The Fed Is Hiking Into A Growth Slowdown | Weekly Roundup

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Finally, the most important Fed meeting of our lifetime until the next one, of course. But excited to be joined this week. We pulled in Vincent Delaward from StoneX to join us for the trio this week on the roundup. So yeah, first off, Vince, it just wanted to say welcome to the roundup. It's great to have you. - Super happy to be here. Ken was going on, how's your weekend trading well? - Feels like it should be Friday, so much activity. So I'm looking forward to the weekend. - Yeah, I love it. Vincent, I think the last time you're actually on four guidance, we recorded like a day after a Fed meeting and we basically spent the first half of the episode saying how pointless the whole thing was to watch it and how stupid it all was. So it feels like a good moment to have you back on. Since then, we obviously have a new Fed share, Kevin Warsh. And it looks like we finally kicked off a hiking cycle, at least we got the first one this week. And I think the most surprising thing for me was how unanimous it was. Everybody voted for the hike, which was quite surprising to me. Vincent, what's your expectations going into the meeting and how did it actually pan out? If you didn't watch the thing. - Thank you, let me start with a bit of public humiliation and say that I expected a dovish hike and I expected Kevin Warsh to fumble the press conference and the truth is I was wrong on both counts. I think it was certainly looked hawkish. Now we can discuss how truly hawkish they can be, but it certainly sounded and looked hawkish. And I thought, you know, give credit to the man. I mean, his performance improved. I think his comment of the room was pretty good. His answers were the right mix of a bit more spontaneity than what we got in the end with all the e-com talk, but without going into the washes, you know, like play the ball, not the referee. Or, you know, so I think he up this game and the market outcome is pretty good from his perspective. - Yeah, I'd agree. I think I was a bit surprised at how consensus formed around the path. And I probably would say there's not enough appreciation yet in the market for the kind of appreciation of the committee for a hiking cycle. 'Cause really, I think October's probably under price right now, just given what the inflation outlook's gonna do. And then you have a gap in the meeting before December, which might make them wanna front load the restriction. And then into next year's dot plot, you had basically toss up between a third hike or just stopping at two. So I was a bit surprised that there wasn't more dispersion across the dot plots of the committee. It seems like he was able to get pretty good consensus around there. But I also question like, how restrictive is just two cuts? Like the markets currently at two hikes. - Yeah, two hikes, sorry, two hikes. The markets currently at roughly four by mid next year. So there's still a fair bit of gap between what you're seeing the interest rate market price and what their guidance is. So, you know, we've had quite a bit of deep risking and dollar up, rates up across the board into this. Wouldn't surprise me if we get the full frontal assault from the admin of fake Iran news, positive China trade news and get some relief here. But bigger picture, I can't help but think with a meeting that had some of the most unanimity around unconcerned about growth and unemployment rate that they're turning most hawkish into peak growth and what could be a slowdown behind this. - Yeah, I mean, if I can jump on this because I mean, this is kind of new for me and feels odd. But, you know, yeah, I mean, for five years I've been on this kind of high nominal growth. You know, we had the market that was pricing seven and eight costs was like, I think they should be hiking. (laughing) And wow, what a, I mean, to me that's the biggest change is how, you know, you look at the, yeah, the dot plot everybody raised, they expect the expectation for GDP, neutral rate. It seems that the stuff that's only crazy when we talked about it about two years ago this idea that recessions are canceled and this is kind of permanent stimulus and then we, it's baked in and then that, maybe it's the contrary to me that that makes me worried that actually, you know, finally when even the Fed Board, you have another consensus to convince all the Fed members that usually want to regime changes. And then I could, my guess is I see that, I see that in the data to some extent. Like I, as you know, I'm a big follower of a day treasury statement and tax collections and it's not catastrophic, but it's definitely slowing and it's slowing steadily. We started the year right about if we look at personal income, 10% growth, now some of that was capital gains that slowed, but, you know, even if we look at the withheld, that's less sensitive capital gain, we fell from about six, seven, two, four, five. So, yeah, it could be that just as no one worries anymore about, you know, any sort of economy slowed down, this is actually the time when, when this in finally, not falls into recession, I think that's a little bit cool, but certainly slows down. - Yeah, that's interesting. I think I just want to show this chart, just to show how big that shift has been. This is just looking at, what we were pricing back in April, which you're talking about, which, you know, those expectations of cuts, and then pretty quickly after the Iran war started, that started to break into a bit of hikes. And I think what's really interesting, trying to piece through like, how to think about what the market is pricing versus what the Fed is saying here. Like, to me, okay, if we start with 25 bets this meeting, it, I also agree, it feels a bit funny that we're only priced at 50% for October. You know, why would, why would, you know, wars talk about, okay, we've removed a bit of restrict, or we've moved a bit of accommodation, which means that they don't even think they're restrictive yet. So, okay, if they're not even restrictive yet, like, why would they not go hike in October? But then maybe it's because like, if you look, it's actually quite a bit more hawkish relative to the, to the own Fed dots here. So it's kind of this weird conundrum where it's like, okay, it feels like we're beginning here. But then it's like, even though it feels like October should be baked in as a hike, we're actually still pricing a more aggressive cycle than what the Fed is even saying in their SEP. So I guess maybe that's what's supposed to be. I don't know what you guys think about that. - Yeah, it, it's definitely, there's just a higher, you know, variance now in the rates market, I think. And that's just what sort of needs to be assumed going forward to, I think, you know, warship kind of dances between not giving forward guidance and giving forward guidance. So that right there is a reason for the increase. Volatility, but the, as Vincent pointed out, I think that cross currents have not been this conflicting in a while. 'Cause I would say, I'm kind of aligned in the sense that if you just zoom out and look at 2026 on balance and the big policy and, you know, overarching things that have happened, you had huge OBB stimulus to the consumer via refunds that are probably waning out. You had what's not appreciated that much but is very big stimulus is a near record draining of the SPR that has kept oil prices lower, help the consumer at the pump. Then you had massive tariff refunds jammed into a very short window of time, leading right into the midterms. And all of these things are sort of, you know, very politically motivated into November, obviously. And then, you know, you've had a gradual worsening of Fed support as the RMPs have come completely off, gone from 40 billion a month to zero. And a Fed that is becoming more hawkish in their path, sending real rates up across the whole curve. So, then you. say, okay, this is all up to midterms, and then after midterms, what do you have? You have a, you know, divided Congress that at best is more geared towards taxation and regulation, more socialism versus capitalism, less AI-friendly than current, less political capital for the Trump admin to kind of push and coerce allies or strategic resources, etc. And all of these kind of waning growth impulses into 27. So I think it's a matter of time before, you know, these things move with a big leg, right? Real rates rise and then you see three to six months after the data starts slowing and everyone's surprised. So I think it's this period of transition change before it, you know, it might not show up in the growth data for another two, three months maybe, but that's always lagged, and if, and if you're making decisions off that, you're, you're looking backwards, not forwards. But the problem is inflation is still sticky. So, and it's going to be through your end because of oil, which by the way, at some point here is going to start causing more growth problems and inflation problems if it keeps rising. So I definitely think it's much diceier than, than probably the markets appreciating. Yeah, I could not agree more with what you said. I think you mentioned four things like the SPR release, the digital tax refund and the tariffs. I mean, just, just being these three things, you know, we probably have about 200 billion, especially even more if you think of the tariffs in terms of, you know, going from high tariffs to negative, right? So that I would add a four, a fourth one, which is this axillary capex in conjunction with the, the capex build out, which effectively reduced corporate income tax correction by about a hundred billion. So you put it all in, you have about three to four hundred billion of, let's call that the stealth midterm stimulus. That's, you know, yeah, I agree with you mostly Wayne. And now we have to consider a pause in the stimulus gap, which made us for a long time, because as you point out, if we do have a democratic sweep, they will not be any sort of political capital to just to pass anything big. And I, I mean, when it comes to the equity market, I fear that to some extent, the surge in earnings, which is real, is entirely attributed to, you know, productivity AI, when a good chunk of that, I mean, if you think that, you know, of these four hundred billion, some of that went straight into profits, right? The tariff reimbursement, that was straight into profits. The individual income reform, I think that, you know, that's, that was spent almost right away. So let's say there's half of that that went to profits, I mean, two hundred billion in terms of, you know, aggregate US profit, that's almost double digit. So a good chunk of that earnings role, that's really supporting the market right now, is on the back of fiscal stimulus that is waning and will probably not be renewed next year. I have a question for you guys. I'd like to hear thoughts because I'm, I'm noodling it on at myself and trying to wrap my head around it, which is, which is the housing market. And so, traditionally, right, we've had, it's been the lifeblood of the US economy. And as we move to more services, you've talked about this, Vincent, you know, moving to more services based, it smoothed the business cycles, less sick locality, you know, obviously, the, the big driver today, now is this, what I would call government stimulated AI CapEx boom, which, you know, I think is, on a rate of change basis, decelerating. But the housing market's effectively dead. Like the, the mortgage rates are back to highs, which we know kind of leads starts and in activity. And if we are getting that deceleration of, of the AI in CapEx trades, you know, there's not really other legs of the stool here to be leaned on too hard. And, you know, part of me wants to go back to this, okay, well, every time you've, you've had these high real rates that bring, you know, the growth problem, then lower rates, you kind of get a boost in refinancing activity as long as come down and all these things. But I just don't actually see, I don't see rates coming down that precipitously, even if we do slow because of both the inflation problem plus the, the supply problem. And I almost, I'm trying to fade myself here a little bit, because I want, I want to be contrarian and just keep buying these dips. But I almost want to say things have to get worse there before they really get better because I don't know how many more levers they have outside like new programs or new stimulus to really unlock the housing market in a major way that helps the economy. What would you guys say to that? I can quickly add, yeah, I think like it's just, we don't want to forget that like a lot of parts of this economy, like kind of suck. And I think it's just like, you know, being above 2% inflation for so many years now, being in this inflation area, like we had the retail sales data this week. And it like beat by crazy, but we also got to remember that's like nominal, right? Like we're just in this nominal world now. And it just, you know, it's not as clear cut as, say, a growth slowdown back in 2018 or something like that, whereas it sort of felt like everything could ebb and flow at the same time. So it's like, we could help manage, you know, mortgage rates and the real estate sector and be a bit more intentional about it. And I think now it's just like we're in this sort of stagnationary malaise with a few different like investment booms tacked on top to keep things afloat. And I think it just makes for like a really tough situation where you can't have, you can't support everything all at once. It's just like, you improve one thing, but it's making another worse. So it's like, okay, you know, we have, you know, seven percent mortgage rates, but that's going to make, you know, housing much worse, but it's going to slow, you know, maybe the economy a little bit in another way. And it's just, yeah, I don't know, it just feels like it's, it's a, it's a mess and it's really difficult to navigate in economy when you have inflation up up 2% for like years now. What do you think, Vincent? Yeah, no, you can add me to the team stack fashion. Yeah. I think that's ultimately what we're talking about is a, you know, persistent inflation problem that I agree with Quinnis is not getting better and we'll probably get worse as we get the, the pass through. I mean, one thing that, um, especially were, I mean, I'm, I don't know, there's a positive now spin we can do, um, and there's a negative spin. So I, I'll start with the first, the fact is, you know, if you look at real wages, right, we had about one 2% growth in real wage before the war in Iran. And that's just gone straight down, right? Basically, um, wages nominal wage kept slowing down at the same time as we've gotten inflation back up. So now we're looking at six months, I think of, of negative real wage growth. And, um, it's kind of odd, right? I mean, because we have full employment. I, I, I, generally I'm skeptical of the, uh, the BLS data, but I kind of agrees with, with the things I track from the day to day statements. So I, I think the job, the jobs are really like, I don't think there is some sort of like, you know, seasonal adjustment or I know the labor market is, is really tight and probably getting tighter. So the question is why, why are wages not, not, not picking up? Uh, and the positive spin, it's this kind of a green span like, uh, productivity argument and, uh, fear of the machines, right? Um, kind of like in 90s, people were afraid of losing their job to the internet, uh, so they were more wage moderation and wage price payroll of the 70s never came back, even though the economy was hot. And then we could argue the same things happening today. People are afraid that, you know, they'll be, uh, fired and replaced by an AI bot. Therefore, they kind of lay low, uh, and we can have, um, you know, basically a shift in the field of security. Well, um, that's the positive spin. Um, and that continues, uh, well, maybe that's, you know, the self-healing, uh, that means that inflation would indeed be transitory. It would indeed be a one-time thing. And as soon as we end the city war, uh, we would be at more or less 2%. Um, I, I'm more on the, um, the negative side of it, which is, um, you know, things take time. There's been a lag, um, I think people, you know, there was some wealth effect from, from the big rally in, in, in May. So people didn't quite need the money, but now you come back from the vacation, you know, you do your barbecue on Labor Day, you see the costs of everything's exploded. You say things are depleted. Um, yeah, you're not, you're not asked for the pay raise. I don't think it's that different this time. I, I, I'm not a big job, but hopefully it's guy. And, and then if we see this Kamari shock passing to wages and then goes into services and then, you know, he just makes the path so much harder for the Fed. Yeah, I, that's such a good point because when you, the first thing I thought of when you said, you know, we're going on multiple months here of negative real wages is like, and that's with all the stimulus things we just talked about. So, and I, I'm, I'm a, the belief that the commodity out price outlook gets worse before it gets better into, into the next six months or so. And then the stimulus fall away. So presumably you, I would say we would, we'll move even further negative real wages, which eventually you get a floor on that because like you said, people asking for for increases in things to combat this. So, all at a time when they've kind of kept a lid on the economy broadly speaking, to not stoke it too hard after the immigration reduction. So just the kind of potential growth level is probably to absorb these types of shocks as less when you have such reduced immigration. Yeah. I mean, we had very stack-flationary policy. If it hadn't been for this AI boom, right, objectively, we are raising the cost of our inputs with arbitrary and erratic trade policies. We are engaging in stupid wars, that cost a lot of money, and get us nothing but trouble, and then we were strategic immigration. So you present that menu, and we're not doing anything about the deficit. So I mean, you present that menu of option to any economies and say, well, yeah, at the end of a very non-expansion, you would expect stack-flation. It's just been, I think, the cycle has been so hard because of this really wants in a century, even once in a millennium kind of technological/investment boom in the AI space, which makes everything harder. But take that away, I think the default should be stack-flation. Yeah. So I mean, I guess the question we're dancing around now is like, are we in the early stages of a policy mistake from the Fed in terms of just kicking off a hiking cycle now? I mean, you look at the last time that 10 years was at 5% a couple years ago, and then he fast-forward like, I don't know, eight months later, and suddenly fall of 2024, and we were panic-cutting rates because of the labor situation. Here we are again, you know, 5% 10-year diesel where it's at, like, this is going to start to hit the mend. You can make the argument that the tightening was already starting to occur, and did we really need to add a hiking on the Fed funds rate? And I mean, the other way to look at that is, does that even really do anything? Like, you know, in this modern economy, I would make the argument that, you know, distillates where they're at, and how that hits the mend, plus a 5% 10-year, like, that's actually hitting the mend. Do we really need to add on more, and it's just because that's what we're used to, that's what we're used to the Fed doing in reacting. What do you guys think about that? Well, I would say, I'd say it's definitely going to do something, and I don't think it's going to be good, where I land as nuance in the sense that, personally, I would call it a, only can call it a policy mistake. If you also can call all these other interventionist policies, policy mistakes that preceded this and led to this discussion, because if you let free market forces do their thing, and you weren't intervening in FX markets, you weren't intervening in bomb markets, you weren't intervening in commodity markets, the market will resolve this with equities down, taking the air out of the AI bubble on its own, and self-correcting in a way that I don't think rate hikes would be on the table. But you've had all of those politically incentivized actions to keep liquidity flowing, and sort of take the baton from a trap fed, and run with things as the quarterback from the treasury to, you know, trying to achieve your intended outcomes pre-elections. And that is to me why hikes are even on the table in the first place from the Fed's perspective. Because the yield curve is still very historically inverted, and, you know, these moves are flattening it further, so I'm of the belief that to really rebalance the economy in a positive and healthy way, you would want an even steeper yield curve. That would put the governor on the profit get spending, and, you know, maybe even allow fed cuts in a world where everything else is kind of brought back to earth. But, you know, we've seen it, you know, huge, you know, no appetite to do that and keep spending in this fiscal dominant world. So it's hard for me then to call it a rate of policy mistake because inflation is raging and growth is raging on, and they're always late. They're never, you know, private forecasters of inflation and growth have had these, have predicted the situation we're going to be in for numerous months. And so by choice, they make sure they're late. So it's kind of typical. Yeah. Yeah. I had the same thought when you said the word mistake, I'm like, I mean, I understand why you use that word. And then in compared to some, you know, theoretical, perfect world, I kind of agree that that's appropriate, but we don't live in that world. Like if you consider the other alternative, I mean, if it's a mistake, it was a forced mistake. Like the market did not leave them a choice. You know, if it didn't do it, it would have been way worse. I think it did it in a way that was, you know, well executed. And yeah, we can talk about, I mean, I kind of agree with Queen's kind of long term vision of what's required to fix the mess, but we also all know that this will be the absolute last option until we exhaust all of the bad ideas. We will finally take the harsh medicine and then we're not there. So, yeah, I agree. And then takes a great point on does it, does it even matter? Probably not. I mean, I've been kind of this fade monetary, doesn't really matter. I mean, what really matters is the stupid war, I mean, you know, you want to know what's going to happen to inflation, the stock market rates, whatever, I mean, you, you know, you have to, you have to end this war. And then suddenly you degrees of freedom explode. I mean, it just seems so obvious that like everybody just wants it. I mean, like, check out the, the poll market odds for the midterms, like, you know, it's just falling apart right now. I, I don't understand. I mean, I feel like I've said this on multiple episodes, but I just, I don't understand the plan. And I, and it just seems like they don't care about losing midterms at all. I mean, now we're the, the base case is a Democrat sweep. And like, so are we just going to spend the last two years of the Trump administration just hearing about impeachment hearings and that sort of thing? Like, I don't know, it just seems like they don't really care. And instead, we're just trying to, you know, work our way through the most unpopular war that's like, ever been had. Like, it's insane to me. Do you, do you have a sense of what that recent big leg up in dem sweep odds is from? Because that, that's a, it went from 50 to 60 in like a week. It's a $5,000 check. True. Yeah. Yeah. They probably get back fired. Isn't that interesting, though? That like, suddenly, it just feels like maybe society is starting to get a hold of like, what's really driving this malaise that we're all feeling. And it's like, okay, if we throw more money at the problem and it's actually making it worse. And then it's like, look, suddenly, you know, I saw a photo the other day of a gas station starting to run out of diesel. And like, diesel is just going crazy like, you know, suddenly, it just seems like these things. The chickens are starting to come to roost like the worst time like we're mid-September right now. And this is where the odds are at. It's just kind of crazy to me. I think I believe in your kind of collective moment of clarity and, and hopefully this is, this will happen in in in the midterms and that's, that's what's baking. But the one thing that, I mean, I worry, I don't know if it's Quino or Felix who mentioned it, but like, why are they so calm, right? I mean, what do we not see, you know, the ratch living the boat, the, the backstabbing? I mean, usually when you have like, you know, the blame shifting, right? You see the, basically, the Titanic running full speed into the iceberg and everybody's on the deck looking at it. Whoa. What do they know? That makes you nervous. And there's a point of me, I'll be very relieved if we have, you know, proper midterms and normal democratic process. There's, I, one, one piece of data that I think Louis Vincent put out today from Gafka, which I thought was interesting, was the, and I'd like to hear your thoughts on that. Trump has not spent any of his back money or almost, you know, almost nothing of his big watch has that he has. Now, it could be that, you know, Trump only spends on Trump and he doesn't see the, the value in helping out losers, but it could be that he's keeping it for, for future litigation. And that would be, that would make a lot of sense based on, you know, kind of never ending ransom, you know, stealing elections, redistricting and the, the, the courts. And then that would, instead of having this kind of clean rejection of, of, of this kind of current drifts, then we just have to deal with it for, for another two years. I, I don't know what you guys think about it. I, how I think, I think through the decision tree and it's like, okay, there's no, I, I think Cubress comes into play a lot with the Trump, with Trump's decision making, you know, pretty evident with Iran thinking it could be another Venezuela, boom, boom, and, here we are seven months later. So I think there's an element of Cubress. But I, there's no world in which I can get my head around the idea that it doesn't matter to them because he lived through, you know, his L in the 2018 midterms, which resulted in more spending, you know, has compromised the following years and, you know, pretty, pretty cruddy last two years of his presidency. So I, I can't think that they don't care. And there have been a lot of things they've I've done to pump markets and influence with money and power, but it's obviously come up very short. And I am surprised that they're sort of late push into leaning back into the populist measures with the growth things. And they started the year, if you recall, feels like Eons ago. They started January with credit card caps, the mortgage thing. It's a huge kind of populist, socialist type of movement. And obviously that caused a little bit of volume to the markets too. And they reversed everything and just kind of went back to feed the rich in corporate class. And I think that's really what's showing up here in the deterioration and approval ratings and polls. Italy, tier kind of hunch, Vincent, I can't help but then question, is the crisis coming before the midterms then like this is a bit more tinfoil hat. But you know, what's the last ditch effort here? Like, yeah, I guess save the war chest for litigation, you know, probably a shit ton of pre-partins. And but there is a small part of me, I had nowhere near my base case, but there's a small part of it. Like a full flag or some sort of geopolitical black one. I mean, all the things over. Yeah, all the. The October surprise. Yeah, all the, there's tons of, all the conditions are there, I think, for a bigger problem in markets. And as we know, they've been doing everything to keep things afloat here. It's not my base case, but I just, it's just, yeah, I just, I don't know what the strategy is. So I'm open to all different explanations. But I don't really know if there's much they can do at this stage to prevent a huge out. Yeah. That's what a gas other than to just say, I also find that the quiet confidence, Erie, who knows what it is. But yeah, I mean, it just seems like it's barely an issue to them. And that's, that's very odd to me for, you know, what is typically a team that is very tapped into markets. I mean, have to trump administration is partners with these prediction markets. Of course, of course, they're looking at them. I guess if you, if everybody in power is pocketed a few billion over the last two years, and we know that it takes what a couple hundred thousand to get a part in here and a couple mill to get out of, you know, I guess they all just don't care. They're just so rich now, they just, you know, like, they don't care anymore. What's your guys' best, this is going to the next, speaking to the AI, cat, but what is your guys' best tinfoil hat theory on why the three leading frontier lab CEOs, all, who despise each other, all started to agree on, you know, strategic and regulatory direction last weekend. What's the, because there's no way it's out of morality or good values. So what do you guys think is behind that? I'll go back. I think it's Adam Smith in maybe the wealth of nation. He mentioned something, you know, if you put three, three captains of industry in the same room, very rapidly, a consensus will emerge to basically corner the market. I think that's, you know, I mean, running this model is increasingly costly, anthropic IPO stress around the corner, which, by the way, I think it's an argument to keep this going, right? Is there, there's a $3 trillion prize in, so close, you can almost touch it, right? So that, when I get too, too bearish, I remind myself of that. And, yeah, I mean, you saw the post right, you know, profits before costs are positive. And I'm a margin X expense, 100%, that's, yeah, certainly if you don't have to spend, you know, trillions of dollars, you know, trying to outrun the next guy to be constantly on the frontier, these things make sense and can be put in an S1 and then so that's, that's maybe the, I don't know, is there any other obvious explanation? I feel like it's, it's sort of, you know, it'd be nice to have one simple explanation that fits Elon and anthropic and chat GBD, early open AI all at once. But I feel like a system, it makes a different incentives that seem to be coming together at the right time. And, anthropic for sure, it's that they have their IPO, that they're, you know, they have this effective altruist mindset over there and they believe in this idea of pursuing regulatory capture. But then like, opening AI, talking about delaying their IPO, which is quite an interesting move. So I would assume they, you know, they're not just hyping up the fear mongering into the road show. So what's there incentive? That's probably the most unclear to me. I'm not sure. You know, Elon supporting slowing down at the frontier, I mean, Grock and his model is in third place right now. I think it would be in his best interest if the frontier slowed down a bit so he could catch up and get tied with the three of them. So I feel like it's just this convenience of different incentives coming together in weird ways and suddenly we're here we are. Or it's that it's real. I don't know. I mean, yeah, who knows. But I mean, the fact of the matter is if we're talking about slowing down, that's probably not good for what the entire economy is dependent on. Continuing. Yeah, that's what just is weird is they're saying the quiet part out loud, which there has to be some good reason to do so because everything's thus far as rested upon that not being the notion. Yeah. Yeah. Weird. All right. Let's go across the pond a little bit. Vincent, you wrote a recent report on looking at Europe and comparing it to Japan. So I have a couple charts here from your recent report. Feel free to just like take some time and would just love to hear about your thesis about what you're saying here because you have a couple of rocket ideas around it. Oh, thanks. Yeah. I think this is going to be a big macro call that made us a decade and you want to be in early on these and the last one I can think of was the devaluation of the yen after Abbey and really just went straight for 15 years and it really transformed the Japanese economy, capital markets. And I guess the thesis that I'm presenting is that Europe today is very much where Japan is was in 2012, also just demography, for example, Japanese tenures ahead of Europe in terms of, you know, by the late 2010 Japan had had the early 2010, it had almost three decades of deflation and, you know, half measures and some QE here and some fiscal there and, you know, nothing really worked and that's when I think they kind of really woke up as a nation and said, listen, we'll just trash the yen, whatever it takes, because we have a crisis that will not be solved with calling for productivity increases, which isn't to be the European project and, yeah, you have a chart of terms of trade, which I think is really important. I think it's an under, under appreciated economic concept and the reason it's under appreciated because it was developed by Marxist economists in '70s and then it was kind of taken away and we replaced that with productivity and TFB and capital penetration and all these things. But I think at the end of the day, terms of trade, how much you sell your exports, how much you have to pay your imports is super, super important. And yeah, Europe and Japan faced the same problem, which is Japan faced it first because it was closer, which is certainly China started massively deflating the cost of industrial exports and at the same time pushing up the price of raw material. So as a nation, you stand out living just degrades when you have an adverse term of trade shock. I mean, this is a history of Latin America for two centuries, you know, it's very hard to maintain the same social policies, the same institutional arrangements when collectively you have to pay more for what you buy and you get less for what you sell. And to fix that, I don't think turning to productivity is this magical thinking, right? It's what Europe has done every five years. We have a bold and brave new report, you know, the drugie report of competitiveness, the Lisbon strategy to turn the Europe into a super, it's not going to happen on its own. Like now because some bureaucrat decides that it's going to happen, like you have an aging population and you have higher social spending and you have an economic model that's destroyed, what in the world makes you think that productivity is going to increase? I mean, if anything, it's going to slow down. So then once you remove the, you know, it's a shallow comb score, right? When you remove all the wrong ideas on only the right one remains, the right one is I will just debase my currency until I can get my tax connections to grow faster than my social spending, which is exactly what happened to Japan. And you know, we had an 80, a handle on the yen at one point, you know, this summer when I was there, it was 165. So normally, it was more than 50%. You add inflation differential, it's close, close to 65%. I mean, this is probably the biggest, I mean, other than the AI story, to me, it's the biggest economic currents consistently applied for 15 years. years, the massive variation of the yen. And 15 years later, it did work. And I think that's the part I think a lot of the yen bear don't get. It's like, Japan fixed its house. You look at the primary budget is in balance. Tax collections are growing by 6%. 6%. So, you know, whenever people talk about debt crisis, right, it's all about R-G. R-G. R-R, how much you pay on your debt, see how quickly your tax receipts are going. If that gap is negative, then you have to have a primary surplus to plug that in. And that's really difficult because in order to get a primary surplus, you have to get spending, which you press is G. That G goes down typically, so the kind of Greek debt spiral. So, you don't want to be there. In Japan, R, sorry, G is greater than R. So, they don't have a debt crisis. And you can actually see that in the data. Like, if you look at debt-to-G, nominal debt-to-G in Japan, net of the central bank holdings, the beautiful diverging has happened. It's gone from 200% of the GDP to 150%. So, 50% is growing to production in that ratio. So, they can have higher rates. They can tolerate a higher yen. The bank of Japan can increase. The places where R and G, the R-managed G equation is much shakier in France, where where G is close to zero. And whatever G we have comes from the fact that we have to pay absurd price for energy. And R is at 4% and rising, and two or less of extent in the US. But, so, what I see is that eventually, Europe would have to follow the Japanese medicine. The problem that I see is that Japan had first moved advantage and did it at a time when there was no inflation. Central banks were concerned about deflation. The US just had figured out it's shale thing. So, the trade balance was improving. They were not so focused on surfaces. The world was at peace, commodity prices. So, you could actually do this kind of stealing growth from the neighbors, compared to the devaluation without getting into much trouble. And indeed, they did not. Like, the treasury never named them as currency manipulator, even though they should have been. And I think the US was kind of cool. You know, it was like, hey, yeah, we saw the earthquake. Yeah, you had like 30 years of deflation. Okay, you catch a break now. And also, kind of helps us to anchor you against China, right? A strong Japan, what is necessary to kind of reduce the cost of US military presence in the region. So, Japan had cards, played it smartly. They also have very committed, like that's the one thing about the Japanese, the data. But once they decide, what do they go? You know, like there was a Ministry of Finance was behind it, the Bank of Japan was behind it, the government was behind it. And it's a small circle of people who all went to the same school. So, they could really do it nice and clean. In a way that I was stunning, I mean, you know, you go to Japan today. It's very pleasant. It's, it doesn't look like a country that has trash discurrency by by 60%. There was very inflation. The banks have been rallying. And then the thing that they had, which was wonderful, is they had this big foreign asset position that cash on the shop, right? You trash discurrency. But at the same time, you get big capital gains on your overseas assets. So net, you cash on the shop to sound living. So, it was a beautiful experiment. I don't think Europe is going to be anywhere near as beautiful. What Japan achieved from, you know, with smart policies and determination, I think Europe will achieve clumsily with with a sequence of nasty political crises, the first one of which will be the French election in this spring. And after that, the German election. And then a really, I think deep existential disdame yours on that crisis. Well, that's that's great timing because as a Canadian, I'm about to join the European Union apparently. So, that's all that's supergold here. I have a few questions Vincent on this, because I'm intrigued by it. And I think, you know, I believe in higher for longer commodity prices and energy, which is a disadvantage for them. Some questions. So, Japan's debt to GDP is what? It's like 230? Or no, it's down now. Yeah, I think it's down. It's around 150 if you net out the bank of Japan. And Europe, if I remember correctly, is less, like, ECB debt to GDP is lower than than both the US and Japan. I guess, Japan's country. Unstated pension. Yeah. So, it's not accounted for. I mean, if you, I've seen studies that you, you know, France already had 500% if you do the net present value of the pension obligation. Okay, so because I was going to say, like, if that's the case, maybe one could argue, they're balance sheet is smaller than Japan, but on the ECB. Yeah, I was just going to wonder if that argues for doing it because you have, like, slightly more fiscal room, even though none of these countries have fiscal room at all, but maybe balance, maybe central bank balance sheet room relative to to Japan in terms of how big my central bank balance sheet room. I mean, the ability of the ECB to monetize more debt, right? I guess because like, Japan is so far ahead of us and Europe in owning their bond market and the next phase of like yield curve control. Yeah. Yeah. I mean, that that's one buff, right? I put it in a crisis eventually underwritten by the European central bank, which, which lowers the value of the euro. I mean, that's, yeah. I agree with that. You make a good point, too, because like every time I think about, I go through, we just, you know, at the beginning of the show, we talked about the reasons to kind of be pretty negative on US equities and the AI bubble and deceleration and the political admins, all these things. And then I always kind of think back and I'm like, well, at least we have AI, and at least we have a CapEx boom, and we are the world's largest producer. And this isn't meant as us first them. It's more of like a from an investment perspective. It's like, you know, most times if you're getting bearish or depending on the reasons you're getting bearish for, you know, for US equities, I think it does raise an interesting point that has me thinking like, are all of these things worse for Europe? Well, I mean, short term, medium term, they are long term, I actually came back somewhat optimistic from Japan. And again, I really looked at Japan, you know, with my lens of, you know, growing up in Europe and then being quite involved in the political debate. And, you know, you talk to Europeans and it's so dark. I mean, everything is messed up. There's nothing but decline. And, you know, Japan had worse problems, and by some standard, I would say, than Europe in the early 2000. And it did find, I mean, the first thing we need to do in Europe is stop, stop doing stupid things, right? I mean, we, okay, the immigration thing, it could have worked, you know, to restore growth. But it created a backlash and it didn't improve the public finances the way people thought. So you kind of stop that, you stop the stupid energy agenda, you already get a little bit better. And then finally, yeah, you can do the Japanese things, where you're like, listen, Japan doesn't have AI either, much, I mean, maybe better robotics. But I mean, most of the tech you see in Japan is kind of 90s and not like cutting edge tech, you know, it's just like little things that work well versus, you know, giant, super cool, mega projects. So my point in, we can't, we can't have if we want to do industrial exports and maintain some cars and, and, and, and, you know, have a nice, totally cities and tourism. We can do that. It's just the price is wrong. You have to do it at a much lower exchange rate. But once you reset the exchange rate, I, it's not, all hope is not lost. That is true, because when I was in Europe in August, I saw the most like BYDs, I, I had seen in some, in some time, like, so that, that too, you have to, you know, they're going to be dealing with that. I guess so you, does this mean you're very bullish gold priced in Euro? Yeah, I mean, look at gold priced in the end since 2012, and yes. But I guess the other side of that is like, I can't imagine the US being all that on board with this. I mean, there already, it seems like the, the position there is already that the dollars overvalued from, from trade and it's making it very difficult for any sort of, you know, reshoring and manufacturing. This sounds like it could make it 10 times worse. Like, you already see best in complaining about the weakness in yen. Imagine if there's also the weakness in Euro. Yeah, so that, that's the way I structure it is mostly against the yen, right? And I think, you know, we saw that, right? And I mean, okay, like, maybe I'm overinterpreting this stupid little incident with, with Besan bringing his, you know, do remember to do the laundry and buy a couple billion in the end Euro. But that cross was interesting, right? Okay, and there's a bunch of technical factors you can say, right? Oh, it was because it's less liquidity, more market impact. He's achieved more salesman. So, you know, if at the same time he's telling other people to buy treasuries and selling them, that's kind of, so there's all this, but the optimist in me, which I think, you know, we need to be optimist because that's a better way to live life, is that maybe there is a, a realization that now it's Euro. time and the US could get behind this because yes, Felix, I agree with you wholeheartedly that now the context is horrible and it was way easier to do it for Japan in the 2010 that is now for Europe, I agree. But at the same time, we cannot just let this, by some measure, the second largest economy in the world, certainly the second largest export market, the second, the savings are massive, just completely for off. Okay, so we need to get past this administration because what the hell goes on. But once we have adults back in the room, I think there is room for a deal, right? Where the Europeans get around the table and say, "Okay, we'll drop the city stuff." Okay, we understand. We're not doing this so we can all retire at 60 and build some solar panels in Northern Scotland. We're doing this because it's an existential problem and we're quite serious and can you buy us some time there? Maybe it will work. Certainly, I think if you hold it against again, where I think Japan is going to reap the reward of a much better position than what the market thinks, that's the trade that are there. And the cost of having that short-year-old loan yen is very short because the race differential collapse, right? So the carries are very small. And in the piece I recommended doing it, adding a little bit of a long U.S. dollar short euro and long Brazilian dollar short euro so you can actually fit that carry into a position that you can hold for a long time. So that's, yeah, I think that's the trade implication now, whether it will work economically to early detail. It would, I agree, probably require a different administration in the U.S. I think that I could see that too because the biggest beef from a currency pair perspective on the dollar side, it's not really with European Union as like, it's not like there's big dumping of goods in Europe or in the U.S. from Europe that it's like champagne and cheese. It's not as big as the land for Americans in the summer like Euclid. It makes sense from that perspective because, and also the other thing, what if part of this is if it's a weakening euro, it's reshoring, it's rebuilding manufacturing, and defense, and there's a big right kind of push in Europe here across the board, the same kind of popular stuff happening everywhere else. But if they actually got serious and said, okay, we're going to up our defense spending, up our energy and infrastructure and industrial spending and say, we need a 25 to whatever 50% weaker currency to really get this through, the U.S. is probably pretty chuffed with that because we're not on, it's taken the burden of the hundreds of billions, we're sending to protect in everything now. So I can see that, it makes sense. There's definitely a deal to be made. The alliance with Europe is not, that will outlast this administration. The geopolitical argument I think applies, right? I mean to, okay, for Japan, it was clear because the recovery of China, but Europe, you know, we still have a lot of cool stuff in Europe. I mean, we have, you know, many industries that are really worth something. We have ports, we have trade routes, we have, if we don't do this, I worry that, then you invite all these bad actors, you know, Russia, Iran, Turkey, China, it's just carve up, and you know how easy it is to carve Europe, right? Because it's already carved up. And if we do have, as I fear, a really bad breakdown between France and Germany, where there is no leadership, the UK is out, France and Germany are squabbling. I mean, Italy is doing marginally better, but you can't lead. Then you can really have a scenario where, you know, Europe is up for grabs, and I think in this scenario, the US will now allow, we'll have to give the European something, and that something would be a cheap deal. Yeah, that's interesting. I mean, yeah, then I needed to go do some work on gold and relative. Yeah, so the debatement trade that everybody's looking at best in the buybacks, but really the debatement trade's hiding in Europe. If you look at historical, you know, slowdowns, it's hard to fight the upward dollar pressure. Like, when I look at the chart of the dollar, it looks pretty coiled. And if we say it's kind of storing energy for a move on a big picture, you know, weekly monthly type of time horizon, what really gets it lower? If we're advantaged, if the US is advantaged in energy, advantaged in AI, advantaged in most most of kind of what matters for the big capital flows at this stage, like I kind of, I lean towards a dollar moving higher, which funny enough, I'm still bullish gold though, because I think, you know, you have these countries hiking into energy shack. So for all the policy, the ECB hiking is a lot more impact than the US hiking. Yeah, I think like if we're going to talk policy mistakes, I'd be curious, Vincent, your thoughts on that. But I mean, I can't see them getting much more, much more than another one or two hikes through over there without like going full tree shade moment. I mean, my level of confidence in the ECB and Christian lagar in particular is way, way, way, way below zero. No, but it's, it's sad, like, you know, as much as we have like a clown show in the US, and I don't have a lot of admiration for Kevin Wars, but it's still, it's, it's a whole different bowl game. I mean, lagar is just basically repeating the, the same textbook blah, blah, blah, blah. I mean, she doesn't understand. I mean, we had, we had, we had, we had, we had, we had, at the time, we had him. But yeah, I know this, this was painful to watch is this ECB press conference. And I don't see the ECB as very helpful in what I'm describing. I see it more as an obstacle in the way, going back to this comparison with Japan, where I think one thing that really helped in Japan was Arbe Kurodao, both there for a very long time, both completely aligned. We won't have that in Europe. Now, fortunately, lagar's terms ends. I, I have this crazy theory that they're going to try to run her for the French presidential election, but that, that's just my conspiracy theory. Most likely, she's going to, you know, get a couple of million dollars at, World Economic Forum and, and, and, and lift tax-free in, in Zoug, as she asked other people to work in pay taxes. So we'll have a, we'll have a new ECB chairperson. So we'll see what happens there. Most likely, again, the institutional logic is, you know, it's always a bargaining. You need to put, you know, a sourdner, northerner, a catholic, a protestant. I mean, there's so many, so many constraints on, on, on what they can do that I, I don't think it's going to, again, it's, it's going to have to get worse before it gets better. And again, the politics in Europe are going to get really, really dicey because we are on the last rope of like, you know, this, 20% of the center, basically, that, that in both in France and in any country that, that, that, clinging to power with this absurd, like now, now it's like, there is really coming out of the hands. And that, that 20% was the European consensus. So, um, and fortunately, I, I, I have to, to agree with you, uh, who knows how to pay out? Maybe, um, you know, at the end of the day, when, when the crisis gets really bad, when, when you, when you can't sell your bonds, the central bank falls in line and, uh, you know, self-preservation is the strongest instinct. So the, the, the ECB, uh, when the choice becomes, okay, either the euro breaks up or we finally the right thing, I think they'll do the right thing. I mean, that's always so much more complicated when looking at the ECB is like the, the original sin of a common currency and, you know, fragmented debt markets is that it's a lot easier for the BOJ to say, hey, we're going to go buy a bunch of, uh, a bunch of bonds, but, you know, you have to, you have to look at spreads between German bonds and Italian bonds and those are very different things when you're deciding what to do. And that's just, uh, yeah, it always just feels like the, the biggest hurdle that will probably make this whole thing harder than it should be. Yeah, Churchill's lines, you can count on politicians do the right thing on the after they've tried everything else. Yeah. Can I, can I, can I pitch my, uh, my, my, uh, contrarian trade now? Yeah. Let's hear it. All right. So, so usually whenever I get, um, baritone on Europe, I always go with the Swiss franc because, you know, they, they were wise to stay out of this, you know, uh, and then the Swiss franc indeed has been a fantastic, uh, you know, hedge for any portfolio Swiss assets, especially if you, if you factor in the location, now I'm a little bit worried that, you know, if it's, if really France and Germany are going at it, as I believe. It's gonna be very hard to be Switzerland. I mean, they'll still be smart, but the DSNB won't tolerate all the money being pushed in the Swiss banking sector, they won't intervene. So you'll just be buying the bonds. You don't want to touch via the SMB. So my idea is that everybody's forgotten about England, like everybody hates England with a passion that I've never seen, maybe in the signature internment, when everybody's against them, but the new thing is even the English hate the English. Usually, I was looking at private sector, defined benefit pension funds in the UK. They used to own 50% and in UK equities, now it's down to 5%. I mean, this is insane. I don't think we've ever seen such level of self hatred since the Brexit vote. So, and you can argue, yeah, maybe they're not gonna change right away, but at least the setting is not right. When you've gone from 50 to 5, you don't go to minus 45 after that. So I could see the UK as not great, but better. And that's what you want, if you think you have a big crisis, you want a hedge that is highly correlated. I mean, yes, maybe platinum is gonna go up, but there is no relation between what's gonna happen to Europe, you want something that's correlated with it, just better for good portrayed. And I think UK equities will be exactly that. They are massively on their own, they are cheap. You look at the index, it's exactly the three sectors that are like energy, healthcare, and then financials. I think they're way more advanced in this crisis. Remember, it started in the UK, right? Brexit was before Trump, like this whole, let's change rule, let's breaking situation. Let's, let's, I mean, the UK is always 10 years ahead of the continent. So I'm not saying they're out of it, but I think there are way more advanced than Europe, they have a one central bank, so they have a lot more policy flexibility than Europe. And then nobody wants to touch it. I mean, every time I throw the idea, I get completely trashed and with eggs on my face, so I view it as a very positive sign. - I like the aspect of the flexibility from having the Bank of England being distinct. That makes a lot of sense to me. - Yeah, I mean, I don't think Americans realize that, but I mean, I was supposed to work in government in France and I've seen some of these meetings at the low level in Europe and then get into a meeting. You have 27 people on the table. Okay, everybody talk about some bullshit, fishing thing or whatever, right? Like, I mean, it's always bullshit in Europe anyway. Just that everybody, first of all, there's always the Greek guy's late, the Lithuanian guy's room, so you got all that, but let everybody in the room, right? Just to start talking about your position on fishing rights in the North Sea, everybody speaks for two minutes, you've already spent an hour and you haven't even started talking. So that's policymaking in Europe. So there's two-year point of flexibility. There really is something to be said for the ability to act. Now, I'm not saying British conditions are great. They may say a lot of mistakes. I think the new guy is marginally better than the old guy, which just says how bad the old guy was. But still, at least they can take decisions. Europe cannot. - Did you look into, when you're thinking about this, did you look in any, like the Nordic or any of those kind of, like maybe, you know, that's Norway? - Yeah, the energy exposure there kind of is helpful. And I just curious if you looked at any other currencies or situations against it. - Yeah, that's, Norway would be the interesting one because they're not in the circus, you know, Sweden. I mean, Sweden Finland is in the euro. I don't know enough about them. Yeah, I know it would be an interesting one, also because of the big net external position. And also, I would point out in, I think it was Norway. They are starting to drill again in the North Sea. And then they gave a big FU to the European Commission and greater, like, yeah, no, sorry, we got to do what's right. The way I was thinking about it, maybe it's because my obsession with the UK's, I was thinking like, if Norway starts to act a bit rational in the North Sea, that would be true. - Yeah, and especially now you got a guy from the North. So, yeah, to me, these are the signs you want to look for in Europe for, it's not gonna happen, like, in the headline. Okay, in the headline, we'll keep, you know, preaching the gospel of Greta and have all the, you know, annoying meetings, but I would want, like, oh, huh, they unfroze a block for inspiration in North Sea. That's interesting. They opened a lithium mine in Azaz, France actually has quite a bit of stuff that we could dig. Like, little things, and yes, the only country that I can think, they've seen that happen yet is, is Norway and maybe the Netherlands are a little bit. - That's happening a bit in Canada too, where like, we had, you know, the whole super green thing, and then we had Carnegie Common who like wrote a whole book about, you know, green economy, but then you see little things change, right? Like, you know, the pipeline stuff of Alberta, and then like this, you know, new, new tax cut for productivity boosting, and that's what, like, there is these little changes underneath the surface, you have to pay attention to. - Yeah, yeah, Felix, I would, can I pick your brain on what you think is happening in Canada? 'Cause I view Canada as super important. I think the, to some extent, the fate of the world rests upon Canada, you know, because they were so exposed to the US and how they respond, and how that policy response is perceived, I think, will shape a lot, especially for Europe, right? 'Cause the Europeans don't take initiative. If they see that what Karni is doing is working, I think they will copy it. So what's you take on Karni and the current dispute? - Yeah, I mean, so like, a year ago, I was, you know, quite constructive on him, 'cause I think people still viewed him as the 2020 Karni of like the world economic forum, and like he wrote this whole book called Values and all that, and it's like, well, no, I think like, I think that's true, like he understands the pulse and the zeitgeist extremely well. And so he knew, obviously he got the popularity based on this whole Terra 4 thing with Trump and he wrote that, but I think he's a lot more pragmatic, and he knows, he knows the issues very well. Like he, you know, he's been talking with Harper every week. Obviously, so the former Prime Minister Harper, who was the last Conservative Prime Minister, he was the one who nominated Karni to be the head of the Bank of Canada in the Central, so they've always been pretty close, even though he's a liberal. And it came out recently that, you know, Harper and Karni talk every single week. So it's quite interesting. He's been able to navigate this like fiscal conservatism while socially liberal balance that I think Canada's been wanting for a long time. Obviously, the last decade has been a mess with Trudeau and the other side of the party wasn't, you know, it was the only other option at the time, but suddenly, when you get this combination, I think it's becoming really popular. And I think it's going to be highly effective. So obviously, there's a lot of popularity right now, like I think it's approval ratings have just been going nonstop upwards. And I would say personally, like he's doing it a lot to write things, I think. Like our biggest issue has been foreign capital investment and that's starting to change. Like, you know, our economy for the last decade was just a real estate Ponzi scheme, basically. And so the fact that education, education is, education is counts. - Yes. - Don't forget that. So I don't know. I mean, like, yeah, I don't really want to attach myself on our country to the EU if it's going to go through this crisis, but I think it's good to lease hydrovets 'cause, you know, the reason we're so close to the US right now was Harper. That was his policy. And he's already, he's at Carnegie's investment summit talking about us needing to hydrovets a little bit. So I think there's just really widespread commitment to this. And I think it'll last, even if, even two years from now when Trump's out of office, I think the sands have already shifted. And I think that hedging is going to happen regardless now. So it's interesting. I mean, yeah, I'm just excited that we're doing something other than trying to speculate on real estate, honestly, but it's great. - And on the capital side of things, what do you think of that now? Can't, has a lot of domestic capital, right? I mean, you have these massive pension funds, like, I mean, you know, in the same way, like kind of Arby was able to, you know, get all the ducks in enroll and then get everybody behind that. Did you see that also happening to Canadian pension sector with different asset allocations to kind of support this agenda? - Yeah, definitely. Yeah, I think like that whole, you know, a whole ESG thing I think is over now in terms of a ESG mandates for pensions. I mean, again, like Harper now, he's speak, he closed out current his investment conference and he's the head of the Alberta pension fund now, which is, so you have like the most conservative guy in the most conservative province closing out the investment conference for the liberal prime minister. It's just like, I don't know how it gets more bipartisan than that. So I think like that bipartisanship paired with this moving away from ESG mandate, like men. I mean, everybody knows we have a shit ton of natural resources here with just, we've been getting in the way of ourselves. So yeah, I think everybody's alive and ready and maybe it's that whole, you know, rallying around the flag thing because of the terror for it, but, you know, Carnegie Smart, and he realizes that's the opportunity to get through these things that have been so divisive for so long. And do you see the Trump administration, do they have any way to pull the rug and the Canada? Or is it just going to be city tweets and stupid insults? I mean, probably, but there's also certain things like, you know, Pada Ash is really important that we export. And like, the US is a huge import of that. Like, you know, the US would have major, there is still some strong levers we can pull to if really need be. So I mean, for sure, like if Trump really wanted to, he could send us into a significant recession. It's just, you know, there might also be some very substantial things that would happen on the other side of that too. But I don't know. I mean, if there's this commitment to just really, you know, like our, our fiscal deficit is honestly like lower than a lot of countries, like we, we have fiscal capacity to really run this thing. Yeah. So I mean, if that happens, like, I could see them really unleashing that and just like making this huge investment capex stimulus boom, yeah, there's room, I think. So we'll see. I don't know. I should add a long CAD to my short EUR trade, huh? I think the natural resource position at a minimum makes it interesting. Yeah. I mean, yeah, the TSX has been doing really well this year, really, really well. It's interesting. Yeah, nice to talk about stuff out in the U S. We were, you know, it's always so U S every sometime. We just got obsessed with the fence and stuff. So that was cool. Yeah. I've got a lot to think about here, Vincent. Appreciate you sharing your ideas and we'll noodle on these some more. Yeah. Yeah. We'll have to get you on again for this. Yeah, we're going to, we're going to rotate in some occasional guest now that we, we no longer have Tyler for the round up, so I'm a lot to do this again, but yeah, I appreciate the charts that the thesis, Vincent, that was super interesting. Really fun. Ah, it was, it was funny. You know, I'm the big fan of the show and I've spent, wow, hours listening to you guys. So I'm honored. I'm honored. I'm honored. Appreciate it. It was worth it. It really is. We'll schedule the next one right after this. Yeah. Cool. All right. I think I'll be going everybody. Guys.