00:00How much of this, Laura, is a concern about what's actually in there, or is it just a nervous undercurrents running through Wall Street?
00:07Well, I think what we've seen is this kind of benign credit backdrop has persisted for a prolonged period of time.
00:13And what the recent developments suggest is we are in late cycle dynamics.
00:17And so I think we are going to see greater pockets of these pressures materialize.
00:22And as the cycle turns, I suspect we're going to see even more, perhaps a steeper default cycle, lower recovery rates.
00:28But I think this is really an environment where we're going to see, it's really crucial to have that robust underwriting, overlay that with the active portfolio management approach to be able for investors to discern the quality in a very complex, nuanced market when we kind of throw in the private credit dynamics as well.
00:47So I think this is an opportune time as we see these dislocations to find these opportunities.
00:51I mean, to you both, was it a long time coming?
00:54Because actually, you know, there was concerns about, again, the underwriting, the liquidity in some of these products.
00:59And so anything that makes people nervous, then people just sell off.
01:03And I think it's too soon to declare this as kind of being an inflection point for a more systemic risk backdrop.
01:08I mean, overall, the backdrop for credit still remains quite healthy.
01:12The fundamentals are strong.
01:14We are still seeing favorable technicals.
01:16So it is still kind of a favorable environment for credit.
01:19But I think the more that we see these pockets materialize in unforeseen segments, perhaps then when the confidence channel could be hit, banks are predicated on confidence.
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