00:00Do you have a sense of what this credit cycle is going to look like, if it's going to be
00:03akin to something that we've seen in the past, or if it's going to have a new kind of dynamic?
00:08Yeah, so some things rhyme and some things never change, okay?
00:11There will be a credit cycle.
00:14It's usually caused by a recession.
00:16The type of recession determines the nature of it.
00:19So stagflation is very different than just a recession, obviously the depth of the recession.
00:23And a credit cycle is a normal cycle.
00:25One of the things that's always different is which industries get really badly hurt.
00:28Like you may remember in 00, 2000, it was telecom and utilities.
00:33You know, the Ma stocks, they pay dividends.
00:35In 008, it was Warren Buffett stocks, media stocks.
00:38You know, this time it may be a software, maybe it's not, but somebody's moving and changing the type of
00:42credit.
00:43I do think it'll be things that cause a recession.
00:46It could be geopolitics.
00:47It could just be, you know, people pulling back and they're spending and companies are laying off, or they can't
00:52pass on prices or something like that.
00:54But I do think when we have that cycle, it will be worse than people expect.
00:58We're late in the cycle.
01:00We're a lot late in new entrants.
01:01There's some people out there who aren't doing great credit because we see the other side of it.
01:04And I'm not talking about private credit.
01:06I'm talking about credit in general.
01:08That could be insurance companies.
01:09It could be private credit.
01:11It could be banks.
01:12We see some banks doing things that, you know, we probably wouldn't do.
01:15So there will be, and the other thing about credit, there's always, if you look at the outcomes, there's always
01:20the people did it well.
01:21They still have a cycle.
01:22Yeah.
01:22And the people did it really badly.
01:24So, you know, that's not going to surprise me when we find out who's swimming naked when the tide goes
01:29out.
01:29So you don't think that private credit's the epicenter?
01:32No, because private credit, I mean, give you big numbers.
01:35Corporate debt in general is in pretty good shape.
01:37Consumer debt in general is in pretty good shape.
01:39And you take private credit, leverage lending, 1.7 trillion, banks do 1.7 trillion, the high yield market, 1
01:46.7 trillion.
01:47I wouldn't put that in the systemic category, even if it gets worse than people expect.
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