WEBVTT - Bonus episode: What the gilt meltdown means

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<v Speaker 1>I'm Francie Laqua and I'm David Merritt, and this is

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<v Speaker 1>in the City, Bloomberg's podcast, connecting you to the stories

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<v Speaker 1>and the voices at the hard the City of London.

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<v Speaker 1>And right now we're going to be recording another bonus episode.

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<v Speaker 1>So much news coming thick and fast. We just had

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<v Speaker 1>to tackle this subject today. There are huge moves happening

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<v Speaker 1>in the U K's guilt market. In fact, some are

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<v Speaker 1>saying that market is crumbling. Yeah, could I just say

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<v Speaker 1>that bonds are meant to be boring? They are francy,

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<v Speaker 1>you know, they're that exciting. So we'll go to try

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<v Speaker 1>and really break it down to make everyone understand what

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<v Speaker 1>we're dealing with and what the wayfold is for the

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<v Speaker 1>Bank of England. In the studio, we're joined by Christina Kino,

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<v Speaker 1>Managing Editor of Markets and Lucia gift Apolo Asset Management Report.

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<v Speaker 1>Although we're calling her a pension queen, right because it's

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<v Speaker 1>all about pensions this week, right, I mean all the

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<v Speaker 1>danger they were in, I mean that's how bad things got. Yes,

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<v Speaker 1>I think they have become quite sexy the last few days.

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<v Speaker 1>Defined benefit pension funds, which are the funds that guarantee

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<v Speaker 1>savers a set payment when they retire, so regardless of

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<v Speaker 1>the swings of the market, they a couple of weeks

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<v Speaker 1>ago they just found themselves into a death spiral where

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<v Speaker 1>they were causing their own demise. They were facing margin

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<v Speaker 1>calls and as a result they had to sell these

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<v Speaker 1>long dated bonds which took the price much lower, and

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<v Speaker 1>then they had to pay more in collateral, so they

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<v Speaker 1>kind of got into a situation with the Bank of

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<v Speaker 1>England had to come in and save them, so a

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<v Speaker 1>death it was literally a death sparal. So these things

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<v Speaker 1>could have actually gone out of business. So people's people's

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<v Speaker 1>actual pension savings are on the line here. Well in

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<v Speaker 1>a way, yes, so they they use some type of

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<v Speaker 1>derivatives to do that and these the funds that they

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<v Speaker 1>use would have had to be liquidated. Now whether the

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<v Speaker 1>pension funds would become solvent is a different question, and

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<v Speaker 1>it's not certain they would have, but they would have

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<v Speaker 1>major life. Has this ever happened in the UK before

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<v Speaker 1>in the pension industry, No, it hasn't to my knowledge.

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<v Speaker 1>In the last so the strategy exists for twenty years

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<v Speaker 1>and it's the first time they've been that people found

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<v Speaker 1>out there is this thing actually exists. But but this,

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<v Speaker 1>I mean, the point is that we had forty eight

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<v Speaker 1>hours of complete chaos in guilds. But this is should

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<v Speaker 1>be low risk investing. And once again, and this is

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<v Speaker 1>usually how crises started. Once again, it's slow risk investing.

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<v Speaker 1>You know, these strategies that are anything but low risk.

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<v Speaker 1>So what did we get wrong? I think that these

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<v Speaker 1>were meant They worked very well in a kind of

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<v Speaker 1>low rate environment where they were not wild market moves.

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<v Speaker 1>But once they started, they couldn't control it because they

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<v Speaker 1>hadn't faced it before. Some people, some consultants, have said

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<v Speaker 1>that the volatiles broke through this model that had worked

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<v Speaker 1>fine for the past twenty years, and now they don't

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<v Speaker 1>know if going forward they can actually use this in

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<v Speaker 1>the way it is right now. I just starting it

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<v Speaker 1>back bit here, maybe bringing in Christine just Um where

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<v Speaker 1>this all began with. We've got a new government in Britain,

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<v Speaker 1>new Chance to the Exchequer, that what they're calling their

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<v Speaker 1>pro growth Agenda. They announced a huge slew of tax cuts.

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<v Speaker 1>It freaked out the markets, but the place it freaked

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<v Speaker 1>them out most was in the government bond market or

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<v Speaker 1>the guilt market. Wasn't it. Can you explain a little

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<v Speaker 1>bit to us more broadly why that happened and how

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<v Speaker 1>do we get to this point where actually everyone's pensions

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<v Speaker 1>on the threat. Well, if I think what we saw

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<v Speaker 1>on bond markets is essentially investors going up in arms

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<v Speaker 1>over the UK's fiscal plan. They're calling it a pro

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<v Speaker 1>growth plan, but what they're really doing is spending more,

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<v Speaker 1>cutting taxes and doing it in such a way where

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<v Speaker 1>it's going to be unfunded, i e. They're going to

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<v Speaker 1>have to increase the amount that they're going to be

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<v Speaker 1>borrowing from public markets over the next few years. Now.

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<v Speaker 1>They justified this and they sort of interrupted. They said, look,

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<v Speaker 1>the market can take more borrowing. They said, Britain's got

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<v Speaker 1>one of the lowest debts of g D p R

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<v Speaker 1>shows of the G seven. You know what we can

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<v Speaker 1>we can afford to borrow it more. But they got

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<v Speaker 1>that wrong, right, Yeah, because I think the other side

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<v Speaker 1>of this, so that's one side of it, right, is

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<v Speaker 1>the fiscal approach, and this is what the UK plans

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<v Speaker 1>to do. And yes, maybe in a vacuum, you would

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<v Speaker 1>think that the government, or or rather the bob market

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<v Speaker 1>in the UK has the capacity to absorb more debt.

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<v Speaker 1>But the other side of this is very important, it's

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<v Speaker 1>the monetary policy side of it. We are in an

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<v Speaker 1>environment of a rising rates and rapidly so in the

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<v Speaker 1>Bank of England already behind as it is versus other peers,

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<v Speaker 1>was going to have to scramble to raise rates a

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<v Speaker 1>lot more to get ahold of inflation. And suddenly you

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<v Speaker 1>have monetary policy and fiscal policy clashing majorly, which really

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<v Speaker 1>what the bond markets was up in arms about. So

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<v Speaker 1>look it was this really a miscalculation from the government.

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<v Speaker 1>As far as anyone can remember or recall, the UK

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<v Speaker 1>run a deficit on its current account, which means that

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<v Speaker 1>the nation, as Mark Arney said, relies on the kindness

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<v Speaker 1>of strangers. Those strangers or investors. I mean for the

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<v Speaker 1>long dated bonds, the main investors are the pension funds,

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<v Speaker 1>and this was one of the problems that there were

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<v Speaker 1>no natural buyers, so no one was going to buy

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<v Speaker 1>when they were selling because they the long dated bonds,

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<v Speaker 1>which are the bonds that would mature in like twenty

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<v Speaker 1>thirty years, they mainly owned by these pension funds. I

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<v Speaker 1>don't know if anyone had thought that this was a

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<v Speaker 1>possibility in life that this this thing could actually happen

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<v Speaker 1>and it would just be another obscure part of the

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<v Speaker 1>market that would blow it all up. But was there

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<v Speaker 1>also a liquidity problem which regulators are now looking into.

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<v Speaker 1>There were liquidity problems because the pension funds had to

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<v Speaker 1>come up with collaterals so fast that they actually not

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<v Speaker 1>have time to sell any assets. So they would have

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<v Speaker 1>to come up with collateral in three or four hours

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<v Speaker 1>when they usually have ten days to do so, and

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<v Speaker 1>they were just they had assets to sell. They were

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<v Speaker 1>liquid in the sense that they had equity to sell,

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<v Speaker 1>they had bonds to sell, they just did not have

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<v Speaker 1>any time to sell them. So we had emergency action

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<v Speaker 1>from the Bank of England to try to try to

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<v Speaker 1>stop the panic. We've had them again this morning, we're

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<v Speaker 1>recording this on Tuesday morning. We've had them again coming

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<v Speaker 1>out and stepping into the market to try and stabilize

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<v Speaker 1>things because yesterday on Monday, we saw this huge, i

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<v Speaker 1>think record increase um in the yields on inflation linked gilts. Christine,

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<v Speaker 1>can you explain a little bit about what happened yesterday

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<v Speaker 1>in the historic move Well, I think what we saw

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<v Speaker 1>yesterday it was precisely the dynamic that Lucia was describing. Right,

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<v Speaker 1>you suddenly had this massive sell off in this part

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<v Speaker 1>of the market that is usually very sleepy, Dave, this

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<v Speaker 1>doesn't happen on a normal day, but we finally saw

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<v Speaker 1>it happened because all of these pension funds that had

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<v Speaker 1>to dump their assets, right, they are mainly the biggest

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<v Speaker 1>buyers of these inflation linked bonds and suddenly they're having

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<v Speaker 1>to sell these and that create did the spiral of

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<v Speaker 1>a sell off in this market. Investors or maybe third

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<v Speaker 1>party observers are suddenly seeing, oh my god, there's a

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<v Speaker 1>sell off. We better get in on this before we

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<v Speaker 1>get burnt, and that kind of just causes the spiral,

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<v Speaker 1>the death spiral that the Lukia had mentioned. And again

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<v Speaker 1>this is why probably we're seeing the Bank of England

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<v Speaker 1>having to step in, what for the second time in

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<v Speaker 1>two days. You know you've covered markets for many years here, right,

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<v Speaker 1>have you ever seen, especially in the boring guilt market,

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<v Speaker 1>these sorts of moves ever before? No, not in my lifetime,

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<v Speaker 1>and I've been in this market for more than a decade,

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<v Speaker 1>aging myself a little bit here. Uh No, this is

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<v Speaker 1>really unprecedented at least in the modern ages. And I

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<v Speaker 1>think this is precisely why investors in the Bank of

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<v Speaker 1>England alike are probably really really worried. Right now, can

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<v Speaker 1>you explain to understand what was really at work? Maybe

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<v Speaker 1>we need to also understand these liability driven investments, right

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<v Speaker 1>That's useful because it means basically that pensions funds have

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<v Speaker 1>to have enough roll re liability to cover it. Dear lord. Yes,

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<v Speaker 1>so this is l d I is something that has

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<v Speaker 1>now become the words people talk about. The three weeks ago,

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<v Speaker 1>I know when when it actually happened, I had investment

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<v Speaker 1>managers calling me and saying, what the hell is that?

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<v Speaker 1>They were googling explainer as to try and understand, and

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<v Speaker 1>then they were trying to kind of explain it, but

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<v Speaker 1>we have to explained around the podcast. Yes, So basically

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<v Speaker 1>this is a type of derivative trade that pension funds

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<v Speaker 1>used to match their liabilities and their assets so they

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<v Speaker 1>have more money to invest in growth assets. So once

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<v Speaker 1>they are they have enough guilts to pay out their

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<v Speaker 1>liabilities in twenty thirty years time, when the when when

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<v Speaker 1>people in the scheme will will be retired, they can

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<v Speaker 1>use assets to actually you know, grow grow the money

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<v Speaker 1>that they have. When one prices fall, they have to

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<v Speaker 1>pay collateral, and when they rise, they get collateral. On

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<v Speaker 1>this occasion, they fell, and they fell steeply, and they

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<v Speaker 1>fell fast, so they had to pay a lot of

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<v Speaker 1>money very fast. As a result, they now need to

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<v Speaker 1>have multiple amounts of cash of what they had before

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<v Speaker 1>to be able to withstand very very wild variations in

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<v Speaker 1>the market. So they're now selling everything they have to

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<v Speaker 1>come up with the cash. So you could argue that

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<v Speaker 1>at some point this was going to combust anyway, and

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<v Speaker 1>the mini budget was the fire that lit it. I

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<v Speaker 1>think yes, I think if people have thought the various

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<v Speaker 1>different scenarios of it, they could have decided that this

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<v Speaker 1>is the case. But no one was thinking about that

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<v Speaker 1>during the very long bull market and low interest rate.

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<v Speaker 1>So it's it's been a wake up call, I think

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<v Speaker 1>for everyone involved. So thinking about the real world, if

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<v Speaker 1>you like impact, there's some people listening to this what

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<v Speaker 1>we're talking about here might find all they're still pretty obscure,

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<v Speaker 1>you know, moving around these derivatives and the guilt and

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<v Speaker 1>the yield and the price action. What does it mean

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<v Speaker 1>for people's pensions, for people's savings, for people's mortgages. Well,

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<v Speaker 1>I think that these are kind of three different things.

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<v Speaker 1>But one thing is that these chaos is now spelling

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<v Speaker 1>into other asset classes. So we've seen a sell off

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<v Speaker 1>in corporate bonds, we reported a sell off in multi

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<v Speaker 1>asset funds, and I'm sure there is a lot more

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<v Speaker 1>happening that we haven't yet reported. So this will affect

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<v Speaker 1>the prices of other assets that are in people's pensions

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<v Speaker 1>as well, including not defined benefit but benefit but other schemes.

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<v Speaker 1>Then for for defined benefit schemes, I think every everyone

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<v Speaker 1>I speak to they try to downplay a bit. They say,

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<v Speaker 1>we're you know, there are no solventcy issues here, we're

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<v Speaker 1>very well liquidated, but we do have to re balance hugely.

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<v Speaker 1>I don't know if any of the big schemes will implode,

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<v Speaker 1>and I would be very worried to say, to make

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<v Speaker 1>an assertion like that, but you know, when yields go up,

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<v Speaker 1>the mortgages go up, so people will have to pay

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<v Speaker 1>a lot more. I think it was a shock. I'm

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<v Speaker 1>not sure how long it will take to manage, because

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<v Speaker 1>we've see now the Bank of England doesn't think it's

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<v Speaker 1>time for it to leave yet, So yes, I mean,

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<v Speaker 1>savers and and and people who have to pay mortgages

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<v Speaker 1>are a bit worried. But there's so much money in

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<v Speaker 1>pensions on there. You know. It's the ripple effects sore

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<v Speaker 1>as you're talking about these these these kind of fire

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<v Speaker 1>sales of other assets that's going to ripple through the

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<v Speaker 1>economy in ways that maybe we can't really protect at

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<v Speaker 1>the moment. Yes, I don't think we can't because it's

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<v Speaker 1>only just started, and investment managers generally say we will

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<v Speaker 1>see this unfolding over the next several weeks. So I

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<v Speaker 1>think it's too early to say with certainty this is

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<v Speaker 1>going to happen that The signs so far are this

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<v Speaker 1>is filling into other parts of the market, Christine, when

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<v Speaker 1>you look at guilts, this is my cf A level

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<v Speaker 1>twenty five. They're so crazy, right, some of the movements

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<v Speaker 1>are so crazy. And the Bank of England has stepped

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<v Speaker 1>in three times to change the parameters to try and

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<v Speaker 1>stabilize them. It hasn't worked. What do they need to

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<v Speaker 1>do for them to you know, stabilize well, for I

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<v Speaker 1>think we could possibly be looking at whatever it takes

0:12:01.400 --> 0:12:04.199
<v Speaker 1>sort of moment here for the Bank of England, because

0:12:04.240 --> 0:12:07.400
<v Speaker 1>so far they've really been on kind of defensive mode.

0:12:07.400 --> 0:12:10.600
<v Speaker 1>You know. They they look at the market reaction, they

0:12:10.600 --> 0:12:14.360
<v Speaker 1>decide to do something in response. The market doesn't really

0:12:15.040 --> 0:12:18.640
<v Speaker 1>um respond all that well, or at least the way

0:12:18.640 --> 0:12:21.199
<v Speaker 1>that the Bank of England intended, and then that necessitates

0:12:21.240 --> 0:12:23.440
<v Speaker 1>even more action from the bank. I think what markets

0:12:23.440 --> 0:12:26.840
<v Speaker 1>are really looking for is really decisive action. They may

0:12:26.880 --> 0:12:30.080
<v Speaker 1>be looking for something more broad in longer term, but

0:12:30.320 --> 0:12:32.720
<v Speaker 1>do they need to persist with the backstop for you know,

0:12:33.040 --> 0:12:36.880
<v Speaker 1>much longer than actually the end of this week, possibly

0:12:36.880 --> 0:12:39.880
<v Speaker 1>into that November the third Bank of England decision where

0:12:39.880 --> 0:12:42.880
<v Speaker 1>we could see a steep interest rate hike. That's certainly

0:12:43.120 --> 0:12:46.719
<v Speaker 1>one of the initial steps that we're hearing from investors

0:12:46.720 --> 0:12:49.760
<v Speaker 1>that could potentially calm the market, extending the length of

0:12:49.800 --> 0:12:53.240
<v Speaker 1>this backstop um from the current endate, which is meant

0:12:53.240 --> 0:12:56.160
<v Speaker 1>to be this week. But then also I think this

0:12:56.800 --> 0:12:59.880
<v Speaker 1>goes back to the very heart of the trajectory of

0:13:00.040 --> 0:13:02.640
<v Speaker 1>Bank of England policy itself, and we were talking about

0:13:02.880 --> 0:13:06.360
<v Speaker 1>a bank that is meant to be tightening policy. They're

0:13:06.360 --> 0:13:09.400
<v Speaker 1>meant to be raising rates, they're meant to be embarking

0:13:09.440 --> 0:13:12.600
<v Speaker 1>on the quantitative tightening process, or you know that process

0:13:12.640 --> 0:13:16.720
<v Speaker 1>of uh, the rolling off bonds from its balance sheet

0:13:16.800 --> 0:13:19.880
<v Speaker 1>after such a long time of buying them, that might

0:13:19.960 --> 0:13:23.520
<v Speaker 1>all be thrown into question because of the extent and

0:13:23.559 --> 0:13:26.000
<v Speaker 1>the speed of what we've seen in terms of the

0:13:26.040 --> 0:13:28.960
<v Speaker 1>market meltdown and the very real implications that it has

0:13:29.040 --> 0:13:32.920
<v Speaker 1>for dependence industry. Yeah, that's been it's been the quantitative confusion.

0:13:32.960 --> 0:13:35.080
<v Speaker 1>It's been called. Right, they're supposed to be ending quantity

0:13:35.120 --> 0:13:37.560
<v Speaker 1>of easing with quantity of tightening and then suddenly they're

0:13:37.600 --> 0:13:40.600
<v Speaker 1>going back to easy again. And there really is a

0:13:40.640 --> 0:13:44.280
<v Speaker 1>credibility problem here, isn't It's interesting as you say, we

0:13:44.320 --> 0:13:46.920
<v Speaker 1>need whatever it takes moment right, that's Marrow Draggy And

0:13:46.960 --> 0:13:48.600
<v Speaker 1>of course, the last time if you look at your

0:13:49.120 --> 0:13:51.760
<v Speaker 1>WB function on your Bloodbog terminal, last time you see

0:13:51.760 --> 0:13:54.840
<v Speaker 1>those sort of bond moves for government bonds across Europe,

0:13:55.080 --> 0:13:57.280
<v Speaker 1>w for world bonds, for well bonds, thank you very

0:13:57.360 --> 0:14:00.080
<v Speaker 1>much on your nearest Blindbog terminal. That was back in

0:14:00.160 --> 0:14:02.600
<v Speaker 1>the in the debt crisis in Europe, right when Maryo

0:14:02.679 --> 0:14:04.960
<v Speaker 1>Dragging had to step up and say I will do

0:14:05.040 --> 0:14:07.440
<v Speaker 1>whatever it takes to save the euro Can you see

0:14:07.480 --> 0:14:09.199
<v Speaker 1>Andrew Bailey coming out to the steps to the Bank

0:14:09.240 --> 0:14:13.480
<v Speaker 1>of England and making some sort of dectoration. Well, that's

0:14:13.480 --> 0:14:16.440
<v Speaker 1>certainly the hope. We don't know if that will actually happen.

0:14:17.080 --> 0:14:19.080
<v Speaker 1>I would love to see it happen, because we're right

0:14:19.080 --> 0:14:25.200
<v Speaker 1>outside the bank didn't spend a single euro sent back then,

0:14:25.600 --> 0:14:28.640
<v Speaker 1>right where they've already spent, and the market is testing,

0:14:28.680 --> 0:14:32.400
<v Speaker 1>testing and testing. Yeah. Well, this is the legacy of

0:14:32.560 --> 0:14:35.840
<v Speaker 1>quantitative easing, and you know this whatever it takes moments

0:14:35.880 --> 0:14:38.240
<v Speaker 1>and that Mario Draggy kind of laid out as an

0:14:38.240 --> 0:14:41.120
<v Speaker 1>example of the rest of the policymakers in the world, right,

0:14:41.160 --> 0:14:44.320
<v Speaker 1>I mean he managed to do it back then. Um,

0:14:44.800 --> 0:14:46.640
<v Speaker 1>this is more than a decade ago now, but the

0:14:46.680 --> 0:14:50.840
<v Speaker 1>stakes have been raised since then. Uh, probably because we

0:14:51.000 --> 0:14:54.240
<v Speaker 1>have been so used to such a long time of

0:14:54.560 --> 0:15:00.000
<v Speaker 1>really low rates, really easy monetary policy, very supportive central banks. Uh.

0:15:00.200 --> 0:15:03.120
<v Speaker 1>But that is all getting behind us now. You know,

0:15:03.160 --> 0:15:05.640
<v Speaker 1>we're entering a new era where center banks are really

0:15:05.680 --> 0:15:11.480
<v Speaker 1>prioritizing inflation potentially over growth, and they may not necessarily

0:15:12.240 --> 0:15:15.440
<v Speaker 1>uh be you know, it may not necessarily be a

0:15:15.440 --> 0:15:19.320
<v Speaker 1>contentious thing to see our recession as a result of

0:15:19.360 --> 0:15:21.440
<v Speaker 1>these efforts to control I mean, you know, with a

0:15:21.600 --> 0:15:23.120
<v Speaker 1>we've got a chancellor who said, you know, in the

0:15:23.160 --> 0:15:25.480
<v Speaker 1>initial term or after as many budgets said, the markets

0:15:25.520 --> 0:15:28.160
<v Speaker 1>will do what the markets do. I wonder how long

0:15:28.200 --> 0:15:30.840
<v Speaker 1>that can hold if things continue to spiral. And as

0:15:30.880 --> 0:15:33.440
<v Speaker 1>you if you say, if there's even a possibility of

0:15:33.440 --> 0:15:36.680
<v Speaker 1>a big pension fund in danger, I mean, surely it's

0:15:36.680 --> 0:15:38.560
<v Speaker 1>not just the Bank of Imman need to do something here, right,

0:15:38.560 --> 0:15:40.400
<v Speaker 1>It's the Treasury and the government as well, isn't It

0:15:42.640 --> 0:15:46.280
<v Speaker 1>isn't a question they need to get their act in order.

0:15:46.480 --> 0:15:49.760
<v Speaker 1>But I know that day and speak from the same hymnsheet.

0:15:51.920 --> 0:15:54.360
<v Speaker 1>Um so I think it's a problem that needs to

0:15:54.360 --> 0:15:56.640
<v Speaker 1>be dealt with. We kind of know that there's a

0:15:56.680 --> 0:15:59.200
<v Speaker 1>lot of lobbying going on to find a way forward,

0:15:59.240 --> 0:16:02.560
<v Speaker 1>at least on the pen inside. We don't really know

0:16:02.640 --> 0:16:04.880
<v Speaker 1>yet where this is going to lead, but there will.

0:16:05.000 --> 0:16:08.600
<v Speaker 1>The things need to change because no one guarantees we're

0:16:08.640 --> 0:16:10.760
<v Speaker 1>not going to go through the same forty eight hours

0:16:10.760 --> 0:16:13.000
<v Speaker 1>of chaos, which might be a week of chaos. They

0:16:13.040 --> 0:16:16.160
<v Speaker 1>say they're better prepared, but cash can only last you

0:16:16.240 --> 0:16:18.480
<v Speaker 1>that long. If it's not two days and it's five days,

0:16:18.520 --> 0:16:21.920
<v Speaker 1>then a lot of the selling has left funds with

0:16:22.280 --> 0:16:27.160
<v Speaker 1>many liquid assets like private equity, private credit, infrastructure. These

0:16:27.160 --> 0:16:30.280
<v Speaker 1>are very hard to sell assets, so I'm not sure

0:16:30.320 --> 0:16:32.720
<v Speaker 1>what is going to happen if they are completely dried

0:16:32.800 --> 0:16:44.480
<v Speaker 1>of cash. Thank you both for joining us, Thanks for

0:16:44.520 --> 0:16:47.080
<v Speaker 1>listening to this week's bonus episode of in the City,

0:16:47.160 --> 0:16:48.960
<v Speaker 1>and we will be back later in the week, but

0:16:49.040 --> 0:16:51.200
<v Speaker 1>in the meantime, if you like our show, please head

0:16:51.240 --> 0:16:54.720
<v Speaker 1>on over to Apple Podcasts or wherever you listen to podcasts,

0:16:55.160 --> 0:16:58.120
<v Speaker 1>rate review, and subscribe, and also definitely sign up for

0:16:58.160 --> 0:17:02.080
<v Speaker 1>our newsletter, The Readouts with Legra Stratton on blud dot com,

0:17:02.080 --> 0:17:04.800
<v Speaker 1>Slash Newsletters, or check out the show notes for a link.

0:17:05.160 --> 0:17:07.639
<v Speaker 1>This episode was hosted by me Francin Laqua and Me

0:17:07.840 --> 0:17:11.160
<v Speaker 1>David Merritt. It was produced by Summer Sadi and special

0:17:11.200 --> 0:17:15.200
<v Speaker 1>thanks to Christine Aquino and Lucia gift Alo.