Professor Siegel On The Markets

  • May 15, 2020

Professor Jeremy Siegel, WisdomTree’s Senior Investment Strategy Advisor and Professor of Finance at Wharton, provides his perspective on the current market and how to prepare for the Coronavirus aftermath.

Conference Call Transcript from May 4, 2020

Operator: Hello, everyone. Thank you for joining the WisdomTree weekly call with Professor Siegel. In this extremely volatile market, we want to make sure we provide advisors with the help and guidance they need. Please visit our website for additional insights, including the recordings of these calls.

Today, Professor Siegel will provide a quick 15-minute update, and then we will open the lines for your questions.

Please note that this call is being recorded and is for financial professionals only. If you need assistance, dial *zero, and an operator will be happy to assist you.

With that, I turn the line to Professor Siegel. 

Professor Siegel: Yes, Jaclyn. What a very nice rally at the close. So, a lot of things are going on for them.

Let’s talk about Warren Buffett. Yeah. I mean, he was pessimistic. The truth of the matter was that the Fed kind of pulled the rug right from under him. I mean, he would have financed had the Fed not come in, but the Fed came in and it was too fast for him. You know, he is a deliberate man. You know, if you missed the bottom by the five days, you missed 10 percent of the market. So, I think that, you know, he didn’t find it cheap now. He hasn’t found it cheap for years. He uses, one of his criteria that I talked about before and then it’s there’s been questions to me about I do not like the GDP due to market value indicator. I think it’s dated. It doesn’t take into account the globalization of the S&P and 40 percent of the profits are global, which was not true back in the 1960s and ’70s. So, you have a way upward trend of this indicator that does not represent overvaluation on the market. So, he has never loved this market, so, when it went within 15 percent of the all-time high, he said, hey, it doesn’t look like it was cheap. It sort of surprises me, got out of all the airlines and now the airlines are down 6, 7, 8 percent. I mean, I think we all remember when he once said, you know, it was about 25 years ago, he said, if you ever hear me say that I want to buy an airline again, take a revolver to my head and shoot me before I do that. You know, I have to prevent myself from ever doing again. Well, he got convinced to do it again. And then I don’t know if he’s made profits on this. I’m sure the returns have been way, way below the market. Listen, I admire Warren. I mean, I know him personally. He’s a wonderful man. And I hope when I’m 89 years old that I’m as sharp as he is.  But let us also face the facts. His performance has not been good over the last year, over the last five years, over the last 10 years. It’s way underperformed the S&P.

One could imagine four years ago he wasn’t dragged kicking and screaming into buying Apple stock, where would he be? I remember back then he made his statement, said, yeah, we only own two technologies, IBM and Apple. Apple is speculative. I’m much more confident in IBM.  By the way, I think he bought IBM at $100 a share. He’s down. Well, IBM has been a disaster. I mean, I’m not saying his judgment is always wrong. And obviously, over his lifetime, it’s been a remarkable and wonderful lifetime. But should people now hang on every word, such that, oh, my God, he is now the guru of the future in terms of whether we should buy or not? First of all, he’s never been a market time. I don’t think so. 

Let’s also talk about tariffs, because it’s been increasingly in the news and Trump has bought it. It was it’s been clear to me for over two or three weeks that Trump is going to be campaigning against China for his presidential re-election campaign. He’s going to blame the Chinese. I’m not going to go where whether he’s right or wrong, although it is absolutely true that they totally bungled the beginning, and had they not, you know, we probably would not have this pandemic at all. But I don’t think it was intentional, although there are debates. But nonetheless, that doesn’t matter. He will be campaigning against China. There will be tariff talks. Tariff talk at this time is not good. No tariffs are really good at this point. My feeling is it’s going to be much more talk than it’s going to be action because he also knows the stock market doesn’t like it, but he’s got to talk tough for his base. And I think that’s going to be, you know, why is the market down? Why is unemployment at 20 percent? Why? Why? Why? Well, China, China, China. So, I think, you know, this is the beginning. And we’re going to be, you know, hearing this for months and months afterwards. As I said, more talk than action. But I just want you to be put on notice with that. 

The virus news. OK, so let’s say, you know, I’ve been on the on the thing that I don’t care that much about—and I know how bad the economy is. I’m glad it is opening up. I think, you know, the states are opening up, and it’s we’re waiting and seeing what is happening. So, let’s talk about it. First of all, in Europe, it’s good. Really, rates are way down. Amazingly, even in that experiment called Sweden, rates are down. Debts are down. Rates are down. Although, it has definitely suffered more cases than some of the other Nordic countries. It’s certainly much less cases than Central Europe, as far as that’s concerned. Which is interesting. Of course, we’re also looking in the United States at Georgia and how that might respond as states selected, we open up. We will see whether there is a surge of cases.

Everything else is on the downside. The only pessimism there and you may have read again, Scott Gottlieb’s op-ed in today’s Wall Street Journal. I’m a fan of his, and he actually expressed this last week that rates and not coming down. They are coming down in New York, which is excellent. Social distancing has worked. We’ve prevented the overcrowding of the medical system, which was all a goal and all that seems to have been achieved, but rates are not coming down quite fast or he says they are in Europe. They’re lingering. They are going down, but they are lingering. He said, you know, it might go down faster. We don’t know all the reasons. You know, maybe it’s been a we’ve had beef up here in the northeast, a lot of warmer weather in the last three or four days. We’re going to see how that affects it, whether that also is the cause of a decline. There’s a lot of unknowns. We need more data, I think, to confirm it.

Of course, we’ve also read that some of the states had opened up like Florida and someone else was on Wall Street Journal has not suffered some of the big increases that were feared. The same is true of Texas and a couple of others. But it is early, very early in this opening up stage, and there are clusters. And now we’re getting the testing, the explosion of testing, the new testing that was just approved with a very good test record–90 percent, 95 percent, for specificity–which, you know, that that will be useful. Testing is being ramped up. But again, you know. Alright, well, so what do we know about the test? Well, the person definitely has antibodies and he can be fearless if he is absolutely positive. Well, for six months, so Gottlieb says. We’re pretty sure it could be longer. It might be years. It would be very rare for there to be no immune response with antibodies. And he said it’s probably a minimum of six months. So, if you get to that stage, that’s possible. I mean, we do hear in the newspapers and on TV, oh, my God, you know, there may be no immune response. And then there’s all the talk again about vaccine four years out, and then waves that go years. I mean, we’re getting that the bears are in there and they’re turning on that. I still think the evidence is way against it. I think the number—I mean, I’m just reading every time from the initial successes. Now they are initial, but the initial successes are really dramatic in terms of some of those, I mean going beyond Remdesivir, for early, very early stages. They may falter at later stages to be sure. But my feeling is that with the dozens that are now in testing, we’re going to get some hits, and even Gottlieb had mentioned, you know, by fall, he said we could have a very effective cocktail of drugs that reduces this to a flu situation and not have it anywhere near as deadly as it is. So, you know, I am still optimistic on that. I think the numbers are still on the whole very, very good that I see on the virus front, and very, very good as I see on the therapeutic front and then on early vaccine development. But again, it is very, very early data here. 

So, let’s get to the main theme that I mentioned weeks ago when I held my very first conference call. And that that main theme is the fact that we have created money and debt at a level in this crisis that far exceeds any other crisis that we have. I talk about the money supply. I monitor the M1 money supply. It is continuing to jump. In the last five weeks, we have had a 17 percent increase in the M1 money. The M1 money supply is all transactions–checking account, payroll accounts and all that, plus the currency that’s in circulation. But the checking accounts and the transactions and payroll accounts are by far, they’re way over 80 percent of that, have jumped by 17 percent, that percent. It’s virtually the same as the entire increase in that in M1 money supply from the week before the Lehman bankruptcy to a year after, in September of 2009. We have jumped as much in five weeks as we did in one year.  Wow. 

And I think this is just the beginning. What does this mean? In my opinion, when confidence returns, of course that depends on the therapies, the vaccine, confidence of the public, the psychology, you know, and a lot of factors, but there is going to be liquidity on the hands of the businesses and the public that is going to spur a very strong economic expansion. Now, everyone is talking, is it you? Is it me? Is it all the rest? And the important thing is that, I think, it’s going to be determined by the virus. But it is my belief that once, you know, effective medicines and some confidence returns, that there is going to be spending power that is virtually unrivaled that is going to be spent here. And what is that going to lead to? Inflation. Hyperinflation? No, but inflation higher than we have seen it for years, decades, in the order of 5, 4 or 5 percent or more over several years.

What does well in that environment? Well, clearly, you know, certain precious metals will do well. Raw land will do well. I don’t like commercial real estate. I think that’s really challenged. And I do want to get back to the airlines in just a moment, because I think it does tell an interesting story about how they may or may not recover. So, real commodities will do well. I think stocks will do well. Stocks do well in that moderate inflationary environment,  especially those that have locked in these rates on long-term debt, because I think interest rates are going to start rising from the half percent on treasuries to the one to one and a half, to two and three.  I think, I repeat, that the 40 year bull market in bonds has ended in the spring of 2020, and we will be looking back for decades at this rate and say, oh my goodness, how could people with the debt at this level be buying treasury bonds had a half a percent. By the way, they were saying the same after World War 2. Oh, my God, how are people buying? And then it was one and a half percent, and inflation wiped out a lot of that index in subsequent years after that.

I just heard a headline, by the way, which is pretty amazing. Because of the lack of tax revenue, the programs, and all the rest in the second quarter of this year, I guess we’re in it, the Treasury expects to borrow three trillion dollars in one quarter. That’s 15 percent of the GDP.  That’s more than what was borrowed entirely for World War 2. That is six times the previous record. Think about that. Six times in the history of the United States.  The previous quarter, we record of borrowing three trillion dollars. Who’s buying that? The Federal Reserve, and that’s where all the money is being created. You know, you can’t tell me that that is not going to have consequences down the road.

With that, operator, I would like to open it up for questions. 

Operator: Thank you. If you would like to ask the question, please just key star and then one on your telephone, record your name, and press the pound key. All questions will be answered in the order received, and you will be advised when to ask your question. All of the other lines will remain on listen only. Again, if you would like to ask your question, please just key star and then one on your telephone, record your name, and press the pound key. 

We already have a couple of questions coming through. The first one is from Chris Rockwell. Your line is now live. Please go ahead. 

Chris Rockwell: Hi Professor Siegel. What are your thoughts on the markets over the last few months, in general, particularly large caps and growth stocks?

Professor Siegel: Oh yeah, it’s been a tech, healthcare, communications market because of the crisis. Obviously, I mean, you know, the smaller the business, the worse off it is. I mean, the worst parts of the economy are those that are so small, they are not public, correct? All the restaurants, all the small businesses. I mean, the micro caps that aren’t public, but are owned by individual families and all the rest. I mean, they’re the ones–many of them are going under and have been slammed. 

So, as the economy comes back–now, you know, you raise a good question. I hear this whole question about, oh, my gosh, you know, half of them won’t be back, half the restaurants won’t be back or a third or whatever. Yeah, it’s going to be a lot. But let me tell you, you know, my feeling is that again, once confidence gets back, people love to go to restaurants, and they would open on a dime. I mean, you’d open the paper in metropolitan areas and every week there would be 10 new restaurants that would open, 50 new restaurants that would open. If the demand is there, it will be open. It might be a different or it might be the same owner with a different name or whoever is in there cleaning up all the debts and pumping out. So, a lot of these businesses are going to be reopened. They’re not going to be permanently shuttered. Yeah, the restaurant business is challenged with the distancing. They need capacity and all that, and there’s already plans for that. It’s going to come back slowly and, again, it’s going to come back with the confidence  of the public and with the development of the drugs, so that if you do get it, OK, it’s going to be a flu. It’s going to be something that very few people would have to go to a hospital. Most people would stay home for a week or so, or maybe less. Again, we’re not there yet. Obviously, this is just the very, very beginning, but remember, stocks are very long-lived assets. They are the longest-lived assets we have. I mean, a 30-year bond terminates in 30 years. Most of the businesses on the New York Stock Exchange last more than 30 years or they’re eaten by another business that last more than 30 years, so they do survive. So, you have to take the long view, and the long view is that we’re going to have a vaccine and the confidence is going to return. 

Thank you, Chris. 

Operator: The next question comes from Doc Darilek. Your line is live. Please go ahead. 

Doc Darilek: Professor, thanks for taking the call. I first want to say, I really appreciate the commitment you and WisdomTree are doing for this ongoing communication. Myself and my team were proactive managers, but we have plugged in ETFs from time-to-time, and we plugged in one last week for WisdomTree. So, thank you for the commitment. 

Professor Siegel: Thank you very much. Appreciate it. Thank you.

Doc Darilek: My question is this. I’m on the camp that you are on inflation for the reasons given, but I am always listening to other people who are smarter than I in the field. Last week, we sat though a conference call, and his argument was that all the printing of dollars and all the stimulus actually acts paradoxically in a weight on the economy, much like the last 30 years in Japan. And his argument was deflation. So, I would love your take in the counter to his conclusion. 

Professor Siegel: I remember Lacey. He’s been a bond guy for decades, right?

Doc Darilek: Right.

Professor Siegel: Yeah, on that. OK. So, in fact, I mean he’s perfectly right in using that counter example of Japan, which, you know, has a debt ratio that is more than twice as high as that of the United States, and yet does not have any inflation. Let me tell you what the big differences are over here. And it’s also the difference that I had noted earlier between the financial crisis of 2008 and 2009 and what we’re experiencing today. In 2008 and 2009, the Fed created an awful lot of money also, and almost all of it got put as excess reserves to the banking system. Trillions. 

OK. The difference this time is that the money is going right to the bank accounts of businesses and individuals. It’s being put there.  It’s being put there by the tax cuts, it’s being put there by the extension of the UN climate insurance, as well as the bonus of the unemployment insurance. I mean, you can go down the list. It’s getting. It’s if this only happened in a very minor way it happened during then, but nowhere near the magnitude that we have now. Now, if I recall and I do remember looking at the Japanese market, I did not see that money causing their money supply to increase at a rapid rate. And in fact, by the way, I actually, you know, Japan had a hundredfold fold inflation following the end of World War 2, actually in the early 1950s. So, I mean, they’ve had terrible inflation. So, to them, they’re almost like the Germans. We don’t want no inflation. You know, they went into a war to it for the end of the dower. And and then it came out when there were economies. restarted, back in 1948, ’49, they were under a kind of a rationing system. Until then, they had 100 percent inflation, and it was 360. And now it’s back down to 100. You know, they went through inflation, and it it’s in the minds of the older generation. Our boomer generation, they remember that. They are very frightened of that inflation, then saving and all the rest. It is a different mindset. We never went through that. But then more importantly, their money hasn’t been pushed into those, what I call, transaction’s accounts, bank accounts. It’s been sitting there as reserves of the banks and the funds.  So, that is the reason why I think this is going to be different. 

Doc Darilek: Thank you very much. 

Professor Siegel: Next question. 

Operator: The next question comes from–your line is live. Please go ahead.

Participant: Professor Siegel, thank you very much. I appreciate all your insights. The question I have is government needs three trillion dollars that they’re borrowing, and the Federal Reserve is buying all this debt. Is that going to cause a lot of losses for the Federal Reserve?

Professor Siegel: No, no, no. Because, you see, it’s a fascinating thing. It’s the liabilities of the Fed, our currency and reserves to the banks. Currency pays zero interest, and the reserves to the banks have been paying at 0.1 Percent. So, they’re still making money buying the treasuries at 0.6. Now, depending on the maturity, now, this is this is another interesting thing. You could say, well, when day when inflation comes down, interest rates are driving up. Will they be in long-term bonds that are lower? Now, that that’s way in the future. That’s not now. Now they’re still making a huge profit. And by the way, they made a huge profit off all of mortgage backed securities, some of which would still. So, I would say their blended yield right now of their whole portfolio is, I’m guessing here, 2 percent. If it is, then they might rate those reserves up to 2 percent. Or.  And this is very likely. It’s very likely that we’re going to go back to an older system where the reserves are not set at that market rate of interest. Don’t forget, they were all the way until 2009, for the first 90 years of the Federal Reserve they were prohibited from paying interest on reserves. So, they always make tons of profit because they were buying bonds that paid interest and their liabilities take nothing currency in the reserves. Now they start paying interest on reserves but set it to whatever they want and they can keep it lower than the rate that they’re getting on the treasuries. So, I am not concerned on that. The debt problem becomes way in the future when their rate goes to one to two to three. Do they have to set the reserves at three? And then they have to say, well, just a minute, I bought Treasury bonds at a half, then I don’t have the money. Now, I’m going to go back to the older thing. But that’s way into the future. And they have the ability to set those reserve rate anywhere they want on reserves. And and in fact, let me finish this by saying it has been a stated goal ever since the financial crisis 12 years ago, seven years ago when they started doing this, that they want to go back to the old system of what’s called a scarce reserve regime, which is not paying interest on reserves or paying a very low fixed rate and not moving it up one-for-one with that interest. They’re not to that point yet, but that’s their desire of doing that. And there are ways that they can do that. So, don’t worry about the Fed. As I say, at the present time its liabilities pay zero interest, and so it’s still a huge profit machine. It’s, by the way, under 100 percent profits tax. All its profits are taxed at 100 percent and they go back to the Treasury. And in past years, they’ve been sending quite a few billions back to the Treasury. So, it’s profit making.

Participant: Given that, if you look at 50 or 100 year bond, can get any above the 100 year bond or a 50 year bond?

Professor Siegel: There’s talk of longer term bonds. Let’s see if they’re going to what’s they call infrastructure bond. You know, obviously, since I think interest rates are going to rise, I think it’s profitable for the Treasury to raise interest at the low. Who’s going to be paying for this? The bond holders. But I’d rather the bond holders than us tax holders pay it. And hopefully, we at WisdomTree will be able to guide you guys around these showels that could, you know, cause you to lose money and keep you in assets to keep up with the inflation that will follow. Thank you.

Operator: Thank you. The next question comes from Jonathan Elks. Your line is live. Please go ahead. 

Jonathan Elks: Thank you, Professor Siegel. I just wanted to get your view on future default rates and the effect they may have.

Professor Siegel: OK. Well, the Fed, obviously, by coming in and saying, you know, we had a bill, it had even an intention of buying high grade yield ETF, which, by the way, is my understanding they have not yet had to buy it. 

You know, what’s so amazing about the government is saying, well, we’re going to buy this, and then it goes up and they don’t have to buy it because it’s already gone up and it’s already dead by saying they’re going to do that. They’ve made that market open. Is that going to save the cruise line?  I hear that Carnival is going to have an August cruise. It’s already planning. I’m not going on it, but some might. I mean, what about the airlines? So, let me mention this. Let’s talk about how it relates to Buffet and the airlines. Let’s assume there’s an effective vaccine, so there’s no fear of infection. It very well will be. I mean, it will be that things will change permanently. I mean, they are going to change the airline industry.

I mean, we’re all learning, hey, you know, we could do a lot of things effectively on the phone and with Zoom and with all our other technologies which we’re going to step up and improve. We really don’t have to fly for these business meetings. Business meetings, even when the virus goes a 100 percent away, may be permanently impaired. Now, with that said, I understand that most business meetings are not just for business. They are for pleasure. That’s the reason why the two top business meeting centers in the United States are Orlando and Las Vegas. I mean, you know, it’s not Detroit where you just sit down. I mean, there’s a reason why that’s done, tax deductible vacations, etc. and so on. So, there’s a lot of that business doesn’t have to be done in person. It’s going to return because they got the companies paying for it. That’s part of my reward. And so a lot of that is going to stay. But there’s a lot of business meetings definitely that are, I think, are going to be held remotely. And so, you know, there is a question about whether business travel will ever get maintained, and that’s going to permanently hurt. There are still legacy pension obligations. Although, don’t forget, the airline has gone bankrupt. Every year, American Airlines has gone bankrupt, and many of them have gone bankrupt two or three times, if I’m right. And by the way, when they went bankrupt, they were continuing to fly. Some people talk about going to go bankrupt they stopped. No, they don’t. They never did. So you got to understand, bankruptcy doesn’t mean cessation of service. But it does mean that the bondholders have to take some sort of a hit. And I do not know what cents on the dollar the airline debt is selling for. You know, 80 to 90 probably. I’m not going to guess it. It’s not my area. There will be some bankruptcy. It doesn’t mean the business is going to stop operating. I mean, it didn’t before. Thank you for your question. 

Operator, is there another question? 

Operator: We do have another question, and this one comes from Adam Deem. Your line is live. Please go ahead. 

Adam Deem: Dr. Siegel, thanks again for doing these weekly calls. My question is just what would you say to the popular argument that we keep hearing, which is savings rates are going to really go up. 

Professor Siegel: They have gone up. They’ve skyrocketed to nearly an all-time record because there’s nothing we could buy. You know, they’re all refunding. All of sudden I’m getting refunds from every trip that I had preplanned. I was going on a cruise. I’m going on flight. It’s all being put in my checking account. It’s a credit balance on my credit card. So, yeah, I mean, that’s why savings accounts are going through the roof. 

Adam Deem: I guess what I’m getting at is that, you know, we have an extended unemployment rate that maybe hit in the mid-teens. How long could that go on? 

Professor Siegel: Well, from what I understand, that extended 600 dollar–is that supposed to expire July 30th of June 3rd? One of those dates. Now, the question being extended, let me say this, that this is important. As we get back to work, it’s been a lot of criticism because with the 600-dollar bonus. I read one article which said, yeah, the Democrats enacted the $15 minimum wage or more through the back door because a 600 dollar unemployment compensation, we’re in the $15 minimum wage, and businesses are having trouble hiring back their own workers, now making more on unemployment. You know, when that runs out, maybe I’ll come back. That’s happening. And you know, listen. You know, I mean, there were mistakes made in that program. I am still going to make the statement that I made weeks ago. It was a remarkable program to be put together, cobbled together by such a fractious Congress so quickly. And yes, they made mistakes, and some are being taken back. Even then, we had some voluntary businesses going back and all that. But I’m giving them a good grade for a good effort there. And I’ll take it with some of those mistakes. Now, why do I say this? Because I do think we’ll see what the situation is in July. I mean, how much is reopened, whether they’re going to have to close again? I mean, we’re in the middle of summer, which, you know, hopefully maybe will attenuate the virus. We’ll have to see. But there’s a lot of people say that the minute that got too hot, maybe they’ll extend the unemployment compensation maybe down to 300 or 200. Or really what it should have been is a fraction of the unemployment that was in the state because of different cost of livings. But because, and this boggles my mind, but I’ve read it in many sources. They couldn’t do it because the computer equipment of these states was so antiquated that they could do nothing. They couldn’t even multiply it by 1.3. They had to just add 600 or a certain amount. I mean, this is sad. But, alright, whatever the reason, I think that’s going to be redone depending on circumstances that will, in my opinion, help get us back. More people are saying, OK, I’ve taken my little bonus. I’ve got my money, and I’m going back to work. And again, some of those are going to go back to work with more money in their pockets than they had before. Thank you.

Operator, I think we have time for one more question, and then I want to hand it to our Global Head of Research, Jeremy Schwartz.

Operator: The next question comes from Jonah Weinstein. Your line is live. Please go ahead. 

Jonah Weinstein: Thank you, Professor Siegel. This morning’s Wall Street Journal quoted Allen Blinders, and he said municipalities are incurring gigantic, unanticipated costs and large shortfalls of revenue. He suggested, and I want to see your option was, that the Fed needs to come in and buy their bonds. Is that now feasible? There are so many thousands of them.

Professor Siegel: I don’t think I. Well, first of all, they are being strained. They were strained before. I know that’s a political issue. My feeling is there’s going to be bailout money from the Treasury. I don’t think the Fed needs to buy them. The market is operating. It is operating. We all know they get that they’ve taken they’re cutting back. I think that the Fed is right. And I think the Treasury is going to loan them the money. I do not think, you know, I mean, yes, they’re going to. They’re going to need money. They were they’ve taken a lot of the burden that the breakouts have been most in in the cities. They’ve had to keep fire and they’ve had to keep police and they had to keep emergency workers. They have cut back on I mean, I live in a center city in Philadelphia. And, you know, I know many others. I know what kind of cutbacks they’ve done. And I think there is sentiment, you know, you know, they they’ve had an unknown, unanticipated hit. We need to give them money. But there’s also that sentiment. I’m not going to be a lot of every obligation they’ve had. And a lot of them, of course, have made, you know, unsustainable pension obligations which do need to be worked with. So that’s going to be a more contentious issue. But there is I believe there’s going to be another Treasury allocation. I think we may not need again, depending on the virus. Another personal allocation or another business allocation, depending on how we will work it out. But, you know, the state governments really weren’t saying I think it was just a very minor one. Hospitals there spent some money given. Some of those are, you know, most of my private now. They’re not when they used to be one, but staying local still some of them. But I think there’s going to be Treasury money. You know, and there is going to be some budget cutting. And but you know what? We need a strong economy. He’s the most important thing. He’s going to be allowed. I think it will. Virtually all the municipalities. Thank you for your question. 

With that, for some closing words, I’m going to give the platform to Jeremy Schwartz.

Jeremy Schwartz: Thank you all for participating. We look forward to talking to you next week. 

Operator: That concludes your conference for today. You may now disconnect. Thank you for joining and enjoy the rest of your day.