Operator: Thank you. We will take our next question from Jim Mitchell with Seaport Global.
Jim Mitchell: Hey. Good morning. Maybe just your thoughts on the outlook for investment banking, I appreciate Denis’ comments, we have seen a big increase in debt issuance, so some improving liquidity in the debt markets at least. Is that, in your mind, a leading indicator for beginning to monetize backlogs? And just generally, how are you thinking about the outlook for investment banking? Thanks.
David Solomon: Yes. Sure. I think that €“ I think one of the things we are dealing with and it’s over-amplified in our very capital market-centric business is that 2021 was not normal. The second half of 2020 and 2021 were not normal. They were way inflated by the massive fiscal stimulus that created kind of, I would call, on the spectrum of activity, excess activity, pulled a lot of activity forward. And then because of market disruption, we have tightened monetary conditions meaningfully in 2022. It’s the first year in over 50 years that both fixed income and equity markets were down. We had the S&P down 20%, the NASDAQ down 30%. You had a real change in asset values across the spectrum. And when that happens, it takes a period of time for people to adjust.
My historical experience would be that period of time is kind of four quarters to six quarters. And so if you think about it, if somebody had a stock that was trading at $100 and the stock goes down by 30%, certainly, for the next couple of quarters, they are still thinking about $100. But if it’s at $70 for four quarters or five quarters, six quarters, then it’s $70. And suddenly, when you look ahead and you think about either an M&A transaction or financing, you have more realism about the reset of values. So, I think we are well into that journey of a reset and expectations. I think it might have another quarter or two quarters to further reset, but I think we are starting to see some additional improvements, people point to the investment-grade debt market.
That would obviously be where it would come first. But my expectations would be in the back half of €˜23 meaningfully better. And also, it’s interesting, and I will be heading to Dallas tonight with others, but I was watching some of the commentary, the macro commentary. People are softening their view of 2023. And I would say it’s getting a little bit more dovish, a little bit more of a softer landing than kind of where people were a quarter or two quarters ago. And that too, will affect capital markets opportunity because it’s really tied to confidence. So, I think we are going through that. I don’t think anything has fundamentally changed. I think these capital markets businesses are still very big businesses. But you shouldn’t look at 2022 as normal, just as you shouldn’t look at 2021 is normal.
They normalized somewhere in the middle.
Jim Mitchell: Right. And maybe just a follow-up on the reserve and provisioning. That’s obviously been a big drag in profitability as you grow the platform business. But as you shrink Marcus, is there also any desire to kind of slow. I know GreenSky is growing on balance sheet, but the rest of the business is that slow? Do we start to see provisioning slow and given how high your reserve levels already are? Just trying to get a better picture on how to think about that cadence and maybe where your macro assumptions are in your reserve levels?
Denis Coleman: Sure. So, as it relates to slowing growth, we actually did slow origination activity over the course of the fourth quarter. Over the course of the year, we have implemented a number of changes to our credit underwriting, tightening some of those provisions. And so we actually did see a slowing of new originations. That being said, the vast majority of the provision build was attributable to the existing balances as opposed to the new originations. So, that’s also something that we are going to watch very carefully as things develop. You notice our overall coverage ratio increasing. That’s a function of what we have observed in our portfolio, but as well as our macroeconomic outlook. And so we have made some adjustments, which reflect our best estimates for performance in the economy going forward.
Operator: At this time, there are no further questions. Please continue with any closing remarks.
Carey Halio: Since there are no more questions, we would like to thank everyone for joining the call. And certainly, if additional questions arise, please don’t hesitate to reach out to me or others on the Investor Relations team. Otherwise, we look forward to speaking with you soon and seeing many of you at our Investor Day on February 28th. Thank you.
Operator: Ladies and gentlemen, this concludes the Goldman Sachs fourth quarter 2022 earnings conference call. Thank you for your participation. You may now disconnect.
