00:00:02 Speaker 1: Bloomberg Audio Studios. 00:00:04 Speaker 2: Podcasts. 00:00:05 Speaker 3: Radio. 00:00:06 Speaker 4: News. 00:00:07 Speaker 5: Bloomberg Money. This is the Bloomberg Money Podcast. I'm Tom Keen with Scarlett Fu. Join us each week for a smart look at the forces shaping your financial life on personal finance, on retirement, and wealth management. We will explore how people are earning, investing, and building wealth. We are live Fridays at noon Eastern on Bloomberg Television. Subscribe to the podcast wherever you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. Good noon, everyone. Bloomberg Money, always on personal finance, retirement and wealth management. Back from the summer, Scarlett Fu and Tom Keenan does feel in New York City like we're back from the summer. 00:01:04 Speaker 1: Yeah, it's really crisp outside. And of course, next week, we've got a whole world descending upon our doorstep. 00:01:09 Speaker 5: We do. You can see it coming in right now in Fifth Avenue, all the security up right now. But part of it is Wall Street, and to me, away from Bloomberg Money, do you want to trade stocks 23 hours a day? I guess that's coming up. I don't buy it. 00:01:22 Speaker 1: I mean, the argument is that people outside of the U.S. want to trade our stocks 24-7. 00:01:27 Speaker 5: I guess so, but it's like Bitcoin. I mean, Bitcoin, I can trade Sunday. 00:01:29 Speaker 1: You almost said BitDog, didn't you? 00:01:31 Speaker 5: Yeah, I almost said BitDog. But the answer is this is a revolution like the market moving down to Texas, maybe. 00:01:36 Speaker 1: Oh, yeah. I mean, more companies moving in that direction. I think Dillard's was the latest one. 00:01:39 Speaker 5: Lots of it. And I learned today, Paul Sweeney told me, Dillard is from Arkansas. 00:01:43 Speaker 1: Yes, Little Rock. 00:01:44 Speaker 5: Learn something every day. We say good morning and good noon to you as well. With us this noon, Henry McVeigh will join us, partner at KKR, a really important regime change essay out, head of global macro and asset allocation. 00:02:00 Speaker 1: And we'll be sitting down with Alicia Levine, BNY Wealth Chief Investment Officer, on what a set it and forget it investment strategy looks like when you're at the start of a new rate hiking cycle. 00:02:09 Speaker 5: Right to it with good conversation ahead. Let's get the stocks right now as we can. Sort of a Friday feel to it after this hellacious week that we've had. But, you know, all in all, holding on, I would say, Scarlett, more than anything, looking at bonds, looking at commodities, looking at foreign exchange, it's a miracle where that VIX is. 00:02:27 Speaker 1: Yeah, it's pretty subdued given what we've seen this week. The S & P 500 set for a second straight week of declines. You flip up the board and we look at the 10-year yield. We're right back at around that 5% level, just a hair below it. What does that mean for stocks? 00:02:43 Speaker 5: Not clear. 00:02:43 Speaker 1: The dollar modestly higher at the moment. It's pretty much at a seven-week high. And we're looking at New York crude at $ 101 a barrel. It is about to close out a third straight week of gains. 00:02:53 Speaker 5: Well, three weeks ago, we were 109, two cups of coffee ago, and we've come in nicely. That dovetailed right with the Fed. 00:02:59 Speaker 1: Well, before the war, we were at 65, so. 00:03:01 Speaker 5: Well, there's big changes. Did you see diesel? 00:03:04 Speaker 1: Oh, more than $ 6. 00:03:05 Speaker 5: I figured out, like, what Gura drives, the F450, you know, the big thing, eight tons or whatever. $ 312 to fill it up. 00:03:13 Speaker 6: Eesh. 00:03:13 Speaker 1: Good thing he lives in Brooklyn. 00:03:14 Speaker 5: It's painful. We'll have to see on this. Speaking of painful, a great set of guests with us this morning to get us started. Always a wide-ranging conversation. Nikki Waller with us, driving all of our Bloomberg Money and personal finance reporting. Story after story that I'm forced to read. I never read Janet Lorne because it's all about tuition. Nobody can afford driving all of our educational product. Janet Lorne with us this morning. as well in slipping in before a ginormous week ahead for Bloomberg this weekend. Sunday, you're at the Plaza, right? 00:03:46 Speaker 7: Yes, as I often am. No, it's the Qatar Economic Forum, powered by Bloomberg, and I'm going to be there hosting the show in the morning, and then a series of panels to follow that will be on Bloomberg TV. 00:03:54 Speaker 5: You and I decided to go beyond that to a huge event this week, and the rumors, I believe Politico first reporting it, that the president of the United States, like JFK and Adenauer, like JFK with de Gaulle, is going to go out to the airport to pick up the luggage for the president of China. 00:04:11 Speaker 7: Well, reportedly, he'll go to Joint Base Andrews to greet President Xi when he arrives. And I think that just underscores the importance of this summit. And as Ambassador Nick Burns has pointed out, this could be the first of three meetings these two leaders have here in the months ahead, but incredibly important, yes, because of trade, but also because of AI, the conversation that we've been having over the course of the week, really, front and center. 00:04:29 Speaker 1: I mean, that's on the agenda, but we don't know exactly how they're going to address it. Also, I wonder whether on the agenda is Chinese students and their visas and their ability to come to the U.S. Janet, I want to bring you into the conversation because the Trump administration, through its Department of Justice, is taking aim at a broader swath of colleges. It's not just Harvard that it's looking to punish anymore. 00:04:50 Speaker 8: Well, we met with Harmeet Dhillon from the Justice Department a few weeks ago in Washington, and she had a lot to say about universities. Yes, it's not just Harvard and Columbia, but we're starting to see more schools getting inquiries about their medical school, their law school. 00:05:04 Speaker 2: Duke was the top of that list as well. 00:05:07 Speaker 1: And foreign influence on schools, too. 00:05:09 Speaker 5: Yeah, this is a third rail for me. Basically, the Trump administration has blown up the graduate programs of education in America. Is that an exaggeration? 00:05:19 Speaker 9: No. 00:05:20 Speaker 8: Do you know that half the entire student loan portfolio is graduate school loans? 00:05:24 Speaker 2: You can borrow up until July 1st. 00:05:26 Speaker 8: You could borrow up to the cost of attendance. 00:05:28 Speaker 2: In some cases. 00:05:29 Speaker 8: $ 125, 000 per year times two or three years of your program, and the interest rates for those loans were 9%. 00:05:38 Speaker 5: So if a child decides to get a graduate degree in screenwriting, they go to the First National Bank of Mom and Dads and overlay it with a general loan? 00:05:47 Speaker 8: No, they go to the federal government, and that's all changed now. 00:05:50 Speaker 5: That didn't happen. Continue the show while I start crying. 00:05:53 Speaker 1: I know, exactly. Well, there are limits to those federal loans now. Nikki Waller, let's bring you in because Tom mentioned the Bank of Mom and Dad. Our reporting shows that more and more we're seeing baby boomers fund a lot of their grandkids' needs and the costs of living in a way that they hadn't had to before. And I'm guessing that must have an impact on how they live. safer their retirement. It has a huge impact. 00:06:14 Speaker 10: And what we're seeing these grandparents providing isn't just temporary help. I'm actually thinking of it kind of like the grandparent economy. The cost of raising a kid is $ 300, 000, not counting college. And I know for all of us in New York, that actually kind of feels like a deal. But families need more money to raise their family, raise the kids and the grandparents are stepping in. 00:06:36 Speaker 1: So in terms of what that means for retirement, they're just raiding their own retirement accounts then as a result, and they're picking up jobs on the side? 00:06:43 Speaker 10: In a lot of cases, we talk to some people in their 60s who are picking up extra jobs so that they can help their adult children, or they're picking up the job of taking care of kids, which is something historically that grandparents have done. But in other cases, the spending is cutting into their own retirement. 00:06:59 Speaker 1: Saving and cash flow. 00:07:01 Speaker 10: And that's something that financial advisors are saying, stop, put on your own oxygen mask before you host. 00:07:06 Speaker 5: Speaking of oxygen masks, I'm thinking of the summed number of summer camps that everybody went to sitting around the desk this year. Are we broke in asking mom and dad to help because we're asking too much of fancy childhoods? 00:07:22 Speaker 10: That is a great question, and I think it depends on what you see as a great childhood. You know, a lot of the grandparents don't want to see their grandkids missing out on the good things in life. 00:07:34 Speaker 5: Which are not a surveillance child expert. David Gurro with us here as well. Your childhood was a Martin, I think it was a D18 or D28 or whatever. Just shut up and practice. And nowadays, kids, my vintage kids, your vintage kids, We won't even talk about Janet Lauren's kids. I mean, off to a fancy school and all that. The answer is it's just gotten so much more complex in our ute. 00:07:59 Speaker 1: One moment. 00:07:59 Speaker 7: First, I have to note, you're taking on a second job here hosting this show. It makes me a little worried, Grandpa, about what's happening. 00:08:04 Speaker 1: It is. 00:08:04 Speaker 2: It is. 00:08:05 Speaker 5: I mean, no. The surveillance casket is, Nikki, you don't know this. The surveillance casket is right outside the radio. Oh, we're not allowed to talk. 00:08:11 Speaker 7: About the surveillance casket. No, you're absolutely right. And I think that there is a lot of tacit pressure. implied pressure among families, certainly in cities like New York, where you look at the summer and it can't just be running around in the park or going to a day camp. There are all these other programs you can pick. And I think even what has been in vogue, these kind of remote camps that are focused on old school being in the wilderness are now out of vogue. It's time to start practicing for this test or that test or thinking about college. 00:08:35 Speaker 5: And all that costs money. We learn. 00:08:39 Speaker 1: You know what else costs money? Making sure that your kid can play sports and getting to college. 00:08:44 Speaker 5: Put the puck in the net. 00:08:44 Speaker 1: Put the puck in the net, you know, hit the ball over the fence. For schools with big basketball or football programs, Janet, they're looking for new revenue sources because we're in this new era of paying college players. And that's turned a lot of college campuses into districts that look like professional sports stadiums, hasn't it? 00:09:02 Speaker 8: They are borrowing a page from the professional sports, and that's because they're paying players and they're generating revenue to find money to pay them. The new trend is building or renovating the sports arenas. You're seeing that at major colleges, including Kansas. 00:09:18 Speaker 2: We were just talking about this. 00:09:19 Speaker 8: Not a football powerhouse, but David Booth gave them $ 300 million to try to make the stadium better. 00:09:26 Speaker 1: And what is the key? Premium seats. 00:09:28 Speaker 7: Yeah. 00:09:29 Speaker 8: Fancy experiences, things that charge a lot of money and bring in more money to pay those players. 00:09:34 Speaker 5: We should mention that David Booth reinvented Bloomberg money, personal finance, retirement, wealth management. He was academically definitively dimensional of getting things done. 00:09:45 Speaker 1: Very well said. 00:09:46 Speaker 5: He's a real deal. 00:09:46 Speaker 1: So when it comes to these new stadiums and these new school, these new offerings, luxury amenities, where does the school part of it fit in? I mean, because the tuition keeps going up, doesn't it? Yes. 00:09:59 Speaker 8: Well, in some cases that they're looking to private equity at the University of Tennessee, they're building this new district that will have hotels, apartments, you name it. 00:10:08 Speaker 4: And they are the landlord. They own the land and they will. 00:10:11 Speaker 8: Be sharing revenue from whatever comes in for those developments. 00:10:14 Speaker 5: Speaking of sharing revenue, is there a name, image, likeness for the New York Mets? 00:10:20 Speaker 1: Oh, I knew you were going there. Well, you know, Pete Alonzo. 00:10:24 Speaker 5: Took the name, image, likeness down to the land of Rubenstein. 00:10:28 Speaker 1: 300th home run, and it.... 00:10:32 Speaker 8: At Baltimore, and he was here at Citi Field doing it. It was kind of a nice honor for him, but yeah, it's too bad. 00:10:39 Speaker 2: It's too bad. 00:10:39 Speaker 5: Have a Tito's and Tang on the way out the door. 00:10:41 Speaker 1: That's the life of a New York Mets fan. 00:10:43 Speaker 5: Yeah, Janet Lorne, thank you, thank you so much. Nikki Waller, thank you and your team for great work on personal finance. I don't know what to say to you. You've got like a 24-hour Sunday, don't you? 00:10:52 Speaker 7: 24-hour Sunday, big event, as I said, coming up. I'm particularly looking forward to talking to Howard Marks. We're going to talk about AI and the economy, so he'll be our guest on the morning show. 00:11:00 Speaker 5: Looking forward to that. 00:11:00 Speaker 2: All right. 00:11:01 Speaker 1: That's fantastic. That's coming up this weekend on Bloomberg. Now, coming up on Bloomberg Money, we're going to talk investing regime change with Henry McVeigh, his partner at KKR. And be sure, as we were just mentioning, to tune in for the Qatari Economic Forum held in New York. Bloomberg will be covering that live on Sunday, including conversations with the IMF managing director and city chair and CEO, Shane Frazier. This is Bloomberg Money. 00:11:25 Speaker 5: You're listening to Bloomberg Money. Stay with us with more to come after this. Bloomberg Money, and we say good afternoon to you. Really the first show back after the summer break. Scarlett Fu and Tom Keene. Again, there's a bustle in the city more than to do with a huge event Sunday. 00:11:46 Speaker 4: Yes. 00:11:46 Speaker 1: Well, the U.N. General Assembly begins this weekend. And of course, we've got a lot of diplomats descending upon the city. It's going to be super busy. Don't try to take a cab across town. 00:11:56 Speaker 5: Across town is worse than going downtown. Here's what we're going to do right now. This is a joy. Henry McVeigh held court at Morgan Stanley for years. To say he's a partner at KKR barely describes his holistic view of our economics, our finance, our investments. So you say, well, what's it got to do with personal finance? What's it got to do with retirement or wealth management? He and his team have put out an absolutely definitive report, history-based, as you'd expect for a guy from KKR. University of Virginia as a history major years ago. Let's start with the history of our regime change. What did we used to do that's maybe dated right now? 00:12:35 Speaker 11: So pre-COVID, if you think about it, coming out of the GFC, we had secular stagnation, right? The central banks could not engender inflation in the system. 00:12:45 Speaker 5: So what would you do? 00:12:45 Speaker 11: You'd lower rates, try to increase borrowing, and then that would lead to consumption. 00:12:49 Speaker 2: Right. 00:12:50 Speaker 11: When COVID hit, you had a huge amount of fiscal stimulus come in the system. The money multiplier started to work, and we went into what we call a regime change. Bigger deficits, governments are spending more. 00:13:02 Speaker 2: Right. 00:13:02 Speaker 11: More geopolitics, messy energy transition, and more things that are going to bump into. 00:13:07 Speaker 5: And into Bloomberg Money, a messy bond transition as well. I want to go to this one quote. This is a really sophisticated report, folks. Get it from KKR. I can't say enough about it right now. And it's simple. Productivity-driven growth and increasing economic choke points for political gains. It reinforces Henry McVeigh's view. We are indeed in a regime change, and it moves to private equity. Why does Scarlett Fu need private equity? IRA? 00:13:38 Speaker 11: Well, ultimately, I think if you believe in compounding, which we think is the eighth wonder of the world, you guys talk about it all the time. That's what private equity does. The second big point is that it actually lends itself to operational improvements and companies making them better. 00:13:53 Speaker 5: So you're not buying beta of the market. 00:13:55 Speaker 11: You're actually buying alpha that's generated by making companies better. We typically own At any time, 200 companies, we're using the network of what we're seeing across all those companies to share best practices and to drive growth for our owners. 00:14:08 Speaker 5: Does Mr. McVeigh know that if there's a third Greek letter mentioned, the trap door opens? Oh, yeah, yeah. 00:14:13 Speaker 1: It's a Friday, so we'll let him off easy. What happens in a higher interest rate environment, though, for private equity? Because they've had a hard time being able to exit some of their investments with borrowing costs elevated, and it's only going to get more elevated. 00:14:26 Speaker 11: Look, I'd say there are a couple of things, which is interest rates is not your only lever, right? Your best thing is how you run the business. There's going to be a vintage of private equity that came through 2021. And you see this in some of the software deals where you paid high prices. That will be a little bit of a bump in the night. But that's ultimately why you need to diversify where you invest. And ultimately, I think we have not been seeing that. And I know this catches the media's attention all the time. But if you look at our exits and we're publicly traded, you can see we've had pretty substantial. 00:14:58 Speaker 5: Exits of late. 00:14:59 Speaker 1: What's the most common mistake or misunderstanding that individual investors have when they allocate to private markets? Because this idea of getting some private assets into your portfolio is kind of new for individuals. 00:15:09 Speaker 5: Kind of new. Revolutionary. It's to be long term. 00:15:15 Speaker 11: Private equity is predicated on an illiquidity premium. 00:15:18 Speaker 1: What, is long-term five years, 10 years? 00:15:20 Speaker 11: Somewhere between five and 10 years. If you're coming in and you need the money in six months, that's not the best. 00:15:24 Speaker 5: Okay, this is the heart of the matter. Good morning, Blackstone. Love you. Good morning. Is there any other companies besides Blackstone or BlackRock? The heart of the matter, Henry, is this liquidity issue. Do we need to set up sensible guardrails within ERISA programs, retirement programs, to make it efficacious to wait five years to get that gross up from private equity. 00:15:46 Speaker 11: I was around when we actually introduced the 401ks into the public markets in the 1990s when we took a lot of these asset managers public. If you think about somebody who's 35, they're going to be in the workforce for 25 to 30 years. Taking some small proportion of your savings and having that compound over time where you don't have a threat of illiquidity, that is in my view. 00:16:08 Speaker 5: Totally agree. Have you seen evidence that people will be adults and do that? Or do they sell or ask to sell on the first stress? 00:16:15 Speaker 11: I think a lot of this gets to investor education, which is what's the right vehicle? 00:16:22 Speaker 5: Where are you? 00:16:23 Speaker 11: What is your long-term goal? And ultimately, what's the best vehicle for getting you there? 00:16:28 Speaker 1: Henry, Tom talked about your regime change framework, and that goes back to the end of COVID. I think 2022 is when you really started talking about it. But a lot has changed since 2022, right? NVIDIA kicked off the AI boom. You have the return of a new president or old president, Trump, and his many policies, which have proven to be inflationary, whether it's tariffs, the war, or immigration, or the one big, beautiful bill. So how do you fold those developments into this framework? Yeah. 00:16:54 Speaker 11: So a couple of things I'd say at the heart of what we're talking about is that stocks and bonds are now positively correlated. So if you think about Liberation Day, what happened? The dollar went down, bonds sold off and stocks sold off. For the prior 20 years, you had when stocks sold off, bonds rallied. And that's how you diversify yourself. Our view is that is a more sustainable trend. What's happened, I would say probably geopolitics has accelerated. That was one of our key foundations. The second is the deficits have accelerated. We have not left the call that you're in this higher resting heart rate for inflation. And so if you think about what KKR has done, more operational improvement in private equity, more real assets in the portfolio, and then credit be up in the capital structure where you're not stuck in just a fixed investment. 00:17:39 Speaker 5: In your brilliant regime change report, There's a chart of the Sharpe ratio. William Sharpe, Stanford, X beta. You learn three risk with the CFA3. Sharpe, Treanor, Jensen. Let's go to the very Sharpe ratio with Henry McVeigh. It's irrefutable with private equity. You pick up an efficacious Sharpe ratio that will benefit someone in wealth management. Why the struggle now? In terms of, let me drill down. Selling it to the public. Yeah. 00:18:10 Speaker 11: Look, I think when you look at, I mean, I don't think that anybody at KKR, I think we think that it should go into the wealth business, individual investor business, but it doesn't have to be accomplished overnight. Again, I get back to, we want to be thoughtful stewards. We want to think about education. But when you think about long-term retirement savings, that's the business KKR is in. We're in the retirement security business. And if you can extend that beyond just pensions and sovereign wealth funds and family offices. It makes sense for individuals to have some portion of their portfolio in that. But I don't think you want to do this irresponsibly. 00:18:42 Speaker 5: And I think where you've seen you've. 00:18:43 Speaker 11: Seen this go back to Janice in the 1999s, like taking way too much money in way too quickly. 00:18:48 Speaker 5: It's hard. 00:18:49 Speaker 11: That happened in the dotcom era. Everybody learned a lesson. We've seen that in different areas. And so just slow and steady wins the race is our 50th year at KKR. This isn't our first radio. We've been around, and I think you know our founders. Ultimately, you've got to have a long-term focus. 00:19:04 Speaker 5: It's too much. Janice, he's throwing massive shade at Denver. 00:19:09 Speaker 11: But ultimately, concentration, all the things that apply to the public markets apply to the private markets, which is have linear deployment, think about concentration, think about leverage. 00:19:20 Speaker 1: What would surprise people about your personal investment strategy? 00:19:23 Speaker 11: So, I mean, obviously, with all the guardrails that I serve as the CIO of the balance sheet, look, what I would extrapolate is we do a lot in Asia, particularly in Japan. And I think there's a lot going on in Japan and Korea around corporate reform. 00:19:37 Speaker 5: Most investors, I. 00:19:38 Speaker 11: Think when they look at their individual accounts, they're highly concentrated in the U.S. So that would be one thing that I would keep in mind. The second is when I think about what's going on in the infrastructure around the world, that's something that we think is a big theme where the public sector is having to hand that off to the private sector. So that's been a big part of what we're doing at KKR. And then I think we hit on this earlier. I'm much more inclined to own stocks over bonds. If we're in this higher resting heart rate for inflation, I probably will be trimming down my government bond holdings. 00:20:10 Speaker 1: To how small? Not going to comment specifically on that. 00:20:15 Speaker 11: But to me, equities are a great inflation hedge. And a lot of what we're doing on the private side is doing that. but also in a way that you're improving the outlook for the company. 00:20:24 Speaker 1: How about housing? How about property and real assets? 00:20:27 Speaker 11: I mean, look, I think the American dream, in my view, is changing, which is I think home ownership is important, but I also think having employee ownership is important. And we've been doing that at KKR through our program. 00:20:39 Speaker 5: So I think that's an important part of the story. 00:20:42 Speaker 1: Thank you, Henry. Really appreciate it. Henry McVeigh, partner at KKR. Coming up next, Alicia Levine over at BNY Wealth. This is Bloomberg Money. 00:20:53 Speaker 5: You're listening to Bloomberg Money. Stay with us with more to come after this. Welcome back. Bluebird money on an afternoon, a Friday. Busy end of the week we will go, end of the weekend as well. Scarlett Fu and Tom Keene. I'm sort of exhausted by the week. I know. 00:21:14 Speaker 1: It's been a lot. There's been a lot. The AI panic, the Fed rate hike. 00:21:17 Speaker 5: The Fed meeting. 00:21:18 Speaker 4: Yeah. 00:21:18 Speaker 1: And we've turned things around since that Fed meeting. We had recovery on Thursday, and now we're back to being down again. You look at stocks on Friday, and all arrows lower, red arrows, with all the industry groups down on the day. 00:21:31 Speaker 5: We need to do a data check here? 00:21:32 Speaker 1: We do. 00:21:33 Speaker 2: Damn. 00:21:34 Speaker 1: Can't get away from it, Tom. 00:21:35 Speaker 5: There it is. I'm stuck. What's a VIX doing right now? 15. That's a bull market VIX. I mean, that's unbelievable. I thought we'd have a VIX at 22 where it's coming to an end. 00:21:44 Speaker 1: And even that with a 5% yield on the 10-year. 00:21:46 Speaker 5: You would think so. And when oil was 109 a barrel. How about a cross-asset data check? We look at that for these bonds, currencies, commodities. You do that. Alicia Levine coming up. That's the way sheet rolls. Oil, the story. 107, 109 earlier. Comes back a little bit during the week. But to me, and we don't have to talk about it on Bloomberg. Money, but the dollar strength this week is really a back story. 00:22:07 Speaker 1: Yeah, it might be a good time to go traveling if you can afford it. 00:22:09 Speaker 5: All right. 00:22:09 Speaker 1: Bloomberg Money is your new destination for personal finance. It's a cross-platform effort that extends beyond your television screen and includes our new digital hub at Bloomberg.com slash money. And Tom, one of the most widely read stories on the Bloomberg this week. and on our website, is the cutthroat competition to get an entry-level job on Wall Street. You have college freshmen competing for spots in student-run finance and investing clubs that then feed into recruiting opportunities at some of these banks. Some students are seeking coaching services that could cost thousands or tens of thousands of dollars. Bloomberg Finance Editor Dan Taub is here to break down the story. And Dan, I mean, these jobs have always been competitive, but we have entered a new era. Yep, that's right. Yeah. 00:22:50 Speaker 9: I mean, the banks want the best recruits and they want them as early as possible. So students have to prepare a lot earlier than they used to starting like freshman year, basically. 00:23:00 Speaker 1: Which is crazy. And the acceptance rate for some of these jobs is lower than to get into Harvard, right? It's like 0.01 percent. Talk a little bit about these student run finance club and investing clubs, because we talk to folks who are doing them and it's competitive to get into those. 00:23:14 Speaker 5: Correct. 00:23:14 Speaker 9: Yeah, it's harder to get into those clubs than to get into the school in the first place. And part of the reason is because they learn the skills at those clubs. They help them get the internships and then help them get the jobs. So some of the things they learn are how to read balance sheets, how to look at cash flow statements, how to value deals and also had him you. 00:23:33 Speaker 5: Know this is brilliant the difference here is these kids are really lumber terminal helping I'm talking our book lumber terminal helping out these kids are looking at the four accounting statements I was looking at the back of the beer can to see if the beer was made in Canada or the US right now are these kids too smart is that why it's too competitive. 00:23:51 Speaker 9: Well, I mean, the kids are smart. I mean, the kids in these clubs who get into them are obviously top to top. But, you know, it's also, you know, the job market is competitive these days. And, you know, if you're preparing for a field that they, you know, have jobs. Coding is not what it used to be in the age of AI. So if you want a finance job and you know it's going to be like less than 1% chance you'll get acceptance at J.P. 00:24:13 Speaker 5: Morgan or Goldman Sachs. 00:24:14 Speaker 1: You have to prepare. You have to prepare. And, you know, these jobs pay well in a time when it's hard to just get a paying job. Bloomberg Finance Editor Dan Taub, thank you so much. 00:24:23 Speaker 5: Right now, this is a joy. She was at Brown University. She's doing okay. So she got her fourth, fifth, sixth internship, and then she wandered over to Chicago and did brilliant mathematics. Alicia Levine owns a high ground on linking mathematics into all that we do within our personal finance, our retirement, our wealth management, holding court as chief investment officer at BNY Wealth. What's the biggest mistake you see in the day-to-day grind of at BNY that people are doing on their retirement? 00:24:54 Speaker 6: I think the biggest mistake that we see, like we're in the wealth business, is wanting to trade the allocations or wanting to swap out all the time because of headlines and essentially trying to pretend that building wealth is the same thing as being a hedge fund manager. That is the biggest mistake. 00:25:14 Speaker 2: That we see. 00:25:15 Speaker 6: And that is one of our messages that we always talk about, which is wealth is built over decades and that trading actually gives you worse returns than if you did the hypothetical experiment and you missed the five best days of the year or the 10 best days of the year. You underperformed by 5% annualized returns. you know, going forward over the next 20 years. 00:25:37 Speaker 5: Do you blame Scarlett Fu and the media? 00:25:40 Speaker 6: No, I don't blame the media because there are plenty of businesses out there that are hedge funds, that are trading, that are using derivatives, trying to hedge some near-term risk. But the wealth, building wealth is very, very different. And building a future where you feel confident is very different than trading. And it's not day trading and it's not even annual trading. And I think that's the biggest business because We. 00:26:04 Speaker 2: Hear scary stories. We hear tariffs. We hear war. We hear oil at 105. 00:26:08 Speaker 1: And you feel. 00:26:09 Speaker 2: Like you have to get out. You have to do this. 00:26:11 Speaker 6: And in the end, those typically, 100% of the time, tend to be mistakes. 00:26:16 Speaker 2: And look at 2008. 00:26:16 Speaker 6: That was a mistake as well. When the markets started rallying, it was like a... It was like a rocket to the upside. 00:26:23 Speaker 1: So I feel like I think about the investment products that do really well, that get a lot of inflows. And you could talk about buffer ETFs. You could talk about these equity income ETFs using derivatives to generate high yields. Is there a place for that kind of strategy, that kind of thinking, that kind of approach in your retirement account at all? 00:26:39 Speaker 6: So there is a place for that. But I think it's really I think you just go back to the simple thing, which is what are you trying to do? You're trying to grow your capital. 00:26:48 Speaker 2: End of sentence. 00:26:50 Speaker 6: So there's a really easy way to grow capital, and that's equities, and that's being fully diversified globally in all sizes, and you let it run. 00:26:59 Speaker 2: And the question you have to ask yourself is, when am I retiring? When do I think I'm retiring, and when. 00:27:04 Speaker 6: Do I have to start transitioning towards protecting those gains or something more conservative? 00:27:10 Speaker 2: But if you're in the growth phase, it's pretty simple. 00:27:14 Speaker 5: Alicia Levine with us writing 24-7. Let's look at the latest note here. As we can, the earnings in CapEx backdrop, well, it remains much stronger than in prior tightening cycles. That's why Alicia Levine's seeing resilience. Inflation-sensitive assets deserve attention. Is a general statement at BNY, are people too afraid? Are they too much in cash, too much in bills, notes, and bonds of lesser duration instead of, not the cliche of owning Nvidia, but just being in the market? 00:27:43 Speaker 6: So, I'd say people have been worried really since 2020, right? People are just worried a lot because it's been a very noisy period. 00:27:51 Speaker 2: A lot of geopolitical events. 00:27:53 Speaker 6: We see the fracturing of the world trade system and we see the building of debt. 00:27:57 Speaker 2: The $ 40 trillion. Again, these are the headlines. I'd say people are worried all the time. 00:28:03 Speaker 6: I wouldn't say that there's a lot of cash out there because the cash tends to be pretty steady, right? 00:28:10 Speaker 2: We talk about what's a money market account. 00:28:12 Speaker 1: Yeah, $ 8 trillion. 00:28:13 Speaker 6: Yeah, but as a percent of the S & P, it's smaller than it was 15 years ago, even though the absolute number is higher. We talk about the absolute number, but as a percentage of the S & P, it's actually smaller. 00:28:24 Speaker 2: I think the issue is that. 00:28:26 Speaker 6: There's more conversation about why you should not be trying to trade this, why you should not be going to cash over time. And one down year in the market does not make it a reason to get out of the market because we all know that there are downturns in markets. And that's that's fairly normal. 00:28:42 Speaker 1: Well, speaking of scary headlines, the $ 40 trillion in national debt that we have out there, this idea has been prominent for decades. But even the experts are now talking about it with this new level of urgency that we haven't heard before. We've, of course, yet to see a policy response, and it's going to take a lot of pain from either side. So that's why we probably haven't seen anything. But is this idea of all this debt actionable for individual investors, especially when it comes to people's exposure to treasuries or to municipal bonds? 00:29:11 Speaker 5: Yeah. 00:29:11 Speaker 6: So I'd say the actual number, in a sense, is part of the growing story of the growing debt. 00:29:17 Speaker 2: I feel every few years we have a panic. It's a big number. It's a round number. It's a zero number. 00:29:21 Speaker 6: It's a five number, like birthdays, and it tends to get people's attention. I'd say for now, what we're doing in our client portfolios is really being in the belly of the curve, intermediate to short-term duration, five. 00:29:33 Speaker 2: To 10 year. I think there's risk any longer duration here. There is concern that. 00:29:39 Speaker 6: I think the Fed hiking right now into what is the inflation that's being caused by the increase in oil prices may not be that effective, actually. And so what kind of inflation hedge can we have in portfolios? And that's what we're doing in portfolios here. So it's not just like short and intermediate bonds, but also looking at real assets and infrastructure. You just had a previous conversation about that as well, because we think we're just in a higher inflationary world since COVID, the reshoring, the friend shoring, the nationalizing of businesses for critical industries, whether it's you know, pharmaceuticals or whether it's chips, manufacturing capacity, that's all coming back to home countries. 00:30:25 Speaker 2: It's happening in Europe as well. And that is inflationary. 00:30:29 Speaker 6: And there is no central bank that's going to hike high enough to squeeze it out to get to 2%. 00:30:33 Speaker 1: Yeah, to address it. 00:30:34 Speaker 2: I'm going to do it. 00:30:35 Speaker 5: Can I do a Bloomberg Money Audible? 00:30:36 Speaker 1: Do it. 00:30:37 Speaker 5: We can do this with Alicia Levine. I think of everyone I know in the game, and there's a few others. I think of Anna Wong. out of Chicago as well with Bloomberg, you have prodigious math abilities to move folks to get fancy about it, to move not in the XY space, but to move almost three-dimensionally through this act. It's profound, and you do it every day. Alicia, when did math happen for you? Math in girls is a really, really delicate thing. 00:31:07 Speaker 2: Not in my world. 00:31:07 Speaker 5: Math in girls. 00:31:09 Speaker 1: Love that answer. 00:31:10 Speaker 5: What was the catalyst that got Alicia Levine math-ed? Go. 00:31:15 Speaker 6: OK, this is so Matt, let me say it was arithmetic and that was early and that was like second nature. And I've never thought about arithmetic. It just happens. And that was first or second grade. And then we had a public school system, New York City public schools, second grade in Queens. Our teacher decided that we all should be doing fourth and fifth grade math, and she taught it in second grade. And nobody ever complained, and no one ever said girls couldn't do it. And my cohort, girls were doing math. And there was no conversation around it. 00:31:50 Speaker 2: We just did it. 00:31:51 Speaker 1: How hard is it going to be to be a math major and be able to find jobs in the age of AI? 00:31:56 Speaker 6: That's an interesting question. I think it's not just math. I think it's a lot of it. I think you're best up with a math major right now over many other majors because the ability to think critically and to reframe a question in a different way is very much a mathematical way of thinking. If I change this variable, if I change this input, I'm going to get a different output. That's what math teaches you to do. It teaches you to think. 00:32:20 Speaker 5: You've been great about the bond market really not giving us total return over X number of years, and yet it's still bonds, bonds, bonds. Are you lesser bonds now? 00:32:32 Speaker 6: So we are technically underweight bonds given our benchmark allocation, but we do have an allocation to emerging market debt, and we do have an allocation. 00:32:41 Speaker 2: To high yield, which has been very additive. 00:32:43 Speaker 6: It's been the core bond portfolio that's been more challenged than the EM debt or the high yield. So we do like fixed income. We're just not focused on, you. 00:32:54 Speaker 2: Know, the treasuries. 00:32:55 Speaker 1: You just see it playing a different role. 00:32:56 Speaker 6: We see it playing a different role because if we're going to be in fixed income, we want to know why we're there. 00:33:02 Speaker 2: So we have all kinds of clients, right? 00:33:03 Speaker 6: Someone The keep me rich, the preservation, or I want less risk in my portfolio. And there are ways of doing that. And so we do different parts of the fixed income market. So we still like fixed income. It's just not as heavily weighted. And again, it's really where you are in your life cycle. Are you in the growth phase or are you in the consolidation? And I want to keep what I have. And then we have to allocate differently for that. 00:33:25 Speaker 5: We're going to work from home. I got 30 seconds. Is BNY saying let's go six days in the office? 00:33:32 Speaker 2: We're back in the office. 00:33:33 Speaker 5: You're back in the office. 00:33:33 Speaker 2: It's not even a question. 00:33:34 Speaker 5: Are the men wearing suits? 00:33:36 Speaker 6: No. 00:33:37 Speaker 5: They're not wearing suits. We're not there yet. They're wearing like Damien Sassauer. 00:33:41 Speaker 1: They're super casual into the office, and then when they go out at night, that's when they wear their suits. 00:33:45 Speaker 5: This is going to be great. Alicia Levine on the cutting edge. She says suits. Thank you so much. With BNY Wealth, Chief Investment Officer Alicia Levine. That's what we're going to talk about here. Scarlett demanded that the well-clothed in suits, not always bow ties. 00:34:00 Speaker 1: No. I don't think the bow ties are back in. Suits are back in for sure. Tailored suits. 00:34:05 Speaker 5: Tailored suits. 00:34:06 Speaker 2: Yeah. 00:34:06 Speaker 1: And sometimes wide-legged pants, which I'm not sure I'm into. The Emmys, they didn't look good on some of the people. 00:34:11 Speaker 5: Who wore them. Why did I know you watched? Should I watch Willow Bay, the show? 00:34:15 Speaker 1: Widow's Bay? 00:34:16 Speaker 5: Willow Bay. Yeah, I call it Willow Bay. Good morning, Mr. Iger. 00:34:19 Speaker 1: Do you like horror? Do you like comedy? It's kind of a mixture of both. 00:34:23 Speaker 5: I don't know. I may watch Widow Bay. You're listening to Bloomberg Money. Stay with us with more to come after this. 00:34:45 Speaker 1: Here in New York, we've all returned to the office. Dress codes, though, are more relaxed than ever across industries, not just on Wall Street. Chris Rauser, Bloomberg's editor for Global Luxury Coverage, sees a new trend emerging. He writes, the pandemic seemed as if it finally marked the death knell of the suit, and yet something improbable has started happening in recent years. The suit is making a comeback. Chris joins us now to discuss, and he's in his suit as well as his bow tie. 00:35:10 Speaker 5: Yes. 00:35:11 Speaker 1: Great to have you here, Chris. 00:35:12 Speaker 5: What are you laughing at? 00:35:14 Speaker 3: I did. I asked Scarlett for permission to wear the bow tie on with you. 00:35:17 Speaker 5: You didn't ask me. That's wonderful. 00:35:18 Speaker 1: That's why it's funny. 00:35:19 Speaker 5: Is it tie tie or is it fake-o-tie? 00:35:21 Speaker 3: Tie tie. 00:35:22 Speaker 5: Thank you. 00:35:22 Speaker 3: I went to boarding school. 00:35:23 Speaker 4: Come on. 00:35:25 Speaker 1: You think about the companies that benefit from the return of suits. Taylor Brands, which owns Men's Warehouse and Joseph A. Bank, they filed for an IPO. This is a real thing. 00:35:33 Speaker 3: They went bankrupt in 2020. And Brooks Brothers also went bankrupt. The pandemic should have been an extinction-level event for suiting, for tailors, especially mass suiting, because people came back to the office and didn't dress up anymore. I used to wear a lot of suits to this office, and then I sort of stopped a few years after the pandemic. And then When people started going to weddings again and people started having events, they started buying suits again. People lost a lot of weight because of GLP-1 and had different shapes and sizes. And then a funny thing happened in the past few years where, after that boom of people coming back and having to buy suits because weddings were happening again, People stopped having to wear suits, have to wear suits to work and stuff, and they started wearing suits for fun. So now the thing that's like really hopping at Brooks Brothers, for example, is fashion suiting. It's fun suits with fun colors and textures. Same thing at Men's Wearhouse and all these other smaller independent brands. 00:36:30 Speaker 1: And you went to visit a Japanese suit maker who comes to New York twice a year to take orders. And the getting to know you process between tailor and customer was really fascinating because it wasn't like, where do you work? What kind of office is it? It was about like, what's your interest? 00:36:43 Speaker 2: This is amazing. 00:36:44 Speaker 6: Yeah. 00:36:44 Speaker 3: Right when I started reporting this story, I went to the Armory, which is a wonderful men's wear shop on the Upper East Side. And this tailor, Taylor Cade, Yamamoto-san, comes from Tokyo twice a year, doesn't speak English. And he comes and he has these total fans that come and they do orders with him. And working through interpreters, he talks to them about what they like, how they live. Do you like 70s rock and roll? Do you like sailing? And so all these people, I talked to like a guy who owns a saxophone shop in Boston. I talked to a guy who is an engineer at Google who wears three-piece suits to work at Google where everyone's wearing t-shirts. 00:37:18 Speaker 5: Wow. 00:37:18 Speaker 3: Like, there are people who, once they figured out that suits can express you and something about you, it doesn't have to be this uniform. 00:37:25 Speaker 5: I miss all the time on this. This is Ralph Fitzgerald, which is the same act. Like, a lot of people are into it. I won't bore people with the huge success he's having right now. But the answer is, he says this is all about America. He's from England. He cut cloth for Huntsman years ago. And he moved to New York just because this is where the return of the suit is. 00:37:46 Speaker 3: Yeah, you're seeing a lot of new tailor shops here. You're seeing a lot of tailors from London move their cutters here. Dunhill's opening up a shop for the first time here coming up later this year. So I think it really is American. 00:37:59 Speaker 5: We've got to bring it up. With Chris, folks, now we can only do this because I don't have a clue what I'm talking about. Oh, my gosh. Should I be wearing white sneakers with my beautiful Fitzgerald suit? I mean, this is like the new thing. I see it on TV, like in Washington. It's not working for me, Chris. Is it working for you? 00:38:16 Speaker 3: I do it sometimes, I got to say, because I have bad feet. So I do sometimes wear a sneaker for, yeah, for like orthopedic reasons. 00:38:22 Speaker 5: Roger Federer can get away with it. He's the only guy in the world. 00:38:25 Speaker 1: That can get away with it. 00:38:26 Speaker 3: It's a very Silicon Valley thing too, right? To wear a white sneaker. 00:38:29 Speaker 1: They don't dress well, I'm sorry. 00:38:31 Speaker 3: Yeah, well, fair enough. I think a lot of people are doing it. I don't know that you need to do it. I think you probably look better with a dress shoe. 00:38:37 Speaker 1: Or his Doc Martens. That's what you wear with your suits. 00:38:39 Speaker 5: I have a bunch of things, but yeah, I think Doc Martens, they're doing some different things. The ones I wear are building their English factory, like the original factory and all that. What's a suit cost? It really varies. 00:38:51 Speaker 3: At Bloomingdale's, where they saw the suits go down and then come up again, it was like a wild ride, the men's guys in there. You can get a suit for like $ 500, $ 600 from Hugo Boss and some of their entry-level stuff, and they have all the way up to like $ 7, 000 at Zenya. 00:39:05 Speaker 5: OK, we do some books here right now. I had to go to Alan Flusser. I mean, he dressed Michael Douglas for Gordon Gekko. 00:39:12 Speaker 1: Oh, really? 00:39:12 Speaker 5: I mean, he's like absolutely definitive into the age. This was the Bible. There was all these like dress for success stuff. I see you get the preppy thing from years ago. This is the book that changed the debate in America, said subdued colors look like an adult act like, you know, and there's different people. mike bloomberg gets his suits made in brooklyn only one place mike bloomberg will go i used. 00:39:34 Speaker 3: To greenfield does he go to mark yeah that's where this suit is from. 00:39:37 Speaker 5: Oh that's very good no wonder you got a raise this year and i didn't that's good guys but there's my book alan flusser it's the bible it's still apt. 00:39:44 Speaker 1: Today What about your book? What did you bring for us? 00:39:46 Speaker 3: Oh, I brought the Preppy Handbook. Preppy is having a real big moment in America and internationally, Spain, Japan. And this is the original Bible here. 00:39:55 Speaker 1: Which is meant to be tongue-in-cheek. 00:39:56 Speaker 3: I mean, it is tongue-in-cheek, but it's hilarious. And then after you and I talked before the show, I brought Take Ivy, which is. 00:40:02 Speaker 5: This is the guy that you talked about. 00:40:04 Speaker 3: Yes, this is a photographer who went to a Japanese photographer who went to the Ivy League in the 60s and took all these photographs of American Ivy style and brought them back to Japan and started the whole wave of just obsession. 00:40:14 Speaker 1: And it led to the creation of Uniqlo and the look that we have there. So there's a legacy. Oh, no, it's great. There's a good podcast on all this. It's Articles of Interest by Avery Truffleman. So you should listen to that. Anyway, Chris, thank you so much. 00:40:26 Speaker 5: Thank you, guys. 00:40:27 Speaker 1: Chris Rauser on the return, the comeback of Suits. He, of course, heads up our Pursuits coverage, our global luxury coverage. And for the latest recommendations and recommendations from Bloomberg, subscribe to the On Books newsletter. 00:40:39 Speaker 5: Good afternoon, everyone. Bloomberg Money on a Friday in New York, the bustle of New York City. Lisa Mateo, of course, will be with Bloomberg this weekend, the U.N. meetings and all that. As you said, crosstown traffic. 00:40:50 Speaker 1: Don't go across. 00:40:51 Speaker 5: You need three cars. 00:40:52 Speaker 1: Yeah, you have to walk the whole time. 00:40:54 Speaker 5: Well, the Plaza Hotel on Sunday. Life is tough. 00:40:57 Speaker 1: Life is tough for some people. But Lisa gets to report from there because the Qatari Economic Forum is taking place. And that's where Bloomberg this weekend will be. Yes. QEF. 00:41:04 Speaker 4: We're going to be there on Sunday. And just the magnificence of it. I mean, the history, the history behind it as well. A lot going on. 00:41:12 Speaker 2: You have QEF. 00:41:13 Speaker 1: You have UNGA going on. The city is. 00:41:15 Speaker 4: Just pumping the restaurants, the hotels, everything. But the plaza itself, the history behind it, if you would like, just curious about the Royal Suite, it'll cost you anywhere from $ 38, 000 to $ 50, 000 a night. So you get a lot for that. 00:41:29 Speaker 1: I'm sure it's booked all week. 00:41:30 Speaker 4: You get a lot. You get about three bedrooms. You get a private elevator. You get 24-hour butler service, a number of bathrooms, too, to accommodate people. A dining room that seats 12 in case you want to have like a whole big group there. 00:41:43 Speaker 2: A chef's kitchen. 00:41:44 Speaker 4: A private gym it has, too, in itself. 00:41:47 Speaker 1: It's part of the room. Yes, and a library as well. 00:41:50 Speaker 4: Overlooks Fifth Avenue. So that's just to give you an idea of that. 00:41:53 Speaker 1: Is that where you're going to be interviewing people? 00:41:55 Speaker 4: That's where I'm staying the night when we do book readings. 00:41:58 Speaker 5: The president wants two scoops. 00:42:00 Speaker 1: Mr. 00:42:01 Speaker 5: President, you and Lisa Mateo, 16 scoops of assorted ice cream, whipped cream, M & M' s, chocolate caramel, raspberry. This is popping $ 350 before the $ 77 service fee. But you know. 00:42:15 Speaker 4: What made a cameo? 00:42:16 Speaker 5: In-room service. 00:42:18 Speaker 1: The Home Alone movie. The Home Alone scene. Yes. The President was there in that movie. He made a cameo. 00:42:23 Speaker 2: He did, right when he was walking through the hall. 00:42:25 Speaker 1: Tim Curry also had a cameo in that movie. Or no, it wasn't a cameo. It was an actual role. 00:42:30 Speaker 4: But they have a whole Home Alone package that you can have there. 00:42:32 Speaker 2: Take you for the limo ride and everything. 00:42:33 Speaker 5: You had some important conversations this weekend. I mean, within the uproar that Scarlett and I have been reporting on all week. 00:42:39 Speaker 2: Oh, most definitely. 00:42:40 Speaker 5: The backdrop is not a Home Alone Sunday. The backdrop is some serious conversation. 00:42:45 Speaker 2: Yes, some serious conversation. It's Christina Ruffini, David Gurra. They'll be going. 00:42:48 Speaker 1: We're starting at 7 a.m. 00:42:49 Speaker 4: We're going all the way through till about 1 p.m. So it's going to be a long day. A lot of guests filled up within there. And they're excited for it. We've been prepping for it for a long time. We have a great team behind us. 00:43:00 Speaker 2: For this. 00:43:01 Speaker 1: And they're just excited about it. I see Jenny Johnson. I see Howard Marks. You've got a gold star panel here of guests coming up that'll kind of set the tone for this new era of the economy and investing that we have here upon us. Lisa, thank you so much. Lisa Mateo of Bloomberg This Weekend. Be sure to watch Bloomberg This Weekend every Saturday and Sunday morning, starting at 7 a.m. Eastern time with that special coverage of QEF on Sunday. 00:43:26 Speaker 5: That's all. It is Bloomberg Money. It's been an extraordinary week. I mean, I can't imagine staggering into October here. 00:43:34 Speaker 1: I can't wait for next Friday. Can you imagine what's going to happen? 00:43:36 Speaker 5: Thank you to our team. It's so wonderful that Kieran picked up a Home Alone Sunday for us all to have here. 00:43:43 Speaker 1: At the end. 00:43:44 Speaker 5: Good afternoon. This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlett Fu. You can watch the show live on Bloomberg TV every Friday at noon Wall Street time. Subscribe to the podcast on Apple, Spotify, or wherever you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app.