Moody's Talks - Inside Economics - Vehicles and More Vehicles

Episode Date: January 21, 2022

Elaine Buckberg, Chief Economist of General Motors, joins Mark, Ryan, and Cris to discuss the vehicle industry. They breakdown what is going on with vehicle prices, supply chains, and the outlook for electric vehicles.Full episode transcript 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 Zandi, the chief economist of Moody's Analytics, and I'm joined, as per usual, with my two co-hosts. We've got Chris Duretis. Chris is the deputy chief economist. And Mr. Sweet, Brian Sweet, the director of real-time economics. Good to have you both. So how are you guys navigating Omicron? Is family okay? Everyone in school, childcare, any disruptions due to Ammocrine? No direct impact. Everyone is safe. Okay. No one's sick. But my wife's a family doctor, so she's pretty busy these days. I can imagine. Lots of cases. Yeah. And you, Ryan, everyone in school? Everyone's good. Everyone's healthy. The only issue we're running into is like getting tests. Because any runny nose, any cough, you have to have a negative COVID test to send them back. So finding those things are kind of tricky, but doesn't that, we're all good. So that means, you can ring the cowbell with abandoned today. I can. Everyone's out of the house or either at school or, you know. And we have a guest, Elaine Buckberg. Elaine is the chief economist of General Motors, GM. Elaine, good to have you.

Terrific to be here. Thanks for inviting me. I think you just scared her with the cowbell. I know. I'm sure she's wondering, what the heck is the cowbell all about? You want to explain, Ryan? So in a little bit, we'll play this game where we try to guess the stat of the week.

And when Mark gets it right, which is not very often, we bring a cowbell to celebrate. I had a good week of like 10 weeks ago, I thought. Yeah, when Chris was out, you were on a tear. I was on a tear. Yeah. Yeah. So, Elaine, this is a game we played just to make this work a little bit, you know, obviously pretty geeky and all over the economic statistics, particularly Ryan. Ryan is really down and dirty with the statistics.

But to make it a little more digestible for folks, we play this a bit of a game. And if you get, you know, each of us give a statistic. The rest of the group tries to determine what that statistic is. And if we get it right, then we have in the past rung the cowbell. So this was, and people, listeners are really into the cowbell. They want to hear the cowbell. So we'll see how that goes. but Elaine, thank you so much for joining.

And obviously, you know, we're going to dive deep into what's going on in the vehicle industry and no better person. Now, speak about that than you. How did you, how long have you been at GM? And can you give us just a general sense of how you got there? I'm really curious your path to becoming chief economist of GM. I've been there for almost four years. It's been a great experience. The auto is really complex and therefore fascinating for an economist.

And we're in all these both product markets and we're also in factor markets and globally. So it's really great as an economist. I've done a lot of different things all in economics in my career. After my PhD, I started at the IMF. I was in the markets at Morgan Stanley as a currency strategist. I spent a bunch of microeconomic years in construction. consulting near Enbrattle. But I also spent several years at the U.S. Treasury Department from 2013 to 2016

as Deputy Assistant Secretary in Treasury's Office of Economic Policy. And I think that more than anything else really prepared me for the breath of working at GM, although, frankly, everything I've ever done comes to pair. Who was Treasury Secretary when you were there? Who was? Undersecretary, Lou. Who is Treasury Secretary? Secretary Lou.

Oh, Lou. Sorry, I missed that. Actually, I saw him the other night. I'm on a... Are you doing? Yeah, yeah. I'm on a group, in a group that he belongs to, that interfaces with Chinese economists and colleagues.

It's the same group that sponsors. the ping pong tournaments back in the 70s between the U.S. and China that kind of opened up conversations. And he's a member of that group. So I just saw him the other, was it last night or the night before last? Yeah. So great guy. It's a great person. Yeah, a great, very nice fellow. And so you have such a very interesting background. And since you were a currency analyst, I got. got a question for you on that that's been bothering me. Or maybe it's just, I've got this wrong, but my kind of cursory view of the currency landscape

is that currency, currencies, except for crypto, if you consider crypto or currency, other than crypto, currency markets have been very stable. I mean, shockingly stable, right? given all the things that are going on in the world, the pandemic and, you know, everything else, the, you know, the U.S. And maybe I'm looking at this obviously is the prism of the U.S. dollar, but U.S. dollar euro, U.S. dollar yen, U.S. dollar one, all seem like they're pretty stable. Is, does that, does that come to mind, has that struck you, that same, if you come to that same

observation? Is that something like that? I mean, if you think about it more in terms of emerging, market currencies versus the dollar emerging market currencies versus advanced economy currencies. So rather than comparing the U.S. dollar to the euro and the yen, compare the dollar and the euro in the end to, you know, a basket, including the Brazilian Reel and, you know, the Mexican peso and so on. I think there have been really huge movements over the course of this. And if you looked at, you know, if you go in your Bloomberg and do DXY currency GP and look at the trade weighted dollar, the fluctuations over the course of the pandemic have actually been pretty big. And there have been pretty massive swings in emerging market currencies as their, you know, safe haven flows to the dollar and to other currencies.

So my kind of, in my mind's eye, I don't have it quite right. But against DM currencies and developed market currencies, do I have more stable? More stable. And not surprisingly to you in the context of everything that's going on, I guess central bank policies have been pretty well coordinated. I mean, everyone's done the same thing. So maybe that's the reason why. Right.

I mean, U.S. prospect, you know, among advanced economies, the U.S. was relatively early in getting to a large amount of vaccination. our equity markets as a result have done disproportionately well. So that helps attract some capital flows. But, you know, otherwise, it's not that surprising because they're certainly right now, advanced economies are way more similar to each other than they are to all of the economies that have had less vaccine access. Although the likes of Mexico and Brazil and so,

and a lot of your middle income economies have caught up a lot on the vaccine access. great okay so i've just in my mind's eye just i need to go back and look a little closer just a yeah i'm sure i got it wrong i mean it's very i'm being very broad brush here yeah so yeah yeah yeah i'm no longer um catching the hour to hour movements and currency which i'm sure was a lot of fun when you were doing it it was fun while you're doing it so hey so do you have any great stories from treasury like any things that are particularly memorable that you can share with us in terms of your standard. My favorite memory is that I worked on the Build America Infrastructure Initiative

and on, I believe, was July, I know, it was June 14th, I think of 2015. President Obama made a big announcement around the initiative and some of the executive measures that were being taken to try to advance more use of private investment in infrastructure in a period where it had been really hard to get Congress to improve infrastructure funding. And he made this announcement in Delaware. And I and my team and others on the Treasury team had worked intensely on this, especially with the White House and with U.S. DOT. And I and two colleagues went with Secretary Liu to Delaware in, you know, for this announcement

and seeing the president announce what you've been working on for really a year is pretty impactful. That was a very special moment. Yeah, that's very cool. Very cool. Well, great. Well, thanks again for joining. Let's dive right into the statistics in the game. And it was a little light on statistics.

this week, I thought. Very light. Very light. So that makes the game a little trickier, I think. But let's give it a shot. And who wants to go first? You, Ryan, or Chris? We're going to let Chris go first because it was a housing week, so we know where he's going.

We know what he's going to do. He's probably going to take my statistic. Go ahead. Go ahead, Chris. All right. Ready? 43. 42.2 weeks.

Oh, that's all right. I got that one. I knew you were going there. I know. But that was a light week, you know. No, but it's also good. It's a good number. Right.

See, Elaine, how deep these guys are into the arcana of the data. It's got to do, you know, just a hint. You know, if it's Chris, it's probably housing. Not this time. It's definitely not average weeks. The listing is on. So. Oh, okay.

That can't be. Number of consecutive weeks housing prices are up. He went autos. I'm sticking to the rules of the game. Yeah. This is a good number. It's a good one to talk about. Is this about affordability?

It is. Oh, and is this the number of weeks of income people need to afford a new vehicle? It is. Average price. Hey, where's the cowbell, my friend? Where's the cowbell? Yeah. Elaine, does that, does that, does that, you probably knew that statistic.

You probably know that by heart. That the, the 43 weeks. No? I know. It's around there. Most hard. Right. Exactly.

Well, we're definitely coming back to that, right? Because we have to talk about these vehicle prices. I mean, they're just... Yeah, so if we're not restricted to this week's data, 37.3%. Oh, that's your statistic. You're playing. Oh. Oh, okay.

Oh, wait a second. 37. Increasing use car prices. Is that what it is, Elaine? Is it the increase of year, December over December. Oh my gosh, we're really rocking and rolling. We're on fire. Is that the Mannheim Use Cart Index?

No, no, that's CPI. Manheim's about 49. Yeah. Oh, the CPI reviews. No, Mann has 45-9 year every year on the most recent reading. So the auction prices are up somewhat more than the retail market at this moment. Right. So the Mannheim Index is a index based on auctions of used vehicle.

And you're saying that's up 45, 50%. Yeah, something like that. Yeah. Between 47 and 49 on the most recent reading. Yeah. And in the use vehicle price that goes into the consumer price index, the CPI, which is, you know, what most of us kind of focus on. It's up 37.3% December over December. Right.

Yeah. The relative cost of a used vehicle to a new vehicle, controlling for, content and quality historically is around one-to-one, as you'd expect, because there's some buyers who are going to substitute. So you want to guess what the answer is about the relative price now? I'm changing the game a little. This is the relative price to have used cars to new cars, quality controlled, quality and content controlled.

And that's usually... Out of the CPI data. And this is usually one-for-one, as you would expect. Historically, it's about one. The market works. You know, prices. Yeah. About 10% of, about 10% of buyers go into a purchase undecided between new and

used. And they are effectively normally arbitraishing away the difference. Got it. So right now, I'd say used is 50% higher, 1.5 relative to new. Is I'm just guessing? Said, what do you guys want to guess? You guys guess? I was close.

Yeah, I was a go to two. Two? Yeah. Two times. Wow. Oh, wow. I can't believe how higher you're guessing. It's 21% higher.

But even so, like that's a pretty, that's a huge gap. You guys, might even shocky. More shockless. Yeah, I mean, I think we all have maybe personal anecdotes here. Like my dad, he sold his three-year-old Toyota Camry with, I think, close to $30, $35,000 mileage on it for more than he bought it three years ago. I mean, that's just wacko. Yeah, Marcus Wacko. But we're going to come back to that because we've got to dig.

We can talk more about the healing of the markets. Yeah. We'll come back to that in just a minute after we finish the game. But you played the, Elaine, you played the game admirably, I'd have to say. That was good. Well done. I don't know if it goes to Cal Bell status, but, you know, that was good. That was really good.

Ryan, do you want to give me your statistic? Give us your statistic? All right. I went with 9%. 9%. I'm going to warn you, this one's really hard, but it's really important. Automotive related? No, it's not.

It's labor market related. It came out this week, you're saying? It did. UI claims related? By the way, UI claims are up a lot, right? Well, this kind of explains why. Oh, say it again, 9.2%. No, no, just 9%.

9% Since January 2021. Okay, so this has got to be number of sick people, something related with sick Amacron people, folks that are related to Omicron.

It's related to Ammacron. Eccentism? Nope. It's a household pulse. It is, Chris. You're getting closer. Okay. Getting there.

That surveys of just a treasure trove of interesting data is. Is that the, it's not the percent of the labor force. Oh, yes, it is. It's the percent of the labor force that's not working because they're sick, taking care of a sick person, or fearful of getting sick. That's an excellent guess, but that's not it.

That was a good one, though. But while we're on that number, I think it was over 8 million people in the latest survey, and it's weekly that were not at work because of either they were sick or caring for someone that is sick. So we're setting up for a dozy of a January number, employment number. Yeah. Hey, wait a second. This is this is the time for me to say at Mark Zan. There we go. There we go. Never fails. Yeah, Elaine. So I got my Twitter handle 10 years ago, never used it. Two months ago, I said, okay, I'm going to start using this thing because everyone's telling me I should use this thing. And it's at Mark Zaney. So every chance I get, I plug it. Not that it helps any, but you know, I plug it. Are you on Twitter? Are you on Twitter? I am, but I'm a reader. Not a tweeter. You're not a Twitter, a tweeter. A tweeter.

Okay. All right. So I did tweet out this morning. I looked at that data, the Pulse survey data, and you're right, it's a treasure trove that the census has been doing the survey intermittently. You know, early on, they were doing it very, almost weekly, but now it's intermittent every few weeks. The last survey goes through January 10th.

And here's 12 million people that are not worked. So one of the set of the questions they ask is if you're not working, why aren't you working? Because this goes to the labor shortages. And 12, almost on the nose, 12 million people said they're not working because they're sick. They're taking care of a sick person or fearful of getting sick. And at the peak of Delta, just to give you context, it was 8 million, 8 million. So you're absolutely right. And that's, you're saying this, and this was the survey week for the Bureau of Labor Statistics.

It was. Employment report. Right. Yeah. So you're saying because there's so many people not working because they're sick or fearful getting sick, that that's going to mean. So are you for you, you expect January employment to could be, could decline. Yeah. And this number, the 9% also gets to why jobless claims are up to 286,000.

Oh yeah, we got to go back to 9%. So the 9% I don't know what that is. I won't make you guys suffer. It is. Okay. Okay. Nine percent of small businesses in restaurants closed temporarily last week, or in the survey week for the poll. Of course. Of course. Of course. Yeah. How did I not get that? It was a lightly week for numbers. Oh, come on. That's crazy. That's an important number.

Oh, wait, wait, wait. What was the number again? Nine percent of what? Small businesses in restaurants, small businesses is in restaurants and accommodations, closed temporarily. Hold it. I didn't even know that data is in the poll survey? So it's the highest

since January of last year. Hold it. So you can look at data across company size. I did not know that. Huh. I'm here to educate.

That is really good to know. Yeah, it's fascinating data. Yeah. Anything else that stand out from that company size? What about pricing?

Do they have any data on, well, I can't imagine they ask that. No, I don't think they have. Yeah. Right.

Oh, that's pretty cool. Yeah, but I always go to that and the labor market questions. Yeah, right, right. I mean, I use it, as you say, it's an incredible data set. And I was just telling the Commerce Department that they've got to keep doing this, you know, even after the pandemic is over. They don't need to do it every two weeks, but please, you know, maybe once a quarter would be nice.

I mean, it really gives you a nice window into what's going. on in the world. But that's pretty cool. Okay. Anything else on that, Ryan, you want to bring up? Once a month, please. You go for once a month? Okay. Yeah. Would you pay for it, Elaine? Would GM any up? No. I don't know if we've ever paid for any special questions. I know. That's what I said to the commerce guys. I said, I have no idea how much it costs. So I'm going to hold on that one. Yeah, I said to them, look, you know, because I have no budget constraint. Could you please do this for So, but yeah, that would be really, really valuable. Okay, you want my statistic?

Yeah. Back to normal index. Here we come. No, I'm not going to do that one. Which we can talk about, by the way. We probably should talk about. And here's the number. 1.52 million.

1.52 million. It is a statistic that came out this week. So it's housing starts related. Yes, it is. All right. Yeah. Now, how did you jump, right from $1.5.2 million to those housing search related.

That's how your mind works. It's just like, I don't know how it works, but yeah, when I hear 1.5. Yeah, no, I mean, that's single family? No, that's, no, single family was one point, almost two million. Yeah. That was starts in the month. We're talking single family housing starts in the month of December was, I think it was 1.17, I think, or something like that, pretty close.

to that. But no, I'm 1.5.2 million. This is housing starts related. This is for the month of December. It was a pretty solid report. We got 1.7 million starts in the month. And that feels like where we are now, 1.7 million. Didn't we have some kind of bet around housing starts or something? Wasn't I right? Didn't I say? You are still wrong. I'm still wrong. I'm still wrong. I said 1.7 million average over. over 2021 and 2022. So we got to get a boatload of starts here. Oh, no, we, no, I'm going to be right.

We're at 1.7 million halfway through, so you just do the arithmetic. No? So we're going to, okay. 1-8, 1-9? All right. No, no, no, I'll stick with the 1-7. I'll stick with the 1-7.

But we will be much higher than this by the end of the year. But you need average. You need average. Yeah. I think this is a big. I'm going to claim a victory here. No? I think it's a little pretty sure.

Okay. All right. So what was it? $1.5.2 million. This is a, this goes to my point. Huh? Oh, to support your forecast? So it's got to be starts under construction?

Yes. All right. Beautiful. It's housing starts that are in the pipeline, you know, headed towards completion. It is the highest it's ever been since the early 70s. And it's still rising, you know, very quickly. I mean, obviously this goes to the supply, global supply chain issues, you know, building materials.

It goes to labor supply issues, construction trades, that kind of thing. Builders can't get things that they've started across the finish line into completion. So it's building up in the pipeline. But there is a lot of property in the pipeline. Just think about that for a second. One point five two million starts or homes that are in the pipeline. That's about a year's supply, the current rate, right? we're at 1.7, but you know, pretty close. And that 1.5 million, by the way, is our estimate,

at least my estimate of the under supply in the market today in terms of affordable housing. So it just feels like we're going to get a lot of supply here. And by the way, a lot of that's on the multifamily side. I don't know if you've kind of noticed this, but multifamily is gangbusters. I mean, 500, 550,000. That's really high by an historical standard. So we're all kind of hand-wringing about rents and rent's going to go into CPI, rents. and add to inflation. And I think that's all true. But I think that's a 22 event.

As we get into 23 and 24, we're going to start seeing vacancy rates start to rise. And I think rent growth is going to come off pretty quickly at that point. You know, there's a long lag, but it's going to come off at that point. Anyway, that's a great number. That's a good, right? That's a good number. Yeah.

A good number. Elaine, they never give me a compliment. They never give me a compliment. So that's. Well, you would get one if you had good numbers. numbers. See, see, now we're back to what the way this is typically what happened. And you know, Elaine, I'm the chief economist too. Look what's happened. Look at how I'm treated. You've obviously created an environment where your staff can express their views. Feel free to disagree that,

you know, their leaders open to new ideas. You're an excellent leader. That's one way of looking at it, I guess. Jeez. And also you and I've been working together for 17 years. So at some point. It's got to be a, yeah. Yeah. Yeah. Got to be.

Well, I think you should talk about the back to normal index. Really? Okay. Yeah, it's 91.2. Yeah. Okay. So, Elaine, we put together this back to normal. The so-called back-to-normal index.

We've been doing it since the pandemic. It's a compilation of government statistics, third-party data, you know, everything from TSA, number of people going through TSA checkpoints to open table. to, you know, a lot of different statistics. It's daily data. We index it to equal 100 as of February 29th, 2020, like, you know, right before the pandemic. 100 would be, we're back to normal. Totally back to normal.

And interestingly, if you go back before Thanksgiving, we were 96%, 7, 98%. We're now back down to 91%. And that's Amicron and, you know, shows us how, you know, painful this. is. It's really crimping, crumping our economy's growth. How about Florida? It's Florida. It's everywhere's down. I think Florida less down. I mean, it's really mostly down in the air. Like New York and PA and Chicago, Illinois, you know, those areas that have been hit hard by on Macron. Florida is at 97.4. Yeah. So it was over 100, I think it was. Yeah, it was over 100, but it's back down again. It was interesting to know whether the correlation is greater with the number

of infections or sort of how how tight or loose restrictions ever were in that place where I think voluntary behavior has followed the you know, path set by the initial restrictions in terms of just sort of peer pressure in standard setting. Well, there is a very clear inverse relationship between the BNI index, back normal index, and infections. you know, by state. So if you just do a scatter plot of states, more infections, you know, per whatever, 100, per thousand people, you can see the BNI is the lower in those areas. So it's pretty clear that the, you know, we're the Omicron is now doing a fair amount of damage.

Hey, Ryan, since I have you, and I know your favorite statistic is the 10-year treasury yield. And of course, that has moved in a pretty big way. I noticed back down today, we're down to 1.75%. We had been close to 1.9, but we were up a lot from where we were just a few weeks ago. And I know you do this decomposition of the 10-year treasury yield and the different parts, components of the yield. What's driving this increase that we're observing now? What's going on? So the two main things are higher inflation expectations, which are just following oil prices higher, and then an increase in the term premium. So the term premium is the extra compensation investors need to hold long-term treasuries versus short-term. And that's gone up.

And that gets back to the Fed signaling that they're going to wind down and end the tapering process in March. And then shortly after the first rate hike, start shrinking the balance sheet. So the term premium is starting to go back up closer to zero. Oh, is it really? It's that far, it's back up close to zero. I didn't realize. Oh, we're moving in that direction. Moving in that direction. So there's the, you decompose 10-year yields into inflation expectations. Correct. And they've moved up, but they're still, I think, consistent with Fed target, right? They're just still 2%. Yeah. And then you said term premium. And then the third is real short term interest

rates. So short term interest rates after inflation. They have they moved? They're really negative. No, not too much. Explain this to me. What, I mean, I don't get it. I mean, the Fed saying I'm going to start normalizing and a step on the brakes. They're even, you know, they're saying, I guess the market is saying, I don't believe you, Fed, you're never going to be able to raise rates like you say you're going to raise rates? Is that what's going on? I don't get it. No, the market's bought in.

I mean, if you look at Fed funds features, they fully priced in a full percentage point of rate hikes this year. Okay. Yeah, but I guess the terminal rate is lower, right? Yeah. Yeah, the market's view of the terminal rate is lower than ours. So we and the Fed say, when I say the Fed, the members of the FMC, produce a forecast every quarter say,

in the long run, as we get back to full employment, inflation back to target, the federal funds rate target should be 2.5%. And that's consistent with what we've said. And the market is saying investors are saying, no, it's like a point below that or something. And I think that's the difference, isn't it? You know, that's why we're not, but I just don't understand. So I guess investors just don't believe the fact can get us back to anything normal. Yeah. Yeah, so I think the market is saying, we believe you, that you're going to raise a this year, but we don't think you're going to be able to get as high as you think you will in the long run. Yeah. Interesting. But also suggests, though, that that seems to be a signal of

long-term inflation expectations coming down really low, other than that's a negative real rate. Yeah. That's a great point. Yeah. Yeah. That's right. That's right. If you look at inflation swap curves, the market's buying into the idea that inflation is going to come back down to where it was you know, pre-pandemics. And we're not in this new inflation regime. No. Okay. Okay.

That was great. I think we should move on and dig into the big topic, which is the, you know, obviously the vehicle industry. And a lot of things we want to cover here, electric vehicles and, you know, maybe a little around autonomous cars. We'll get to that. But top of mind has got to be those vehicle prices we were talking about earlier because they are a big contributor to the acceleration.

in overall inflation. And just to kind of frame this, consumer price inflation, CPI inflation is 7%, that's year over year through the month of December. And correct me if I'm wrong, but I believe about 20, 25% of the acceleration in inflation is directly related to the exponential increase in vehicle prices over the past year. Is that roughly right? know, Elaine? I haven't calculated it that way, but that's generally right, right?

It's been a really big contributor. And frankly, in third quarter GDP, the slowdowns in production at that time, which we can talk about and how things have improved, we're also the single largest drag on GDP. So the chip crisis and its repercussions for production, inventory, sales, and the feedback effects and the used card market have been very important, both for inflation and GDP. So that's fundamentally what's going on here. The prices are going up because vehicle manufacturers like GM can't produce enough cars, and that goes directly back to the chip industry and the shortages in the chip industry?

In general, that's right. But I would say that there have been real improvements in chip supply and production now compared to really the worst of it, was the third quarter. So I can start digging in here if you'd like. Yeah, yeah, yeah. Yeah, I'm really, yeah. Yeah, what's going on?

Yeah. So a little over a year ago, was when issues really first started arising about chip supply into the auto market and that that could be a production constraint in 2021. Frankly, it was a more complicated problem because the pandemic exacerbated. So fundamentally you have a structural problem

where both consumer electronics and vehicles are increasingly chip intensive. And for vehicles, one way you think about it is there's all this desired technology that people want in their vehicles. They want to buy a vehicle that has sideblind spot alert and front and collision prevention. And they want to buy a truck

with 360-degree cameras so they can park and trailer well. And they want a computer screen like dashboard. And so all of this increases chip content. Only Chris. Only Chris DeReedys wants that. In fact, we actually think that over the next few years, the chip content in our vehicles will literally be doubling.

At the same time, similar things are happening in consumer electronics. and a newer top-end self, you know, smartphone has about twice as much ship content as one a couple years ago or a generation before. Take all of that and then you have some production disruptions due to lockdowns in 2020 and a huge increase in consumer electronics demand. And that's really the start of the problems. that chip makers had difficulty serving all of their demand with these sudden changes during the pandemic. And then over the course of the year, there were additional disruptions to a stress system.

So there was the Texas deep freeze that caused some Texas-based chip suppliers to have to take their plants down and not really get back to full production for months because it's very delicate stuff. So it's not like that's shutting down your computer and turning it back on 15 seconds later. And then there was a fire at a major chip maker for auto in Japan. And then perhaps most severely of all in the late summer, the Delta wave that hit Malaysia and some other Southeast Asian countries and resulted in complete shutdowns of plants for some period and then operating at limited capacity really put stress on virtually every automaker in terms of their ability to supply the set of chips that would go into. to vehicles for vehicle production and caused a lot of plant downtime across the globe and across automakers, which is really what hurt that third quarter production in the U.S. around the globe and made the market especially tight in the fourth quarter.

And it's important to keep in mind that in order to make a vehicle, you need a set of chips, a set of distinct chips. And that that's one of the challenges. So when you've got a stress system and you've got stress all over the place. It becomes harder to handle the next impact. However, I will say that things have improved considerably in the fourth quarter in this year. Because that, yeah, you know, we need to, I'd love to hear about that. But so it feels like there's a lot of obviously moving parts here and lots of reasons for, you know, the shortage of

chips and the impact on production and on prices. But it feels like you kind of landed at the most important reason, and that's the delta wave and the damage it did to Asia. And you mentioned Southeast Asia. Does that, is that a fair characterization? Yeah. And in particular, the worst, the worst of the problems really happened in the late summer. And in Malaysia, in particular, where many chips passed through, the government completely shut production at chip plants for a couple weeks, roughly, and then held it at 60% capacity. But, Malaysia, can I give credit to Malaysia? They did an astounding job on vaccinations. So they went from like 5% vaccinated in about July 1 to when they fully reopened the economy in some point in October,

they were at 90% vaccination. So they just did an incredible job. And frankly, through, I don't know whether it's Gavi or, you know, what organization, but vaccines got to that country and got prioritized to that country. Yeah. I mean, I tell this story, and I think it's this anecdote, and I know it's another auto maker, but the F-150, which is obviously a very important, I think it's maybe the best seller. I don't know in the U.S.

It's a Ford, obviously. That relies on chips coming from two Malaysian chip plants, largely, and those chip plants were just shut down, that Malaysians, because they weren't vaccinated and they were scared. by the Delta wave and what it was doing, shut things down, and that really disrupted F-150 production and obviously no inventory and higher prices. I'm sure that the F-150 relies on chips that come from many places.

Yeah. But I'm sure that those were critical chips without which they couldn't make a vehicle or they couldn't even nearly make the vehicle with the intention to retrofit it. And that's when you take downtime. Yeah. But the situation...

Yeah. I want to go, before you go there, one more question, just to press you a little bit, to take it a little broader to the impact on inflation that we're observing now. There's this raging debate, you know, in the economics community as to what's behind the higher inflation. Is it demand or supply? And obviously, that simplifies things enormously. It's both demand and supply. And here's how I characterize it. And I just want to get your reaction to it. Although I'm scared after you told me that currency movements. I'm wrong about currency movements. So I'm a little nervous, but here, here's how I characterize it. A year ago, about a year ago, inflation started to really pick up. And that was a demand,

primarily a demand side phenomena, vaccine rollout, reopening, businesses that at slash prices during the pandemic. You know, think hotels, think rental cars, they just normalize prices. And that is a one-time bump to inflation. Then you had the American Rescue Plan. And that was the stimulus support, almost $2 trillion back in March of last year. That really juiced up demand significantly. And so that added to inflation. But at that point, the run-up inflation wasn't really kind of top of mind. It wasn't in the kind of normal discourse.

It was almost a feature, not a bug, because, you know, the Fed had been working hard to get inflation up. And here we finally got inflation up to a place where, you know, we might feel more comfortable with. And we felt like it was going to come back in as, you know, the demand. support faded and it's already fading. But then the thing that really was a surprise was Delta. Delta, we thought the pandemic was, well, I was hoping it was over. And, you know, the administration was saying, you know, go enjoy July 4th. But the Delta

wave was already in train. And that really did a lot of damage to labor markets. People got sick. And most importantly, to supply chains going back to what we just talked about in Malaysia and the chips in the vehicle industry. So the inflation problem that we're observing now that is made at top of mind is supply. It's the supply side effects of the pandemic that's evident in labor markets and global supply chains. Okay, I'll stop. What do you think of that kind of narrative? So first of all, in terms of bringing inflation down, not just an auto, but across the economy,

I think it's all about resolving supply chain issues and that you can bring down in large parts of the economy that have particularly contributed to inflation, especially goods. You can bring down inflation or in some cases even see prices reverse, even if you're still going to have some upward pressure associated with higher wages, especially at, you know, the lower end of the spectrum. and hitting services. With respect specifically to auto, of course it's a supply demand mismatch. But I think, especially later in the year, the hits are really coming from supplies.

So you had fundamentally strong demand conditions. And frankly, you went into 2021 with low inventories. So just look back at 2020 for a second. You lose 24% of U.S. auto production days due to lockdowns. demand is down 15% for the year. So already your inventory shrunk by the time you finished 2020. And there was a real premium placed on private transportation versus, you know, public

transportation and you had people moving out of cities to places where they might need to rely on vehicles more. So that's what you go into the year with. And then you have strong fundamental demand conditions, especially as you have stimulus checks, you have lots of savings. I mean, think about just the 2021 stimulus payments that went to 85 to 90 percent of households. Family of $8,000. If you're a household that hasn't been hit financially by the pandemic, that's a big windfall that can be spent on something not so easy necessarily to spend it on some of the services.

you used to spend, but you can spend it on a vehicle. So in addition, ample jobs, the optimism of vaccination. So lots of reasons for really fundamentally strong demand conditions. So I would have been forecasting record sales, but for supply constraints. So then you have these supply constraints. And it's like it's a crisis with multiple waves. And you've had these, you know, there are always shocks to the auto supply chain. which is very complex, but this was a lot of shocks to one particular part of the supply chain,

which each one, as the system becomes more stressed, is harder to take. So, yeah, I think that's a supply constraint as a bigger consideration. And certainly that's the consideration later in the year is you have more, you had more plant downtime in the third quarter and early in the fourth quarter associated with the delta wave and supply chain issues than you had earlier. And that's when your inventories really got to about 1.1, 1.2 million. Many dealer lots are empty. And prices started ramping up more on the consumer side.

And that's a combination of, you know, you've got this constrained supply. You have lower incentives. You have dealers taking more prices. Incentives come from the automakers. Dealers also taking more price. and basically vehicles being pre-sold before they hit the dealer law. And not a lot of ability to substitute into the used vehicle market, especially because if fewer vehicles are being sold,

fewer vehicles are being traded in and moving, you know, those near new vehicles moving into that used vehicle market. But I do want to talk about, I want you to get to talking about the future. Yeah, yeah, yeah. So it feels like you're going to give us an more upbeat kind of picture here. So, yeah, fire away. Please do. I mean, chip supply has improved.

All the automakers have been working on this. And we haven't had a new wave of problems. And the fact that there's more widespread vaccination around the globe and also more people have been exposed to the virus, reduce the odds of future lockdowns or their severity. So chip supply improved in the fourth quarter. It has improved more in the first quarter. The outlook for this year is better. Still some fluidity, but definitely the outlook's better.

At GM, we have all of our North American plants, but for one, operating on normal schedules. We're doing weekend overtime at many of them, including our full-sized truck and SUV plants. We're adding shifts back into plants. And then when I look across automakers, there's only one. one that I'm aware of that has planned downtime announced in North America for something related to supply chain versus normal vehicle transitions or something at the moment. So it's a much better outlook. So typically pre-pandemic, we were selling and presumably globally producing 17 million units.

This is new, light vehicles. We were there up through May, April, May of 2021, and then it collapsed because of the supply shortages we have and all the things you described. In December, we were down to $12.4 million, I believe. I think that was the last night I looked. Are you saying now that we are producing pretty close to a level that we can now start selling again 17 million units at least? because we're back to typical, except for a few cases, we're back to kind of typical production levels. Is that sound right? I think we're close. We're close.

I think we're close. Of course, we won't build inventory with that. Yeah. You know, much closer to that typical level of recent years of 17 million. Okay. So we're going to see we are, I feel like globally, I can see auto production picking up in many parts of the world. And so you're saying in the next few months, we've, should start to see vehicle sale units kind of normalized, starting to get back to that kind of

17 million units pace. Right. I think, you know, again, inventories super low. Many dealers have bear lots. So it's really the throughput from plants or coming off, you know, to the extent of vehicles are being sold in the market, imported. It's that through foot that is determining sales. And, you know, they're pretty much selling immediately, never been faster turn rates. So productions higher, sales will be higher. Cool. And that also would should mean that even if inventories were to flatline and every new vehicle made were to be sold on that, that should take pressure off new vehicle prices.

Right. So are you, now do you think this is enough to bring prices down? Yeah. Do you think it brings prices down or do you think it just stabilized prices? Do we need inventory to increase before prices come in? You know, it's ultimately a lot of that is about the competitive dynamics. Okay. Right.

So not only are automakers like GM deciding the incentives that we offer into the market, which are effectively discounts off a vehicle, you know, sold by one of our dealers, those are, you know, calibrated on very high frequency, right? So competitive dynamics can affect that. And even more so competitive dynamics will affect. where dealers want to sell vehicles. So JD Power does put out statistics on dealer markup over dealer cost. And the historical norm is about 1% in the latest readings are 9%.

So they have the capacity to negotiate that based on immediate competitive conditions. And when I talk to dealers, they say, you know, when you ask me, they're like, what depends on the inventory of the guy across the street who's selling, you know, one. they'll be very subtly and continuously reactive to changing competitive conditions. It's also worth looking at the ratio of ETP or average transaction price to MSRP or manufactured retail price. And historical norm going back, you know, if you went back the five years before the pandemic, is 85%. So effectively a 15% discount off 18%.

of MSRP. At the moment, 100.1. Yeah, right. Right. So that's a big move up. That's compression of incentives, but also dealers pricing differently in relation to their cost. Got it.

Does the industry have the capability to reasonably increase production over that 17 million unit pace? I mean, can the industry do that? Or is that pretty much? In general, yes. Yes, okay. Does the chip supply currently allow that? I think not.

But, you know, all the dynamics hold. I don't think that in 2022. Not in 2022. Okay. But there are things that we're doing. I mean, so at GM, we've been really changing the nature of how we are acquiring the chips for our vehicles. And for example, we already had a, we had a big announcement back in late November,

early December about microprocessor units, which are one kind of chip. And we have gone directly into the design and are working with chip makers to manufacture those chips. And we are reducing by 95 percent the number of unique different microcontrollers that go into our vehicles. So much more standardization across vehicles working directly with seven chip makers on that design and manufacture. And actually much, you know, more substitute ability, more stability over time. and a lot less engineering, so a lot of efficiencies. And we're carrying this across, you know, this approach across other kinds of chips. And other automakers have made similar announcements to really de-risk our own supply chain.

Makes sense. And again, you know, I talked about that needing the right set of chips to go into your vehicles. This helps with that. Got it. So you're saying going forward, we're going to be in a much better spot if we ever get into another scrape, whatever it's going to cause that. Yeah. One other question, and I do want to get to EVs in just a minute, but this is very, very helpful.

Penn up demand. So, you know, there's demand. It can be satisfied because there was no supply. So if we're at 17 million, let's just say that's revealed demand. That's what we should be getting. We've gotten, we're down to 12-4 in December. You do a little bit of arithmetic. You know, that's about a million and a half units that cars that have not been sold that could have

sell so that presumably that's what I would call pent up demand. Those consumers will buy it when they can get it at a reasonable price. So it's $1.5 million. That's about, that's a lot of cars. And that's not enough because you've got to be looking at pent up demand from last year. Oh, well, in, oh, yeah, I didn't even look at 2020. I was just looking at 2020.

So the accumulated pent up demand is, is in the low single-ded, at millions. It's north at two. Oh, okay. Yeah, you're right. I didn't, you're right. I just did this quickly before we got on. And I didn't even think about 2020, but you're right, because the pandemic, right. So you're saying it's two, three million, something like that. Yeah, I'm not going to pin you down. I imagine a little higher there. Oh, geez. Okay. All right. Okay. So there's a lot of pent up demand and that'll be released as vehicles come available. And it's worth keeping in mind that, so, you know, our survey evidence, We've got a great market research team who runs questions for me.

Our survey incident tells that people buy a new vehicle, you know, for a variety of reasons. They want the latest safety technology. They like to have something new. Or they get to some place where they say, either I've got enough miles and I'm concerned about the risk of more maintenance or, you know, the maintenance time and costs have gotten so high. So people do want to replace their vehicles. And they're driving again.

So they may have put on less mileage in some cases in 2020. but since about July, August, if you look at, for example, gas sold, it's right in the heart of the normal historical range. And so people are moving around just as much as normal, maybe with some different patterns behind those. But people are using their vehicles and they're going to want to replace them. And when supply improves, pricing improves or they just decide, I don't feel like waiting any longer. I'm going to put in my custom order, they will be buying vehicles. Yeah, we've got this. A couple years of pants up demand, I think, to satisfy.

Yeah, I need you to talk to my auto guy. We've got this really good auto analyst, Mike Brisson. I don't know if you've met Mike, but he's really very good. Oh, I thought you were asking for a discount on a GM vehicle, Mark. I mean, I'd be happy to. Yeah, yeah. Well, he, he, I debate him all the time, and he comes back, and he's about pent up demand, in the vehicle industry. And I'd say, look, you know, if we're below 17 million units,

that's got to come back in some point down the road. We can talk about when, but, you know, that's got to come back. And he comes back and he says to me, look, and this probably applies to the 2020 kind of stock, the pent up demand we measure there, that people weren't driving, right? So you weren't depreciating your car. Like, I got a, you know, I lease my cars and I lease a car right before the pandemic. And I didn't, you know, I barely drive it anyway, but I didn't drive it at all. And so I didn't, you know, what do I do I, you know, with that? So is that, does that resonate with you? So first of all, I mean, Mark, I'll just be more forthcoming.

You know, I think pent up demand going into Ceres on the order of four million units going into the year. Okay. Okay. Mike, you hear this, Mike? I don't think production will, you know, again, great improvements in the chip situation, although still fluid, but it's not going to meet, it might, my supply constrained forecast is not going to meet what we might be, we might be, fundamental demand forecast. So you're going to exit the year with even more pent up demand. And again, new appreciation for having a vehicle for safe transportation. That kind of sense is not going to completely vanish. People have changed their geography in ways that with more people

living in the suburbs, they're more likely to need a bigger household fleet, whether it's going from zero to one or one to two or whatever it is. And they've developed new habits like liking to camp and boat and things that may require them to have more vehicles. And maybe they've figured out that actually driving on that trip versus flying, they've decided it's a better way to go. So fundamentally, I don't think that demand has changed. And again, I think also in terms of privately owned vehicles versus shared transportation,

whether it's ride hailing or taking the subway, I think that there's going to be a permanent preference shift to having a vehicle, even if sometimes you're using still shared transportation. You convince me. We've got to talk to Brisson, you know. We've got very strong vehicle, new vehicle forecast, but I suspect it's not strong enough based on this conversation.

But let's talk about electric vehicles. And I'm not sure how to start this conversation. Maybe I just, Chris, Ryan, Is there something, some way you want to ask this question around EVs? So I actually was thinking about it. So if we in fact do have 4 million units of penned up demand, so very strong pent up demand, is that still in the ICE and the internal combustion engine? Or is that shifted or have preferences shifted at the same time that we've had this

pandemic experience? So yeah, there's a lot of demand out there, but maybe it's more demand. So we have about a doubling of EV sales as a percentage of sales between 2020, where it was under 2% to, not sure I have a final number for 2021 yet, but more like 3.5% is about where I'd expect to land. And, you know, when the sales actually happen and how much they're deferred,

will determine to what extent their ice or EV vehicles. And the thing that's really changing is the number of vehicles that are available in the market with many new EVs coming to the market and in a more diverse set, so everyone's preferences can be. fit and that the EVs that are coming to market are increasingly more complete substitutes for an ice vehicle, especially in terms of having more battery costs have come down. We at GM and other

automakers can put more battery into an EV. And that means it can have a longer range. And it also means that we can bring out vehicles that serve a wider set of preference. So I proudly own a Chevrolet Bolt and love to drive it. And it's great for me, my husband and my small dog, right? But if I were going on a road trip, 15 hours to Florida with a family of five, wouldn't be a good fit, right? So there, right, there you want an SUV, right? We've got the Hummer SUV coming.

We've got the blazer coming in a few years, the e-blazer. but or you know you want to pick up truck as a style statement or a functional statement and you know you'll be able to buy an EV Hummer or an electric Silverado in the coming years so again the more they're deferred the more that the the number of models coming to market especially mainstream models is doubling every couple years of this point And so again, fitting all sets of preferences at the same time that the average range is going up. And in general, we find in our market research that when you give people 300 miles of range, they sort of say, okay, I'm good.

That'll serve all my needs. And I'm comfortable with that. And I'm happy to talk more also about, you know, charging. but all the things are driving towards continued shift of consumer preferences towards EVs, which see dramatically happening in our market research, and also continue to shift in the supply to meet those preferences. Right. So if that's the case, the 17 million number, which is overall, may not tell the real story, right?

If suddenly there's more demand for those electric vehicles and supply is still constrained because capacity is not up to the level. that they're still ramping up, you said? You have new models coming out in the future. Could we see price pressures continue? Because demand is still going to outstrip the supply. I mean, basically what you're saying is, would pricing on EVs go up? If, in fact, the demand is shifted.

Right, but the demand is there when you find the right, you know, for the right product. If, for example, you know, we've got a multi-year wait list on the Hummer EV. So, okay, there won't be, if you want to buy a Hummer EV, you're not probably getting incentives on it. But this applies also small. So it's not going to have a big impact on the CPI. Now, the big thing is whether and when we get the EV tax credit that's in, you know, what has been the build back better package would maybe in some smaller package. I don't know whether it'll, what name that will have.

But the EV tax credit, as in the most recent versions of the bill, $7,500 base credit, another $500, if the battery is made in the U.S., $4,500 more if it's U.S. and union made, as well as credits for used vehicles and commercial purchase of vehicles. This is a game changer and out through the end of 2031. So this is a big game changer in terms of the relative cost of an internal combustion vehicle to an EV vehicle. And compressing that price differential is like number one on the list of what consumers tell us that they want and would make them convert to an EV. Even more than more charging stations and greater range. You think it's more important. I mean, it's price differential. It's range.

It's making sure I have charging everywhere. Let's take that on in a second. And it's that I don't have to sacrifice what I want my vehicle to look like for it to be an EV. But that price differential is huge. And right now, currently law provides for up to $7,500 incentives, but only for the first 250 vehicles sold by an automaker. which means that those automakers, including GM, that really sort of produced winning vehicles,

no longer have it. So to say this will be in market for 10 years is really huge in terms of shifting adoption and changing that price differential and making more people willing to buy an EV. Another important thing is education. And as more people also realize how much cheaper owning an EV is,

both in terms of your fuel, cost and in terms of lower service needs and sort of just the ease of owning an EV, I think that will also really help when people, you know, people aren't great necessarily at present discounted value calculations and they can be myopic about costs, but if they really better understand the cost advantages of ownership and can think about that total ownership cost that will help. But it sounds like you feel like, I'm using a little economic charge. and the price elasticity here is pretty high for EVs,

meaning it's quite sensitive to that subsidy and therefore the ultimate price that's the consumer face. Absolutely. And I mean, what's really stunning is our market research team does clinics with sort of consumer live events with EVs continuously. And quarter by quarter, we can see a move up who are in this making a hypothetical

with some education about EVs and a hypothetical choice between a bunch of either internal combustion engine and EVs, they get to see a model of of some sort that are comparable in their, you know, roughly comparable in their size class and functionality, the percentage that goes EV. And it's all, it's happening across the spectrum. It's not just on smaller vehicles. It's on full-size pickups and large SUVs. people are really ever increasingly open to an EV.

And those numbers go up. And just to give you some public statistics, so surveys by consumer reports in Ipsos say that about one third of drivers or potential buyers are ready to consider an EV today for their next purchase. And 70% say that they're expecting to buy an EV at some point or consider an EV at some point, even if not for their next purchase. and that one third ready to consider today is triple what it was in 2018. Hey, Ryan, Chris, do you guys own EVs or hybrids?

You got, oh, Chris, he only drives high-end Italian cars. I don't think they've gotten to EV yet. Yeah, after he drinks his amaretto or whatever. He got a very nice vision of all my lifestyle. Look at him. Look at him. Ryan, are you driving? Are you driving an EV yet?

Not yet. Our next car. My wife wants to get an EV. Yeah. That's our next purchase. Maybe a nice lyric for your wife. They're beautiful. Which one, Elaine?

The lyric. It's our Cadillac crossover that's coming to market later this year. It's gorgeous. That sounds, I like to think your wife would like it, Ryan. I like it. You see how she sells? It's really very subtle. After this, I'm going to Google it.

It's not looking. I'm definitely interested now. That was great. That was fantastic. Going back to that one question, though. What about you, Mark? You know, that's my next car. He's going to be an EV for sure.

I lease, but my next car is going to be an EV for sure. So would it be a gas tax or an incentive, EV incentive that would push you over the edge there? For me to buy? Yeah. Well, no, either way at this point, I'm so nervous about getting to net zero. I'm all in now. We've got to do something. You don't need any sense.

You know, my carbon footprint tends to be high. You know, as you know, I have propane heaters on my back deck so I can stay on my deck in the middle of January in suburban Philly. So I got to do something to offset my carbon footprint. And if you have a house with a back deck and private parts, I mean, the convenience of EV is just amazing. For our EV, we never go to the gas station. We plug in right at home every, you know, probably with our miles, like, once a week.

And you never need to go to the gas station. And we have solar panels. So we literally charge on the sun. I'm like, oh, now she's bragging. I consider this to be bragging now. You want to get to net zero? I'm incentivizing you. I'm giving you more.

compelling reasoning. You're absolutely right. Hey, so, but if I gave you a buck and I said, you could only spend it on charging stations or a tax credit, which would it be? I think the tax credit moves the consumer fastest, but I think it's critical to have public charging infrastructure and the $7.5 billion that's already been spent in the bipartisan infrastructure package is catalytic. So again, you and I have. You and I have. have a single family home. But I feel most of my life in apartments. So for people who live in apartments and for highway charging, it's essential to have that charging so that 75% of new car buyers have an owned home with dedicated parking. But that percentage is going to decline as you get into

use car buyers. And you want an EV for everyone. So first of all, in the highways, you want people to have the assurance that they can own one vehicle. It'll serve all their purposes. And there'll be fast charging available without a queue if they want to take that Thanksgiving road trip. And so that's, it's essential to roll out DC fast charging on our highway corridors. USDOT is very focused on that, although ultimately it'll be on the states and local governments to actually put that charging in place. And then you need charging in the community for those people who can't charge at home or at work. workplace charging can be very powerful as well.

And you need that to be placed where people stop. So a fast charger at the grocery store. So while you're in the grocery store for 20 minutes, you can be, you know, charging your vehicle. So that's really critical to a long-term widespread adoption. Hey, I know we're taking a lot of your time and I don't want to take too much more time, but I have two quick questions for you. First question, when am I going to be able to,

able to take a, you know, a level four autonomous, you know, taxi in Philadelphia? When's that going to happen, do you think? So I don't know exactly when cruise automation plans to get there, but in San Francisco right now are cruise automation partially owned sub, which were the majority owner. They are letting employees are riding on the streets and driverless vehicles. No one at the wheel. There's some great videos just you can look up on that. And so it's a matter of when it gets to Philadelphia,

but I think with that happening, it's in a handful of years away. That's so cool. And, you know, cities, like, you know, urban areas where there's high demand for vehicles is exactly where ride sharing, ride hailing, autonomous or otherwise is most efficient. So that's where it's coming first to those downpins.

areas. Can't wait. Final question. A little glib, but, you know, and you can tell me if I'm off, off the rails here. But you remember that old phrase, as GM goes, so goes the U.S. economy. You remember that? I think it was GM CEO, circa 1960 or 55. Is that still the case, do you think, Elaine?

As GM goes, so goes the U.S. Economy. Look, the economy is very diverse. but GM is tied into virtually every market between the inputs to our goods, the labor market, the importance of a vehicle as the second biggest expense any household will make. So very closely tied auto sales normally when we're not having chip supply issues are highly, highly pro-cyclical. And people have very tight emotional relationships with their vehicles.

vehicle. Okay. So you're saying, yes, it's still critical. And you're, uh, because your chief economists of GM and you did, uh, you were fantastic selling GM cars. I think the economy's prospects are excellent. I think we're in good, pretty good shape here. Just saying, just saying, but we're going to be following you and really do a pretty, this was fantastic, really learned a lot. Damien, you know, particularly appreciate it because you give me a lot of fodder when my discussions with Mr. Brisson and his, auto forecast, but thank you so much for participating. Any last words? Any last pearls of wisdom, guys? Anything else you want to ask, Elaine? No. Great to be here. Thanks for having. Thanks so much, Elaine. Hey, thank you. I know I'm supposed to say something. Ryan,

you know what I'm supposed to say to end this? At Mark Zandi. Exactly. No, I think you're, we would appreciate reviews. So, you know, if you want to give us a review. And if you've got suggestions for topics for the future, you know, please fire away. You can email us or go to economy.com and there's a place there for you to tell us what you would like us to address. But we're looking for ideas, but happy to do that. Hey, thanks, Elaine. And thanks, everyone.

Take care. Until next week.