1928: Renegotiating RE Deals, Corporate Landlord Lessons, End of Cheap Money, Chris MacIntosh

This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit hartmanmedia.com hey, Jason.

This is Scott Crook. I was on the Empowered Investor zoom call last night and just so thankful for the value that's created inside that group. And you know, you just consistently bring subjects that are so important and relevant to what I'm needing and I believe other investors need. So thank you so much. I appreciate you and all that you've done for helping us become better investors.

Thanks, Ben.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur. Entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now, here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1928. 1928 30. Thank you for joining me today. I'm excited to say our guest today will be hedge fund manager Chris McIntosh and he will be with us in a few minutes. But first, I want to look back in time. Just several months, not that far. Because when we look at what the Fed is doing, and certainly all eyes are on the Fed the last several months, when we look at what they're doing, and these drastic, drastic interest rate increases, increases that, you know, I mean, we've seen it happen a thousand times before throughout history, right? It's not going to be any surprise. An official recession will be announced probably sometime next year and then the Fed will back off, they'll start lowering rates and we will all have a chance. If we're taking out loans right now, or maybe we're paying cash for properties, we'll all have a chance to refi our properties and make the deal better. Remember what I've always said, this is one of the prime sort of golden, wonderful benefits of income property, the most historically proven asset class in the entire world. What is that benefit? Look, think about it, folks. In life, we've all been in deals with people, we've all made agreements with people, and then the person on the other side doesn't keep the agreement. What do we call those people? We call them weasels. We don't like doing business with those people. And sadly they seem to becoming a lot more common nowadays, those weasels. But anyway, you know, what if we got the chance with our deals, with our investments to renegotiate the deal all along the way without doing anything wrong, without being a weasel, without, you know, without taking advantage of anybody. And that's the way it is with income property because we buy the property and then we can turn around and renegotiate the deal throughout our ownership. We can refinance it, we can improve it, we can change the capital structure. We can do 1031 exchanges and basically renegotiate the way our whole portfolio works. We can change the rental arrangement with the tenants. You know, one of the things we're going to be talking more about is we're going to be talking more about doing rent to own deals. And those are pretty darn interesting in some cases. So we're going to be looking into a lot of this stuff in future episodes. But for today, let's just realize that the way the Fed is acting now is pretty much unprecedented. But it will change. The pendulum always swings back and forth as they cool the economy off. They'll overreact and then what will they do? They will lower rates and they will try to stimulate the economy and get us out of the recession that they of course put us into. And we're already seeing signs that inflation is moderating. I'm going to show you a chart probably next week on an episode. I just got this chart and it's the Baltic Index. This is the shipping index for container shipping around the world and it is showing drastic price reductions in container shipping. What does that mean? That means demand is subsiding, supply chain shortages or supply chain bottlenecks, I should say easing dramatically. And problems are starting to finally be solved. And this reduces the inflationary pressure, which ultimately means will lead to lower interest rates. But the other thing is we've got to always remember when we consider what the Fed is doing and the way they're acting, we've got to remember that the Fed, a huge part of their fight on inflation is related to, to housing costs. Because the way they figure housing costs in the consumer price index is this crazy owner's equivalent rent. I've talked about it on past episodes. I won't go down that rabbit hole today. But I just want to share a little bit of this 60 Minutes segment. And I think this was about eight months ago. If I'm not mistaken. So it's really quite recent in the overall scheme of things. And let's just check this out. I think you'll be very interested in this.

Every American is feeling the bite of inflation. Groceries cost more, gas costs more. Everything seems to cost more. This past week, the Federal Reserve raised interest rates in an effort to tame the highest inflation in 40 years. The cost of rent is really through the roof. Residential rents across the country went up an average of 15% last year, nearly twice the overall inflation rate.

Can you believe that? Residential rents went up 15% last year. Now, that depends where, of course, but twice the inflation rate. So, I mean, investors are just getting ahead in so many ways. Again, society is paying for this, right? Because this is a massive decline in the middle class and it's a massive decline in standard of living. But the fact is, what we need to do is just put ourselves on the right side of that trade. That's what I'm here to teach you. So you are insulated from it. And that's the importance of education, right? Why seeking out shows like this is so important for you because it puts you on the right side of that peril.

That's particularly painful for tenants because according to Census Bureau data, they now often have to spend as much as half their total income on rent. Why are rents rising so much? Well, it turns out that big Wall street firms are playing a role, but we found the fundamental problem was years in the making and will take years to fix. How much did your rent go up?

They attempted to raise it $400 a month.

That would have been a 40% jump for Justin Blocky and Brittany House. She's a nursing student and he's an occupational therapist in Jacksonville, Florida. When they first rented their apartment a year and a half ago, they were paying just over $1,000 a month.

I eventually came to terms with them.

For a 30% increase, which was $300.

Still 30%.

I've never heard of anything like that.

Do you know why your rent jumped that much?

They told me the market justified it, and they were right because I looked.

At 30 other apartments and they were.

All way too, too much for us to afford.

So when your rent goes up 30%, what's the impact? Are you having to give things up?

Yeah, our fridge does not look the same as last year before our lease.

Really cutting back on groceries.

Yeah, it's pretty much universally true. Rents are going up all around the country, but it's even more severe in migration destinations like the Sunbelt of the country, Austin Phoenix, Florida. A lot of people are moving there and there's just more demand for rents.

Darrell Fairweather is the chief economist at Redfin, a nationwide real estate brokerage firm that pulls together real time statistics on both the sales and rental markets. For example, their numbers show that rents increased 31% in Jacksonville last year, 40% in Austin, Texas.

So look what's happening. There is people now, as we see rents subside a little bit, they just have to give back some of that massive increase. I mean, it's not a big deal, folks. This is just not a big deal. If we see rents decelerate a bit. Overall, the trend is definitely up. So let's just go into a little more of this video. I think the spot I want to get to is right about here. If I remember correctly, in places like.

Jacksonville, Atlanta, Charlotte, investors are buying almost 30% of the homes that are available for regular home buyers.

This is a home we bought. This is 3518 Shiner Drive now.

So that investor activity as we talked about on the last episode is down a little bit, but it's still historically high. Investors are still seeing massive opportunity buying properties, but it is down from that peak where, you know, almost 35% of all the properties were being purchased by investors.

So today we own about 30,000 single family rental homes across the US largely in the Sun Belt, and we've got probably about 75,000 people living in our homes.

You are a multi billion dollar company. You're publicly traded on the New York Stock Exchange.

Correct. And the Toronto Stock Exchange.

Toronto Stock Exchange. I even read in one of your own documents that your revenue went up last year by 67%. Is that correct?

Yeah, we're expanding. I mean, when you think about it, we have an incredible amount of demand for what we do. So, Leslie, in any given week, institutional.

Landlords, I mean, they get it. This is the smart money you're looking at right here, right now, folks. The smart money buying up properties like crazy. Again, their activity is down a little bit from the peak, but still historically high. So I talked before about mom and pop investors a moment ago. Still historically high, down a little bit from the peak. Now, institutional investors, that's who you're seeing right now. Again, down from the peak, but still massively high.

Historically speaking, we might have two or three hundred homes available for renting. For renting. And we get about 10,000 leasing inquiries a week.

So 2 to 300 homes available and 10,000 inquiries from prospective tenants. Just look at the shortage, look at the imbalance there Folks, it's just monumental.

Tricon is trying to buy 800 houses a month. And there are companies even bigger. Invitation Homes owns more than 80,000 rental houses. American homes for rent, close to 60,000. Some of the all stars of finance, Goldman Sachs, JP Morgan, Blackstone, have put hundreds of millions of dollars into these companies. They all offer rental homes online and all focus on the Sun Belt.

Our largest portfolio would be in Atlanta, in Charlotte, in Phoenix, in Tampa.

And those are the cities that young millennials are flocking to.

This is where Americans want to be. We're finding that Americans are moving from the Northeast, from the Midwest to move to the Sun Belt because taxes are lower. It's a friendlier business environment, it's better weather. And so there's a movement taking place.

Place.

And the pandemic unleashed powerful nesting trends. And work from home trends.

Nesting trends, powerful nesting trends.

When we survey our residents, why did they move to be with us? The number one reason is they want more space.

Big investment companies like yours are being.

Just as I predicted in February of 2020. The Home Office trend, the remote working trend, would cause people to need larger homes with not just one home office, but two home offices. And at the time, I talked a lot about the kids being home from school and taking their school lessons on Zoom, which I think was a terrible experience for children, but it did make the parents realize a lot more about the complete brainwashing these kids were suffering from because they were overhearing the Zoom classroom. So that was a good thing. Some good things have definitely come out of the pandemic. No question about it being blamed for.

This huge increase in rents across the country. And you can set the rent any way you want, really, given the demand you're talking about first.

I mean, Corporate landlords represent 2% of all single family rental housing. So there's a lot more going on than just corporate landlords bidding up homes.

Okay, so let's just make sure we understand that. And you know, again, we've talked about this before. The corporate landlord element is bigger than it's ever been. But the question is always, compared to What? It's only 2% of the market. Most of it is all of you. You, mom and pop investors, me, you, everybody else that is buying single family homes for rental to secure their financial future, to help them get out of the rat race and to help them retire early while they're still good looking. So only 2% of the market, 98% of the market of these 18 million ish, give or take, single family homes Owned by investors is all of you mom and pop investors.

Very competitive and difficult environment.

It's true that big investors don't own nearly as many houses as mom and pop landlords, people who might have just a few properties. But big firms like Tricon do play a larger and growing role in the Sunbelt cities where they're active. Rent increases are all over the map. 35% in New York, but just 9% in Chicago. 29% in Portland, only 10% in LA. And in only one big city where rents actually down last year, Kansas City. Gary Berman says Tricon strictly caps how much it will raise rent on existing tenants when they renew their leases. But let's say I come in as a new renter here. Would the rent here be 30% more than it was about a year ago?

It could be, because when we come in and buy a home, we have to pay a market price for the home and then we have to set a market rent, right?

Here are two examples of homes Tricon recently bought in Jacksonville. This one, they're charging 40% higher rent than the previous owner asked. This one, 30% higher. These before.

Okay, so here's the deal, folks. Remember, I've said this so many times. The big benefit of these institutional landlords getting into our business now, it's not all good, okay? But a huge benefit is they are much better at raising rents. I mean, did you hear what she just said? They raised the rent 40% above what the prior owner was asking. So it was already an investment property again, you know, they're fixing these houses up a bit. And then the other one, they raised it 30% higher. Guess what that is setting rental comps for you. That means you get to charge higher rents. This is great news for mom and pop investors. We get to ride on the coattails of these institutional investors who are much better at optimizing their rental portfolio, frankly, than we've ever been. So just ride on their coattails. They're using software to tell them how much to charge for rent to optimize and constantly optimize their portfolio for higher rental income. And most of the tenants hate these landlords, okay? You can do a better job managing your properties than these corporate landlords can. And I bet you can retain your tenants longer and better than they can because, you know, there's just a ton of complaints about these institutional landlords. But, you know, that's not what we're talking about now.

Fore. And after pictures taken by Tricon show how they fix up many of the houses they buy. They Also have a fleet of trucks and technicians to service them.

This is a standard Tricon home.

And you put in the kitchen, you put in the appliances.

This home was built three years ago. We put in about $15,000. Most of our homes are a little bit older. We probably put in about 20 or $25,000.

This is very, okay, so 15 to 20 to maybe $25,000 in renovation fees. But they're increasing rents by 30 to 40%. That's a good deal for them.

Typical of what our product looks like when you move into it. It's move in ready condition, it's broom swept.

And if things go wrong, if there's.

A leak, if things go wrong, we have a leaky faucet or the oven or microwave is not working, you will call it us, you'll call and our maintenance tax will come and service the home.

The houses Tricon and other investors are buying in places like Jacksonville are what might be called starter homes, usually selling for about $300,000. When one of those comes on the market, investors are ready with all cash offers.

I would say probably a third of the listings that I'm putting up are getting investor offers.

Heather Crui is a Redfin real estate agent in Jacksonville. She represents both buyers and sellers.

You are seeing a lot of these Wall street investors that are coming in. You know, you put a house on the market and within an hour I'm getting offers, full price cash. And so these, the sellers are seeing that.

And so in the eight months or so, I think this was about eight months old. Forgive me if I didn't get that quite right. I should have just double checked that before. But, but you know, I think it's about eight months ago or so, something like that. You know, the market has obviously cooled since then because interest rates are quite a bit higher than they were eight months ago. But it's good to look at history, right? You know, people who do not have a sense of history, and this is not exactly history. It's only, you know, several months ago. Right. But it's still been a historical shift in the market. But overall, folks, keep your eye on the ball in the long term trend. Remember, most people fail in investing regardless of asset class, whether it be, you know, stocks, bonds. I don't even know if I want to put cryptocurrency in there because we're not even sure that's really an asset class yet. I mean, bitcoin is, but all the other stuff is mostly junk. You know, we all know about the FTX scandal and all the other scandals, right. But you know, precious metals, whatever the asset class is, right. When there are changes in the economy in the market, it's typically 18 to 24 months to sort them out, right. For the market to kind of be sorted out for the money that sort of reigns in its horns a little bit to come off the sidelines because of the Tina effect, there is no alternative. And that money comes off the sidelines. And I'd say our business, right, about half of you are still buying up properties, snapping them up like crazy. Right. But another half of you are, you know, you're kind of scared. You don't know what's going on. You're worried about the market and maybe you haven't really come to terms with the thing, you know, in three decades of doing this. Now, my own personal experience that you can just keep renegotiating the deal all along the way by refinancing and, you know, other ways, of course. But refinancing is the main one. The refi till you die plan. The deal you agree to today is not the deal you'll have forever.

Oh, okay, Cash it can close in 15 days. It's very enticing to people when they see that offer come across.

So when you sell, are you having to stage the house, paint it, put furniture in, make it look really nice?

Not now. It's not necessary now in this, this way. The way the market's going now, you really don't need to do anything to your house to sell it. Typically, the investor should never look at the home. Never.

They don't even look at them.

They never look at it.

That plus the fact that investors often waive inspections puts would be that's change at a serious disadvantage before they can even see a starter house. It's.

So we'll just go past this is just how the crazy, nutty market was, right? But let's just move on.

Don't have the credit to buy the home. So for example, they may have student debt or they may have medical debt and therefore they can't qualify to get a mortgage. And if they want access to a single family home, which we think is incredibly important, this is the best way for them to obtain it. I think if you asked a lot of millennials, and that tends to be our primary resident, they would probably tell you they don't necessarily desire to own a home or to own a car. They've grown up in the sharing economy and for what's important to them is lifestyle, right. And so if they can move into this what we call a turnkey or hotel ready home and have a low maintenance lifestyle. That's very compelling for them.

And I agree that is super compelling. By the way, like I always say, the best thing you can have on a resume is mobility to be able to move to where the jobs are. And I very much agree that the idea of renting a home home in which you live and owning other investment properties is a very good plan.

Very compelling.

We were told by the head of one of these big companies.

The problem is most of these people, you know, they don't own other investment properties. So that's unfortunate. But you listening, you know, you get it.

The people your age want to rent that you're not as interested in buying a house.

I mean, I think the American dream is owning your own property and having.

Your own dirt that you own.

That's specifically why we moved here, was.

To own a house.

I realized my first house is probably going to be a starter home. It may not be that dream house, but it's a house. It's a home. Now the.

And think about how ridiculous that statement is that she just made. How I mean that just sort of smacks of the over entitled millennial stereotype. Sorry, millennials. That is a stereotype. You already know it's true. Right. But for her to even have to make the statement, I realized that my first house is not going to be my dream home, it's going to be a starter house. Well, compared to what? What other generation in history like did the baby boomers did my generation, the Gen X generation did any generation in history, you know, the great greatest generation did. Was their first home their dream home? Was it not a starter home? I mean it's ridiculous.

Dream is now unattainable. It's very, it's disturbing. Most people desire that single family home with a picket fence. And if they can't buy it because they can't afford it, their only option is to rent it.

Yeah, but the investor's buying it.

Yeah.

And they're getting that wealth that normally or in previous years would have gone to the person living there.

So what's happened to the American dream when we used to say that it meant owning a house. What's the American dream now?

Well, if we think the American dream is embodied in a suburban home with a yard and a white picket fence, then I think making the American dream much more accessible.

Rent your American dream.

You can rent the American dream.

That is if you can afford the rent.

Reminds me of the great reset. You'll own Nothing. And you'll be happy, you know, and that's definitely the thing we're moving to. No question about it. Anyway, just wanted you to see that. I hope it was helpful. You know, we want to just keep some perspective on. On the way things were very, very recently. Not that long ago. Okay, so be sure to go grab your tickets for Empowered Investor Live at the end of January in Scottsdale. They have been selling like hotcakes, by the way. Thank you for all of you who've already purchased your tickets, we can't wait to see you in Scottsdale last weekend of January. It's going to be a great time. We're about to pick the band, so we're going to have great music and dancing on Saturday evening. Our conferences, people always tell us they are the funnest event of the year. So not only will you learn a lot, not only will you make new friends, not only will you have a great time. And depending on where you live, not only will you get to enjoy the beautiful Scottsdale, Arizona climate in late January. Compared to what? Compared to a lot of other areas where it's quite nice there. And you'll learn a lot, of course, and you'll just have a lot of fun. So go to empoweredinvestor.com live or jasonhartman.com either place works. And be sure to get your tickets for Empowered Investor Live. We can't wait to see you. And without further ado, let's get to our guest today. We've got just a brief interview with hedge fund manager Chris McIntosh. Here we go. It is my pleasure to welcome Chris McIntosh to the show. He is the founder of Capitalist Exploits, puts out a fantastic newsletter, lots of great articles, and he is an actual money manager. So we're going to look at the macro economy and a whole bunch of very interesting things. I had the pleasure of hanging out with him for many days in Mexico, recently in Playa del Carmen at our collective Mastermind retreat. Chris, it's good to have you on the show.

It's great to be and it's awesome to see you again, Jason.

Yeah, likewise. And you are coming to us from down under. You're in New Zealand, right? Beautiful New Zealand.

I'm currently in New Zealand for the summer and as far away from the current fiasco in Europe as it would appear.

But, yeah, well, the question is, pick your fiasco. There's a lot of them going on all around the world.

We have a plethora.

Yeah, no question about it. But hey, you know, Chris, you wrote a great article recently about the end of cheap money. And we're all experiencing that. You know, real estate investors are concerned about it. Times they are changing. We've had money that was just way too cheap for way too long. In my opinion, they should have raised sooner, but more softly. And you talk also about how we are at the end of the debt cycle. Elaborate on that for our listeners and viewers, will you?

Sure. Well, look, if you think about cheap money, it's the cost of credit. And what we've had post Bretton woods, which is now for multi generations, is an environment whereby by and large interest rates have kept falling, bond prices have kept going up in an increasingly deflationary world. We've had deflation as a consequence of more globalization. So as the world got more and more globalized, more interconnected, more trade deals done, you were bringing more and more participants into one economic system. That was why it was deflationary. That was why you have goods and services that cost less and less. Because we were essentially we're importing cheap labor. And in that environment, what you had was a lot of capital flowing into, in particular US capital markets, which allowed for this increased amount of capital going into the bonds to finance this entire system. And so our belief has been that that system has ended. It is ended for the simple reasons of economic necessity and mathematical probabilities. And it is also on a timeline whereby if you take and you look at history, we pretty much every 80 to 100 years go through a regime change and at a long term debt cycle. So this is many, many factors you can look at which all point you to the same conclusion, which is at the end that we're in at the end of that long term debt cycle. And so what that means for investors or average people is that the cost of capital has to go up. And it's going to go up purely from the consequence that these bonds, which are the flip side of that, are mostly worthless or worth less than most people anticipate. When we had 2008, we had it in the corporate world that should have corrected. But basically what the governments and the central banks did was they took those liabilities and moved them onto the government's balance sheets. And now we're at the end of that cycle where the governments are completely broke. This is where we're at today with respect to that cheap money. It's obviously very different, dependent on which country you might be in. There's all variances behind it. But this is a macro scale trade and it's one where I believe if you miss that trade, there's so many ramifications, second and third order consequences that come on the back of it that will impact you whether you like it or not. And if you miss them or you don't see them coming, it could be kind of painful.

So what is the trade that needs to be made given we are at the end of the cheap debt era?

Well, one of the easiest things that one can do is often just to look at the various investments that one can make, analyze them, and then eliminate those that don't make any sense. That's one way to go about it. A lot of people look at something and go, what's most exciting, what's going to go up? Whatever. You can do that. But I think it's also an interesting exercise to go through and say, what looks, what do we just eliminate? And if you actually go through that exercise, you come to the same conclusion or the same result as if you attack that particular question, saying, what should I buy? So if we eliminate that which is expensive, it's largely anything that is credit related. So businesses that have taken on extraordinary amounts of debt, and especially those which have been able to finance themselves as a consequence of cheap capital, in particular, I would say Silicon Valley type stuff. These were growth companies which didn't produce any profits. They might have produced revenue, but no profits.

And some didn't even produce revenue, by the way.

Exactly. Those are finished but done. If you were to highlight a particular character, if you will, in that space, it would be Cathie Woods Arc Capital.

Yeah, I bought some of Kathy Woods. I really bought into a lot of her stuff for a little while there. So I've, I've lost all of that.

Yeah, bad idea. I mean, look, all of that was predicated on continuous cheap money. You see, here's the thing. If you're a money manager, say running a pension fund, you need to get roughly a 7% annualized return just to stay alive. Now, pension funds are mandated to have certain portions of their capital invested into quote, unquote, safe asset classes, which is bonds. If your bonds, if your Treasuries are paying you 1, 2% and your corporate bonds, even junk bonds. In fact, at the peak of the cycle, junk bonds were paying 3%. These are the things that like every second Tuesday, rip your face off. And they were only paying you 3%. So if you've got that structure in your portfolio, you're really, really short on the balance to make up the 7%, you've got to take extraordinary risk at the tail end of Your portfolio, the most extraordinary risk at that point is basically it's venture capital and it is things like the Fangs. It's these businesses which go up 5, 10, 20 times, something like that. And you need to get that just to kind of get to your break evens. And so that's what, that's what this era of cheap money did. It was, it pushed capital into very, very risky assets which were growing their user bases or whatever. It was fast.

Right.

And then of course there's a feedback loop there.

Sure, I know there's a feedback loop. And you know when, when all the tech company layoffs started and they've been going on, I've been commenting media and saying this on my show, is that, look, these companies have been overfunded and overstaffed for far too long. This is good, it's creative destruction. It needs to happen. I mean, you know, it's, it's just not healthy that all the money goes to these tech companies that don't really build anything. You know, if you want to open a steel mill, you can't get any funding. You know, I mean, it's just ridiculous. All the VC money is just attracted to these super scalable companies that censor our thoughts and do all sorts of evil things, misuse our data and influence elections. And these are frankly terrible companies. They abuse their employees. Isn't this healthy?

They're morally and ethically bankrupt in many respects. But even if that wasn't the case, the other thing to consider here is where capital goes is one thing, but where is it not going to? Where is it being restricted? And so while capital was getting funneled into these unprofitable Ponzis, in many respects.

Ponzi is the right word for a lot of these companies.

Yeah, it is, it is. And look, easy money always creates or brings about shenanigans and bad characters. And that's true in any sector. It's like you can't pick a sector and say, oh, that's a bad sector, it's full of Ponzis. Any sector which gains and gets huge amounts of capital will attract those kinds of people and we'll go through that cycle. And we can get to this in a point in, for example, energy, we will go through a period of time, it might be five, six years from now, where there will be all sorts of frauds and things taking place in that. Why? Because there's going to be huge amounts of capital pouring into it out of necessity. So you go through these cycles, but what with where we're at now and where we've been as a consequence of all of this capital going into quote, unquote growth equities has been that there's been an incredible lack of capital expenditure in all things that are, you know, manufacturing, mining and in particular energy. Because the other scam that is being brought on us, of course, is this climate hysteria with the idea that fossil fuels are bad, damaging and we need to get rid of them. And so there's been a lack of capital expenditure in that space while at the same time commodity markets move in cycles. And our last commodity high was about 2012. So we've had a, over a decade now of a bear market in that space. Capital expenditure should have actually picked up years a couple of years ago. It hasn't. As a consequence of political narratives and this extraordinary push towards decarbonizing the world, that is now where the greatest opportunities lie. A Even if you've built some particular fart app in Silicon Valley, it doesn't work if the electricity doesn't work. It doesn't work if you can't power the battery on your iPhone. It doesn't work if you can't get the copper, the lead, the zinc, the cobalt, all of the materials to build that iPhone.

You know, the best, the best social meme, social media meme I've seen lately was Greta Thornberg complaining, you know, you're ruining my childhood. And then it had a photo of kids in Africa mining cobalt. I mean, the irony here, trouble for you.

Greater. Yeah, it's. And, and it's, it's, you know, it's a great meme because it has so much truth to it.

Yeah.

And look, here's the other thing. You can't fix that by changing interest rates. You can't fix supply of oil or gas or copper or lead or zinc or anything by changing the cost of the cost of capital. Especially when you have a narrative that is coming out saying we will not have fossil fuels by 2030. Now here's the thing. That whole industry is extraordinarily capital intensive. If you and I were to go in and fund a refinery, our payback on that is in 10 years. Plus right now, if we're being told that in 10 years we're not going to exist, why would we invest the capital?

We wouldn't.

It's insane. And so there's just no capital going into actual long term investments in infrastructure or anything else.

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