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00:00 Speaker A
I feel like during earning season, when you get ready to hear from the big banks, you could almost like feel a lot of investors getting to almost like this uh, this like defensive crouch, Nathan, and you’re kind of wondering, okay, is this it? Is this the quarter when they’re going to come out and they’re going to say, you know what, the economy’s cracking, the consumer’s hitting a wall. But then you looked at this commentary, Nathan, that we got from Brian Moynihan or or Jamie Dimon and when you were listening to them talk about the economy, the consumer, businesses, it was broadly positive. And I’m just curious though to get your take.
00:38 Nathan
No, I think that’s right. And and I think for the last few quarters, you know, we’ve been in this group too. It feels like we’re waking up every day, waiting for the consumer to crack, waiting for the economy to crack. Because if you go back a long period of time, you know, we’ve had a recession in this country almost every seven or eight years. And we didn’t really have one in COVID, right? You know, that that was an absolute pause. So it’s been all the way back to call it 12 or 13 since we’ve really, really had a downturn. So it feels like we’re almost due at this point.
01:05 Nathan
And you’ve seen some weakness, some softness in the labor market. You’ve seen the consumer be a little bit stretched. But what you continue to hear from the management teams is that spending is holding up. They’re not seeing real issues with the consumer despite sentiment somewhat waning, and they’re not seeing any problems with their small business borrowing base. So they still feel pretty optimistic, I think.
01:29 Nathan
And one of the things that I think helps them feel better about the future is the fact that we’ve got some stimulus from things like tax cuts uh and and deregulation coming this year. So, still some wind in the sails, but I think you framed it right that heading into the quarter, everybody is just worried, you know, how much longer can this last?
01:47 Nathan
And what one other thing that I would note, you know, I mentioned earlier that not only has credit come up, when you look at all different kinds of components, yes, you had delinquencies rise for a few quarters in a row heading into to 25, but they’ve really stabilized. And here in Q4, we didn’t really see any further deterioration there. So that’s something that should give you a lot of confidence, the fact that you would start to see loans going bad at a higher rate, you know, across the board, particularly with things like early stage delinquencies and and consumer credit, and we just really haven’t seen it move that materially.