Markets Fail To Hold Onto Gains
The markets continued to move in a broad band of uncertainty on Monday as was largely expected
On Episode 672 of The Core Report, financial journalist Govindraj Ethiraj talks to C S Vigneshwar, President, FADA as well as Adam Wolfe, Emerging Markets Economist at Absolute Strategy Research (ASR).
SHOW NOTES
(00:00) Stories of the Day
(01:00) Markets fail to hold onto gains, steel, auto stocks shine
(02:52) India is set to outstrip China in oil demand
(03:38) Gold hits a fresh high, quick reminder, bullion is up 38% this year
(05:10) How auto dealers are happy tax rates are down but they want to be compensated for higher priced inventory
(15:40) How Tesla’s US market share has hit an 8 year low
(17:26) Why foreign investors are selling for more than a decade now and the story from 1998 - 2016. A deep dive discussion
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Tuesday the 9th of September and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital. We've got a packed show today.
Our top stories and themes,
The stock markets fail to hold on to gains but steel and auto stocks do well.
India is set to outstrip China in oil demand.
Gold hits a fresh high. Quick reminder, bullion is up 38% this year.
How auto dealers are happy tax rates are down but they want to be compensated for higher priced inventory.
Why foreign investors are selling for more than a decade now and the story from 1998 to 2016, a deep dive discussion.
And how Tesla's US market share has hit an 8-year low.
A Band Of Uncertainty
The stock markets continue to move in a broad band of uncertainty on Monday which was somewhat expected going in. They opened strong on Monday morning but lost most of their gains, though closed in the positive.
The BSE Sensex hit an intraday high of 81,171 but closed up 76 points at 80,787. The NSE Nifty 50 was up 32 points to close at 24,773. The Nifty Mid Cap 100 and the Nifty Small Cap 100 were also up slightly 0.5% and 0.16%. So auto stocks continue to do well, including ancillary companies.
Shares of steel companies also continue to rise. Basis reports the government was preparing a national mission with a proposed outlay of 5,000 crore rupees to promote sustainable steel production. There were other reports which suggested that China would cut steel production in 2025, according to a report in Business Standard which added that Tata Steel hit a 52-week high and then stocks of Steel Authority, JSW Steel and Jindal Steel and Power were also up, rather up beyond the market.
Sector-specific news clearly appears to be lifting stock prices as we saw on automotive stocks as well, thanks to the expected impetus from tax cuts on cars and two-wheelers more on all of that shortly. Meanwhile, even more supplies are on the way. South Korea's LG Electronics is looking to launch its maiden IPO or initial public offer in October.
It plans to sell about 15% of its stake and that will be worth about 15,000 crore rupees and that would make it, as things stand, the largest IPO of 2025, according to a report in Business Standard. And then on Wall Street, stock markets were looking to start on an upbeat note ahead of inflation and jobs data that could influence how fast the Federal Reserve lowers interest rates this year, according to the Wall Street Journal, which added that the rate cut next week is viewed as a virtual certainty following August's lousy jobs report. Elsewhere, oil demand growth in India looks set to outpace China's underlying gains this year, according to a Bloomberg report quoting Trafigura Group, adding that this year, Indian demand is set to outstrip China if you exclude strategic stockpiling.
China is seeing slowing crude consumption growth aside from petrochemicals. Going into next year, there are also fewer clear drivers for global demand, analysts said, even as more supply comes into the market, making it difficult to see how the extra oil will be soaked up, according to that report. All the analysts were speaking at the Asia-Pacific Petroleum Conference, or APEC, by S&P Global Commodity Insights, and that's going on in Singapore.
Is there enough demand to absorb this, an analyst asked. We're talking about next year under a million barrels a day of demand growth. Unless you're talking about double that, just on the demand side, it's tough to see.
Elsewhere, demand continues to be strong for gold prices, which continue to rise. Gold went past the $3,600 per ounce level for the first time on Monday after soft U.S. jobs data increased expectations of an interest rate cut by the U.S. Federal Reserve next week, according to a Reuters report. Spot gold was up about 0.9% to $3,617 per ounce, and bullion was, or rather hit a record high of $3,622 earlier in the session.
Now, bullion is up 38% this year, and that is atop a 27% gain in 2024. The reasons range from a weak dollar to strong central bank buying, which we've discussed before, a soft monetary policy backdrop, and then, of course, the most important geopolitical and economic uncertainty. Meanwhile, in the sign of times to come, China's exports to the United States fell 33% in August, while overall growth slowed to its weakest in six months.
Remember, exporters would have, and have front-loaded their exports in anticipation of higher tariffs, and therefore, we could be seeing an adjustment there. Imports from the U.S. also dropped 16% from a year ago, according to customs data quoted by CNBC.
Car Sales
The Federation of Automobile Dealers Associations, or FADA, has written to the government to seek clarifications on the goods and services tax 2.0 that was announced last week that subsumes the earlier compensation CESS regime for automobiles.
FADA said in a letter dated September 5 that dealers today hold significant, validly availed compensation CESS balances in their electronic credit ledgers. Once no further CESS liability arises, these balances cannot be utilised against CGST, SGST, or IGST, that's Central Goods and Services Tax State, and Integrated Goods and Services Tax under the current law. FADA has requested the government to transfer the balance lying in the compensation CESS credit ledger by September 21 to their Integrated Goods Service Tax and Central Goods and Services Tax credit ledger so that their festive sales are not impacted.
Now, I know this is sounding a little complicated, so hold on. According to dealers, there could be an estimated CESS loss of about 2,500 crore rupees to them. So, goods and services tax has come down for auto from 28 to 18 percent, but there are a lot of other adjustments and the I reached out to CS Vigneshwar, President of the Federation, and I began by asking him how firstly, the last month has been, particularly after the Prime Minister's August 15 announcement of a GST rate cut, which in turn led to many buyers holding back their purchases.
INTERVIEW TRANSCRIPT
C S Vigneshwar: Well, we've been advocating a rationalisation of the GST for quite a while, and even very recently we wrote a letter requesting for a rationalisation. What came in on the 15th of August was a bolt out of the blue. I mean, it was absolutely a surprise and it was much welcomed because we really require lower taxes for us to aid consumption and consumer behaviour in a positive way.
So that happened. It was just announced on the 15th and then the clarity came in about a few days back. I think it's fantastic for the economy.
The bounce you're going to see in terms of customer spending, the money circulation, it's really going to help because we are already seeing a jump in customer interest. So even after the announcement on the 15th, we had a lot of enquiries, a lot of showroom walk-ins came in. And of course, we thought that the month of August would be worse because a lot of them are postponing the purchase.
But actually we came away relatively unscathed. We grew at about two and a half to three percent overall across various verticals, which was good. And there was fantastic growth in Kerala because of Onam and because of Ganesh Chaturthi, also Maharashtra had an excellent run compared to the rest of the nation, of course.
But when you look at it, I think it's fantastic. I think it's somewhere where all the states and the centre came together on a common note and they decided unanimously that this is needed for the economy. It's a path-breaking reform, I think, from a very complex structure, at least for dealerships, that has become a lot more simpler because we have different kinds of cesses along with GSTs.
Govindraj Ethiraj: So I'll come to the cess in a moment, Vignesh. But so you're saying that despite the fact that there was a promise of rates coming down only later and which is now September 22nd, we still have some time to go. You're saying that people did not really hold back on purchases or is it a different kind of purchase that we saw in value terms?
C S Vigneshwar: Perhaps we'd have seen a little bit more purchase had the announcement not come, but at least it wasn't a degrowth in terms of year. So it was quite strong.
Govindraj Ethiraj: And is there any category that saw more purchases as opposed to any other shifts in patterns or was it the same as, let's say, the month before?
C S Vigneshwar: It's very similar to the month before. Overall, as I said, we had decent growth overall. It was quite good even in terms of the tractor market.
The tractor market actually grew by about 30 percent. Look at passenger vehicles, those are about 1 percent. Two wheelers, what about 2.18 percent. We also had commercial vehicles, which showed 8.55 percent, which is again a decent growth. So there was pretty much growth throughout the particles. So it was quite good that way.
Govindraj Ethiraj: Got it. OK, now let me come to the compensation cess or I mean, if maybe let's try a simpler version of it. So the tax that you're paying when you're buying the vehicles into your dealerships is obviously now more than what you will get from the consumers from September 22nd onwards.
So how does that play out?
C S Vigneshwar: So there are two components here, one of the GST portion of it and one of the cess portion of it. The GST portion will get adjusted over time. I thought that was a headache, but now cess has become a bigger headache.
Govindraj Ethiraj: So can you just walk us through, suppose if it was a 10 lakh car, how it would work?
C S Vigneshwar: So the simple thing is there are two components to it. One of the cess, for the highest amount of cess, let's say charge to an Innova Krista is about 22 percent. So the overall came to about 50 percent.
And when you look at it, the GST charge was 28 percent. So the rest 22 percent was actually cess. So what the government has said is the GST component, which is 28 percent, which has gone to 18 percent, which has gone to 40 percent in this case.
It's actually the other way around. We quickly claim credit for it. But the issue is the 22 percent, which the government said to charge as cess.
At the end of the day, the cess was supposed to be paid by the end customer, not by the middleman. I'm a distributor. I should not pay that cess.
So the concept of the act doesn't make sense given the fact that they said that on the 22nd, the cess would go away. And go away, that means I need to absorb it into my books and I need to write it off. We are a high value product industry.
So we just can't write off cess that way, which is going to lead to a huge amount of losses. And honestly speaking, we can't do losses that amount to more than 2500 crores for us as dealership stocks. We as an industry can't take this.
Govindraj Ethiraj: So this is money that you have paid manufacturers who have paid the government or what's the normal chain?
C S Vigneshwar: Yes. So that's how it goes. I have paid the government.
The cess goes to the government. So the issue is that money is still with the government. So the government needs to consider how they give it back to us.
Otherwise, I can't go and charge my customer here. So it's a very sad situation. But we have highlighted to the government perhaps they also have promised to have allocated.
Our Honourable Finance Minister, Anuradha Sitharaman has stated that there will be some kind of interim measure. I read in the paper where she gave an interview. And we've also been approaching the various government ministries who are connected with this.
And they have to get back to us. But hopefully we can engage them and make them understand.
Govindraj Ethiraj: And you're saying this is not as simple as a book entry between, let's say the cess account to a GST account?
C S Vigneshwar: They said it's not possible. They can't do that. So given the current rules, the box is this small.
So probably they enlarge the box for even the bureaucrats to make decisions. Today, the bureaucracy is giving answers saying that it can't be done because that's the box. So we need to enlarge the size of the box and see whether it's fair to leave us burdened with the cess which was supposed to be paid by the end customer.
Govindraj Ethiraj: And this is really the cost that dealerships like you have incurred in this period from the date, which is last week to today, and will incur till September 22nd?
C S Vigneshwar: We don't know if the government is going to, you're talking about the interest component, but I'm also talking about the whole principle of it. The whole principle component was running 22. Sometimes for some vehicles, it's 1%.
For some vehicles, the component of cess is 22%. So I don't think it's fair when we are left to burden the cess.
Govindraj Ethiraj: Got it. And when it comes to consumers, people who've let's say booked cars or four wheelers in the last 10 days, 15 days, and still not got delivery, where do they stand?
C S Vigneshwar: So a lot of companies are already offering discounts, which would match the new tax rate after the 22nd. I think it's a fantastic feat. It'll be better if the customers go and grab it right now, because during the festive season, the peak festive season, definitely we won't have the vehicles to give you.
The colour, your suffix, the version of it, we may not have stock to give it to you. But it's great that a lot of companies have come forward and said, we'll give you the same rates right now. Please go and take your vehicles right now.
I think it's a fair thing to do, because definitely we're not going to take any more stock as dealers, because if we take any more stock before the 22nd, we don't want to be burdened with more cess seasons. So that being the case, there's only a limited amount of stock for the first day of Navratri. Grab your vehicle right now.
The vehicles are being offered at rates which you're going to get after the reduction of G3. So it's a good time for the customer to go and shop.
Govindraj Ethiraj: So who's taking the haircut here then? If the consumer is getting it at a price which is post-September 22nd price.
C S Vigneshwar: I think some of it costs, the burden has been taken by the manufacturer and some of it is taken by the dealer. But at the end of the day, the manufacturer has a bigger role to play, because as FEDA, we've been screaming out aloud for the last year and a half, we are overstocked. We are saying 21 days of stock is more than enough to serve customers.
A lot of manufacturers are taking the stock to an average of 55 days, 56 days right now. Some of them are 30 days, some of them are 50 days, some of them are even higher. So the owners right now are the manufacturers.
We've said that I don't want this stock, but we've been pushed the stock by manufacturers. So the majority of the stock is because of their doing. And therefore, they also have the responsibility of liquidating stock and the stress which is accumulated because of higher stock.
Govindraj Ethiraj: Got it. Last question, Vignesh. So beyond September 23rd, how are you seeing this season, particularly compared to last year?
C S Vigneshwar: I think it's going to be great. The economy has been doing well, in general. In our markets, we predicted the two-wheeler industry to grow in the mid, slightly higher single digits.
The commercial vehicle and the commercial vehicle might be flat, that's what we commented. And the four-wheel industry will probably be growing in the lower single digits. I think all of it has come true with the two-wheeler, which has been much less than predicted.
But having this new tax structure is going to really buoy demand, get people over to our showrooms. And it was an option, people sell them a vehicle of their choice.
Govindraj Ethiraj: Great to hear. All the best for the festive season, Vignesh. Thank you so much for joining me.
C S Vigneshwar: Thank you.
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Meanwhile, India's Commerce Minister has joined the Finance Minister in exhorting industry to pass on the tax cuts to consumers. He said that it must be ensured that goods and services tax reduction reaches consumers, which in turn will strengthen industry and trade.
Tesla's Woes
Sticking to cars and another sign of how nothing is permanent or even close to it, Tesla's U.S. market share has now dropped to a near eight-year low in August even as buyers switched to rival models against an ageing lineup from Tesla, according to Reuters, which quoted data from research firm Cox Automotive. Can you imagine Tesla's lineup being called ageing? The decline highlights the threat from automakers who are ramping up electric vehicle incentives at a difficult time for industry. Analysts expect, says Reuters, an EV sales bump to continue through September in the United States and then drop when federal tax credits expire at the end of the month, which raises financial pressure on Tesla and other auto companies.
Now, here's the interesting part. Tesla once held more than 80% of the U.S. electric vehicle market and now accounted for only 38% in August, and this is the first time that has fallen below the 40% mark since October 2017, when it was ramping up production of the Model 3, its first mass-market car, according to data from Cox, quoted by Reuters. Tesla, of course, as we've been discussing, has turned its focus to building robotaxis and humanoid robots and also using that as a pitch for more value and valuation in its company, and much of that Tesla's trillion dollar valuation hangs on that bet.
And by the way, the company on Friday proposed an unprecedented $1 trillion pay package for Musk, apart from other operational milestones, which is related to Tesla's value rising to $8.5 trillion over the next decade. Now, the value, of course, is notional, but the pay package is more real, I would imagine, and at $1 trillion, that's about one-fourth of India's current GDP.
The Long Road To FII Sales
Why are foreign institutional investors selling now for more than a decade? And looking back, how long did the emerging market boom really last? Now, the reasons and the background are quite interesting, and so are the timelines, and some recent history can be quite illustrative. At the Elara India Dialogues for 2025 in Mumbai last week, I spoke with Adam Wolff, emerging market economist at London-based Absolute Strategy Research. Wolff has covered China and other emerging markets for over 15 years and has also contributed to the US-China Economic and Security Review Congressional Commission.
I began by asking him what has happened, or rather, what happened after that sustained growth phase that emerging markets saw between 1998 and 2016, and whether there's any hope of things returning to what they were.
INTERVIEW TRANSCRIPT
Adam Wolfe: I think the big turning point has been, the big structural factor holding back our emerging markets over the past 10 years or so has been the dollar. The dollar has been appreciating a broad basket of other currencies, and typically what you see is when the dollar appreciates like it has over the past 10 years, that leads to bad events in emerging markets. And this time around it's really just led to kind of doldrums growth in emerging markets, where that the growth differential between emerging markets, excluding China, because it's kind of a separate thing now, and developed markets narrowed from about three, four percentage points down to, well just about nothing really in 2020.
But even that kind of outcome is better than what we would expect in previous dollar cycles. If you think back to the early 1980s or the mid 1990s into the early 2000s, you saw a number of emerging market financial and debt crises at the end of that, those dollar cycles. And this time around we saw a few of those, but just in kind of smaller frontier markets.
And most emerging markets actually have managed that appreciation of the dollar much better, but still had these headwinds for economic growth that comes from that.
Govindraj Ethiraj: And what explains, I mean for someone who's trying to understand, what explains this sustained rise in the dollar itself?
Adam Wolfe: So I think typically what's driven that in the past, which is a little bit different this cycle, is that you've seen aggressive monetary tightening in the US and that sucked capital out of the rest of the world back into the US. This time around was a little bit different in the sense that a lot of it was coming from just very strong earnings growth in the equity market from a very small portion of that market. And also somewhat less aggressive monetary easing relative to other developed markets.
So the bond US treasuries were still attractive for investors in Europe and Japan, for example, and that pulled money into the US and led to the appreciation of the dollar.
Govindraj Ethiraj: And when we look at emerging market flows from the West, now it's not only the United States. The dollar is, I guess, the defining currency, but it's also coming from other countries, including in Europe. But you're saying that really it's the dollar which is determining where money will go, not from where it's coming.
Adam Wolfe: Right. I think because the international financial system by and large is a dollar-based system. And so no matter where you sit, it's the kind of dollar funding costs that determine the overall funding flows for the rest of the global economy.
And so where the dollar goes, by and large, the rest of the world kind of moves in that direction as well.
Govindraj Ethiraj: So if, let's say, big funds, including endowments and long-term pension funds, I mean, they're the kind who also invest in large amounts for long periods of time in emerging markets or have invested. If they have not been investing so much in emerging markets in this period, particularly, let's say after 2016, where have they been putting their money?
Adam Wolfe: A lot of the money has gone to the US. I mean, you can see the flows into US treasuries, which is really just an alternative compared to, they've looked more attracted to European bonds that they might've added to those portfolios. But a lot of that has gone into the US equity market.
And you can kind of see the concentration of that into the US and you see the up-performance in terms of valuations as well. And that's been driven partly by earnings growth, but that earnings growth has attracted those flows and amped up the price of those stocks.
Govindraj Ethiraj: Say we are in the cycle today. I mean, are we sort of plateauing? Is it still going downwards?
I'm talking with the flow because the dollar, of course, has weakened, and I'll come to that in a moment.
Adam Wolfe: In terms of the flows, it doesn't look like anything has changed dramatically so far. So we saw this blip in April when the first round of tariffs came from the US and you saw US treasury yields spiking while the dollar was depreciating. And that kind of led to some outflows, but that's since reversed.
And you're still seeing flows going back into the US. I think the difference since April has been a larger portion of those flows have been hedged, currency hedged. And that's kind of led to this decoupling between treasury yields and the dollar that you typically don't see.
Govindraj Ethiraj: And if I were to come back, I mean, what's the outlook here? I mean, if we were to look now, it's been more than six months of tariff tantrums. The uncertainty seems to have been absorbed by all markets, or most markets, though the economic damage, I suspect, will be felt much later or for longer.
So which way could flows go?
Adam Wolfe: I think that we're probably nearing a tipping point in terms of flows and for the dollar itself. A simple way to put it would be that global investors are over-indexed to the US at this point. New questions are emerging about the safety of those investments for political reasons, but also for reasons of just market concentration . It's really six stocks driving most of the US market at this point.
And the dollar is really overvalued by almost any metric right now. And currencies do tend to mean revert over time back to their fair value. As you have that kind of valuation and the catalyst to push it in that direction.
So I think we're probably nearing the tipping point where we should be in more of a structural bear phase for the dollar. And that bear phase will mean net outflows from the US to the rest of the world.
Govindraj Ethiraj: And what's your sense about emerging market risk appetite right now? So again, if I were to, if you were to keep dollars aside for a moment, I know you can't do that. But if you were to, for a moment, I mean, investors spend time and effort trying to understand, identify stocks in emerging markets, because they saw long term growth potential, higher alpha and so on.
While that may be sort of being counterbalanced by the strong dollar all this while, I would imagine that there is still risk appetite or, well, let me put the question differently. What's your sense of that risk appetite when it comes to emerging market equities?
Adam Wolfe: So we haven't seen big flows into emerging market equities so far. And I think that global risk sentiment towards emerging markets is still somewhat cautious. I think that the economics look relatively positive, or have looked relatively positive so far.
So you see the real GDP growth differential, why do you need to back out between emerging markets and developed markets? The thesis of investing in emerging markets is that they should grow faster than developed markets. And so that thesis is being reflected in real data again. So that should be pushing flows in.
I think that the volatility in US politics and what that's meant for the global economy has left people a bit more cautious. And so while there are concerns about the riskiness of US assets, that's not going into even riskier assets, it's going into close alternatives for other safe assets. So gold has done very well as a result of that, because in terms of the risk spectrum, it's closer towards the treasury than an EM bond would be necessarily.
Govindraj Ethiraj: And if you were to look at, let's say, the rest of 2025, how are you seeing the overall behaviour of the dollar versus frozen once again?
Adam Wolfe: I think as things start to settle down, and economic fundamentals become more important, that we should start to see more flows going into emerging markets and going further out on the risk spectrum in non US assets and emerging markets will benefit from that as well. I think Europe also looks attractive. So some of the flows will go into Europe and EMs may not absorb the bulk of those flows, it might be a smaller portion, but it'll be a net positive compared to what emerging markets have seen over the previous 10 years.
Govindraj Ethiraj: And I mean, I don't know if you've done any early studies on what the impact of tariffs are going to be. But what's your sense? I mean, not so much linked to investing in equities, but what's your sense in terms of the economic harm, if so?
Adam Wolfe: So I think for most emerging markets, this is an absorbable hit, that it's half a percentage point off of GDP growth or something like that. And for a country like India, that's growing seven and a half percent, that probably doesn't even get noticed. For some other countries, the hit might be a bit larger for smaller, more open economies, the hit will be larger, but in aggregate, it's going to knock a little bit off of GDP growth, but not really disrupt that growth pattern over the medium term.
And I think that there are some offsetting benefits for emerging markets. One would be the dollar itself, if it were to depreciate, because most global trade is invoiced in dollars, that means that imports become cheaper for the rest of the world in local currency terms, and that tends to boost the volume of global trade overall. And that can offset some of the impact of the higher tariffs in the US, which will drag down, you know, about 15% of global imports that come from the US.
That is a meaningful headwind. But if the other 85% is growing faster, that absorbs some of that impact.
Govindraj Ethiraj: And what's your sense now that all the other major countries, China, Russia, India, for example, have just got together, there's an attempt to present a unified front of sorts against the United States in the tariff context. What could this lead to? I mean, it could lead to not much, but if it could lead to something, what could it be?
I mean, as a macroeconomist?
Adam Wolfe: Yeah, I mean, there are a number of outcomes that this can lead to. So I think on the most extreme would be a real economic and financial, closer financial integration between the economies and moving away from this international dollar payment system, trying to settle more trade in local currency, for example. Or the easiest thing would be to settle more trade in Chinese RMP, because the international payment system exists already as an alternative to the international dollar payment system.
And so we can see more of that trend. And you are seeing Chinese banks lending more aggressively abroad in RMB rather than dollars they have done traditionally. And that can kind of push a portion of emerging market activity into a different system that would have behaved differently from this kind of global dollar cycle that we've been talking about.
I do think that it's, so South-South trade has been a growing portion of most emerging markets and export baskets. And so the BRICs broadly defined trade more with other BRIC countries than they do with the US and US allies and kind of NATO broadly defined plus Japan and Australia. And that trend will continue.
And that also makes them a bit more insulated from the kinds of cycles in developed markets. I think what's difficult is that South-South trade can't be a direct replacement necessarily for US imports, because the products that India exports to the US, for example, only about a third of that export basket overlaps with the export basket of what it exports to the other emerging markets. And so it would require a more aggressive retooling of the economies that seems unlikely in the short run.
But it's a helpful offset, but it's not a direct kind of one-for-one replacement.
Govindraj Ethiraj: Last question. So, I mean, when you get up in the morning, what's the metric that you usually look at to see where the world's at from your vantage point?
Adam Wolfe: Well, I mean, I think that the two most important variables from the financial markets are really the dollar, trade-weighted dollar and where the US 10-year treasury will hit us. And that helps to determine where everything else is going to flow. Because I do think that the dollar cycle really is the dominant financial cycle for the global economy.
Govindraj Ethiraj: Right. And a pleasure speaking with you. Thank you so much.
Adam Wolfe: Thank you for having me.
