, really difficult job of running and operating a global business and all the regulatory and the governance and all the XYZ stuff which he hates. All of the stuff that comes with that, that's not him. And the bigger they get, the more of a, the more damage he's doing and the more of a risk he becomes. Now, what I'm interested to know is, do you think he was always like this? It's just that his platform has grown and now he's got X number million followers on Twitter and he's the richest man in the world and the media wants to write stories about him all day every day. But was he always like this or has he morphed into this? Has he become quite arrogant? I think they all morph, surely. I mean, you look at Bezos when he was in the garage in the late nineties and he's like this total dweeb, like total dweeb. And then there's that meme of him walking out and he's got like a gilet on with nothing underneath and he's busting out some huge gun muscles and he's got a massive explosion behind him. If you can see, I mean, and it's like he's turned into this like Arnold Schwarzenegger figure from this dweeb. Yeah, of course, I think they change. You would change. That's human behavior. You're gonna change. It's gonna take that whatever was in you and it's gonna amplify out because, yeah. I mean, I'd be hard pushed to find someone who's not altered by that situation. Okay, so basically that Elon's gotta go. That's not gonna be a popular comment. You know that, right? Yeah, but that doesn't mean he can't have success and go on to other things. Like he should constrain on SpaceX, which is... I don't know how he can retain employees that Tesla as a company culture, as a managing like a board of directors. They must be, it must be a situation if he goes in the boardroom and he goes, he just literally, someone speaks and he goes, shut up. Because it must be a completely one-dimensional, overarching control from him, otherwise they would have got rid of him. Yeah, dictatorship. Yeah, and a business can only run like that for a short period of time. Well, yeah, this Twitter saga could well be the one step too far for Mr. Elon. Time will tell. So I've got a call from Bill Gates. He wants to talk about the position. Hold on. All right, so we'll end it there. Thank you for listening. Hopefully that was interesting and hopefully I've not pissed off too much. Alienated. Me, you know, I'm sure a lot of people think they're completely opposite to me and that's fine. That's what makes a market, ladies and gentlemen. But yeah, thanks for listening and we'll see you next week. Thanks, Piers. See you guys. Have a good weekend.