Moody's Talks - Inside Economics - Delta and Debt

Episode Date: August 18, 2021

Mark, Ryan, and Cris welcome back Marisa Di Natale, Senior Director at Moody's Analytics to discuss the impact of the Delta variant of COVID-19 on the U.S. economy. The big topic is the health of the American household balance sheet. Full episode transcript can be found here: https://about.moodys.io/podcast-episodes/delta-and-debt Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Sandy. I'm joined by my colleagues, Ryan Sweet, director of real-time economics and Chris, Chris DeReedy's Deputy Chief Economist. And we have Marissa Dina Talley back. Welcome, Marissa. Good to have you back. Yep. And you are ahead of global forecasting. Last time you were on a couple weeks ago, two or three or four weeks ago, we were talking about forecasting. This go around, we're going to be talking about the American. the state of the American household, maybe better put, the state of the, what should I say, the financial health of American households. I don't know why that was so hard to say,

but we're going to be talking about how well American households are doing. And it's apropos to have you on because you have a lot of expertise in understanding household balance sheets. And we'll get back to that in just a minute. This is a little weird, this podcast, right? It's Wednesday morning. Typically, we record this podcast Friday afternoon. We have a whole week of economic data to talk about. Because I'm going to be on a plane traveling, we decided to push this up a little bit. But it feels a little weird, doesn't it?

To me, it does. It does. We don't have as much. Go ahead, Chris. Yeah, so just to preview, I'm going to break the rule in terms of the week, indicators within the week. I'm going to look back two weeks. Ryan, is he allowed to do that? I mean, he just unilaterally changed the rules.

Yeah, I guess. I guess we're going to fly. Just three days? Not even Wednesday, right? That's fair. I was thinking of doing the same thing, but then I was thinking, Ryan, would give me all kinds of grief for doing that. So I'll do that anyway.

Mine is from last week, too. Oh, okay. I thought it was fair game since it's a short week. Okay, okay, fair enough. That sounds good. I think that's fair, given the situation that we're in. I did, though, sound an email out, just kind of outlining the conversation a little bit. I think we should focus on indicators that relate to the Delta variant and the impact on the economy.

Is that fair? Is everyone on board with that? Or is that consistent with indicators? Also, certainly, right? But we also want to talk about the household financial. health rights. A little bit of both, maybe? Okay, a little bit of both.

Okay, fair enough. I have a feeling Chris's... Oh, I know what Chris's indicator is. Yeah, yeah. I just gave it away. I was playing at home. Yeah, okay. All right, fair enough.

Okay, well, why don't we begin with you, Chris? Oh, well, and I should say, just for the fair listener, as you know, part one is a discussion of the indicators, and we each put forward a, our favorite indicator for, I guess now, last week and this week. And then we do turn to the topic at hand. And we are going to focus on the health of the American household, the financial health of the American household. Okay. So with that, Chris, let's start with you. I'm intrigued. What's your indicator? So this is underhanded softball now. It's 37.7 billion. Now, I think I know. Mercer, do you know? I think this is

right. I think so. I'm right. Okay. God let you go. Ladies first. Go ahead. Well, is it growth in household credit over the last quarter? That's right. The G19 series from the Federal Reserve. So that's total consumer credit revolving plus non-revolving. Oh, well, okay, well, let me ask, let's make this a little harder. Okay. Okay, but before I do that, give us some context.

Is that a, what kind of number is that? That's strong. Certainly. It's strong in normal times, certainly. It's a big jump and certainly coming out of COVID. It's a big increase. Increases, like I said, both non-revolving and revolving, almost a 50-50 split, right? About 18 billion on the revolving side and 20 billion on the non-revolving side. So consumers are out there borrowing once again. They're charging on their credit cards. They're, they're, they're, they're, they're, they're, Borrowing for auto, student loans, really across the board, you see credit growth. And that's supporting some of the spending we're seeing. In revolving means basically cards, bank cards.

Basically bank cards. Although now things are shifting as well, we can get into some of these trends as well. The millionaire generation in particular is attracted by the buy, now, pay later type of arrangements, less interested in the credit card perhaps. although that remains to be seen. So that revolving component, it seems as though, that also captures some of these newer fintech type of loans as well. Oh, got it. And gas prices.

Gas prices. Yeah. So when gas prices go up, you see revolving. Yeah. Good point. For sure. Yeah. And non-revolving is mostly auto debt and student loan debt, correct?

Yes. And it would also include the fixed term personal loan. Right. Well, here, let me make this a little more complicated. What was the increase in total household debt in the quarter? Oh, including mortgage? Wait a second. Was that $37.7 billion the monthly increase or was that the quarterly increase?

That's a monthly. Monthly. Oh, okay. There was a monthly increase. May to June. Yeah. May to June. Oh, really?

So, okay. So what was the quarterly increase, so this is Q2, in a total household debt outstanding, which would also obviously include mortgage, first mortgage debt. And Mercy, you should know this, I think, because this is based on the Equifax data. Yeah, and it came out last week, but I don't know what it off the time. Came out last week, yeah. No, no, you don't know that data? Oh, okay.

I can look it up. I'm going to stay you up. It's about $100 billion increase in the quarter. And actually credit. $94. It was it? How much was it? $94 billion.

Yeah. Yeah. About $100 billion. That was the month. Sorry, that was the month of June. Oh, okay. I thought it was the quarter. Okay.

So the month of June. Sorry, July. It was July. Oh, geez. Yeah. I think we should start this podcast. The perfect podcast has ended. It's like, all right, we sort of know the data.

Okay. Look it up. Okay. But it does show that household credit growth is picking up. It's accelerating. We're now seeing kind of mid-single-digit year-over-year growth. And for a while there, it was obviously declining. So a big turnaround there.

Okay, fair enough. Okay. Ryan, what's your statistic? All right. So I got two. I have an economic one and a non-examination. economic one, but we'll save the non-economic one because it's the perfect transition to the big topic. All right.

All right. So I'll give you the economic one right now. And this is, you're going to screen that this isn't fair, but Mark asked for something that shows the delta variant impact. And the number is 32.1%. 32.1%. That's positive. No, no negatives. I know my signs.

Side joke, by the way. Not that inside if you listen. Go back and listen to the last podcast, Marissa was on. Oh, my goodness. 32%? 32.1%. It's a weekly number. It's a weekly number.

And you said it's related to the Delta variant. And we're showing some impact of the Delta variant. Yep. Hmm. Can you give us another hit? The only market to show an increase was Philadelphia. Oh, so I don't know. This is a metric that I've been tracking.

It's kind of off the radar. Is it the stringency index? It's not. It is not. I don't know, I don't know, Ryan. What is it? So you went back into the office. When we go in the office, you swipe to get in.

So there is a castle back to, work index and they track the across 10 markets, the number of people are, you know, going in and out of the office. And this is down from 34.8% at the end of July. So since the beginning of August, we get this big surge in COVID cases. It's slowing and reducing the number of people are going back to the office. Oh, has it been steadily improving? And this is the first kind of step back. Yeah, it was improving. And now since late July, it's been just coming down. Oh, interesting.

And Philly was the only metropolitan area out of what you said, 10 that actually... In the last week, Philly was the only one that went up. They were down across the board. Yeah, and there's hardly anyone going to work in Philly. I know that, at least into the office buildings. That's interesting. And, you know, I was in the office, our office, was it Monday? Yeah, on Monday.

And I think that was the first day that people could go back if they wanted to go back. I think we call it a phase one reopening. And I tell you, there were three people in the office other than me. Three people. And it was funny. I ran into two of them. They were brand new employees. I mean, literally brand new.

And they were just kind of looking around, looked little lost. I didn't know who they were. And they were of the three other. And Phil, the really good data guy. was in also. So I think it was, oh, Summer. Summer was also in the office manager, but that was it. Okay, so are we going to come back to you then, Ryan, for the non-economic one in a minute?

Okay, all right, good. We'll do that. And then, okay, Marissa, what is your statistic? I think this is easy. Okay. It is 96.7. It's an index value of a week ago. Do you know, Ryan? And this is, and this also shed some light on whether the Delta

variance is having some impact on the economy. Right. Is this our back to normal index? That's my guess. Yes. No, no. But. Which state? Yeah, I got to figure out the state. Oh, no, now you're going down to the state level. Oh, Florida. Florida. Yeah. Yeah. Oh, boy. Florida's back to normal index. So, I mean, I think it's significant because Florida had risen up above

the 100% back in May and reached. So indexes, it's indexed to 100. It was, we should tell people it was indexed. I mean, you guys have talked about it a lot. It's indexed to right before the pandemic in late February 2020 was 100. It combines a whole bunch of private data and big data and economic data to see how to normal every state is. And Florida has been well above the national average. almost the entire time, just given that it hasn't had the stringent lockdowns that a lot of other states had. But it got back above 100 in May. It was well above 100, about 102, 103 for most of June. And that has been falling since, you know, Delta really emerged in mid to early July.

And now it's 96.7. So it's still above the national average. but you definitely see it faltering. And Matt Collier, who's our colleague who puts the index together and covers, it writes about it on Economic View, was saying that of all the states where Delta has surged in the past month, this index value has fallen about a percentage point. And in the states that have reimposed lockdowns that are doing relatively better, the index is still rising and rose by about a percentage point.

So you're really starting to see the impact of, I think, the virus itself having, taking a toll on some of these states where there is a resurgence of cases, hospitalizations, and now deaths, even if the state isn't, you know, necessarily implementing new lockdowns or restrictions to spread the slow of the virus. Yeah, just for context nationwide, and I think this is a really good indicator to follow because we construct it every day. We release it once a week on a Friday. It's at a state level, and it really is very sensitive to what's going on right now. Nationwide, we're stuck at 92%. So we steadily improved. It steadily improved in the spring, early summer, as vaccinations got rolled out. And then really since mid-June, really kind of early July, it's gone flatline nationwide.

And that reflects declines in the index in states where vaccination rates are low and the economy's starting to struggle. That's being offset by continued improvement in some of the other states that are more vaccinated and infections are low. Like New York continues to improve. But still, we're kind of going sideways here. That's a good one. That BNI index, back to normal index. We constructed it with CNN business. And we put it on our economic view set.

but you can also find it on CNN business as well. They have a pretty good visual there that helps you kind of look at that index over time by state. Okay, that's a good one. All right, I'm going to give you two numbers just to help you out a little bit, and they are related to providing some sense of the impact of the Delta variant on the economy. And the two numbers are 70 and 50. and 15, 70 and 15. And these are, you know, related indicators. There are different indicators, but they're related. One of them came out this week on Monday. The other one came out last week on a Friday. So the 70 is something with you, Mish. Is that the present conditions? That's the overall index. Oh, the overall, yeah. So that was down 11 points. That was an enormous drop. Yeah. That is a big. And in fact, I think 70,

is the lowest reading since pandemic hit, even lower than last March and April. What about the 15? It's related. That's our global business confidence survey. Exactly. That's right. That was my second. That was my backup statistic.

Oh, was that right? Okay. Yeah. We have our own business survey, weekly survey we've been doing since 2003. It's a diffusion index. So a percent of positive, less percent of negative responses. And it improved again in the spring and early summer when vaccinations were getting rolled out, but has gone flatline now over the last really six, eight weeks. Here's an interesting thing in last week's reading, though.

One of the questions is a broad one around present condition. So the survey respondents asked, you know, how do you assess current business business conditions broadly. And that, again, that's a diffusion index, percent of positive responses, things are improving, less percent of negative responsive things are getting worse. That turned negative last week for the first time since back in March. And that present conditions question is, I think, the most sensitive to what's going on in the economy real time. So that gives you a sense that. I think the Delta variance is having an impact. It's really starting to, to, uh, You know, I don't know, we got retail sales yesterday.

They were very, very weak. That probably there's a lot going on there, right, Ryan? I don't know if you can see. Yeah, there's nothing to do with Delta. Delta really, no, no. Okay. You'll see the August data for retail sales, the Delta variant, the impact on restaurants. Oh, I see.

Right. Yeah, the restaurant and bar was actually up. Yeah, it was up in July. What was up in July? Yeah, that's pre-surge in COVID cases. The weakness in August or July. That was the timing of Amazon's Prime Day, the drop in vehicles that all weighed on retail sales. So I'm sorry, what happened in July?

What was up in July in the July of retail numbers? Restaurants spending? Restaurant and bar. Oh, okay. It was up 1.7%. Oh, was it? Okay. All right.

Very good. So, but what do you think? I mean, how big a deal is this? I mean, I guess if we're all assuming, and it feels like we're kind of all assuming the Delta variant is going to roll over here, that infections and hospitalizations are going to start to come down in the next few weeks, kind of sort of what happened in the United Kingdom, which seems to be leading us a bit in terms of the waves here. But if that doesn't happen, and this continues to, the infections and hospitalizations continue to increase, how worried should we be?

Let me put it this way. When should we get worried? You know, what do we have to see before it starts impacting the economy to agree that our optimism about the economy starts to fade a little bit? Or has it already started to fade? I think it's all about the schools, right? If we... I'm not to say that.

If the infections do get... If the hospizations, actually, that's the key factor, I would watch. If those rise to a level that threatened. the hospital system, then you could see more imposition of, you know, stay-at-home requirements. And if the schools have to go online again, then I think that certainly is going to impact the outlook, certainly over the next quarter at least. Yeah. So if schools don't reopen for in-person learning, that would be a clear tell that this thing

is doing some real, going to do some. damage to the economy. Yeah. I think so. I don't know, Marissa, Ryan. It just feels like the data is,

you know, you know, the data coming, they ebb and they flow, so I don't want to read too much into the ebbs and the flows, but it feels like it's ebbing a little bit here. The numbers,

all these different statistics coming together, and it's, you know, the big statistics like retail sales, and it's the, you know, minor statistics like the home builders sentiment

index, they all are coming in now, surprising to the downside a bit, feels like. You don't want to read too much into it because things are still really, really strong. So control retail sales are still 18% above their pre-pandemic level. So things are coming off the boil, but I mean, we're, they kind of is booming, you know, earlier this year. So control retail sales being. So that's total retail sales excluding autos, restaurants, building materials and gas. And that's what feeds into the BEA's estimate of real consumer spending.

Yeah. And I mean, a lot of that was a shift from service spending to goods because, you know, during lockdowns and the pandemic, people weren't going out to restaurants. They weren't going out to, you know, movie theaters and things like that. So they shifted their spending towards goods, which is mostly what retail sales captures. Okay. All right. And you don't really see, correct me if I'm wrong, Ryan, but we're not really seeing huge

movements or slowdowns in like the Google mobility or table or anything like that, right? Even like weekly gasoline demand is still holding up. I don't know, but like I mean, the Bank of America, they track card spending. Do you see their release and showed spending on airline tickets really starting to fade here in the last couple weeks, spending on, I believe, on hotels fading. Yeah, travel seems to be affected, being affected. Yeah, the number of people going through TSA checkpoints is declining, but, you know, there could be some seasonality there. You know, we're coming towards the end of the summer. So it's really hard to read through the signal versus the noise.

Okay. I mean, I think you're right. I mean, we haven't changed our forecast. It's still, you know, very positive, upbeat forecast. And I do think that's why I love the GDP tracker that we have that takes all the disparate pieces of information. and through statistical techniques, translates that into an estimate of GDP growth in the current quarter, which is Q3.

And right now I think it's still at 6.5% annualized, correct? And that's, I read this morning, housing starts came out today, and they were okay, a little on the soft side, but they didn't change that 6.5%, which would be, if it's pretty good. Yeah. Okay. Yeah, I mean, part of it is a, you know, completions is still pretty solid and permits, you know, which lead housing starts.

You know, they rode. So, you know, I think we're in this little bit of a blip. So things should start to pick back up for housing. So it's just a temporary. Yeah. Okay. And housing starts are very volatile. They're unreliable.

They're subject to enormous revision. So we really, you know, don't want to read too much into a month-to-month fluctuations and starts. And I guess, Chris, the statistic you've been following pretty regularly here, initial claims for unemployment insurance. They continue, they're elevated, but they continue to move in the right direction. Is that right? There's no sign in that data that Delta is doing any damage, certainly not to the labor market.

Not yet. Not yet. The last read was for early August, I think August 7th, right? So at that point, it was $375,000 for the week. And that was trending down. So still elevated by historical standards, but showing continued improvement. Okay. So we get claims tomorrow for the payroll reference week.

And people are going to read too much into it, but they're going to drop a lot just because of seasonal adjustment issues. And so people are going to be like, oh, you know, the Delta variance is not affecting the labor market. You really can't trust claims right now, not until, you know, later another week or two. Payroll reference. Do you notice Ryan, he's getting to be very jargonesque, you know, control. retail sales, payroll reference week. Like I, you know, keep up with me, guys. Well, come on.

What is the payroll reference week? I'll let Marissa. Marissa, she used to do the report, so she can elaborate much more than I can. She's like the expert. I can interpret Ryan's jargon. Yeah, okay. He's my interpreter. Okay.

See, he's your whisperer. Marissa is the sweet whisperer. Okay. So the payroll reference week is when, when, and the BLS surveys employers to find out what the count of, you know, employment gains or whatever are each month, they ask, they're asking about a specific pay period during the month. So they're asking about the pay period that includes the 15th of the month for the payroll survey, the 12th of the month for the household survey or do I have that the other way around?

I think she's got that wrong. And my goodness gracious, and you had a chance to redeem yourself. Oh my gosh. That's like, oh. Well, one is the 12th. One is the 15. Right. Do I have it backwards?

Yeah. Yeah, the 12th for the, okay, so it's the 12th for the. You used to put the data together for the BLS? Oh my God. It's been a while. Yeah, it's been 18 years. Thank you. I don't think we're so.

appreciates my humor. I do. You do? It's early for her. Oh, I forgot about that. You're sitting in California. It's like really early there for you. Yeah, well, you know, you don't even have Wawa coffee in California.

No, but I have a nice espresso. Okay. Very great. Okay. Anyway, so they're asking about this specific pay period during the month. And that's what employers are answering the question about, you know, how many people are on your payroll during this pay period. So the jobless claims figure that comes out during that week gives us a preview into what the

payroll number might be. Okay. And so, Ryan, you're saying, it's actually going to be a positive surprise. It's going to fall a lot more than I think people anticipate. Okay. Interesting. Okay. What's your guess?

Well, I don't guess. There's no guess. You just said it's unreliable, it's unpredictable. I mean, Mars criticizing me for jargon. I got 350, but I wouldn't be surprised if it comes in lower than 350,000. $350,000. Oh, that's a substantial drop. Yeah.

Yeah. Okay. All right. Okay, very good. And the indicator I've been watching also suggests no damage from Delta, at least not globally, that's copper prices. Although I haven't, I don't want the last. They dropped a lot yesterday.

It's weak. Oh, did they? Oh, okay. So when did it fall to? Do you know? 4.15, I think. Oh, okay. It's still over $4.

But approach it. Yeah. Copper prices, anything over $4 a pound is consistent with a pretty strong economy globally. It's Dr. Copper. But it was at $4.35. So that came down quite a bit. That is interesting. So we'll have to watch that.

Oh, that came down with the market. All markets were down yesterday, though. Equity markets were down. And that gets to bond. yields, they're back down to one point two, 10 year treasury yields are back down to 1.25, I think. Mm-hmm. Oh, my goodness. And is that, I guess, Delta is having some impact here on.

Yeah, a little bit, yeah. Yeah, a little bit, right. And in all markets, I think. I haven't looked today with what's market doing today, but it'll be curious to see. But anyway, okay. So the conclusion, bottom line, don't worry, Delta, it's not helping. certainly no upside here, but the downside feels limited and unless schools en masse decide to go stay online, we should be okay here. We should kind of navigate through and our optimistic

prospect outlook for the economy should hold forth. That's kind of the general consensus view here. Anybody disagree with that? No, I'd agree. I think we're banking on things rolling over. Missouri is a good example where things got really bad. Now they seem to be improving. So it seems as though this Delta variant will burn itself out, hopefully. Okay. Okay. All right.

All right. Well, that, uh, anything else on the indicators you want to talk about? I mean, I think we cover a lot of ground there. You want my, my number for the perfect segue? Yeah. The perfect segue. Let's hear it. So the, the perfect podcast we know is it's over.

All right. It is Wednesday. So, you know, it's wacky Wednesday. So here's the number. It measures, is a perfect measure of consumer behavior. 32,340. This is non-economic, though, right? It's non-economic.

I guess there's a little economics to it. Is there any probability we would know this number? No. Well, I, no. Okay. What was it again, 32,340? Yeah, I mean, it's a Guinness world record. you might be up there if they had it for Wawawak coffee.

So it's a personal consumption of something. And is it global or U.S.? That's one person since 19702. 1% consumed 32,340 of these things. Yep, since 1972. To a day. To a day. And this somehow relates back to the health of the American consumer.

Maybe the health of individual consumer. It's getting really micro here. We are getting really micro. One person, world record. Anybody want to take a crack at that before we say we give? Hot dogs. Close. Oh, wow.

Yeah, it's a food item. Huggies. Chewing gum. Chewing gum. Breathments. Big Macs. Big Macs. Big Macs.

She's projecting now. She's projecting. Yeah, breath means. No, one individual consumed 32,000, 3,000, 340,000 Big Macs since 1972 to a day. Is that person still alive? Yeah. I still adding to the record. They're still adding to it.

What does this have to do with anything, Ryan? I mean, consumer spending. Consumer spending. Can you imagine the amount of money they spent on Big Macs? Hence, segue into the American. Oh, man. That is a. Wow.

Huge. I don't know. That is a reach. You guys are impressed by that? 32,000 Big Macs? Impressed or? I'm slightly disgusted. Since when, Ryan?

Did you say 1970? 1972. Wow. I didn't even know they had Big Macs that far back. 72. Interesting. I guess. Sort of.

Okay. When you said the health of the American consumer, Ryan took that literally. He took that literally. He took that literally, yeah. Okay, so that is the issue here. And, you know, when I think about the health of the consumer, I think broadly three things. One, jobs and income, you know, are they employed and are they getting pay increases? second debt leverage.

Obviously, big problem prior to the financial crisis, not so much right now, but leverage. And what do they own, assets, house prices and stock values, that kind of thing. And if you kind of look at the consumer, the American consumer from that perspective broadly, and here I'm generalizing. It's a broad brush.

There's obviously lots of distinctions we can and should make across the population. But broadly, it feels like the American consumer is in pretty good shape, right? I mean, you know, clearly the pandemic has been a problem and we're still recovering from the pandemic. The consumer, you know, unemployment's 5.4%. It was 3.5% before the pandemic. But we're creating lots of jobs, unemployment is coming in. And it feels like we're going to head back to full employment pretty quickly. Leverage and wage growth has been held up admirably well in the pandemic.

People have been able to save. There's a lot of excess saving. Leverage is low. Here's statistic for you I was looking at before in preparation for this. The financial obligations ratio, that's the percent of income disposable after income that consumers, households are devoting to meeting their financial obligations, which includes not only their debt payments, but also lease and rental payments,

is 12.9% as of Q1, 2021. That's a record low. We've got data back to 1980. The average is close to 16%. So leverage seems low. Asset prices are, well, they've gone skyward, right? I mean, housing values and stock prices and bond prices and crypto prices and anything you own, I think it's worth a lot,

more today than it was, you know, a year ago, two years ago, three years ago, five years ago. So am I wrong, but, you know, broadly speaking, the state of the American consumer is good, right? I mean, would you, anyone disagree with that or take umbrage with that? I mean, I agree with that kind of representative agent type of model. Yeah, sure. Yeah. Absolutely. Yeah.

Okay. But once you peel it back, right, that's when you see the distinction, certainly. Okay, go ahead and peel it back. I mean, how do you want to peel that back? If you can peel it back in any number of ways, I guess one way would just be by income or education, right? So certainly folks who are more educated have been able to fare through better during the pandemic than folks with less education just in terms of their ability to work remotely or keep hang on to jobs. right so while savings rates are up and they're up in aggregate and they actually are up across the board they certainly are much higher for folks in the upper income distribution more highly educated

than at the at the bottom part of the distribution right so you're saying the obvious distinction underneath is across income and wealth distribution that there's been this ongoing skewing of the distribution low income household low moderate income households have been left behind over the last, well, almost 30, 35 years, something like that. Sure. And the asset gains that you mentioned during the pandemic, whether it's housing or financial, right, those have accrued to the upper part of the distribution by a significant degree, right?

Folks at the bottom at the bottom don't hold a lot of financial assets. They don't, many of them don't own homes, so they really haven't participated in those gains. Right. Well, one fortunate thing in the pandemic is all the fiscal support that's been provided, right? Because that really helped low and moderate income households in particular navigate through the pandemic. Not gracefully. That's definitely the wrong word, but reasonably gracefully, right? I mean, the stimulus checks, the unemployment insurance, the food assistance, the rental assistance, that kind of thing.

Would you concur with that? Yeah. And like I said, the savings actually are. higher. If you look at checking account balances by income, they are larger today or higher today, even for folks in the bottom 10 percentile than they were prior to the pandemic. So I attribute that certainly to a lot of pandemic stimulus support as well as lack of spending opportunities, right, during the pandemic. So from that, if you just look to that metric, sure, they're better off, but proportionally or relative to the upper end of the distribution, right?

their gains are small. Yeah, the other thing I've noticed is the labor market is tightened up, but it's really tightened up for lower skilled workers and wage growth for folks in the bottom part of the wage distribution. You know, part of that increases in minimum wage, but, you know, the very tight labor market for the bottom part of the wage distribution, that wage growth there has been actually quite strong, and that's helped too, I think. Mercer and Ryan, anything, any other way you would

broadly characterized the American consumer. So I talked about it in aggregate. Chris talked about it across the income and wealth distribution. Is there any other way we should be looking at it that provides some insight into the health of the American consumer, broadly speaking? No. I mean, with any sort of income cuts or wealth cuts, you know, certainly looking at it by race, for example, you know, the vast majority of wealth and asset gains have gone to white households, not to Hispanic or black households. Same thing with the income cuts. I think another thing, you know,

you had mentioned that the financial obligations ratio is at its lowest level ever, I think you said. Yeah. You know, and a lot of that, what Chris just said, there's been not as much to spend on until recently. And then we've had a lot of fiscal support. I was just looking at the data on the child tax credit payments that have started to go out. And those are quite large and going to a lot of households.

And you can see in that data, this is from the Census Bureau Pulse survey that they've been doing since the start of the pandemic, that people are really using that. 40% of people said that they're using it to pay down debt. And then another third of people are using it to save. and only less than 30% are actually spending it. So it just goes to this notion that there is a lot of excess saving and debt is coming down because people have been able to use some of this money to pay down debt as well. Oh, I didn't know that.

I missed that. So in the most recent Census Bureau's household pulse survey, which I recommend to everybody, that's a pretty cool survey that they've been doing more or less regularly since the pandemic, early on in the pandemic. In the most recent survey, they had questions around the child tax credit. Oh, and you can see that the bulk of that is being used to pay down debt and to save, not to spend. Yeah, I mean, 40% of it is going to pay down debt.

So this is data that goes, I think the latest iteration that they did goes through early August. So the questions were as of a couple weeks ago. And it's a wonderful data set because they ask, all kinds of health questions about how COVID has affected people's lives in terms of not only health, but how they're working, how their children are going to school or not, if they're doing remote learning. And you can glean a lot of really interesting things, I think, from that data set. But yeah, one of the sets of questions is about all of the fiscal stimulus.

So they ask about how are you using, if you're using extended unemployment insurance benefits, what are you doing with that? How much are you using? How much are you using? it. What about just the stimulus checks? And now the child tax credit is part of the questionnaire as well. And it just, oh, go ahead. Sorry. Sorry. And you can clearly see that that paying down debt and saving is, you know, it's turned from those initial payments that went out. The first tranche of stimulus, people sent it, right? Which makes a lot of sense. But as you, as you kept going, the sending kind of fell a bit more and it went more toward paying down debt and saving. saving. And that's true across all income buckets, too, which is very interesting. I mean,

we know low-income households are more likely to send than save. And that was certainly too early on in the pandemic, but even now those lower-income households are using it to save and pay down debt as well. Yeah. Just to provide context, the child tax credit was expanded as part of the American Rescue Plan. That was the legislation support package passed last in March. And that's, in current law, that is from July to December, and then it will expire in January of 2022, unless with this new legislation that's being debated in Congress, there's an extension of that child tax credit through 2025. And that one of the reasons for this is it's actually quite substantive. It's a pretty big, expensive line item. So it can be, you know, very costly.

but it is clearly helping out low-income households, at least save more and pay down debt and help them with their bills. That's good to hear. That leads to a critical question with regard to our outlook for the economy, our optimistic outlook for the economy, and that is how much of this excess saving will be spent in over what period of time. So just to make that clear, what I mean by that, people's saving rates have increased dramatically during the pandemic.

You know, part of that was I'm sheltering in place. I can't go to a restaurant. I can't travel. You know, I can't do stuff. I might spend a little bit more on a, you know, a heater for my back tech or, you know, let this. I'm talking me now. Or a power washer, you know, but there's only so many power washers, one

can buy, therefore you save more. And then it's also the government support, the stimulus checks, and other support, some of that has gone to, you know, a lot of that's gone to low-income households who have spent it because they needed it to navigate through because they lost her job. But some of that went to middle, even some higher middle-income households who have been saving it. And now, as you point out, even some of the child tax credit that's going to a low-middle-income households is going to savings and paying down debt, which is the same thing. So saving rates have been very elevated during the pandemic. So excess savings represents the difference in the actual saving rate and the saving rate that was evident prior to the pandemic. If there had been no pandemic,

that's the kind of saving rate one would have expected. And if you towed up all of the dollars saved in excess, this excess saving, you know, by our calculation, it's almost $2.5 trillion. $2.5 trillion. That's over 10% of GDP. That is a lot of cash sitting out there in people's deposit accounts and, you know, one other reason why other asset prices are rising. And the question is how much of that excess saving is going to be spent in over what period of time? And I'm just curious, you know, what do you think? Is that, if all that excess saving got spent, you know, quickly over the next 12, 18 months, that would be, you know, obviously a ton of growth and the economy would probably overheat. So that's not what we're expecting. So I'm just really curious what people

are thinking about this and, you know, whether, how much of that excess saving will be spent. I mean, do you have to review, Ryan, on that? Well, our baseline is a third, correct? A third between Dow and the end of 2022, right? Correct. Correct. I think that seems reasonable, but I think the risk is that it's spent slower and less than what we're anticipating, given the distribution of the excess savings, really favors high income, high wealth households. So they have a much lower marginal dependency to consume. And I think they might treat that more as wealth than, you know, extra cash. So I think that I would, I think our forecast is reasonable, but I wouldn't be surprised if it comes out slower. Right. Chris, I know you put together a nice deck with a lot of slides. And I saw one on the saving. I think you actually went and calculated the increase in the amount of cash sitting in

people's deposit accounts, right? Based by where they were in the income or wealth distribution. That's right. This is data from the Fed. They produce distributional account information now. They actually break out all different asset types, right? So I just pick the checkable deposits just as the most liquid form of savings. And this goes back to my earlier point about, and there's a lot of cash sitting in these checking accounts, really across the income distribution. But as Ryan said,

it's really skewed towards that higher income household. So I agree with Ryan. I think that the risk is actually to the downside in terms of, less of a burn or less of a cash coming into the economy over the next 12, 18 months. And that would be consistent with what happens after post-World war errors, where you had a lot of excess savings during them. And then when you come out of it, it really didn't get released very, very quickly.

So, you know, it's a small sample size, but, you know, that might be what, you know, we see going forward. Yeah, there was a really great peace and barons going back to after World War II. And they had one quote from an economist, you know, in that period, saying watch out. There's a lot of excess saving. I think he even used the term excess saving, I think. If he didn't, that's what he was implying, because there was a lot of pen-up demand. People couldn't spend during the war, right? Because we were all producing military equipment. We weren't producing homes or anything else. So his argument was, well, people are going to come home from the war. There's going to be this massive increase in spending. And we're going to have

this huge spike in inflation. We're going to have a real problem with inflation. It felt just like the debate we're having to, I mean, literally, you know, the debate we're having today. And of course, that did not happen. People did not go out and spend, you know, spending was strong post-World War II, but it was not booming. It's certainly not booming to the point that it led to this runaway inflation that the economists at that point in time we're worried about. So I think that is a pretty good analog today. Mercer, any insight here on the, on wealth, on excess saving that we missed? Well, I just, what you just said kind of led me sort of to think about another question,

which was all the stimulus that we've had over the past year. And, you know, there was some, I remember there was some debate back when that was being proposed that, you know, pumping all of this cash into the economy and giving all of this cash to households and could that eventually spark inflation? and I don't think that that's, I don't think there's much evidence of that too. It's just, it's been so gradual. And a lot of the sending is still to come and will trickle out, you know, over the course of, particularly like the infrastructure stuff where it has to be dispersed to states and states need projects.

And, you know, that will happen over a longer period of time. I mean, it's an incredible amount of money that's going into the economy, but it seems to be kind of being dispersed at least gradual. over the course of the years and we're not seeing any huge spikes. I think that we can blame on that in inflation either. I don't know if you agree with that. Yeah, I do. I think that's right.

I mean, I do think the, you know, one other concern expressed about all that support, fiscal support or stimulus, as you labeled it, was that, you know, it's kind of a waste of money, you know, because you're not stimulating the economy of people who are going to save it. But I would take umbrage with that. I mean, I think, you know, it's very important to help out these low middle-income households that, you know, we're having a great deal of difficulty. And still are having great deal difficulty, you know, kind of navigating the pandemic, you know, through no fault of their own.

And they had no savings. And so, you know, helping them out here to kind of navigate through was obviously helping them out, but I think ultimately helped out the economy. So I don't think that argument was a very good one either, but that was one you also heard. I'm actually hopeful that the savings stick, right? Before the pandemic, we were very concerned about financial fragility, as you recall. Exactly. So many homes can't afford a $400 emergency expense.

Yeah, the other thing. I'm sorry, go ahead, Chris. Yeah, just to say, if these savings help or these stimulus funds help them to build up some cash buffer, that points to our long-term resiliency. The other thing I really worried about, you know, if you go back a year ago when things were really tough, unemployment very high. And there was, you remember the riots in the streets that we were experiencing last summer, it felt like the whole social fabric of the country could come undone. And, you know, I get it. I mean, if you're a household, you're out of work, no prospect for going back to work, you're stuck at home. Your internet connectivity is poor.

You got kids there that are struggling. to adjust to the situation that they're in, you know, their incredible hardship. If we hadn't provided that support, you know, what would have happened? You know, would the, would we, would the fabric of the nation actually rip apart? But it didn't. It kind of held together. And I think one could argue that that's because of all of the support. It really did help these households navigate through this period reasonably well. So I think that was important from that perspective also. Another issue concern about the health, you know, again, about the health of the American consumer

is sticking to government support is that, you know, the federal government has also provided support to households with debts. So various moratoriums on rental eviction, moratoriums on foreclosure, you know, for government-backed loans from Fannie Mae, Freddie Mac, FHA, V-A-V-S-T-A, also forbearance on mortgage payments for government-back loans. So, you know, if your income was disrupted by the pandemic, you're having trouble making your mortgage payment on a Fannie Mae loan, you could get forbearance. And so a lot of people have gotten, and forbearance means I don't, I don't make those mortgage payments. I think it was up to 18 months in total.

Student loan borrowers also have forbearance. And correct me, if I'm wrong, Chris, I think that now extends into January, doesn't it? January 2022. That's right. Yeah. But all those supports to consumers on the debt side of their balance sheet, you know, on the leverage side of their balance sheet are going to expire. It's just, you know, it feels like it's now probably by early next. year, this is all going to go away. The rental eviction moratorium, which is extended through

October, if it's not changed by the courts, will expire. The forbearance is starting to wind down. One of the concerns was that as that support faded away, this so-called forbearance cliff would be a problem, that households would struggle with that and that that would hurt their ability to spend on other things. So if I don't have to make a mortgage payment, I can spend on other the things, but now that I have to make a mortgage payment, that will create problems. And it will also lead to other credit issues, you know, people not making mortgage payments or student loan payments or card payments, whatever it is. Any how worried should we be about that at this point?

Any insight there? Chris, I'll turn to you and then to Marissa. How are you feeling about that so-called Fort Bergerner's Cliff at this point in time? Yeah, not particularly worried, certainly when it comes to mortgage, just in terms of everything that has gone on in addition to the forbearance, particularly the rise in home prices. So the demand is strong. Incomes are growing. Jobs are plentiful. So I believe that homeowners will be able to, for most homeowners will be able to resume their payments. I don't see much of a problem there. For those that can't, that can't replace the income or continue to struggle,

from the bank perspective or the lender perspective, at least they have the option to sell their homes, right? For many of them, they have positive equity, so I don't expect to see a wave of foreclosures, for example, at the end of the forbearance period here. So for mortgage, I'm not particularly where lending standards have continued to remain very tight, even prior to the pandemic. So I don't see a foreclosure cliff coming anytime soon there. So from that perspective, I'm feeling pretty comfortable. What about student loans? Should we be worried about that? So for student loans, I think we'll see the problems that we had before the pandemic,

before the forbearance went into effect, will be revealed once again. There, it's a little bit different situation because the defaults really do or are highly correlated with the performance. of the borrower as a student, right? So we see that most defaults or most significant defaults come from people who took out some student debt but didn't actually complete the degree or took out a degree or studied in an area that where the degree has has very limited value. So as the forbearance expires, I think the people who have well-paying jobs, college educated, you know, they do have student debt. I do see them as being able to restart their payments, but it's that group once again that has perhaps limited amount of student debt, but it doesn't have the income generation opportunity to service the debt.

So I think that will be a problem, but I don't see this as a problem that's any worse than what we had prior to the pandemic, again, because the labor market is relatively strong. First, anything to add to that? Any different perspectives? You disagree with any per cent? Back on the mortgage forbearance. So it's, you know, it's relatively small. So the number of people that are behind on mortgage payments is about 7 million people,

and that's a little under 8% of all households that have a mortgage. That's the Equifax data you're referring to? No, this is actually also from the CPS. the Pulse survey. Oh, the Pulse. Oh, the Pulse survey. Yeah. Yeah.

So this is, you know, this is very current as of a couple weeks ago. So there's 7 million people that are behind on their mortgage payment. And almost like 40% of them, a little less than half of them, are unemployed currently. So, I mean, I think you can, you know, you can clearly see how helpful some of these programs have been just to get us through the past year and a half. on this stuff. But I think that's still a relatively small percentage of all homeowners, mortgage owners. And I think, like Chris said, just given the increase in asset values over the past couple of years, you know, I think that becomes less of a worry when this does start to roll off. You know, Marissa, I don't think I'd be using that data. I'm not sure.

Seven million. That's a lot. I mean, there's 49 million people. people with mortgages. So 7% would be a very high delinquency rate. Okay, well, it's, so it's, it's people that live in an owner occupied home that where there's a mortgage on the home. So it's, I think that it could be higher because you have multiple people in a household. Oh, that's what's going on. They're asking about, yeah, so they're asking individuals and they're asking about, does the household have a mortgage? Okay. Yeah, I think I would use our data or the Equifax data or the, which shows very low delinquency, you know, some of it because it's forbearance, but to your point, but I'm not sure I'd use that poll survey, just a little wary of it in that

context in terms of the numbers. Yeah, I wanted to look at it just because I wanted to cross it with the different kinds of stimulus and forbearance and fiscal health that's been offered to see how those people are not using it. Well, here's another statistic. This is from the Mortgage Bankers Association. There's 1.6 million people that are receiving some form of mortgage forbearance at this point in time. So that, and that's declining very quickly. You know, they release that data every single week.

It's falling pretty quickly. I think the delinquency rate is, or the forbearance rate is about three and a half percent, but that's coming in pretty quickly now at that point. So that makes me more consistent with what you're saying, that, you know, we're coming to the same place using different data, but I feel, you know, less worried. I think it is important to point out, though, that delinquency rates, loss rates, foreclosure rates are going to rise.

right? Because they are very, very low because of all this forbearance. And as that goes away, you know, they're going to rise simply just to normalize to kind of levels that prevailed prior to the pandemic. So that they're already rising. I mean, if you look at the Equifax data across all different kinds of household debt, they're rising. But from very, like you said, very, very low levels. But they're starting to tick up as people are, credit is expanding and people are spending again. Yeah. Okay. So we've talked about income and savings all feels pretty good, okay. You know, obviously higher income households, a lot more excess savings than lower income households, but across the board feels like we're moving in the right direction. We've talked about leverage

in debt, talked a little bit about the forbearance cliff. There again, feels like we're moving in the right direction. Everything feels pretty good. You know, not got a ways to go before we're back to normal, but we're headed in that direction. Let's talk about. the asset side of the household balance sheet. Of course, you know, assets are largely owned by, you know, a small part of the population, right? I mean, homeownership rates are 65%, so that means, you know, 35% of the population are renters. But if you look at stock holdings, only 50% of the population own any stock whatsoever, and the bulk of that is in the top, you know, 10% of the wealth distribution, you know, deposits and other savings account.

accounts and fixed income assets, again, pretty skewed. But there, that feels really, I mean, what's not to like about what's going on with asset prices, right? I mean, now I've got a couple of worries there, but before I express my worries, do you guys have any concerns about that? What's bugging you about the asset side of the balance sheet? Or is there nothing to worry about on the asset side? Well, one thing I would say is just as we're talking about excess saving with all these high-income households, very likely they'll invest some of that even further, right? So especially high-income households with that cash,

they're not going to have that sitting in a savings account. They're likely to invest it either back into equities or maybe into real estate. So, I mean, I think you're going to have more growth in. I got a good story there. My mother-law, my mother-law, you know, every time his CD rolls over, we'll call and say, what do I do with that money? So does my mom.

Well, this is what I tell her. I'm curious that you tell you your mom. I say, I say, I don't know. That's a good answer. I said, you know, because she's in her 90s, right? I mean, do you really want to invest in equities or even fixed income or, you know, so I said, well, my mom, you know, maybe just keep it in cash, you know. And she goes, she kind of says, oh, she was, she wanted to know about gold.

And I said, I'm not so sure. And she goes, what's this thing called Bitcoin? Oh, God. I know. He said, no, let's just, why don't we just keep it in cash? And she goes, well, okay, what is it you do for a living again? So, okay, how do you answer your mom when she asked that question? I tell her that she's paying a financial advisor to answer these questions and go ask him.

No, I mean, you know, I just like, it's just how much do you want liquid versus basically I told her just let it roll over and give him the money and have him invested. Yeah. Yeah. I don't know what it is, but anytime anyone ask me what I do, I said, I'm an economist. The first question is, what's going to happen with the stock market? Yeah. Yeah. Me too.

I am the wrong person. ask that question. Okay, Ryan, what's going to happen with the stock market, man? That's what everyone on this podcast wants to know what you think is going to happen with the equity market. I think it's going to keep going up until... It goes down. Exactly. I think the fourth quarter of this year is going to be rocky because you're going to have the Fed tapering. You're going to have the debt ceiling battle. But again, that's like, you know, the stock market, you know, corrections are normal. They haven't every, you know, one to two years on average since the 1970s. But, you know,

over time, and it's going to continue to climb. Okay, I got two worries. Well, I guess we were three. We just tackled one, and that is, well, what do I do with my savings? You know, what do I invest? That's one worry.

Second worry is, what happened to the wealth effect? And is there a, let me throw this out. This might be in the Anthemah, but could there be a, the wealth effect's been flipped on his head that, you know, the wealth effect is if I, if I'm wealthier, if the value of what I own increases, then I'm going to save less and spend more. Not, you know, it may not be a lot more, but I'm going to spend a little bit more, right? Because I'm wealthier.

You know, I'm prepared for retirement, my child's college education. I don't need to save as much. And historically, that is kind of sort of what happens, right? You know, stock prices go up, people's saving rates go down. House prices go up, savings rates go down, people spend more. That's not what we're observing now. fact, could it be flipped on its head because we were seeing boomers, people in their, you know, now in their, you know, late 50s in their 60s, early 70s, saying, hey, I'm worth a lot more than I was.

Do I really need to work anymore, particularly given this mess called the pandemic? And we have seen participation rates for people 55 years and old or really come down a lot, right? And they're not coming back, at least not so far. And that may be a pretty big hold to the labor market. So it's actually hurting growth, not helping growth. Am I on to something here? What do you guys think? Does that sound right to you?

It's kind of a negative wealth effect. Isn't there a positive spin to it, that particularly on the housing side, that people aren't using their house as an ATM anymore, which caused a lot of problems during the bubble, the housing bubble in the early 2000s. So it wouldn't be, you could make the argument that's actually a good thing that people are saving the wealth in their house instead of tapping it like an ATM. That's consistent with what I just said, though. Yeah, I think that's good though.

I'm not, yeah, okay. So you say, okay, so there is a, it's actually a negative wealth effect. It's not a positive wealth effect. That it's reducing higher wealth traditionally meant more spending, more growth. and now we're saying higher wealth means less spending, less growth. That's different. That's a big change. This sounds like you're saying it's a temporary thing.

Well, I don't know how temporary. Around the pandemic. Yeah. Well, I mean, it's temporary sort of what's temporary, though. I mean, it could play, it could be like the wealth effect could be flipped on and said for the next two, three, five years, right? I mean, depending. I also wonder if households really believe the wealth that the wealth gains that they have are real, right?

Sure, they have gains on paper, but I think increasingly people are worried about some type of, and expect some type of house price correction or adjustment or financial markets. They would expect to see some decline there. So perhaps they're not willing to spend these gains that look great on paper. Yeah. I mean, yeah, I'm sure you're, and that goes to my third concern, and that is, well, how resilient are these asset prices? How durable are these asset prices? I mean, it feels like they're disconnected increasingly from underlying fundamentals, you know, stock prices to corporate earnings, housing values to rents, you know, crypto to nothing, you know, so. That's where crypto is headed. To nothing. Right.

Yeah. $2 trillion market, though. It's crazy. I know it's crazy. Pitch. So what do you guys think? Am I on to something, do you think? In terms of maybe we should explore this in more detail.

I mean, because that would be different than anything we've experienced historical. To Maris's point, it could be. Temporary. Maybe the wealth effect, the lags are much longer. Yeah. Wasn't the stock market wealth effect, you know, over one to two years, they spent that money? Maybe it's a little bit longer than pre-pandemic. Right.

And it was interrupted by any spending that could have been done was interrupted by a pandemic. So I also wonder if there's a permanent shifting consumer's preferences, right? That's the pandemic, uh, influence conspicuous consumption and what people want to spend on, like more sensitivity to the climate, right? So they're not going to buy a flashy car perhaps. And so, Chris, that's definitely not your household. I mean. Yeah.

Come on. Just to take a look at your house. Ryan, doesn't he spend like, they're out of control over there in the Jericho's house. Yeah, I drove by the office the other day. There was a, there was a Tesla in the parking lot. I think. Who is that? I know it's not yours.

First thought was Chris. Yeah. Well, no, actually, Marissa, she's out of control over there. She's in, you know, Newport Beach, you know, all the she, she, she, restaurants and no. No? I am actually thinking of buying a fully electric. vehicle next year. Which are in California.

That's required. That's standard. Yeah. That's standard. Right. Exactly. All right. Well, I think we covered a lot of ground.

So bottom line, we're feeling pretty good about things. Obviously, again, you know, a lot of pressure on lower income households, minority households in particular. But, you know, and I don't, it's not fair to say abstracting from that issue because that is a big issue. So in aggregate, in total, the health of the American consumer is good and should support the economy going forward for the foreseeable future, right? Any disagreement with that? We're all on the same page.

Yep. I do have some concern about the eviction moratoriums. I think if there's one piece of all of this that concerns me, it's that. Yeah, it's a good point. I forgot to bring that up as part of the forebearance cliff that I was mentioning, the rental eviction moratorium. Because the Centers for DZ Control extended the national moratorium through early October, but it's challenged in the courts, you know, because it may not be constitutional for the CDC to do that. So it may expire earlier. And by our estimates, there are six and a half, seven million renters out there. And that is a lot of renters. You know, that there's, you know,

probably what, 48, 47, 48 million renters out there. So that's a lot of renters that, you know, are behind on their rent and at risk of being evicted.

So, yeah, I agree with you. That could be an issue. Yeah. All right. The funds are going to get allocated more quickly.

Congress had set aside. Yeah. Well, just to bring everyone up to speed on that one very quickly, because I know we're running out of time here is Congress and the administration, actually under the Trump administration, Congress, they passed a rental assistance of $25 billion. That was the December legislation. And then the March ARP, American Rescue Plan, they passed another over $20 billion. So if you add it all up, it's $45, $46 billion in rental assistance. And they're having a hard time getting that money out because it's being administered by state and local governments. And so the Treasury apartment is cutting checks, but then the checks are kind of sitting there. And I get it. There's a great piece I read yesterday about New York's rental assistance program dead in the water. They haven't

been able to get any money out because it's just, you know, do think about it for a second. It's not easy, right? You got to set up the, the, the, some kind of portal, you know, where people can go and apply. And then you got to, they got to, they got to, they got to, they got to, records on their income. Landlords have, have to participate. They, you know, you know, there's all, there's all kinds of issues, you know, just nitty gritty kind of issues involved in, you know, cutting a check to a landlord to help for back rent. And so it's not going so well. So I don't know. I think this is going to be tough for them to, you know, really get that money out quickly. So another reason to be a little nervous about that for sure. Yeah.

Okay, I'm cognizant of time. We have been chatting and my wife is peering through the door here saying, what's going on. She's been making sure the dogs don't bark. Mine's texting me. Great job. Great job. My wife was texting me if we're done yet. Oh, is that right?

Okay. Okay. I think we should, we should, Marissa, anything else you want to add here that we, we missed? Okay. Very good.

Pardon me? No. No. Okay. All right. Very good. And Chris's, have you noticed Chris has also gotten into emojis recently?

Yes. Nothing but emojis. I have noticed. I'm all into the emojis. I resist for a long time. Moji Maven. Actually, my wife, she's over here looking at me. She is the emoji maven.

She could really help you out, Chris, on, you know, what emojis you should be using. Oh, that's very interesting. Thumbs up. Okay, very good. All right, we're going to call out a podcast. Thanks, everyone. Take care. Talk to you next week.