Ep.127: Why Surging Yields May Break The Financial System!

Welcome back to the trading floor, and before I begin, make sure you're sat down and you're strapped in because what we're going to cover is the following: the world's biggest bond market hits a wave of selling, global bonds at the mercy of Treasuries in echo of the 2020 COVID debt sell-off, and Treasury bond collapse ranks among the worst crashes in history. Do, do, do, do, do, do, do, do, do.

Jesus. Okay. You know, I'm glad I stocked up on that tinned food and, and dry pasta in my basement.

Do you know what? I, I tweeted Morgan Freeman last night and I said, Morgan, I need you. I need you for episode 127 of the Market Maker podcast, just for 10 seconds to intro. And he, he replied and he said, I'm busy, I'm busy. And I was just like, ah, next time. Um, but look, some of that— there's some of the headlines obviously in circulation this week. To add a bit more on that, Bloomberg reported losses on Treasury bond with maturities of 10 years or more notched a 46% since March 2020, while the 30-year bond had plunged over 50%. And these losses are nearly in line— this is the comparable— stock market losses seen during the worst crashes in recent history. So they're talking about the, the depth of that bond sell-off being the same as the equity slumping 49% after the dot-com bubble burst and 57% in the aftermath of the global financial crisis. So in terms of this episode, what are we going to do? Well, look, after all this kind of jokes aside drama, we're going to just go back, step out of the kind of hysteria for a moment, and just recap and surmise what exactly is going on and why is this happening in the bond market. Then take the conversation one step further. Hopefully, Piers, you can deconstruct this a little bit, and let's break down the financial system into its parts, that being the banks, US and European, then insurance, pensions, debt markets, and private equity, because they've all got a unique tie to this story, as does the whole global financial system, but in different ways, and the impact might be different in terms of how it's felt. So first off, perhaps we could kick off with what on earth is going on?

Well, first, before we get into that, I want to know what your Armageddon, uh, strategy is, you know. Have you got— I'm talking about human survival now, you know, if we're going here. What have you got? What's your basement setup?

Basement setup?

Yeah.

No, no, I'm definitely one of those people, you know, when you watch a Hollywood film. I'm one of those people. I'm definitely a lover, not a fighter. So I'd be definitely on the roof of my house Right. My wife's hand and my children.

Okay. Interesting.

And I'd just be like, look, let's just, uh, I'd open that nice bottle of wine that's been sat there for the last 15 years, never found the right occasion. And I'd be like, yeah, let's just embrace it.

Okay. Interesting. Just watch that mushroom cloud approach.

Yeah. Whilst my skin gets ripped from my body.

You know what the biggest, the biggest travesty of all of that? Would be you wouldn't get time to finish watching the Beckham documentary.

Oh, right. Oh, you know, not that, not that that docuseries would reveal anything I don't already know.

Well, yeah, exactly. Um, anyway, let's talk. Yeah, well, it's actually, it's good to have bond markets in, you know, grabbing the headlines. Um, you know, I, I I'd love to know what the stat is, you know, what percentage of financial media column inches is made up of commentary about stocks. I mean, I don't know. Well, what would you guess? It's probably 80+%. I don't know.

Yeah. Well, I was having a conversation with a student who was asking me about writing about markets for blogging and LinkedIn, stuff like that.

Yeah.

And we were sat in this coffee shop in the city yesterday And I was like, go out in the street now, grab Joe Blogs, and say the word yields, and see what response you get off, off them. No one cares in the mainstream, not one person. It's so interesting, like, unless it's got like an AI or an Apple attached to it, it's just not interesting for the mainstream. And yet global financial markets, as I've just described to open the episode, are in absolute turmoil. At the time.

No one cares until they need to care, and maybe they actually need to start caring. I mean, if we go way back, I mean, what's happening here is that unless you are— let me think here— unless you were born in the '70s, okay, like me.

I was going to say no, no, fortunately not, no.

But I mean, unless you were an adult in the 1970s. Okay. Which would let— let's say you, you needed to have been 20 years old in that decade. So that's putting you at 70 years plus, right? Uh, 80 years, let's just say. So, so obviously the vast majority of people aren't that old. So the reason why I'm saying this is because it was in the '70s that we last had a proper, uh, bond yield rally, bond yields spike, you know, surge in bond yields to incredibly high levels, right? And it kind of peaked. It was a bit of a double peak. I'm looking at the 10-year U.S. Treasury yield chart, and in September 1981, um, it peaked, right? And it peaked at a quite unbelievable almost 16%, uh, but anyway So it peaks there, right? That moment in time from then until now. And when I say now, we're obviously talking about half a century here. So when I say now, I mean in the last 12 months, right? That's what now is. But really, from the start of the 1980s until now, bond yields have gone down, down, down, down, down, down. It has been a 40-year downward trend. Okay, now when yields go down, bond prices go up, and so therefore it's been a 40-year uptrend on price, a 40-year rally. And now, for the first time in four decades, the rally's done, the rally's over, and we are having a reversal of that 40 year trend. Okay, so that's the kind of backdrop on why all of a sudden it's starting to get some front page attention. So why is it happening? And then who's it going to impact is really, I guess, the two key questions. And if we talk about, well, why is it happening? So I'd say broadly, so when we talk about the price of anything moving, we, we've got to think about supply and demand, all right? The price of literally anything— what's the price of an orange? Well, it's supply and demand. What's the price of government bonds? Well, it's supply and demand. And so what's happening with the supply and demand side functions of government debt? Well, if we talk about the US, right, and you can kind of extrapolate these arguments out across the Western world, but obviously we've had an inflation surge post-COVID, which has been followed by a very aggressive monetary policy hiking cycle to try and contain that. Right. So when inflation goes up and when interest rates go up, well, bond yields go up. Okay. Bond yields go up. Well, why? What's the connection there? Well, a bond, don't forget, is a loan. So when we talk about government bonds, well, that's the government's way of borrowing money. So they issue bonds and then investors buy these bonds and essentially lend the government money, right? Now, when we're talking about long-term bonds, let's take the 10-year U.S. government bond. Uh, we'll talk about people like pension funds in a minute, but when a pension company, when a pension fund buys a US 10-year government bond, they're lending the government money for 10 years, and in 10 years' time, the government pays the money back. Okay, now what's the value of that money? Well, let's say you lend $100 today. Well, then in 10 years' time, the government pays you back $100. It's exactly the same amount of money. But what's key is the value of that money changes over time in terms of its purchasing power, right? Now, when inflation goes up, well, this means prices are rising, which actually means the value of your money is declining more rapidly. So when we got high inflation, the value of your $100 in the future is going to be less. Okay, now lenders require compensation for that. They're not going to lend to you unless you, the borrower, pay a higher interest rate so that during that period when you've got my money, you're paying me a higher interest rate, which compensates me for the lower value of that money when you give it back to me at the end of the loan. Okay, so when inflation goes up, bond yields rise. Okay, when interest rates are going up, bond yields rise. Okay, so this is, this is one thing that's driving the yields up now. From a supply side. So they're like the core fundamental factors. If we talk about supply, well, remember it's the government borrowing money. Okay, well, our governments, well, what's their borrowing requirements? Well, their borrowing requirements have just gone through the stratosphere because of all the fiscal support through COVID. Okay, and because of Biden's, you know, inflation-busting act and his spending that's got out of control. The government's deficit has widened. In fact, the US government deficit, it's the cost of— it's their interest payments, basically, or the cost of borrowing as a function of GDP, or how much more are they borrowing compared to how much they're earning in a 12-month period. Basically, it's like nearly 8% now. Okay, their deficit. So deficits have jumped. And by the way, just as an aside, that's one of the highest deficits ever. I'm not sure, I might be right in saying, and again, this might be, you need to fact-check this, but I think it might be the highest, the widest deficit in a non-recessionary period or a non-war global conflict period. But you might have to fact-check that. Anyway, point is, wide deficit. Well, what does a wide deficit mean? Well, they need to borrow more to fund that deficit. So what's going to happen, um, it's happening now and it's going to continue, is that the government are going to have to borrow more money. Their borrowing requirements are going up. How do they borrow? They issue bonds. So the supply of bonds is expected to rise steadily and quite, quite sharply in the months ahead. Okay, so more supply, what does that mean? More price drops. Anything, right? Just supply-demand dynamics. If supply goes up, price goes down. So as we know, when price drops, when a bond's price drops, the yield goes up. Okay, so another reason why yields are rising is the expected increase in supply. Now we look at the demand side, right? So all that's fine and all that makes sense. Um, and obviously, sorry, one more point, you know, the Fed's higher-for-longer pivot in September where they've got more hawkish has meant that those longer-term inflation and interest rate expectations have gone up, which is again pushed yields higher, right? But let's think about the demand side then, because, all right, more debt. Well, what's the demand levels looking like to buy that debt? And there's kind of— I'd say there's kind of 3 core problems on the demand side. Um, number one, the biggest buyer in town has shut up shop and moved out. Biggest buyer being the Federal Reserve. So the Federal Reserve, via their monster quantitative easing program— that's where they're buying U.S. bonds, right? Well, they're not buying anymore. In fact, the opposite. They're kind of starting to kind of reduce their balance sheet. Okay, so the biggest buyers at out, number one. Number two, I do think that the Russia-Ukraine conflict has revealed to the world the US's modern weapon of choice, and that is essentially their monetary weapon, where, um, so, so when, when the US wanted to squeeze Putin. It was, it was more about, right, let's seize assets, you know, let's use the SWIFT payment system to try and block their ability to do transactions, XYZ. The point is, I think for the whole world, it did show that having a large dollar exposure could be a bit of a problem if you ever found yourself annoying the US and in, in a little bit of conflict. So there's one very, very, very large country that I'm particularly thinking of, um, who historically have been one of the biggest buyers of US bonds, and that's China. Okay, so China, the other big buyer other than the Fed, well, they're kind of like, well, perhaps we want to change our long-term strategy here and, and stop being so, you know, dollar dependent. So that's another buyer that's more reluctant. And thirdly, Japanese yields. We talked about Japan, I think, a few weeks ago, but Japanese yields are finally rising after, like, literally after 30 years. Japanese yields are rising. Now, the thing about that is Japan is a big buyer of US debt, one of the reasons being there's no yield in Japan. So, right, let's buy the next best thing, which is the US debt. But now yields in Japan are rising. You could say Japanese demand is also are going to start to drop. So just as supply is about to dramatically increase, just as you've got those core fundamentals of inflation and interest rates super high, you've also then got the demand side of the situation looking particularly weak at the same time. And so this is all wrapped up into this, this kind of multifaceted scenario that's all pushing Yields higher and why the 40-year bond market rally is dead.

So just take this just to connect the dots here. So what does this mean for the Fed and for the interest rate expectations? We heard from them being super hawkish. We heard from them pricing in that they're going to hike potentially one more time. This year. So how has this development in the last week influenced investors about their expectations for the Fed now?

Well, it's, it's a really interesting one how all this stuff's connected, right? So the Fed at their last meeting, as you know, said, look, wow, we might need to touch on oil prices given that was the focus of last week. And my Lord, I mean, we were looking at how quickly prices have gone up. Well, it's just fallen off an absolute cliff. But anyway, the Fed were hawkish that we're going to need to keep rates higher for longer, blah, blah, blah. But them just saying those words has led to bond yields spiking, which then means borrowing is more expensive. Which then means that people borrow less and invest less, which then means that the economic growth story deteriorates, which then means inflationary pressures reduce, which then means the Fed don't need to keep rates higher for longer.

Can you repeat that and say it backwards? So, so then just, yeah, again, threading the needle here. So what— so that's why oil fell?

Yeah, well, yes, I, I exactly. So the oil price sell-off, um, and let me just get— I mean, what, what were the numbers on that? I checked, I checked in the store. I hadn't looked at oil for—

been quite busy this week and hadn't checked the biggest fall midweek in a, in a year, I think.

Wow, it's just crazy. So Pete's last week at Well, I think on, on WTI crude got up to— let's just round it up to $94. It's now trading $82. Um, yeah, so look, this is very short-term, you know, very dramatic volatility as people try and figure out something that's incredibly difficult to predict and get right, which is I guess if you want to strip it all back to the basics, are we going to have a recession or not? And I think that in the summer we thought, well, actually we're not. Things are looking pretty rosy. Economic momentum strong. Happy days. We're going to somehow magically avoid this recession even though interest rates have gone through the roof. And so oil went up because the demand side expectation is growing. And now, well, that, that's now led to that spike in interest rates, which now people— because it's, it's the speed of it that's, that's really the thing here. It's the speed of the increase in the yields that's just caught everyone off guard, and everyone's just had a little bit of a mini panic, including oil traders who are now like, oh my God, maybe actually there is going to be a recession. Oh no, demand's going to collapse! Quick, sell, sell, sell while price is really high and I can lock in a bit of profit. So it's kind of been a little bit of a frenzied, panicked, uh, week, I would say.

So I know what you're like as a trader. So everyone's running around like a headless chicken, everyone's panicking, everyone's running for the hills, and there you are just buying.

Nice.

They're all running, they're just— you're just buying more and more. When you look at bonds at the moment in this current state Yeah. Is it not a case of, you know, it is dramatic, but is there not specific reasons that adds to the dramaticness that do not make it comparable to the '70s and the '80s? Just the mechanics of the market now.

Yeah. I mean, like the '70s and the '80s, I mean, interest rates got up to whatever it was, 15, or even 20, was it 20%? I'm talking about the interest, the central bank's interest rate, right? I mean, you know, we're panicking interest rates are at 5%, but they were literally 4 times that, right? So we're— obviously there's similarities to that period, but it's nothing, you know, but at the same time it's quite a bit different.

Um, but, but yeah, I mean, if the Fed are at the end of this cycle, the slowdown, that's the kind of domino effect that you mentioned. There's no more hikes, we start talking about cutting, the recession odds go up at that point. There, if there was a systemic risk to the system, we know that the central bank, even in their deficit, would just go, okay, so QT, quantitative tightening, or any idea of tightening of policy, okay, we, we're, we're backing off the, the interest rate lever. 'Well, let's just start tweaking about on the QE lever.' Not that they would do QE, but they could guide around this kind of, um, I guess, uh, sizing down on the amount of debt there. So is the panic— it just makes me think that the panic is a bit unwarranted, and it's all just got awfully behavioral, like the oil move, like the stock market move that we've discussed in recent months. Feels like another episode of the Netflix docuseries here.

Well, yeah, I think that fundamentally we're talking about debt here and government debt. And look, what Biden is doing is basically, I think this, these basically the markets are now finally going, what, what the hell do you think you're doing? Where you're spending, rolling out these huge stimulus spending programs. I get that during the height of COVID Yeah, well, fine, you needed emergency action. COVID's gone. We're not in a recession. And look, Trump before was— you forget about it now because COVID obviously dominated everything. But when Trump got into office, He basically confounded economic convention by rolling out a big stimulus program when the economy was actually growing pretty nicely already. Trump began this spending spree, right? And then obviously COVID happens, more spending, and now Biden's in and he wants more spending. And ultimately that's not sustainable. And that's the kind of basis of everything. So the— everyone needs to get their fiscal house in order and stop being short-term, you know, a populist politician trying to get reelected by giving loads of handouts.

But in Western democracy, I'm afraid to say that I guess the historical pattern is you need a financial catastrophe, an economic one, to reset that fiscal mindset, right?

And we didn't get it, right? Yeah, we didn't get that. That COVID should have been Yeah, that moment. But you could say governments in some respects handled that incredibly well because we avoided that financial catastrophe. But that catastrophe is still lurking. Yeah, you are right. You do need a crisis to kind of force change.

But okay, well, look, we've covered quite a bit there. Yeah, so perhaps then between those different kind of different participants within the financial system, is there any one out of US, European banks, insurance, pensions, debt markets, or private equity that you feel is the more interesting one out of the bunch?

Well, I think you can kind of wrap up, um, banks, insurance, and pension into kind of one. So there's a lot of panic going on, right? And there's lots of headlines out there. I love the stories about US banks. Let's just maybe zoom in a little bit where people are kind of panicking about US banks' bond portfolios are now close to the losses are now close to $400 billion. US banks have lost $400 billion on their bond portfolio.

Right. So explain to me, like, when you, when, when you see those numbers, like, you just think, what? So, like, what? So they're going to collapse? But what are they referring to with these figures?

Okay, so there's this thing called hold to maturity. So back to my very simplistic example, at the start. If the government wants to borrow money, they issue a bond and a lender will buy that bond, lending them money. Right. If it's a 10-year bond, right, I'll buy— I, the lender, I'll buy that bond at what's called par. So on a newly issued bond, it's 100. Okay. That's the price is 100. I buy it for 100.

Okay.

That's the par value. Great. I then hold that bond as the lender. And I receive interest payments, and that interest rate is fixed at issuance. That's called the coupon rate.

Okay.

And I, as the lender, I receive the interest payments every year for 10 years. Okay. And then the government pays me back the 100 that I lent. That's it. That's a bond. If I'm a hold-to-maturity player, That's it. I buy the bond for 100, I receive the interest, and then I get the 100 back. Okay, now in the meantime, what I've just described is like the primary market. In the meantime, there's a secondary market for bonds. So me as the lender, I could, if I wanted, I could sell that bond to a different investor before maturity, basically passing on that loan liability to someone else. And then that other person, they'll get the interest payments from the government and they will get the 100 100 back when the bond reaches maturity. Right now, what price does the bond trade at in the secondary market? Well, it's not 100. The price goes up and down as we go through the economic cycle and as the creditworthiness of the borrower obviously goes up and down over time due to a whole load of factors. Right? So when they say US banks have lost $400 billion on their bond portfolios, they haven't lost that amount of money. It's not like they've given $400 billion that they used to have in the account is now gone. This is them what's called marking to market the value of their bond portfolio. And yes, bond prices have dropped, as you were saying, whatever those percentages were, right? The prices have dropped radically, except it doesn't matter. It doesn't matter because the banks aren't going to sell them at those prices. What they're going to do is they'll wait for the full 10 years and they'll get the 100 back.

Yeah, you've got to have, you've got to have diamond hands.

Well, I mean, look, but particularly like pension funds, they are literally, they're hold-to-maturity players. They buy bonds and then with the interest rate that they know It's fixed income, right? You know how much interest payments you're going to get in, and they can match those incoming interest payments with their outgoing pension liabilities. They're not selling. They would never sell. They wait till maturity and they receive the full 100% that they paid back. Okay, now the issue comes— the only issue comes here is if you are— if any one of these players, banks, insurance companies, pension funds, if any one of them for any reason is forced to sell their bonds pre-maturity. Okay? Now, this is what happened to the likes of Silicon Valley Bank. Okay? This is what happened to the likes of UK pension funds during the Truss saga, right? They, for liquidity re— let's take a bank again, a simple example. One of the challenges that banks have is that interest rates have gone up. So their depositors expect to earn more money on their deposits, right? And if banks aren't paying you enough money on your deposit account, well, savvy players are going, well, fine, I'll withdraw my money from my deposit account, thanks. And I'll go and buy a debt instrument on Hargreaves Lansdown or something, right? But that means taking my money out of the bank. Well, hang on then. Well, hang on. How does the bank How's the bank going to pay you your money? Well, it depends how much deposits are being withdrawn, right? And if a lot of deposits are being withdrawn, the bank's got a liquidity problem where they are then forced to sell the bonds to raise the cash to pay their depositors, right? So that is a forced seller. Then yes, they are realizing that really big loss on that bond asset. Okay, so unless you're a forced seller because of liquidity problems, unless that happens, this is all fine. They're hold-to-maturity players and the mark-to-market looks ugly, but it doesn't matter.

Yeah, I've got that meme of the dog sat in the cafe with the flames going up going, it's fine.

But I would say, well, yeah, sorry, no, I get what I—

what you explained makes complete sense. Um, however, as we now know in retrospect, the composition of SVB's holdings, yeah, was very unique. Um, definitely not that of similar to where the bulk of these numbers are coming from, which I'm guessing is the JPMorgans of the world, right? Yeah. And then secondarily, you've got the diversification and the, the more tight relationship with the government in terms of dealings that they have within being a player within the bond market of their size. So that can happen, but what, the probability is so infinitely low?

Yeah, like, like Bank of America are getting a little bit of heat, a bit spicy, because they've got— out of all of the big banks, they, they own more long-duration government bonds than anyone else, right? So you could say, well, they've got the biggest problem then. It's their bond portfolio mark to market that has declined the most. I think it's like a $100 billion loss or something, paper loss. But Bank of America, they don't have a liquidity problem. I mean, they've literally got liquidity coming out of all orifices.

Careful, careful.

So they're not going to be forced sellers. But don't get me wrong, unless you get that minute, tiny— unless it is Armageddon and I am battening down the hatches in my basement, unless that happens, which is fantastically remotely, you know, the possibilities just not even worth discussing, unless that happens, they're absolutely fine. Um, what— but, but you will get casualties. So Metro Bank in the UK, right? They have a liquidity problem, so they are being forced into being a seller or trying to raise capital, which is what they've been trying to do. Um, and all of a sudden now they're in the headlines. So what has happened? Well, depositors are going to want their money out, which of course means their liquidity problem gets even worse. And, you know, they're now on that sort of slippery slope. Now they're trying to sell a third of their mortgage portfolio to one of the big boys, right? Um, so you're going to get episodes because definitely the weak, the smaller, are going to run up against a liquidity crisis every now and then. And then yeah, they're in trouble, real trouble. Um, so you're definitely going to get casualties, and this is a function of the higher interest rate environment.

Okay, so you group, you group those up. As a package. What about your debt market and private equity?

Right, exactly. So I think that— let's talk private equity. So I think for them this is very different. And this is a real— I mean, perhaps Stephen will give you some better guidance and more detailed guidance on the Wednesday podcast. But this is a real issue for them because ultimately private equity, where you just think leverage buyout, don't you? And so, well, leverage, what's that leverage part? Well, that's debt. But of course, the cost of debt has gone up sharply, and now we think it's going to stay higher for longer, right? Yeah, I would guess so. Often you talk about with PE, you're talking about interest cover ratio. So, right. So when they buy a company, when a private equity firm buys a company, they buy it with debt, but they basically put that debt on the company. So it's the company that's got to pay for the debt interest costs. Well, the interest coverage ratio is looking at a company's, basically their profit versus their interest expense. Okay, but now their interest expenses have gone up sharply because interest rates have gone up. So these coverage ratios are way, way, way worse than they used to be, which means there's a lot more risk. So you either say, well, fine, I'll take the more risk and I'll carry on buying these companies with the same amount of leverage, or— and then the risks are higher and it's, you know, more failures will occur and you'll take more losses— or you say, well, I'm going to have to deleverage and I'm going to have to use less debt to make these. And without less debt, well, means, well, more cash or more equity, right? And so it's much more expensive and/or more risky for private equity players who operate in this environment.

Okay. And then finally, the debt—

finally, debt markets. So here we talk about— I've been talking about the government a lot. Well, of course, companies borrow money through the corporate bond markets. And I think I said last week, right, what's the cost of borrowing in the corporate debt market? What are the yields on corporate bonds? Well, they're definitely— so I say there's two parts to that story. What's the yield? One part is out of the company's control. This is the macro side. And so this is right, what's the macro climate? What are interest rates? What's inflation? and ultimately, where's the 10-year Treasury yield at? And fine, if a company's borrowing, the investor's going to want and demand an interest rate that's greater than that being offered by the US government's 10-year yield, right? So you always pay a spread, a premium. So that's number one. The company can't do much about that. Then obviously number two is the company itself, and it's their creditworthiness. Right? And their credit rating will ultimately determine whether they're going to have a lower or higher interest rate. Now, the big problem in this is the, what we call the junk bond market, um, which is just companies that have a credit rating of below BBB. Just means they're smaller, there's more risk, and so investors require— or their balance sheet's not as good, or they've got issues or problems, and so the investors see that as being a more risky borrower, so they need more interest to justify that risk. So with— so the average yield on U.S. junk bonds has spiked to 9.3%. Okay, uh, just one month ago it was 8.5%. So that's a massive move in a really short space of time. So again, it's speed of change here that's caught everyone off guard, but Point being, it's just way more expensive to borrow money as a company. And that either means you're going to reduce costs so that you don't— you can operate more leanly and you don't need as much working capital. I'm fine, I'm not going to borrow because it's too expensive. Well, that means less investment. Maybe you're going to lay people off, people lose their jobs, and then from a macro point of view, that starts to look like a drag and negative. Okay. Or worst case scenario, you haven't got a choice. You're not profitable. You need to borrow, but it's so expensive that, right, actually you go bankrupt. And some might say there's a lot of zombies out there in the system that have been lurking there for 15 years since the 2008 crisis, which is— interest rates dropped to zero. So some might say The zombies are about to be found out.

Okay. And on that, on that statement, maybe I could lead with that. The zombies are about to be found out. There's a, there's a bit of intrigue, but look, we'll wrap it up there just because I know we've covered a lot of ground there. A couple of things. For one, don't forget that on Spotify, there is a Q&A function. Do feel free to use that if there's any questions at all. I am very conscious of the fact that a lot of students are now in the application cycle. In fact, I know some US banks are doing their assessment centers next week. So hopefully this episode has been particularly useful because you will be questioned about what's just happened.

100%.

For sure. The other thing is, if I could kindly ask, if you've made it this far on Spotify, I think we're at 494 or so 5-star ratings. So we need 6 more. Get us over the, the hump of 500. That'd be much appreciated. But Piers, thanks as ever, and thanks everyone for listening.

Have a great weekend.