WEBVTT - Bloomberg Money: Bond Moves, Social Security and the US Open 0:00:00.080 --> 0:00:08.119 Bloomberg Audio Studios, Podcasts, radio news, Bloomberg Money. 0:00:12.840 --> 0:00:15.960 This is the Bloomberg Money Podcast. I'm Tom Keene with 0:00:16.000 --> 0:00:19.080 Scarlet Foo. Join us each week for a smart look 0:00:19.360 --> 0:00:23.160 if the forces shaping your financial life. On personal finance, 0:00:23.440 --> 0:00:27.640 on retirement and wealth management. We will explore how people 0:00:27.640 --> 0:00:32.160 are earning, investing, and building wealth. We are live Fridays 0:00:32.159 --> 0:00:36.200 at noon Eastern on Bloomberg Television. Subscribe to the podcast 0:00:36.240 --> 0:00:39.680 wherever you listen, and is always on the Bloomberg Terminal 0:00:40.080 --> 0:00:44.240 and the Bloomberg Business app. Niki Waller joins us, driving 0:00:44.280 --> 0:00:46.640 all of our personal finance coverage. It seems like every 0:00:46.720 --> 0:00:50.040 day there's a germane story out there, really to lean into. 0:00:50.159 --> 0:00:54.440 David Gera Bloomber this weekend program note Tom Keene will 0:00:54.440 --> 0:00:57.800 appear with David Gera on Sunday. I'm coming on Sunday 0:00:58.320 --> 0:01:00.720 Jackson Hall previow its two much Oh my God, my 0:01:00.840 --> 0:01:04.040 people located about an hour ago and joining us. We 0:01:04.080 --> 0:01:07.080 are thrilled to bring you. Sarah Fryar driving so much 0:01:07.319 --> 0:01:11.120 of our technology cover. She changed the dialogue on social 0:01:11.160 --> 0:01:14.080 media a few years ago. She figured out Instagram before 0:01:14.120 --> 0:01:18.360 anybody else. Her book just hugely, hugely successful. If you 0:01:18.480 --> 0:01:21.240 wrote your book today, how would it be different? 0:01:21.959 --> 0:01:25.160 Well, so much is changing about the way we consume information. 0:01:25.319 --> 0:01:28.720 I feel like the biggest change for all of us 0:01:28.800 --> 0:01:32.039 is that it's become a more passive experience. That when 0:01:32.040 --> 0:01:33.760 we look at our devices and we go on we 0:01:34.360 --> 0:01:36.559 may not have an idea of what we want to find, 0:01:37.080 --> 0:01:40.120 We're being told what we should find. The critical thinking 0:01:40.200 --> 0:01:41.559 is out of those. 0:01:41.520 --> 0:01:43.959 Okay, I feel that way every day. But on no 0:01:44.280 --> 0:01:47.840 filter AI is our new filter, right it is. 0:01:47.920 --> 0:01:50.960 It's making decisions for us on what we should care about, 0:01:51.000 --> 0:01:53.880 how we should think about it, and that takes away 0:01:54.560 --> 0:01:57.040 the decision making on our parts about what we want 0:01:57.080 --> 0:02:00.480 to know why we walk walked into using our phones 0:02:00.520 --> 0:02:03.400 in the first place. So I think that that's that's 0:02:03.440 --> 0:02:07.240 the moment we're in where we need to really think 0:02:07.280 --> 0:02:10.639 about what we're trying to accomplish when we use our technology. 0:02:10.639 --> 0:02:14.400 And probably if I. 0:02:13.040 --> 0:02:16.080 Tried to ban social media in France. 0:02:16.200 --> 0:02:16.800 Can you do that? 0:02:16.800 --> 0:02:16.960 Though? 0:02:17.040 --> 0:02:19.880 Does that the judge is the court? What are kids 0:02:19.919 --> 0:02:21.840 going to do? Social media's bands are going to talk 0:02:21.880 --> 0:02:25.639 to their chatbots? They getting outside or they could hang out, 0:02:25.680 --> 0:02:26.320 they could hang. 0:02:27.040 --> 0:02:30.200 Conversation, make a note? Can I pencil you in for 0:02:30.240 --> 0:02:32.880 a conversation Wednesday exactly what it is. 0:02:32.960 --> 0:02:34.760 Well, let's stick with this tech team a little bit here, 0:02:34.840 --> 0:02:38.320 David Gurra, because technology is coming up as a issue 0:02:38.360 --> 0:02:41.079 in the internal elections, data centers comes up a lot, 0:02:41.120 --> 0:02:44.000 and it seems like voters hate data centers, whether you're 0:02:44.000 --> 0:02:45.720 on the left or the right, and the politicians, the 0:02:45.760 --> 0:02:48.120 elected officials are picking up on that as we had 0:02:48.160 --> 0:02:48.480 towards them. 0:02:48.840 --> 0:02:51.360 Fascinating toe by Michael Hart last week from Bank of America. 0:02:51.400 --> 0:02:53.760 He of course coined the Magnificent seven moniker, but he 0:02:54.000 --> 0:02:57.080 wrote about the prospects for there being a longer lasting 0:02:57.120 --> 0:03:00.200 bubble depending on how the election results in Texas turn out. 0:03:00.240 --> 0:03:02.880 So Greg Abbott, of course very pro data centers. 0:03:02.880 --> 0:03:04.320 We've seen a lot of them crop up more in 0:03:04.360 --> 0:03:07.280 the works in Texas, Michael Hart and his team saying 0:03:07.440 --> 0:03:09.600 were he to be elected, that would extend the life 0:03:09.639 --> 0:03:11.280 of the cycle that we're in right now. But you're 0:03:11.320 --> 0:03:13.919 absolutely right. This is something I think is galbinizing a 0:03:13.960 --> 0:03:16.799 lot of people. The prospects of these things being in 0:03:16.840 --> 0:03:18.120 their backyards is something that's. 0:03:18.160 --> 0:03:21.200 Really agitating, right because these data centers supposedly bring about 0:03:21.280 --> 0:03:24.880 higher utility bills, water bills, electricity bills. They're noisy. Maybe 0:03:24.880 --> 0:03:25.600 they cause cancer. 0:03:25.720 --> 0:03:27.440 Not a lot of jobs after the initial construction of. 0:03:27.440 --> 0:03:29.360 It are saying they caused cancer. No. 0:03:29.360 --> 0:03:31.120 No, but there's a lot of talk on social media, 0:03:31.200 --> 0:03:32.840 and I mean, I don't know if it's true or not, 0:03:32.960 --> 0:03:35.680 but this is kind of the conversation. David, just stay 0:03:35.720 --> 0:03:38.560 with the midterms for a minute, because there's been some primaries, 0:03:38.640 --> 0:03:41.000 and I wonder what the takeaway is because you have 0:03:41.320 --> 0:03:45.960 Donald Trump's Republicans versus what feels like increasingly unmored Democrats. 0:03:46.360 --> 0:03:48.280 Yeah, although I think that the Democratic Party's ind of 0:03:48.280 --> 0:03:49.920 coalescing here, there's a little bit of adject at the 0:03:49.920 --> 0:03:51.800 beginning here, is there going to be this split within 0:03:51.840 --> 0:03:53.800 the Democratic Party. I think that that narrative has kind 0:03:53.800 --> 0:03:55.240 of fallen to the wayside a little bit. But I'm 0:03:55.280 --> 0:03:57.880 watching President Trump making his way to South Carolina's a 0:03:57.920 --> 0:04:00.560 data campaign for the late Lindsay Graham City, and there's 0:04:00.560 --> 0:04:02.240 going to be a parade of other kind of Republican 0:04:02.240 --> 0:04:04.480 dignitaries with him. I now think that the folk now, 0:04:04.640 --> 0:04:06.800 the split that I'm looking at is within the Republican Party. 0:04:06.840 --> 0:04:09.000 Those who have sided with President Trump off at their 0:04:09.040 --> 0:04:11.200 own peril not having to make the case for his 0:04:11.280 --> 0:04:12.440 policies when. 0:04:12.360 --> 0:04:13.880 It seems like there reasons a whole lot there on. 0:04:13.880 --> 0:04:16.880 Twenty seconds, I got to get to ms Waller twenty seconds. 0:04:16.960 --> 0:04:20.000 Does the far left want America to create wealth? 0:04:20.640 --> 0:04:23.119 Yes, I think, but once that wealth's be more widely shared. 0:04:23.120 --> 0:04:25.599 And so I think, Look, the economy is doing relatively 0:04:25.640 --> 0:04:27.600 well by many measures, but the way that it's distributed 0:04:27.640 --> 0:04:28.440 something that I think that they care. 0:04:28.520 --> 0:04:30.880 Kay, and we're going back to normal Bloomberg coverage that 0:04:31.040 --> 0:04:33.480 the thirty year bond is coming up. My god, Nikki, 0:04:33.560 --> 0:04:37.320 what does this new vest in yield mean for our 0:04:37.360 --> 0:04:40.960 personal finance? There's got to be a seismic shift this week. 0:04:41.240 --> 0:04:43.920 Well, you know, I think bonds used to be pretty 0:04:44.040 --> 0:04:47.279 drama free, and then a game board is changing for 0:04:47.440 --> 0:04:50.200 investors right now. I think one way to simplify and 0:04:50.240 --> 0:04:52.400 think about it is, if you need money, it is 0:04:52.440 --> 0:04:55.120 going to be more expensive to get that money. If 0:04:55.160 --> 0:04:57.760 you have money, there are a lot more interesting places 0:04:57.800 --> 0:04:58.960 you might be able to put it. 0:04:59.240 --> 0:05:00.680 Oh, that's a really good way of putting in. What 0:05:00.720 --> 0:05:02.960 I find fascinating too, is that it's one thing for 0:05:02.960 --> 0:05:06.880 Bloomberg to fixate on the Treasury marketing. But you have 0:05:07.080 --> 0:05:10.839 CNN and you have other mainstream publications now featuring the 0:05:10.880 --> 0:05:14.200 thirty year bond yield on their screens. Right now, people 0:05:14.200 --> 0:05:16.440 are talking about it in a way that feels like 0:05:16.480 --> 0:05:18.719 it's alarming. I don't know if that's necessarily the case, 0:05:18.760 --> 0:05:21.120 given that the thirty year bond year yield has been 0:05:21.120 --> 0:05:23.080 at two thousand and seven levels for a couple of 0:05:23.120 --> 0:05:26.200 weeks now, but it's entering the conversation in a new way. 0:05:26.040 --> 0:05:26.800 That's absolutely right. 0:05:26.800 --> 0:05:29.280 This week, it feels like something has boiled over, and 0:05:29.360 --> 0:05:32.640 even if things do calm down next week, I think 0:05:32.680 --> 0:05:36.640 we're in for a longer period of uncertainty, which is 0:05:36.760 --> 0:05:39.760 the theme we come to over and over again with politics, 0:05:39.880 --> 0:05:41.080 with tech and everything. 0:05:41.320 --> 0:05:43.240 One of our introns just brought this, so let's bring 0:05:43.279 --> 0:05:46.000 it up right now. This is either the expense at 0:05:46.040 --> 0:05:49.599 the girl household in camp this summer or the US 0:05:50.040 --> 0:05:52.839 that pluck did you get out the thirty nine trillion 0:05:52.880 --> 0:05:54.200 point nine day period. 0:05:54.480 --> 0:05:57.120 If we're not there yet, that the compounding facet of 0:05:57.160 --> 0:05:59.000 having so many camp payments to make is getting us 0:05:59.000 --> 0:05:59.560 somewhere near. 0:06:00.000 --> 0:06:01.320 Although it looks better and red, I think when I 0:06:01.360 --> 0:06:01.680 look at it. 0:06:01.720 --> 0:06:04.040 We've been through this fourteen times, the three of you 0:06:04.120 --> 0:06:07.000 as well. The fact is, fiscal policy doesn't matter in 0:06:07.000 --> 0:06:07.960 the voting booth, does it. 0:06:08.720 --> 0:06:10.480 I think that people are getting more and more concerned 0:06:10.480 --> 0:06:12.000 about it. I think that the follow on is the 0:06:12.040 --> 0:06:14.440 thing that we haven't seen yet. So we've had Republicans 0:06:14.520 --> 0:06:16.480 Democrats talk about the fiscal situation, as you say, for 0:06:16.560 --> 0:06:19.800 many cycles here, but there's no coherent plan for what 0:06:19.839 --> 0:06:21.000 to do with it. I think that's what we're seeing, 0:06:21.040 --> 0:06:22.120 kind of manifest How are you going to. 0:06:22.160 --> 0:06:24.600 Post this next week with your team of four hundred. 0:06:29.080 --> 0:06:29.520 He's out. 0:06:30.400 --> 0:06:33.320 We'll just be there scriveting me and you Tom. But 0:06:34.000 --> 0:06:35.400 you know, I think to your point, one of the 0:06:35.440 --> 0:06:38.640 interesting things is that the Trump administration is Tate with Lake, 0:06:38.640 --> 0:06:41.599 with best AND's moves, is taking steps to try to 0:06:41.600 --> 0:06:44.799 bring down costs for people, whether it's borrowing costs for mortgages, 0:06:44.920 --> 0:06:47.880 and the market is pushing them right back. 0:06:47.960 --> 0:06:50.640 I got to get this in. We celebrate Sarah Fryar 0:06:50.760 --> 0:06:52.919 coming back to the East Coast as well. Are you 0:06:53.000 --> 0:06:56.960 the last person leaving California? This billionaires? I come on, 0:06:57.040 --> 0:06:59.600 you know all these fancy people, are they really all 0:06:59.640 --> 0:07:00.040 going to go. 0:07:00.080 --> 0:07:03.760 You know, the core of the tech industry is still there. 0:07:03.920 --> 0:07:06.239 See a lot of people try to make Miami happen, 0:07:06.320 --> 0:07:08.880 try to make you know, Austin happen. They all they 0:07:08.960 --> 0:07:12.640 all come back at some point to California. The reason 0:07:12.640 --> 0:07:15.480 I'm here, though, is because you know, sort of a 0:07:15.600 --> 0:07:18.640 kind to what you all are talking about, the tech 0:07:18.760 --> 0:07:21.320 story and how it's intertwined with the economy, how it's 0:07:21.360 --> 0:07:27.320 intertwined with politics and the future of the whole system. 0:07:28.400 --> 0:07:30.800 A lot of it has to be a conversation among 0:07:30.880 --> 0:07:34.200 all of us here at Bloomberg, and it's really I 0:07:34.200 --> 0:07:38.400 think part of why people are so against data centers 0:07:38.400 --> 0:07:40.840 is because they're seeing the stock market and they're seeing 0:07:40.920 --> 0:07:44.640 the wealth creation and they're not feeling it. They're they're 0:07:44.640 --> 0:07:48.600 seeing data centers as the symbol of how tech companies 0:07:48.600 --> 0:07:51.720 are spending billions and how it's not coming into their 0:07:51.760 --> 0:07:55.120 pocket instead it's driving their bills up. It's it's you know, 0:07:55.200 --> 0:07:58.000 even just like memory chips, for instance, are are harder 0:07:58.040 --> 0:08:00.240 to get, so their phones are more expensive. This this 0:08:00.280 --> 0:08:04.160 is all playing into the anxiety we're seeing around the midterms. 0:08:05.000 --> 0:08:08.080 This has been wonderful, NICKI thank you so much greatly appreciated. 0:08:08.160 --> 0:08:11.040 Sarah thrilled that you're back where there's mister garralse you 0:08:11.160 --> 0:08:16.920 Sunday hours tonight with Tony Crescenzo. There will be bagels 0:08:16.960 --> 0:08:20.280 to Global wall Street Anthony Cassenzi on Bloomberg this weekend 0:08:20.400 --> 0:08:23.800 is really really something. He's truly a giant of the 0:08:23.840 --> 0:08:27.080 fixed income market. And I believe Nicky Waller will tender. 0:08:27.240 --> 0:08:29.360 You know, there's you know, we're deal. 0:08:29.360 --> 0:08:30.560 We're gonna talk to her people after this. 0:08:30.680 --> 0:08:33.880 We'll see as well coming up. This is an important conversation. 0:08:34.040 --> 0:08:39.120 Rebecca Patterson for years driving wealth management at Best mar Trost. 0:08:39.120 --> 0:08:42.520 Of course you know her from Bridgewater. Rebecca Patterson on 0:08:42.559 --> 0:08:45.480 the trum oil in the markets and your long term 0:08:45.520 --> 0:08:49.959 plan from New York City. Bloomberg Money. 0:08:50.960 --> 0:08:51.600 That was a good. 0:08:51.440 --> 0:09:08.600 Surprise, good Friday afternoon, Bloomberg Money, Scarlet Fu and time. 0:09:08.920 --> 0:09:11.240 Thank you so much for being with us. Let's get 0:09:11.320 --> 0:09:13.319 right to at Kevin Gordon with us later. But now, 0:09:13.400 --> 0:09:17.120 Rebecca Patterson, the fancy title writing daily, great work with 0:09:17.200 --> 0:09:21.320 Sebastian Melodies, senior fellow it accounts on foreign relations. I 0:09:21.360 --> 0:09:24.160 don't care because it's Bloomberg Money. Wonderful to have you 0:09:24.240 --> 0:09:27.320 here long ago and far away at Bessemer Trust. I 0:09:27.360 --> 0:09:31.840 came in and I said, wonderful pontification to wealth management people. 0:09:31.960 --> 0:09:34.880 If you were at Bessemer Trust today, how do you 0:09:34.960 --> 0:09:36.280 handle this bond market? 0:09:37.200 --> 0:09:40.840 You know I would have been nervous about bonds for 0:09:40.920 --> 0:09:43.240 some time. I wrote an op ed in The New 0:09:43.280 --> 0:09:47.360 York Times in January last year expressing some concern about 0:09:47.400 --> 0:09:50.160 longer term bonds because the policies we were good at getting. 0:09:50.200 --> 0:09:53.520 We're going to increase the deficit, increase growth, which is 0:09:53.520 --> 0:09:56.319 a good thing, but push up inflation there for a 0:09:56.559 --> 0:10:00.600 likely higher rate. So this isn't a surprise that's happening. 0:10:00.640 --> 0:10:02.480 I think the surprise this week is now we have 0:10:02.600 --> 0:10:04.719 volatility in those rates thanks. 0:10:04.480 --> 0:10:05.200 To the Treasury. 0:10:05.280 --> 0:10:07.400 So I would prefer to be in cash or short 0:10:07.480 --> 0:10:10.600 term fixed income and other types of diversifiers. 0:10:10.920 --> 0:10:12.080 Dare I say it? Gold? 0:10:12.360 --> 0:10:15.200 Here's the canard of the business folks. Bring up the 0:10:15.280 --> 0:10:19.320 chart please. This is for Rebecca Patterson. Wall Street and 0:10:19.360 --> 0:10:23.160 Rebecca Patterson talk differently than mere mortals. If you own 0:10:23.200 --> 0:10:26.640 the TLTs out twenty years plus, like a lot of 0:10:26.679 --> 0:10:30.959 retail does, picking up that yield, it's priced down from COVID. 0:10:31.120 --> 0:10:34.920 It has been a crater of yield up, price down 0:10:35.360 --> 0:10:39.240 in your world? What's long term seven year duration? Not 0:10:39.440 --> 0:10:42.800 twenty year when you're looking at retirement and wealth management. 0:10:42.880 --> 0:10:47.240 Yeah, I think even shorter duration money markets right now. 0:10:47.480 --> 0:10:50.080 So the yield pickup you have by owning a longer 0:10:50.160 --> 0:10:52.640 term bond right now, yes, you get something for it, 0:10:52.880 --> 0:10:55.520 but is it worth the risk, and right now I 0:10:55.600 --> 0:10:58.679 haven't thought it is. What I would say, though, is 0:10:59.240 --> 0:11:02.880 for retail investors, if you lose money when rates going up, 0:11:02.960 --> 0:11:05.640 it does depend on how fast the rates go up, 0:11:05.920 --> 0:11:07.959 and it depends what the yield is. So if I'm 0:11:08.000 --> 0:11:10.440 getting a high yield, say the thirty year it's five 0:11:10.440 --> 0:11:13.640 point two four percent, and the yields continue higher but 0:11:13.800 --> 0:11:17.199 very slowly, I lose money as the price is fall 0:11:17.240 --> 0:11:19.160 in the yields go up, but I'm making money on 0:11:19.200 --> 0:11:23.560 that coupon, So it depends how quickly this move happens. 0:11:23.640 --> 0:11:26.600 They get the envelope at home, I'm sorry to get 0:11:26.600 --> 0:11:28.760 the envelope at home and one hundred thousand has become 0:11:28.880 --> 0:11:32.319 ninety seven thousand, thirty eight dollars, and then for your 0:11:32.320 --> 0:11:35.320 wealth management the next month, it's ninety five thousand, eight 0:11:35.400 --> 0:11:39.440 hundred wall Street rationalizes in the Bloomberg money world, folks, 0:11:39.559 --> 0:11:41.560 you're looking to yield up price down right. 0:11:41.800 --> 0:11:43.559 The rate of change is what you're saying. You're correct, 0:11:43.559 --> 0:11:46.439 it's not correct. But if we look at the volatility 0:11:46.480 --> 0:11:48.120 in the bomb market, and you can see it certainly 0:11:48.160 --> 0:11:50.480 this week, yes, does it feel like the usbl market 0:11:50.520 --> 0:11:54.040 is increasingly looking like aped developing market as opposed to 0:11:54.040 --> 0:11:55.040 a developed. 0:11:54.679 --> 0:11:56.000 Market a little bit? 0:11:56.120 --> 0:11:58.280 Yes. If I wanted this kind of volatility, I'd go 0:11:58.320 --> 0:12:01.240 and invest in another countries bonds, not the US. 0:12:01.440 --> 0:12:04.400 Well, the irony today is that a number of emerging 0:12:04.480 --> 0:12:08.400 market financial markets have done better than the US market 0:12:08.440 --> 0:12:11.800 in stocks and bonds this year. And some of that 0:12:11.920 --> 0:12:14.160 is fundamentals and some of it is just point in 0:12:14.240 --> 0:12:16.520 time and what those economies are doing. If I'm Korea 0:12:16.640 --> 0:12:19.440 or Taiwan and I'm doing a lot of ai that's 0:12:19.480 --> 0:12:22.439 obviously helped me. If I'm another country and I'm doing 0:12:22.480 --> 0:12:24.960 a lot of commodity exports, maybe that would have helped me. 0:12:25.040 --> 0:12:25.680 But I hear you. 0:12:25.800 --> 0:12:29.040 The point is that with our debt to GDP in 0:12:29.080 --> 0:12:32.000 the United States running around one hundred percent, employees to 0:12:32.040 --> 0:12:34.960 go towards one hundred and twenty over the next decade, 0:12:35.280 --> 0:12:38.240 and questions around who's buying the bonds and what yield 0:12:38.520 --> 0:12:39.880 they need to buy them. 0:12:40.400 --> 0:12:42.160 It makes things a little more tenuous. 0:12:42.679 --> 0:12:44.600 You say, we need to watch the US dollar because 0:12:44.640 --> 0:12:47.800 it'll suffer if the US Treasury under Scott that's it 0:12:47.880 --> 0:12:50.520 and can bring down yields. If you're an American living abroad, 0:12:50.559 --> 0:12:52.680 you certainly feel the effects of the dollar's strength and 0:12:52.720 --> 0:12:55.760 weaknesses all the sways. Yep, And I feel affected if 0:12:55.800 --> 0:12:58.080 I'm traveling abroad, but not if I'm sitting here in 0:12:58.080 --> 0:12:59.400 New York for weeks on end. 0:12:59.600 --> 0:13:04.200 Right, If you're an American, you live in dollars, you 0:13:04.240 --> 0:13:07.040 get paid in dollars, you spend dollars. The only way 0:13:07.080 --> 0:13:09.839 you're going to feel that exchange rate movement is what 0:13:09.880 --> 0:13:13.680 it does to inflation and what it does to financial conditions. 0:13:13.679 --> 0:13:15.679 And what I mean by that is when you have 0:13:15.760 --> 0:13:19.600 a weeker dollar. Basically, it tends to push up inflation 0:13:19.679 --> 0:13:22.120 in the US, and at the margin that might make 0:13:22.160 --> 0:13:24.760 it more likely that the Federal Reserve thinks it needs. 0:13:24.520 --> 0:13:25.680 To raise interest rates. 0:13:27.400 --> 0:13:32.280 H I'm more in kind of the range camp right now, 0:13:33.080 --> 0:13:34.960 So I don't think the dollar's about to fall off 0:13:35.000 --> 0:13:35.720 a cliff. 0:13:35.559 --> 0:13:37.640 Just brought up the girl Camp bill for this summer. 0:13:37.720 --> 0:13:39.719 Let's bring it up again. I was a mistake as 0:13:39.760 --> 0:13:42.360 a Bloomberg money correction. The folks, this is the US 0:13:42.480 --> 0:13:45.680 debt clock. Yeah, hopping out of forty trillion dollars. You 0:13:45.720 --> 0:13:49.679 and I were weaned on Paul Sungas, Sam Nunn, Pete 0:13:49.720 --> 0:13:53.360 Peterson and the rest. Every year, cry wolf, cry wolf, 0:13:53.440 --> 0:13:57.320 cry wolf. In my retirement, in my wealth management study, 0:13:57.600 --> 0:13:59.720 is a time to stop cry wolf. 0:14:00.160 --> 0:14:03.080 There's two things that are different today. One is simply 0:14:03.120 --> 0:14:06.680 the size of the debt and the fact that well, 0:14:06.760 --> 0:14:09.240 so that's one thing. The second thing is that neither 0:14:09.280 --> 0:14:12.040 the public nor the politicians are willing to turn the 0:14:12.120 --> 0:14:16.080 corner on fiscal policy. Americans since two thousand and eight 0:14:16.120 --> 0:14:18.240 have been conditioned to think the government's going to come 0:14:18.280 --> 0:14:22.320 to their rescue anytime there's a problem, and politicians trying 0:14:22.320 --> 0:14:25.560 to hold onto their seats. Fiscal austerity doesn't get you reelected, 0:14:26.080 --> 0:14:29.240 and so it's just been the self fulfilling thing where 0:14:29.280 --> 0:14:33.440 every government, both parties, keep increasing that deficit, which pushes 0:14:33.520 --> 0:14:34.400 up that debt clock. 0:14:35.200 --> 0:14:36.880 So something has to give. 0:14:37.080 --> 0:14:39.840 We need politicians to be honest with voters and say 0:14:39.880 --> 0:14:42.880 we need to have fiscal austerity, and we need voters 0:14:42.920 --> 0:14:46.920 to accept that to have a stronger financial market and economy. 0:14:46.680 --> 0:14:47.480 There is a price. 0:14:47.640 --> 0:14:49.800 So when you say something has to give, what does 0:14:49.800 --> 0:14:51.960 that look like and how will people feel it? 0:14:52.240 --> 0:14:55.760 Well, if it is fiscal austerity, more spending cuts which 0:14:55.760 --> 0:14:59.000 are harder to do, or tax hikes, and we'll see 0:14:59.040 --> 0:15:02.360 who pays those t hikes, that's a question mark. If 0:15:02.360 --> 0:15:05.600 it's not that, and politically that's not likely anytime soon, 0:15:06.000 --> 0:15:09.280 then we have to get something else happening. And my fear, 0:15:09.520 --> 0:15:12.200 and I'm not calling for a crisis, but my fear 0:15:12.280 --> 0:15:15.880 is this happens in an ugly way that forces the austerity, 0:15:16.160 --> 0:15:17.960 and that could come from a few things. 0:15:17.960 --> 0:15:19.080 It could come here at home. 0:15:19.440 --> 0:15:22.200 Let's say there's a catalyst that pulls down sentiment towards 0:15:22.320 --> 0:15:25.960 artificial intelligence AI stocks. It's not just an AI stock 0:15:26.000 --> 0:15:30.600 trade anymore, it's AI stocks, AI debt. Everything comes to stock market, 0:15:30.600 --> 0:15:33.520 the entire corporate bottom and globally now right, AI is 0:15:33.520 --> 0:15:35.920 in a lot of different markets. So that's one risk. 0:15:36.240 --> 0:15:38.560 I think a second risk is if inflation sticky, the 0:15:38.600 --> 0:15:41.280 FED has to raise rates higher than expected. 0:15:41.480 --> 0:15:43.760 That could be another catalyst. And don't forget overseas. 0:15:44.200 --> 0:15:46.920 You might be spending and living in dollars, but if 0:15:46.960 --> 0:15:50.280 France has a debt crisis, we will have contagion here 0:15:50.320 --> 0:15:50.800 in the US. 0:15:51.480 --> 0:15:53.440 I'm sorry, I didn't research just the interns of all 0:15:53.480 --> 0:15:56.360 going back to school? Are you on to task force? 0:15:56.760 --> 0:15:58.840 Are you one of the FED task force? 0:15:58.960 --> 0:15:59.000 No? 0:15:59.160 --> 0:16:00.880 One of Warsh's task forces. 0:16:01.000 --> 0:16:02.960 Luck to you, you're not at What would you do 0:16:03.000 --> 0:16:04.720 on a retirement task force? Right now? 0:16:04.760 --> 0:16:06.560 What would be goal retirement task? 0:16:06.600 --> 0:16:08.280 For Social Security tax force? 0:16:08.280 --> 0:16:10.360 For Social Security task force? 0:16:10.600 --> 0:16:13.920 We have to raise the age where you start getting 0:16:14.160 --> 0:16:15.760 benefits from social Security? 0:16:15.760 --> 0:16:16.520 People live one. 0:16:16.480 --> 0:16:19.080 Hundred percent agree? We also the rich people have to put. 0:16:18.880 --> 0:16:22.040 In more, and we could do some means testing. I 0:16:22.640 --> 0:16:25.680 don't mind contributing to social Security. I shouldn't get any 0:16:25.960 --> 0:16:28.360 I'll live fine without it. I would rather have my 0:16:28.520 --> 0:16:31.360 money going to help people who need it more, and 0:16:31.480 --> 0:16:33.280 therefore we don't have a financial crisis. 0:16:33.280 --> 0:16:34.720 That's sure, that's a popular opinion. 0:16:34.840 --> 0:16:37.680 I want to get a sense of your personal investment approach. 0:16:37.920 --> 0:16:39.600 How do you do things? Are you kind of a 0:16:39.680 --> 0:16:41.880 set it and forget it person? Or are you constantly 0:16:41.960 --> 0:16:43.840 making changes based on conditions. 0:16:44.040 --> 0:16:46.320 I'm not a trader, and when I say that, I 0:16:46.360 --> 0:16:48.640 mean people who like to figure out what to buy 0:16:48.680 --> 0:16:51.680 and sell daily or even hourly. I'm an investor, so 0:16:51.840 --> 0:16:55.560 I'm saying, what are my retirement goals, what money do 0:16:55.600 --> 0:16:58.560 I need along the way for kids' weddings, down payments 0:16:58.560 --> 0:17:01.760 for homes, et cetera, and then figuring out my assid allocation. 0:17:02.720 --> 0:17:05.440 Partly because I've been living in this world for thirty years, 0:17:05.480 --> 0:17:08.840 I'm comfortable making some tactical tilts in my portfolio along 0:17:08.880 --> 0:17:11.480 the way, whether I'm leaning a little harder int equities 0:17:11.600 --> 0:17:14.480 or out, or towards a certain country or a sector. 0:17:15.240 --> 0:17:16.920 But I'd say those are at the margin because I 0:17:16.960 --> 0:17:21.960 think for most people, they get emotional. They think they 0:17:22.040 --> 0:17:24.359 need to time it. Oh my gosh, the market's frothy, 0:17:24.400 --> 0:17:26.919 there's a bubble. I want to get out. It's really 0:17:27.000 --> 0:17:30.320 unusual that people can time getting out and then back in. Well, 0:17:30.440 --> 0:17:33.160 so you'll time it twice. You're better off. Just figure 0:17:33.200 --> 0:17:35.520 out what makes sense for you personally and then let 0:17:35.520 --> 0:17:35.720 it go. 0:17:35.960 --> 0:17:37.760 Is there anything that's off limits to you when you 0:17:37.800 --> 0:17:39.840 look at all the possible investments out there? 0:17:40.560 --> 0:17:43.840 I am agnostic about crypto. If other people want to 0:17:43.840 --> 0:17:46.919 trade it, God bless it's not for me. I don't 0:17:47.240 --> 0:17:50.679 like that you can't determine a fair value. I don't 0:17:50.800 --> 0:17:54.600 like that there are so many idiosyncratic drivers around it. However, 0:17:54.680 --> 0:17:56.879 I will fully admit if you bought it in twenty 0:17:56.920 --> 0:17:59.639 twelve and held it to today, you'd be extremely happy. 0:18:00.119 --> 0:18:02.560 Rebecca, such a pleasure to have you here. Thank you 0:18:02.560 --> 0:18:05.520 so much. Thanks, Rebecca Patterson, Senior Fellow at the Council 0:18:05.560 --> 0:18:08.159 on Form our Relations formerly with Bessemer Trust. 0:18:08.480 --> 0:18:10.200 Coming up on Bloomberg Money. 0:18:09.920 --> 0:18:13.080 We continue our conversation with Kevin Gordon, head of macro 0:18:13.119 --> 0:18:16.280 Research and Strategy at Charles Schwab, to discuss how rising 0:18:16.280 --> 0:18:19.800 oil prices and bond market swings are hitting your savings. 0:18:20.400 --> 0:18:32.520 This is Bloomberg Money Investments Vacation, Gordon's trooper. Bloomberg Money 0:18:32.640 --> 0:18:35.120 is your new destination for personal finance. It's a cross 0:18:35.160 --> 0:18:38.679 platform effort that extends beyond your television screen, including our 0:18:38.720 --> 0:18:41.439 new digital hub at Bloomberg dot Com, Slash Money and 0:18:41.480 --> 0:18:44.160 tom This story really got my attention. You know about 0:18:44.160 --> 0:18:47.480 gap years. Yes, well, you know we both have firsthand 0:18:47.520 --> 0:18:50.080 experience with this. But for a certain cohort of families, 0:18:50.400 --> 0:18:53.520 there's a ninety five thousand dollars gap year part people. 0:18:53.800 --> 0:18:57.600 It is a rich people story and include bungee jumping, 0:18:57.640 --> 0:19:00.480 your Victoria falls in Southern Africa, visiting a Brazil bank, 0:19:00.520 --> 0:19:03.919 coding an app Bloomberg. Sarah Foster wrote about this for 0:19:04.040 --> 0:19:06.720 The Money Team and she joins us, now, this is 0:19:06.760 --> 0:19:09.360 more than just getting some experience and you know, maturing 0:19:09.400 --> 0:19:12.000 into your college experience, isn't it. 0:19:12.000 --> 0:19:12.920 It used to be this. 0:19:12.880 --> 0:19:15.560