Latest / Bloomberg Intelligence / Employment Traits of Gen Z, 'Juicy' Bond Yields, Americans Quit Bowling

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Employment Traits of Gen Z, 'Juicy' Bond Yields, Americans Quit Bowling · Bloomberg Intelligence

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  Speaker 4: We're still there with us today.
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  Speaker 6: David Gurr is with us this morning here for Bloomberg
• 0:47
  Speaker 6: this weekend and into the political maelstrom that he's in
• 0:50
  Speaker 6: as well. Nikki Waller's here on a wide set of topics,
• 0:54
  Speaker 6: which I think is going to be great. And personal
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  Speaker 6: finance is sort of shattered within these markets.
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  Speaker 4: Sure is.
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  Speaker 1: Good thing we're all in it for the long term.
• 1:03
  Speaker 6: Romain Bostic with us with some real expertise. What's different here, folks,
• 1:07
  Speaker 6: is we all follow the blur. Scarlett and I do that,
• 1:10
  Speaker 6: but then Romain's really channeled it, and we're going to
• 1:12
  Speaker 6: talk about his perspective on running shoes.
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  Speaker 1: Well, he talks to a lot of CEOs, and he's
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  Speaker 1: got good insight into how some of these consumer-facing companies
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  Speaker 1: are managing through this period.
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  Speaker 6: Romain Bostic on a first-word basis is with Jalen Brunson
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  Speaker 6: about which shoe he's going to wear next year for
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  Speaker 6: Ford Gazillion.
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  Speaker 4: I call him Jay.
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  Speaker 2: That's good.
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  Speaker 6: Great, let's get this started. David Gurra, we're into the
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  Speaker 6: election season. You got Raoul Braunstein on here, Bloomberg this weekend.
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  Speaker 6: What's your first question, Raoul, about the cacophony we're living?
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  Speaker 7: Why is the president going to Texas and Oklahoma and Alabama?
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  Speaker 7: Why is the vice president going to Florida? What does
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  Speaker 7: it say about their strategy, Republican strategy going forward? We
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  Speaker 7: were promised by the president a few months ago.
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  Speaker 6: Right.
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  Speaker 7: Everything's up for grabs. He's going to crisscross the nation.
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  Speaker 7: He is sticking firmly to these red states.
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  Speaker 6: The personal finance of 50 states is flat on their back.
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  Speaker 6: I did Duluth, Minnesota today. Forget about that. Why aren't
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  Speaker 6: they in Iowa where the affordability issue, Grassley, at what,
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  Speaker 6: 90 years old? Is that perplexing about this?
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  Speaker 7: Yes, in his 90s. Look, I think in states where
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  Speaker 7: now we're seeing races incredibly close, you have candidates who
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  Speaker 7: might not feel so easy with the president going there
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  Speaker 7: because of what's been happening in the economy more broadly,
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  Speaker 7: and I was struck by what Tom Tillis of North Carolina,
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  Speaker 7: my home state, said he, of course, retiring from the Senate.
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  Speaker 7: This is a time when these lawmakers who are up
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  Speaker 7: for reelection are focusing on their own states. They don't
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  Speaker 7: want to have the burden of the president of these districts.
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  Speaker 4: Is this where he mentions Duke is 4-0?
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  Speaker 1: Yeah, I think it is.
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  Speaker 7: I will not talk about UNC football on principle on
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  Speaker 7: the show.
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  Speaker 1: Let's talk about the economy, though, because, Romain, we got
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  Speaker 1: some jobs numbers today. We also got consumer confidence this
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  Speaker 1: week that shows people feel really lousy, even though there
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  Speaker 1: is job growth. And we had solid PMI numbers which
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  Speaker 1: show that the economy's doing well. It's kind of hard
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  Speaker 1: to get a handle of where things are.
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  Speaker 8: It's hard to get a handle. I think someone said
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  Speaker 8: it best to me.
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  Speaker 9: They said right now you have a consumer that is
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  Speaker 9: behaving a lot better.
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  Speaker 8: Than what he or she actually feels.
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  Speaker 9: And I guess that's good in the short term, but
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  Speaker 9: long term it raises a lot of questions about Are
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  Speaker 9: we reaching a breaking point?
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  Speaker 8: And to your point, David, about the midterm elections.
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  Speaker 9: This is something that has come up time and time
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  Speaker 9: again on the campaign trail. It doesn't seem like a
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  Speaker 9: lot of people in Washington are paying a lot of
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  Speaker 9: attention to it. But I can tell you this right now,
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  Speaker 9: a lot of the retailers and the apparel makers and
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  Speaker 9: the companies that are selling goods and services, they are
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  Speaker 9: paying attention to it.
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  Speaker 8: That's all you hear on the conference calls these days.
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  Speaker 1: And Nikki, you see that too with companies like Dave &
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  Speaker 1: Buster's and Lucky Strike. They're hitting some serious economic headwinds.
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  Speaker 10: Yeah, we're seeing real consumer fatigue. And we know when
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  Speaker 10: people's finances are stressed, the first thing to go.
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  Speaker 1: Is that they're going to chop out is.
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  Speaker 10: That discretionary spending and a fun night out. The other
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  Speaker 10: thing that's happening is that places like Lucky Strike and
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  Speaker 10: Dave & Buster's aren't cheap anymore. You're looking at a
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  Speaker 10: couple hundred bucks for a night out. When I think
• 3:50
  Speaker 10: all of us can remember the bowling alley beat you,
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  Speaker 10: you can have a good time for 20 bucks.
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  Speaker 1: You can have a good time for 20 bucks. One
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  Speaker 1: go with that.
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  Speaker 8: Absolutely.
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  Speaker 1: Between wages, between insurance costs, that's gone way up. So, Romain,
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  Speaker 1: you have talked to the CEO of Nike a couple
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  Speaker 1: of times. They have their own issues, right? They have
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  Speaker 1: their own execution issues. Elliot Hill inherited a bunch of problems,
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  Speaker 1: but they kind of really show some of the challenges
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  Speaker 1: that these consumer-dependent, consumer-facing companies face. are encountering.
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  Speaker 9: Yeah, and it's kind of one of the more ultimate
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  Speaker 9: discretionary names out there, and they've been struggling. A lot
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  Speaker 9: of idiosyncratic issues, but there are some broader macro issues there, too.
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  Speaker 9: You know, I was looking at a lot of the
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  Speaker 9: anecdotal Fed data about where spending is. You're still seeing
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  Speaker 9: spending strong at value places, the big box stores, the
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  Speaker 9: Costcos of the world. Durable goods is just really just
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  Speaker 9: kind of starting the circle to drain. But at the
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  Speaker 9: bottom of that stack was actually apparel and footwear. And
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  Speaker 9: it had done better at the start of the year,
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  Speaker 9: but you're starting to see a pullback. People are only
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  Speaker 9: buying the things either that they absolutely need or things
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  Speaker 9: that are really unique and exciting.
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  Speaker 8: And there's not a whole lot in between.
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  Speaker 4: I'm looking this weekend. I mean, Mrs.
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  Speaker 6: Keene told me she's got the Jalen Brunson Nikes, you know,
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  Speaker 6: the custom-made ones. I don't even know what they cost.
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  Speaker 6: You don't want to know what they cost. The Nikes
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  Speaker 6: are like in, in, in right now. I mean, does
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  Speaker 6: the name still matter to Nike, like the endorsements?
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  Speaker 8: Oh, yeah, it matters.
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  Speaker 9: Just yesterday when they released their earnings report, they also
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  Speaker 9: released the Caitlyn Clark connection. This is a huge deal,
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  Speaker 9: the most money that they've backed for a woman athlete ever. And,
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  Speaker 9: in fact, the amount of money they're spending on this
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  Speaker 9: rivals what they would spend on some of their male athletes.
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  Speaker 4: They really see her.
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  Speaker 8: As sort of being the potential focal point for the branding,
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  Speaker 8: the endorsement branding.
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  Speaker 4: And why is the stock cratered?
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  Speaker 8: Well, because they're not selling. Jordan is down. Sportswear is down.
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  Speaker 9: The only real bright spots, they had some sort of,
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  Speaker 9: and the Nike brand here in North America.
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  Speaker 8: China is just abysmal.
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  Speaker 9: That was down 22% in the most recent quarter. They're
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  Speaker 9: not selling anything over in Europe right now. This is
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  Speaker 9: a story right now where people have options. And for
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  Speaker 9: a lot of people, those options are not Nike.
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  Speaker 1: People have options. People are being selective with their spending.
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  Speaker 1: But David, if you listen to the president, there is
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  Speaker 1: no affordability crisis. There is no affordability challenge. As far
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  Speaker 1: as he's concerned, he fixed whatever inflation problems existed.
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  Speaker 7: I just want to say, in the Gurra household, we
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  Speaker 7: bought some Sabrina Ionescu, sort of in our part to
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  Speaker 7: help Nike's bottom line.
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  Speaker 4: But no, I think that's right.
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  Speaker 7: And so what we have from the president is this
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  Speaker 7: promise of this $ 5, 000 dividend, this promise that, you know,
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  Speaker 7: come election day, the war is going to end, oil
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  Speaker 7: prices are going to come down. And I think there's
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  Speaker 7: frustration among the American people with having to hold on
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  Speaker 7: to that as the best hope here that the president
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  Speaker 7: is offering. And I think there's just this talk about sentiment,
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  Speaker 7: a real disconnect. That was something, that $ 5, 000 check was
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  Speaker 7: kind of a throwaway line at this Republican convention in Dallas.
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  Speaker 2: It continues to have life.
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  Speaker 7: And I think lawmakers are having to deal with how
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  Speaker 7: do they answer their constituents who now expect this sort
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  Speaker 7: of thing.
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  Speaker 10: At the same time, this has been a little bit
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  Speaker 10: of a Republican talking point. It has a lot of truth.
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  Speaker 10: Americans are fairly rich. One of the things we're looking
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  Speaker 10: at in money is that later this year, the Fed
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  Speaker 10: is going to release its survey of household consumer finances.
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  Speaker 10: And we are going to see how it is that
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  Speaker 10: people are managing to shop and spend, even with everything
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  Speaker 10: they're facing. And I think we can't avoid the fact
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  Speaker 10: that people have retirement accounts. People have homes by and large.
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  Speaker 10: They are in a pretty good situation with their mortgages.
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  Speaker 10: It's what feels bad is sometimes the discretionary stuff.
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  Speaker 1: No, and on top of that, you have AI kind
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  Speaker 1: of looming over everyone. I know that your team wrote
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  Speaker 1: something up about how there's a new report that shows
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  Speaker 1: AI may force 11 million workers into new jobs.
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  Speaker 10: It's a really big number from McKinsey and shows sort
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  Speaker 10: of the extent of what we could be looking at
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  Speaker 10: in the next couple years. And how our jobs are
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  Speaker 10: going to change, we don't know. It's a really, you know,
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  Speaker 10: I think that's one of the things that's helping people
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  Speaker 10: feel not so great is that, you know, tell anyone
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  Speaker 10: there's big change coming, but we can't tell you how,
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  Speaker 10: but it's going to be kind of painful. And that
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  Speaker 10: adds up to some really dark consumer sentiment like we
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  Speaker 10: saw earlier this week.
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  Speaker 6: David mentioned the Carolinas. and for his birthday. What we
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  Speaker 6: need to understand is this is like his.
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  Speaker 4: Second job.
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  Speaker 6: His real job is nailing a major pentatonic scale and
• 7:53
  Speaker 6: the mixolydian scale with incredible ability here. David Gurra playing
• 8:01
  Speaker 6: fiddle a few weeks back.
• 8:05
  Speaker 7: This is very much back, years back.
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  Speaker 4: Thank you.
• 8:22
  Speaker 6: I wasn't sure which video we had. That was a
• 8:24
  Speaker 6: celebration during COVID.
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  Speaker 7: Well, yeah.
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  Speaker 8: Those are some skills. Thank you so much.
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  Speaker 4: During COVID as well, to see that. It was a
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  Speaker 4: birthday time.
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  Speaker 1: Well, happy birthday, David Gurra.
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  Speaker 4: Thank you very much.
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  Speaker 1: Appreciate it. We'll maybe get you to do this live one.
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  Speaker 2: Day for us.
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  Speaker 7: Yeah, I'd love to. Tom can bring his guitar, mandolin.
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  Speaker 7: We'll do the full, hit the band together.
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  Speaker 4: Wonderful.
• 8:44
  Speaker 1: What's your instrument, Nikki?
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  Speaker 4: Triangle.
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  Speaker 1: I'll bring the cowbell all right thank you so much
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  Speaker 1: to all of our guests today nikki waller david gora
• 8:53
  Speaker 1: and romaine bostick.
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  Speaker 6: Tom well i mean you know there we are coming
• 8:57
  Speaker 6: up we've got you know a really important discussion this
• 8:59
  Speaker 6: is suzy welch hugely anticipated my essay of the year
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  Speaker 6: last year she's at nyu and this will get some
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  Speaker 6: heat going in the room this this is a.
• 9:10
  Speaker 4: Controversial moment with Susie Welch.
• 9:13
  Speaker 1: She's got some strong opinions. All right, we're going to
• 9:14
  Speaker 1: look into all that, including her research on decision-making and
• 9:17
  Speaker 1: how it applies to your money moves. This is Bloomberg Money.
• 9:26
  Speaker 6: Bloomberg Money, it's on personal finance, it's on wealth management,
• 9:29
  Speaker 6: it's on retirement.
• 9:31
  Speaker 4: Scarlett Fu and Tommy, what a day.
• 9:33
  Speaker 6: The jobs report and then we had like, you know,
• 9:35
  Speaker 6: British hydro, European hydrocarbons.
• 9:38
  Speaker 4: And all that.
• 9:38
  Speaker 1: You also have the French bond crisis for anyone who's
• 9:40
  Speaker 1: paying attention to what's going on in Europe.
• 9:42
  Speaker 4: It's like serious stuff.
• 9:43
  Speaker 1: Yeah, absolutely.
• 9:45
  Speaker 4: We welcome all of you.
• 9:45
  Speaker 6: We're a little bit off topic on that and way
• 9:47
  Speaker 6: off topic here with someone who's beyond important. Joining us now,
• 9:52
  Speaker 6: Susie Welch, NYU Stern School business professor, which barely describes
• 9:57
  Speaker 6: her impact.
• 9:58
  Speaker 4: The book is 10, 10, 10.
• 9:59
  Speaker 6: A life transforming idea. We'll talk about their path to
• 10:03
  Speaker 6: academics and all that. I can give you the exact
• 10:06
  Speaker 6: date here, folks. September 24, 2025, I said, yeah, Susie
• 10:12
  Speaker 6: Welch said, is Gen Z unemployable? And it's just real simple.
• 10:16
  Speaker 6: It was a blistering essay in the Wall Street Journal.
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  Speaker 4: About the kids. What how damaged are the kids out
• 10:24
  Speaker 4: of let's do this?
• 10:25
  Speaker 6: This is the morning must read here the the money
• 10:28
  Speaker 6: must read I should say this is from the essay
• 10:30
  Speaker 6: and it's just simple The message is often met with
• 10:33
  Speaker 6: a pushback that business needs to change What has the
• 10:37
  Speaker 6: focus on achievement gotten us but anxiety? Oh woe is
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  Speaker 6: me and who wants a life of scope with action
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  Speaker 6: and and a decent paycheck when the world is already unstable?
• 10:47
  Speaker 6: How damaged were the kids out of COVID?
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  Speaker 5: I don't know if I'd use the word damaged. I
• 10:52
  Speaker 5: have to say, you know, I love Gen Z. I
• 10:54
  Speaker 5: think that they were changed. I mean, maybe they were
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  Speaker 5: changed even before Gen Z, but what the pandemic reinforced
• 11:01
  Speaker 5: for them is that they did not want to postpone joy.
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  Speaker 5: They did not want to earn their happiness, which is
• 11:06
  Speaker 5: actually a very ancient concept. If you go all the
• 11:09
  Speaker 5: way back to the Stoics, the idea is that you
• 11:11
  Speaker 5: work very hard and then you earn your gold watch
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  Speaker 5: and your relaxation and your retirement, basically, that you play,
• 11:17
  Speaker 5: you work very hard, then you get to play hard.
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  Speaker 5: And I think what happened and what the research would
• 11:21
  Speaker 5: show is that they came out of the pandemic and
• 11:23
  Speaker 5: they said, we don't really like that arrangement. We would
• 11:25
  Speaker 5: like not to postpone joy. And look, maybe their reasons
• 11:27
  Speaker 5: are the bottom can fall out at any time. Maybe
• 11:29
  Speaker 5: there's no joy at the end of the working.
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  Speaker 1: So why would we sign.
• 11:32
  Speaker 4: Up for that? steam coming out of my ears.
• 11:35
  Speaker 1: Scorching yeah a little bit it feels like they're they've
• 11:38
  Speaker 1: subscribed to YOLO in like a very very extreme way
• 11:42
  Speaker 1: yes what do old people like Tom like me get
• 11:45
  Speaker 1: wrong well what do we get wrong about the skills
• 11:48
  Speaker 1: that you need and how to build a career today
• 11:50
  Speaker 1: for this cohort of Gen Zers who don't want to
• 11:53
  Speaker 1: delay joy who you know want to live life I
• 11:55
  Speaker 1: think that People from older generations have the former kind
• 12:00
  Speaker 1: of array of values, which is they value achievement more,
• 12:03
  Speaker 1: and they have also this equation in their heads that
• 12:06
  Speaker 1: you have to work to get your period of pleasure.
• 12:10
  Speaker 5: You know, I want to say maybe they're right, okay?
• 12:13
  Speaker 5: I mean, I don't ascribe to it. I work all
• 12:15
  Speaker 5: the time, and I love working, and I've always loved,
• 12:17
  Speaker 5: but I would say that what If you are managing
• 12:20
  Speaker 5: Gen Z, and you cannot put your finger on why
• 12:23
  Speaker 5: they are driving you crazy, but there are words for it,
• 12:26
  Speaker 5: and that is that their values are very different than yours,
• 12:29
  Speaker 5: and either, depending on how much power you have, how
• 12:32
  Speaker 5: much hiring power you have, you can decide whether or
• 12:35
  Speaker 5: not you want the Gen Z with that attitude, or
• 12:37
  Speaker 5: you can go get the Gen Z with you.
• 12:38
  Speaker 4: But are there two groups?
• 12:39
  Speaker 6: Because I got Eli on Bloomberg Money, who works nothing
• 12:42
  Speaker 6: under a 60-hour work week, maybe even seven, He knows
• 12:46
  Speaker 6: the King's English. He can do math. To me, there's
• 12:49
  Speaker 6: two parts of Gen Z. There's a Gen Z that
• 12:52
  Speaker 6: you and Mr. Welch, Jack Welch knew, and Scarlett grew
• 12:55
  Speaker 6: up with, and I grew up with. And then there's
• 12:57
  Speaker 6: this cohort you're talking about.
• 12:59
  Speaker 5: Okay, so not everyone in Gen Z is the same.
• 13:01
  Speaker 5: But if you actually look at the numbers, 2% of
• 13:04
  Speaker 5: Gen Z have the values that we would typically ascribe to.
• 13:08
  Speaker 1: Two?
• 13:09
  Speaker 2: 2%.
• 13:09
  Speaker 4: So, yeah, they exist.
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  Speaker 5: And you know what happens is there's a cage match
• 13:13
  Speaker 5: of organizations and individuals who are trying to hire that 2%.
• 13:17
  Speaker 5: And the rest have a different set of values. Their
• 13:19
  Speaker 5: top value is self-care and well-being. Their second value is agency,
• 13:24
  Speaker 5: which is like wanting to make all the decisions. They
• 13:26
  Speaker 5: are very, very self-deterministic. And then they would like voice
• 13:29
  Speaker 5: as their third value, which is authentic self-expression.
• 13:31
  Speaker 4: How do you say this with a straight face?
• 13:34
  Speaker 1: So my question here, sorry to interrupt, but my question
• 13:37
  Speaker 1: is how much of the responsibility lies with schools? I mean,
• 13:41
  Speaker 1: you have to have the knowledge, the skill set base
• 13:43
  Speaker 1: in order to kind of move forward with these kinds
• 13:45
  Speaker 1: of demands. universities and professors don't appear to be equipping
• 13:49
  Speaker 1: these young people with the right skill set. Their values
• 13:52
  Speaker 1: are formed by the time they get to school, okay?
• 13:54
  Speaker 5: I mean, I don't think the professors all feel the
• 13:56
  Speaker 5: same way about this. I don't think this is happening in.
• 13:58
  Speaker 4: School, okay?
• 13:59
  Speaker 5: Schools have learned to cater to it because they're getting
• 14:03
  Speaker 5: in students who have a certain set of values. But
• 14:05
  Speaker 5: those students didn't arrive with totally different values and then
• 14:08
  Speaker 5: have them change. I think it's happening a little earlier
• 14:11
  Speaker 5: than that. And I want to just say, I have
• 14:12
  Speaker 5: one little piece of data which I think you're going
• 14:14
  Speaker 5: to be delighted in because I've just gotten this data recently.
• 14:16
  Speaker 5: We went in at Becoming Labs, which is the lab
• 14:19
  Speaker 5: that I work in, and we gave our test, the
• 14:22
  Speaker 5: values bridge, to 300, the top 300 executives at a
• 14:26
  Speaker 5: large bank that shall remain nameless, except for to say
• 14:31
  Speaker 5: it is a wildly successful, extremely large bank based in
• 14:34
  Speaker 5: New York. So we gave the values bridge test to
• 14:38
  Speaker 5: their top 300 executives.
• 14:39
  Speaker 8: Why?
• 14:39
  Speaker 5: Because the CEO asked me to.
• 14:41
  Speaker 1: And we looked at their values.
• 14:42
  Speaker 5: There was 91% value overlap with this group.
• 14:46
  Speaker 2: That's unbelievable.
• 14:47
  Speaker 5: 91% of them had the exact same values.
• 14:50
  Speaker 4: Their top values were wildly.
• 14:53
  Speaker 5: Different than the Gen Z people that they were managing.
• 14:55
  Speaker 5: But what was fascinating is They didn't have Gen Z's
• 14:58
  Speaker 5: top values, agency and voice, self-determination, self-expression. Those were down
• 15:03
  Speaker 5: at number 14 and 15 for them.
• 15:05
  Speaker 2: So they had risen up to the top.
• 15:06
  Speaker 5: So we've got this very successful cohort of banking executives,
• 15:10
  Speaker 5: and they are managing people with radically different values.
• 15:13
  Speaker 1: This is what's causing the tension. We wanted to ask
• 15:16
  Speaker 1: you about the worst career advice you ever got. Not
• 15:18
  Speaker 1: the best, but the worst. And I know that something
• 15:20
  Speaker 1: that drives you absolutely bananas is something that Steve Jobs
• 15:23
  Speaker 1: used to tell everyone, which is follow your passion.
• 15:26
  Speaker 2: Yeah.
• 15:28
  Speaker 1: Hold it on here. Look, I think maybe you should,
• 15:31
  Speaker 1: but maybe you shouldn't. Because passion, which is often really
• 15:34
  Speaker 1: your interest, it's just one part.
• 15:36
  Speaker 5: It's sort of a three-legged stool when you're going to
• 15:37
  Speaker 5: try to build a career that's sustainable. And what you're
• 15:40
  Speaker 5: interested in, your passion, is one leg of the stool.
• 15:42
  Speaker 5: But you also have a set of values. Everyone has
• 15:44
  Speaker 5: a set of values. But also you have aptitudes. fine,
• 15:48
  Speaker 5: follow your passion if you're good at it. You know,
• 15:50
  Speaker 5: like I, you know, I would be up there like
• 15:52
  Speaker 5: with Beyonce if I was just following my passions, I
• 15:53
  Speaker 5: would like to perform, but I'm terrible. I mean, terrible
• 15:56
  Speaker 5: at it. So, I mean, I think that what students
• 15:58
  Speaker 5: want is like this wonderful answer. And I understand why
• 16:00
  Speaker 5: people give this advice because if you're, you know, technically,
• 16:04
  Speaker 5: first of all, it feels very good to say, just
• 16:05
  Speaker 5: follow your passion. And everybody goes, yeah, I should just
• 16:08
  Speaker 5: follow my passion. I would also say another piece of
• 16:10
  Speaker 5: it is sometimes people don't know what their passions are.
• 16:12
  Speaker 5: I mean, we've got kind of a generational cohort who
• 16:14
  Speaker 5: will say with dead seriousness, like, some days I want
• 16:17
  Speaker 5: to be a veterinarian.
• 16:18
  Speaker 4: That's what I hear all the time.
• 16:19
  Speaker 5: But then in the afternoon, I want to start a
• 16:21
  Speaker 5: tech company based on AI.
• 16:22
  Speaker 1: And it's like, well, you've got to choose between those,
• 16:24
  Speaker 1: I'm afraid.
• 16:25
  Speaker 6: Susie, I'm going to dovetail this all together with your
• 16:27
  Speaker 6: acclaim at NY.
• 16:29
  Speaker 4: You had a father-in-law.
• 16:32
  Speaker 6: Who, his voice, you have a voice when you're a
• 16:35
  Speaker 6: Boston and Maine railroad conductor. So Jack Welch's father was
• 16:39
  Speaker 6: a conductor on a train a million years ago. That
• 16:43
  Speaker 6: heritage wasn't about a voice. It wasn't about all the
• 16:46
  Speaker 6: stuff you've brilliantly studied Here, what did you learn from
• 16:49
  Speaker 6: Jack Welch about grinding through the investment day of retirement?
• 16:55
  Speaker 5: I have to say, I've often thought about what Jack's values,
• 16:58
  Speaker 5: if we'd had the values bridge, I would have loved
• 16:59
  Speaker 5: to know what his values were. But Jack actually believed
• 17:02
  Speaker 5: in enjoying your work. I mean, and I don't want
• 17:04
  Speaker 5: people to take out what they find to be an
• 17:06
  Speaker 5: enjoyable thing.
• 17:07
  Speaker 1: But Jack believed in hard work.
• 17:08
  Speaker 5: I mean, he was one of these people who was
• 17:10
  Speaker 5: like very driven to you know, we left our honeymoon
• 17:14
  Speaker 5: early because we missed work so much. I mean, that
• 17:17
  Speaker 5: was our shared personality type. And so I think that
• 17:20
  Speaker 5: he believed in work and the term fun employment probably
• 17:23
  Speaker 5: would have driven him just about as crazy as it
• 17:25
  Speaker 5: drives me when my students say they're going to have
• 17:27
  Speaker 5: some fun employment, which is purposely not work to have fun.
• 17:30
  Speaker 5: And I'm like, but work is fun. So I think
• 17:32
  Speaker 5: that he would have some thoughts. So his aptitude was work,
• 17:36
  Speaker 5: hard work. His value was work. He certainly had the
• 17:38
  Speaker 5: value of work centrism. His aptitudes were too many to list.
• 17:42
  Speaker 1: All right. Susie, thank you so much for joining us.
• 17:44
  Speaker 1: Susie Walsh, we were just getting started here with NYU
• 17:46
  Speaker 1: Stern School of Business, author of many books, but really
• 17:50
  Speaker 1: thought leadership here when it comes to career management and
• 17:53
  Speaker 1: also decision making and everything that entails.
• 17:56
  Speaker 11: All right.
• 17:57
  Speaker 1: Coming up, we've got a conversation with Torsten Slocke, chief
• 17:59
  Speaker 1: economist at Apollo. Of course, we're going to focus on
• 18:02
  Speaker 1: personal finance, retirement, and wealth management. This is Bloomberg Money. Okay,
• 18:07
  Speaker 1: you need to tell me about this study.
• 18:10
  Speaker 5: So we have a methodology. It's a methodology that I
• 18:14
  Speaker 5: teach at NYU.
• 18:21
  Speaker 1: Let's bring in Torsten Slocke right now. He is chief
• 18:23
  Speaker 1: economist at Apollo.
• 18:24
  Speaker 6: Torsten Slack with us, and we are thrilled he's with
• 18:27
  Speaker 6: us with an eclectic vision from Deutsche Bank over to Apollo.
• 18:31
  Speaker 6: And I've got to say, Torsten, I look at this,
• 18:33
  Speaker 6: and the thing at the end of the weekend, in
• 18:35
  Speaker 6: terms of personal finance, retirement, and wealth management, is we
• 18:40
  Speaker 6: have a top-line boom economy GDP like we've never had.
• 18:46
  Speaker 6: Discuss it. It's like after Napoleon's war. It's after 1947,
• 18:49
  Speaker 6: World War II. This boom nominal GDP is extraordinary.
• 18:54
  Speaker 3: Yeah, because we have very, very strong tailwinds to growth
• 18:56
  Speaker 3: coming from the AI spending boom. We also have tailwinds
• 18:58
  Speaker 3: coming from the one big bit of a bill. And
• 19:00
  Speaker 3: we also have some tailwinds coming from the home showing
• 19:02
  Speaker 3: of production. The manufacturing sector is actually doing really well.
• 19:05
  Speaker 3: And what's most noteworthy is also that the weekly data
• 19:08
  Speaker 3: for business formation is telling you that the number of
• 19:12
  Speaker 3: new businesses that are created every week is at the
• 19:14
  Speaker 3: highest level ever, ever in U.S.
• 19:15
  Speaker 2: History.
• 19:16
  Speaker 3: We've never had just a dynamic economy as we're having
• 19:18
  Speaker 3: at the moment because people can use AI to start
• 19:20
  Speaker 3: a new business.
• 19:21
  Speaker 6: So, Torsten, bring this over to the retirement plans where
• 19:24
  Speaker 6: everybody's in four index funds trying to get it done.
• 19:28
  Speaker 6: If we have a roaring economy, as Edgar Denny talks about,
• 19:32
  Speaker 6: are we at risk with our retirement?
• 19:34
  Speaker 3: Well, this is what's really important about this discussion is
• 19:36
  Speaker 3: something you and I have talked about for years because
• 19:38
  Speaker 3: now we have a huge capital need for financing AI.
• 19:41
  Speaker 2: And in the meantime, we also have.
• 19:43
  Speaker 3: A huge capital need also for financing the government. So,
• 19:46
  Speaker 3: we went from a savings glut from 2010 to 2020
• 19:48
  Speaker 3: where there was a significant amount of savings from China,
• 19:53
  Speaker 3: from savers, from people who have a 401k. But today,
• 19:56
  Speaker 3: there are so many things to invest in. You can
• 19:58
  Speaker 3: decide to invest in high government bond rates. You could
• 20:01
  Speaker 3: also decide to invest in AI. The number of projects
• 20:04
  Speaker 3: that need capital is very significant. And that's the reason
• 20:06
  Speaker 3: why interest rates keep going up. because there's just a
• 20:09
  Speaker 3: shortage of capital relative to the savings glut that we
• 20:12
  Speaker 3: had for many years before the pandemic.
• 20:14
  Speaker 1: Let me go back to the economy, because as strong
• 20:16
  Speaker 1: as the numbers indicate, it doesn't feel like it for
• 20:19
  Speaker 1: a lot of people. The consumer-facing part of the economy
• 20:21
  Speaker 1: feels like it's a completely different story than what's going
• 20:24
  Speaker 1: on in AI and all the CapEx and all the
• 20:27
  Speaker 1: buildup of the AI infrastructure.
• 20:29
  Speaker 3: Absolutely, and that's because the economy is bifurcated into the
• 20:32
  Speaker 3: very strong AI spending boom, and on the other side,
• 20:35
  Speaker 3: you have the interest rate sensitive parts of the economy,
• 20:37
  Speaker 3: namely housing and autos. And housing, mortgage rates during the
• 20:40
  Speaker 3: pandemic were 2.7, now mortgage rates are 7.2. In other words,
• 20:44
  Speaker 3: it's become unaffordable to buy a house, and if you
• 20:47
  Speaker 3: add that to affordability issues with healthcare, with education, oil prices,
• 20:52
  Speaker 3: that's why consumer confidence continues.
• 20:53
  Speaker 2: To do so poorly.
• 20:54
  Speaker 6: The person within wealth management, within just basic wealth management,
• 20:58
  Speaker 6: Project out one year, three years, five years out of
• 21:03
  Speaker 6: how we bring down this odd boom economy.
• 21:07
  Speaker 4: Where will the damage be?
• 21:08
  Speaker 6: That's what Bloomberg Money people want to know.
• 21:10
  Speaker 4: Absolutely.
• 21:11
  Speaker 3: And the key conclusion is that interest rates are going
• 21:13
  Speaker 3: to stay higher for longer because inflation is higher for longer.
• 21:16
  Speaker 2: And from a 60-40.
• 21:17
  Speaker 3: Portfolio perspective, that means that we now suddenly need to
• 21:20
  Speaker 3: think more about fixed income. because the yield you can
• 21:23
  Speaker 3: get in fixed income is actually really, really juicy if
• 21:25
  Speaker 3: you go back and look at history. And if that's juicy,
• 21:28
  Speaker 3: that means that both in rates but also in high-quality credit,
• 21:31
  Speaker 3: you could get some very high levels of yields that
• 21:33
  Speaker 3: you have not been able to get literally for decades.
• 21:34
  Speaker 4: Scarlett, juicy is CFA level four.
• 21:38
  Speaker 1: Yeah, it's a very technical term. I mean, you don't
• 21:40
  Speaker 1: even have to go into fixed income. You could just
• 21:42
  Speaker 1: keep money in cash and do pretty well, given where
• 21:45
  Speaker 1: deposit rates are. And this is something that you have
• 21:48
  Speaker 1: written about, this idea that people who keep their money
• 21:51
  Speaker 1: in cash With the use of AI, that becomes a
• 21:55
  Speaker 1: whole different picture here because AI can really change behavior
• 21:59
  Speaker 1: in a way that the industry, the financial industry, is
• 22:02
  Speaker 1: not quite prepared for.
• 22:03
  Speaker 3: Yeah, because we've had a lot of conversations in the
• 22:05
  Speaker 3: last few weeks about Muse and what will Muse do to.
• 22:08
  Speaker 2: The Meta app, right?
• 22:09
  Speaker 3: The Meta app, your personal assistant that suddenly can make
• 22:11
  Speaker 3: your life easier in a number of different ways. And
• 22:13
  Speaker 3: one worry, of course, you can have is that if
• 22:15
  Speaker 3: that makes your life easier by swiping out cash that
• 22:18
  Speaker 3: you have in your checking account where interest rates are 0.01,
• 22:21
  Speaker 3: if you can swipe that into another account while I
• 22:23
  Speaker 3: walk into Whole Foods, suddenly my money go into my account.
• 22:26
  Speaker 2: When I walk out, the money goes out.
• 22:28
  Speaker 4: Okay, wise guy, would you do that?
• 22:29
  Speaker 3: So, well, the question is, this is why we are
• 22:31
  Speaker 3: about to figure out how many people are giving their
• 22:33
  Speaker 3: data to Muse and to the personal assistant.
• 22:35
  Speaker 4: You've got to be kidding me. I think it's Kara
• 22:36
  Speaker 4: Swisher said it. You've got to be kidding me.
• 22:38
  Speaker 6: You're going to give Zuckerberg and that crew your personal
• 22:42
  Speaker 6: financial data?
• 22:43
  Speaker 3: It's already possible today in many different ways to take
• 22:46
  Speaker 3: your money in and out of your checking account.
• 22:47
  Speaker 2: There are some issues. Sometimes it takes a day. Sometimes
• 22:49
  Speaker 2: it takes a little bit less time.
• 22:51
  Speaker 3: But the issue is, at the end of the day,
• 22:52
  Speaker 3: that if you can swipe your money out of the
• 22:54
  Speaker 3: checking account, you can have a checking account elsewhere where,
• 22:56
  Speaker 3: of course, you also get a higher yield.
• 22:58
  Speaker 2: So, I do think that this is the way we're moving.
• 22:59
  Speaker 3: That may not be happening with Muse and the personal
• 23:02
  Speaker 3: assistants from AI, but it's certainly that way that things
• 23:04
  Speaker 3: are moving. Also, of course, with blockchain technology, making these
• 23:07
  Speaker 3: things also a lot easier.
• 23:08
  Speaker 6: We love to mention blockchain and Bloomberg money.
• 23:10
  Speaker 1: I think we can. Yeah. Yeah, for sure. Well, AI
• 23:12
  Speaker 1: has made it so that price shopping, rate shopping, and
• 23:15
  Speaker 1: switching is now frictionless. And that means that I feel
• 23:19
  Speaker 1: like that's going to introduce a lot more volatility. The
• 23:21
  Speaker 1: number that you see today may not last for very long.
• 23:24
  Speaker 4: Well, that's true.
• 23:25
  Speaker 3: And that's also why, of course, the risk ultimately becomes
• 23:27
  Speaker 3: if money moves around much quicker and if suddenly subscriptions
• 23:30
  Speaker 3: are canceled and subscribed to much quicker, of course, you
• 23:32
  Speaker 3: could have a more volatile economy. So that's why AI,
• 23:35
  Speaker 3: once again, can be disruptive. And it can be disruptive,
• 23:37
  Speaker 3: of course, in the normal consumer economy, but it can
• 23:40
  Speaker 3: also be disruptive, of course, in personal finances.
• 23:42
  Speaker 11: Right.
• 23:42
  Speaker 6: I got to ask this, and this comes right over
• 23:44
  Speaker 6: to wealth management, to retirement, to psychology of what we're
• 23:47
  Speaker 6: doing on Bloomberg Money.
• 23:49
  Speaker 4: You are expert on the continent of Europe.
• 23:52
  Speaker 6: Is the continent of Europe, the United Kingdom, well, less
• 23:55
  Speaker 6: the United Kingdom, but are they going to become more
• 23:58
  Speaker 6: Anglo-american in their capitalism. We're all praying for them to
• 24:02
  Speaker 6: take more risk to me more equity based Do you
• 24:05
  Speaker 6: buy it?
• 24:06
  Speaker 3: I over time this will come because the Europeans understand
• 24:10
  Speaker 3: this they know that they need more capital to take
• 24:12
  Speaker 3: risk if they need growth They will absolutely have to
• 24:15
  Speaker 3: grow their economies and have more developed financial markets Think
• 24:18
  Speaker 3: about it if you and I sit in Germany or
• 24:20
  Speaker 3: Denmark or France and we have a good idea You
• 24:23
  Speaker 3: will need to then go into your bank and say
• 24:24
  Speaker 3: can I borrow some money? And if that says no
• 24:27
  Speaker 3: You really have no other places to go. So when
• 24:29
  Speaker 3: financial markets in the U.S., you can go to venture capital,
• 24:31
  Speaker 3: private credit, private equity. You can go to another bank.
• 24:33
  Speaker 3: There are different places you can go and have this discussion.
• 24:36
  Speaker 2: Can I borrow from this great idea?
• 24:37
  Speaker 4: I'm going to get one more in.
• 24:38
  Speaker 6: Because Scarlett's got smarter questions. You know I bought the
• 24:41
  Speaker 6: Austrian 100-year paper.
• 24:44
  Speaker 2: Oh, I'm sorry to hear that.
• 24:46
  Speaker 4: I was a yield hog, folks. Just so you know,
• 24:49
  Speaker 4: I really screwed up on this. And Torsten said, don't
• 24:51
  Speaker 4: do it.
• 24:52
  Speaker 6: I bought the 100-year paper, and it's down like 80%.
• 24:55
  Speaker 6: You're laughing at me. At least I didn't buy it leveraged.
• 24:59
  Speaker 6: That was cash we did that with. Tell me about
• 25:02
  Speaker 6: yield hog right now, given these bond gyrations within our
• 25:06
  Speaker 6: retirement fund.
• 25:07
  Speaker 3: What's most important about your 100-year bond is that you
• 25:09
  Speaker 3: bought duration. And that tells you that bonds can actually
• 25:12
  Speaker 3: also be very risky. We're figuring that out that anyone
• 25:14
  Speaker 3: who has public U.S. treasuries and public credit are also
• 25:18
  Speaker 3: very duration sensitive. So that's, of course, why being short
• 25:21
  Speaker 3: of duration.
• 25:21
  Speaker 2: Is a good idea at the moment.
• 25:22
  Speaker 3: And what's particularly also a good idea is to be
• 25:24
  Speaker 3: up in quality, first lien, see a secure top of
• 25:27
  Speaker 3: the capital structure, but make sure that you are in
• 25:29
  Speaker 3: short of duration debt so that you're not exposed to
• 25:31
  Speaker 3: those duration moves that you unfortunately were exposed to when
• 25:33
  Speaker 3: you bought.
• 25:34
  Speaker 2: A 100-year bond.
• 25:34
  Speaker 4: That's brutal.
• 25:35
  Speaker 1: If you're early on in your retirement planning, you've got
• 25:38
  Speaker 1: decades left to work and you want to put money away. Yes,
• 25:41
  Speaker 1: you put it in equities, but we keep hearing about alternatives,
• 25:43
  Speaker 1: private equity, private credit. The idea that this is still
• 25:48
  Speaker 1: a good place to go when interest rates are rising
• 25:50
  Speaker 1: confuses me because private equity and private credit got their
• 25:54
  Speaker 1: heyday because rates were so low. Now that rates are higher,
• 25:57
  Speaker 1: how is this still a good time?
• 25:58
  Speaker 3: As long as you make sure that you're up in
• 25:59
  Speaker 3: high quality private credit, high quality private equity. I mean,
• 26:02
  Speaker 3: you get private credit as investment grade. That is as
• 26:04
  Speaker 3: good as investment grade from the U.S.
• 26:06
  Speaker 2: Government.
• 26:06
  Speaker 3: Meaning the rating may not be exactly the same, but
• 26:08
  Speaker 3: investment grade is very high quality. And that exactly is
• 26:11
  Speaker 3: the whole point, that when something is investment grade, it's
• 26:14
  Speaker 3: able to pay the higher debt servicing costs that come
• 26:16
  Speaker 3: along when interest rates are higher. So make sure that
• 26:18
  Speaker 3: your investing companies, I know it sounds trivial, investing companies
• 26:21
  Speaker 3: that have earnings, investing companies that actually make money and
• 26:24
  Speaker 3: therefore able.
• 26:24
  Speaker 2: To pay the higher interest rates that we're facing.
• 26:26
  Speaker 4: At the moment.
• 26:28
  Speaker 1: Lots of things were rated investment grade in the last
• 26:30
  Speaker 1: go-around in 2007, and it turned out they weren't.
• 26:33
  Speaker 2: Of course, that's true.
• 26:34
  Speaker 3: But I mean today, I mean a lot of things
• 26:37
  Speaker 3: are investment graded by several rating agencies. Of course, investors
• 26:40
  Speaker 3: need to think about what type of, and think about
• 26:42
  Speaker 3: the broad spectrum of risk that investors, you can take
• 26:44
  Speaker 3: venture capital where you literally have no earnings the next
• 26:47
  Speaker 3: five years. That's a different type of risk relative to
• 26:49
  Speaker 3: investing in private credit that has the property of having
• 26:52
  Speaker 3: earnings and therefore the ability to pay the high debt.
• 26:55
  Speaker 6: I got one final idea here. Are you read in
• 26:57
  Speaker 6: on the New York Yankees?
• 26:59
  Speaker 4: You're Apollo.
• 27:00
  Speaker 6: Took a minority interest in the New York Yankees.
• 27:02
  Speaker 3: Absolutely.
• 27:03
  Speaker 4: Are you steeled for Tampa Bay and New York?
• 27:06
  Speaker 2: We're so ready. Absolutely. I have the hat.
• 27:08
  Speaker 4: I'm going to wear it. And I'm going.
• 27:10
  Speaker 2: It will be fun.
• 27:12
  Speaker 4: That was compliance approved.
• 27:13
  Speaker 1: Did you see the Yankees beat the Red Sox? Were
• 27:16
  Speaker 1: you part of that?
• 27:16
  Speaker 3: I was personally not part of that. But I do
• 27:19
  Speaker 3: read it, and we're very excited about it. We're so
• 27:20
  Speaker 3: proud of this.
• 27:21
  Speaker 1: All right, Torsten, thank you so much. Torsten Slock is
• 27:23
  Speaker 1: chief economist over at Apollo. Really appreciate it.
• 27:26
  Speaker 4: Thank you.
• 27:27
  Speaker 1: Coming up on Bloomberg Money, for millions of Americans, rising
• 27:30
  Speaker 1: expenses are just another pressure point on top of their
• 27:33
  Speaker 1: student loans. And guess what? Those loans, the payments are
• 27:36
  Speaker 1: getting bigger. We'll explain why. This is Bloomberg Money.
• 27:39
  Speaker 4: Can you see over at Apollo like he has to
• 27:41
  Speaker 4: know what.
• 27:41
  Speaker 2: The info is?
• 27:53
  Speaker 1: Bloomberg Money is your new destination for personal finance. It's
• 27:56
  Speaker 1: a cross-platform effort that extends beyond your television screen, including
• 28:00
  Speaker 1: our new digital hub at Bloomberg.com slash money. And Tom,
• 28:04
  Speaker 1: this week, a story that feels extremely relevant right now
• 28:08
  Speaker 1: is about soaring student loan bills and affordability because everything
• 28:12
  Speaker 1: is more expensive. But now there's been this reorganization, restructuring,
• 28:17
  Speaker 1: overhaul of student loans that's left people with student loan
• 28:20
  Speaker 1: debt paying even bigger payments.
• 28:22
  Speaker 4: I'm glad you chose to do this. I'm conflicted.
• 28:24
  Speaker 1: Let's bring in one of the authors of this story,
• 28:25
  Speaker 1: Bloomberg Money reporter Sarah Foster. So, Sarah, what happened here?
• 28:28
  Speaker 1: This has to do with Joe Biden and what he
• 28:31
  Speaker 1: did for student loans and now what President Trump is
• 28:33
  Speaker 1: doing when it comes to student loans, right?
• 28:35
  Speaker 11: A lot of American student loan borrowers are really kind
• 28:37
  Speaker 11: of caught in the crosshairs of these shifting federal student
• 28:40
  Speaker 11: loan repayment plans. We spoke with my colleagues, Liam Knox
• 28:44
  Speaker 11: and Janelle Marte. We kind of profiled student loan borrowers
• 28:47
  Speaker 11: across the country, asking them what payment plans they're picking,
• 28:51
  Speaker 11: how their bills are changing, how it's impacting their finances.
• 28:54
  Speaker 11: And many of the borrowers that we spoke with told
• 28:56
  Speaker 11: us that their payments have, in some cases, doubled.
• 28:59
  Speaker 1: So that's because they're choosing bigger payments as opposed to
• 29:02
  Speaker 1: extending their loans for longer, right?
• 29:04
  Speaker 11: There's two new repayment plan options, and a lot of
• 29:07
  Speaker 11: them either come with longer repayment windows or they come
• 29:11
  Speaker 11: with higher bills that can accelerate those repayments. And so
• 29:15
  Speaker 11: it's resulting in a lot of these Americans who took
• 29:17
  Speaker 11: on student loan debt kind of choosing between paying off
• 29:21
  Speaker 11: their student loan bill or saving for retirement, saving for
• 29:23
  Speaker 11: other long-term goals. And a lot of the borrowers that
• 29:26
  Speaker 11: we spoke with mentioned to us that they're kind of
• 29:28
  Speaker 11: having to sacrifice their future.
• 29:30
  Speaker 6: In your research on this, is there any understanding that
• 29:33
  Speaker 6: for decades people paid their student loans?
• 29:37
  Speaker 11: I spoke with one borrower who has continued to make payments.
• 29:40
  Speaker 11: for almost 20 years, and he switched to multiple different
• 29:43
  Speaker 11: repayment plans. He's gone back and forth on forbearance periods
• 29:47
  Speaker 11: while he's gone to graduate school, and it's ultimately resulted
• 29:50
  Speaker 11: in the interest of being even higher than the principal
• 29:53
  Speaker 11: balance that he took out.
• 29:55
  Speaker 1: The amount that people are borrowing now is vastly different
• 29:58
  Speaker 1: than what they were borrowing 20, 30, 40 years ago.
• 29:59
  Speaker 4: I totally agree with that.
• 30:01
  Speaker 1: So I don't know that it's a fair comparison.
• 30:03
  Speaker 4: I agree.
• 30:04
  Speaker 1: I mean, the outstanding student loan out there is massive
• 30:08
  Speaker 1: compared with credit card loans or auto loans. Talk a
• 30:11
  Speaker 1: little bit about the makeup there. Yeah, we also looked at.
• 30:14
  Speaker 11: Kind of the composition of debt that a lot of
• 30:16
  Speaker 11: households have, and it's still the case that, you know,
• 30:19
  Speaker 11: this housing debt makes up the biggest share. But when
• 30:22
  Speaker 11: you compare auto loans and student loan debt, you know,
• 30:25
  Speaker 11: those are roughly identical, and it's really kind of the
• 30:27
  Speaker 11: increase that we've seen in student loan debt since the
• 30:29
  Speaker 11: early 2000s that's been a major kind of hurdle for us.
• 30:33
  Speaker 6: I've got to do this on personal finance. The chart
• 30:35
  Speaker 6: earlier in the week was a shock, and it was
• 30:37
  Speaker 6: so important, folks. We're going to give it to you again,
• 30:39
  Speaker 6: and of course... Sarah's living this as we look at
• 30:42
  Speaker 6: the 30-year mortgage rate.
• 30:43
  Speaker 4: Who knows where.
• 30:44
  Speaker 6: It'll be Monday? Who knows where it'll be a month
• 30:47
  Speaker 6: from now? But the trajectory is really, really shocking. The
• 30:52
  Speaker 6: long-term trend of the free lunch, Scarlett expanded out to
• 30:56
  Speaker 6: 8,000 square feet right in the bottom there in 2022.
• 30:59
  Speaker 6: And up, up we go from 3% to 7%. Sarah,
• 31:02
  Speaker 6: this is a profound impact, even for people who aren't
• 31:06
  Speaker 6: looking for a 30-year mortgage.
• 31:08
  Speaker 11: I go back to the beginning of the year, and
• 31:10
  Speaker 11: I think about what I was hearing from a lot
• 31:12
  Speaker 11: of the economists who I was speaking with, and the
• 31:15
  Speaker 11: hope was that 2026 would really be better for us.
• 31:17
  Speaker 11: We even briefly saw mortgage rates tip below 6%. Right.
• 31:22
  Speaker 1: The idea was that we would see interest rate cuts
• 31:24
  Speaker 1: from the Federal Reserve, and therefore that would bring down
• 31:27
  Speaker 1: mortgage rates and allow people, especially first-time homebuyers, to finally
• 31:31
  Speaker 1: be able to buy that home.
• 31:32
  Speaker 11: And it's been so difficult because I think what was
• 31:34
  Speaker 11: originally thought as the ceiling, that 7% rate, is now
• 31:37
  Speaker 11: being questioned as whether it's the new floor. And as
• 31:39
  Speaker 11: long as the war in Iran continues, oil prices trading
• 31:43
  Speaker 11: above $ 100 a barrel, diesel at record highs, this is
• 31:47
  Speaker 11: going to continue to be a problem.
• 31:48
  Speaker 6: And now, folks, on Bloomberg Money, we destroy Sarah Foster's weekend.
• 31:52
  Speaker 4: Let's do it with a book.
• 31:53
  Speaker 6: This is my autumnal read, which I just think is
• 31:56
  Speaker 6: incredibly important on bonds, but it's a highly readable look.
• 32:01
  Speaker 6: at the history of bonds from Venice to Amsterdam to
• 32:05
  Speaker 6: London and over to Alexander Hamilton in America. This is
• 32:08
  Speaker 6: a triumph by Robin Wigglesworth. A Fabulous Debt, which is
• 32:13
  Speaker 6: a quote, I believe, from England ages ago. I just
• 32:16
  Speaker 6: can't say enough about the readability of this. For people
• 32:19
  Speaker 6: that want to know from the past, it reads like
• 32:21
  Speaker 6: Daniel Yergin, The Prize, Commanding Heights, and the others.
• 32:25
  Speaker 1: Does it demystify the bond market?
• 32:26
  Speaker 6: It does, and he's beautiful about explaining Tom Keene Babel
• 32:31
  Speaker 6: in English. Robin does a great job, and I can't
• 32:34
  Speaker 6: say enough about it.
• 32:35
  Speaker 1: Mary Childs wrote a fantastic review of this book for
• 32:37
  Speaker 1: a Bloomberg weekend. I'm curious whether they're going to turn
• 32:40
  Speaker 1: into some kind of TV series on Netflix or something else.
• 32:44
  Speaker 1: Because you talk about how there's like specific examples, right?
• 32:47
  Speaker 1: What happened in Amsterdam? What happened when Alexander Hamilton was
• 32:51
  Speaker 1: leading the treasury?
• 32:52
  Speaker 4: Yeah, it was. And even, you know, he brings in
• 32:54
  Speaker 4: the play from Broadway. And so he brings everything. He
• 32:57
  Speaker 4: even has Mary Childs in the book, I might point out.
• 32:59
  Speaker 11: Oh, really?
• 33:00
  Speaker 4: Ed Yardeni shows up early and then Sidney. Great book.
• 33:03
  Speaker 4: And I love You've Got Gretchen as your book this week.
• 33:06
  Speaker 12: Yes.
• 33:06
  Speaker 11: All right.
• 33:06
  Speaker 1: You teased it. Dead is at the heart of the
• 33:08
  Speaker 1: PE industry, which is one of the single most significant
• 33:11
  Speaker 1: wealth generators in the past 30, 40 years. You just
• 33:14
  Speaker 1: look at who owns all the sports teams and drives
• 33:16
  Speaker 1: Wall Street. So my book is Gretchen Morgenson and Joshua
• 33:20
  Speaker 1: Rosner's These Are the Plunderers, How P.E. Runs and Wrecks America.
• 33:23
  Speaker 1: So not subtle at all. They clearly have a point
• 33:26
  Speaker 1: of view. But it's really about how private equity financiers
• 33:29
  Speaker 1: use debt to fund corporate takeovers and load them up
• 33:31
  Speaker 1: with debt while cutting costs and generate big profits for
• 33:34
  Speaker 1: themselves and really remaking the economy in the process. And
• 33:38
  Speaker 1: We're now seeing it.
• 33:38
  Speaker 4: We're now learning it.
• 33:39
  Speaker 6: And what I hear all the time, and this goes
• 33:41
  Speaker 6: back to Susie Welch earlier in the program, you can't
• 33:44
  Speaker 6: do this without reading background. And that's what the Wigglesworth
• 33:48
  Speaker 6: and Morganson-Rosner books do. They're background to make you have
• 33:52
  Speaker 6: a deeper thought about what we're doing in personal finance.
• 33:55
  Speaker 1: I meet so many young people, and Sarah, I'm sure
• 33:57
  Speaker 1: you feel the same. You've encountered this as well, who
• 34:00
  Speaker 1: say that they want to go into private equity. This
• 34:02
  Speaker 1: is before they've ever worked in banking at all. They
• 34:04
  Speaker 1: just want the straight line to private equity because that's
• 34:06
  Speaker 1: how you build wealth. That's how you make a lot
• 34:07
  Speaker 1: of money. That's the new investment banking in Wall Street.
• 34:10
  Speaker 4: It's true.
• 34:11
  Speaker 11: There's this new rise in young earners who I think
• 34:13
  Speaker 11: have realized that you don't grow your wealth through your
• 34:16
  Speaker 11: salary alone. You kind of grow your wealth through assets.
• 34:18
  Speaker 11: And especially if you're able to kind of take a
• 34:20
  Speaker 11: job that woos you with some of these stock options,
• 34:23
  Speaker 11: maybe the ability to eventually work for a company that IPOs.
• 34:25
  Speaker 6: But they have a timeline of what? One year, two years?
• 34:28
  Speaker 6: Where am I going to be in four years, right?
• 34:31
  Speaker 11: The investing schedule is difficult and it's complicated. You know,
• 34:33
  Speaker 11: as we see, it's so much volatility in the market
• 34:35
  Speaker 11: that it's something you definitely have to consider.
• 34:38
  Speaker 1: All right, Sarah Foster, really appreciate you joining us as always.
• 34:40
  Speaker 1: Bloomberg reporter Sarah Foster with our coverage of student loans
• 34:45
  Speaker 1: as well as mortgages. For the latest reviews and recommendations
• 34:48
  Speaker 1: from Bloomberg, be sure to subscribe to the On Books newsletter. Tom,
• 34:52
  Speaker 1: your book once again, The Elegant Debt.
• 34:56
  Speaker 4: Oh, I like that. Robin, thank you so much. Scar
• 34:58
  Speaker 4: Butcher and the Fabulous Dead.
• 35:01
  Speaker 1: A Fabulous Dead.
• 35:01
  Speaker 4: A Fabulous Dead.
• 35:02
  Speaker 1: Fabulous Dead. All right. It may feel like summer. The
• 35:05
  Speaker 1: leaves are changing. Tom had an autumnal book. Will you
• 35:08
  Speaker 1: put gas in the tank to go see fall foliage?
• 35:11
  Speaker 1: We're going to take a look at what people are
• 35:13
  Speaker 1: spending their money on this weekend and in the weekends
• 35:16
  Speaker 1: to come. This is Bloomberg Money. That's upstate New York.
• 35:20
  Speaker 4: I think it's Central Park.
• 35:22
  Speaker 1: Central Park.
• 35:29
  Speaker 6: The Bloomberg Money, and we say good afternoon to you.
• 35:31
  Speaker 6: Scarlett Fu and Tom Keene with us now. Lisa Mateo,
• 35:35
  Speaker 6: any number of things to talk about to get to
• 35:36
  Speaker 6: this weekend and Bloomberg this weekend. But as we said
• 35:39
  Speaker 6: with Torsten Slott, Yankees on a roll, crushed the Red Sox.
• 35:45
  Speaker 6: No one was more happy. than Lisa Mateo. The Yankees
• 35:49
  Speaker 6: doing well. And of course, Lisa's been garbed in the
• 35:52
  Speaker 6: dreaded New York Yankees merch here over the years.
• 35:56
  Speaker 4: And oh, thank you for the Red Sox photos, guys.
• 35:59
  Speaker 8: Really appreciate it.
• 36:01
  Speaker 12: Oh, Tom, I'm so sorry.
• 36:02
  Speaker 1: I know you call them the dreaded Yankees.
• 36:03
  Speaker 12: But we have to go on because yes, the fabulous
• 36:07
  Speaker 12: jacket that I do have of the Yankees.
• 36:10
  Speaker 4: Thank you to Tom Keene, who looks so happy.
• 36:16
  Speaker 1: There's a first game of the ALDS on Saturday, right?
• 36:19
  Speaker 8: On Saturday, yeah, go to Tampa.
• 36:20
  Speaker 12: So after they swept the boss, they swept boss, and
• 36:23
  Speaker 12: we're moving on Saturday to Tampa Bay. And then from Saturday,
• 36:26
  Speaker 12: you go to Monday. But then Wednesday, they bring it
• 36:29
  Speaker 12: back home. And that's where you start looking up tickets
• 36:31
  Speaker 12: because my husband's already asking me, can we get tickets?
• 36:33
  Speaker 4: Talking about personal finance.
• 36:35
  Speaker 8: Yes, can we get tickets Wednesday?
• 36:37
  Speaker 11: No.
• 36:37
  Speaker 12: So if you look at behind where the Yankees sit, $ 6, 000,
• 36:43
  Speaker 12: about $ 6, 000 for one ticket.
• 36:45
  Speaker 6: So $ 12, 000.
• 36:47
  Speaker 1: That's the starting.
• 36:49
  Speaker 12: But then if you go all the way back to $ 200, 000,
• 36:51
  Speaker 12: $ 300, 000 section, which is usually where we are, it's about
• 36:53
  Speaker 12: between $ 200, 000 and $ 300, 000.
• 36:55
  Speaker 4: So there you go.
• 36:56
  Speaker 1: That feels a little more reasonable.
• 36:57
  Speaker 7: Yeah, $ 400, 000 range.
• 36:58
  Speaker 12: You can get them for $ 100, 000 and something.
• 36:59
  Speaker 2: But everyone's asking about the ticket.
• 37:01
  Speaker 4: Well, that's a nice banner. Yankees beat Red Sox.
• 37:03
  Speaker 11: Yes.
• 37:03
  Speaker 1: It still hurts. We did that special for you.
• 37:05
  Speaker 6: Doesn't it? Why don't we segue here to what matters
• 37:08
  Speaker 6: in the autumnal glow?
• 37:10
  Speaker 1: Oh, a lot of people driving out and checking out
• 37:12
  Speaker 1: the fall foliage.
• 37:13
  Speaker 12: I've already started. They started in the Poconos. You see
• 37:15
  Speaker 12: the colors already. We've been up there, way upstate. You
• 37:17
  Speaker 12: can start to see it too. And they have this
• 37:19
  Speaker 12: great ferry that takes you on this whole beer trekking,
• 37:22
  Speaker 12: you know.
• 37:23
  Speaker 4: Oh, I'm shocked.
• 37:25
  Speaker 8: Straight up the Hudson River.
• 37:26
  Speaker 1: It's amazing. Just in time for people to visit their
• 37:29
  Speaker 1: kids at school, right? Visiting weekends tend to coincide with
• 37:32
  Speaker 1: these fall foliage.
• 37:33
  Speaker 2: Correct, correct.
• 37:34
  Speaker 11: Yes, I know.
• 37:35
  Speaker 12: I just came back from visiting my daughter, so it
• 37:37
  Speaker 12: was a great experience.
• 37:38
  Speaker 1: There's also the possibility if you happen to fly, I
• 37:40
  Speaker 1: don't know if you know about this, United wants you
• 37:43
  Speaker 1: to defect from Delta or American. It's the battle of
• 37:45
  Speaker 1: the Wi-Fi. You have to think about it.
• 37:47
  Speaker 12: If you're going to travel, are you going to go
• 37:48
  Speaker 12: United or are you going to go Delta? Because United
• 37:50
  Speaker 12: has Elon Musk's Starlink and Delta does not. They have
• 37:53
  Speaker 12: Amazon Leo.
• 37:54
  Speaker 1: And this is in-flight Wi-Fi service. Yes, in-flight Wi-Fi. So
• 37:58
  Speaker 1: it's the whole back and forth.
• 37:59
  Speaker 12: United is trying to get Delta's customers to say, hey,
• 38:02
  Speaker 12: you know, through October 15th, we'll take you on and
• 38:04
  Speaker 12: we'll keep your loyalty points, too.
• 38:06
  Speaker 6: I mean, I know we do personal finance, but basically
• 38:08
  Speaker 6: because of Lisa's appearance here, SpaceX.
• 38:11
  Speaker 4: Is spiked up today.
• 38:12
  Speaker 8: Yes.
• 38:13
  Speaker 4: Up to a 157 level. And that's Starlink, right?
• 38:16
  Speaker 1: That's Starling.
• 38:16
  Speaker 8: That's right.
• 38:16
  Speaker 4: That is Starling.
• 38:17
  Speaker 1: Yes, among many, many businesses. But, you know, everyone's points.
• 38:21
  Speaker 1: That's personal finance.
• 38:21
  Speaker 4: Does your daughter bother you in class yet?
• 38:24
  Speaker 12: She is attempting, yes. She has a big anatomy physics
• 38:27
  Speaker 12: test today.
• 38:28
  Speaker 1: Well, good luck to her. She's a little stressed out.
• 38:31
  Speaker 1: But it's good.
• 38:31
  Speaker 2: It's very good. It's very good.
• 38:32
  Speaker 1: Lisa McHale, thank you so much. And make sure to
• 38:34
  Speaker 1: watch Bloomberg this weekend every Saturday and Sunday morning starting
• 38:37
  Speaker 1: at 7 a.m. Eastern time. That does it for Bloomberg
• 38:39
  Speaker 1: Money today. Have a great day.
• 38:42
  Speaker 6: This is the Bloomberg Money Podcast, bringing you a smart
• 38:45
  Speaker 6: look at the forces shaping your financial life. I'm Tom
• 38:49
  Speaker 6: Keen with Scarlett Fu. You can watch the show live
• 38:53
  Speaker 6: on Bloomberg TV every Friday at noon Wall Street time.
• 38:57
  Speaker 6: Subscribe to the podcast on Apple, Spotify, or wherever you listen.
• 39:01
  Speaker 6: And as always, on the Bloomberg Terminal and the Bloomberg
• 39:05
  Speaker 6: Business app.
• 39:09
  Speaker 11: Bye.