263303412 - 1_rvmdqp4p - PID 1851201 Welcome to revision daily briefing. It's Thursday, June 30, 2022. I mash Bennington joined today by Toby cost, a partner and Portfolio Manager at Kresge capital. Tommy, welcome. Hi. Thanks for having me. It's a pleasure to have you here. Let's take a look at the closing numbers. On the day, it looks like the nasdaq is off about 1 third% bouncing around now around the nine rounds, excuse me, around the 11 thousand level. As we close out for the day, I, S and P 500 off a little under 1%. Dow Jones Industrial Average off spot 9%. Tav a, obviously, lots to talk about. You can see it right there on the tin on the title of the show talking about stagflation. I was just reading on Bloomberg. We are now off to the worst start of the year, worst each one, first half since 1970. A truly staggering statistic. Yep, this is old-fashioned bear market looks like to me. We're coming up soon. So really extreme valuations in equity markets overall. In my opinion, a macro balances are severe as far as prices. And finally, we're seeing now there's lack of liquidity starting to really rewrite those valuations at much lower prices. And so this is a very different environment than what we saw. Remember the days when people used to say inflation is positive four for equity markets, but it's certainly hasn't been the case here with cost of capital rising. It's difficult to justify very large multiples in equity markets. So I think, I think there's a lot more to go personally. I think this is an old-fashion type of berry market. And so I growth to value transition. There's a, there's a lot going on equity markets right now. Also an old-fashion macro-environment. You said it really well there lots of moving parts to this. We should say out today, Fed's preferred measure of inflation core PCE, 4.7% in May. Obviously this is not the dial that they watch most closely. So you have rising inflation. You've got, you've got this recessionary headwind coming in terms of contraction of growth in Q1, 2022. And now we try and game this all out. It certainly looks like there's a rising risk of a stagflation or environment. Yeah, it's every, everything, every article in the last six months or so have been all about inflation. They think we're yet to see. The new narrative is probably going to be this, this demand falling off a cliff. And by Cliff, I mean, we're a record earnings right now still an equity markets. And it's hard to believe that consumers are going to get hit over time here. And so this is, this is a narrative still playing out, still getting priced in the markets. And I think there's a lot more to go. I mean, it's cost of living is historically elevate it. You got mortgage rates moving to two levels, then it'll doubling just in the last six months, which should also be a hit on consumers. Savings rates now are somewhere close to below 4%. They were close to 30 percent relative to disposable income not too long ago with a government boost that we saw. So this is a very different environment. It's important, remember even wages now in real terms are collapsing. They've been collapsing for some time, but, and so now we're seen as divergence, which we've had in our ladder. Maybe you guys can, can show this chart. It's a divergence between consumer sentiment relative to corporate earnings. And so the next shoe to drop should be corporate earnings. And you have to start thinking about what's the implication of that in overall markets as we get there. Obviously, a lot of moving parts here. One of the things that really struck me yesterday was chair pals remarks when he appeared with Matt, I'm the guard, the ECB to talk about central bank policy. I mean, obviously there's a lot of nuance to the way that fetches discuss this. But to me, the message was that he was delivering was very clear. It was, **** the torpedoes. Full speed ahead. We're going to tighten. We're going to reduce this balance sheet. The dangers that we face on the inflationary front are just too great to ignore. The flip side of that. We've joked about it here on the show before the drinking game. Whenever we mentioned the Scylla and Charybdis take a drink with this idea that the Fed is really trapped now between these two sort of mutually exclusive problematic scenarios. Now the Fed is meant to have this leeway with the dual mandate. Maximum employment stable prices to try and optimize were one of those variables at a time. But when they both go off the rails simultaneously, you see this risk that we see in markets today, chair pal, I thought yesterday, at least in my interpretation of his remarks, saying, we don't care, We're going to cause pain if it means we can reduce, we just have to reduce this inflation. We're okay with letting more recessionary headwinds develop where okay, with I think it's probably reasonable to say to see some asset price declines in the process. How do you think about it? Complex scenario. How do you balance out both sides of the ledger, so to speak? Well, I think the Fed made a major mistake obviously in hindsight in 2021 by not looking and leading indicators for inflation at the time. And now it's about to make another mistake, which is the Fed can commit to, to the tightening cycle here as long as unemployment rates and labor market. So the jury further, but that's a lagging indicator. We all know unemployment rate is, is a lagging indicator. And so what they should be looking at is on the consumer side because as we see that falling apart, we don't, companies are not doing very well. You got the rising cost of capital. You have the wage pressure, you have even the raw material prices is still historically elevated, so they're getting squeezed on their margins at some point. That should also lead to higher unemployment rates. But that's again, that's a lagging indicator. Once that happens, they're going to start moving again and reacting accordingly, but that's going to be too late one more time. And so we know that. And so I think we should, we should start thinking about what's, what's the peak tightening cycle here. And I don't think we're too far from that personally. I think, I think that the, the issues in the economy are so large that it's hard to believe we're not going to see something really break here. And we're already seen and look at small cap companies, the crypto markets technology companies are cute. Yeah, I mean, everything that was doing very well in the last 12 months is is completely collapse in. And so it's hard to believe we're not going to see a major change in labor markets. Technology itself is one of the largest parts of the economy today. There's about 10 percent of technology companies actually above that 208 moving average right now. And this is, this is pretty much near record lows. And then you may think, well, is this the final part of the, of the bear market here? I don't think so. That's kind of the beginning. Things are coming off so much in terms of valuations historically is still, is still the retesting what we saw back in a tech bubble of 2 thousand. And so in my opinion, you know, I'm, I'm very focused on labor markets because I think that's what's going to be starting to Cause the Federal Reserve to change the narrative as we get into the later parts of the year. I wanted to double-click on something you said there that I thought was very important by the way, for folks who are relatively new to the macro space. You've got leading indicators that pre-seed a movement. You've got coincident indicators that happened at the same time, and you've got lagging indicators that occur afterward. This is one of the things that we talk about or that you hear said when you hear folks say the Fed is behind the curve, there behind the curve because you see the inflation rising before they begin to tighten. You were suggesting that they weren't looking at the leading indicators at the time. As inflation was beginning to build up in the system, as price pressures were starting to increase to the upside. Topic, where are we right now in terms of leading indicators of inflation? And what do you see that suggests potentially the directionality of price pressure. So just to set the record straight, I, I'm in inflation camps, so I do think we're entering an inflationary environment, but I think we've seen first of the, most of the first wave of inflation, inflation like the seventies, we've seen three waves. And I can change my view regarding, let's say, geopolitics change. And if things really deteriorate in places like Russia and Ukraine, I think, I think you're, you should readjust your views as well. But as of today, I think certainly we're seeing a lot of deceleration on the inflation front. Commodities, the majority of commodities are down significantly. Base metals or down a very large percentage over some of the double digits already. Now I guess down somewhere close to 50 percent today it's over 40% from its peak oil prices down significantly as well. We haven't seen yet things like guest, gasoline prices are still very high. There came off about $0.15 was still up above buck 50 cents all the way back to the year to date. So there's still a lot of issues when it comes to inflation being historically elevated. But the growth of it certainly decelerating and maybe that's what's causing Tenure yields to move their way. They have the movie which in a decline more recently in the last few days of this reaction in equity markets. So again, I do think that structurally the inflation is, is the inflation story is easier to state. There are a lot of pillars and inflation side the wages growth. It's probably at the very beginning, early innings. I think we're going to continue to see that pressure from consumers to earn more capital from, from their employers. We're also going to see the issues with CapEx not get reversed anytime soon from the natural resource companies. I don't think we're going to see the end of fiscal stimulus. And then the fourth one, which is even more important. I don't think we're at the end of the geopolitical problems. I think we're at the very beginning of one. And so those trends should and to support the inflationary narrative over the long term. But as you ask the question, short-term, I think we're seeing that deceleration of that enable to see most of the first wave of it. Yeah, lots of important points there. We should say WTI, the West Texas Intermediate, this is the US price of oil on the day off, about 3.5% closing out of 10, five spot 90 for this rollover really began in the in the second week of June, down from about 120 plus 120 to, I think near the high there. But as you said also the gasoline price. Not purely just a story in terms of the cost of inputs. There's also a whole refining capacity distribution play that happens with gasoline in case you're wondering why you see oil prices and gasoline prices not necessarily moving in the same direction. Yeah, I would say the first part of inflation, you have companies being able to pass that on to the consumer. And then as cost of living, he starts to rise, you start seeing the pressure from the consumer to earn more capital. That's when you see the reversal of this wages and salaries growth that we've seen, I would say started really in the middle part of 2021, started really intensifying. And that's, that's when earnings you start to decelerate it. So go to get a little squeezed because the raw materials that are not able to pass that on to the consumer as much anymore. And you start seeing cost of capital rising too. So that starts to squeeze the margins and then it'll pop with that. Now we're at a phase where, which I think is symbols dangerous one, which is when the consumer demand falls apart too. So that's another part for corporate earnings. And so, you know, again, I'm very focused on the leading side of this and so that the corporate earnings, in my opinion, is very likely to contract significantly from here. And guess what? Wall Street analysts are still predicting or suggesting that earnings are going to grow about 15 percent this year, 20 plus percent in the second year, and 35 percent in three years from now. I think there's no way we're going to see that. So I actually think we're going to see a significant contraction similar to what we saw in the late 60s, beginning of seventies and the first wavelet inflation to, yeah, to pick up on another data point from some points that you just touched on their consumer spending slowing decelerating rate of gain up to May 0.2%. This is this is from a revised 0.6% increase in April, the lowest gain of the year. So you can see that cooling process, that deceleration, that compression of the second derivative. I think the big story is that analysts and investors, they finally started talking about nominal versus real. And I actually think we're going to see domino contraction in demand. So this obviously with real terms is going to be even worse. So there is a big case that I believe in real terms were probably in a recession already this quarter. And so it, it's, it's hard to believe the Federal will be able to do what they're saying in the following is, but it's also hard to make a bet on, on the treasury market. If you see Fed funds rate already pricing a 60 basis points decline in Fed funds rate by 2023 December. And so in my opinion, they're better vehicle to perhaps plate that the ketchup from the Federal Reserve. As we see, labor markets began to deteriorate. Excellent points there told me this is that Scylla and Charybdis, the rock and a hard place the Fed is between right now talking of which I wanted to take a look at a conversation that I had with Hari Krishna on out today on the religion platform, on a central Plus and pro that speaks to precisely that point. Let's take a look. It may be that the Fed candle itself, this problem. So if I lay it out as a proper mathematical formulation, it may be that there is no oscillation. There was a solution when inflation was low and growth needed to be pumps. Now there's no oscillation. He's inflation's high. Growth cannot be trash too badly, and growth gets hit first. The second is from a training standpoint. How do you move back and forth between betting on fat hikes and fed policies? I think this is a contrary. The environment or reward horizon can be debated. I think over multi month horizons were in a contrary an environment where the Fed will try and react in a way that's probably a little bit behind the curve to whatever's going on in relative to the inflation picture. The leading indicator picture, which of course includes the shape of the yield curve and the S and P among other things. And so what you're going to see is kinda the drunken sailor outcome at this point, which is the drunken sailor is trying to get back to his hotel. And he either works too far to the left or too far to the right. Try to just walk in a straight line and I think the lags relax really do. And this is the crucial point is that they induce oscillations. That the lags a pretty pernicious if they're bad ANDs overreactions in two directions. And I think that's what we're facing in the, in the short to medium term. Disconcerting points there from my conversation with Hari Krishna on out today on religion Plus Pro and essential tier, I should say in the way of full disclosure, Harry and I are old friends. We wrote a book together called market tremors, talking about some of the challenges we had in the last cycle that continue into this cycle. What's interesting to me about that clip, Tommy, is the context that Hari is coming from on this Hari is a gentleman who has a PhD in Mathematics and chaos theory. He's looking at this from the perspective of control theory, a kind of 1970s, 1980s framework for thinking about how complex systems work. And essentially what he's saying is as a mathematician, as a mathematician. There is no solution for this equation that makes sense for managing both the sides of the dual mandate for inflation and maximum employment. A pretty grim assessment really, from Harry Christian. Yeah, this this environment requires that this inflationary environment for things to not completely break apart. And to me, and by the way, those are very valid points that he was that he was saying. And I think we're facing a trifecta of macro balances. We have that, the debt problem that we saw back in the 1940s, just as extreme in terms of government that we're facing, that the inflation problem of the Seven Easy my view with wages and growth, spiral kind of type of movement. And the third one, in my opinion, is this valuation of the late nineties in the late 20s. And so those three really constrained policymakers from doing much. And so any sort of real deceleration of growth or contraction of growth, which I think we're about to see in the next six months should cause effect to actually reverse its policy. So I think that that's the whole story for it, for inflation, in my opinion, is the fact that that's the only way out in my view. And so I think, I think this is just a way to look at things, how they're going to develop themselves a lot more persistently when it comes to cost of goods and services over time. Given effect of those is structural in those pillars of inflation's that I that I was referring to earlier. Yeah. Tell me, we've got questions coming in red hot now. A whole list of them. What do you say? We hit some of those and talk a little bit about what some of the viewers are asking because there's some really good questions coming in. Let's do it. So first one comes to us from a mature, a long time, a viewer of ours here at religion daily briefing through the exchange. This is religions internal social media network. And the question is high, how do you see upcoming midterm elections affecting the stock market, if at all? Tommy, I think we're about to see a shift in politics. Leadership in a large way, inflation usually is, causes those, those shifts. I come from, from an emerging market. And I've seen those many times. Every time you see growth and inflation, usually you tend to see changes in leadership. So I think we're about to see one of those, but I'm not sure it's going to be as, as, as critical to equity markets and markets in general, as a lot of people will. If, if anything, you could actually be a net positive from the, from the market perspective side. But I do think that the balances again are too large. And as we heat a recession here, as we hit a downturn, it's hard to believe. We're not going to see, for instance, deaths, it's increasing in average all the way back to the seventies. Deaths relative to GDP increase about six percentage points in every recession that we had. And so it's hard to believe we're not going to see that again, regardless of the leadership and showed them a change of them might be even more aggressive depending on who is taking charge, but I still think I'm not sure that's going to be as relevant as the macro imbalances will, will play out. This is, again, as we were talking about old school macro-environment, I think it's certainly one of those. And so I would, I would pay much more attention to what's happening in the economy right now. Tell me, did I hear that correctly? Deficits, not aggregate debt levels, but deficits, a flow variable increasing 6% on average per recession, meaning in sequence it continues to compound. And so I think I have a chart on this. Basically, if you go from the bottom of a recession, I shouldn't see the recession itself. So every time you have a recession and you look at the spiking deficit relative to GDP, usually you see about six percentage points increase. That's an average, right? So in the last recession we saw 13 percentage increase in that sits relative to GDP. And so we're back now to a more normal levels. But that's, it's very misleading will receive today because this is accounting for 2021. With a lot of folks with a boost in stimulus actually caused most assets to rise. And so a lot of people paid a lot of realize taxes. And therefore, we've had a lot of gains from MBA, from the tax revenue side of it, which was the largest gain in history by the way, by far, I don't see a lot of people talking about, but if you look at a chart even adjusted for inflation all the way back to the 16 forties, that the revenue amount that we saw in March was insane. And so that is that is backward-looking. Now, forward-looking. It's going to be difficult to see the same level revenues. And so usually you have the fall of GDP that causes deficit to GDP to rise, but also government spending increases at that time too. There are a few times in history where government spending, or I should say, GDP didn't fall as much like the SNL crisis. We didn't see much of a decline in GDP, but did see large increasing that sits, or I should say, and in government spending. And so that's is relative to GDP tend to rise about six percentage points in recessions from, from the beginning of a recession today, end of one. I don't think we actually have that chart, but don't worry, we will get it out to on Twitter after this conversation. If you're wondering why I didn't pop up on the screen, we'll definitely get that out to you. Here's a question that comes to us from John Kay from the real vision site. This is actually something you and I were talking about off camera told me before the show got started, the question is, I remember you were big proponent of commodities. Can you give an update on the recent industrial metal performance and do you think their value holds up in case of a deep recession? Probably not. If we have a deep, deep recession, I don't think they're gonna hold their value as much, but I'd also don't think this Zoe et al, 2008 we saw, especially on the cap ex strand side. I mean, if you look at, if you can't even separate buy, buy commodities, but based models in terms of CapEx, was significantly higher. Energy was about almost three to four times what we see today. And if you adjust for GDP levels, because obviously CapEx bacchanal seeks no way. It wouldn't, it wouldn't do the same to what we have today with inflation. And so, and also the economy's much larger. And so it just suffered for GDP, I would say CapEx trends, they're probably at a 14, 15 year low. And so it's quite concerning relative to that. So that's, that's a, I think it's a much more structural problem. And so in my opinion, this is a type of market where you want to be by cobalt is when you have a dip and you want to be selling into markets when you have a rally. And so to me it all goes back to the minus to equity ratio chart in terms of positioning, that's what we're focused on. We're focused on finding the best quality commodity place that we can find in other ways that we can hedge that exposure by shorting what we think is asymmetrically attractive from a, from a multiple perspective, from a, from a squeeze perspective, from a margin perspective too. And so I think that's, that's, that's it. You need it. The most attractive way of positioning upper for the array. Now, here's a question that comes to us from Ralph Humphrey on the real vision websites. A question we've seen echoed in some of the comments that I'm watching here on Twitter as they scroll by. And the question is this, what is Tommy's view of precious metals? We've gotten a lot of other questions about gold. He also goes on to mention palladium and wheat, but specifically toffee precious metals, particularly gold, something that people have been asking about here in the chat. Look, I think go, there's been, even though we've been in an inflationary environment, since CPI actually increase above the Fed's target in 2021, we're above 2%. I would say Gold is one of the asset classes that actually perform positively. Majority of S, It's actually declined. Nasdaq is down somewhere close to 20 percent. Gold is up about 5%. Commodities are up significantly to and you have even Bitcoin down close to 60 percent. So most of the risky assets certainly declined in this more inflationary environment, less 12 months. Now, what's ahead of us? We've seen gold really getting, really suffering from the dollar strength. That's a big part of it. The second thing has been that the total, this mole performance and collapse in global bonds, fixed income markets, majority of bonds, German bonds, scene even GDPs, Canadian government bonds, US Treasury. It's hard to believe that it was such a large move in nominal rates. And some, to some places, even real rates, we didn't see even, even larger hit on gold. Gold has actually been hold up very well. The other thing I should point out has been a reversal of probably one of the biggest reversals when it comes to policy stance in history, right? We went from basically doubling or the Fed's balance sheet and slashing interest rates to 0. To now talking about the pleading acids and taking interest rates to levels that we haven't seen in many, many years when it comes to year over year change of those instruments. And so the tightening policy is as a very large impact and gold prices in the last month or so. But I think when we talked about the potential of a reversal of those policies, the potential for yield curve control at some point if we see yields continue to rise, those are the real policies. They should move gold. And I'm extremely bullish. I have a static, basically a static part of our portfolio where we hold exploration assets into gold, space and silvers, least in these metals. And so we don't move that much. So those, now, those are going to stay there, in our opinion for five to ten years, that's the goal. We think that there's an asymmetric opportunity just there, but I think gold prices, It's hard to believe with its effect of macro and balances that we're not going to see gold price is higher, not lower in the next five to ten years. And that's the approach that I'm trying to think about. How do I maximize my gain if I believe in that, I think is through exploration. Tell me what are the hallmarks of a great guest on religion daily briefing is the flow of questions coming in. My screen is lighting up right now with lots of questions from our viewers. This is a fun one kind of a thought piece. I'm curious to hear your thoughts about this. This comes to us from Gregory, from the real vision website. Tommy, are we headed to a Bretton Woods? Three, as Zoltan pose are at CES. That's a shopper. I spent a little bit of time when I was one of the young guys on Wall Street, Credit Suisse question effectively and he goes on to say, I-I, do we need a new global monetary framework. Now, I know that that's a, that's a three hour essay question up. But some thoughts. Essentially what he's really asking here is, is the old system beginning to come unmoored? And do we need to begin thinking about a new global monetary framework? Is it that severe in your view topic? Well, I think thankfully I don't I don't have to have a very strong view about, I think this is one of the biggest Mac with debates out there in my opinion, is regarding the dollar. And I, my opinion, I am not as much of a bear in the dollar as most would believe in. And that is because I do also see the point. Of, of the balances that we have in Europe, balances that we have in terms of any other country or a region that could potentially replace a dollar at some point. And I don't want, I also think that it's going to happen through the crypto market either. And so gold, I believe, will play a bigger role over time. My mushroom, specifically answering the question the way the person wanted me to answer. But I do think that we're going to see a major demand for gold. And it's going to be very similar to what we saw back in the 70s. Remember, in the seventies, interest rates were rising, the ten-year yield arising. So folks are selling 10-year Treasuries at a time when gold was rising at the same time today, That wouldn't be, No one I think would imagine a scenario like that in the next 10 years. And so certainly the holdings of foreign reserves in terms of other countries. We've seen the cell off of treasuries from, from, from very end. I do think we're going to see an attempt from central banks to improve the quality of their, or I should say, their credibility other fiat currencies. And by that, I think we're going to see another trend of improvement when it comes to the quality of international reserves. And I think gold is going to play a major role into this. And so to me, it's more of gold answering the monetary environment a little bit more like we saw back in the seventies and other times as being a serving a real monetary asset alternative that unstageable and also has history of its credibility that can potentially drive better quality of international reserves in that way, attempting to improve the quality of those, of those fiat currencies. But I think it's messy. I think all few currencies are in a race to the bottom. And again, it goes back to why I believe precious metals are going to do very well over the long-term. Yeah. You know, if if j and Janet and and Christine and Andrew call you and say we need to fix this. What's your what's your word? You need to have some advice for them. I I I don't want to advisee any of them. Actually. I'm very happy. I we can run a portfolio without having to make those decisions. But I think ultimately, it's especially now, I think it's quite interesting. I mean, we, all of us want to go back in history and look at analogs and, and trying to find a way, especially macro analysts and macro investors in general are always looking back in history and say, well, what is it that we have today that is perhaps similar to those times, but it's very unique when it comes to, as I said before, the debt problem, the evaluation problem, and then on top of it, inflation problem. We never had the three all happening at the same time. And the 40s, is it with a lot of people actually use the 40s as an example with inflationary environment today. I caution them because I don't think, you know, in the forties we are actually at the end about the globalization trend, right? We saw that World War Two effort that this was the beginning of a globalization, more globalized world, which help the inflation problem in a large way. I don't think we're entering that environment at all in the next five to ten years. So it's hard to believe that it's going to play out similarly. So i'm, I'm, I'm worry, I think this is an inflationary environment. The gold will play its role as an inflation hedge at some point. And, you know, I would much rather hold Golden Treasury, my opinion. You know, it's very interesting this touches and historical correlations breaking down as you mentioned, between, for example, stocks and bonds, as challenging as it is to run a portfolio in this environment. Far less challenging than having to be a policymaker figuring out how to steer the ship through these very troubled waters? Yeah, I think if I was and I don't want to pretend to be one and I don't want to be one at all, but I would certainly be cautious when it comes to those leading indicators I was referred to, I think the Fed unfortunately wait until they see labor markets or I should say, unemployment rate begin to rise. But, you know, there's a chart maybe you guys could show with part-time, jobs is starting to increase and diverging from unemployment rates are ready. We saw the same divergence and start back in, oh, wait before to await, before the global financial crisis. So those are signs that I would be quite worry. The other thing is on initial jobless claims. Remember, labor markets usually are very good, contrary indicator. In other words, every time you get a very extreme low or a historical low and unemployment rates, usually you're at the peak of the cycle and certainly I think we are near historical lows right now, I think is at 3.6%. Correct me if I'm wrong, and so it's hard to believe we're going to go much lower than that right now. And I think, I think this is the beginning of a problem in labor markets and we're going to start seeing layouts. And in technology companies, we're already starting to do here it Dassler layoffs and full series. So those stores, I should start emerging and that's going to change the labor market situation. And I think that's going to impact policy as we go. Yeah. Tell me we appreciate you coming here and sharing your views with us today. Especially appreciate the clarity of your opinions. Lots of people who can analyze macro don't necessarily have this desire to take a strong stand on a particular position. But the idea that you see Central Bank action really favoring precious metals rather than sovereign debt. An important point that you made here today as we come to the conclusion of this conversation, final thoughts, key takeaways that you'd like to leave our audience with today? Well, to me, I mean, if I would think about the most contrary way to invest today, which I don't think a lot of people are thinking about, is this issue with the lack of natural resources is a big concern, but certainly it is just being overblown in a beaded. Everyone is talking about it, but no one is doing anything about it either. So we're not seeing capital being deployed, things like exploration. So to me that's the most contrary and trade of the next five to ten years, one more time. Because those assets are not being priced accordingly. They're not being price probabilistically of what they have when it comes to the probability again, of having a very large world-class discovery. And so to me, that's where the opportunity really is in. It's a, it's not a capital Trent, it's a labor trend. Because labor markets in terms of the geosciences and folks, they usually study geology in general. We've been in a, in a secular decline of folks that have interesting that everyone was working technology, nobody wants to work in geoscience. And so those are the inefficiencies. There were seeds. So that's my closing thought. Great conversation topic. Thank you so much for joining us here today. My pleasure. And thank you for watching everyone will be back again with revision daily briefing tomorrow. I'll be back hosting mark Ritchie The second. Have a good afternoon, everybody.