90,000 Lost Jobs and $90 Oil

Welcome to Inside Economics, I'm Mark Sandi, the Chief of Commerce and Moody's Analytics,

and I'm joined by my two trusty co-host, Marissa Dina Talley and Chris DiRidi, side guys.

Hey, Mark.

Hi, Mark.

Happy Friday.

Happy Friday.

It's good to see you.

We've got lots to talk about.

We've got Dr. De Antonio, Dante De Antonio with us.

Hey, doctor.

Hi, Mark.

How you doing?

Good.

Good.

And of course, a lot going on in the Middle East, and that has all kinds of implications for

energy markets and our economy, and we've got two guests, colleagues, Chris Lufakis and

one Pablo Fuentes.

Hey, guys.

Hi, Mark.

I was just thinking, I remember having a podcast with you a couple of three years ago about

this time of the year, as I recall, so it's good to have you back, a lot to talk about

there.

I guess the big news, before we kind of dive into the meaning of the matter is this debate

we've been having about pasta, it's Checo versus the big news.

That is the big news.

Is that what it was?

Did I pronounce that right?

To Checo?

Checo or gorilla?

Yeah.

Borrella.

Borrella.

Not on me, but I'm surrounded by Italians.

I didn't don on you before.

Well, you just realized that, man.

Not to the degree that, you know, because I didn't realize that Franco, one of our engineers,

you didn't realize that Franco, Benatilli, was a town.

I never connected the dots.

It apparently Sarah.

It's Sarah.

Yeah.

Ron Riggas.

Well, what's that all about?

She's a Italian too, somehow.

Okay.

And then it got all the de-Antonio, de Natali, de Ridi's, oh, Chris is Greek, Greek.

I'm Greek.

He's Greek.

That's what Pablo is doing as well, and I have that.

Chris de Greece.

Yeah.

But actually, the 23 and me, and came back Italian.

There you go.

All right.

Borrella, Italian and Greek, lineage.

Interesting.

Yeah.

But anyway, we've got a comment from Jane from Germany about this, the Checo versus

Burrella.

And she took Chris gave advice, I guess, last podcast that you should try the Checo.

And she did.

And she's like on board.

Yeah.

All right.

Because the whole world is not switching over.

Borrella is going to be, how do you say Borrella?

Borrella.

That's fine.

Borrella, they're going to be pretty upset here, I think, you know?

Anyway, the real weird thing is, you know, I haven't had spaghetti for a long time.

My wife made spaghetti the other day, and she went to the store, and she typically flies

by as Borrella.

It couldn't find any Borrella, so got the Checo, so we had the Checo spaghetti.

Yeah.

But I can't tell you which is better.

I have no idea.

How do you tell?

Chris, how do you tell?

Well, the consistency, it has to have a nerve, right?

It has to be, it's not just a floppy noodle when you cook.

It has to be able to hold up under boiling, right?

I did.

Not to shake in his head here.

It's about the mouthfeels, are you telling me?

Exactly.

Yeah, but that's also dependent on how you cook it.

Yes.

Well, yes.

But the Checo pasta here, I'm going to be a promoter here.

Their pasta holds up better under cooking, so.

That's my personal opinion, but.

Doctor, do you agree with that, W?

I'm not going to argue with him.

I think he's more of an expert than I am, so.

I don't typically buy Borrella, I'll say that.

I've tried a few other sort of fancier varieties over the years, but.

I like to check out.

It's good.

Could it be, and I'm just just, you know, someone who has no real.

People think Sandy's an Italian name, but it's not.

It's not an Italian name.

It's an honorary.

An honorary.

An honorary.

So I really don't know, but.

Could it be that what matters more isn't the brand?

It's the kind of pasta you get.

We had the Checo spaghetti.

I didn't like it as much because I like angel hair pasta more than this thick spaghetti pasta.

Right?

You would agree with that.

Well, then there's a whole other vein here in terms of the sauce, right?

You have to choose the shape of the pasta to match the sauce.

That's critical.

Oh.

Yeah, that's even more important night.

That's you know.

We're sure you've got to be honest to check out Borrella thing.

Controversial.

Are you asking me?

Yeah.

Oh, well, I told you I don't.

I buy them both.

In my grocery store that I shop at, there's way more Borrella to choose from than to Checo.

I went grocery shopping the other night and to Checo only had like spaghetti, ziti, and

elbow macaroni.

But Borrella had like 10 things to choose from.

Nice to see.

Shapes.

So for me, it's all about the shape.

It depends the sauce I'm making.

Yeah.

So a lot of times I buy Borrella just because I can't find the right shape into Checo.

Got it.

Got it.

Yeah.

When the debate done, homemade is the best.

And our producer here, Franco apparently makes a big producer of homemade pasta.

Oh.

Very impressive.

Yeah.

If we weren't remote, I'd ask Franco to make some for the group.

But unfortunately, we're all over the planet now.

Anyway, well, let's get down to business.

Yeah.

And the, well, geez, the jobs numbers.

Holy cow.

Wow.

This is a Friday, March the sixth and late morning.

Eastern standard time.

So big decline.

So Dante, can't you want to walk us through the numbers?

I can.

Yeah, I think my, I think I said yikes out loud when I opened it.

That tells you something.

So the headline decline was 92,000 jobs that we lost in February.

On top of that, you had big downward visions to the prior two months.

So it actually turned December's number negative.

It hadn't been negative before.

So now we've got two negatives in the last three months.

The average job gain over the last three months is now just 6,000.

So not, not a great performance here.

Despite the, you know, somewhat strong January number.

Still almost no job growth over the last three months.

If you look across industries in February, I mean, there's,

there's not really a bright spot that I can find.

You know, the biggest gain was 10,000 jobs in finance.

And there were a lot of losses on the board.

Legion hospitality was the biggest down 27,000.

Healthcare was down about 19,000, although there was a big strike

that made that a little bit worse than it would have normally been.

And then a lot of other smaller losses.

Construction was down, manufacturing was down,

transportation warehousing was down, information was down.

You know, basically everything else was down or flat.

So just not a lot of good news to find there.

Weage growth, maybe I guess you could call that a bright spot.

It was, you know, 0.4%.

It pushed the year your growth rate up slightly to 3.8%.

But not sure that is a much of a silver lining given how weak job growth has been.

So, so it feels like, because we got an upside surprise in January,

it was, although it was revised in a little bit, probably would be revised down even more.

But nonetheless, and this one's a big decline.

So kind of feels like you should net the two sorta,

because there's seasonal adjustment issues and other vagaries of the data.

But if you do that, you still come close to zero.

You know, no job growth, right?

Yeah, I was going to say, I think, yeah,

that best you're basically at zero here.

And I think your case for zero trend job growth,

I think we're getting closer and closer to that,

you know, coming to fruition here based on what we've seen over the last eight, nine, ten months.

I mean, I was looking at a chart of the data.

I think employment now in February is no higher than,

it may even be a little bit lower than what it was April of 2025,

which is, you know, liberation day, right?

That's the day the president imposed this reciprocal tariffs

that are now deemed to be illegal.

But that clearly has done a lot of damage to the economy.

I mean, that's right, that total payroll is actually down slightly

over that period, down about 19,000, yeah.

Yeah, right.

So would you say that you've come over to my side

that underlying job growth abstracting from the vagaries of the data is now basically zero?

Give or take?

I think it's getting harder to not.

I mean, if you look over the last ten months,

job growth has seesawed positive negative every month over the last ten months,

which feels like a pretty good indication that we're somewhere close to zero.

So yeah, I think it's harder to argue against that now.

And what would you say the break-even rate of monthly job growth is?

That rate of job growth necessary to maintain stable unemployment?

We'll get back to the unemployment rate, but that's been moving higher.

That moved higher. So what would that be?

I think it's messy or obviously, you know, we got the new population controls

and so you got to be shift in the level of labor force.

It was actually up slightly in February, but it's a little bit messy.

I would argue it's 25K in that neighborhood,

which I think is not all that different that we've talked about before.

Really? Wow.

Okay.

And we will come back to the household employment data,

which is the basis for the unemployment rate in labor force,

because a lot going on there.

But before we do that, Marissa, what do you think?

What's your view?

Any same kind of a diagnosis of what it means?

Yeah, it's terrible.

And it's becoming harder and harder to reconcile

how we can say we have a solid economy when we're losing jobs

or not creating any.

I mean, it's...

Hasn't that been my point?

Yeah.

We've been talking about it for a long time,

but it's...

That's all tenuous to remember the debate we've had.

I mean, doesn't it seem like right in line with that, right?

Yeah.

Yeah.

I mean, as Dante said, downward revisions to December.

Now we have a negative number there, too.

So we're very, very near having consecutive declines

in payroll employment here.

And who knows, we could get it when we get more revisions,

right, to the January number.

So it's really tough to square that we have 3% GDP growth,

but we're not creating any jobs.

Or we're actually losing jobs in the unemployment rate is rising.

Right.

Chris, any pushback there, any comments on that?

No, no.

No, you agree.

So basically no job growth is underlying job growth.

Yeah.

Clearly weak.

Yeah.

Well, the one thing that made me a little more worried

is health care.

That decline.

Now you're right.

There was a strike in...

I guess Kaiser Permanent in California,

and that's about 30K.

So you got to take that into account.

That'll bounce right back next month.

But it does feel like that's been...

Health care has been really the only source of job creation.

Right.

And that feels like that might be getting a little long

in the tooth that might not be able to maintain

kind of the pace of job growth we have been getting.

And if that's the case, then what does that imply?

You know, for overall job growth.

Right.

I mean, certainly if you lose that as the engine,

there's no way to avoid losses.

I mean, we talked about that over the last 10 months,

you know, payrolls are down slightly.

If you take health care out of that, right,

we've lost over 500,000 jobs over the last 10 months.

Right.

So that's the only thing that's been driving the labor market.

And so if you lose that, there's really no hope, I don't think.

Yeah.

And meaning we'll start getting consistent negative numbers here

in terms of...

Yeah, I don't see how we wouldn't, right?

I mean, we've already seen it over the last 10 months

if you don't look at health care.

And so if health care goes somewhere close to zero,

then I think you see broad declines.

Right.

And I've said this before, but I'll say it again,

just get feedback, get your feedback.

I mean, this is all happening zero job growth

without really any significant, ostensible impact

from AI on productivity.

I mean, there's some...

I mean, I'm sure it's playing a role.

You can kind of see it feel it in hiring rates

and look if you look across employment

and across occupation industry.

And young people coming out of school,

they're having trouble in the particularly tech sector

so there's some evidence.

But it seems pretty modest so far.

And that feels like that's going to kick into a higher gear here.

No, Chris.

Would you agree with that?

Yeah, I would say if anything, AI is actually helping.

Right.

In terms of the construction jobs provided from support

as we're building out data centers

and power plants and whatnot.

As that fades,

then I think you start to see some of that more effect

of the productivity actually kicking in

and certainly restricting hiring

and even leading to some layoffs.

Right.

Right.

Okay.

And I guess hours worked also kind of on the soft side.

Overall, they were flat, but manufacturing hours worked down.

So, and they're pretty low by any historical standard, right?

So, no.

Yeah.

Okay.

There's what, you know, you look at the, when you get these job numbers,

there's always some mixed signals, right?

There's a lot of cross currents in the day.

Some things are good, some things are bad.

This feels pretty universally ug.

No?

Dante?

Yeah, I don't think there's a single thing in here that I would point to

to say that, you know, it's a bit of good news in the report.

It's all pretty bad.

I mean, you know, with the caveat that it's still just one month

and, you know, I'm sure every month won't look just as bad as this one,

but I think this one's pretty universally bad.

And just to tease where this conversation is going,

all of this is before any fallout from what's going on in the Middle East

and all prices.

So, we're going to come back to that.

But all of this, you know, this is a data based on a survey done,

you know, a few weeks ago, right?

So, you know, it's nothing to do with the word in the Middle East.

Okay.

And you mentioned hourly earnings, the growth in wages,

year over year, I think it's 3.8%.

It is throttling back.

So, it is still above the rate of inflation.

So, people's on, you know, if you look at the typical American,

based on this data, we're still getting some circle of real wage growth.

So, I guess that's, that's, I'll take it.

But even there, the real wage gains seem to be moderating here pretty quickly.

Yeah, and I think we talked about, you know, the ECI,

which is only through the end of 2025, is quite a bit weaker, right?

That's, I think, 3.3% as of the end of 2025.

So, you'll have to wait a bit to see, right, the first quarter.

But, yeah, I mean, certainly wage growth is not a huge positive story right now.

Yeah, what you're saying is the, because average hourly earnings,

which is in this report, has all kinds of measurement things going on.

The ECI, the implement cluster index, is lagged, is quarterly.

But that's a better measure because it controls for everything.

And that's even weaker.

Yeah, okay.

All right.

All right.

Okay, okay.

Now, tell us about the household survey data,

because that had some big changes related to population control.

So, why don't you explain all that?

Sure. I mean, so I'm going to talk about February 1st,

because, you know, the change from January to February is not impacted by the population control shifts,

since that went into effect as of January.

So, if you just look at, you sort of, over the month change,

the unemployment rate was up a tenth, you know, to 4.4%.

The labor force was basically flat.

It was up, I think, 18,000.

Participation rate was down slightly between January and February.

But the bigger story there is that the participation rate is much lower than it was, you know,

before the new population controls went into effect.

So, we got a big downward shift between December and January in the size of the labor force,

and, you know, correspondingly in the participation rate.

So, if you go back to December, the participation rate was 62.4%.

Now, in February, it's all the way down to 62%, which is the lowest that it's been since late 2021, I believe.

I will say though, if you look at the, you know,

which labor force participation or primate, employment population ratio,

those held up much better, right?

Those were not impacted nearly as much as the overall rates were.

So, you know, I think a lot of the impact on labor force and participation was sort of on the margins,

are the young workers and older workers, you know, the primate segments, they're down slightly,

but they've held up much better through those revisions than the overall measures did.

So, I'm having a hard time getting the incorporation of the population controls,

because they're added in at the beginning of the year,

and they're causing the numbers to jump all around.

What do you think underlying labor force growth is, you know,

abstracting from these data issues?

I've got a view, but it's not a strongly held view.

What's your opinion? What is it?

My guess, I think, is that it's slightly positive.

I mean, yeah, it's hard, because at the beginning of last year we had this big upward level shift,

and now we have this big downward level shift this year,

and yeah, my guess is, you know, moving forward here in 2026,

it, you know, averages to something very slightly positive, you know,

but that's hard to tell from the data given the level shifts there.

Right.

And on that unemployment rate, where it's 4x4,

what is it?

We're going to test your, your, your skills here.

What, what is it to the second or third significant digit?

It's 4, 4%. I mean, I know you already know.

It's a really good idea.

You know, it peaked at 4.54% in November.

That was the highest rate we've had this cycle.

It's down slightly, but yeah, we're getting close to that sort of previous peak.

And by my calculation, looking at this new day,

I think the unemployment rate is up a full percentage point from where it was at it

when it hit bottom three years ago.

So we're up, it's been, it's been moving higher.

Three, four, tens of a percent per annum for the past three years.

And now we're here at, you know, four, four, closing it on four, five.

Okay, so again, looking at all the data,

are there any redeeming features to this at all, except?

I don't need that.

Liter-fourth participation.

Is that it?

Yeah, I mean, maybe right.

The, the prime age participation held up, right?

It hasn't gotten better, but it, it didn't get hurt nearly as much

from those updated population controls.

That's maybe the bright spot, but that's pretty thin.

Right.

Merced anything on, on, else you want to add on the,

the household employment data, the unemployment rate data?

Just to the population controls.

I was actually pretty surprised that usually they don't,

the population controls don't change the rates of things very much.

Yeah.

Usually maybe by a 10th or two tenths maybe.

This time it took almost half a percentage point off of both the

participation rate and the employment population ratio,

which is really big.

You know, as Domte said, we, we have a much lower participation right now.

And BLS said it was because the population controls removed a lot of

prime age men from the population and added a lot of older women,

65 years old and older.

So, you know, you took out a group with high, high participation

and added a lot of people in with low participation.

So the result was much lower overall participation.

Of course, anything?

Of course, the reading.

Merced highlighted the point I was going to make,

but yeah, just in terms of population controls.

Yeah.

I guess the other thing I noticed was the, the number of people

that are unemployed for a long period of time.

You know, that didn't move up in the month of February,

but it's up a lot over the past year, like a million and a half people.

Those are people that have been unemployed for more than 27 weeks,

which is consistent with the continuing and unemployment insurance claim.

So it's not like it's a surprise, but it just kind of strikes the point that

you don't want to lose your job because if you lose your job,

it's pretty tough to get another job in this particular environment.

Yeah, they make up a quarter of all unemployed now.

Is that right?

Yeah.

What is it typically?

Do you know?

No.

Not a quarter.

Something much higher.

That's your time.

Yeah.

It's high.

Yeah.

Okay.

I guess the other labor market data we should call out,

because it is maybe the bright spot, I guess,

is the productivity numbers, right?

They came out this week.

We got productivity growth from Q4.

Did you look at those Dante?

I did.

I'm scratching my head a little bit.

I mean, they were still very strong.

I mean, down, they were very, very strong in the third quarter of 2025.

So they came in from that, but it was still 2.8% annualized.

I think if I remember that correct in the fourth quarter,

which, obviously, GDP growth was much weaker in the fourth quarter.

And I think their measure of aggregate hours was basically flat.

So it's a little bit of a puzzle to me how productivity growth was still that much stronger

than sort of overall output growth.

Yeah.

I mean, I think it's still a positive productivity story there that I'm not sure

that that's good for the average worker, right?

That, you know, if productivity remains that strong,

it just means that firms are going to be able to continue to operate

with probably fewer and fewer workers moving forward.

Well, presumably, you know, if it all works out as it should,

the higher productivity should mean higher wages,

but at the moment, we're not seeing that.

Right.

And it could just be, yeah, there's probably a lag there.

It's time needed to do that.

Hopefully.

Yeah.

That manifests in the hierarchy.

It's one of the concerns around AI that, you know,

you get all these productivity gains,

but they don't distribute widely.

Yeah.

You know, I always try to put these numbers into kind of a broader context in my own mind.

And I just want to lay out the way I'm thinking about things

in the context of this data and the productivity numbers.

So if you look at GDP, the real GDP growth,

it feels like, you know, extracting from the vagaries of the data,

it's growing 2 and a quarter percent per annum, right?

And I'm going to round a little bit just to make the numbers work more easily

in the conversation.

That's kind of the growth we got last year in 2025 on a calendar year basis,

I believe, and also on a Q4, a Q4 basis.

And, you know, extracting from the effects of the government shutdown

on the fourth quarter of last year, we would have probably gotten around 2 and a quarter percent.

So it feels like, to me, GDP growth is 2 and a quarter percent.

And looking at all this data we just got on labor force

and what's going on with unemployment and productivity,

it feels like that the economy's potential rate of growth.

That rate of growth that is consistent with stable unemployment

is about 2 and 3 quarters percent.

And that would be, you know, not that would be consistent with labor force growth

of about a quarter point per annum kind of to your,

what you were saying, Dante, a little on the positive side.

And 2 and 3 quarters non-farm business productivity growth.

And that's kind of sort of what we've been getting.

That, you know, if you do the arithmetic there,

it adds up to more than 2 and 3 quarters.

But you got to take out because of when you're looking at GDP,

productivity growth in the government sector,

and that takes out about a quarter.

I know that I'm doing a lot of things here, waving a lot of hands.

But buying a my arithmetic,

and that would make sense in terms of the increase in the unemployment rate.

The unemployment rate is rising.

You know, so the gap between the potential rate of growth of the economy

between 3 quarters and the actual growth of 2 and 1 quarter is 50 basis points.

Right?

And Oakens Law would say if that kind of got,

Oakens Law is the relationship between what's going on with unemployment

and how that's relating to this difference between actual and potential GDP,

that you get it, you would see the unemployment rate rise

about a quarter point per amp, two to three tens of percents per amp.

And that's what we've been saying, you know, for the past three years.

So, does that all, I just said a lot,

and I'm sure a lot of people out there are scratching their head,

what the hell did you just say?

But let me, Chris, does that make sense to you when I just said?

Yeah, yeah.

It adds up.

Yeah, it adds up.

Right.

Which, you know, in a sense is the good news in that is

the potential rate of growth of the economy, two and three quarters is strong.

Right?

That's pretty healthy.

If you told me that we were going to get 5, 10, 15 years ago,

I'd say bring that on.

You know, that's great.

The problem is the economy is actually not,

it's going to have a point below that, two and a quarter,

and that goes to all the stuff that's going on out there.

You know, from, I mentioned the Illumeration Day,

which obviously I'm referring to the tariffs,

and it goes to the, it goes to Doge cuts,

it goes to uncertainty around foreign policy,

and again, we're going to come back to this in just a second on what's going on in the Middle East.

But all those things seem to be weighing pretty heavily on the economy,

and you know, not pushing us into recession,

but it just feels like a very significant weight on the economy's ability to grow

and to realize that potential that, you know, was pretty good.

Two and three quarters is pretty good.

Does that make sense?

Anyone want to push back on that?

Mercer, does that make sense?

Yeah, it does.

I just, again, it's so difficult to think that all the growth that we're getting

is from AI investment and capital spending,

and nothing's coming, really nothing coming from the labor force side of things.

It's all productivity.

I mean, that's the way it's measured,

but it just doesn't feel good from a labor market perspective.

But yes, you're the math, everything that you just said makes sense.

Chris, what do you think?

I abstracted from how I explained it,

because there's a lot of moving parts there, but does that make sense?

It does. I think there's, I mean, there's some timing issues here, right?

We still believe that there's a lot of stimulus coming through now,

right?

There's a tax refunds and tax cuts,

and right, there are some pretty significant tailwinds here.

In the short term, but I think you're saying over kind of abstracting

through that, looking through the year where we might expect some weakening

as we go forward, I think the numbers hold.

Yeah.

I mean, our baseline is that growth will pick up from that two and a quarter

to something closer to the two and three quarters,

and at 50 basis points, that half point is that juice you just talked about,

that fiscal stimulus, but that's temporary, right?

I mean, exactly.

At least most of it is.

Maybe you could argue the corporate tax cuts on the,

on expensing for investment, that may have no longer benefits,

but most of it's temporary.

And so you get the juice this year,

and if something doesn't change, by next year we got,

we're back in the soup, we're back into, you know,

growth is below potential and rising unemployment.

And, you know, when the unemployment rate is 4, 4, 4, half,

it's uncomfortable.

You know, I'd say full employment is closer to 4,

and that's why wage growth is decelerating.

So it's a little uncomfortable, but it's not, you know,

you don't feel discomfort, right?

I mean, it's not, it's not painful.

Let me put it that way.

But if the trend lines continue,

and you start getting closer to 5%, as opposed to 4%,

then that's painful.

That's painful.

And you're in a very precarious spot anyway.

Where do you think a natural rate of unemployment is, the navy room?

I think it's still 4.

I mean, yeah, because we're at 4, 4, 4, 4, and a half,

and wage growth is decelerating.

So that would suggest navy is lower than the natural rate of unemployment,

the full employment unemployment rate is lower than the current unemployment rate, right?

So that feels about right to me.

So I think we're still about 4%.

Of course, that may change too with AI,

but the impacts that might have.

OK, anything else on the labor market front?

Or, you know, we got retail sales.

They were kind of OK, I guess, for the month of January,

not great, not, they were up,

after you take out autos and gasoline,

and Christmas was OK.

It wasn't gangbusters, it wasn't bad.

It was, I guess, OK.

Anyone want to disagree with that?

No.

OK.

No, you got some asterisks here with the weather and whatnot.

Good point.

Yeah, good point.

Yeah.

But I agree.

Kind of OK.

OK.

All right.

OK.

Let's go on to the next part of this.

And I know the conversation so far has been a bit of a bummer,

except for the conversation around, but positive to buy.

But, you know, it's been a bit of a bummer.

Talking about a bummer, Crystal Fakas, you know,

these events in the Middle East,

how would you characterize them?

And what do you think the fallout's going to be?

Yeah.

So, things are moving extremely quickly.

It is, it's very difficult to stay on top of the news,

but that's where we rely on the news to do our analysis.

And the initial reports are that this is not going to be

as short of a time duration,

then, you know, might have been thought

at the outset of the military operation.

This could stretch longer.

There's no negotiations between the Iranian government

and the U.S. government to put a ceasefire in place.

No one is moderating these discussions.

And increasingly, what we've seen is missile attacks

and drone attacks from Iran,

even though it's conventional military capability has been degraded.

The amount of havoc that Iranian missiles

and drones in particular can do,

it still remains very high.

And so, there have been damages to oil and gas infrastructure

in the Middle East.

The conflict has now spread.

It's not just an Israel-US Iran conflict.

It is now engulfed 17 countries

in the Gulf Coast.

So, it is developed into a full-blown regional war.

We have energy assets,

such as Saudi Arabia's largest refinery

that have been attacked by drones twice.

Bahrain's refinery has been attacked.

Qatar has stopped shipping LNG

through the Strait of Hormuz.

In fact, all shipping traffic through the Strait of Hormuz

has slowed to a little more than a trickle.

And who's getting through, by the way,

is anyone getting through,

or any kind of thing through?

No.

If Iran wants to,

it can send its vessels through,

but of course, they're at risk of being,

you know, hit with US and Israel,

destroyers and missiles.

So, it's basically a standstill right now.

So, the Strait of Hormuz is effectively shut down.

Nothing's going through.

Yes.

And that's because, you know,

these tankers that are moving through the Strait,

you know, cost one of those $160 million.

If they can be disrupted or damaged or crippled

by a Shahedron,

which cost around $30,000 to produce,

then an insurance company,

like Lloyds of London,

is not going to underwrite an insurance policy

to guarantee the safe passage

of a tanker through the Strait of Hormuz.

And that's why you've seen,

on Thursday, the US government announced that the US DFC

would be asked to look into underwriting policies,

insurance policies for tankers traveling through the Gulf.

It was also floated that the US would escort ships

that were moving through that wanted to take a chance

to move through the Strait of Hormuz.

No one's taken the US government up on its offer just yet.

But there's a capability for drones to disrupt tanker vessels

through the Strait of Hormuz.

There is the capability for missiles to be launched

from, you know,

landlocked platforms or increasingly mobile platforms.

That's going to be the next stage of the war as well,

as kind of mobile missile launching platforms

from Iran as the conventional ones are taken down.

And then also, there's the potential for sea mines

to disrupt traffic through the Strait of Hormuz as well.

We saw sea mines used during the Iran Iraq conflict

in the 1980s.

And, you know, if you get a tanker that trips on one of those,

you know, it could go down.

And that's a lot of cargo that, you know,

companies are not really taking a chance on moving right now

without insurance.

So the Strait is effectively shut down.

That is the main reason why oil prices are spiraling out of control.

You know, we had a $60 oil price or they're about

close to the beginning of the year before conflict

with Iran started to get priced in.

I just looked and today we're at $91.48 on Brent.

It is rising.

That's up about $6 from yesterday,

which is up another 6-7% from a couple days before that.

As traders really price in the increasing likelihood

that there will be fewer off-ramps available

on the timeline that was originally thought of.

So let's just take a step back for a second.

So you're using Brent oil prices,

because that's kind of the global price.

It's opposed to the West Texas Intermediate,

which is kind of the price for oil here in the U.S.

But they're obviously closely related.

And before this mass, we were kind of sitting around $60 a barrel.

Now we're sitting kind of around $90 a barrel.

That's kind of that's ballpark.

Up about $30 a barrel.

And the key here is that, you know,

obviously Iran produces a lot of oil and exports a lot of oil.

But the real problem is that a lot of the oil produced

in the region, Saudi oil and natural gas,

what's coming from the UAE,

so far from the so-bar rain, everything else,

travels through the straight-of-hormouse.

And that is effectively shut down because it's a pretty thin

kind of passage.

And it sits right against Iran,

and Iran can shut that down quite easily.

And that's what's going on.

And the problem in terms of production is that, you know,

if the producers in the Middle East can't ship,

at some point they're going to use up all their storage,

and then they've got to stop producing.

And in fact, we were starting to see that happen in the case of Iraq.

They have no storage less,

so they've started to cut production.

Then that means that you've got to equilibrate supply

with demand.

If you have less supply,

you've got to get demand down to equal supply.

You need a higher price,

and that's what we're observing right now.

That's exactly right.

That is exactly right.

And so a youth-seeing country is like Iraq take that decision.

Kuwait is said that it might need to shut production in as well.

When you shut production in,

it's not a trivial matter to bring it back online.

It can take days or weeks to bring it back online.

And you have to shut production if you run out of storage.

And so the question is how much storage is there,

and how quickly can the straight be reopened?

And it is not sustainable for the straight to be closed

for a prolonged period of time,

and there are not to be any implications for a global oil market.

Because 20%, almost 20%,

between 15% and 20% of all of the world's crude oil travels

through the straight-of-war moves.

And there are major exporting countries.

We talked about some of them.

Saudi Arabia, Iran, Iraq, Kuwait, and the UAE.

Those are the five major countries that send oil through the straight-of-war moves.

And most of that oil heads towards Asia.

So it's being used by China.

It's being used by Japan.

It's being used by South Korea.

These countries have strategic petroleum reserves

that they might need to be forced to tap

if the straight remains closed for a long period of time.

But those are finite as well.

And so at some point, you have to reopen the straight

or else oil prices will escalate to $100 per barrel

and stay there.

So that's why it's so important that the straight is open

that insurance is underwritten for the global economy.

Because otherwise we're going to feel the effects of higher oil prices.

So in our baseline assumption about how this all plays out,

we describe that.

I mean, how long will this go on for

and how long will the straight-of-war moves be shut down or impaired?

So our baseline forecast expects that before the end of March

that the straight is reopened and that shipping activity can resume.

And our baseline, what we're going to implement in March,

we're going to boost our oil price forecast

by nearly $10 per barrel on account of all of the news

when we release our March forecast,

which will be released on Tuesday next week.

It will feature these higher oil prices.

Now we'll have to see where every day brings more news.

And-

$10 a barrel for what, the second quarter of 2026?

Because it's higher now.

Yeah, the first quarter forecast, which keep in mind

that we already have historical data for January and February.

So for the average for the quarter is not going to be $10 a barrel higher

because we expect this thing to drag on through the end of March.

Exactly.

And then in the second quarter of this year,

what's the average going to be?

How much higher is it going to be?

It's going to be roughly $10 higher than what we had thought about a month before.

And then by Q3, Q4 comes back to something,

this phase away is what we're saying in the baseline.

This phase away in the baseline.

But I will have to say that after each passing day,

the odds of prolonged closure are creeping up.

And so our baseline forecast assumptions are a bit fluid as well,

depending on how the news evolves.

Yeah, you're saying I have no confidence in these forecasts.

That's what you're saying.

I'm saying let's see what's happening over the weekend.

I think that's a big problem because it is impossible.

It's very difficult to handicap.

Right.

Yeah, yes.

And you know, every day that this conflict has grown,

I have become more concerned.

Got it.

Before we move on to the kind of understanding the impact,

let me turn it to JP, one Pablo.

You heard all that.

We're flesh it out for us.

So what else do you, what are the color do you have to provide on this?

No, no, much more.

I think the critical thing right now is that,

as Chris said, like every day now,

like we have now like one week of basically a straight

of hormones being shut down.

Every extra day that stays a situation

that will have a big repercussions in the market,

because the longer countries have to cut production,

then the longer it will take for them to go back to normal,

let's say, once the situation resolves.

So we are at a critical juncture where every extra day

is going to, you know, keep prices higher for longer.

Got it.

So you heard Chris lay out the baseline,

the most likely scenario in the middle of the distribution.

You know, this goes on through a couple more weeks,

a few more weeks by the end of March.

It's roughly resolved.

The straight of hormones starts to open up,

and we kind of normalize here, you know,

as we move a couple of three months down the road.

So oil prices are elevated,

10 bucks a barrel on average, you know,

over the next few months, but come back in.

So does that feel right to you?

Juan Pablo, that baseline?

You can disagree with him.

You can always disagree with Chris.

I encourage it, actually.

I feel less confident with that baseline.

Let's say we are working on an alternative scenario.

And, you know, we have been discussing the probabilities

of that alternative risk scenario.

And, you know, I feel like that darker scenario,

the probability is probably higher now than two or three days ago.

Right.

What probability would you put on a materially darker scenario

than the baseline, Juan Pablo?

25%.

25.

Chris, what about you?

Because you also expressed the lack of confidence.

What would you say the probabilities?

Yeah, I would say the probability of $100 scenario is 25%.

But it's going up every day.

I mean, you know, talk to me on Monday.

Yeah.

Hey, Chris, you've heard the conversation.

And we're going to get back to what does this all mean?

You know, for the economy and markets and everything else.

But so far, you know, what do you think?

How does this sound to you?

The framework we're thinking about how it's playing out?

Yeah, I think it's a good frame.

Obviously, lots of uncertainty.

But I think we have all identified all the pieces in terms of what could happen here.

Right.

Yeah.

In terms, I'm going to split the middle a little bit in terms of, I'm more pessimistic

in the short term, maybe more on Juan Pablo's side.

But I'm a little more optimistic in the long term.

My sense is that things could actually recover and move faster than what some are anticipating.

I'm thinking maybe I'm colored by the first Gulf War.

Remember all the, when all the wells were on fire and they said it would be a year to put them out.

And then, you know, the industry, there was a lot of movement and things corrected pretty quickly.

So I just have that frame at my mind.

But in the short term, I'm certainly more concerned.

I could easily see spikes above $100, $1020, even for a short period of time.

I guess a lot depends on what happens with the regime in Iran.

I mean, if the current regime remains in power, it's going to be a problem.

I would think, from the straight away, it's for an extended, it could be for as long as they're there.

They could be creating havoc, you know.

Certainly.

Yeah.

So, okay.

That's the uncertainty.

Okay.

Let's talk about what does it all mean for the economy?

And I'll go back to you, Chris.

Can you kind of lay out the kind of connect the dots between, you know, these higher oil prices, higher natural gas prices.

You mentioned LNG, liquefied natural gas.

That's also up because it's produced in the region.

You know, how does it come back on us as an economy?

Absolutely.

So it hurts to you as consumer.

Every $1 increase in the price of oil over a year costs consumers $3 billion.

So we just mentioned a $30 increase since when all of this geopolitical news started to get priced in.

So that $30 billion, I mean, that $30 increase, if it is sustained, sustained $30 increase for a calendar year, would cost $90 billion for US consumers.

About half of that would be felt through higher gas prices.

And the price of gas goes up by, you know, $0.25 per every $10 increase in oil price.

So if you're talking about $30 oil price, that's 75 cents.

And so that it also boost inflation.

I believe it's around 15 basis points for a $10 increase in the price of oil.

Can I just say, you know, for the listener, because I did the calculation.

So that for every $10 increase in the price of a barrel of oil, it lifts inflation.

And that's a sustained increase, right?

Yes.

And not just a temporary increase, a sustained increase.

As inflation has measured by the growth in the consumer expenditure inflator, it raises it by 0.15 percentage points in the year that follows.

So, you know, just to make that concrete, right now the consumer expenditure inflator is growing 3%.

Which by the way, that's the measure of inflation the Fed uses to set its 2% target.

So it's already high, uncomfortably high.

It will now, if it's only $10 a barrel, sustained, it will be 3.15% going over the coming year.

If it's $30 a barrel, that's not our baseline.

But, you know, to say if it was, then that means that we would be at almost 3.5%, almost 3.5%, you know, kind of inflation.

How do you define sustained?

How long does it have to stay up there?

For that entire year.

For that entire year.

For that to be the case.

Sorry, Chris, I just wanted to make that concrete for folks.

Yeah, absolutely.

Thank you.

And it hits GDP growth too.

And I believe that it's about 10 basis points for every $10 increase in oil prices.

Yeah.

And the mechanism is that oil prices rise.

The inflation accelerates.

That undermines people's real incomes.

They're purchasing power.

They're after inflation income.

That lowers growth and translates into lower GDP growth, fewer jobs and everything else.

So it's what economists call a negative supply shock, right?

You're both hitting inflation.

You're pushing up inflation.

And as a result, you're also hurting economic growth.

And by the way, it's one of three negative supply shocks economies now dealing with that all started a year ago.

One is tariffs and trade the trade war.

That's a negative supply shock.

Two is the heavy-handed immigration policy.

That does the same thing.

It raises the cost of labor and inflation and reduces growth.

And now you've got this third effect.

So the economy is grappling with these three negative supply shocks.

Does that sound right?

Absolutely.

Yeah.

Okay.

That's perfect.

Yeah.

So there are some positives to higher oil prices.

Like if you're in the energy sector, you're better off.

You have higher profit margins.

Maybe you can invest more.

So if you're in kind of Midland, Texas or Odessa, you know, that might help those economies.

But, you know, by and large on net, it is a negative for the U.S. economy.

Because the propensity for these companies and businesses to spend is less than kind of your consumer

affected by prices going up at the pump.

Yeah. I guess the way, though, I would put it is that it's a matter of timing.

Because, you know, if you take a step back, the U.S. produces as much oil as it consumes.

We're the largest producer on the planet about 20 million barrels a day.

Just for context, we produce and consume globally about 100 million barrels a day.

Maybe a little bit over.

And so that would suggest that if oil prices rise, yes, it hurts the consumer.

From the way we just described.

But as you say, it helps producers because they are making more money.

And over time, that should be kind of a wash.

That the impact should be, you know, not large of an impact.

And I think that arithmetic is roughly right in the long run.

But it takes a long time to get to the long run.

In the here and now and for the foreseeable future, certainly over the next year,

the negative consequences for consumers overwhelm the positive potential benefits for producers.

In a significant part because the consumers feel it right away.

And in part because it's lower middle income households that feel it right away.

And they, you know, they have some pretty tough choices to make if they have to put more of their harder money into their gasoline tank.

But the producers, they don't respond right away because they think about it from their perspective.

Given the uncertainty, how long are these prices going to stick around?

And if they're not going to stick around, if I make a big investment that is going to play out of repetitive years,

I'm not going to do that.

I'm going to wait until I, it's absolutely positively sure that prices are going to remain high.

But no one's going to be able to make that calculation.

That's right.

And I mean, some of these producers got burned by extreme oil price volatility in 2014, 2015.

Many of them almost went and solve it.

And so as a result of that experience, they've been

and also initiatives, you know, focused on ANG investing in the way that, you know, their companies are valued,

have been very reluctant to plow money back into exploration and production.

And so, you know, they're investing enough to maintain production at current levels.

But we don't really expect U.S. oil production to grow too much.

And this is prior to oil prices spiking.

Now maybe the calculus changes a little bit.

But prior to all of this, we were not expecting growth in U.S. oil production in 2026.

All right.

Hey, Juan Pablo, anything to add on in terms of the kind of the fallout on the U.S.

or the rest of the global economy?

So the U.S. isn't a really good spot in terms of compared to Europe or Asia.

In Europe, we have seen like natural gas prices in Europe are up 60 to 70%.

But this month, hitting oil in Europe is also high, 70% off since the start of the week.

So they have, they are energy importers.

So they need to, you know, that it is not a lot of options to get extra energy sources.

I think that for the U.S., the impact is more limited compared to those, you know,

economies in Asia and Europe.

In the U.S., I think the impact on investment in oil is more, as you said,

there's a lot of uncertainty.

So the companies are very, very cautious about investing, except for the LNG and natural gas sector.

I think this is a chief that started with the Russian invasion.

And LNG seems to be like the one area where we have seen structural shifts around the world

where we have, you know, the U.S. is one of the main exporters of LNG in the world,

has the largest reserves.

So that's an area where I think even this conflict, like it's going to increase more appetite

for LNG coming from the U.S.

Yeah, you know, the LNG being liquefied natural gas.

So we got a lot of natural gas here.

We liquefy it and put it on a ship and send it over to Europe or other places

and then they turn it back into a liquid and use it.

And that's really come on since the Russian invaded Ukraine because of the surge in natural gas prices

that occurred in Europe as a result.

So it made it very attractive to kind of build this infrastructure into, you know, ship overseas.

But the kind of the dark irony for the American consumers now,

the increasingly the U.S. natural gas market, which was completely a domestic market

and prices remained low no matter what was going on in the rest of the world,

now opens us up to, you know, these events, right?

Because, you know, now European prices go up and you get more LNG and it drives up prices here.

I mean, we're still a long way from being part and fully integrated with the rest of the global LNG market

but we're moving in that direction.

We are moving in that direction.

It's going to take years, I think, to get to the point where prices are moving in a short time horizon

because a lot of the gas that the U.S. is exporting right now has already been accounted for.

It's being priced in long-term contracts.

That's what suppliers need for reliability.

And so you don't have kind of a fully-fledged, you know, market that can respond in the short-term to price fluctuations.

So that's why, you know, still, you know, we're at $3 per million BTU,

which is a very low price in the U.S.

But I think increasingly, increasingly we're going to get there as more investment takes place.

It's going to take years and it's going to take billions of dollars

because it's very expensive to put these trains into effect,

to build the liquid-faction facilities, to get the trains online,

to get the super-cool tankers because you have to keep, you have to super-cool gas in the liquid form

and then keep it at liquid form until it gets to its end destination

and then it can be regasified and injected into the pipeline network.

All of this is very expensive.

It's a lot more expensive than just putting oil on a barge and sailing across the ocean.

One other point that I did want to make, though, is that there is,

because I've heard this notion that, well, all the oil that's traveling through the strait

is destined for Asia anyway, so, you know, why does the U.S. care?

That's not how it works.

What is happening in the strait of hormones does affect U.S. consumers.

It affects what U.S. consumers are paying for gasoline at their local gas stations

because oil is a global market and oil prices are set globally.

And so, if there is a supply disruption, it doesn't matter if the oil that was flowing to, you know,

Japan or India or Australia or whoever else is affected,

the global oil price will increase.

And if the global oil price increases, then U.S. consumers, in addition to European consumers

and Asian consumers, pay more for gasoline and petroleum.

Yeah.

Yeah. You know, one pushback on the dark scenario that I've heard,

and I'm curious what the group thinks of it, is the way President Trump appears to be operating.

And that is, you know, once it looks like whatever he's doing is having an impact on the economy and markets,

that he will quickly declare victory move on and, you know, whatever the crisis was,

we'll begin to evade very quickly.

So, you know, in this case, he's, I'm sure he's watching those gasoline prices, right?

Because affordability is a very significant political issue in the lead up to the midterm elections.

American households are already on a higher alert.

The only thing, the only product for which the price wasn't rising was gasoline.

And he actually, I think he called that out in the state of the union.

He said, look how low gasoline prices are, but well, they've rocketed higher,

much instantaneously with what's going on up in the Middle East,

we're back, you know, up 30, 35 cents a gallon because of what's going on there,

that in stock markets now starting to sink, bond yields are starting to rise,

mortgage rates are back up, you know, all these things that seems like he's been focused on,

that he's going to internalize that and say, okay, you know, enough already,

we beat these guys, we won, you know, they surrendered

whether they did or not, the matter they surrendered and move on.

And then we're not only overly pessimistic,

this thing isn't going to extend on through the end of March, it's going to end next week,

or maybe, maybe over the weekend, it could end.

What do you think? Any views on that?

The concern is that it's not up to him, right?

I mean, you know, Iran has been attacked and their leaders have been assassinated

and they're increasingly have nothing to lose, and that is very dangerous.

Shaheed drones only cost $30,000 to manufacture.

They can cripple $160 million oil tanker.

Ironically enough, the Pentagon is now talking to the Ukrainian military

to understand how it's been dealing with Shaheed drones,

which have been on the battlefield between Russia and Ukraine since 2022,

because Russia has been purchasing those drones from Iran.

And so right now, the math doesn't work out because we're sending,

we're using a $4 million Patriot middle missile battery to take out a $30,000 drone.

That math is not sustainable and you're going to run out of Patriot batteries.

So you have to adapt, the U.S. has to adapt.

It needs to use radio wave jamming that Ukrainians use

and other tactics that the Ukrainians use to deal with Shaheed drones,

because you're right.

I mean, this disruption to not only traffic through the straight,

but also continue to tax on regional energy infrastructure could go on for longer than President Trump would like.

And even if he stops bombing Iranian targets,

there's no guarantee that the Iranian government will stop attacking

Gulf Coast oil and gas assets or impede flow of oil and gas

and liquefied natural gas for the straight-of-form news.

Chris, what do you think?

What about that alternate scenario where the President declares victory,

pulls back and everything kind of gets back to normal,

at least until the next thing that we're dealing with.

I wouldn't discount it entirely.

I don't think it's immediate.

I think to Chris' point, it's a hot conflict,

and it's going to take a while to convince,

even if there is a negotiation, there's going to be some time to get there.

But I think you're right.

I think certainly the administration has proved it sensitive to economic conditions

and $4 a gallon gasoline.

If it gets to that point or gets really elevated,

I could see the pressures mounting.

I'm curious what the group here thinks about other measures

that the administration might take to try to alleviate the pressure,

like reversing tariffs on imported products

or there's been talk about the strategic petroleum reserve releases.

I'm not entirely sure that would help.

That seems like those barrels would go, be exported as well.

But I'm curious if you think there's anything in the mix here.

Yeah, adding to that, I'm curious from one of the things about this.

In the context of the question you just asked,

is the other thing I throw into the mix,

is there's some discussion that the Treasury Department

will intervene in oil futures markets

in an effort to influence the price?

I'm confused by it.

I don't know how it works in the context of what's going on in the physical market,

but there's been some discussion about that.

But I lob that question to Juan Pablo about an hour ago,

so maybe I'll lob this over to Juan Pablo.

What do you think about these alternative efforts?

Yeah, I don't think, I mean, I think the idea is to,

if you look at the curve, the futures curve now,

the front-month price is the 91 that we have seen today.

If you look at the 12-month price,

it's down to like 70, 70, between 70 and 75.

So it's a big gap and a big opportunity to trade in those two terms.

So you can influence the one-month price

by flattening that curve between the front-month and the 12-month.

An skeptical that that would be a solution,

it might be like that.

I think it's similar to a central bank trying to intervene in a Fordx market

when there are fundamental forces driving one currency up or down.

You know, you can have an impact like one day,

but you cannot turn the fundamentals by doing those kind of manipulations.

Yeah, can I be like?

Sure, go ahead.

Yeah.

This is a terrible way to lose American taxpayers' billions of dollars.

If somebody takes care of work.

You're saying it's not going to work?

Yeah, it's just not going to work.

Yeah, if you think of a trade basis.

I could just buy like a contract.

And now you have to deliver barrels to me at Cushing or at Brent.

And if you can't, then you have to buy the day before at like very worse prices

and lose a lot of money.

So it's just you can't really like manipulate the laws of economics.

That's what I love about economics.

What about the, Chris, the release mentioned the SPR,

the strategic petroleum reserve, what about that?

Yeah, I guess you could unleash like that.

You could release barrels from there.

And those barrels could then be used to make deliveries at Cushing.

And that could be like one solution to this.

So presidents can use SPR.

That is like a valid tool that you can use.

The other things that they're thinking of.

Can I ask on that?

I know President Biden used it more than once.

I believe in his administration.

When Russian invaded Ukraine, we got $5 for a gallon rig on the letter.

That did seem to work a little.

It wasn't a game changer, obviously.

It was kind of temporary, but on the margin, it seemed to help a little bit.

Right.

Have we been able to, as the nation been able to replenish those stocks

that were used under President Biden?

Do you know?

No.

No.

I'm a little bit.

Yeah.

There has been a program of buying quickly various small amounts.

I think we're still significantly down from the before Russia.

So you might be able to actually use this SPR then.

And you can use the SPR.

It's just that the effect that it's going to have is going to amount to, you know,

a couple of $3, not $30 per barrel.

And you have more power when it's done on a coordinated global international basis.

That's what President Biden did.

And it amplified the power of the U.S. releases.

So maybe something like that could happen.

And maybe it'll take some of the edge off if the straight remains closed for longer than March.

The other bit of information was that on Thursday, Treasury Secretary Bissend said that India would be granted a waiver to purchase Russian crude oil.

Interestingly enough, because remember they had sanctioned India for purchasing Russian crude.

Singled it out with high tariffs for dimming.

So now the reversing course.

It's a bid to kind of, as you said, stabilize the oil market because of the political sensitivities.

We're approaching a midterm election.

The gas price is the most watched and known price in the entire economy.

And everybody knows why gas prices are going up.

So they're trying to kind of blunt the impacts of that both economically and politically.

Okay. Well, we're getting a little long in the tooth.

Did we miss it?

Merced did you've been listening to the conversation anything miss anything you want to highlight or call out?

I mean, I have a lot of questions.

Well, to your, I guess I'm wondering what's the, what's the off ramp here? What's the, what's the end game?

I mean, how does this, how does this end?

Mark, you laid out one scenario that things get to economically perilous and President Trump just kind of says,

we achieved our objective, right? We killed the Ayatollah.

We're going to end this.

But then there's Israel, who's also pretty heavily invested in this.

They probably have an opinion about that.

And I just don't know how does this, how does this come to an end?

What did they actually want to see happen here?

Is it regime change?

Because it doesn't seem like that's close to happening.

I think the president said I want complete surrender.

I mean, it was something to that effect.

I think I didn't have the world that, I mean, I don't know.

But that's a good point.

And that goes to the 25% probability scenario that Chris and Juan Pablo laid out that this thing doesn't go away quickly.

Certainly not as quickly as we're expecting the baseline.

This plays out over a long period of time.

But then you make a great point.

I mean, it's not obvious at all what the end game here is.

I make a good point.

I think he thought that this was going to be Venezuela too.

And they just went to whatever is in power to like surround the Surrender.

And you know, invite Trump or drove you to Terran or something like that.

All right.

Well, complete surrender means that the probability that 25% probability could be going up.

Yeah, that just doesn't seem as likely to me.

Well, as you said, Chris, we are running an alternate scenario here on the downside because it does feel like that.

Probabilities on the rise here.

So, you know, kind of considerate.

I believe we'll be doing a webinar too, Mark.

I don't know if that I can.

Yeah.

Yeah.

Yeah.

No, not at all.

I think we're going to wait another week to do it.

Maybe the week after next just to let get a little bit more clarity here.

Get better sense of, you know, how this thing is playing out.

But we're going to do webinars for sure.

Okay.

Anything else?

I mean, I can't believe it.

It's already we're closing in our magic one hour and 10 minute podcast again.

I don't know how that happens.

I didn't want to mention the summit, though, the moody summit again.

We want to see you out in San Diego if you have an interest.

And that would be in May.

The economic stay is on May the 6th.

So it would be good to see you all there.

And I did I'm on the board.

I'm on a few boards.

I'm on one that I'm very proud of a nonprofit called the Coal Ridge.

And Coal Ridge is an organization that helps facilitate the use of data across the government,

federal and state and local governments.

And there's a convening in Washington in the end of March and a few weeks March 24 through 27.

So I'm going to be there with a group of fed economists and others to talk about AI and data.

And there's a lot going on with that conference.

So be good to see you there as well.

With that, guys, anything, anything else before we call this a podcast?

I'm, you know, we're at one minute, one hour or nine minutes.

I feel a little weird shutting us off before we get to one hour and 10.

But anything, anything else to add?

Dante?

Dr. De Antonio?

No.

No, I don't think so.

You're in good shape.

Yeah.

Crystal Fakas.

You're in good shape.

One Pablo.

Okay.

I don't care as much about the co-hosts.

They're all, you know, you know, understood.

Understood.

Yeah.

Okay.

With that dear listener, we are going to call this a podcast to talk to you next week.

Take care now.

Okay.

Thank you.

Thanks.

Bye.

Thanks.

Thanks.

Bye.