{"id":44239,"date":"2023-06-03T07:21:14","date_gmt":"2023-06-03T12:21:14","guid":{"rendered":"https:\/\/completeintel.com\/?p=44239"},"modified":"2023-06-03T07:21:14","modified_gmt":"2023-06-03T12:21:14","slug":"realignment-crude-market-trillions-of-usts-amp-us-middle-east","status":"publish","type":"post","link":"https:\/\/completeintel.com\/ci-markets-weekly\/realignment-crude-market-trillions-of-usts-amp-us-middle-east\/","title":{"rendered":"Realignment: Crude market, Trillions of $USTs &amp; US-Middle East"},"content":{"rendered":"\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Realignment: Crude market, Trillions of $USTs &amp; US-Middle East\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/O8ot6yHQgqg?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Be a smarter trader and investor with CI Markets. Learn more: https:\/\/completeintel.com\/markets <\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the latest episode of The Week Ahead, Tony Nash leads an insightful discussion with industry experts Tracy Shuchart, Markets &amp; Mayhem, and Albert Marko. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One of the key themes explored in the episode is the low crude prices and the upcoming OPEC meeting. Tracy Shuchart analyzes the factors contributing to the downward pressure on crude prices, despite expectations of a seasonal increase. She highlights recession fears and limited market participation as major factors hampering the rise in prices. The OPEC meeting, scheduled for June 4th, becomes a focal point of discussion, particularly in light of Russian overproduction. The experts discuss the potential outcomes of the meeting, including the possibility of production cuts and their impact on countries like India that heavily rely on affordable Russian crude.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Mayhem delves into the issue of U.S. Treasury debt issuance and its implications for market liquidity and financial conditions. The recent passage of the debt ceiling prompts an exploration of the upcoming $1.2 trillion of U.S. Treasury issuance. Mayhem provides insights into the expected timing of the issuance and its potential impact on the markets. The experts also touch upon the decline in investor home purchases, questioning whether the rise in interest rates is the sole cause or if other factors are at play. They contemplate the extent of this trend and its potential future implications.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Albert Marko leads the discussion on the changing dynamics of the Middle East and the implications for the United States. The UAE&#8217;s withdrawal from a maritime agreement with the U.S. serves as a catalyst for analyzing the broader challenges in the region. Tensions with Saudi Arabia, Qatar, and Turkey, coupled with evolving U.S. policies, shape the geopolitical landscape. The experts emphasize the need for the U.S. to build strong relationships with important countries like Turkey and Indonesia without excluding other global powers. They acknowledge the complexities of navigating the Middle East and stress the importance of long-term efforts in rebuilding relationships.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As the episode concludes, the participants share their expectations for the week ahead. They look ahead to the OPEC meeting and its potential outcomes, considering the impact on global energy markets. Additionally, they discuss the upcoming Federal Reserve meeting and the decision on interest rates, offering diverse perspectives on whether a rate hike is imminent or if the Fed will adopt a more dovish approach.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Overall, this episode of The Week Ahead provides listeners with a comprehensive overview of crucial economic and geopolitical developments. The insightful analysis and diverse viewpoints offered by the experts shed light on the intricacies of global markets and highlight the challenges and opportunities that lie ahead.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key themes: <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1. Why is crude so low? (and OPEC) <br>2. UST Tsunami <br>3. Middle East (UAE) <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is the 67th episode of The Week Ahead, where experts talk about the week that just happened and what will most likely happen in the coming week. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Follow The Week Ahead panel on Twitter:<\/strong> <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tony: <a href=\"https:\/\/twitter.com\/TonyNashNerd\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/twitter.com\/TonyNashNerd<\/a> <br>Tracy: <a href=\"https:\/\/twitter.com\/chigrl\">https:\/\/twitter.com\/chigrl<\/a> <br>Albert: <a href=\"https:\/\/twitter.com\/amlivemon\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/twitter.com\/amlivemon<\/a> <br>Mayhem: <a href=\"https:\/\/twitter.com\/Mayhem4Markets\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/twitter.com\/Mayhem4Markets<\/a> <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Transcript<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Everyone,&nbsp;and&nbsp;welcome&nbsp;to&nbsp;The&nbsp;Week&nbsp;Ahead.&nbsp;I&#8217;m&nbsp;Tony&nbsp;Nash.&nbsp;Today&nbsp;we&nbsp;are&nbsp;joined&nbsp;by&nbsp;Markets&nbsp;inMayhem,&nbsp;Use,&nbsp;macro&nbsp;analyst&nbsp;and&nbsp;trader,&nbsp;of&nbsp;course.&nbsp;We&#8217;re&nbsp;also&nbsp;joined&nbsp;by&nbsp;Albert&nbsp;Marko&nbsp;and&nbsp;TracyShuchart.&nbsp;We&#8217;ve&nbsp;got&nbsp;a&nbsp;wide&nbsp;variety&nbsp;of&nbsp;items&nbsp;to&nbsp;cover&nbsp;this&nbsp;week.&nbsp;The&nbsp;first&nbsp;is&nbsp;why&nbsp;is&nbsp;crude&nbsp;so&nbsp;low?I&#8217;ve&nbsp;been&nbsp;talking&nbsp;with&nbsp;Tracy&nbsp;about&nbsp;that&nbsp;all&nbsp;week&nbsp;and&nbsp;trying&nbsp;to&nbsp;understand&nbsp;those&nbsp;mechanics&nbsp;a&nbsp;littlebit&nbsp;better.&nbsp;And&nbsp;obviously&nbsp;we&nbsp;have&nbsp;an&nbsp;OPEC&nbsp;meeting&nbsp;coming&nbsp;up,&nbsp;so&nbsp;we&nbsp;want&nbsp;to&nbsp;talk&nbsp;throughwhat&#8217;s&nbsp;going&nbsp;to&nbsp;happen&nbsp;there.&nbsp;I&nbsp;want&nbsp;to&nbsp;talk&nbsp;about&nbsp;the&nbsp;UST,&nbsp;US&nbsp;Treasury&nbsp;tsunami&nbsp;that&#8217;s&nbsp;coming.We&#8217;ll&nbsp;talk&nbsp;to&nbsp;Mayhem&nbsp;about&nbsp;that&nbsp;and&nbsp;understand&nbsp;some&nbsp;of&nbsp;the&nbsp;implications&nbsp;of&nbsp;this&nbsp;tighteningactivity&nbsp;that&nbsp;we&nbsp;see,&nbsp;particularly&nbsp;on&nbsp;things&nbsp;like&nbsp;real&nbsp;estate.&nbsp;And&nbsp;then&nbsp;we&nbsp;want&nbsp;to&nbsp;talk&nbsp;about&nbsp;theUAE&nbsp;and&nbsp;I&nbsp;guess&nbsp;the&nbsp;broader&nbsp;Middle&nbsp;East&nbsp;with&nbsp;Albert,&nbsp;some&nbsp;of&nbsp;those&nbsp;relationships&nbsp;seem&nbsp;to&nbsp;bespoiling&nbsp;a&nbsp;bit&nbsp;with&nbsp;the&nbsp;US.&nbsp;And&nbsp;so&nbsp;we&nbsp;want&nbsp;to&nbsp;understand,&nbsp;is&nbsp;this&nbsp;kind&nbsp;of&nbsp;finally&nbsp;the&nbsp;Middle&nbsp;Eastpivot&nbsp;to&nbsp;Asia&nbsp;or&nbsp;is&nbsp;there&nbsp;something&nbsp;different&nbsp;going&nbsp;on?&nbsp;So&nbsp;guys,&nbsp;thanks&nbsp;so&nbsp;much&nbsp;for&nbsp;joining&nbsp;us.&nbsp;Ireally&nbsp;appreciate&nbsp;your&nbsp;time.&nbsp;I&nbsp;know&nbsp;it&#8217;s&nbsp;very&nbsp;valuable.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tracy,\u00a0let&#8217;s\u00a0start\u00a0off\u00a0with\u00a0you.\u00a0With\u00a0crude.\u00a0Why\u00a0is\u00a0it\u00a0so\u00a0low?\u00a0We\u00a0saw\u00a0things\u00a0really\u00a0head\u00a0down\u00a0fora\u00a0couple\u00a0of\u00a0weeks.\u00a0We\u00a0saw\u00a0things\u00a0start\u00a0to\u00a0perk\u00a0up\u00a0on\u00a0Thursday\u00a0and\u00a0so\u00a0far\u00a0they&#8217;re\u00a0doing\u00a0well\u00a0onFriday.\u00a0So\u00a0what&#8217;s\u00a0happening\u00a0with\u00a0it?\u00a0You\u00a0hit\u00a0the\u00a060s,\u00a0it&#8217;s\u00a0back\u00a0up\u00a0above\u00a070,\u00a0I\u00a0believe,\u00a0right\u00a0now. So\u00a0what\u00a0factors\u00a0are\u00a0keeping\u00a0crude\u00a0down\u00a0at\u00a0a\u00a0time\u00a0when\u00a0we&#8217;d\u00a0think\u00a0seasonal\u00a0factors\u00a0would\u00a0reallystart\u00a0to\u00a0push\u00a0crude\u00a0prices\u00a0up\u00a0a\u00a0little\u00a0bit?\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah,&nbsp;absolutely.&nbsp;I&nbsp;mean,&nbsp;really,&nbsp;it&#8217;s&nbsp;the&nbsp;broader&nbsp;macro&nbsp;environment.&nbsp;What&nbsp;you&nbsp;have&nbsp;here&nbsp;is&nbsp;thatglobal&nbsp;supplies&nbsp;are&nbsp;tightening,&nbsp;right?&nbsp;We&nbsp;are&nbsp;draining&nbsp;global&nbsp;supplies.&nbsp;Iran&#8217;s&nbsp;done&nbsp;dumping&nbsp;theirfloating&nbsp;storage.&nbsp;So&nbsp;markets&nbsp;should&nbsp;really&nbsp;tighten&nbsp;up&nbsp;here&nbsp;this&nbsp;summer,&nbsp;particularly&nbsp;with&nbsp;the&nbsp;newOPEC&nbsp;cuts,&nbsp;the&nbsp;voluntary&nbsp;cuts&nbsp;that&nbsp;went&nbsp;into&nbsp;effect&nbsp;this&nbsp;month.&nbsp;But&nbsp;there&#8217;s&nbsp;still&nbsp;these&nbsp;broaderrecession&nbsp;fears.&nbsp;You&nbsp;wouldn&#8217;t&nbsp;think&nbsp;at&nbsp;that&nbsp;looking&nbsp;at&nbsp;the&nbsp;market&nbsp;right&nbsp;now,&nbsp;but&nbsp;there&#8217;soverwhelming&nbsp;thoughts&nbsp;of&nbsp;there&#8217;s&nbsp;still&nbsp;these&nbsp;recessionary&nbsp;fears.&nbsp;We&nbsp;had&nbsp;terrible&nbsp;manufacturingdata&nbsp;come&nbsp;out&nbsp;of&nbsp;the&nbsp;EU&nbsp;this&nbsp;week.&nbsp;We&nbsp;had&nbsp;terrible&nbsp;manufacturing&nbsp;data,&nbsp;one&nbsp;of&nbsp;the&nbsp;data&nbsp;sets&nbsp;inChina&nbsp;that&nbsp;really&nbsp;set&nbsp;the&nbsp;tone&nbsp;at&nbsp;the&nbsp;very&nbsp;beginning&nbsp;of&nbsp;the&nbsp;week&nbsp;when&nbsp;we&nbsp;saw&nbsp;that&nbsp;dive&nbsp;down&nbsp;into67.&nbsp;US.&nbsp;Manufacturing&nbsp;also&nbsp;contracting&nbsp;a&nbsp;bit&nbsp;as&nbsp;well.&nbsp;And&nbsp;so&nbsp;I&nbsp;think&nbsp;that&nbsp;traders&nbsp;are&nbsp;looking&nbsp;atthose&nbsp;numbers&nbsp;and&nbsp;spooking&nbsp;the&nbsp;market.&nbsp;We&nbsp;also&nbsp;have&nbsp;the&nbsp;participation&nbsp;in&nbsp;this&nbsp;market&nbsp;is&nbsp;done.There&nbsp;is&nbsp;no&nbsp;participation&nbsp;in&nbsp;this&nbsp;market.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Basically,&nbsp;you&nbsp;say&nbsp;participation,&nbsp;you&#8217;re&nbsp;talking&nbsp;about&nbsp;trading&nbsp;volume.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So&nbsp;open&nbsp;interest.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Open&nbsp;interest.&nbsp;Okay.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Right.&nbsp;So&nbsp;open&nbsp;interest.&nbsp;There&#8217;s&nbsp;just&nbsp;not&nbsp;really&nbsp;a&nbsp;lot&nbsp;of&nbsp;open&nbsp;interest.&nbsp;Most&nbsp;longs&nbsp;have&nbsp;exited&nbsp;themarket.&nbsp;And&nbsp;it&#8217;s&nbsp;not&nbsp;that&nbsp;really&nbsp;shorts&nbsp;are&nbsp;adding.&nbsp;It&#8217;s&nbsp;that&nbsp;nobody&#8217;s&nbsp;engaging&nbsp;in&nbsp;the&nbsp;market.&nbsp;Andso&nbsp;there&#8217;s&nbsp;just&nbsp;really&nbsp;a&nbsp;lack&nbsp;of&nbsp;interest&nbsp;right&nbsp;now&nbsp;in&nbsp;this.&nbsp;Even&nbsp;though&nbsp;fundamentals&nbsp;are&nbsp;still&nbsp;tight,it&#8217;s&nbsp;just&nbsp;this&nbsp;economic&nbsp;macro&nbsp;backdrop&nbsp;that&#8217;s&nbsp;really&nbsp;kind&nbsp;of&nbsp;pushing&nbsp;people&nbsp;away&nbsp;from.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Okay,&nbsp;so&nbsp;I&#8217;ve&nbsp;seen&nbsp;some&nbsp;people&nbsp;talk&nbsp;about&nbsp;like&nbsp;a&nbsp;bull&nbsp;whip&nbsp;effect.&nbsp;We&nbsp;saw&nbsp;things&nbsp;fall&nbsp;so&nbsp;far&nbsp;withthings&nbsp;like&nbsp;the&nbsp;unemployment&nbsp;data&nbsp;coming&nbsp;out&nbsp;on&nbsp;Friday&nbsp;being&nbsp;above&nbsp;expectation.&nbsp;Could&nbsp;westart&nbsp;to&nbsp;potentially&nbsp;see&nbsp;some&nbsp;sort&nbsp;of&nbsp;bull&nbsp;whip&nbsp;whip&nbsp;effect&nbsp;where&nbsp;we&nbsp;see&nbsp;crude&nbsp;rally&nbsp;on&nbsp;a&nbsp;notablebasis?&nbsp;Or&nbsp;will&nbsp;it&nbsp;take&nbsp;a&nbsp;lot&nbsp;more&nbsp;than&nbsp;something&nbsp;like&nbsp;that?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No,&nbsp;I&nbsp;think&nbsp;we&nbsp;absolutely&nbsp;could.&nbsp;First&nbsp;of&nbsp;all,&nbsp;we&nbsp;just&nbsp;started&nbsp;having&nbsp;these&nbsp;OPEC&nbsp;cuts&nbsp;right,&nbsp;inMay,&nbsp;even&nbsp;though&nbsp;we&nbsp;haven&#8217;t&nbsp;really&nbsp;seen&nbsp;Russian&nbsp;exports&nbsp;up&nbsp;until&nbsp;this&nbsp;month.&nbsp;I&nbsp;think&nbsp;I&nbsp;imaginethat&nbsp;it&nbsp;would&nbsp;take&nbsp;like&nbsp;a&nbsp;month&nbsp;or&nbsp;two&nbsp;really,&nbsp;for&nbsp;those&nbsp;cuts&nbsp;really&nbsp;to&nbsp;filter&nbsp;into&nbsp;the&nbsp;fundamentalanalysis.&nbsp;I&nbsp;mean,&nbsp;OPEC&nbsp;is&nbsp;looking&nbsp;at&nbsp;by&nbsp;the&nbsp;end&nbsp;of&nbsp;June,&nbsp;we&#8217;re&nbsp;looking&nbsp;at&nbsp;a&nbsp;2.3&nbsp;million&nbsp;barreldeficit&nbsp;keeping&nbsp;these&nbsp;cuts&nbsp;online.&nbsp;So&nbsp;I&nbsp;think&nbsp;that&nbsp;as&nbsp;these&nbsp;markets&nbsp;tighten,&nbsp;people&nbsp;will&nbsp;not&nbsp;be&nbsp;ableto&nbsp;kind&nbsp;of&nbsp;ignore&nbsp;that&nbsp;any&nbsp;longer.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Okay,&nbsp;very&nbsp;interesting.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Real&nbsp;quick,&nbsp;what&nbsp;about&nbsp;a&nbsp;cap&nbsp;on&nbsp;Russian&nbsp;seaborne&nbsp;exports&nbsp;or&nbsp;existing&nbsp;cuts&nbsp;going&nbsp;mandatory&nbsp;forOPEC&nbsp;meetings?&nbsp;Is&nbsp;that&nbsp;possible?&nbsp;Either&nbsp;one&nbsp;of&nbsp;them?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah,&nbsp;absolutely.&nbsp;I&nbsp;mean,&nbsp;I&nbsp;think&nbsp;there&#8217;s&nbsp;a&nbsp;lot&nbsp;up&nbsp;for&nbsp;the&nbsp;discussion&nbsp;in&nbsp;the&nbsp;OPEC&nbsp;meeting.&nbsp;I&nbsp;thinkthey&#8217;ll&nbsp;focus&nbsp;on&nbsp;compliance.&nbsp;So&nbsp;anybody&nbsp;that&#8217;s&nbsp;been&nbsp;over&nbsp;producing&nbsp;will&nbsp;have&nbsp;to&nbsp;stopimmediately.&nbsp;I&#8217;m&nbsp;not&nbsp;sure&nbsp;that&nbsp;they&#8217;re&nbsp;going&nbsp;to&nbsp;make&nbsp;additional&nbsp;cuts&nbsp;just&nbsp;because&nbsp;those&nbsp;cuts&nbsp;arejust&nbsp;now&nbsp;starting&nbsp;to&nbsp;filter&nbsp;in&nbsp;again,&nbsp;it&#8217;s&nbsp;only&nbsp;been&nbsp;a&nbsp;month,&nbsp;and&nbsp;so&nbsp;really,&nbsp;that&nbsp;hasn&#8217;t&nbsp;really&nbsp;filteredinto&nbsp;really&nbsp;into&nbsp;the&nbsp;supply&nbsp;side&nbsp;situation.&nbsp;I&#8217;m&nbsp;sure&nbsp;that&nbsp;Russia&nbsp;will&nbsp;get&nbsp;a&nbsp;talking&nbsp;to&nbsp;because&nbsp;I&nbsp;thinkthat&nbsp;even&nbsp;though&nbsp;they&nbsp;have&nbsp;cut&nbsp;some&nbsp;production,&nbsp;they&nbsp;said&nbsp;500K,&nbsp;it&#8217;s&nbsp;about&nbsp;300K.&nbsp;Their&nbsp;exportsstill&nbsp;have&nbsp;not&nbsp;really&nbsp;gone&nbsp;down.&nbsp;That&nbsp;said,&nbsp;over&nbsp;the&nbsp;last&nbsp;couple&nbsp;of&nbsp;weeks,&nbsp;according&nbsp;to&nbsp;Bortexadata,&nbsp;we&nbsp;are&nbsp;starting&nbsp;to&nbsp;see&nbsp;those&nbsp;exports&nbsp;come&nbsp;down&nbsp;a&nbsp;bit.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&nbsp;again,&nbsp;I&#8217;m&nbsp;sure&nbsp;they&#8217;ll&nbsp;get&nbsp;a&nbsp;talking&nbsp;too,&nbsp;but&nbsp;I&nbsp;think&nbsp;it&#8217;s&nbsp;too&nbsp;early&nbsp;to&nbsp;really&nbsp;to&nbsp;make&nbsp;additionalcuts.&nbsp;That&nbsp;said,&nbsp;OPEC&nbsp;is&nbsp;known&nbsp;for&nbsp;surprises,&nbsp;and&nbsp;so&nbsp;you&nbsp;don&#8217;t&nbsp;really&nbsp;know&nbsp;100%.&nbsp;I&nbsp;wouldn&#8217;tcount&nbsp;it&nbsp;out&nbsp;100%,&nbsp;but&nbsp;I&nbsp;would&nbsp;lean&nbsp;towards&nbsp;probably&nbsp;no&nbsp;change.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So&nbsp;they&#8217;re&nbsp;meeting&nbsp;on&nbsp;the&nbsp;fourth.&nbsp;You&nbsp;don&#8217;t&nbsp;think&nbsp;there&#8217;s&nbsp;going&nbsp;to&nbsp;be&nbsp;a&nbsp;change.&nbsp;But&nbsp;you&nbsp;do&nbsp;thinkthey&#8217;re&nbsp;going&nbsp;to&nbsp;focus&nbsp;on&nbsp;compliance&nbsp;by&nbsp;Russia.&nbsp;So&nbsp;OPEC&nbsp;is&nbsp;pretty&nbsp;patient&nbsp;with&nbsp;their&nbsp;memberstates,&nbsp;right,&nbsp;generally.&nbsp;And&nbsp;it&nbsp;sounds&nbsp;like&nbsp;Russia&nbsp;has&nbsp;really&nbsp;had&nbsp;its&nbsp;run.&nbsp;They&#8217;ve&nbsp;overproduced.&nbsp;Alot&nbsp;of&nbsp;the&nbsp;stuff&nbsp;is&nbsp;going&nbsp;to&nbsp;places&nbsp;like&nbsp;India.&nbsp;So&nbsp;once&nbsp;that&nbsp;Stern&nbsp;talking&nbsp;to&nbsp;happens,&nbsp;and&nbsp;if&nbsp;Russiadecides&nbsp;to&nbsp;comply,&nbsp;what&nbsp;happens&nbsp;to&nbsp;places&nbsp;like&nbsp;India?&nbsp;And&nbsp;Saudi&nbsp;has&nbsp;been&nbsp;importing&nbsp;Russianbarrels&nbsp;too,&nbsp;right?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah,&nbsp;they&#8217;ve&nbsp;been&nbsp;importing&nbsp;Russian&nbsp;diesel&nbsp;and&nbsp;then&nbsp;selling&nbsp;their&nbsp;higher&nbsp;priced&nbsp;diesel&nbsp;to&nbsp;Europe.Obviously,&nbsp;if&nbsp;oil&nbsp;prices&nbsp;go&nbsp;up,&nbsp;obviously&nbsp;that&#8217;ll&nbsp;put&nbsp;some&nbsp;pressure&nbsp;on,&nbsp;say,&nbsp;India&nbsp;and&nbsp;China&nbsp;buyingreally&nbsp;cheap&nbsp;barrels.&nbsp;But&nbsp;Russian&nbsp;oil&nbsp;is&nbsp;still&nbsp;trading&nbsp;at&nbsp;a&nbsp;large&nbsp;discount&nbsp;to&nbsp;Brent&nbsp;as&nbsp;it&nbsp;is,&nbsp;and&nbsp;OPECreally&nbsp;wants&nbsp;to&nbsp;see&nbsp;at&nbsp;least&nbsp;Brent&nbsp;in&nbsp;that&nbsp;range.&nbsp;And&nbsp;so&nbsp;I&nbsp;think&nbsp;they&#8217;re&nbsp;going&nbsp;to&nbsp;try&nbsp;to&nbsp;manipulatethe&nbsp;market,&nbsp;but&nbsp;oversee&nbsp;the&nbsp;market&nbsp;so&nbsp;that&nbsp;they&nbsp;can&nbsp;get&nbsp;those&nbsp;prices&nbsp;that&nbsp;they&nbsp;need.&nbsp;If&nbsp;you&nbsp;look&nbsp;atkind&nbsp;of&nbsp;the&nbsp;OPEC&nbsp;nation&#8217;s&nbsp;break&nbsp;even,&nbsp;fiscal&nbsp;break&nbsp;evens,&nbsp;they&#8217;re&nbsp;all&nbsp;in&nbsp;that&nbsp;$70&nbsp;to&nbsp;$80&nbsp;range.&nbsp;Soreally&nbsp;they&nbsp;want&nbsp;that&nbsp;$80&nbsp;to&nbsp;$90&nbsp;range.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;love&nbsp;that&nbsp;you&nbsp;said&nbsp;OPEC&nbsp;isn&#8217;t&nbsp;manipulating&nbsp;the&nbsp;market.&nbsp;I&nbsp;think&nbsp;that&#8217;s&nbsp;great.&nbsp;What&nbsp;do&nbsp;you&nbsp;say?I&#8217;ve&nbsp;seen&nbsp;a&nbsp;lot&nbsp;of&nbsp;people&nbsp;over&nbsp;the&nbsp;past&nbsp;couple&nbsp;of&nbsp;weeks&nbsp;say,&nbsp;look,&nbsp;OPEC&nbsp;only&nbsp;controls&nbsp;30%&nbsp;ofglobal&nbsp;markets,&nbsp;so&nbsp;they&nbsp;don&#8217;t&nbsp;really&nbsp;have&nbsp;control&nbsp;over&nbsp;crude&nbsp;prices.&nbsp;What&#8217;s&nbsp;your&nbsp;response&nbsp;to&nbsp;that?Is&nbsp;that&nbsp;true?&nbsp;Are&nbsp;they&nbsp;immaterial?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s&nbsp;OPEC&nbsp;and&nbsp;OPEC&nbsp;plus,&nbsp;right?&nbsp;Between&nbsp;US.&nbsp;Russia&nbsp;and&nbsp;Saudi&nbsp;Arabia,&nbsp;we&#8217;re&nbsp;the&nbsp;top&nbsp;threeproducers&nbsp;in&nbsp;the&nbsp;world.&nbsp;And&nbsp;so&nbsp;that&nbsp;is&nbsp;quite&nbsp;significant&nbsp;because&nbsp;a&nbsp;lot&nbsp;of&nbsp;these&nbsp;other&nbsp;countries,there&#8217;s&nbsp;a&nbsp;lot&nbsp;of&nbsp;countries&nbsp;producing&nbsp;oil,&nbsp;but&nbsp;in&nbsp;much&nbsp;smaller&nbsp;amounts,&nbsp;by&nbsp;far,&nbsp;those&nbsp;are&nbsp;the&nbsp;threelargest&nbsp;producers.&nbsp;And&nbsp;so&nbsp;they&nbsp;can&nbsp;with&nbsp;the&nbsp;plus&nbsp;part&nbsp;of&nbsp;OPEC,&nbsp;it&nbsp;is&nbsp;easier&nbsp;to&nbsp;manage&nbsp;the&nbsp;market,especially&nbsp;when&nbsp;shale&nbsp;is&nbsp;not&nbsp;really&nbsp;a&nbsp;threat&nbsp;to&nbsp;them&nbsp;anymore,&nbsp;because&nbsp;our&nbsp;production&nbsp;isn&#8217;t&nbsp;reallygrowing&nbsp;at&nbsp;this&nbsp;point.&nbsp;They&nbsp;don&#8217;t&nbsp;have&nbsp;to&nbsp;worry&nbsp;about&nbsp;Shell&nbsp;going&nbsp;crazy&nbsp;overproducing&nbsp;andbringing&nbsp;oil&nbsp;prices&nbsp;down.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And&nbsp;we&nbsp;know&nbsp;there&#8217;s&nbsp;a&nbsp;floor&nbsp;to&nbsp;shale,&nbsp;right?&nbsp;We&nbsp;know&nbsp;there&#8217;s&nbsp;a&nbsp;floor&nbsp;of&nbsp;65,&nbsp;60,&nbsp;whatever&nbsp;to&nbsp;shale.Right.&nbsp;So&nbsp;if&nbsp;they&nbsp;can&nbsp;be&nbsp;prepared&nbsp;for&nbsp;that,&nbsp;which&nbsp;we&#8217;ve&nbsp;seen&nbsp;over&nbsp;the&nbsp;past&nbsp;couple&nbsp;of&nbsp;weeks,&nbsp;thenit&#8217;s&nbsp;not&nbsp;really&nbsp;as&nbsp;far&nbsp;as&nbsp;it&nbsp;goes,&nbsp;but&nbsp;it&#8217;s&nbsp;kind&nbsp;of&nbsp;as&nbsp;far&nbsp;as&nbsp;it&nbsp;goes&nbsp;on&nbsp;a&nbsp;sustainable&nbsp;basis.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Right.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tracy,&nbsp;does&nbsp;it&nbsp;seem&nbsp;like&nbsp;the&nbsp;oil&nbsp;markets,&nbsp;if&nbsp;there&nbsp;was&nbsp;a&nbsp;pretty&nbsp;meaningful&nbsp;disruption&nbsp;to&nbsp;supply,&nbsp;orif&nbsp;the&nbsp;Chinese&nbsp;reopening&nbsp;story&nbsp;really&nbsp;does&nbsp;start&nbsp;to&nbsp;take&nbsp;shape,&nbsp;that&nbsp;this&nbsp;tightness&nbsp;could&nbsp;lead&nbsp;to&nbsp;apretty&nbsp;significant&nbsp;rebound&nbsp;in&nbsp;price?&nbsp;If&nbsp;there&#8217;s&nbsp;any&nbsp;catalyst&nbsp;on&nbsp;either&nbsp;side,&nbsp;a&nbsp;disruption&nbsp;in&nbsp;supply&nbsp;oran&nbsp;increase&nbsp;in&nbsp;demand,&nbsp;it&nbsp;kind&nbsp;of&nbsp;seems&nbsp;like&nbsp;we&#8217;re&nbsp;priming&nbsp;the&nbsp;pump,&nbsp;so&nbsp;to&nbsp;speak.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Oh,&nbsp;absolutely.&nbsp;100%&nbsp;agree&nbsp;with&nbsp;that.&nbsp;And&nbsp;what&#8217;s&nbsp;interesting&nbsp;is,&nbsp;though,&nbsp;we&nbsp;have&nbsp;seen&nbsp;theproperty&nbsp;sector&nbsp;and&nbsp;manufacturing&nbsp;in&nbsp;China&nbsp;is&nbsp;still&nbsp;horrible.&nbsp;Right?&nbsp;Or&nbsp;manufacturing&nbsp;lesshorrible.&nbsp;But&nbsp;we&nbsp;did&nbsp;see&nbsp;them&nbsp;come&nbsp;out&nbsp;overnight&nbsp;and&nbsp;talk&nbsp;about&nbsp;how&nbsp;they&nbsp;want&nbsp;to&nbsp;try&nbsp;torevitalize&nbsp;the&nbsp;property&nbsp;sector.&nbsp;That&nbsp;did&nbsp;give&nbsp;oil&nbsp;a&nbsp;little&nbsp;boost.&nbsp;But&nbsp;also&nbsp;interesting,&nbsp;China&nbsp;has&nbsp;beenimporting&nbsp;a&nbsp;lot&nbsp;of&nbsp;crude.&nbsp;In&nbsp;fact,&nbsp;our&nbsp;all&nbsp;time&nbsp;high&nbsp;was&nbsp;just&nbsp;in&nbsp;April&nbsp;at&nbsp;16&nbsp;million&nbsp;barrels&nbsp;a&nbsp;day,which&nbsp;is&nbsp;huge.&nbsp;And&nbsp;so&nbsp;even&nbsp;though&nbsp;their&nbsp;imports&nbsp;keep&nbsp;increasing,&nbsp;there&#8217;s&nbsp;still&nbsp;this&nbsp;overwhelmingsentiment&nbsp;that&#8217;s&nbsp;weighing&nbsp;on&nbsp;the&nbsp;markets,&nbsp;particularly&nbsp;with&nbsp;what&nbsp;is&nbsp;going&nbsp;on&nbsp;economically&nbsp;withinChina.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Very&nbsp;interesting.&nbsp;Okay.&nbsp;It&nbsp;seems&nbsp;to&nbsp;me&nbsp;that&nbsp;tell&nbsp;me&nbsp;if&nbsp;I&#8217;m&nbsp;wrong&nbsp;here,&nbsp;but&nbsp;we&#8217;ve&nbsp;kind&nbsp;of&nbsp;seen&nbsp;Iwouldn&#8217;t&nbsp;say&nbsp;the&nbsp;absolute&nbsp;floor,&nbsp;but&nbsp;at&nbsp;least&nbsp;temporarily,&nbsp;we&#8217;ve&nbsp;hit&nbsp;where&nbsp;we&#8217;re&nbsp;going&nbsp;to&nbsp;hit&nbsp;andthings&nbsp;may&nbsp;muddle&nbsp;around&nbsp;for&nbsp;a&nbsp;while,&nbsp;but&nbsp;generally&nbsp;there&#8217;s&nbsp;an&nbsp;upside&nbsp;expectation&nbsp;for&nbsp;crudethrough&nbsp;the&nbsp;summer.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah,&nbsp;I&nbsp;think&nbsp;that&nbsp;we&nbsp;will&nbsp;see&nbsp;that.&nbsp;I&nbsp;think,&nbsp;yes.&nbsp;Again,&nbsp;those&nbsp;cuts&nbsp;filter&nbsp;in.&nbsp;We&#8217;re&nbsp;going&nbsp;to&nbsp;seemarkets&nbsp;significantly&nbsp;tighten&nbsp;over&nbsp;this&nbsp;summer.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Great.&nbsp;Okay.&nbsp;Very&nbsp;interesting.&nbsp;Thank&nbsp;you&nbsp;for&nbsp;that.&nbsp;And&nbsp;so&nbsp;speaking&nbsp;of&nbsp;tightening&nbsp;mayhem,&nbsp;let&#8217;stalk&nbsp;about&nbsp;US.&nbsp;Treasuries.&nbsp;You&nbsp;put&nbsp;out&nbsp;a&nbsp;piece,&nbsp;I&nbsp;think,&nbsp;a&nbsp;week&nbsp;ago&nbsp;or&nbsp;so,&nbsp;maybe&nbsp;less&nbsp;than&nbsp;thatabout&nbsp;no,&nbsp;a&nbsp;few&nbsp;days&nbsp;ago,&nbsp;I&#8217;m&nbsp;sorry.&nbsp;About&nbsp;now&nbsp;that&nbsp;the&nbsp;debt&nbsp;ceiling&nbsp;has&nbsp;moved&nbsp;forward,&nbsp;we&#8217;regoing&nbsp;to&nbsp;see&nbsp;$1.2&nbsp;trillion&nbsp;of&nbsp;treasury&nbsp;debt&nbsp;issuance.&nbsp;So&nbsp;can&nbsp;you&nbsp;talk&nbsp;us&nbsp;through&nbsp;that&nbsp;and&nbsp;help&nbsp;usunderstand&nbsp;how&nbsp;that&nbsp;will&nbsp;impact&nbsp;markets,&nbsp;what&#8217;s&nbsp;the&nbsp;timing&nbsp;of&nbsp;that&nbsp;expected&nbsp;and&nbsp;so&nbsp;on?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sure.&nbsp;So&nbsp;the&nbsp;first&nbsp;thing&nbsp;is&nbsp;going&nbsp;into&nbsp;this&nbsp;year,&nbsp;treasury&nbsp;Secretary&nbsp;Yellen&nbsp;issued&nbsp;a&nbsp;warning&nbsp;in&nbsp;midJanuary&nbsp;saying&nbsp;that&nbsp;they&nbsp;were&nbsp;reaching&nbsp;the&nbsp;statutory&nbsp;limit&nbsp;to&nbsp;what&nbsp;the&nbsp;US.&nbsp;Could&nbsp;borrow&nbsp;withouta&nbsp;change&nbsp;in&nbsp;the&nbsp;debt&nbsp;ceiling.&nbsp;And&nbsp;so&nbsp;at&nbsp;that&nbsp;point,&nbsp;issuance&nbsp;of&nbsp;debt&nbsp;for&nbsp;new&nbsp;debt&nbsp;was&nbsp;suspended.And&nbsp;it&nbsp;was&nbsp;only&nbsp;debt&nbsp;that&nbsp;was&nbsp;being&nbsp;refinanced&nbsp;that&nbsp;continued&nbsp;to&nbsp;be&nbsp;auctioned&nbsp;off&nbsp;in&nbsp;the&nbsp;market.So&nbsp;we&nbsp;still&nbsp;saw&nbsp;treasury&nbsp;auctions,&nbsp;but&nbsp;they&nbsp;weren&#8217;t&nbsp;nearly&nbsp;the&nbsp;same&nbsp;size.&nbsp;And&nbsp;with&nbsp;TGA&nbsp;accountspending&nbsp;into&nbsp;bank&nbsp;reserves&nbsp;that&nbsp;helped&nbsp;to&nbsp;add&nbsp;some&nbsp;fast&nbsp;moving&nbsp;liquidity.&nbsp;We&nbsp;also&nbsp;had&nbsp;positiveboosts&nbsp;from&nbsp;central&nbsp;banks&nbsp;like&nbsp;the&nbsp;People&#8217;s&nbsp;Bank&nbsp;of&nbsp;China&nbsp;and&nbsp;the&nbsp;bank&nbsp;of&nbsp;Japan,&nbsp;adding&nbsp;inaggregate&nbsp;a&nbsp;pretty&nbsp;significant&nbsp;amount&nbsp;of&nbsp;liquidity,&nbsp;more&nbsp;than&nbsp;offset&nbsp;QT&nbsp;by&nbsp;the&nbsp;Fed&nbsp;and&nbsp;later&nbsp;bythe&nbsp;European&nbsp;Central&nbsp;Bank&nbsp;that&nbsp;started&nbsp;in&nbsp;March&nbsp;of&nbsp;this&nbsp;year.&nbsp;So&nbsp;now&nbsp;we&#8217;re&nbsp;getting&nbsp;to&nbsp;the&nbsp;sort&nbsp;ofother&nbsp;side&nbsp;of&nbsp;this&nbsp;where&nbsp;the&nbsp;treasury&nbsp;general&nbsp;account&nbsp;is&nbsp;essentially&nbsp;drained.&nbsp;There&#8217;s&nbsp;less&nbsp;than,&nbsp;Ithink&nbsp;at&nbsp;this&nbsp;point,&nbsp;$30&nbsp;billion&nbsp;in&nbsp;the&nbsp;account.&nbsp;So&nbsp;it&#8217;s&nbsp;very&nbsp;crucial&nbsp;that&nbsp;they&nbsp;do&nbsp;pass&nbsp;the&nbsp;increasessigned&nbsp;in&nbsp;and&nbsp;that&nbsp;they&nbsp;move&nbsp;forward&nbsp;with&nbsp;everything.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;never&nbsp;thought&nbsp;a&nbsp;default&nbsp;was&nbsp;a&nbsp;risk,&nbsp;but&nbsp;there&#8217;s&nbsp;a&nbsp;lot&nbsp;of&nbsp;kabuki&nbsp;theater&nbsp;that&nbsp;happens&nbsp;around&nbsp;here.And&nbsp;the&nbsp;one&nbsp;thing&nbsp;I&nbsp;just&nbsp;wanted&nbsp;to&nbsp;say&nbsp;as&nbsp;I&nbsp;get&nbsp;into&nbsp;the&nbsp;next&nbsp;part&nbsp;is&nbsp;that&nbsp;when&nbsp;people&nbsp;start&nbsp;saying&nbsp;adefault&nbsp;is&nbsp;imminent&nbsp;or&nbsp;if&nbsp;we&nbsp;reach&nbsp;this&nbsp;date,&nbsp;a&nbsp;default&nbsp;is&nbsp;going&nbsp;to&nbsp;happen&nbsp;and&nbsp;it&#8217;s&nbsp;just&nbsp;sort&nbsp;of&nbsp;cutand&nbsp;dry.&nbsp;That&#8217;s&nbsp;never&nbsp;been&nbsp;true&nbsp;because&nbsp;the&nbsp;executive&nbsp;branch&nbsp;has&nbsp;the&nbsp;authority&nbsp;to&nbsp;delegate&nbsp;whichpayments&nbsp;are&nbsp;going&nbsp;to&nbsp;be&nbsp;prioritized,&nbsp;and&nbsp;they&nbsp;can&nbsp;continue&nbsp;to&nbsp;do&nbsp;that&nbsp;with&nbsp;debt&nbsp;repayments&nbsp;oninterest&nbsp;in&nbsp;maturing&nbsp;bills&nbsp;and&nbsp;otherwise.&nbsp;But&nbsp;on&nbsp;the&nbsp;other&nbsp;side&nbsp;of&nbsp;it,&nbsp;they&nbsp;can&nbsp;shut&nbsp;down&nbsp;thegovernment&nbsp;furlough&nbsp;workers,&nbsp;defer&nbsp;payments.&nbsp;The&nbsp;whole&nbsp;idea&nbsp;that&nbsp;we&nbsp;were&nbsp;ever&nbsp;going&nbsp;to&nbsp;have&nbsp;adefault&nbsp;was&nbsp;a&nbsp;bunch&nbsp;of&nbsp;noise.&nbsp;And&nbsp;it&nbsp;was&nbsp;really&nbsp;more&nbsp;about&nbsp;what&nbsp;potentially&nbsp;happens&nbsp;at&nbsp;the&nbsp;otherside&nbsp;of&nbsp;the&nbsp;resolution&nbsp;of&nbsp;the&nbsp;debt&nbsp;ceiling,&nbsp;which&nbsp;is&nbsp;all&nbsp;but&nbsp;inevitable.&nbsp;Right.&nbsp;And&nbsp;it&#8217;s&nbsp;good&nbsp;wedidn&#8217;t&nbsp;have&nbsp;it&nbsp;shut&nbsp;down&nbsp;because&nbsp;that&nbsp;would&nbsp;have&nbsp;been&nbsp;a&nbsp;drag&nbsp;on&nbsp;the&nbsp;economy&nbsp;if&nbsp;it&nbsp;lasted&nbsp;a&nbsp;while.Government&nbsp;spending&nbsp;has&nbsp;been&nbsp;pretty&nbsp;important&nbsp;to&nbsp;GDP&nbsp;the&nbsp;last&nbsp;two&nbsp;quarters.&nbsp;And&nbsp;so&nbsp;avertingthat&nbsp;shutdown&nbsp;is&nbsp;constructive.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But&nbsp;what&nbsp;it&nbsp;means&nbsp;is&nbsp;that&nbsp;over&nbsp;the&nbsp;next,&nbsp;say,&nbsp;five&nbsp;weeks&nbsp;or&nbsp;so,&nbsp;there&nbsp;is&nbsp;about&nbsp;700&nbsp;billion&nbsp;of&nbsp;billissuance&nbsp;that&nbsp;needs&nbsp;to&nbsp;happen&nbsp;before&nbsp;we&nbsp;end&nbsp;out&nbsp;the&nbsp;second&nbsp;to&nbsp;last&nbsp;quarter&nbsp;for&nbsp;this&nbsp;governmentbudget.&nbsp;And&nbsp;then&nbsp;we&nbsp;also&nbsp;have&nbsp;by&nbsp;the&nbsp;end&nbsp;of&nbsp;the&nbsp;fiscal&nbsp;year,&nbsp;which&nbsp;is&nbsp;September&nbsp;30&nbsp;for&nbsp;the&nbsp;USgovernment.&nbsp;There&#8217;s&nbsp;a&nbsp;total,&nbsp;including&nbsp;that&nbsp;700&nbsp;billion&nbsp;of&nbsp;1.2&nbsp;trillion&nbsp;that&nbsp;needs&nbsp;to&nbsp;be&nbsp;issued.&nbsp;Now,it&nbsp;sounds&nbsp;like&nbsp;a&nbsp;lot&nbsp;because&nbsp;it&nbsp;is,&nbsp;but&nbsp;it&nbsp;really&nbsp;wouldn&#8217;t&nbsp;have&nbsp;been&nbsp;as&nbsp;much&nbsp;if&nbsp;we&nbsp;were&nbsp;issuing&nbsp;itstarting&nbsp;in&nbsp;the&nbsp;beginning&nbsp;of&nbsp;the&nbsp;year,&nbsp;right&nbsp;when&nbsp;we&nbsp;started&nbsp;to&nbsp;run&nbsp;into&nbsp;that&nbsp;ceiling.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Okay,&nbsp;so&nbsp;let&nbsp;me&nbsp;just&nbsp;stop&nbsp;you&nbsp;there.&nbsp;So&nbsp;1.2&nbsp;trillion&nbsp;by&nbsp;September,&nbsp;what&nbsp;is&nbsp;the&nbsp;typical&nbsp;run&nbsp;rate&nbsp;over,say,&nbsp;a&nbsp;four&nbsp;month&nbsp;period?&nbsp;Is&nbsp;it&nbsp;close&nbsp;to&nbsp;that?&nbsp;Is&nbsp;it&nbsp;1.2&nbsp;trillion?&nbsp;Is&nbsp;it&nbsp;500&nbsp;billion?&nbsp;What&nbsp;is&nbsp;the&nbsp;debtissuance&nbsp;on&nbsp;a&nbsp;normal&nbsp;run&nbsp;rate?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There&#8217;s&nbsp;nothing&nbsp;normal&nbsp;about&nbsp;the&nbsp;times&nbsp;we&#8217;re&nbsp;in.&nbsp;So&nbsp;there&nbsp;are&nbsp;a&nbsp;lot&nbsp;of&nbsp;good&nbsp;historical&nbsp;analogues&nbsp;tolook&nbsp;at.&nbsp;We&nbsp;can&nbsp;look&nbsp;at&nbsp;last&nbsp;year&nbsp;and&nbsp;say&nbsp;for&nbsp;the&nbsp;last&nbsp;quarter&nbsp;of&nbsp;the&nbsp;year&nbsp;there&nbsp;was&nbsp;about&nbsp;a&nbsp;halftrillion&nbsp;dollars&nbsp;of&nbsp;issuance,&nbsp;I&nbsp;believe.&nbsp;But&nbsp;at&nbsp;the&nbsp;same&nbsp;time,&nbsp;that&nbsp;was&nbsp;when&nbsp;a&nbsp;lot&nbsp;of&nbsp;spending&nbsp;wasbeing&nbsp;kicked&nbsp;up&nbsp;significantly,&nbsp;right?&nbsp;This&nbsp;was&nbsp;when&nbsp;there&nbsp;was&nbsp;funding&nbsp;necessities&nbsp;for&nbsp;the&nbsp;Chipsand&nbsp;Science&nbsp;Act&nbsp;and&nbsp;the&nbsp;Inflation&nbsp;Reduction&nbsp;Act,&nbsp;whether&nbsp;it&#8217;s&nbsp;ironically&nbsp;named&nbsp;or&nbsp;not.&nbsp;And&nbsp;a&nbsp;lotof&nbsp;that&nbsp;stuff&nbsp;started&nbsp;to&nbsp;come&nbsp;online&nbsp;and&nbsp;then&nbsp;interest&nbsp;expenses&nbsp;are&nbsp;coming&nbsp;up&nbsp;too,&nbsp;because&nbsp;the&nbsp;Fedis&nbsp;doing&nbsp;QT.&nbsp;And&nbsp;that&nbsp;means&nbsp;that&nbsp;the&nbsp;interest&nbsp;free&nbsp;kind&nbsp;of&nbsp;borrowing&nbsp;that&nbsp;the&nbsp;treasury&nbsp;was&nbsp;able&nbsp;todo,&nbsp;where&nbsp;the&nbsp;Fed&nbsp;would&nbsp;buy&nbsp;at&nbsp;auction,&nbsp;they&nbsp;were&nbsp;the&nbsp;biggest&nbsp;buyer.&nbsp;And&nbsp;when&nbsp;they&nbsp;did,&nbsp;theypay&nbsp;back&nbsp;the&nbsp;interest&nbsp;at&nbsp;the&nbsp;end&nbsp;of&nbsp;the&nbsp;year&nbsp;minus&nbsp;any&nbsp;Fed&nbsp;expenses&nbsp;that&#8217;s&nbsp;over&nbsp;while&nbsp;interestrates&nbsp;are&nbsp;also&nbsp;rising.&nbsp;So&nbsp;interest&nbsp;rate&nbsp;expense&nbsp;is&nbsp;set&nbsp;to&nbsp;hit&nbsp;over&nbsp;a&nbsp;trillion&nbsp;dollars.&nbsp;That&#8217;s&nbsp;anotherreason&nbsp;that&nbsp;debt&nbsp;issuance&nbsp;is&nbsp;increasing,&nbsp;to&nbsp;be&nbsp;able&nbsp;to&nbsp;offset&nbsp;that.&nbsp;We&#8217;re&nbsp;essentially&nbsp;paying&nbsp;off&nbsp;theinterest&nbsp;on&nbsp;our&nbsp;debt&nbsp;by&nbsp;issuing&nbsp;more&nbsp;debt&nbsp;in&nbsp;an&nbsp;environment&nbsp;where&nbsp;rates&nbsp;seem&nbsp;set&nbsp;to&nbsp;stay&nbsp;high&nbsp;forsome&nbsp;time.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So&nbsp;I&nbsp;think&nbsp;that&nbsp;all&nbsp;that&nbsp;being&nbsp;said,&nbsp;on&nbsp;a&nbsp;typical&nbsp;four&nbsp;month&nbsp;basis,&nbsp;it&nbsp;would&nbsp;be&nbsp;much&nbsp;more,&nbsp;I&nbsp;wouldsay,&nbsp;average&nbsp;to&nbsp;see&nbsp;100&nbsp;and&nbsp;5200&nbsp;billion,&nbsp;maybe&nbsp;250&nbsp;if&nbsp;it&#8217;s&nbsp;heavy&nbsp;spending.&nbsp;But&nbsp;we&#8217;ve&nbsp;also&nbsp;seenthat&nbsp;over&nbsp;time,&nbsp;all&nbsp;and&nbsp;this&nbsp;kind&nbsp;of&nbsp;goes&nbsp;back&nbsp;to&nbsp;the&nbsp;debt&nbsp;ceiling.&nbsp;Should&nbsp;we&nbsp;even&nbsp;have&nbsp;one?&nbsp;Allthat&nbsp;we&#8217;ve&nbsp;ever&nbsp;seen&nbsp;with&nbsp;our&nbsp;debt&nbsp;is&nbsp;that&nbsp;it&nbsp;goes&nbsp;up.&nbsp;And&nbsp;the&nbsp;debt&nbsp;ceiling,&nbsp;if&nbsp;you&nbsp;look&nbsp;at&nbsp;it&nbsp;overtime,&nbsp;especially&nbsp;the&nbsp;last,&nbsp;say,&nbsp;25&nbsp;years,&nbsp;it&#8217;s&nbsp;more&nbsp;like&nbsp;a&nbsp;debt&nbsp;elevator&nbsp;doesn&#8217;t&nbsp;really&nbsp;stop&nbsp;any&nbsp;of&nbsp;thefrivolity&nbsp;or&nbsp;any&nbsp;of&nbsp;the&nbsp;excess&nbsp;or&nbsp;any&nbsp;of&nbsp;the&nbsp;pork&nbsp;barrel&nbsp;spending.&nbsp;So&nbsp;I&nbsp;would&nbsp;say&nbsp;that&nbsp;there&#8217;s&nbsp;noreal&nbsp;normalcy&nbsp;we&#8217;re&nbsp;in&nbsp;this&nbsp;post&nbsp;COVID&nbsp;era.&nbsp;There&nbsp;was&nbsp;helicopter&nbsp;money,&nbsp;there&nbsp;was&nbsp;so&nbsp;muchspending.&nbsp;They&#8217;re&nbsp;continuing&nbsp;down&nbsp;that&nbsp;path.&nbsp;It&nbsp;takes&nbsp;$1&nbsp;of&nbsp;you&nbsp;get&nbsp;one&nbsp;dollars&nbsp;of&nbsp;GDP&nbsp;growthout&nbsp;of&nbsp;every&nbsp;$4.5&nbsp;of&nbsp;government&nbsp;debt&nbsp;incurred.&nbsp;Right.&nbsp;So&nbsp;it&#8217;s&nbsp;not&nbsp;a&nbsp;very&nbsp;efficient&nbsp;way.&nbsp;But&nbsp;back&nbsp;toyour&nbsp;question,&nbsp;what&nbsp;does&nbsp;it&nbsp;do&nbsp;to&nbsp;the&nbsp;market?&nbsp;What&nbsp;does&nbsp;it&nbsp;do&nbsp;to&nbsp;the&nbsp;economy?&nbsp;So&nbsp;this&nbsp;ispotentially&nbsp;a&nbsp;liquidity&nbsp;sponge.&nbsp;It&nbsp;really&nbsp;depends&nbsp;on&nbsp;how&nbsp;the&nbsp;plumbing&nbsp;of&nbsp;the&nbsp;markets&nbsp;handles&nbsp;it.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There&nbsp;is&nbsp;some&nbsp;chance&nbsp;that&nbsp;if&nbsp;the&nbsp;rates&nbsp;on&nbsp;the&nbsp;bills&nbsp;are&nbsp;high&nbsp;enough,&nbsp;that&nbsp;it&nbsp;could&nbsp;tempt&nbsp;somemoney&nbsp;out&nbsp;of&nbsp;other&nbsp;sources.&nbsp;So&nbsp;it&#8217;s&nbsp;not&nbsp;as&nbsp;big&nbsp;of&nbsp;a&nbsp;liquidity&nbsp;sponge.&nbsp;Maybe&nbsp;if&nbsp;we&nbsp;see&nbsp;rates&nbsp;onthose&nbsp;bills&nbsp;getting&nbsp;closer&nbsp;to&nbsp;six,&nbsp;six&nbsp;and&nbsp;a&nbsp;half&nbsp;percent,&nbsp;you&nbsp;start&nbsp;to&nbsp;see&nbsp;some&nbsp;money&nbsp;coming&nbsp;out&nbsp;ofreverse&nbsp;repos.&nbsp;You&nbsp;start&nbsp;to&nbsp;see&nbsp;some&nbsp;money&nbsp;coming&nbsp;out&nbsp;of&nbsp;some&nbsp;of&nbsp;the&nbsp;equity&nbsp;accounts&nbsp;as&nbsp;peopleare&nbsp;looking&nbsp;for&nbsp;that&nbsp;sort&nbsp;of&nbsp;ongoing&nbsp;great&nbsp;rotation&nbsp;into&nbsp;fixed&nbsp;income&nbsp;and&nbsp;out&nbsp;of&nbsp;equities&nbsp;that&nbsp;we&#8217;veseen&nbsp;as&nbsp;a&nbsp;bit&nbsp;of&nbsp;a&nbsp;theme.&nbsp;But&nbsp;I&nbsp;think&nbsp;if&nbsp;it&#8217;s&nbsp;not&nbsp;as&nbsp;tempting,&nbsp;it&nbsp;does&nbsp;have&nbsp;the&nbsp;potential&nbsp;to&nbsp;start&nbsp;topull&nbsp;liquidity&nbsp;out&nbsp;of&nbsp;bank&nbsp;reserves.&nbsp;Either&nbsp;way,&nbsp;it&#8217;s&nbsp;going&nbsp;to&nbsp;have&nbsp;that&nbsp;impact.&nbsp;It&#8217;s&nbsp;a&nbsp;question&nbsp;as&nbsp;toscale&nbsp;of&nbsp;impact.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This&nbsp;is&nbsp;interesting.&nbsp;So&nbsp;you&nbsp;mentioned&nbsp;the&nbsp;liquidity&nbsp;sponge,&nbsp;and&nbsp;you&nbsp;also&nbsp;talked&nbsp;earlier&nbsp;about&nbsp;howthe&nbsp;TGA&nbsp;activity&nbsp;was&nbsp;kind&nbsp;of&nbsp;offsetting&nbsp;the&nbsp;QT&nbsp;activity&nbsp;that&nbsp;the&nbsp;Fed&nbsp;was&nbsp;doing,&nbsp;right?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So&nbsp;if&nbsp;this&nbsp;debt&nbsp;issuance&nbsp;is&nbsp;acting&nbsp;as&nbsp;a&nbsp;liquidity&nbsp;sponge,&nbsp;it&#8217;s&nbsp;almost&nbsp;an&nbsp;acceleration&nbsp;of&nbsp;tighteningbecause&nbsp;you&nbsp;don&#8217;t&nbsp;have&nbsp;the&nbsp;TGA&nbsp;necessarily&nbsp;offsetting&nbsp;QT&nbsp;anymore.&nbsp;Right.&nbsp;You&#8217;ve&nbsp;got&nbsp;thisliquidity&nbsp;sponge&nbsp;that&#8217;s&nbsp;taking&nbsp;dollars&nbsp;out&nbsp;of&nbsp;the&nbsp;market&nbsp;unless&nbsp;the&nbsp;US&nbsp;government&nbsp;can&nbsp;acceleratetheir&nbsp;spending.&nbsp;Is&nbsp;that&nbsp;fair&nbsp;to&nbsp;say?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;would&nbsp;say&nbsp;that&nbsp;even&nbsp;if&nbsp;they&nbsp;do&nbsp;accelerate,&nbsp;the&nbsp;net&nbsp;impact&nbsp;is&nbsp;likely&nbsp;to&nbsp;offset.&nbsp;And&nbsp;I&nbsp;don&#8217;t&nbsp;thinkthat&nbsp;the&nbsp;way&nbsp;things&nbsp;are&nbsp;lined&nbsp;up&nbsp;now,&nbsp;that&nbsp;we&#8217;re&nbsp;not&nbsp;going&nbsp;to&nbsp;see&nbsp;too&nbsp;much&nbsp;acceleration.&nbsp;But&nbsp;Icould&nbsp;of&nbsp;course,&nbsp;be&nbsp;very&nbsp;wrong&nbsp;about&nbsp;that.&nbsp;But&nbsp;the&nbsp;main&nbsp;takeaway&nbsp;here&nbsp;that&nbsp;I&nbsp;have&nbsp;is&nbsp;like&nbsp;yousaid,&nbsp;really&nbsp;from&nbsp;October&nbsp;of&nbsp;last&nbsp;year&nbsp;until&nbsp;present&nbsp;we&#8217;ve&nbsp;had&nbsp;a&nbsp;lot&nbsp;of&nbsp;flows&nbsp;from&nbsp;TGA,&nbsp;PBOCand&nbsp;BOJ.&nbsp;Now&nbsp;the&nbsp;BOJ&nbsp;and&nbsp;PBOC&nbsp;are&nbsp;probably&nbsp;going&nbsp;to&nbsp;continue&nbsp;being&nbsp;aggregate&nbsp;adders&nbsp;ofliquidity.&nbsp;They&nbsp;have&nbsp;to,&nbsp;yeah,&nbsp;I&nbsp;think&nbsp;so.&nbsp;And&nbsp;they&#8217;re&nbsp;trying&nbsp;to&nbsp;kind&nbsp;of&nbsp;decouple&nbsp;their&nbsp;credit&nbsp;cyclethe&nbsp;best&nbsp;they&nbsp;can&nbsp;from&nbsp;credit&nbsp;cycles&nbsp;that&nbsp;in&nbsp;the&nbsp;west&nbsp;are&nbsp;being&nbsp;ended&nbsp;intentionally&nbsp;by&nbsp;centralbanks&nbsp;to&nbsp;try&nbsp;to&nbsp;offset&nbsp;this&nbsp;inflation&nbsp;wave&nbsp;that&nbsp;we&#8217;re&nbsp;experiencing&nbsp;which&nbsp;is&nbsp;now&nbsp;concentrated&nbsp;morein&nbsp;services.&nbsp;I&nbsp;think&nbsp;that&nbsp;that&nbsp;vacation&nbsp;is&nbsp;kind&nbsp;of&nbsp;coming&nbsp;to&nbsp;an&nbsp;end&nbsp;and&nbsp;what&nbsp;we&#8217;re&nbsp;seeing&nbsp;now&nbsp;isthe&nbsp;inverse&nbsp;that&nbsp;not&nbsp;only&nbsp;is&nbsp;the&nbsp;TGA&nbsp;not&nbsp;going&nbsp;to&nbsp;be&nbsp;spending&nbsp;as&nbsp;much&nbsp;in&nbsp;all&nbsp;likelihood,&nbsp;but&nbsp;alsothat&nbsp;that&nbsp;issuance&nbsp;combined&nbsp;with&nbsp;QT&nbsp;by&nbsp;the&nbsp;ECB,&nbsp;by&nbsp;the&nbsp;Fed&nbsp;and&nbsp;to&nbsp;some&nbsp;extent&nbsp;by&nbsp;the&nbsp;bank&nbsp;ofEngland.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&nbsp;is&nbsp;more&nbsp;of&nbsp;getting&nbsp;back&nbsp;to&nbsp;what&nbsp;monetary&nbsp;policy&nbsp;had&nbsp;intended&nbsp;for,&nbsp;which&nbsp;is&nbsp;to&nbsp;tightenfinancial&nbsp;conditions.&nbsp;And&nbsp;then&nbsp;the&nbsp;other&nbsp;additive&nbsp;to&nbsp;that&nbsp;is&nbsp;also&nbsp;that&nbsp;credit&nbsp;conditions&nbsp;aretightening.&nbsp;Right.&nbsp;Banks&nbsp;are&nbsp;lending&nbsp;less&nbsp;and&nbsp;to&nbsp;whom&nbsp;they&#8217;re&nbsp;lending,&nbsp;they&#8217;re&nbsp;lending&nbsp;at&nbsp;higherinterest&nbsp;rates.&nbsp;And&nbsp;so&nbsp;there&#8217;s&nbsp;aggregate&nbsp;impacts,&nbsp;there&nbsp;are&nbsp;cumulative&nbsp;impacts&nbsp;to&nbsp;what&#8217;s&nbsp;happeningwith&nbsp;rates&nbsp;rising&nbsp;as&nbsp;much&nbsp;as&nbsp;they&nbsp;have&nbsp;because&nbsp;more&nbsp;and&nbsp;more&nbsp;people&nbsp;have&nbsp;debt&nbsp;that&nbsp;they&nbsp;have&nbsp;torefinance.&nbsp;There&#8217;s&nbsp;also&nbsp;small&nbsp;mid&nbsp;sized&nbsp;businesses&nbsp;and&nbsp;a&nbsp;fair&nbsp;amount&nbsp;of&nbsp;consumer&nbsp;debt&nbsp;that&nbsp;arerevolvers&nbsp;that&nbsp;as&nbsp;rates&nbsp;rise,&nbsp;the&nbsp;compounding&nbsp;effects&nbsp;of&nbsp;those&nbsp;higher&nbsp;rates&nbsp;are&nbsp;starting&nbsp;to&nbsp;reallyhurt.&nbsp;So&nbsp;I&nbsp;think&nbsp;that&nbsp;when&nbsp;you&nbsp;put&nbsp;that&nbsp;all&nbsp;together,&nbsp;it&nbsp;does&nbsp;suggest&nbsp;that&nbsp;there&nbsp;is&nbsp;some&nbsp;potentialfattening&nbsp;of&nbsp;the&nbsp;left&nbsp;tail&nbsp;going&nbsp;into&nbsp;the&nbsp;back&nbsp;half&nbsp;of&nbsp;this&nbsp;year&nbsp;in&nbsp;terms&nbsp;of&nbsp;how&nbsp;risk&nbsp;assets&nbsp;and&nbsp;ratesmight&nbsp;behave&nbsp;in&nbsp;an&nbsp;environment&nbsp;where&nbsp;liquidity&nbsp;goes&nbsp;from&nbsp;being&nbsp;rather&nbsp;abundant&nbsp;to&nbsp;rather&nbsp;scarceduring&nbsp;a&nbsp;time&nbsp;where&nbsp;seasonality&nbsp;has&nbsp;a&nbsp;similar&nbsp;effect.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Right.&nbsp;So&nbsp;in&nbsp;terms&nbsp;of&nbsp;the&nbsp;impact&nbsp;of&nbsp;say,&nbsp;the&nbsp;credit&nbsp;crunch&nbsp;that&#8217;s&nbsp;coming,&nbsp;whatever&nbsp;normal&nbsp;is,&nbsp;arewe&nbsp;returning&nbsp;to&nbsp;kind&nbsp;of&nbsp;a&nbsp;normal&nbsp;balance&nbsp;or&nbsp;is&nbsp;it&nbsp;extraordinarily&nbsp;tight?&nbsp;Do&nbsp;you&nbsp;think&nbsp;things&nbsp;willget&nbsp;extraordinarily&nbsp;tight?&nbsp;I&nbsp;know&nbsp;that&nbsp;no&nbsp;matter&nbsp;what&nbsp;happens&nbsp;it&nbsp;will&nbsp;feel&nbsp;extraordinarily&nbsp;tightcompared&nbsp;to&nbsp;where&nbsp;we&#8217;ve&nbsp;been&nbsp;for&nbsp;the&nbsp;last&nbsp;few&nbsp;years.&nbsp;But&nbsp;are&nbsp;we&nbsp;returning&nbsp;to&nbsp;a&nbsp;normal&nbsp;or&nbsp;will&nbsp;itbe&nbsp;tighter&nbsp;than&nbsp;normal?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&#8217;s&nbsp;a&nbsp;really&nbsp;good&nbsp;question&nbsp;and&nbsp;I&#8217;m&nbsp;going&nbsp;to&nbsp;imagine&nbsp;that&nbsp;it&nbsp;will&nbsp;gradually&nbsp;become&nbsp;tighter&nbsp;thanwhat&nbsp;we&#8217;re&nbsp;used&nbsp;to.&nbsp;But&nbsp;what&nbsp;we&#8217;re&nbsp;used&nbsp;to&nbsp;was&nbsp;also&nbsp;a&nbsp;rather&nbsp;unprecedented&nbsp;time.&nbsp;It&nbsp;was&nbsp;severaldecades&nbsp;of&nbsp;disinflation&nbsp;of&nbsp;a&nbsp;really&nbsp;overall&nbsp;pretty&nbsp;strong&nbsp;economy,&nbsp;lower&nbsp;and&nbsp;lower&nbsp;interest&nbsp;ratesalong&nbsp;the&nbsp;way,&nbsp;very&nbsp;abundant&nbsp;liquidity&nbsp;and&nbsp;credit&nbsp;ever&nbsp;increasing&nbsp;over&nbsp;really&nbsp;the&nbsp;better&nbsp;part&nbsp;of&nbsp;thelast&nbsp;14&nbsp;years&nbsp;to&nbsp;unprecedented&nbsp;levels.&nbsp;So&nbsp;in&nbsp;comparison&nbsp;to&nbsp;what&nbsp;most&nbsp;people&nbsp;are&nbsp;used&nbsp;to,&nbsp;I&nbsp;wouldsay&nbsp;yeah,&nbsp;it&#8217;s&nbsp;likely&nbsp;to&nbsp;be&nbsp;tighter.&nbsp;The&nbsp;question&nbsp;is&nbsp;for&nbsp;how&nbsp;long?&nbsp;And&nbsp;the&nbsp;question&nbsp;is&nbsp;what&nbsp;otherunintended&nbsp;consequences&nbsp;will&nbsp;happen&nbsp;along&nbsp;the&nbsp;way.&nbsp;I&nbsp;think&nbsp;one&nbsp;of&nbsp;the&nbsp;most&nbsp;interestingdiscussions&nbsp;on&nbsp;the&nbsp;other&nbsp;side&nbsp;of&nbsp;this&nbsp;is&nbsp;that&nbsp;as&nbsp;rates&nbsp;go&nbsp;higher&nbsp;and&nbsp;stay&nbsp;higher&nbsp;for&nbsp;longer,&nbsp;it&nbsp;notonly&nbsp;helps&nbsp;to&nbsp;subdue&nbsp;demand,&nbsp;but&nbsp;it&nbsp;actually&nbsp;also&nbsp;starts&nbsp;to&nbsp;constrain&nbsp;supply.&nbsp;Because&nbsp;if&nbsp;you&#8217;re&nbsp;theCEO&nbsp;of&nbsp;an&nbsp;energy&nbsp;company&nbsp;or&nbsp;a&nbsp;metals&nbsp;company&nbsp;or&nbsp;an&nbsp;agricultural&nbsp;company&nbsp;and&nbsp;you&#8217;re&nbsp;hearing,okay,&nbsp;wages&nbsp;are&nbsp;going&nbsp;up&nbsp;and&nbsp;they&#8217;re&nbsp;high&nbsp;already,&nbsp;costs&nbsp;of&nbsp;capital&nbsp;are&nbsp;high&nbsp;and&nbsp;availability&nbsp;ofcapital&nbsp;is&nbsp;dwindling&nbsp;and&nbsp;business&nbsp;conditions&nbsp;aren&#8217;t&nbsp;so&nbsp;robust&nbsp;moving&nbsp;forward,&nbsp;am&nbsp;I&nbsp;going&nbsp;toexpand&nbsp;supply&nbsp;into&nbsp;that&nbsp;environment?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So&nbsp;then&nbsp;what&nbsp;do&nbsp;things&nbsp;look&nbsp;like&nbsp;as&nbsp;we&nbsp;approach&nbsp;and&nbsp;get&nbsp;into&nbsp;the&nbsp;next&nbsp;credit&nbsp;cycle&nbsp;when&nbsp;we&nbsp;startfrom&nbsp;a&nbsp;place&nbsp;of&nbsp;higher&nbsp;prices&nbsp;but&nbsp;less&nbsp;availability&nbsp;of&nbsp;supply,&nbsp;when&nbsp;demand&nbsp;comes&nbsp;back&nbsp;andthere&#8217;s&nbsp;not&nbsp;supply&nbsp;able&nbsp;to&nbsp;absorb&nbsp;that&nbsp;and&nbsp;credit&nbsp;still,&nbsp;it&#8217;ll&nbsp;loosen,&nbsp;but&nbsp;it&#8217;ll&nbsp;likely&nbsp;be&nbsp;tighter&nbsp;thanwhat&nbsp;we&#8217;re&nbsp;used&nbsp;to.&nbsp;It&nbsp;seems&nbsp;like&nbsp;there&#8217;s&nbsp;not&nbsp;the&nbsp;capability&nbsp;to&nbsp;address&nbsp;that&nbsp;in&nbsp;a&nbsp;timely&nbsp;manner,&nbsp;thatinflation&nbsp;has&nbsp;become&nbsp;a&nbsp;little&nbsp;bit&nbsp;more&nbsp;structural.&nbsp;And&nbsp;some&nbsp;of&nbsp;the&nbsp;irony&nbsp;of&nbsp;that&nbsp;is&nbsp;part&nbsp;of&nbsp;that&#8217;sdriven&nbsp;by&nbsp;the&nbsp;Fed&#8217;s&nbsp;policy.&nbsp;Now,&nbsp;to&nbsp;their&nbsp;credit,&nbsp;they&nbsp;can&#8217;t&nbsp;do&nbsp;much&nbsp;to&nbsp;offset&nbsp;the&nbsp;fact&nbsp;that&nbsp;thegovernment,&nbsp;not&nbsp;only&nbsp;at&nbsp;the&nbsp;federal&nbsp;level,&nbsp;but&nbsp;various&nbsp;state&nbsp;governments&nbsp;and&nbsp;other&nbsp;countriesgovernments&nbsp;are&nbsp;sort&nbsp;of&nbsp;providing&nbsp;this&nbsp;inflation&nbsp;relief&nbsp;right,&nbsp;checks&nbsp;to&nbsp;people&nbsp;to&nbsp;offset&nbsp;the&nbsp;impactof&nbsp;inflation.&nbsp;But&nbsp;that&nbsp;just&nbsp;in&nbsp;aggregate&nbsp;adds&nbsp;money&nbsp;to&nbsp;the&nbsp;system.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&#8217;s&nbsp;like&nbsp;your&nbsp;02:00&nbsp;P.m.&nbsp;Sugar&nbsp;high,&nbsp;right?&nbsp;Like&nbsp;it&nbsp;just&nbsp;gets&nbsp;you&nbsp;through&nbsp;dinner.&nbsp;It&nbsp;doesn&#8217;treally&nbsp;keep&nbsp;you&nbsp;going.&nbsp;Right?&nbsp;I&nbsp;mean,&nbsp;that&nbsp;can&#8217;t&nbsp;be&nbsp;permanent.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No.&nbsp;And&nbsp;it&#8217;s&nbsp;just&nbsp;kind&nbsp;of&nbsp;extending&nbsp;some&nbsp;of&nbsp;the&nbsp;issues&nbsp;and&nbsp;making&nbsp;them&nbsp;a&nbsp;little&nbsp;more&nbsp;structural&nbsp;innature,&nbsp;I&nbsp;feel&nbsp;like.&nbsp;So&nbsp;for&nbsp;the&nbsp;first&nbsp;time&nbsp;since&nbsp;the&nbsp;1930s,&nbsp;we&#8217;ve&nbsp;seen&nbsp;M&nbsp;two&nbsp;money&nbsp;supply&nbsp;fall&nbsp;yearover&nbsp;year.&nbsp;But&nbsp;then&nbsp;if&nbsp;we&nbsp;look&nbsp;at&nbsp;it&nbsp;just&nbsp;as&nbsp;a&nbsp;number&nbsp;rather&nbsp;than&nbsp;a&nbsp;year&nbsp;over&nbsp;year&nbsp;trend,&nbsp;we&nbsp;can&nbsp;seethat&nbsp;it&#8217;s&nbsp;just&nbsp;really&nbsp;reverting&nbsp;back&nbsp;to&nbsp;the&nbsp;trend&nbsp;that&nbsp;it&#8217;s&nbsp;had&nbsp;that&nbsp;money&nbsp;supply&nbsp;growth&nbsp;wasextraordinarily&nbsp;high.&nbsp;During&nbsp;COVID&nbsp;that&nbsp;they&nbsp;really&nbsp;flooded&nbsp;the&nbsp;system&nbsp;with&nbsp;money,&nbsp;helicoptermoney,&nbsp;liquidity&nbsp;for&nbsp;the&nbsp;financial&nbsp;system&nbsp;while&nbsp;simultaneously&nbsp;shutting&nbsp;everything&nbsp;down&nbsp;andthen&nbsp;kind&nbsp;of&nbsp;scratched&nbsp;their&nbsp;heads&nbsp;when&nbsp;prices&nbsp;of&nbsp;everything&nbsp;went&nbsp;up,&nbsp;when&nbsp;there&nbsp;wasn&#8217;t&nbsp;enoughsupply.&nbsp;But&nbsp;some&nbsp;of&nbsp;the&nbsp;supply&nbsp;constraints&nbsp;that&nbsp;we&#8217;re&nbsp;dealing&nbsp;with,&nbsp;and&nbsp;Tracy&nbsp;could&nbsp;speak&nbsp;to&nbsp;thismuch&nbsp;more&nbsp;than&nbsp;me,&nbsp;is&nbsp;a&nbsp;lack&nbsp;of&nbsp;investment.&nbsp;We&nbsp;haven&#8217;t&nbsp;been&nbsp;investing&nbsp;in&nbsp;so&nbsp;many&nbsp;of&nbsp;theseresources&nbsp;for&nbsp;such&nbsp;a&nbsp;long&nbsp;time.&nbsp;And&nbsp;that&#8217;s&nbsp;also&nbsp;created&nbsp;some&nbsp;structural&nbsp;potential&nbsp;for&nbsp;inflation&nbsp;tomove&nbsp;higher.&nbsp;And&nbsp;as&nbsp;we&nbsp;get&nbsp;into&nbsp;another&nbsp;credit&nbsp;cycle,&nbsp;I&nbsp;think&nbsp;we&#8217;ve&nbsp;probably&nbsp;seen&nbsp;the&nbsp;worst&nbsp;ofgoods&nbsp;inflation.&nbsp;This&nbsp;credit&nbsp;cycle&nbsp;barring&nbsp;any&nbsp;kind&nbsp;of&nbsp;meaningful&nbsp;disruption&nbsp;in&nbsp;supply.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But&nbsp;then&nbsp;services&nbsp;inflation&nbsp;is&nbsp;also&nbsp;quite&nbsp;sticky.&nbsp;And&nbsp;one&nbsp;of&nbsp;the&nbsp;recurring&nbsp;themes&nbsp;we&nbsp;see&nbsp;in&nbsp;ismdata&nbsp;and&nbsp;employment&nbsp;data&nbsp;is&nbsp;the&nbsp;services&nbsp;industry&nbsp;is&nbsp;very&nbsp;strong.&nbsp;Wages&nbsp;continue&nbsp;to&nbsp;rise&nbsp;there,and&nbsp;those&nbsp;wages&nbsp;are&nbsp;being&nbsp;passed&nbsp;on&nbsp;to&nbsp;consumers&nbsp;in&nbsp;the&nbsp;form&nbsp;of&nbsp;rising&nbsp;prices.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes,&nbsp;Albert&#8217;s&nbsp;talked&nbsp;a&nbsp;lot&nbsp;about&nbsp;the&nbsp;structural&nbsp;nature&nbsp;of&nbsp;inflation&nbsp;and&nbsp;expects&nbsp;it&nbsp;to&nbsp;rear&nbsp;its&nbsp;headagain.&nbsp;But&nbsp;what&#8217;s&nbsp;interesting,&nbsp;from&nbsp;what&nbsp;I&#8217;m&nbsp;hearing&nbsp;from&nbsp;both&nbsp;you&nbsp;and&nbsp;Tracy&nbsp;is&nbsp;tightness.&nbsp;Tracyis&nbsp;talking&nbsp;about&nbsp;tightness&nbsp;in&nbsp;crude.&nbsp;You&#8217;re&nbsp;talking&nbsp;about&nbsp;tightness&nbsp;in&nbsp;credit.&nbsp;And&nbsp;it&nbsp;just&nbsp;feels&nbsp;likewe&#8217;re&nbsp;on&nbsp;the&nbsp;precipice&nbsp;of&nbsp;this&nbsp;snap&nbsp;change&nbsp;where&nbsp;we&#8217;re&nbsp;transitioning&nbsp;from&nbsp;this&nbsp;world&nbsp;ofabundance&nbsp;for&nbsp;the&nbsp;last&nbsp;few&nbsp;years,&nbsp;setting&nbsp;aside&nbsp;the&nbsp;supply&nbsp;chain&nbsp;aspects&nbsp;of&nbsp;things&nbsp;world&nbsp;of&nbsp;kind&nbsp;ofrelative&nbsp;abundance&nbsp;into&nbsp;a&nbsp;world&nbsp;of&nbsp;scarcity.&nbsp;And&nbsp;that&#8217;s&nbsp;what&nbsp;happens&nbsp;when&nbsp;interest&nbsp;rates&nbsp;rise,right?&nbsp;That&#8217;s&nbsp;what&nbsp;happens&nbsp;when&nbsp;credit&nbsp;markets&nbsp;tighten,&nbsp;is&nbsp;you&nbsp;have&nbsp;scarcity,&nbsp;then&nbsp;you&nbsp;have&nbsp;realbidding&nbsp;for&nbsp;the&nbsp;price&nbsp;of&nbsp;things.&nbsp;Right.&nbsp;So&nbsp;that&#8217;s&nbsp;really&nbsp;interesting.&nbsp;So,&nbsp;Ma&#8217;am,&nbsp;let&#8217;s&nbsp;move&nbsp;on&nbsp;to&nbsp;realestate.&nbsp;You&nbsp;posted&nbsp;a&nbsp;really&nbsp;interesting&nbsp;chart&nbsp;about&nbsp;investor&nbsp;purchases&nbsp;of&nbsp;real&nbsp;estate.&nbsp;So&nbsp;you&nbsp;saynew&nbsp;home&nbsp;purchases&nbsp;by&nbsp;investors&nbsp;have&nbsp;fallen&nbsp;by&nbsp;the&nbsp;most&nbsp;ever.&nbsp;Is&nbsp;it&nbsp;BlackRock&nbsp;kind&nbsp;ofphenomenon&nbsp;where&nbsp;they&nbsp;stop&nbsp;buying&nbsp;homes,&nbsp;or&nbsp;is&nbsp;that&nbsp;real&nbsp;people&nbsp;stopping&nbsp;to&nbsp;buy&nbsp;investmenthomes&nbsp;as&nbsp;well?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s&nbsp;both.&nbsp;And&nbsp;I&nbsp;mean,&nbsp;it&#8217;s&nbsp;driven&nbsp;by&nbsp;some&nbsp;of&nbsp;the&nbsp;same&nbsp;factors&nbsp;that&nbsp;we&#8217;ve&nbsp;talked&nbsp;about&nbsp;becausehome&nbsp;prices&nbsp;are&nbsp;stubbornly&nbsp;high.&nbsp;There&nbsp;is&nbsp;a&nbsp;lack&nbsp;of&nbsp;supply&nbsp;from&nbsp;existing&nbsp;homes&nbsp;because&nbsp;whowants&nbsp;to&nbsp;move&nbsp;when&nbsp;mortgage&nbsp;rates&nbsp;have&nbsp;more&nbsp;than&nbsp;doubled&nbsp;from&nbsp;where&nbsp;they&nbsp;may&nbsp;have&nbsp;financedtheir&nbsp;mortgage&nbsp;at?&nbsp;So&nbsp;there&#8217;s&nbsp;a&nbsp;lack&nbsp;of&nbsp;supply&nbsp;there.&nbsp;Homebuilders&nbsp;are&nbsp;trying&nbsp;to&nbsp;keep&nbsp;up&nbsp;with&nbsp;thenew&nbsp;orders,&nbsp;but&nbsp;they&#8217;re&nbsp;struggling&nbsp;because&nbsp;they&#8217;re&nbsp;facing&nbsp;rising&nbsp;wages,&nbsp;rising&nbsp;capital&nbsp;costs,&nbsp;lessavailability&nbsp;of&nbsp;capital,&nbsp;lower&nbsp;in&nbsp;aggregate&nbsp;new&nbsp;homes&nbsp;pricing.&nbsp;So&nbsp;their&nbsp;orders&nbsp;have&nbsp;gone&nbsp;down,their&nbsp;backlogs&nbsp;have&nbsp;gone&nbsp;down.&nbsp;We&#8217;re&nbsp;starting&nbsp;to&nbsp;see&nbsp;that&nbsp;in&nbsp;some&nbsp;of&nbsp;the&nbsp;homes&nbsp;data,&nbsp;but&nbsp;I&nbsp;thinkthat&nbsp;it&#8217;s&nbsp;both&nbsp;sides&nbsp;of&nbsp;the&nbsp;coin&nbsp;because&nbsp;if&nbsp;you&#8217;re&nbsp;an&nbsp;individual&nbsp;home&nbsp;flipper&nbsp;or&nbsp;someone&nbsp;whoaspires&nbsp;to&nbsp;be&nbsp;a&nbsp;landlord&nbsp;or&nbsp;whatever&nbsp;else,&nbsp;banks&nbsp;are&nbsp;going&nbsp;to&nbsp;be&nbsp;more&nbsp;skeptical&nbsp;lending&nbsp;to&nbsp;thosesecond&nbsp;and&nbsp;third&nbsp;mortgages,&nbsp;right?&nbsp;Your&nbsp;initial&nbsp;mortgage,&nbsp;they&#8217;re&nbsp;still&nbsp;churning&nbsp;those&nbsp;out,&nbsp;butthey&#8217;re&nbsp;much&nbsp;tighter&nbsp;with&nbsp;their&nbsp;credit.&nbsp;But&nbsp;for&nbsp;the&nbsp;folks&nbsp;that&nbsp;are&nbsp;hopeful&nbsp;investors,&nbsp;most&nbsp;banks&nbsp;arenot&nbsp;willing&nbsp;to&nbsp;do&nbsp;that&nbsp;for&nbsp;a&nbsp;rate&nbsp;that&nbsp;is&nbsp;favorable.&nbsp;So&nbsp;you&nbsp;look&nbsp;at&nbsp;the&nbsp;disparity&nbsp;between&nbsp;rent&nbsp;andhome&nbsp;ownership&nbsp;in&nbsp;a&nbsp;lot&nbsp;of&nbsp;areas.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s&nbsp;hard&nbsp;for&nbsp;a&nbsp;new&nbsp;landlord&nbsp;to&nbsp;get&nbsp;in&nbsp;because&nbsp;with&nbsp;the&nbsp;mortgage&nbsp;cost&nbsp;and&nbsp;insurance,&nbsp;propertytaxes&nbsp;are&nbsp;all&nbsp;going&nbsp;to&nbsp;pay.&nbsp;They&#8217;re&nbsp;not&nbsp;going&nbsp;to&nbsp;be&nbsp;able&nbsp;to&nbsp;compete&nbsp;with&nbsp;some&nbsp;of&nbsp;the&nbsp;otherlandlords&nbsp;unless&nbsp;they&#8217;re&nbsp;in&nbsp;a&nbsp;really&nbsp;hot&nbsp;up&nbsp;and&nbsp;coming&nbsp;area.&nbsp;Like,&nbsp;you&nbsp;might&nbsp;be&nbsp;able&nbsp;to&nbsp;do&nbsp;it&nbsp;inNew&nbsp;York,&nbsp;you&nbsp;might&nbsp;be&nbsp;able&nbsp;to&nbsp;do&nbsp;it&nbsp;in&nbsp;Miami,&nbsp;you&nbsp;probably&nbsp;won&#8217;t&nbsp;be&nbsp;able&nbsp;to&nbsp;do&nbsp;it&nbsp;in&nbsp;a&nbsp;lot&nbsp;of&nbsp;theUS.&nbsp;But&nbsp;in&nbsp;terms&nbsp;of&nbsp;what&#8217;s&nbsp;going&nbsp;on&nbsp;in&nbsp;real&nbsp;estate,&nbsp;it&#8217;s&nbsp;an&nbsp;interesting&nbsp;dichotomy&nbsp;because&nbsp;then&nbsp;onthe&nbsp;other&nbsp;side,&nbsp;we&#8217;re&nbsp;seeing&nbsp;prolific&nbsp;weakness&nbsp;in&nbsp;office&nbsp;buildings.&nbsp;Right.&nbsp;There&#8217;s&nbsp;the&nbsp;lowestamount&nbsp;of&nbsp;utilization&nbsp;we&#8217;ve&nbsp;ever&nbsp;seen.&nbsp;So&nbsp;there&#8217;s&nbsp;at&nbsp;least&nbsp;one&nbsp;place&nbsp;in&nbsp;the&nbsp;market&nbsp;where&nbsp;there&nbsp;isn&#8217;tscarcity.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah,&nbsp;I&nbsp;think&nbsp;a&nbsp;couple&nbsp;of&nbsp;things.&nbsp;I&nbsp;think&nbsp;Meta&nbsp;just&nbsp;announced&nbsp;that&nbsp;they&nbsp;want&nbsp;their&nbsp;staff&nbsp;back&nbsp;threedays&nbsp;a&nbsp;week&nbsp;or&nbsp;something&nbsp;soon,&nbsp;which&nbsp;it&#8217;s&nbsp;going&nbsp;to&nbsp;be&nbsp;really&nbsp;interesting&nbsp;to&nbsp;see&nbsp;how&nbsp;that&nbsp;playsout.&nbsp;But&nbsp;also&nbsp;in&nbsp;terms&nbsp;of&nbsp;people&nbsp;moving&nbsp;gosh,&nbsp;I&nbsp;was&nbsp;just&nbsp;in&nbsp;Austin&nbsp;last&nbsp;weekend,&nbsp;and&nbsp;I&nbsp;thinkprobably&nbsp;six&nbsp;to&nbsp;8%&nbsp;of&nbsp;all&nbsp;the&nbsp;license&nbsp;plates&nbsp;I&nbsp;saw&nbsp;were&nbsp;California&nbsp;plates.&nbsp;So&nbsp;there&nbsp;are&nbsp;a&nbsp;lot&nbsp;ofpeople&nbsp;who&nbsp;are&nbsp;selling&nbsp;their&nbsp;places&nbsp;in&nbsp;California&nbsp;and&nbsp;moving&nbsp;to&nbsp;Austin.&nbsp;I&nbsp;don&#8217;t&nbsp;see&nbsp;that&nbsp;as&nbsp;muchwhere&nbsp;I&nbsp;live,&nbsp;but&nbsp;that&nbsp;seems&nbsp;to&nbsp;be&nbsp;one&nbsp;of&nbsp;those&nbsp;markets&nbsp;that&nbsp;seems&nbsp;to&nbsp;be&nbsp;defined&nbsp;gravity,&nbsp;which&nbsp;isjust&nbsp;crazy&nbsp;to&nbsp;see&nbsp;that&nbsp;as&nbsp;the&nbsp;rest&nbsp;of&nbsp;the&nbsp;US.&nbsp;Seems&nbsp;to&nbsp;be&nbsp;at&nbsp;least&nbsp;holding&nbsp;or&nbsp;maybe&nbsp;selling&nbsp;off.Okay,&nbsp;that&#8217;s&nbsp;great.&nbsp;Ma&#8217;am,&nbsp;thank&nbsp;you&nbsp;so&nbsp;much&nbsp;for&nbsp;that.&nbsp;Your&nbsp;stuff&nbsp;is&nbsp;great.&nbsp;I&nbsp;really&nbsp;appreciate&nbsp;yourfeed&nbsp;and&nbsp;all&nbsp;the&nbsp;stuff&nbsp;you&nbsp;always&nbsp;put&nbsp;out.&nbsp;It&#8217;s&nbsp;really&nbsp;balanced&nbsp;and&nbsp;really&nbsp;smart.&nbsp;So&nbsp;thank&nbsp;you&nbsp;forthat.&nbsp;Albert&nbsp;let&#8217;s&nbsp;move&nbsp;on&nbsp;to&nbsp;some&nbsp;geopolitical&nbsp;stuff.&nbsp;And&nbsp;there&nbsp;was&nbsp;an&nbsp;announcement&nbsp;this&nbsp;weekabout&nbsp;the&nbsp;UAE&nbsp;that&nbsp;you&nbsp;tweeted&nbsp;about&nbsp;where&nbsp;UAE&nbsp;is&nbsp;pulling&nbsp;out&nbsp;of&nbsp;a&nbsp;maritime&nbsp;coalition&nbsp;that&nbsp;theUS&nbsp;set&nbsp;up&nbsp;for&nbsp;security&nbsp;and&nbsp;Gulf&nbsp;waters.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And&nbsp;I&nbsp;know&nbsp;that&nbsp;the&nbsp;US&nbsp;and&nbsp;UAE&nbsp;have&nbsp;been&nbsp;partners&nbsp;in&nbsp;security&nbsp;for&nbsp;the&nbsp;region,&nbsp;very&nbsp;closepartners&nbsp;for&nbsp;a&nbsp;couple&nbsp;of&nbsp;decades,&nbsp;and&nbsp;it&nbsp;seems&nbsp;like&nbsp;that&nbsp;may&nbsp;be&nbsp;breaking&nbsp;up.&nbsp;But&nbsp;we&#8217;ve&nbsp;talkedabout&nbsp;this&nbsp;several&nbsp;times&nbsp;before.&nbsp;Like,&nbsp;the&nbsp;State&nbsp;Department&nbsp;in&nbsp;the&nbsp;US.&nbsp;Is&nbsp;very&nbsp;ineffectual.&nbsp;It&#8217;sactually&nbsp;DoD&nbsp;that&nbsp;conducts&nbsp;the&nbsp;more&nbsp;important&nbsp;diplomacy&nbsp;on&nbsp;behalf&nbsp;of&nbsp;the&nbsp;US.&nbsp;So&nbsp;when&nbsp;we&nbsp;seethese&nbsp;defense&nbsp;things&nbsp;break&nbsp;up,&nbsp;it&#8217;s&nbsp;significant.&nbsp;So&nbsp;can&nbsp;you&nbsp;help&nbsp;us&nbsp;understand&nbsp;that&nbsp;a&nbsp;bit&nbsp;more?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There&#8217;s&nbsp;two&nbsp;reasons&nbsp;for&nbsp;this.&nbsp;One&nbsp;is&nbsp;the&nbsp;Biden&#8217;s&nbsp;administration&nbsp;of&nbsp;continuing&nbsp;Obama&#8217;s&nbsp;theories&nbsp;oflead&nbsp;from&nbsp;behind&nbsp;in&nbsp;the&nbsp;Middle&nbsp;East,&nbsp;which&nbsp;is&nbsp;absolutely&nbsp;nonsensical.&nbsp;It&nbsp;just&nbsp;doesn&#8217;t&nbsp;work.Vacuums&nbsp;get&nbsp;filled.&nbsp;Turkey&nbsp;had&nbsp;to&nbsp;stabilize&nbsp;the&nbsp;region&nbsp;by&nbsp;looking&nbsp;towards&nbsp;other&nbsp;nations&nbsp;like&nbsp;theUAE,&nbsp;qatar&nbsp;and&nbsp;Oman&nbsp;and&nbsp;Saudi&nbsp;Arabia.&nbsp;And&nbsp;this&nbsp;is&nbsp;just&nbsp;a&nbsp;natural&nbsp;progression&nbsp;of&nbsp;the&nbsp;US.Stepping&nbsp;back.&nbsp;If&nbsp;you&nbsp;ask&nbsp;the&nbsp;Biden&nbsp;administration,&nbsp;they&nbsp;continue&nbsp;to&nbsp;say&nbsp;that&nbsp;they&#8217;re&nbsp;engaged,&nbsp;buttheir&nbsp;level&nbsp;of&nbsp;engagement&nbsp;and&nbsp;the&nbsp;way&nbsp;they&nbsp;go&nbsp;about&nbsp;it&nbsp;is&nbsp;questionable&nbsp;at&nbsp;best&nbsp;with&nbsp;the&nbsp;Saudis&nbsp;justwith&nbsp;lack&nbsp;of&nbsp;respect&nbsp;towards&nbsp;Biden&nbsp;and&nbsp;Blinken.&nbsp;This&nbsp;is&nbsp;nothing&nbsp;of&nbsp;a&nbsp;surprise&nbsp;to&nbsp;me.&nbsp;In&nbsp;fact,&nbsp;Iforesee&nbsp;Turkey&nbsp;being&nbsp;a&nbsp;much&nbsp;more&nbsp;regional&nbsp;player&nbsp;in&nbsp;the&nbsp;coming&nbsp;decade&nbsp;than&nbsp;the&nbsp;US&nbsp;will&nbsp;be.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s&nbsp;really&nbsp;interesting.&nbsp;About&nbsp;20&nbsp;years&nbsp;ago,&nbsp;a&nbsp;book&nbsp;came&nbsp;out&nbsp;called&nbsp;The&nbsp;Next&nbsp;Hundred&nbsp;Years,&nbsp;andGeorge&nbsp;Friedman&nbsp;wrote&nbsp;about&nbsp;how&nbsp;Turkey&nbsp;was&nbsp;going&nbsp;to&nbsp;be&nbsp;a&nbsp;regional&nbsp;power&nbsp;again.&nbsp;And&nbsp;at&nbsp;thetime,&nbsp;it.&nbsp;Seemed&nbsp;not&nbsp;intuitive.&nbsp;And&nbsp;I&nbsp;know&nbsp;Friedman&nbsp;has&nbsp;a&nbsp;lot&nbsp;of&nbsp;things&nbsp;that&nbsp;haven&#8217;t&nbsp;necessarilystuck,&nbsp;but&nbsp;to&nbsp;see&nbsp;Turkey&nbsp;reemerge&nbsp;as&nbsp;a&nbsp;regional&nbsp;power&nbsp;is&nbsp;very&nbsp;interesting&nbsp;for&nbsp;me.&nbsp;And&nbsp;to&nbsp;seeErdogan&nbsp;reelected,&nbsp;I&nbsp;don&#8217;t&nbsp;think&nbsp;it&#8217;s&nbsp;a&nbsp;complete&nbsp;surprise,&nbsp;but&nbsp;it&#8217;s&nbsp;interesting&nbsp;to&nbsp;see&nbsp;the&nbsp;leadershipthey&#8217;ve&nbsp;taken.&nbsp;So&nbsp;can&nbsp;you&nbsp;give&nbsp;a&nbsp;couple&nbsp;of&nbsp;examples&nbsp;of&nbsp;how&nbsp;Turkey&nbsp;is&nbsp;taking&nbsp;leadership&nbsp;in&nbsp;thatregion?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well,&nbsp;they&#8217;ve&nbsp;been&nbsp;setting&nbsp;up&nbsp;military&nbsp;bases,&nbsp;I&nbsp;believe,&nbsp;in&nbsp;Qatar&nbsp;and&nbsp;the&nbsp;UAE.&nbsp;They&#8217;ve&nbsp;beenworking&nbsp;hand&nbsp;in&nbsp;hand&nbsp;with&nbsp;the&nbsp;Iranians,&nbsp;believe&nbsp;it&nbsp;or&nbsp;not,&nbsp;in&nbsp;Africa.&nbsp;And&nbsp;the&nbsp;Russians,&nbsp;they&#8217;vebeen&nbsp;pushing&nbsp;out&nbsp;their&nbsp;drones&nbsp;to&nbsp;pretty&nbsp;much&nbsp;anyone&nbsp;that&nbsp;was&nbsp;willing&nbsp;to&nbsp;buy&nbsp;them.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Including&nbsp;Ukraine.&nbsp;Right?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Of&nbsp;course,&nbsp;the&nbsp;Ukraine,&nbsp;everybody,&nbsp;they&nbsp;push&nbsp;it&nbsp;out&nbsp;to&nbsp;anybody&nbsp;they&nbsp;can&nbsp;buy.&nbsp;And&nbsp;they&nbsp;use&nbsp;thatas&nbsp;leverage&nbsp;for&nbsp;trade&nbsp;deals.&nbsp;And&nbsp;right&nbsp;now,&nbsp;a&nbsp;lot&nbsp;of&nbsp;Russian&nbsp;money&nbsp;goes&nbsp;through&nbsp;Turkey.&nbsp;Andthey&nbsp;don&#8217;t&nbsp;really&nbsp;care&nbsp;what&nbsp;the&nbsp;United&nbsp;States&nbsp;has&nbsp;to&nbsp;say&nbsp;because&nbsp;the&nbsp;United&nbsp;States&nbsp;still&nbsp;and&nbsp;theworld&nbsp;has&nbsp;to&nbsp;deal&nbsp;with&nbsp;Turkey&nbsp;as&nbsp;a&nbsp;geostrategic&nbsp;place&nbsp;in&nbsp;the&nbsp;world.&nbsp;Look&nbsp;at&nbsp;Map,&nbsp;for&nbsp;God&#8217;s&nbsp;sakes.They&nbsp;have&nbsp;the&nbsp;Prosphous,&nbsp;the&nbsp;Black&nbsp;Sea.&nbsp;They&nbsp;touch&nbsp;Europe,&nbsp;they&nbsp;touch&nbsp;the&nbsp;Middle&nbsp;East.They&#8217;re&nbsp;active&nbsp;in&nbsp;Africa.&nbsp;They&#8217;re&nbsp;everywhere.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And&nbsp;they&nbsp;have&nbsp;relationships&nbsp;with&nbsp;China,&nbsp;too,&nbsp;that&nbsp;are&nbsp;positive.&nbsp;Right?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah.&nbsp;Well,&nbsp;of&nbsp;course,&nbsp;the&nbsp;Chinese&nbsp;need&nbsp;to&nbsp;push&nbsp;their&nbsp;materials&nbsp;through&nbsp;Turkey,&nbsp;the&nbsp;bots&nbsp;forstraits,&nbsp;and&nbsp;through&nbsp;train&nbsp;rail.&nbsp;And&nbsp;they&#8217;re&nbsp;a&nbsp;force&nbsp;that&nbsp;you&nbsp;just&nbsp;can&#8217;t&nbsp;get&nbsp;around,&nbsp;literally.&nbsp;Now,they&nbsp;do&nbsp;have&nbsp;big&nbsp;economic&nbsp;problems,&nbsp;and&nbsp;I&nbsp;have&nbsp;disagreements&nbsp;with&nbsp;them&nbsp;concerning&nbsp;the&nbsp;USdollar,&nbsp;but&nbsp;once&nbsp;that&nbsp;reality&nbsp;bites&nbsp;them,&nbsp;they&nbsp;turn&nbsp;back&nbsp;and&nbsp;actually&nbsp;build&nbsp;some&nbsp;reserves.&nbsp;Theireconomy&nbsp;should&nbsp;be&nbsp;fine&nbsp;and&nbsp;get&nbsp;away&nbsp;from&nbsp;this&nbsp;hyperinflation&nbsp;threat&nbsp;that&nbsp;they&#8217;re&nbsp;facing.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;see&nbsp;countries&nbsp;like&nbsp;Turkey,&nbsp;India,&nbsp;Indonesia&nbsp;that&nbsp;are&nbsp;pretty&nbsp;independent,&nbsp;diplomatically.&nbsp;Theyhave&nbsp;a&nbsp;foot&nbsp;in&nbsp;the&nbsp;US&nbsp;sphere.&nbsp;They&nbsp;have&nbsp;a&nbsp;foot&nbsp;in&nbsp;the&nbsp;Chinese&nbsp;sphere.&nbsp;Some&nbsp;of&nbsp;them,&nbsp;like&nbsp;India,turkey&nbsp;especially,&nbsp;have&nbsp;a&nbsp;foot&nbsp;in&nbsp;the&nbsp;Russian&nbsp;sphere.&nbsp;What&nbsp;does&nbsp;that&nbsp;mean?&nbsp;Can&nbsp;the&nbsp;US.&nbsp;Kind&nbsp;ofmend&nbsp;fences&nbsp;and&nbsp;build&nbsp;relationships&nbsp;with&nbsp;those&nbsp;guys?&nbsp;Because&nbsp;there&nbsp;are&nbsp;three&nbsp;very&nbsp;importantcountries.&nbsp;You&nbsp;don&#8217;t&nbsp;hear&nbsp;about&nbsp;Indonesia&nbsp;a&nbsp;lot&nbsp;in&nbsp;the&nbsp;US.&nbsp;But&nbsp;it&#8217;s&nbsp;one&nbsp;of&nbsp;the&nbsp;largest&nbsp;countries&nbsp;inthe&nbsp;world.&nbsp;Turkey&nbsp;is&nbsp;strategically&nbsp;placed,&nbsp;and&nbsp;India&nbsp;is&nbsp;the&nbsp;largest&nbsp;country&nbsp;in&nbsp;the&nbsp;world.&nbsp;So&nbsp;howcan&nbsp;the&nbsp;US.&nbsp;Build&nbsp;those&nbsp;relationships&nbsp;without&nbsp;having&nbsp;kind&nbsp;of&nbsp;a&nbsp;binary,&nbsp;say,&nbsp;bilateral&nbsp;partnershipwith&nbsp;them?&nbsp;Meaning&nbsp;it&#8217;s&nbsp;the&nbsp;US.&nbsp;And&nbsp;no&nbsp;China,&nbsp;no&nbsp;Russia?&nbsp;What&#8217;s&nbsp;the&nbsp;best&nbsp;approach&nbsp;for&nbsp;them?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well,&nbsp;I&nbsp;think,&nbsp;first&nbsp;of&nbsp;all,&nbsp;we&nbsp;need&nbsp;to&nbsp;get&nbsp;an&nbsp;entire&nbsp;new&nbsp;administration,&nbsp;starting&nbsp;with&nbsp;the&nbsp;StateDepartment&nbsp;and&nbsp;the&nbsp;DoD.&nbsp;Without&nbsp;that&nbsp;changing.&nbsp;Nothing&#8217;s&nbsp;going&nbsp;to&nbsp;change.&nbsp;First&nbsp;Obama,&nbsp;andnow&nbsp;you&nbsp;have&nbsp;the&nbsp;Biden&nbsp;administration&nbsp;continues&nbsp;to&nbsp;push&nbsp;on&nbsp;the&nbsp;Indians&nbsp;and&nbsp;given&nbsp;themultimatums&nbsp;on&nbsp;dealing&nbsp;with&nbsp;Russia&nbsp;and&nbsp;whatnot.&nbsp;India&nbsp;is&nbsp;a&nbsp;billion&nbsp;people.&nbsp;They&nbsp;have&nbsp;their&nbsp;ownconcerns,&nbsp;economic&nbsp;concerns.&nbsp;They&nbsp;need&nbsp;that&nbsp;cheap&nbsp;oil,&nbsp;and&nbsp;they.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Have&nbsp;a&nbsp;long&nbsp;history&nbsp;with&nbsp;Russia,&nbsp;too.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And&nbsp;they&nbsp;use&nbsp;Russia&nbsp;as&nbsp;a&nbsp;counterbalance&nbsp;with&nbsp;the&nbsp;Chinese.&nbsp;Now&nbsp;Indonesia&nbsp;has&nbsp;the&nbsp;same&nbsp;oppositeeffect.&nbsp;I&nbsp;mean,&nbsp;Indonesia&nbsp;is&nbsp;food&nbsp;security.&nbsp;They&nbsp;have&nbsp;their&nbsp;own&nbsp;food&nbsp;security,&nbsp;so&nbsp;they&nbsp;don&#8217;t&nbsp;reallyneed&nbsp;that.&nbsp;They&nbsp;have&nbsp;a&nbsp;bustling&nbsp;manufacturing&nbsp;center&nbsp;just&nbsp;gaining&nbsp;more&nbsp;steam,&nbsp;and&nbsp;they&nbsp;interactwith&nbsp;the&nbsp;Chinese&nbsp;because&nbsp;they&nbsp;have&nbsp;to.&nbsp;That&#8217;s&nbsp;the&nbsp;regional&nbsp;power.&nbsp;So&nbsp;you&nbsp;can&#8217;t&nbsp;really&nbsp;expect&nbsp;Idon&#8217;t&nbsp;understand&nbsp;why&nbsp;people&nbsp;expect&nbsp;pick&nbsp;them&nbsp;or&nbsp;us.&nbsp;It&#8217;s&nbsp;never&nbsp;like&nbsp;that&nbsp;in&nbsp;the&nbsp;world.&nbsp;It&nbsp;justdoesn&#8217;t&nbsp;work&nbsp;like&nbsp;that.&nbsp;Like&nbsp;I&nbsp;said,&nbsp;things&nbsp;will&nbsp;change&nbsp;when&nbsp;we&nbsp;have&nbsp;a&nbsp;new&nbsp;administration,&nbsp;andit&#8217;s&nbsp;probably&nbsp;going&nbsp;to&nbsp;take&nbsp;a&nbsp;couple&nbsp;of&nbsp;decades&nbsp;to&nbsp;rebuild&nbsp;those&nbsp;relationships,&nbsp;but.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Couple of&nbsp;decades,&nbsp;you&nbsp;think,&nbsp;well,&nbsp;you&nbsp;can&#8217;t&nbsp;just.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Turn&nbsp;something&nbsp;around&nbsp;in&nbsp;one&nbsp;administration.&nbsp;Let&#8217;s&nbsp;just&nbsp;say,&nbsp;theoretically,&nbsp;DeSantis&nbsp;wins&nbsp;andcleans&nbsp;house,&nbsp;and&nbsp;it&nbsp;takes&nbsp;two&nbsp;years&nbsp;to&nbsp;be&nbsp;able&nbsp;to&nbsp;shift&nbsp;things&nbsp;around&nbsp;properly&nbsp;and&nbsp;see&nbsp;somethingstarting&nbsp;to&nbsp;materialize.&nbsp;And&nbsp;that&#8217;s&nbsp;not&nbsp;enough.&nbsp;Then&nbsp;you&#8217;re&nbsp;up&nbsp;for&nbsp;reelection&nbsp;after&nbsp;four.&nbsp;If&nbsp;he&nbsp;winsagain,&nbsp;you&nbsp;have&nbsp;eight.&nbsp;Maybe&nbsp;at&nbsp;the&nbsp;end&nbsp;of&nbsp;his&nbsp;second&nbsp;term,&nbsp;you&nbsp;have&nbsp;some&nbsp;kind&nbsp;of&nbsp;fruits&nbsp;thatwill&nbsp;be&nbsp;blossoming&nbsp;between&nbsp;those&nbsp;relations.&nbsp;But&nbsp;until&nbsp;then,&nbsp;this&nbsp;is&nbsp;just&nbsp;not&nbsp;good&nbsp;news.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And&nbsp;they&#8217;re&nbsp;just&nbsp;looking&nbsp;out&nbsp;for&nbsp;their&nbsp;own&nbsp;self&nbsp;interest,&nbsp;right?&nbsp;I&nbsp;mean,&nbsp;it&#8217;s&nbsp;not&nbsp;every&nbsp;nation&nbsp;does.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s&nbsp;national&nbsp;self&nbsp;interest.&nbsp;I&nbsp;made&nbsp;this&nbsp;argument&nbsp;about&nbsp;the&nbsp;EU&nbsp;for&nbsp;so&nbsp;many&nbsp;years.&nbsp;Everyone&nbsp;keptsaying,&nbsp;oh,&nbsp;the&nbsp;EU&nbsp;is&nbsp;unified&nbsp;and&nbsp;we&#8217;re&nbsp;this&nbsp;and&nbsp;we&#8217;re&nbsp;that.&nbsp;Well,&nbsp;when&nbsp;you&nbsp;add&nbsp;a&nbsp;little&nbsp;stress&nbsp;tothe&nbsp;situation,&nbsp;the&nbsp;rift&nbsp;between&nbsp;Berlin&nbsp;and&nbsp;Paris&nbsp;starts&nbsp;to&nbsp;show&nbsp;its&nbsp;ugly&nbsp;head&nbsp;and&nbsp;the&nbsp;NorthernEurope&nbsp;versus&nbsp;Southern&nbsp;Europe,&nbsp;and&nbsp;everybody&#8217;s&nbsp;in&nbsp;for&nbsp;themselves.&nbsp;It&#8217;s&nbsp;just&nbsp;the&nbsp;reality.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Go&nbsp;ahead,&nbsp;Mayhem.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;would&nbsp;just&nbsp;say&nbsp;that&nbsp;the&nbsp;issue&nbsp;that&nbsp;Albert&nbsp;mentioned&nbsp;about&nbsp;countries,&nbsp;governments,&nbsp;that&nbsp;you&nbsp;guyswere&nbsp;talking&nbsp;about&nbsp;them&nbsp;having&nbsp;their&nbsp;own&nbsp;self&nbsp;interest,&nbsp;always&nbsp;in&nbsp;mind,&nbsp;that&#8217;s&nbsp;also&nbsp;an&nbsp;issue&nbsp;withpoliticians&nbsp;individually,&nbsp;and&nbsp;that&#8217;s&nbsp;a&nbsp;huge&nbsp;problem&nbsp;as&nbsp;well.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes.&nbsp;Are&nbsp;you&nbsp;talking&nbsp;about&nbsp;America?&nbsp;Are&nbsp;you&nbsp;talking&nbsp;about&nbsp;everywhere?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;can&nbsp;only&nbsp;speak&nbsp;to&nbsp;America,&nbsp;but&nbsp;I&#8217;m&nbsp;going&nbsp;to&nbsp;say&nbsp;it&#8217;s&nbsp;likely&nbsp;everywhere.&nbsp;And&nbsp;one&nbsp;of&nbsp;the&nbsp;problemsthat&nbsp;we&nbsp;do&nbsp;face&nbsp;in&nbsp;America&nbsp;that&#8217;s&nbsp;a&nbsp;big&nbsp;challenge&nbsp;is&nbsp;that&nbsp;money&nbsp;has&nbsp;the&nbsp;rights&nbsp;of&nbsp;free&nbsp;speech,&nbsp;thatcorporations&nbsp;are&nbsp;treated&nbsp;as&nbsp;people,&nbsp;and&nbsp;unfortunately,&nbsp;that&nbsp;doesn&#8217;t&nbsp;necessarily&nbsp;bode&nbsp;well&nbsp;for&nbsp;theinterests&nbsp;of&nbsp;the&nbsp;citizenry&nbsp;being&nbsp;represented&nbsp;by&nbsp;the&nbsp;political&nbsp;elite.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Absolutely.&nbsp;I&nbsp;agree&nbsp;with&nbsp;you.&nbsp;And&nbsp;we&nbsp;could&nbsp;have&nbsp;a&nbsp;very&nbsp;long&nbsp;conversation&nbsp;on&nbsp;the&nbsp;voices&nbsp;that&nbsp;getheard&nbsp;in,&nbsp;say,&nbsp;the&nbsp;State&nbsp;Department,&nbsp;and&nbsp;the&nbsp;voices&nbsp;that&nbsp;get&nbsp;heard&nbsp;in&nbsp;DoD&nbsp;and&nbsp;the&nbsp;voices&nbsp;that&nbsp;getheard&nbsp;in&nbsp;these&nbsp;different&nbsp;departments.&nbsp;It&#8217;s,&nbsp;I&nbsp;believe,&nbsp;fully&nbsp;money&nbsp;backed&nbsp;100%.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Just&nbsp;look&nbsp;at&nbsp;the&nbsp;Fed&nbsp;and&nbsp;the&nbsp;Treasury.&nbsp;Where&nbsp;do&nbsp;those&nbsp;guys&nbsp;go&nbsp;to&nbsp;work&nbsp;after&nbsp;they&#8217;re&nbsp;done&nbsp;withtheir&nbsp;wall?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Exactly.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You&#8217;re&nbsp;telling&nbsp;me&nbsp;that&nbsp;Yellen&nbsp;and&nbsp;Powell&nbsp;don&#8217;t&nbsp;take&nbsp;calls&nbsp;from&nbsp;market&nbsp;makers&nbsp;and&nbsp;brokerages&nbsp;onthe&nbsp;side?&nbsp;I&nbsp;mean,&nbsp;that&#8217;s&nbsp;just&nbsp;a&nbsp;joke.&nbsp;It&#8217;s&nbsp;literally&nbsp;a&nbsp;joke,&nbsp;right?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let&nbsp;me&nbsp;just&nbsp;get&nbsp;back&nbsp;to&nbsp;Geopolitics&nbsp;for&nbsp;a&nbsp;minute&nbsp;in&nbsp;the&nbsp;Middle&nbsp;East.&nbsp;So&nbsp;the&nbsp;US&nbsp;relationship&nbsp;withSaudi&nbsp;Arabia&nbsp;has&nbsp;really&nbsp;started&nbsp;to&nbsp;change&nbsp;a&nbsp;bit&nbsp;over&nbsp;the&nbsp;past&nbsp;couple&nbsp;of&nbsp;years,&nbsp;and&nbsp;I&nbsp;think&nbsp;it&nbsp;reallystarted&nbsp;changing&nbsp;during&nbsp;the&nbsp;Khashoggi&nbsp;stuff&nbsp;and&nbsp;it&#8217;s&nbsp;kind&nbsp;of&nbsp;deteriorated&nbsp;since&nbsp;then.&nbsp;So&nbsp;Tracy,what&nbsp;are&nbsp;you&nbsp;seeing&nbsp;with&nbsp;in&nbsp;energy&nbsp;markets?&nbsp;I&nbsp;know&nbsp;this&nbsp;nuclear&nbsp;thing&nbsp;was&nbsp;just&nbsp;announced&nbsp;withSaudi,&nbsp;but&nbsp;with&nbsp;regard&nbsp;to&nbsp;energy,&nbsp;we&#8217;ve&nbsp;seen&nbsp;Biden&nbsp;go&nbsp;to&nbsp;Saudi&nbsp;and&nbsp;ask&nbsp;him&nbsp;to&nbsp;release&nbsp;more&nbsp;oilwhile&nbsp;restricting&nbsp;oil&nbsp;here.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As&nbsp;far&nbsp;as&nbsp;energy&nbsp;is&nbsp;concerned,&nbsp;the&nbsp;US.&nbsp;Doesn&#8217;t&nbsp;have&nbsp;any&nbsp;pull&nbsp;there&nbsp;anymore.&nbsp;And&nbsp;again,&nbsp;that&#8217;sbecause&nbsp;shale&nbsp;is&nbsp;no&nbsp;longer&nbsp;a&nbsp;threat&nbsp;to&nbsp;them&nbsp;because&nbsp;it&#8217;s&nbsp;not&nbsp;growing&nbsp;for&nbsp;a&nbsp;lot&nbsp;of&nbsp;reasons,&nbsp;right?You&nbsp;have&nbsp;heroin&nbsp;acreage&nbsp;gone.&nbsp;You&nbsp;have&nbsp;no&nbsp;capex&nbsp;for&nbsp;the&nbsp;last&nbsp;seven&nbsp;years.&nbsp;You&nbsp;have&nbsp;oilcompanies&nbsp;beholden&nbsp;to&nbsp;shareholders&nbsp;at&nbsp;this&nbsp;point,&nbsp;buybacks&nbsp;dividends,&nbsp;capital,&nbsp;discipline,&nbsp;payingdown&nbsp;debt,&nbsp;et&nbsp;cetera.&nbsp;And&nbsp;so&nbsp;really,&nbsp;you&#8217;re&nbsp;not&nbsp;going&nbsp;to&nbsp;see&nbsp;shale&nbsp;go&nbsp;crazy&nbsp;anymore.&nbsp;So&nbsp;it&#8217;s&nbsp;not&nbsp;asbig&nbsp;of&nbsp;a&nbsp;threat&nbsp;as&nbsp;it&nbsp;once&nbsp;was.&nbsp;And&nbsp;so&nbsp;that&nbsp;factors&nbsp;in&nbsp;as&nbsp;well.&nbsp;And&nbsp;the&nbsp;current&nbsp;administration&nbsp;iscertainly&nbsp;not&nbsp;helping&nbsp;by&nbsp;any&nbsp;stretch&nbsp;of&nbsp;the&nbsp;imagination&nbsp;as&nbsp;far&nbsp;as&nbsp;trying&nbsp;to&nbsp;get&nbsp;these&nbsp;companies&nbsp;togrow&nbsp;whatsoever.&nbsp;He&nbsp;wants&nbsp;to&nbsp;shut&nbsp;it&nbsp;all&nbsp;down&nbsp;tomorrow.&nbsp;So&nbsp;I&nbsp;think&nbsp;that&#8217;s&nbsp;really&nbsp;this&nbsp;nuclearthing&nbsp;that&nbsp;came&nbsp;up,&nbsp;what&nbsp;they&#8217;re&nbsp;calling&nbsp;kind&nbsp;of&nbsp;the&nbsp;nuclear&nbsp;Aramco,&nbsp;I&nbsp;think&nbsp;that&#8217;s&nbsp;very&nbsp;interestingbecause&nbsp;it&nbsp;does&nbsp;point&nbsp;that&nbsp;I&nbsp;think&nbsp;Saudi&nbsp;relations&nbsp;with&nbsp;this&nbsp;particular&nbsp;administration&nbsp;are&nbsp;at&nbsp;the&nbsp;lowlevel,&nbsp;but&nbsp;they&nbsp;know&nbsp;that&nbsp;this&nbsp;current&nbsp;administration&nbsp;is&nbsp;not&nbsp;going&nbsp;to&nbsp;be&nbsp;here&nbsp;forever.&nbsp;We&nbsp;still&nbsp;needthose&nbsp;ties,&nbsp;and&nbsp;we&#8217;ve&nbsp;had&nbsp;tumultuous&nbsp;times&nbsp;with&nbsp;Saudi&nbsp;Arabia&nbsp;since&nbsp;we&nbsp;really&nbsp;started&nbsp;having&nbsp;thatalliance&nbsp;in&nbsp;the&nbsp;1930s.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But&nbsp;we&#8217;ve&nbsp;been&nbsp;longtime&nbsp;partners&nbsp;and&nbsp;have&nbsp;gone&nbsp;through&nbsp;bumps&nbsp;in&nbsp;the&nbsp;road.&nbsp;So&nbsp;I&nbsp;don&#8217;t&nbsp;think&nbsp;thatrelationship&nbsp;is&nbsp;I&nbsp;wouldn&#8217;t&nbsp;count&nbsp;on&nbsp;that&nbsp;being&nbsp;gone&nbsp;whatsoever.&nbsp;It&#8217;s&nbsp;just&nbsp;right&nbsp;now,&nbsp;this&nbsp;particularadministration&nbsp;particularly&nbsp;does&nbsp;not&nbsp;have&nbsp;any&nbsp;pull.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Albert,&nbsp;what&nbsp;are&nbsp;your&nbsp;thoughts&nbsp;on&nbsp;that?&nbsp;I&nbsp;do&nbsp;kind&nbsp;of&nbsp;actually&nbsp;worry&nbsp;about&nbsp;the&nbsp;US&nbsp;relationshipwith&nbsp;Saudi&nbsp;Arabia.&nbsp;Is&nbsp;that&nbsp;something&nbsp;where&nbsp;you&nbsp;think&nbsp;the&nbsp;Saudis&nbsp;are&nbsp;just&nbsp;kind&nbsp;of&nbsp;biting&nbsp;time&nbsp;untilthe&nbsp;administration?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yeah,&nbsp;they&#8217;re&nbsp;buying&nbsp;time.&nbsp;They&nbsp;still&nbsp;listen.&nbsp;They&nbsp;still&nbsp;know&nbsp;that&nbsp;the&nbsp;US&nbsp;dollar&nbsp;is&nbsp;a&nbsp;reservecurrency&nbsp;and&nbsp;not&nbsp;changing&nbsp;in&nbsp;anybody&#8217;s&nbsp;lifetime.&nbsp;They&nbsp;know&nbsp;that&nbsp;they&nbsp;have&nbsp;to&nbsp;rely&nbsp;on&nbsp;the&nbsp;UnitedStates&nbsp;as&nbsp;a&nbsp;defense&nbsp;partner.&nbsp;They&nbsp;have&nbsp;these&nbsp;realities&nbsp;that&nbsp;they&nbsp;go&nbsp;through.&nbsp;Obviously,&nbsp;they&nbsp;haveissues&nbsp;with&nbsp;the&nbsp;current&nbsp;administration.&nbsp;There&#8217;s&nbsp;no&nbsp;question&nbsp;about&nbsp;that.&nbsp;They&nbsp;don&#8217;t&nbsp;like&nbsp;howrelations&nbsp;have&nbsp;been&nbsp;handled&nbsp;in&nbsp;public.&nbsp;So&nbsp;inevitably,&nbsp;the&nbsp;Saudis&nbsp;were&nbsp;going&nbsp;to&nbsp;push&nbsp;back&nbsp;a&nbsp;littlebit&nbsp;and&nbsp;at&nbsp;least&nbsp;give&nbsp;a&nbsp;little&nbsp;bit&nbsp;of&nbsp;tension&nbsp;towards&nbsp;DC&nbsp;to&nbsp;push&nbsp;back&nbsp;and&nbsp;say,&nbsp;hey,&nbsp;we&#8217;re&nbsp;not&nbsp;justpushovers.&nbsp;You&nbsp;just&nbsp;can&#8217;t&nbsp;use&nbsp;us&nbsp;as&nbsp;a&nbsp;punching&nbsp;bag&nbsp;for&nbsp;whatever&nbsp;political&nbsp;situation&nbsp;you&nbsp;have&nbsp;backhome.&nbsp;It&nbsp;doesn&#8217;t&nbsp;work&nbsp;like&nbsp;that.&nbsp;But&nbsp;until&nbsp;I&nbsp;don&#8217;t&nbsp;think&nbsp;anything&nbsp;really&nbsp;dramatic&nbsp;is&nbsp;going&nbsp;tohappen.&nbsp;Like,&nbsp;they&#8217;re&nbsp;just&nbsp;going&nbsp;to&nbsp;say&nbsp;the&nbsp;hell&nbsp;of&nbsp;the&nbsp;United&nbsp;States,&nbsp;we&#8217;re&nbsp;going&nbsp;to&nbsp;China,&nbsp;oranything&nbsp;like&nbsp;that.&nbsp;There&#8217;s&nbsp;too&nbsp;many&nbsp;other&nbsp;realities&nbsp;that&nbsp;play&nbsp;here.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Okay,&nbsp;guys,&nbsp;let&#8217;s&nbsp;wrap&nbsp;it&nbsp;up&nbsp;just&nbsp;really&nbsp;quick.&nbsp;The&nbsp;week&nbsp;ahead,&nbsp;we&#8217;ve&nbsp;got&nbsp;the&nbsp;Fed&nbsp;meeting&nbsp;comingup.&nbsp;We&#8217;ve&nbsp;got&nbsp;OPEC&nbsp;meeting&nbsp;on&nbsp;Sunday,&nbsp;this&nbsp;sort&nbsp;of&nbsp;thing.&nbsp;Tracy,&nbsp;let&#8217;s&nbsp;start&nbsp;with&nbsp;you.&nbsp;What&nbsp;doyou&nbsp;expect&nbsp;for&nbsp;the&nbsp;week&nbsp;ahead?&nbsp;Do&nbsp;you&nbsp;see&nbsp;strength&nbsp;continuing&nbsp;to&nbsp;come&nbsp;back&nbsp;to&nbsp;crude&nbsp;anddissolates,&nbsp;or&nbsp;what&nbsp;do&nbsp;you&nbsp;see&nbsp;happening?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tracy<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;think&nbsp;the&nbsp;OPEC&nbsp;meeting&nbsp;kind&nbsp;of&nbsp;set&nbsp;the&nbsp;tone&nbsp;for&nbsp;the&nbsp;week,&nbsp;right?&nbsp;If&nbsp;they&nbsp;do&nbsp;nothing,&nbsp;we&nbsp;may&nbsp;seea&nbsp;little&nbsp;bit&nbsp;of&nbsp;a&nbsp;pullback&nbsp;in&nbsp;oil.&nbsp;But&nbsp;again,&nbsp;this&nbsp;market&nbsp;is&nbsp;heading&nbsp;for&nbsp;tightness,&nbsp;and&nbsp;that&#8217;s&nbsp;just&nbsp;afact.&nbsp;So&nbsp;really&nbsp;my&nbsp;weekend&nbsp;is&nbsp;spent&nbsp;on&nbsp;OPEC,&nbsp;and&nbsp;that&#8217;s&nbsp;really&nbsp;what&nbsp;I&nbsp;am&nbsp;looking&nbsp;forward&nbsp;to,obviously,&nbsp;their&nbsp;macro&nbsp;events.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Albert,&nbsp;what&nbsp;do&nbsp;you&nbsp;see&nbsp;for&nbsp;the&nbsp;week&nbsp;ahead&nbsp;as&nbsp;we&nbsp;tee&nbsp;up&nbsp;for.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Albert<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The&nbsp;Fed,&nbsp;definitely&nbsp;starting&nbsp;with&nbsp;OPEC,&nbsp;I&nbsp;want&nbsp;to&nbsp;see&nbsp;what&nbsp;they&nbsp;do.&nbsp;I&nbsp;actually&nbsp;think&nbsp;that&nbsp;they&#8217;regoing&nbsp;to&nbsp;probably&nbsp;announce&nbsp;some&nbsp;surprise&nbsp;cuts.&nbsp;I&nbsp;think&nbsp;markets&nbsp;run&nbsp;up&nbsp;based&nbsp;on&nbsp;that.&nbsp;I&nbsp;thinkthey&#8217;re&nbsp;trying&nbsp;to&nbsp;create&nbsp;a&nbsp;buffer&nbsp;because&nbsp;tension&nbsp;because&nbsp;of&nbsp;OPEC&nbsp;oil&nbsp;probably&nbsp;rising&nbsp;andprobably&nbsp;the&nbsp;Fed&nbsp;coming&nbsp;in&nbsp;there.&nbsp;And&nbsp;Jerome&nbsp;snap&nbsp;slapping&nbsp;25&nbsp;basis&nbsp;points&nbsp;on&nbsp;us&nbsp;again.&nbsp;I&nbsp;thinkthis&nbsp;might&nbsp;be&nbsp;the&nbsp;last&nbsp;one,&nbsp;but&nbsp;I&#8217;m&nbsp;not&nbsp;sure&nbsp;until&nbsp;the&nbsp;fall.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Okay.&nbsp;And&nbsp;Mayhem,&nbsp;you&nbsp;can&nbsp;come&nbsp;in&nbsp;here&nbsp;too.&nbsp;I&nbsp;think&nbsp;the&nbsp;25&nbsp;seems&nbsp;all&nbsp;but&nbsp;guaranteed,&nbsp;but&nbsp;whatdo&nbsp;you&nbsp;expect&nbsp;the&nbsp;tone&nbsp;will&nbsp;be?&nbsp;Do&nbsp;you&nbsp;think&nbsp;it&nbsp;will&nbsp;be&nbsp;a&nbsp;relatively&nbsp;hawkish&nbsp;tone&nbsp;given&nbsp;the&nbsp;jobsnumbers,&nbsp;or&nbsp;do&nbsp;you&nbsp;think&nbsp;it&nbsp;will&nbsp;be&nbsp;a&nbsp;relatively&nbsp;kind&nbsp;of&nbsp;dovish&nbsp;hike?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&#8217;m&nbsp;going&nbsp;to&nbsp;be,&nbsp;I&nbsp;guess,&nbsp;a&nbsp;bit&nbsp;divergent&nbsp;versus&nbsp;what&#8217;s&nbsp;been&nbsp;expressed&nbsp;so&nbsp;far.&nbsp;I&nbsp;don&#8217;t&nbsp;think&nbsp;the&nbsp;Fedhikes&nbsp;in&nbsp;June.&nbsp;I&nbsp;don&#8217;t&nbsp;think&nbsp;they&nbsp;hike&nbsp;in&nbsp;June.&nbsp;I&nbsp;think&nbsp;that&nbsp;they&#8217;re&nbsp;going&nbsp;to&nbsp;go&nbsp;into&nbsp;more&nbsp;of&nbsp;a&nbsp;hikeskip,&nbsp;hike,&nbsp;skip&nbsp;pattern.&nbsp;If&nbsp;there&nbsp;are&nbsp;to&nbsp;be&nbsp;more&nbsp;hikes,&nbsp;I&nbsp;think&nbsp;the&nbsp;next&nbsp;hike&nbsp;is&nbsp;likely&nbsp;to&nbsp;come&nbsp;inJuly,&nbsp;and&nbsp;I&nbsp;think&nbsp;that&nbsp;they&#8217;re&nbsp;going&nbsp;to&nbsp;leave&nbsp;the&nbsp;door&nbsp;open&nbsp;to&nbsp;additional&nbsp;hikes,&nbsp;and&nbsp;they&#8217;re&nbsp;going&nbsp;tosay&nbsp;they&#8217;re&nbsp;continuing&nbsp;to&nbsp;monitor&nbsp;data.&nbsp;But&nbsp;one&nbsp;thing&nbsp;Powell&nbsp;specifically&nbsp;mentioned&nbsp;watching&nbsp;isjolts.&nbsp;And&nbsp;with&nbsp;the&nbsp;data&nbsp;that&nbsp;we&#8217;ve&nbsp;gotten&nbsp;recently,&nbsp;we&nbsp;can&nbsp;see&nbsp;that&nbsp;we&nbsp;still&nbsp;have&nbsp;something&nbsp;like1.71.8&nbsp;jobs&nbsp;available&nbsp;for&nbsp;every&nbsp;person&nbsp;seeking&nbsp;work,&nbsp;and&nbsp;that&#8217;s&nbsp;a&nbsp;metric&nbsp;that&nbsp;displeases&nbsp;this&nbsp;Fed.So&nbsp;at&nbsp;the&nbsp;very&nbsp;least,&nbsp;whenever&nbsp;they&nbsp;are&nbsp;done&nbsp;hiking&nbsp;and&nbsp;it&#8217;s&nbsp;sooner&nbsp;than&nbsp;later,&nbsp;maybe&nbsp;they&nbsp;haveone,&nbsp;two,&nbsp;maybe&nbsp;three.&nbsp;I&nbsp;kind&nbsp;of&nbsp;doubt&nbsp;it,&nbsp;but&nbsp;I&#8217;m&nbsp;leaning&nbsp;pretty&nbsp;heavy&nbsp;on&nbsp;at&nbsp;least&nbsp;one&nbsp;hikes&nbsp;left&nbsp;intheir&nbsp;plan.&nbsp;But&nbsp;the&nbsp;bigger&nbsp;and&nbsp;I&nbsp;think&nbsp;more&nbsp;important&nbsp;question&nbsp;and&nbsp;this&nbsp;is&nbsp;something&nbsp;that&nbsp;Powellhas&nbsp;even&nbsp;expressed&nbsp;to&nbsp;the&nbsp;press,&nbsp;is&nbsp;that&nbsp;the&nbsp;bigger&nbsp;question&nbsp;is&nbsp;how&nbsp;long&nbsp;do&nbsp;they&nbsp;leave&nbsp;rates&nbsp;high?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How&nbsp;long&nbsp;do&nbsp;they&nbsp;run&nbsp;down&nbsp;their&nbsp;balance&nbsp;sheet?&nbsp;And&nbsp;I&nbsp;think&nbsp;that&nbsp;is&nbsp;a&nbsp;really&nbsp;important&nbsp;questionthat&nbsp;the&nbsp;market&nbsp;continues&nbsp;to&nbsp;misprice&nbsp;the&nbsp;answer&nbsp;to.&nbsp;The&nbsp;answer&nbsp;is&nbsp;generally&nbsp;thought&nbsp;of,&nbsp;oh,they&#8217;re&nbsp;going&nbsp;to&nbsp;start&nbsp;cutting&nbsp;as&nbsp;soon&nbsp;as&nbsp;September&nbsp;or&nbsp;November&nbsp;of&nbsp;this&nbsp;year&nbsp;and&nbsp;we&#8217;re&nbsp;going&nbsp;tojust&nbsp;automatically&nbsp;go&nbsp;back&nbsp;into&nbsp;a&nbsp;complete&nbsp;easing&nbsp;cycle&nbsp;when&nbsp;inflation&nbsp;has&nbsp;become&nbsp;much&nbsp;stickierthan&nbsp;I&nbsp;think&nbsp;anyone&nbsp;wanted&nbsp;to&nbsp;see.&nbsp;My&nbsp;thought&nbsp;is&nbsp;that&nbsp;and&nbsp;I&nbsp;saw&nbsp;Albert&nbsp;laugh,&nbsp;and&nbsp;I&nbsp;agree.&nbsp;Imean,&nbsp;it&nbsp;is&nbsp;laughable,&nbsp;but&nbsp;my&nbsp;thought&nbsp;is&nbsp;that&nbsp;it&#8217;s&nbsp;much&nbsp;more&nbsp;likely&nbsp;next&nbsp;year&nbsp;and&nbsp;probably&nbsp;in&nbsp;thesecond&nbsp;half&nbsp;of&nbsp;next&nbsp;year&nbsp;that&nbsp;the&nbsp;Fed&nbsp;considers&nbsp;really&nbsp;easing.&nbsp;And&nbsp;the&nbsp;caveat&nbsp;there&nbsp;is&nbsp;if&nbsp;they&nbsp;breaksomething&nbsp;big&nbsp;enough,&nbsp;because&nbsp;that&#8217;s&nbsp;been&nbsp;the&nbsp;classic&nbsp;Fed&nbsp;turnabout,&nbsp;their&nbsp;real&nbsp;dual&nbsp;mandate,&nbsp;Ilike&nbsp;to&nbsp;say,&nbsp;is&nbsp;creating&nbsp;and&nbsp;destroying&nbsp;bubbles.&nbsp;They&nbsp;haven&#8217;t&nbsp;yet&nbsp;destroyed&nbsp;this&nbsp;bubble&nbsp;and&nbsp;thelagged&nbsp;impacts&nbsp;of&nbsp;monetary&nbsp;policy.&nbsp;That&nbsp;hiking&nbsp;cycle&nbsp;having&nbsp;really&nbsp;just&nbsp;started&nbsp;early&nbsp;last&nbsp;year,they&#8217;re&nbsp;only&nbsp;starting&nbsp;to&nbsp;hit.&nbsp;The&nbsp;first&nbsp;hike&nbsp;was&nbsp;in&nbsp;March.&nbsp;The&nbsp;first&nbsp;bout&nbsp;of&nbsp;Junior&nbsp;QT&nbsp;was&nbsp;in&nbsp;Juneand&nbsp;then&nbsp;it&nbsp;went&nbsp;up&nbsp;to&nbsp;full&nbsp;throttle&nbsp;in&nbsp;September.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We&nbsp;haven&#8217;t&nbsp;yet&nbsp;felt&nbsp;the&nbsp;entire&nbsp;tightening,&nbsp;nor&nbsp;have&nbsp;we&nbsp;felt&nbsp;the&nbsp;tightening&nbsp;of&nbsp;credit&nbsp;conditions&nbsp;frombanks.&nbsp;So&nbsp;I&nbsp;still&nbsp;think&nbsp;there&#8217;s&nbsp;more&nbsp;to&nbsp;kind&nbsp;of&nbsp;go&nbsp;through&nbsp;and&nbsp;I&nbsp;think&nbsp;the&nbsp;Fed&nbsp;is&nbsp;going&nbsp;to&nbsp;strike&nbsp;ahawkish&nbsp;but&nbsp;balanced&nbsp;tone&nbsp;and&nbsp;say&nbsp;that&nbsp;don&#8217;t&nbsp;misinterpret&nbsp;this&nbsp;skip&nbsp;for&nbsp;an&nbsp;actual&nbsp;pause,&nbsp;a&nbsp;hawkishpause.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tony<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&nbsp;like&nbsp;that.&nbsp;It&#8217;s&nbsp;not&nbsp;consensus&nbsp;and&nbsp;that&#8217;s&nbsp;why&nbsp;I&nbsp;like&nbsp;it.&nbsp;Very&nbsp;good.&nbsp;So&nbsp;we&nbsp;have&nbsp;a&nbsp;little&nbsp;bit&nbsp;of&nbsp;adifference&nbsp;here,&nbsp;so&nbsp;let&#8217;s&nbsp;see&nbsp;what&nbsp;happens.&nbsp;So,&nbsp;guys,&nbsp;thank&nbsp;you&nbsp;so&nbsp;much&nbsp;for&nbsp;your&nbsp;time.&nbsp;I&nbsp;reallyappreciate&nbsp;it,&nbsp;all&nbsp;your&nbsp;insight.&nbsp;Have&nbsp;a&nbsp;great&nbsp;weekend&nbsp;and&nbsp;have&nbsp;a&nbsp;great&nbsp;week&nbsp;ahead.&nbsp;Thank&nbsp;youvery&nbsp;much.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mayhem<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thanks&nbsp;for&nbsp;having&nbsp;me.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay up to date with the latest discussions on crude prices, the OPEC meeting, U.S. Treasury debt, and shifting dynamics in the Middle East. Join Tony Nash and industry experts Tracy Shuchart, Markets 4 Mayhem, and Albert Marko on The Week Ahead as they provide valuable insights to help you navigate the global landscape effectively. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-44239","post","type-post","status-publish","format-standard","hentry","category-week-ahead"],"_links":{"self":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts\/44239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/comments?post=44239"}],"version-history":[{"count":0,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts\/44239\/revisions"}],"wp:attachment":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/media?parent=44239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/categories?post=44239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/tags?post=44239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}