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NBA's Byron Scott on Leadership On and Off The Court · Bloomberg Intelligence

0:05
Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.
0:08
Speaker 1: Along with my co host Lisa Abramowitz. Each day we
0:11
Speaker 1: bring you the most important, noteworthy, and useful interviews for
0:15
Speaker 1: you and your money, whether you're at the grocery store
0:17
Speaker 1: or the trading floor. Find the Bloomberg P M L
0:20
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Well,
0:32
Speaker 1: you know, Lisa, when I think of slam dunk, I
0:34
Speaker 1: think really only a basketball, but I guess you can
0:36
Speaker 1: apply it to a variety of different business techniques. And
0:39
Speaker 1: here to help us understand sort of the convergence of
0:43
Speaker 1: what you learn on the court and what you can
0:45
Speaker 1: learn in the office is Byron Scott. Thank you very
0:49
Speaker 1: much for being here. He is an NBC studio analyst,
0:52
Speaker 1: but of course he is known as h. Yes, I
0:54
Speaker 1: was gonna was gonna give the whole record, you know,
0:57
Speaker 1: I was gonna tell everybody about his what three NBA champions,
1:02
Speaker 1: uh NBA All Rookie first Team, also coach to the
1:07
Speaker 1: l A. I mean, just you're thank you for being here.
1:09
Speaker 1: Thank you guys for having me all right. And in
1:11
Speaker 1: the in the other corner is Charles Norris. He is
1:13
Speaker 1: the chairman of Fresh Pet and he is the former
1:17
Speaker 1: chief executive of McKesson Water and deer Park Spring Water. Charles,
1:21
Speaker 1: thanks for being here. Okay, so this is the obvious question,
1:25
Speaker 1: what do you two gentlemen have in common? We were
1:30
Speaker 1: just talking about that, even though we don't look alike,
1:35
Speaker 1: we have a lot in common. We're separated by at
1:37
Speaker 1: least a couple inches, a little page, a little bit
1:43
Speaker 1: of hair, but uh, we have a lot in common.
1:47
Speaker 1: And uh it was remarkable as we got to know
1:51
Speaker 1: each other and spend time together how much we had
1:54
Speaker 1: in common. And we learned it because Byron invited me
1:58
Speaker 1: to work out with him at the Laker facility when
2:00
Speaker 1: he was coaching, and he invited me to go into
2:03
Speaker 1: coaches meetings, film sessions with players, watch practices. And I
2:08
Speaker 1: in turn invited Byron to come to bank meetings and
2:12
Speaker 1: board meetings and really get involved in the businesses I
2:16
Speaker 1: was in. And we then started talking about the techniques
2:20
Speaker 1: we used in leadership, and lo and behold we found
2:24
Speaker 1: that they were very similar. Well and Byron, so you
2:28
Speaker 1: coached the Sacramento Kings, New Jersey Nets, New Orleans Hornets.
2:31
Speaker 1: I could go on and on what one skill do
2:35
Speaker 1: you think sort of connects both the corporate world and
2:40
Speaker 1: the bull Well, I think Lisa, from a leadership standpoint
2:44
Speaker 1: in Charlie's taught me this, you know, in various ways,
2:48
Speaker 1: and I was doing it and really didn't know I
2:49
Speaker 1: was doing it. But you really got to get to
2:52
Speaker 1: the heads and hearts of the people that you're that
2:54
Speaker 1: you're that you're dealing with and basketball that is the
2:57
Speaker 1: players you know in the business world. In the corporate world,
2:59
Speaker 1: he's deal with his employees. So it just taught me that,
3:03
Speaker 1: you know, you have to ask that second and that
3:04
Speaker 1: third question because one thing that you want them to
3:07
Speaker 1: know is that you're very interested in the things that
3:09
Speaker 1: they want to bring to the table. And we both
3:11
Speaker 1: believe that you have to be able to get delegate
3:14
Speaker 1: authority you know two people. In my case it was
3:17
Speaker 1: assistant coaches um to give them the right to go
3:20
Speaker 1: out and do their job to the best of their
3:22
Speaker 1: ability and if they failed, you know, then you kind
3:24
Speaker 1: of jump in. But you want to have them have
3:26
Speaker 1: that sense of knowing that you know everything they do
3:29
Speaker 1: counts as well. And I think that's something that Charlie
3:31
Speaker 1: and I both had in common coming from our backgrounds.
3:34
Speaker 1: So you co authored a book that was just really
3:37
Speaker 1: slam dunk success. Uh. Was published by Center Street on
3:40
Speaker 1: April's yesterday. Correct, I just came out what was the
3:45
Speaker 1: process of writing it? Like? I mean, Byron, you were
3:47
Speaker 1: telling me about the death death like workouts that you
3:52
Speaker 1: guys engaged on, and but what was the process of
3:54
Speaker 1: writing the book? Like? It was great to be honest with.
3:57
Speaker 1: I mean, once we decided that this is something that
3:59
Speaker 1: we could really do, and a lot of that was
4:02
Speaker 1: because of Charlie's wife, Peggy, who said who used to
4:04
Speaker 1: be an editor herself, and said she really thought we
4:07
Speaker 1: had something here. Uh. Then we started taking a little
4:10
Speaker 1: bit more serious and we contacted her friend of Charlie's name,
4:12
Speaker 1: Todd Smith, who took it to a totally different level.
4:15
Speaker 1: But in the process of doing it, our writer John Work,
4:18
Speaker 1: who was a great writer who did a great job
4:20
Speaker 1: of really capturing I think the essence of what this
4:22
Speaker 1: book is all about. Uh, And we both speak in
4:25
Speaker 1: the first person, and he was really able to kind
4:28
Speaker 1: of capture everything that we wanted to really apply to
4:31
Speaker 1: to the to the leadership roles and the and the
4:33
Speaker 1: other chapters that we have in the book that we
4:35
Speaker 1: thought would be very interesting to a lot of our readers.
4:38
Speaker 1: If I can add something to that. Byron and I
4:42
Speaker 1: sat down and we listed about fifteen leadership qualities that
4:46
Speaker 1: we had in common. And when John Worke uh interviewed us,
4:51
Speaker 1: he interviewed us thinking specifically about each of those leadership
4:56
Speaker 1: qualities as a separate chapter. Now, Charles, I want to
5:00
Speaker 1: just put it to you that you know and it's
5:02
Speaker 1: your success at McKesson water, Uh, also do your park
5:08
Speaker 1: and also fresh Pet. How do you contrast that with
5:12
Speaker 1: what perhaps goes on in the court, which is, if
5:14
Speaker 1: you don't perform on the court or as a coach,
5:18
Speaker 1: your time there is pretty limited. But there are many
5:22
Speaker 1: cases in which we see companies run by chief executives
5:27
Speaker 1: who get huge pay packets, Uh, and their measurement is, well,
5:33
Speaker 1: let's just put it subjective because they might be tied
5:36
Speaker 1: to stock performance and that doesn't necessarily I mean, just
5:39
Speaker 1: because the stock goes up doesn't mean you're a great CEO.
5:42
Speaker 1: How do you sort of have the same incentives for
5:45
Speaker 1: figures on the court and figures in the boardroom. Well, Uh,
5:50
Speaker 1: we both have to win. And how you define winning obviously, Uh,
5:56
Speaker 1: in sport, it's who who gets as points. In business,
6:03
Speaker 1: it who gains market share. And uh, it's a very
6:08
Speaker 1: easy scorecard if if you're every year you have a budget,
6:13
Speaker 1: and that budget is around sales profit, but it's also
6:18
Speaker 1: around how you're growing versus your competition in the market.
6:22
Speaker 1: And it's honestly surprisingly as competitive in business as it
6:29
Speaker 1: is in sport. To that end, Byron, you talked about
6:33
Speaker 1: how each chapter in the book is a different leadership quality.
6:36
Speaker 1: Is there one leadership quality that stands out to you
6:39
Speaker 1: is the most counterintuitive? Well, for me, again on a
6:43
Speaker 1: basketball court, I've always been a guy is believe that
6:47
Speaker 1: if you're going to lead her, if you're gonna be
6:49
Speaker 1: a leader, you got to lead by example. You know.
6:51
Speaker 1: So if if I'm going to lead by example, I
6:54
Speaker 1: want to be at the gym early, you know, I
6:55
Speaker 1: want to I want the players to come in and
6:57
Speaker 1: see me on the trap me you'll see me in
6:59
Speaker 1: the weight room and be able to also go on
7:01
Speaker 1: the floor and be able to show them certain things
7:03
Speaker 1: that I want to be done. Because it's it's kind
7:06
Speaker 1: of hard as a coach when you say I want
7:07
Speaker 1: you to do it this way, but you can't show
7:09
Speaker 1: them how to do it. You know, you can tell them,
7:11
Speaker 1: but you can't show them. So I still really believe
7:13
Speaker 1: that's one of the most important things, especially in my field,
7:16
Speaker 1: is being able to go out there and participate and
7:19
Speaker 1: to show the guys exactly what you mean, uh. And
7:22
Speaker 1: I think a lot of guys really enjoy that when
7:24
Speaker 1: a coach can get out there and kind of play
7:26
Speaker 1: around a little bit with them as well. Charlie, what
7:28
Speaker 1: about in the corporate boardroom, Well, what I find counter
7:32
Speaker 1: intuitive is celebrating risk and learning from failure. Uh. To
7:40
Speaker 1: be successful in business and to be successful in life,
7:44
Speaker 1: you've got to get outside your box. And I look
7:48
Speaker 1: for people uh to surround me who are willing to
7:52
Speaker 1: take risk. And if we don't encourage that, ultimately, people
7:57
Speaker 1: are going to get nervous if they're um uh, they
8:01
Speaker 1: take a risk, and then they're punished for having failed
8:05
Speaker 1: in the risk they take. So the counterintuitive aspect of
8:08
Speaker 1: that is to celebrate the fact that you're willing to
8:12
Speaker 1: go out and take calculated risk. Thank you so much
8:16
Speaker 1: both of you for joining us today. Truly a pleasure.
8:19
Speaker 1: Byron Scott is NBA studio analyst for ESPN and longtime
8:24
Speaker 1: NBA champion and coach of a number of the top
8:27
Speaker 1: NBA teams, as well as Charlie Norris, who is the
8:31
Speaker 1: chairman of Fresh Pet also the former head of McKesson
8:34
Speaker 1: Water and deer Park Spring Water. Their book is currently
8:39
Speaker 1: on the bookstand Slam Dunk Success. Loneliness is a killer.
8:55
Speaker 1: As Pim was saying, a lot of older people are
8:57
Speaker 1: increasingly living alone and this is an increasing problem for many.
9:02
Speaker 1: Doors Schooler might have the answer Door School or as
9:05
Speaker 1: chief executive Officer of Intuition Robotics, which is an Israeli
9:09
Speaker 1: start up focused on creating electronic companions for people who
9:14
Speaker 1: perhaps live alone. Door thank you so much for joining us. Uh.
9:18
Speaker 1: First of all, just let's start with what is ellie
9:21
Speaker 1: q Hi Lisa, thanks for having me on. Yeah. Eli
9:25
Speaker 1: Que is an active aging companion. She's a social robot
9:28
Speaker 1: that actually um lives in the home of the older adult,
9:32
Speaker 1: usually in the living room, and it helps them be
9:34
Speaker 1: more connected and engage. It helps them to simplify the
9:37
Speaker 1: way to communicate with their family by bridging the digital
9:40
Speaker 1: to five, and it helps them meet their own goal
9:42
Speaker 1: towards an active aging lifestyle by helping them implotting them
9:46
Speaker 1: to go for a walk or take their medication on time,
9:49
Speaker 1: learn new things every day and so on. Okay, and
9:52
Speaker 1: and the door. Just in the interest of full disclosure,
9:55
Speaker 1: I just want to say that you've raised what a
9:56
Speaker 1: total of six million dollars from investors that include the
10:00
Speaker 1: Rumba maker, I Robot, as well as Terra Venture partners,
10:03
Speaker 1: uh man, Ive Mobility, and Bloomberg Beta. Just in terms
10:07
Speaker 1: of fair disclosure there uh and also on the crowdfunding
10:11
Speaker 1: platform our crowd. What are you using the money for?
10:15
Speaker 1: What's the next step? Yeah, the next step is really
10:18
Speaker 1: funding research and development and also manufacturing UM and user
10:22
Speaker 1: trials as we plan to bring this product to market
10:24
Speaker 1: UM hopefully within the next twelve months. Because I was
10:27
Speaker 1: watching your video that you have online in which you
10:30
Speaker 1: have an example of this device and it's paired with
10:35
Speaker 1: some kind of tablet. I guess that's where the software runs.
10:38
Speaker 1: Maybe you could describe, how did you It almost looks
10:41
Speaker 1: like a I don't know, I don't know how to
10:42
Speaker 1: describe it, Almost like a multi stacked flower vase. That's
10:49
Speaker 1: one way of putting it. Yeah, there are two components
10:51
Speaker 1: to the solution. One part is a screen or removable
10:54
Speaker 1: tablet that we provide to our users. UM. And the
10:57
Speaker 1: main part is l Q, which is the the social robot.
11:00
Speaker 1: And she does look kind of like, UM, I don't know,
11:04
Speaker 1: a new uh physical presence in the home. She's very
11:07
Speaker 1: beautifully designed by eve Bihar. But it's it sits on
11:10
Speaker 1: a table. I mean, this is not something This is
11:11
Speaker 1: not a life size thing. This is something that's that
11:14
Speaker 1: sits on a table. Correct, she sits on the table.
11:17
Speaker 1: But she does have automatronic capability, so she we use
11:20
Speaker 1: body language essentially, which we are humans are kind of
11:23
Speaker 1: programmed to understand. So she will look to the side,
11:25
Speaker 1: you look up, she'd lean forward to make a point. UM.
11:28
Speaker 1: When we connect with families and lets they send a
11:31
Speaker 1: picture over a we make it super simple for them
11:34
Speaker 1: to do that and for the older adults do it,
11:36
Speaker 1: but they also elak. You will turn look at the picture,
11:39
Speaker 1: have a comment about it after understanding what's in it,
11:42
Speaker 1: and then try to solicit the older adult to respond
11:44
Speaker 1: and be part of the conversation on Facebook messenger. Is
11:48
Speaker 1: this um? Have you done psychological studies to see whether
11:52
Speaker 1: a robotic presence is equal or nearly equal to really
11:57
Speaker 1: having another person there A right, it's definitely not the same.
12:02
Speaker 1: I mean, look, we would all like to be closer
12:04
Speaker 1: to our parents, and we'd all like to visit them
12:05
Speaker 1: all the time, but the fact of life is that
12:09
Speaker 1: we live further and further away from them, and even
12:11
Speaker 1: if we live close, we can't be with them all
12:13
Speaker 1: the time. So we're not trying to replace a meaningful
12:16
Speaker 1: interaction between humans UM with some kind of a robot.
12:19
Speaker 1: What we are trying to do is bring to better
12:21
Speaker 1: technology that will help bring people closer together, overcome the
12:25
Speaker 1: digital divide, help older and all UM consume music and
12:30
Speaker 1: ted talks and other interesting things on the on that
12:33
Speaker 1: are available to them, and also be somewhat of a
12:36
Speaker 1: nudge or an assistance or coach if you will, UM
12:39
Speaker 1: to help convince them to go for walks and to
12:41
Speaker 1: take their medications and time and so on. So it's
12:43
Speaker 1: not replacements, for sure, but it is better than being alone.
12:47
Speaker 1: And let's remember that of older adults live at home,
12:51
Speaker 1: about sixty of themselves professed that they're lonely and socially isolated,
12:56
Speaker 1: about fifty percent the TVs their main companion, and about
12:59
Speaker 1: for percent talk to one person or less week. So
13:03
Speaker 1: so it is what it is, and we're trying to
13:05
Speaker 1: do what we can UM to make the situation better
13:08
Speaker 1: and help people listful or live. Have you started selling
13:11
Speaker 1: l a Q We have not started, telling an she's
13:15
Speaker 1: now starting trials in the San Francisco Bay area. UM,
13:19
Speaker 1: and you're right said they're good demonstrations and we're starting
13:21
Speaker 1: a pilot program, but we still need to learn how
13:24
Speaker 1: people react to the product if if it's you know,
13:26
Speaker 1: the usabilities the way we hope it will be, and
13:30
Speaker 1: we have to do those things before we start selling
13:31
Speaker 1: the product. So are you are a serial entrepreneur? Correct? Correct?
13:37
Speaker 1: Maybe just give people a little bit of your background
13:40
Speaker 1: and why did you choose this as your next project? Sure? Yes,
13:45
Speaker 1: I did my first startup straight after leaving military intelligence
13:48
Speaker 1: in the Israeli Army at aged three, and this is
13:51
Speaker 1: now my fifth venture venture. The last one was actually
13:55
Speaker 1: inside a large company UM which is Office Alucan now
13:58
Speaker 1: part of Nokia, and my co founders and I decided
14:02
Speaker 1: if we really want to do something with high social
14:04
Speaker 1: impact this time around and touch people's lives, and you
14:08
Speaker 1: know that they are now the rec result proven by
14:10
Speaker 1: the Center of Disease Control of loneliness and social isolation
14:13
Speaker 1: where um it actually creates accelerated dimensiona depression and even mortality.
14:18
Speaker 1: But the good news is that there are other studies
14:20
Speaker 1: that show that when older guls practice active aging, when
14:23
Speaker 1: they're actually more active and engaged, they push out they
14:26
Speaker 1: mentioned for seven percent of the time, they heal faster
14:29
Speaker 1: from illness and disease twenty of the time, and they're
14:32
Speaker 1: just happier. So we really are trying to to harness
14:35
Speaker 1: the latest technology in artificial intelligence and machine learning and
14:39
Speaker 1: voice platforms and robotics to try and bring as many
14:43
Speaker 1: older adults with that check in category as possible. I
14:46
Speaker 1: want to thank you very much for joining us and
14:48
Speaker 1: sharing your thoughts and telling us about this invention. Door
14:52
Speaker 1: Schooler is the chief executive officer of Intuition Robotics. They're
14:56
Speaker 1: based in Israel. You can follow him on Twitter at
14:59
Speaker 1: door d O R school or s k U L
15:02
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15:41
Speaker 1: slash lens. Well more people are struggling to pay their
15:53
Speaker 1: credit card bills. That is what we learned yesterday after
15:56
Speaker 1: Capital One Financial and Discover Financial Services reported earnings, showing
16:01
Speaker 1: that there were a larger number of credit card charge
16:04
Speaker 1: offs in their card units, capital One in particular seeing
16:09
Speaker 1: a twenty nine percent increase in the provisions for losses
16:12
Speaker 1: in the credit card unit. To make some sense of
16:14
Speaker 1: this and to figure out what the broader implications are,
16:17
Speaker 1: I want to bring in Ryan O'Connell, senior analysts focusing
16:20
Speaker 1: on financials for Bloomberg Intelligence. Thank you so much for
16:22
Speaker 1: joining us, Ryan, So what was your biggest takeaway from
16:24
Speaker 1: these results, which were really quite disappointing. Well, good morning list,
16:27
Speaker 1: Good morning Pim. This is really a pretty ugly earnings report,
16:30
Speaker 1: and I think at least with regard to Capital One,
16:32
Speaker 1: we've kind of hit a bit of an inflection point
16:35
Speaker 1: several reasons. First of all, it just the magnitude of
16:38
Speaker 1: the jump in provisions. If you look at their US
16:41
Speaker 1: credit card business, which their biggest business, their provisions actually
16:44
Speaker 1: went up about sev seven. Oh that's over here, just
16:48
Speaker 1: to give some sort of perspective of the dollar amount,
16:50
Speaker 1: about one point seven billion dollars. So that means the
16:53
Speaker 1: amount of money that they're sitting aside to cover potential
16:55
Speaker 1: losses in their card unit has now gone to one
16:58
Speaker 1: point seven billion dollars. Right, And that's so that's your year.
17:01
Speaker 1: You're absolutely right about the that's it's the quarter, so
17:04
Speaker 1: you're a bear. And the other thing is their charge
17:07
Speaker 1: off ring went from about four percent to five percent.
17:10
Speaker 1: And what they also said is folks, you should expect
17:13
Speaker 1: five percent for the rest of the year. So this
17:15
Speaker 1: isn't just a one quarter of blip. This is a change.
17:19
Speaker 1: Is did they give any details as to what is
17:21
Speaker 1: behind this? Right? So what I thought was also very
17:25
Speaker 1: interesting about this is that cap one is basically changing
17:28
Speaker 1: its tune up until now. The reason for you know,
17:31
Speaker 1: more bad loans, more chargeots is a lot of loan growth,
17:34
Speaker 1: which is true, and the loans are getting older this time.
17:38
Speaker 1: What they said is we've changed our view and the
17:40
Speaker 1: way consumers are behaving. What does that mean cons change
17:44
Speaker 1: their view? I mean it's just because, uh, you know,
17:47
Speaker 1: because I mean, if someone doesn't repay a loan, it
17:50
Speaker 1: can be because there's something wrong with the way the
17:52
Speaker 1: loan was put together in the first place, or the
17:55
Speaker 1: person should not have been allowed other company was not
17:57
Speaker 1: should have been allowed to actually take out the loan.
18:00
Speaker 1: They given credit cards to people that they shouldn't be
18:02
Speaker 1: giving them too. Well, that's a great question, I guess.
18:05
Speaker 1: Let's let's let's refer to it this way. They are
18:08
Speaker 1: referring to higher levels of consumer debt. And again we
18:11
Speaker 1: have to bear in mind that they're really talking about
18:13
Speaker 1: their subprime customers, right, because that's about a third of
18:16
Speaker 1: their business. As to whether or not they made bad loans,
18:19
Speaker 1: let's just look at the results. Well, I think though,
18:23
Speaker 1: it's important to note if they're saying now, if they're
18:25
Speaker 1: changing their tune and they're now saying that there's a
18:27
Speaker 1: change in consumer behavior, this is pretty fuzzy. Does this
18:31
Speaker 1: mean they really don't have a handle on why there
18:33
Speaker 1: has been such an unexpectedly big increase in charge offs. Well,
18:37
Speaker 1: what I would say is that they sounded a lot
18:40
Speaker 1: more cautious on this call than they have in the
18:42
Speaker 1: last several calls, and I think they just see higher
18:46
Speaker 1: levels and debtedness. Uh. In hindsight, perhaps they got a
18:50
Speaker 1: little bit aggressive on the loan growth, but they've been
18:52
Speaker 1: tamping that down. So is Capital One alone in an
18:56
Speaker 1: isolated case in this pretty substantial increase in net charge offs?
19:00
Speaker 1: I mean, yes, Discover also saw a larger amount of
19:03
Speaker 1: charge offs and expected, but still way below Capital One.
19:07
Speaker 1: Or does this sort of point to some kind of
19:09
Speaker 1: broader weakness in the consumer. Well, uh, we'll have to
19:13
Speaker 1: see a Synchronique, which also has a large subprime credit
19:17
Speaker 1: card business. They were going to report their earnings on Friday,
19:20
Speaker 1: and we'll just have to see how that goes out.
19:22
Speaker 1: I'm not judging that to your point, Lisa discovers, Yeah,
19:25
Speaker 1: their charge also went up a bit, but it wasn't
19:27
Speaker 1: a big deal. And Discover still says that things are
19:30
Speaker 1: going pretty much as I expected. Now, again, the big
19:32
Speaker 1: difference is Capital One's got about a third of their
19:35
Speaker 1: customers and credit cards and subprime and Discover doesn't. Was
19:40
Speaker 1: the subprime market a strategic you know position for the bank?
19:45
Speaker 1: I mean they say, we want to go after these
19:47
Speaker 1: people because this is where we can make the most money,
19:51
Speaker 1: even if we do have to do charge offs later on.
19:53
Speaker 1: I mean, this can't be something that just happened, right,
19:55
Speaker 1: I mean, you don't. It's not like a multi week event.
19:58
Speaker 1: This is something that's taken a happen. Capital One has
20:02
Speaker 1: been in the subprime credit card business and in the
20:05
Speaker 1: subprime auto business for a long time now. To be
20:08
Speaker 1: fair to Capital One, they are still expecting seven to
20:12
Speaker 1: eleven percent earning his growth this year, but frankly a
20:15
Speaker 1: lot of us from cost cuts, and also they're doing
20:18
Speaker 1: better in their commercial bank because the energy loan crisis
20:21
Speaker 1: is sort of passing. So um, first, I've got two questions. First,
20:26
Speaker 1: did we see weakness also among some prime credit card
20:29
Speaker 1: customers or is the pain entirely isolated to the subprime customer? Well,
20:34
Speaker 1: I think basically we're really talking about the subprime customer here, Lisa,
20:38
Speaker 1: because again, if we use Discover or JP Morgan Bank
20:41
Speaker 1: of America, they've all had some increases in charge offs,
20:45
Speaker 1: but nothing like a hundred basis points okay, and then
20:47
Speaker 1: the next point is what about auto loans. Did we
20:50
Speaker 1: see the increase in charge offs there too? Actually no
20:54
Speaker 1: uh net charge us for the outer loans were flat.
20:57
Speaker 1: Your here. You know. One of the things we've also
21:00
Speaker 1: trying to track is the correlation between this and what
21:04
Speaker 1: happens in the larger economy. Obviously, any prospect of the
21:08
Speaker 1: bank say anything about wages or about people being able
21:11
Speaker 1: to make more money. Well, again, the tone of the
21:14
Speaker 1: commentary was very different. So discover they still see a
21:17
Speaker 1: growing economy again they're dealing with and they're still making
21:20
Speaker 1: money as you just as you just describe. So maybe
21:22
Speaker 1: they're saying, all right, you know, we're willing to take
21:24
Speaker 1: this hit. I mean, even though the stock is down
21:26
Speaker 1: I think about four percent percent right for three point
21:29
Speaker 1: eight percent right now, it's more down more than three
21:31
Speaker 1: three dollars a share, they're willing to take that hit
21:34
Speaker 1: because they believe that this will you know, they're you
21:37
Speaker 1: gonna be able to take this hit and not have
21:39
Speaker 1: an effect the bottom line. Uh well, it's certainly infect
21:43
Speaker 1: to the bottom line in this quarter. I think their
21:45
Speaker 1: expectation is they've been in this businesses for a long time,
21:48
Speaker 1: they're gonna ride through different cycles, and again they are
21:51
Speaker 1: they are tightening up. Just be clear, they were tightening
21:53
Speaker 1: up a loan growth now so they're responding. They are
21:56
Speaker 1: responding because I mean down five percent, so it's five
21:59
Speaker 1: and a half sense so far this year it's stock
22:01
Speaker 1: and just paying at one point nine percent dividend. And
22:04
Speaker 1: just to put this into perspective, the total amount of
22:06
Speaker 1: credit card debt in the US has exceeded a trillion
22:08
Speaker 1: dollars for the first time since the financial crisis, So
22:11
Speaker 1: there's a lot of money at stakecare clearly. Well. One
22:14
Speaker 1: other thing is that this is the highest level of
22:16
Speaker 1: net charge justin about six years for a cup one. Alright,
22:19
Speaker 1: Ryan O'Connell, thank you so much for joining us. Ryan
22:21
Speaker 1: O'Connell is senior analysts focusing on financials for Bloomberg Intelligence,
22:24
Speaker 1: and he joins us in our Bloomberg eleven three oh studio.
22:34
Speaker 1: Thanks for listening to the Bloomberg P and L podcast.
22:37
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts, SoundCloud,
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Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm
22:45
Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa
22:48
Speaker 1: abramoids one before the podcast. You can always catch us
22:52
Speaker 1: worldwide on Bloomberg Radio