No more bears in there? Is the bear market done already?

Adam: [00:00:25] Hello and welcome to comedian versus economist. We demystify the world of money and help you get a handle on the bigger picture. My name's Adam and we're joined, as always, by my little older brother and real life economist Thomas. Hi, Thomas. 

Thomas: [00:00:38] Yeah. Gday. Adam, how are you doing? 

Adam: [00:00:40] Doing very well. Thank you. Nice to be back. Back from holidays. Did you have a good couple of weeks off? 

Speaker 1: [00:00:45] Yeah, I did. 

Thomas: [00:00:46] I did. The kids crystal mining. And that's what we do up here. 

Adam: [00:00:49] In Mullumbimby as you do, yeah. Do you feel you boots. You get some crystals, some sweet crystals. 

Thomas: [00:00:55] They make you pay for it actually. So we. 

Speaker 1: [00:00:57] What. Yeah.

Adam: [00:00:59] Because inflation is getting everywhere. It's even hit the crystal market. Uh, so. Oh, well, that's good. It's nice to be back. Not to be back. It was nice to have a holiday, too, or, as I call it, a lower day madness to jump off and do a bit of stand up over the break. So that was fun. Just as soul crushing as I remember it. And it is good. It good fun as always. Big show coming up. So let's get stuck straight into it. Inflation is blowing up again as it does. I guess if it wasn't, it wouldn't be called inflation. It would be inflation. BMW more like bam trouble year as owners start to hack their cars, we'll find out why. But first timers, last time we took a break over Christmas, the markets all went to custard. So two weeks off. Thomas, what did we miss? Yeah. [00:01:53][53.6]

Thomas: [00:01:53] Now the markets have have. They're up. They're going well. Yeah. [00:01:56][3.1]

Adam: [00:01:57] Tokyo. [00:01:57][0.0]

Thomas: [00:01:58] Yeah, yeah. So, yeah, maybe we don't have as big an impact on the market. [00:02:02][3.3]

Adam: [00:02:02] As we initially feared. [00:02:03][0.7]

Thomas: [00:02:04] Now things are looking pretty good for the US market. That's up now. Well, yeah, it's like I said, we've had a shocker of the year. Through the first six months of the year, the US market was down 20%, the worst half year performance in 50 years, but now it's up 12% since that since hitting a low point. Yeah, Nasdaq's up 16.4%, so yeah. And now July's the third for the US market is the third best July ever and the best since 1939 really. [00:02:32][28.2]

Adam: [00:02:33] Doesn't feel that way. I'm not I'm not picking up that vibe in the media and stories that I thought were still very doom and gloom. [00:02:40][6.6]

Thomas: [00:02:41] It is, it is. It's it's it's a weird rally. And so a lot of people this is a and this is a similar story in the Aussie market. It's up about the same amount, about 9% or something, but there's not, it's not like there's a catalyst for it. Karen Maley in the in the AFR calls it The Things Can't Get Any Worse rally. [00:03:00][19.6]

Speaker 1: [00:03:01] I heard one of. [00:03:03][1.7]

Adam: [00:03:03] The markets. [00:03:03][0.1]

Thomas: [00:03:03] Going well can't get any worse. [00:03:05][1.8]

Adam: [00:03:06] Anyway from here is up but that's what I reckon though there's a lot of people that seemingly think things can get significantly worse from here, but that's the tone that I'm that I'm get. Maybe I'm reading the wrong my way so I don't know. [00:03:21][15.5]

Thomas: [00:03:22] Yeah. I mean, if you look at you look at the narrative building around the rally at the moment, there's sort of two things. One is earnings. We've had some earnings seasons in America. We've had some big results, big names at the moment. So like Amazon and Apple and those guys, they all came in better than expected. So not amazing, but analysts are expecting it to be a lot worse. And so it's better than expected. And so people are like, oh, maybe it's maybe it's not so bad pinning a bit of hope on that. And the other the other thing is monetary policy. So Jerome Powell from the Fed, he was saying that he thought the Fed was getting closer towards neutral, that interest rates were having having their impact. The latest statements had recent indicators of spending and production have softened. So markets sort of took that as a bit of a signal saying like, oh, the Fed's going to not be so aggressive from here on. And maybe, maybe we've we've gone past the peak of the hiking cycle. There's still more hikes to come potentially, but it's not going to be as dramatic as we potentially fearing. [00:04:23][61.6]

Adam: [00:04:24] He was saying all that on the same day, though, that he announced a 75 basis point rise. [00:04:30][5.5]

Speaker 1: [00:04:31] Yeah. [00:04:31][0.0]

Adam: [00:04:33] That was that was a really got me. It was kind of like, oh yeah, there's a lot of positive talk coming from from Fed Chair Powell. It's like, well, yeah, but he also did mention 75 basis point increase. Let me just write to have you guys picked up on that. So it just seemed like everyone was happy to ignore that almost. Oh, is that because that was already priced in like that? That was to be expected already. So no one was like, well, this isn't a surprise. It's not almost it was just bizarre that it wasn't almost even newsworthy. [00:05:04][31.6]

Speaker 1: [00:05:06] Yeah. [00:05:06][0.0]

Thomas: [00:05:06] So it was in the fine print really. Oh yeah. Hiking, but yeah. [00:05:10][3.4]

Adam: [00:05:10] Five weeks and we're going to hike more like it wasn't the end. And it wasn't like because I was always thinking it would be the markets would turn when they kind of went right. Well, we reckon that's it. That's the last hike that we're going to do. And then all the markets were to go on a. A nice one and sort of, you know. [00:05:26][16.1]

Thomas: [00:05:27] And the. [00:05:27][0.7]

Adam: [00:05:27] Trajectory, again, is. [00:05:28][0.9]

Thomas: [00:05:29] That you got to be forward looking near the hill market. So it's always trying to anticipate the future and that so that was the pivot U.S. like rather than this sense you had out of the Fed, it's like, oh my God, everything's out of control. The whole economy is on fire. We're going to have to keep hiking the more like, yeah, okay, we've hiked and now it's having an impact some of the does softer and so that was that was like the signal to the markets so they took that as a signal like okay he's not as aggressive as he was a month ago. [00:05:58][28.9]

Adam: [00:05:59] Did the bear market start and and so is it now over is is this like the commodity supercycle that we had last year that lasted for about a month and a half? Yeah. [00:06:08][9.3]

Thomas: [00:06:08] Is it I mean, this this this is the question in markets right now. So is this rally sustainable? Have we have found a bottom and is it onwards and upwards from here or is this a false signal? Well, maybe call it like a dead cat bounce where we just get this sort of lift and then then things type and keep keep going down. I saw an interesting stat the other day saying like in the the dot com collapse in 2000. So between March 2000 and April 2002, the Nasdaq fell 78%. It's a huge fall, but in that time, it rallied more than 10% on 11 different occasions and in one rally added 45%. So, yeah, so there's there's a lot of cases in history where the market gives you a false signal, where it looks like it's found the bottom, but it hasn't. It keeps going down. So so this is the question that remains, though, like is it onwards and upwards and here and particularly because, you know, it's it's that idea that things can't get any worse. Like that's not a lot to hang hang a recovery on. There's a bit of sort of hope in that mix like is there inflation still not contained and killed? So that's one one part of the story. So like. Right, they're raising rates. They that seems to be working. The economy seems to be slowing, but we don't know. And there is sort of some hint of of wages pressure. Latest wage rate in the US is showing wages growing at over 5%. So that seems seems less and wages pressure picking up there. So maybe maybe inflation isn't down, which means that interest rate hikes aren't done either. That's still a risk. [00:07:48][99.9]

Adam: [00:07:49] And what about the R word? What like the recession that my understanding is a recession has a definition, right? That recession is two negative quarters of GDP. Yeah. Is that right? That's the recession. Yeah. So the US had that and then Joe Biden and others came out and said, well, yeah, it's a technical recession. Technically it's a recession. I'll go give you that. But it's not really a recession. So is it a recession or is it not a recession? [00:08:17][28.1]

Thomas: [00:08:17] Thinking about recession, the reason we care about recessions isn't because of the stuff that we're producing. So GDP measures, the stuff that the economy produces and when it goes down for two consecutive quarters, that's a recession and that's bad. But it's not bad in and of itself in the sense that it's really worse, that we have, you know, 1% less stuff in the in in the quarter than the previous quarter or something like that. The reason we care about recessions is that typically unemployment lifts when you've got a recession and that creates real human impacts because people lose jobs and then they can't afford mortgages and then they stop spending and all this sort of thing. So that's that's why we care about recession. And I think the point that they're making there is that, yes, GDP is slowing, but unemployment remains very low and wages are lifting. So there's not the human toll that normally goes with a recession. So while it's while it has GDP's printed negative, it's not a classic recession in the sense that unemployment's lifting and there's bad social outcomes. [00:09:23][65.4]

Adam: [00:09:23] You can call it a recession or you can't. [00:09:25][1.9]

Thomas: [00:09:26] Yeah, no, no, it's definitely a recession. Yeah. Okay. No dodging that. But like, it's not it's not saying like it's, you know, in the worst of times and things are really bad. And typically like because I think the case, if it was the classic recession and GDP's falling and unemployment really high and getting worse, then you wouldn't be raising rates. You wouldn't raise rates into a recession. It doesn't make sense. And so they're saying that that's sort of what the economic commentariat sort of saying is like. Yeah, it's technically a recession, but it's still inflationary. Pressures are there. Unemployment is still very low. You still need to raise rates. Right, to head off inflation. [00:10:05][38.7]

Adam: [00:10:05] And so just on the interest rates thing, so so the markets are all comfortable with rising rates now then. Yeah. [00:10:11][6.2]

Thomas: [00:10:12] So yeah. So the RBA is going to meet tomorrow. We're recording, we were recording on Monday, the meeting tomorrow. [00:10:17][5.2]

Adam: [00:10:18] Very convenient that the RBA chose to meet due to meet on a Tuesday. Yeah. Yeah. For our show. [00:10:23][5.0]

Thomas: [00:10:24] Yeah I know. [00:10:24][0.4]

Adam: [00:10:24] I mean one of the word was filler that. Yeah. [00:10:26][1.6]

Thomas: [00:10:27] Next time we have dinner. Mhm. Yes it is awkward but yeah. So it's like marketing 90% chance of 50 basis points tomorrow. That seems pretty likely. But the terminal right now where the market's pricing in that's come off a bit, so it's down to around 3% now, whereas to two and a bit months ago it was four, four and a half per cent something like that. Right. So it does seem that markets are sort of starting to walk back some of the worst fears about where rates could go in Australia and probably in America too. [00:10:57][30.4]

Adam: [00:10:57] Right. [00:10:57][0.0]

Thomas: [00:10:58] So it's still on the way up, but probably not headed as high as we were worried about two or three months ago. [00:11:04][5.8]

Adam: [00:11:05] Alright, well there you go. So maybe it's the bottom, maybe it's not. Hopefully that helps you with your investing decisions. All right, Thomas, we're talking about inflation. And this segment is brought to you by Invest Smart, Intelligent Investor. You can find them at WW Dot Invest Smartkom, don't you? THOMAS Inflation data is out this week. What did we learn? [00:11:30][25.1]

Thomas: [00:11:30] Yeah. So it was up. It met expectations though. So it's a strong numbers, but in line with expectations that didn't really rock markets. We were at 1.8% in the quarter, now 6.1% over the year. So 6.1%. That's the highest level since the introduction of the GST. Back in the turn of the century. [00:11:49][18.8]

Adam: [00:11:50] They said it would be a problem when they brought in GST. I said it was going to cause problems and here we are. [00:11:54][4.5]

Speaker 1: [00:11:55] A. [00:11:55][0.0]

Adam: [00:11:59] Little bit longer to play out. [00:12:00][1.0]

Thomas: [00:12:01] So but yeah, I mean it was, it jumped up to 6.1% back then, but only for like a couple of quarters. And then it sort of worked its way out of the system pretty quickly because is just a one off shift. We're not seeing that. So it was 5.1% over the year to the last quarter, to the March quarter now 6.1% to the most recent quarter. So so it's rising and it's probably going to stay high going forward, right? Yeah. And now and importantly like with the in terms of the RBA, like the it's the furthest it's been from the from their target band that you remember, they target 2 to 3% inflation so further than it's been since that since the early 1990s. So yes generational change in the inflation outlook we haven't had. Yeah, most people don't remember. Inflation is higher. [00:12:45][44.4]

Adam: [00:12:45] No I don't remember inflation at all. Yeah. [00:12:48][2.3]

Speaker 1: [00:12:48] Yeah. [00:12:48][0.0]

Thomas: [00:12:50] Yeah. So that remains up to 4.9%. That's Yeah. Higher since two since I've started tracking the three main back in 2003. Yeah. So it's a strong result. I mean interestingly so energy's not in this in this data yet, so electricity prices are lifting and that's sort of the way the energy markets structured. It's going to take a while to feed through into retail electricity prices. So we're not seeing that in the data yet. So that means there's more pressure coming through the pipeline. But at the same time, commodity prices, particularly oil and wheat, have started to fall off their most recent highs. So that's going to put some downward pressure there. And if you look at the quarterly numbers like so it was 1.8% in the quarter, but that's down from 2.1% in the previous quarter. So if that sort of trend continues, maybe suggesting that we've passed the peak in in inflation. [00:13:42][52.3]

Adam: [00:13:43] What's New Zealand doing because they are the canary in the in the coal mine and I don't have a hand. [00:13:49][5.6]

Thomas: [00:13:50] I don't know, you know, I'd have to check. [00:13:52][2.5]

Adam: [00:13:53] Yeah. I'm not going to believe that we've peaked until I've seen New Zealand peak. Yeah. [00:13:56][2.8]

Thomas: [00:13:56] Yes. It's a, it's a bit of a mixed bag so yeah. It's strong. I mean part of this I think is why we talked previously about like the markets sort of ratcheting back their expectations for the terminal interest rate, terminal cash rate. I think this is part of the story like it's not it's not getting out of control. It's in line with with what markets are thinking. Yeah. So I was reading the Intel's investors. There's an analyst called John Adams who has lots of great stuff, but he sort of broke it down saying, look, you really got to look at this in terms of supply and demand. So at the moment we've got supply shocks and they're in the news a lot. So we got the war in Ukraine and, you know, gas, gas prices and all of that. And then you also have the demand shocks as well. So is like the pent up spending from COVID and government stimulus measures coming through and they're they're feeding through. And so the question that that the RBA is thinking and what markets are trying to unpack and try to understand is is inflation temporary, have like is it as it's here so vaguely suggesting at the moment that we've peaked we've passed peak inflation, that this inflationary impulse is going to move quickly through the system and we're going to return to sort of more normal levels of inflation. Or is it more permanent? [00:15:10][73.7]

Adam: [00:15:11] I'm curious like how long do we get to answer this question? Because this this is inflation transitory or is it more permanent? I think was first asked we started talking about it eight months ago. [00:15:22][11.0]

Speaker 1: [00:15:25] Like. [00:15:25][0.0]

Adam: [00:15:26] How long do we get before we have to just go? Well, it's it's it's permanent. It's at least more permanent than transitory, because I don't know that we like, you know, we're still going to be here in three years time. I'm going. Well, we're not sure yet. It could be could be permanent or it could be transitory. We're still the the jury's still out like three and a half years. [00:15:46][20.2]

Thomas: [00:15:48] I think what you're looking for is when inflation starts to feed back on itself and this is sort of why everyone's asking about the wage price spiral, is that that's when inflation starts feeding back on itself. So inflation goes up and then people demand more wages. To compensate for inflation, firms start pushing up prices to compensate for higher wages. That pushes prices up, which then. People need more in their wages and you sort of get this feedback loop and that's what you would sort of call permanent. I think once you once you see evidence of that, that's when that's when you say, I have this is this is permanent. This isn't just a temporary thing moving through the system. Well, I read a couple of pieces by John at us, and I like what he's saying here. He's making the case that it's not we're not seeing there's no evidence of the wage price spiral yet. He doesn't reckon we're going to see it anytime soon. So saying that it's not not in the wages level yet, particularly in Australia, our wages data is a bit slow, but even in America like there's some hints like it's dead, wages are definitely, definitely lifting, but they're not likely to get a run on. It doesn't it doesn't seem that will definitely and that's definitely not in the. [00:16:57][68.7]

Adam: [00:16:57] Why why why are we not going to what like what's the rationale for that for us not having a wage price spiral? [00:17:04][6.7]

Thomas: [00:17:04] So John, at this point, so a couple of things like the first is that that union power is down. So if you go back to the 1970s and like the wage wage price spiral that that started then, which is sort of like the classic textbook textbook example, union power was much stronger. Their union membership was about 50% of the working population back in the 1970s. It's down to 15% now. So unions have, yeah, much of the union membership has tanked and alongside that, so work stoppages, a strike strike action that's down from that's down 97% on where it was in the seventies. [00:17:41][36.9]

Adam: [00:17:42] That's because strike action now has to be organised on Reddit and things like that rather than through meetings, organised case of unions and have been replaced by Reddit forums. Boy, you reckon we should strike. Yeah, we got three people there. Yeah. Yeah. [00:17:58][16.5]

Thomas: [00:17:59] So without so the unions really cemented that sort of wage price spiral because they were, they were actively organising and making sure that their workers were keeping pace with wages, were keeping pace with inflation. Then they're building it into agreements formally, right? Yes. But union memberships down partly that's about sort of like policy settings that have that have sort of undermined union membership. But it's also about the structure of the economy that we've we've moved away from a manufacturing six heavy economy towards a more services sector, and services just generally is less unionised and has always been less unionised. So as, as the, as the composition of the economy shifted that's that's eroded unionisation rates. [00:18:42][43.7]

Adam: [00:18:43] Is it possible to that with rising inflation, people are having to cut some spending and they've just gone, oh, I just can't pay these union fees anymore. Yeah, maybe, maybe. Yeah, I wouldn't hang my hat on that. I'm going to get rid of my Stan subscription. I might stop by, pause Disney and maybe I'll just ditch the A.U. for a while. Yeah, no, I'm pretty sure that's that's not it. Yeah. [00:19:13][29.8]

Thomas: [00:19:14] So that that's happening. I mean, we are seeing some so Starbucks is is on a is on a unionisation push. So there's 200 stores in America that have unionised in the past two or three months or something oh maybe eight months or something like that. Like it's quite, quite strong. There's a strong push there and that's sort of partly fed by a tight labour market is people feel like they've got more bargaining power. So we are seeing some hints of that. But I think we're not going back to 50%. And that's the point that John Adams makes, is that that wage price spiral was a was a kind of an artefact of an economic era where unionisation rates were really high. And in the absence of that, you're not going to get that automatic seed feedback loop, right? Yeah. So that's part of that. And the other point the other point he makes is that immigration's going to pick up sometime soon. So while the labour market is very tight at the moment, so unemployment rate's three and a half percent in Australia, that's lowest in 50 years. A lot of that has come from the absence of immigration, which has sort of lessened the pool of labour available, which is then changed the unemployment rates. So once immigration returns, that should take some of the heat out of the labour market and some of the pressure out of wages to put on pulling all those together. Like he's saying, it's hard to see your wage price spiral getting getting out of getting out of control, particularly given that given how aggressively the RBA and the Fed have hiked in recent months. [00:20:38][84.0]

Adam: [00:20:38] Is he suggesting that we're not likely to see inflation keep accelerating then it's going to it's going to start tapering off now. [00:20:45][6.5]

Thomas: [00:20:45] Yeah, I don't know if he's saying it's it's it's peaked necessarily and partly because like you look on the supply side, there are still things that are that are feeding through like you like the electricity prices. So this that that so that impulse is still coming in to the inflation data. So e-wallets temporary. It's still not there yet. So we might still see inflation pick up, but it won't be long lasting and it might not necessarily be the case that you want to meet that with aggressive rate hikes because it'll. It'll pass through relatively quickly. [00:21:15][29.6]

Adam: [00:21:15] Well, if you're interested in more articles or analysis like this, then head over to Intelligent Investor on the investment website. Invest Smartkom that you will put a link in the show notes. Make it nice and easy to find. We're going to take a quick break now and be back with more comedian versus economist right after this. All right, Thomas. Finally on the show today, BMW owners have started hacking their cars. What's going on there? [00:21:41][25.1]

Thomas: [00:21:41] BMW has introduced micro-transactions. So there's been a push in business to move to subscription models for everything. So basically, just like to get a steady stream of money out of your customers rather than one off payments. So, you know, Microsoft Office is now subscription versus a one off payment you can buy under with on subscription. [00:22:03][22.0]

Speaker 1: [00:22:04] What? Yeah. [00:22:06][1.3]

Adam: [00:22:06] Under way. Yeah. [00:22:07][0.8]

Thomas: [00:22:07] You just get an undeclared or something. You get like a pair of one pair of underwear a month or something. [00:22:13][5.2]

Adam: [00:22:13] As long as it's not like one of those sharing type arrangements where, you know, like it's like pants sharing or something. Yeah. You can dial up some undies to be delivered within minutes. People can make make spare cash out of their unused underwear. [00:22:31][18.1]

Speaker 1: [00:22:33] Okay. [00:22:33][0.0]

Thomas: [00:22:34] Ten pairs are sitting in your drawer doing nothing. [00:22:35][1.7]

Speaker 1: [00:22:37] But. [00:22:37][0.0]

Adam: [00:22:38] BMW has jumped on. [00:22:39][1.0]

Thomas: [00:22:39] Jumped on that bandwagon. Hmm. They are offering subscription features to unlock things that are already built into the car. So, like heated seats, for example, you can pay money to access the heated seats. The heated seats that there in the car, but they're not turned on until you pay a subscription and activate. [00:22:58][19.1]

Adam: [00:22:59] I keep hearing I keep reading this as well. Like people are talking like, you know, it's become like the heated seat story. Like everyone cites this, but there's a bunch of other features. And the one I'm not sure why we're not talking about is the fact that you can buy simulated exhaust sounds. [00:23:14][15.3]

Speaker 1: [00:23:15] Yeah, like. [00:23:16][0.4]

Adam: [00:23:16] That's the killer feature, isn't. [00:23:17][1.0]

Speaker 1: [00:23:17] It? [00:23:17][0.0]

Adam: [00:23:19] You buy a BMW instead of that instead of the twin turbo three litre inline six, you can make it sound like a child pretending to make a car noise as you leave the lights. [00:23:28][9.5]

Thomas: [00:23:32] I know it's so dumb. Like I love electronic vehicles. Like, the beauty of them is they don't make noise and they just can, like, simulate some noise on them and pay for it. Pay for the. [00:23:45][12.6]

Adam: [00:23:45] Privilege. Like, this sounds like a complete rip off. But are there any good arguments for for this model? Oh. [00:23:50][5.6]

Thomas: [00:23:52] I don't think so. There are some arguments people people are making, like, I wish I just wouldn't write them myself. There's always someone saying like that, like with the heated seats, like, not every customer wants to pay for heated seats, but if BMW is going to put a heated seat option into the the cars and the non non heated seat option like that increases the manufacturing expense. And then if you're shipping different cars around the place, that increases the cost. So it's a way to get costs down by just giving everyone heated seats and then only turning them on for the people willing to pay for the sort of an idea that maybe that makes it cheaper and makes it cheaper if you don't potentially if you don't want one heated seats but hmm. I don't know, like that sort of then implies that if you are paying for heated seats, you're paying more than the marginal cost of the heated seats because you're paying for everyone who doesn't get the heated seats option. Right. I mean, so so that means you're necessarily paying more like has to be the has to be the case that but. 

Adam: [00:24:55] You could get heated seats for like selectively within your own car though too. Like if you could get them just for winter, but you could also, if you wanted to be mean, just get one for yourself and leave the passengers just to sit are called seats. Yes, exactly. Really spice up the next family holiday. Punished is punish the kids if they're being naughty in the back. Yeah. Turn off your heating. Don't make me do it. Oh, man. Talk about first world punishments. Yeah, this is an old problem. Like, I remember I bought a CD once, right? It was a placebo seat. I wanted a real estate, but all I could find was a placebo. Like, okay, now I've got this placebo sitting. It had this digital rights management on it. And it just all it meant was that I couldn't play it on my Discman. So what I had to do was I had to put it in my computer, work out a way to to bypass the digital rights management, rip it onto my computer, and then burn a new CD so I could play it on my Discman. Like, I think the problem is if you start, if you make anything accessible at any point, then you're going to, you kind of run the risk of people just going to work out ways around it and they're going to work out a way to access it. So the heated seats are in the car? 

Speaker 1: [00:26:14] Mm hmm. 

Adam: [00:26:15] And that's what's happening, isn't that? Now people are like, Well, I'll just work out how to turn on the heated seats because you've put them in there. So I'm going to fire them up and. 

Thomas: [00:26:24] It's going to create a whole niche industry of BMW techies. Come round, come round it. 

Adam: [00:26:30] Turn on you. Ten seats for you. We saw it with Android. And iPhones like. People started jailbreaking their phones to get out of their kind of the walled garden of apple and whatever to try and what do you call it, sideloading apps and stuff like that. The problem is like in doing so, they also effectively like wiped out any of the security protections that were offered by those walled gardens as well. So then their phones got hacked. So I don't know if you're worried about paying micro-transactions via heated seats, then the alternative might be that you now have to pay a hacker $20,000 in Bitcoin to unlock your car. I'm guessing the BMW warranty is going to be pretty much void if you've hacked your own car to unlock live heated seats. 

Thomas: [00:27:18] I think that's how they get you. Take it into the BMW service centre for yourself. And they would get someone to unlock someone's hacked open. You think you hope your warranties for. 

Adam: [00:27:28] Oh, man. All right. We might leave it there. We do. Thank you for tuning in, of course, once again. And you can find lots of other great shows from Equity Mates Media Get Started Investing Equity Mates Investing Podcast. You're in good company. Talk money to me. Crypto curious and of course the dive will be back again next week. We look forward to talking to you again then. It's bye for now.