After a Rollercoaster Week for Banks, What Next for Stocks
Tonight I'm going to start off with a poem by Rudyard Kipling. Not the whole poem, thankfully, just the first stanza that comes to me in times like this. The poem is called "If" by Rudyard Kipling.
If you can keep your head when all about you
are losing theirs and blaming it on you.
If you can trust yourself when all men doubt you
but make allowance for their doubting too.
That is the perfect description of a wealth advisor. Most of the time I'm just sitting at my desk, keeping an eye on news, keeping an eye on things, while my clients happily go about their lives. But every once in a while something happens in the news, and all of a sudden the clients are riveted to their portfolios and log into their planning portal for the first time in a while and are very anxious to do things and got to take charge, got to make decisions. I got to buy. I got to sell. I got to do stuff.
And that's the moment when I say, “No. Actually we don't have to do anything, because we are prepared for these kind of scenarios to happen all the time.”
Yes, there was a financial crisis this past week, nothing like the financial crisis of 2008-2009, nothing like the financial crisis of 1998, when Long Term Capital disappeared overnight. LTCI was a firm run by PhDs and Nobel Prize winners, it was there. It was gone. So I'm going to maybe five minutes to recap what actually happened last week and talk about what might happen next. Then Buff has a good list of questions that will lead us through the rest of the conversation.
It has been a pretty quiet five years for bank failures. In the last five years, only eight banks failed. By comparison, between 2008 and 2011, 440 banks failed. So bank failure is something we haven't heard much about in a while. What has caused stress in the system has been the Federal Reserve Bank which, starting in January '21, began raising rates as we got out of the COVID crisis. It was pretty clear they'd be raising rates for a while. The Fed was very concerned about inflation. And so it would be reasonable for anybody with a modest knowledge of history to say, "Okay, well rates are currently 0% on Fed funds but were 4%, 5% back in 2007. It's reasonable that they will target at least 4%, 5%. And when that happens, the entire yield curve rises. This is my magic ruler from when I used to teach bond math at Morgan Stanley back in the '80s.
The whole yield curve rises as short rates rise. These are short term securities, T bills maturing in three, six, 12 months. This is the middle size of the curve called T notes, one to five years. And then out here is the treasury bond market. That's securities maturing in 15 to 30 years. So as short rates come up, the whole yield curve moves higher in yield. But this shift in yield has a different affect on prices. At the short end of the curve, higher rates don't change the value of T bills at all. They mature at par. In the middle area, where we have a lot of our clients' money invested right now, there is some loss of price as yields go up. At the far end of the curve there is a lot of movement as yields go up. Last year, for example, the securities in three to five-year band fell 5%. But the long dated securities – 10-30 years out actually fell 15%. This is the lesson that anybody who goes into a bank credit training program learns on the first week of that training program. It's number one!
I used to teach this class at Morgan Stanley back in 1987. Well the folks at Silicon Valley Bank somehow forgot that lesson. And even though it was perfectly obvious that rates were going to be rising last year, and bond prices were going to be falling, they took no action to hedge the portfolio that backs up their reserves.
Let me explain what reserves are. Every time you put a dollar into a bank, the bank loans it out to somebody else who deposits back, so on and so forth. And through recycling you could essentially have infinite amount of funds. The Federal Reserve requires is that a bank keep about 10% of your money in the bank or deposit in the Federal Reserve or invest it into portfolio treasury bonds, so that there’s always cash available to fund withdrawals.
Silicon Valley Bank had an interesting problem of having a lot of money deposited into it from the venture capital firms that used it and from the companies that were funded by the venture capital firms but actually didn't have a lot of opportunities to lend funds, because startup companies don't borrow money. They have no collateral, they don't have any cashflow. They can't borrow money.
Silicon Valley Bank said, "Well no worries, we'll just put all this money in long dated treasuries. We'll get 5% on the treasuries. We'll pay out 1% on the deposits. We'll pocket the spread and make a lot of money." And that worked great until after recently, when the value of those bonds was way down, and Silicon Valley Bank was having trouble maintaining its reserves. So they said, "Well no worries, we'll just announce that we need money, and we'll put out a stock offering, and we'll go from there."
But then the venture capitalists got ahold of that information, said, "My god, it's the end of the world. We need to pull all our money out right now." I mean some of these guys wrote in ALL CAPS, please! And so then everybody in fact did pull out their money, and now you have a death spiral. And by Thursday morning, the FDIC and the Federal Depositary Insurance Company stepped in to own the bank.
So last weekend we wrote, "Yeah, this happens from time to time, and don't worry about the fact that there's a quarter of a million dollar cap on FDIC insurance. In the last 70 years, no depositor has lost money in a bank, because the FDIC steps in, takes over the clients’ bank deposits, transfer those accounts to another bank and then tries to pay off remaining liabilities by liquidating the bank." So really what happened to Silicon Valley Bank was of their own error, failure of risk management. I learned last week that the SVB risk manager had retired in April 2022, and his replacement wasn't hired until December 2022. But meanwhile the president of the bank, his job was to do risk management. But he was too busy being a tech evangelist. So what happened to Silicon Valley Bank was specific to them.
Another bank went bankrupt last week, Signature Bank. Signature Bank was an old-school New York City bank with three lines of business:
1. lending to law firms,
2. lending to real estate companies, and
3. lending to finance taxi medallions, a very old-fashioned business.
Well they wanted to be with the cool kids, so they decided to get into crypto in a big way and blew themselves up. So that demise was also specific to Signature bank.
There was another bank in the news this past week, Credit Suisse, which is actually a Swiss company, not American, 200 years old. They've been badly managed for decades. Their job as a Swiss bank is to take in flight capital and pay no interest on it and lend it out in small rates. But they didn't think that was where the cool kids should be. They though they should be in wealth management. They wanted to get hedge funds in and alternatives and private equity and a bunch of other stuff. And all these products were terrible and cost them billions and billions and billions of dollars in losses.
And so even though they got a $50 billion cash infusion last week from the Swiss government, the Swiss banking system, they still went out of business effectively over the weekend. And they're going to merge into UBS as a result. And by the way, UBS is not a very healthy bank either, but it's a Swiss bank. It's not an American bank. So everything that happened in the past couple days was completely predictable, completely foreseeable by both the people who study banks and people who work for banks.
But how do you live in this universe of Twitter, where any idiot, any fool at all can put out an opinion on Twitter? It goes viral. It goes all around the world, and next thing you know, people are pulling out their hair. So I trust myself, speaking of Rudyard Kipling, because I've been doing this for 40 years, and because I've been through so many banking crisies.
And my clients trust me to not panic, which is a good thing, because where are we this year? Well from the start of the year, the S&P 500 was up 6% at the end of January.
And then there was some turbulence in February and part of March. And so now we're up 2.4%. To go from up 6% to up 2.4%, really not a disaster. And by the way, my forecast is still 15% by the end of the year. I'm sticking to my forecast. The market is undervalued. Earnings are great. The economy is doing terrifically. So no, not worried about failing banks. And Buff, that's a good place to start with your questions.
Buff Parham:
So we witnessed the first bank run driven by social media. In light of SVB, the problems at Credit Suisse and Signature, a hard look right now in terms of banking regulations. Should we expect any revisions?
David Edwards:
Well I think that anybody who was tweeting doom and gloom last week should not get their money back. It's one thing to shout fire in a crowded theater. It's another thing to splash gasoline on the ground, apply the match to it, shout “fire, and then expect to get your Hamilton ticket refunded. No, you don't get your ticket back.
The SEC actually just announced that they doubled their cybersecurity division, because of so many Ponzi schemes, pump and dump schemes. My god, anything you can imagine back in the bad old days is out there times a million. And there are a lot of gullible, novice investors who read this stuff and act on it. Strangely, Bitcoin soared last week. It went from 20,000 to 27,000, because people don’t trust the banking system. “You've got to be in Bitcoin!”
Well my forecast for Bitcoin is still down. Two years from now, a few years from now, it'll be zero. NFTs are already worth nothing, that was all the rage last year. When push comes to shove, you have to be thoughtful about where you get your information from.
One thing I've talked about a lot recently is the narrative versus data, the narrative versus data. So for example, the narrative at the start of the year was that the Fed raising rates guarantees a recession. And everybody has been repeating that narrative for the last 12 months. But the data doesn't support that. The data is company revenues at record levels, company earnings at record levels, US GDP at record levels.
The unemployment rate is near all-time lows, there are two job openings for every one person looking for a job right now. 12 million jobs were created in the last two years. That is the fastest rate of jobs growth in all American history. So the data doesn't support the narrative. And actually in the January, people started to reject the narrative, and all of a sudden stocks went up. But now in February and March, no, the narrative is back on, and stocks are down. But meanwhile at our firm, any client who's got spare cash right now, we are waiving it right in, investing as fast as we can because right now the market is reading extreme fear, according to CNN. And that's the best time to buy stocks. You see fear, we're buyers.
Buff Parham:
Well also in this aftermath, we've got a Fed expected to raise next week. What are the chances the Fed actually raises rates right after all that's happened?
David Edwards:
Yeah, so the Fed has got two mandates. One mandate is to keep inflation under control, the other is to promote full employment. Well we got full employment done. That's perfect. So the Fed is willing to raise rates for quite a while. And I would have said 12 months ago that they would raise rates for about 18 months, which is on par for past cycles. And they would take us in 4 or 5%, which is where we were in 2007. And right now we're at 4.5% so pretty close. So now I'm still looking at the end of June as being the end of the Fed increases.
Prior to 10 days ago, I would have said 50 basis points at the end of next week. Now I'm going to say 25 basis points. The Federal Reserve is like “whoa, if we break too many of these banks, we'll have a really serious recession.”
Buff Parham:
Exactly.
David Edwards:
So I'm going to say 25 basis points. They're also going to just keep doing their job, and they settle at five and a half percent at the end of the cycle. That would be reasonable. The thing that's making the Fed's job really hard right now is there are three components of inflation. One of them is the price of labor, which is up sharply, because Americans are all upscaling their jobs. The second cost is just basic goods and services, food, energy. Well energy prices are way down right now. The price of oil is lower now than it was before the Russians invaded Ukraine. That's interesting. The world swapped around exactly as we said it would, and now we're back to $70 bucks a barrel.
The third part of inflation that's really tough to beat is housing. After 2009, US housing construction slammed to a halt for seven or eight years and only just started coming back in recent years but at a slower pace. So right now we're short 4 million housing units in this country. And what that means is that the prices are high, if you want to buy. Prices are high if you want to rent. And that is a major component of what's driving inflation right now, and we can't fix it overnight. There's no way of magically creating apartment buildings, especially in the United States, where so many communities have got NIMBY rules in place that block multifamily housing that's most in demand. So at a certain point the Fed will level off at 6% and have to accept the higher rate of inflation while these other issues resolve themselves.
There's one other way that we could actually reduce demand, goods demand. This is from intro to macroeconomics - the class you take freshman year in college. You can raise taxes.
Raising interest rates makes it hard for companies to borrow, therefore more likely to lay people off, and that inflicts pain on the least paid, least educated blue collar members of society. The other way you could reduce demand is by increasing taxes on the wealthy and on businesses. And then people like me have less to spend.
The reaction of course among the investor class is that “I am a rich person. You can't take away my money!” And the response could be, “Well I'm a poor person. You can't take away my job!” But in our society, rich people have lobbyists, and poor people don't. So we will probably struggle with higher inflation for a while and higher rates for a while. And then eventually this will work itself out.
Buff Parham:
Well I think I know where you are in the next one. We're hearing more sentiment regarding a near-term recession. What's your take on that one?
David Edwards:
It's still low. The consensus forecast is a 35% chance of a recession in the next year. Yeah, okay, well I'm more in the 10% chance. Show me the data, show me data!
Buff Parham:
Well we've got one more coming. It's the debt showdown regarding the debt ceiling. It looks like a game of chicken. How much is it going to affect the market, is my question.
David Edwards:
Well the market so far is pretty blasé about it. The debt ceiling has been raised, I don't know, 70, 80 times in the last 100 years. It was raised three times during the Trump Administration.
David Edwards:
So the problem is that you got the idiot caucus in Congress right now that wants to hold their breath until they get their way. And the way that they want is for us to cut federal spending by 90% or something like that. And that's just not showing any knowledge of reality. And I think Biden is playing it really well. He's like, “Yeah, whatever, guys. I'm here. I'm at the White House. I've got my budget, happy to talk about it. If not, if you blow up the economy, it's all on you. Bye, see you in 2024.”
So what can happen to us if the debt ceiling does not pass? Well already the treasury department has slow paying vendors and not putting money into the federal pension plan. If the debt ceiling doesn't go through, salaries for, I don't know, 600,000 federal employees stop the next day. Actually it's more than 600,000. It's more like a 1.6 million stop the next day, including all of our soldiers and sailors all around the world. They'll be making some phone calls to their congressmen for sure!
Also the treasury will stop paying interest on treasury notes, bonds, bills. And we have got a lot of our clients right now in T bills picking up four and a half and 5%, because my gosh, we haven't seen this kind of returns in 15 years. We’re not taking client money out of those treasuries, because even the Treasury can’t pay interest for days, weeks, even months, I know that eventually the debt ceiling WILL be raised and investors will get their money.
Buff Parham:
Well we'll see what happens, right? We're entering the second year of the Russian invasion of Ukraine, no ceasefire, no negotiations, nothing in sight to say it's going to end any time soon. But I wanted you to share with you what you told us a year ago about this whole situation.
David Edwards:
So a year ago, yeah, it is exactly a year ago. There were four scenarios. Scenario one was that the Russians would overrun Kyiv in a couple days, didn't happen. Scenario two would be that we have a stalemate. That's kind of where we are right now. Scenario three would be that the Ukrainians would push the Russians out pretty quickly. And scenario four was that the Russians would go nuclear. So scenario one obviously didn't happen. Scenario two, we're definitely in the stalemate right now. There's a 1,200 mile border between Germany and Ukraine. It looks like your worst scenesfrom World War I and World War II. I actually have a client who's 98 years old, who's a veteran of the Battle of the Bulge. He's like, "Yeah, I remember those days."
Buff Parham:
God.
David Edwards:
The Russians spent 50,000 troops to try and move the borderline 50 yards and did not succeed. Now the Ukrainians have been training an army to go the other way. They may have equal problems, because 1,200 miles is a lot of terrain. Each side is spending millions of artillery shells. Both sides are running out of artillery shells. The whole west, United States, Canada and Europe can't manufacture artillery shells fast enough. Meanwhile the Russians are hoping to import artillery shells from North Korea and China. Well if China got into the game, that would be a big problem for us.
The most interesting Ukrainian plan would be a sudden move south Mariupol, which is a port city on the Sea of Azov that would cut the highway from Russia proper to Crimea and simultaneously would put the bridge that goes from Russia to Crimea within artillery range as well. And if that happens, it's possible for the Ukrainians to encircle the entire Russian Army in Crimea. They'll be evacuating by boats.
There's always still the risk that Putin goes nuclear on this. I never used to worry about this. Now I do. But I think the Pentagaon has said, "Vladi, the day you go nuclear is the day we go nuclear on you personally.”
I think this war could go on another three or five years. I think that sucks for everybody. It's a humanitarian disaster. It's an act of vandalism, frankly. I mean you look at the videos, it looks like Dresden after the fire bombing. What does this have to do with our stocks? Nothing at all. The oil markets reconfigure themselves. We got by that. The Europeans figured out how to get natural gas. They even got by that. The Chinese have been buying up a lot of goods with Russia trading stuff back and forth. They don't really care about humanitarian issues. So we'll just have to watch as these two combatants fight it out for no purpose at all, no reason until both are exhausted.
Buff Parham:
Yeah, sadly enough, the world has, quote, unquote, adjusted while the fight goes on.
Buff Parham:
I have fiddled around with ChatGPT. And I find it to be both amazing and scary. But do we really, really understand the implications of widespread uses of AI just yet? Do we really get that?
David Edwards:
Yeah, there's AI embedded in everything we do now. Yes, ChatGPT gets all the headlines right, but there's AI in American Express analyzing every time I swipe my Amex card and selling that information. There's AI at Facebook analyzing everything in your personal data. I don't use Facebook anymore. I don't use Twitter anymore. There's no scenario where I would use TikTok.
Now I was curious about ChatGPT, because I'm halfway through writing a book, and the book is stalled, because I don't have time to edit it. I was thinking maybe I can use ChatGPT to edit my book for me. That'd be so cool. So I did an experiment. I said, "Hey, ChatGPT, write me a five-paragraph essay on 1984," which was a standard book that we all read in, what, 10th? And we had to write five-paragraph essays, blah, blah, blah, intro paragraph, 3 paragraph body, concluding paragraph. ChatGPT wrote me a five-paragraph essay. And then I read it, and thought, “Wow, this is really banal.”
I fed the text into another AI product called Readable that analyzes text, and Readable scored the text as a D. So I don't know how practical it would be in my daily work.
Here's the bigger concern, though. ChatGPT looks at a huge block of data extracted from the internet but only up until 2022. ChatGPT has no way of evaluating whether any of that text is true or false, right?
Buff Parham:
Right.
David Edwards:
Out there there's tons of stuff about QAnon and Democrats eating babies and stuff like that. ChatGPT would cheerfully put those conspiracy theories into an essay, because ChatGPT doesn't understand about sourcing. For many years I wondered, what was the value of my Hamilton College education in history and math? And my conclusion was that my Hamilton history degree gave me a lifelong bullshit detector. I read dozens of highly sourced materials all the time. What I don't read is Twitter, because out of the 10,000 tweets I might read, only one of the is useful. That's a really low signal to noise ratio. But number two, I don't know who this person is. What are their qualifications? Is it a 12-year-old kid? So even when you go to Wikipedia, you can evaluate the quality of the Wikipedia post by reviewing the footnotes. ChatGPT has no footnotes. You have no idea where the underlying information is coming from.s. So I'm not saying that AI has no utlity. It's definitely got valuable applications. Self driving cards are another application of AI, but I won't be driving a self-driving car any time soon.
Buff Parham:
Yeah. Well I asked it, I had it do "Mary had a Little Lamb" in Shakespeare. It was rather entertaining.
David Edwards:
Let's ask our audience if they want to submit any questions via chat.
Buff Parham:
How will China's actions and behavior play into world economics?
David Edwards:
This is where being a history major is fun, because you like to think that we can all get along. And the fact is, the United States has their society. The Chinese have their society. And we think we're better, and they think we're better, and there's going to be a conflict for the next 100 years as the new top dog. Maybe a year or so ago I commented that I thought that by 2030 China would be the largest economy in the world. They're going at [inaudible 00:28:38] of the year, just hoovering up all the manufacturing of the world. Everything seems going good for them. There was another Asian country that I thought was going to take over the world.
Back in the 1980s, the US was in a terrible manufacturing depression. American cars were just awful. Our whole Ohio, Pennsylvania [inaudible 00:29:01] to the rust belt. And the Japanese built these beautiful, modern cities with monorails and amazing cars. And I actually went to visit Japan for a month in 1986, and I just walked around like this. These people are going to eat us alive. But then it crashed and burned, and the reason why is because push comes to shove, Japan is a very hierarchical society, a very straightened society. And the more we get into the modern world, the more you need flexibility. It's like you're a football team, very structured, very rigid. Basketball team, very fluid. I think a basketball team would crush a football team on the basketball court, March Madness. So Japan entered a recession around about 1991. They haven't come out since, and actually [inaudible 00:30:04] death spiral. And they still have the manufacturing, cool stuff, but they're no longer a player on the world stage. So China was doing pretty well up until 2020 or so and then got all wound up in COVID, just finished that whole crisis.
And the financial crisis going on based on real estate portfolios, that is a problem. And also they're reaching out to the Russians probably at the worst possible time. So as a result, the growth rate in China has come way down. US companies are either moving their manufacturing to other counties like Taiwan and Vietnam, Cambodia and Bangladesh, or they're resourcing these factories back to the United States. So maybe China will not be as much [inaudible 00:30:54] take longer. And then also the Chinese are evaluating how we're dealing with Taiwan. The Chinese are evaluating how we're in the Russians and Ukraine to see what we would do if they decided to do a naval invasion of Taiwan. And think it would be a pretty catastrophic experience for them. You've got to send 1,000 ships across the straights of Taiwan there while you've got Americans with cruise missiles and submarines and [inaudible 00:31:26].
So anyway, but we'll never stop this conflict. Russia was the second largest economy in the world after World War II. Now they're 20th, and they're going further down in the rankings. That's why Putin is so frustrated and angry. It's almost like you see this girl in a bar, and she doesn't want you so then rape her afterward. Whoa, in the parking lot, you know?
Buff Parham:
Try to remain relevant.
David Edwards:
That's unfortunate imagery, but that's it. That's the motivation.
Buff Parham:
That's all we got.
David Edwards:
We got another question that came in?
Buff Parham:
I think so, hold on. Hasn't the Fed failed at checks on SVB and Signature? And can we not expect more such failures? And where's the backup and the dollars backup?
David Edwards:
So ironically the Fed 100% did their job on Silicon Valley Bank. After the financial crisis in 2009, the Federal Reserve created this whole stress test program as part of the Dodd Frank legislation. And basically what that meant is they had models, and you had to test those models as in, what if inflation goes high? What if interest rates go high? What if GDP goes lower? How is your bank going to respond to that? And in 2018, the Trump Administration watered down those rules and said, "Well only the 15 largest banks have to do that." And Silicon Valley Bank was the 16th largest bank. Now the Fed was still there last year with just some routine audits and stuff. And we did some stress testing, and we used the wrong model. Why? Because the woman who was the head risk manager had retired in April of 2022, and her replacement did not start working until December 2022. So there was no one running the risk [inaudible 00:33:24], but somebody should have done more than that.
So I did spend a lot of time last week trying to understand, was this crisis at Silicon Valley Bank specific or general? And it's specific for Silicon Valley. It's specific for Signature. It's specific for Credit Suisse. It's not applicable to the [inaudible 00:33:43]. There is one more risk to consider. Once upon a time there were like 20 or 30 airlines in this country, and now there are four. And if you're a consumer flying across country, it's not a fun experience, because it's virtually a monopoly right now.
Buff Parham:
No competition.
David Edwards:
Well yeah, there's like 200 banks in this country, but 75% of the deposits are at four banks, JP Morgan Chase, Citibank, Bank of America and Wells Fargo. And Silicon Valley Bank will be absorbed into one of those banks and same thing with these other banks. So we're losing all the smaller and mutual banks which understand what the business people and at a local level and put in these really big banks. What if those banks has a problem [inaudible 00:34:32]?
So you know the answer about the Fed? In 2008, the Fed, the treasury, [inaudible 00:34:41], they were pretty much weighing that every single day. I mean everybody was on 24-hour [inaudible 00:34:45] diet Cokes, whatever, trying to stay awake. It seems like they made careful notes of that experience, and they actually had checklists. And so when SVB got in trouble, they didn't wait until the weekend. They just shut it down at 11 o'clock on a Thursday morning and had a plan ready to go by 6:00 PM before markets opened at 6:00 PM Sunday, before markets opened on Monday. So it seems like they have got plans, checklists, whatever. And so when these banks made dumb mistakes, well we're here to pick up the pieces. One more question came in.
Buff Parham:
Yeah, we got one more. It says-
David Edwards:
We'll make this the last question.
Buff Parham:
Last question. Back to Russia-China restoring, et cetera, what do you estimate is the potential downside in profits and earnings for companies that exit China and its cheap labor and have to pay more for their workers?
David Edwards:
Great question. The interesting thing about these companies bringing manufacturing back to the United States, they're bringing a lot of machinery. They're not bringing a lot of people. So Taiwan for some reason ended up being the number one listed manufacturer in computer chips. Well that's a big risk to the United States. We've got to have computer chips, so we're bringing those back onshore. But that's all done by automated machines with a handful of highly skilled, highly paid professionals on top.
What is interesting is what's happening across the entire continent. You take the lowest paid job, let's say you're doing childcare in a daycare center. That's the lowest paid job. It's like minimum wage. When you quit that job, you work for Starbucks at 15. Well the person at Starbucks quits their job and goes to work at, I don't know, something else for 20 bucks an hour. And that person goes out and gets 25 bucks an hour. So the reason why personal income is on the rise, real gains verse income for the first time in 25 years is that everybody is just up, going up the value chain and getting paid more for similar hours. I don't really see that it's going to have a big impact on [inaudible 00:37:04] which right now are so fast. We've never seen problems like these ever, and I'm like yeah. That would be awesome, if some of those profits went back to workers or back to pay taxes. That would take [inaudible 00:37:18]. So that was a great question to end on, and it is 6:38, would love to end on time. So everybody, I wish you a happy spring.
Buff Parham:
Take care.
David Edwards is president and wealth advisor with Heron Wealth, a $500 million registered investment advisor based in New York City working with 225 client families across the U.S. and around the world.
At time of publication, Edwards and/or his clients held positions Amazon, Apple and Google.